you won't want to miss this. it is a really poignant portrayal of the decisions that all of us will face one day. the movie starts at 12:00 and we will reconvene at 12:30. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> the house republican majority transition team that today and we will get an update in a moment. after that, the conversation on the tea party movement and the elections. and later, the bp oil spill commission hearing. >> in one of his first live appearance is, george w. bush on his memoir of the former president discusses the critical decisions of his administration and his personal life. sunday at 4:00 p.m. eastern. >> the congressmen is chairing the transition committee as republicans get ready to have majority status in january. they talk about their plans for the one hundred twelfth congress. and we will talk with the reporter about the gop

transition. >> there we go. we are ready to go. i want to thank all of you for coming in today. we have a transition team and we will meet most of today. the goal is to see how we can make the u.s. house of representatives more accessible, transparent, and open for the american people, the press, and us in terms of legislative policy. it is really important we get the input from all of our members and a broad cross- section. it will also be reaching out to members of the order -- the other party and the staff to figure out how we can run this place more efficiently and cut costs.

it is essential, we have the people's business to do and people have a right to watch that being done. we had a good session last night, and we will break down and work groups. next week, the entire republican caucus will be here and they will weigh in and give us their input. there will be further workgroup sessions so that they have quality time to give us advice. we have well over 80 members that will be new to our conference. they will bring intelligence and experience that we want to incorporate how we write the rules of the house and the roles of the republican congress. >> [inaudible]

>> it is essential to list all the members. we all have the same environment. we have some dynamic young leaders that are coming in our conference and you bet we are waiting for them because they are bringing the message that we have heard from americans heeded -- americans. >> and the first impressions from some of the new members? how you feel like your voices being heard? >> this is an important opportunity for us to be at the table looking forward to what this congress looks like. and of course, transparency and accountability is number one. >> [no audio] -- [inaudible]

>> realize that we all go together. it will always be about how to make that footprint with no exclusions. >> and the 1994, there was a transition team. what were some of the things you can learn that they told you to do better in the transition? >> there are a couple of things that are important. sweat the small stuff. the small stuff matters. it matters how this body operates and how the public perceives the institution. the other thing that is really important, the message that came from gm, do unto others the way

that you will want to be treated. i think it is really important to restore confidence in this institution to make it the best deliberative body on the planet by allowing everybody to participate regardless of your party in a constructive way to that we can harness their energy and ideas. certainly making sure that they have the opportunity to be full participants. too often the decisions around here have been made at the highest levels including the rank-and-file members of both parties. we need everybody to pull together to solve these huge problems that the country faces. we have to figure out a job strategy that works. we have to work together to reduce the deficit spending and i think we can find good participation. we met yesterday with the

transition for the democrats. they have some great ideas about reform and he was a real leader and necessity. we tried to get it done in this congress. >> [inaudible] >> i would probably defer that to the leader, mr. boehner. you have 80 incoming freshman members. we want that the leadership table and they will be represented effectively. thank you everyone. >> one of the things that we heard from the transition team is that they want to cut the

cost of running the u.s. house. any specifics on that? gosh no specifics. -- >> no specifics. they're meeting and looking through a lot of suggestions to be able to find efficiencies and cut. but they did not outline any specific cuts. we might hear from them later this week. >> what else are they talking about? >> they are talking about mapping our rules in the daily rhythms that they will be responsible for. this is everything from the schedule, when members are going to be required in washington for a vote, when they will be home for recess. they are talking about all kinds of other issues, the monday and operations that are hugely

important in congress in determining when certain bills come to the floor. and they will also be looking at the cost of running the sizes of the staff at the committee and all sorts of other corners of the capital. >> them and to begin applying the campaign themes and promises. how will that play out? >> it is a little bit unclear at this point. they have to pledge that the republican house members might unveil during the campaign, and that had a lot of principles. this is the first step in trying to adopt those themes and to make decisions how they govern the house. these are not talking about policy changes. it is really more about the bureaucracy of the house of

representatives. it is a huge institution that costs a lot of money to run and has a real schedule that the majority party can control. they are trying to figure out what they might change and what that might be. >> what is in the binder of information? >> i only saw the binder. all of the members have misinformation, and i suspect it is a lot of proposals and facts, information about size of things and the schedule as it is now. the binder interestingly enough included quotations from house republican leader john maynard -- boehner, who is in line to be speaker. >> quinn is the next time we will hear from the transition team? >> it appears that congressman

weldon will be doing a press conference with speaker boehner tomorrow. >> think you. -- thank you. tomorrow, the gop transition chairman will talk to reporters about their agenda and the weeks ahead. live coverage begins at 11:00 eastern. a number of republican house and senate candidates that were supported by the party groups were elected to last week's elections. the heritage foundation examines the future of the tea party movement. this is an hour.

>> is my privilege to welcome you to the auditorium. whee welcome those that joined us on the web site and those that are viewing us through c- span. we would ask that last courtesy check that the cell phones be turned off and we will post the program within 24 hours for everyone's future reference. posting our discussion this morning is the vice president of government relations who oversees the outreach to capitol hill and the executive branch. he previously served as director of communications for the army of texas and the heritage director of congressional relations. he served in the office of national drug control policy and the legislative council.

please join me in welcoming mike franc. mike? [applause] >> welcome to the heritage foundation. this is something we wanted to do not immediately after the election, but it gives us a few days for all of the people to form some thoughts about the significance of what happened last tuesday. tuesday, and we want to invite three folks who will set an awful lot of light on a historical collection. we had a couple of markers for discussion that point to the significance of were the two party has come from. if we did this a couple of years ago, people would ask what tea party? now everyone has an opinion about the tea party movement.

there is very little trust in the major parties. approval and disapproval of the democrat and republican parties were both negative 10. the tea party was 39 approve, 32 disapprove. the rest were neutral. they actually had a net positive. at the state level, there were some cases where there were more questions as the bulk ked e tea party and the other major parties. teh tea parhe tea party is net e in 17 states. also interesting to me is that

there were 11 states whe the tea party had and a higher approval rating than one of the major parties. in califora, ohio, washington, and orgaorigen the tea party was more popular. having it is obvious that where we are at is -- i'd think it is obvious that where we're at is a major for. we ll look at major prospective scope of questions relating to the sustainability of the two-party movement. how will the two-partea party ey and passion find its way in washington? we have three terrific speakers. billie tucker, executive director of the first coast tea

party in florida. she served as ceo for 20 years and her former role as executive vice president of tecflorida. she has spent her entire career working with ceos and executives, earning her reputation for the teen understandings of motivations to become more effective. we need a lot of that here. she will be our first weaker. billie is representative of the leaders that have emerged. there is really no one leader of the tea party movement. it is the spontaneity that came out of almost nowhere to have their voice heard. billie does a great spokeswoman

for that dynamic. our next speaker launched a political blog in 2003. he helped create a model for success and expansion. his pieces have appeared in "the daily standard" and "the new york post." his commentary is widely sought after. 25,000 daily visitors to his daily readings. he will address some of those aspects today. our cleanup speaker is byron york. he provides conservative commentary once a week for the examiner, which is a terrific column. i encourage you to read it. he previously was a white house correspondent for "the national

review." i want to read the title of his book that i thoroughly enjoyed. "the vast left wing conspiracy." that is the title of a great book. you could start off, and we look forward to going ahead. >> thank y. i want to take this moment for saying i am here to represent a lot of people that set u on november 2 and before that to take our country back. everyone says they get back to waake it back to what? i will do my best to represent each of you. there is no leader in the tea party movement, and that is what

makes us unique and so different. most of us did not know we would be in this movement. that is exactly my story. it is really interesting because we are all being asked what now? it is like we're setting up a secret room. it did not happen that way. we were all call to this through a movement inside a parked at that told the sunday and was seriously wrong in this country. -- we were all called to this movement through our gut. duri this election campaign -- when the movement first got started, we were really focused on the issues. that is what the tea party is all about. we have a lot of issues.

we are in serious financial trouble. we are in a lot of ways we are in a decline that we have never seen iour history. this is why people are waking up, because we know it. there are a lot of smart people in america, and i am so honored to have worked with them. i have worked with ceo's that have brought huge organizations to our country, and i though they were smart until i started working with people in the tea party movement. americans are very smart people. they have known for a while the something was gog on in our country. what happened last tuesday night was so great. our founders created this whole process by which we could do that. we put it into action. it was so cool to be a part of that. it was so phenomenal to be a part of it.

listen, we are not smart enough to figure that stragy out. our founders did it for us. and it worked beautifully last tuesday night. i am here to tell youhat people say what now? we do not know. we did not know what was now for the tea party when we got involved for it. we know one thing, we're not going away. we d not give our lives of foufor two years -- and that is what most of us did. a lot of people gave up careers, walked away from any kind of financial way to create wealth for them, and they created an organization of loosely- connected groups all over the country without any big money. there was no big factor.

-- big backer. we paid our own airline ticket to comee he and say no to this. we wrote our congressman. we activated our citizenship. we did this in a robust led by paying for it at our own pockets. we are all grow. -- broke. we are all trying to regroup. tuesday night we had great night. i am from florida, we had a super night in florida. marco is coming to washington, d.c., because of the tea party. we are all about telling the truth. the gop did not get behind him when it first came out. there were standing behind our governor who ended up being --

we do not know what he was. they did not stand behind marco. he showed up at the tea parties. he had no money. i remember hearing a radio show where he was talking about he had no money. the gop did not get behind him, but the tea party did. all of a sudden, the gop realize we have put our faith in the wrong person. they had to scramble. that is who is coming to washington. the gop let him do his address on saturday. he has not even got here. after obama's address, sh did his address. we have a governor in florida that the gop did not support at first. the tea party did.

we're not blaming the gop, we're just saying we stood outside. we kept saying no because we are smart. we put fpressure on both parties. now they are saying now what? we're saying we're going to keep pressuring you. we're going to make sure the democrats take their party back from the progressives. we have to come back together to our parties. that is what we want. we are so thrilled about it. i am not the expert. i am not the queen of the tea party. i am just one person in america that is standing up. before i came, i said i am going to go to heritage, tell me what you want me to tell them. i am disappointed quickly go thugh this. -- i am going to quickly go

through this. we had 90 people telling us what you can do. i am going to share a few of these things with you. this is america. number one, we're not going away. if you think we are, we are not. we have to have garage sales to fund this. [laughter] we will watch each and every new member of congress to make sure they are not going to be corrupted when they come to d.c. something happens when people come up here. they seem like a really great people, and after a while they do not look like the same people we sent here. heritage, you are up here. we are born to ask you to keep an eye on them. -- we are going to ask you to keep an eye on them. i cannot tell you how much i have learned in the past few years. here are the issues we are

concerned. the decline of the dollar. the over-reaching federal reserve is another one. the debt. out of control spending. they want you to balance the budget. hello? this is common sense. we do not want any more pork, earmarks. we want you to keep taxes low. tax reform. keep it simple. repeal the health-care bill and finance bill. we want congress to get back to working on the constitutional ways. this is craziness that went on. how about reading of bil a bill? we did. they said read the bill? what are you talking about?

it is all just craziness. somebody put something in the water. [laughter] national security. it is a big deal. we do not feel safe. we do not feel safe with our money. we do not feel safe with our security. our borders. we of rrorism going on. when of terrorism with our money. -- we have terrorism with our money. we went to algor builcreate a nd of communicating. and it is important that the people we send up here stay connected to those of us back home. we also want you to check on the regulatory agencies, make sure we know what they are doing. we did not trust the epa, the department of energy, any of the bureaucracies.

there is a huge level of stress going on. we will stick connected. there is no big organization, no big leader or board that tells us what to do. we like it that way. we have done a pretty good job without being managed from the top down. one thing we are doing, and this is florida. the florida groups -- how do we communicate? we google. we were divided. we were divided when we had our governor's race as to the gop candidates or the tea party candidate. we came together and we said we're going to get behind mr. scott and we did and he wo in florida we decided we will create our own organization so that whenever we want to talk to

marco and our governor, they will hear from all of us as a coalition. it will be a coalition of tea party. we are organizing in a little way, but not top down. we are encouraging people to run for office. we will fight the liberals. we will focus on education. ithese are little things. we will use technology. and we will broaden our base by using other organizations. we use heritage last year. we love heritage. other organizations that helped us, liberty central helped us undetand the issues that were going on. we have a lot of partners out there. and i know i am talking too

much. the other thing we want to focus on is the media. they probably will not like me for saying that, but the media really did not tell the truth. not all of the media, but there were a lot of lies out there. the people in the grassroots movement knew it. we want the media to be held accountable as we move thrgh the process. are we going away? no. we know what we're going to do? no. but we didn't, and we won. [applause] thank you very much. >> first off, i want to tahnhan heritage for inviting me share. this s been an amazing couple of years. mostly because it really

reinforces the speci nature of american politics. it is incredibly dynamics. american politics are incredibly dynamic. sometimes we forget that because we operate with a paradigm of a two-party system. in most cycles this tends to cover most of the basis. with some people they feel the two-party system is constructed and does not all for hest grass-roots movements. the last two years proved that. i think the american system is healthy and really worked in the last two years. you had a mass of people who were very dissatisfied with not just the way washington was working, not just the way the economy was working, but the

options that were being offered by both political parties. instead of checking out of the system, instead of staying home and being silent, what you had was a nationwide movement of people. it was really started by -- inspired by a two-minute rant on nbc. it energize pple to go out and demonstrate -- it energized people to go out and demonstrate and demand change. i have been on the side of being part of that, of watching it in writing about it. incredible movement. it is really like iunlike anythg i have seen since 1978 in california when the tax revolt began. and that was a grass-roots-

fueled citizen movement to increase tax rates in california. it was on a specific issue, but it with a grass fire that went across the nation. it said not every solution should involve taking more of our money. in some ways it is very similar to what we've seen but thwiththa party. i think you have to look at the proposition 13 fight in 1978. that is really an analogy. that was not a moveon.org type of organization. there was an organization that formed in created organization thght got people out in the street. the people went out in the street first and then u.s. leaders that emerged.

provincial you have ronald reagan and republicans in the 1980's. -- eventually you had that ronald reagan and republicans in the 1980's. it did peter out when we got othe idea that thae era of big government was over. then people got comfortable. the anti-tax movement, which was an insurgency, became part of the establishment, became part of point in but what we didn't -- became part what we didn. this is the same type of dynamic. you are seeing people get out in the street and looking for

leadership. they are not going out in the street because people told them to go out into the street they are not going into t street because someone created an organization that had a nice website and was pushing back against an unpopular congress. this was a populist revolt in the clear sense of the word. without organization -- obviously there will be some limitations, i will not even sit limitations. there will be some issues that the movement has to overcome, organization being one of them. it is very easy with a grass- roots movement to simply peter out. especially after an election.

this was an extraordinary set of circumstances. you had an extraordinary economic upheaval. a congress that absolutely refuse to listen to the people that sent them to washington. in such an arrogant manner that i am not sure that even has a parallel. it was an incredibly arrogant congress. at the same time you had this encroaching regulation that was being part of that arrogance. all of those things tend to motivate people into action. now what you have is a republican congress, at least a republican house, that will be ble to address some of the spending ises. hopefully as a consequence we will see economic improvement. hopefully we will see a reduction in the regulatory environment. the question is, how much success will it take to take the steam out of the tea party

movement, if you can? success may be the big issue here. let's say the republicans get into congress and do not do what they pmised, do not slowed down the regulatory expansn, spending the -- i do not think there is much of a chance of that with the people we elected. john painteboehner will force ud alona stand-alone issue on whatl be the debt load. it will be very easy for the tea party to maintain momentum, but also grow momentum. once again you have more arrogance, people who are not willing to listen. the question for the tea party

in the next year will be as the tea party succeeds, how you keep the momentum moving and build on success and how you keep people like billie who has sunk an incredible amount of sacrifice and to this movement, how you keep folks in the movements and working and sacrificing like that as we succeed? i think that really is going to be the big question in the next couple of years. [applause] >> i want to thank you, mike, and everyone at heritage for inviting me to speak. i hope i have a little bit to add after that. just before the electn i gave a speech at the federalist society. the deal was for me to talk about some of the candidates i have met during covering the campaign.

i talk about what i thought was are really high-quality level of a number of republican candates. it was a vergood class. these were people who were successful in their private lives. they had never thought about running for office, many of them, until the spring and summer of 2009 when they watched barack obama and the democratic leadership in congress to enact one enormous government initiative after another. they each came around to the idea of running and they aspired to be citizen-legislators. they did not want to be professional politicians. it was a touching story that i told, except the three guys that i've focused on all lost -- that i focused on all lost. rob steele who ran a good race against john dingell in michigan. the last was a man named john

dennis who challenged nancy pelosi. after i did the speech i went back out and did the final trip for the campaign and went to illinois, wisconsin, and ended up in nevada. i think the most impressive person i saw during that trip was a man named ron johnson, the senator elected from wisconsin. very happy in his life as ceo of a plastics manufacturing company. never thought of our running for anything. is appalled by what happens in the first months of 2009 and invited to speak at a tea party rally in oshkosh where he lives. after he speaks people come up to them and ask them why don't you run? he began to think about it. after a lot of thought he gets

in the race and runs on an admirably simple platform. everywhere he goes he says i only had two things in my platform, i nt to repeal obama care and reduce the size and scope of the federal government. obviously he will have to do other things when he gets here, but was an admirably simple platform he is a very serious guy and is going to do what he said he is ing to do. i would expect that he will devote a lot of his energies to repealing obama care. the question would be what would be the tea party's role in policing ron johnson? the bigger question is a are all of the republican candidates going to be that way?

the one thing we heard the most was we have learned our lesson. we really have learned our lesson. we're so sorry we strayed from conservative ways, but if you elect us again, we probably will not do it again. -- we promised we will not do it again. i give them some credit for that. i think some of them have learned their lesson. it seems to me they have gone about their business in a pretty sober way. i think the question for the tea party is the future of the party is in the hands of the congress. what if republicans really have learned their lessons? what if they've performed admirably over the next -- they perform admirably over the next two years?

try to bring federal stimulus back to pre-tarp budgets? i tink if that happens, a lot of the passion with saul and te saw in the tea party rallies will dissipate. i think their actions will be seriously constrained by an engetic house of representives, if that is what the republican leadership of the house chooses to do. i suspect that if republicans perform well, we will see a dissipation of the energy that took place, which will be compounded by the beginnings of a 2012 presidential race. there is no clear, single person that every tea partier would

get behind. i think it will disappoindissipe of the energy as well. and there are born to be performance monitors. they will keep their eye on everyone. i suspect that will take place, but i think you may have a situation where the success of the tea party creates a little dissipation and their energy. thanks. [applause] >> now we can go to some questions. i thought i would srt off by asking billie, in terms of expectations, how do you think the two-parea party support woud define congress and the next few years? where would they set the bar?

>> we certainly want them to look at the health care bill. we want to see that actually take place. we want to see limited government. we do not want them intruding into our lives. we want our taxes to be less than what they are and what they're going to be. we want to see them do the things they said they were going to do. and we want them to fix the mess we're in financially. we are in a pickle. there is an article that i wanted to ad. we have passed a milestone that is negative beyond the pale. the u.s. now has exceeded this level. they have work to do. we are scared out there in america, and we want this congress to fix this mess.

we will see if they are successful if they can fix that. >> questions from the audience. yes, sir. everyone identified themselves. >> [inaudible] if you look at the last 100 years of government, it is hard to argue that congress alone can't solve the problem, because we have periods where conservatives may be in charge and where liberals are in charge. where is this tea party movement on the the idea of constitutional reform? this is a question for anybody. here do think the people are on the idea that we need a

constitutional reform if we are going to permit -- permanently limit the idea of fiscal responsibility? >> balance the budget is a big deal in the tea party movement. and we want to go back to our constitutionaloundation. the big government is not working for us out there. we want to go back to where we used to be at some point in our history. you know more than we do. we're not exports. but we know it has to go back to wehrwhere it was. >> i do not necessarily think you have of a balanced budget amendment to have a balanced budget. the problem is congress. congress writes the budget. they are responsible for writing

the budget. they are not going to balance the budget or lower debt just because there is a constitutional amendment to balance it out. it will just keep raising taxes. it is more incumbent on american voters to send people to congress that will spend less. he raised some very good questions, because a lot of the spending right now is automatically triggered. a key part of this will have to be entitlement reform. we will have to fix or replace social security and medicare. until you do those things, i am not sure a balanced budget amendment is going to address the actual problem. you can balance the budget and still exploit it. >> i think if you did a poll of supporters, they would favor a balanced budget amendment. i think that they would be happy just to see significant progress

in this area, because if you talk about some hazy, lovely time in the past where things were better 2007 might be a place to start. in 2010 that total federal expenditures are 3.7 trillion dollars. prior to 2007 the glut may be 100 billion per year. they go up maybe 100 billion per year. if i could say one thing in semi-defense of republicans, if the economic conditions that pre-date tarp and stimulus of existed, i doubt many of them would have very passionate about being tea parties. -- tea partiers.

the federal deficit is $160 billion. thin were not nearly as bad. that is why i think the republicans got all lot of mileage by saying if we can just go back to 2008 spending levels. balancing the budget is certainly of gold, but making it better is probably something that would really satisfy most two-parea party activists. to>> you both talk about success dissipating in the movement. i thought opposite. i think that tea party members usually look -- term. -- usually look long-term.

i was wondering if success would help create the long-term of more conservative-leaning of the republican rty if ty could do some of the stuff you just talked about. >> first of all, there are zillions of ways for republicans to fail, some of which we do not even know about. [laughter] i was actually serious. if they fail to reduce spending, in other words, if they keep to their ways, and like i said, their old ways are not nearly as bad, if they keep to those ways, i think the tea party -- there is a serious decision to make. there are other issues that the

tea party is much less clear about. obviously the preside conducts foreign policy, but if there is an enormous foreign policy issue that arises in the next couple of years, what is the tea party's position? what is the tea party's position on afghanistan right now? they have been extremely focused on budget, and not as much on the entire spectrum of issues that face goverent leaders. >> i want to disree a little bit with that. and people tend to think of the tea party as focus on fiscal issues. that is really what brought peop together. but because of my background and leadership i always found out that there will be one thing -- how many of you are in relationships? right, and when you are in a

fight with somebody in a relationship, it always starts with a surface issue. what you have to do is dig deep to find out the real issue, the one we do not want to talk about. that is what happened with the tea party movement. we started with the monetary issue, but the more we work together, the more we found out it was a deeper issue in our country. the deeper issues we have in our ountry is one word, and it is corruption. that is it. we have been out there working, we have been out there doing our job and sending our money to washington, and the political class rrupted our money. that is the issue that is going on in this country. to>> the issues you're talking about, dustin, armonk-tee long-m issues.

repealing obama care is not something will happen in the next congress because it cannot happen. when she is talking about with corruption can also be talked about in terms of trust. the reason you had depth tea the tea party erupts because of trust. good start counting. i think that is something that we need to make sure we acknowledge. if you have republican congress that starts working on rolling back obama care, serious entitlement reform, serious structural changes to the budget, including the budget process, i think that is a good start and people will reward them for that. >> our country was founded on a good start.

it started with a tax on tea, but the reality was taking our freedom from us. that is the same exact thing that is happening in our country again. >> [unintelligible] my question is it is very easy to win an election -- >> really? [laughter] >> ross perot did this 15 or 20 years ago. newt gingrich did this 12 years ago. the point you are trying to make is many organizations in washington who are fighting for reform but did not happen. the people that are reflected in congress --[inaudible] i am from pakistan. we have like 50%.

here it is very different. you did not have thatype of corruption. my question is, i am republican. one person said we should defeat a congressman because he is muslim. if this is the substance of the party -- >> it is not the substance of the pty. at the start represent the tea party -- it does not represent the tea party movement in america. if somebody said that, shame on them. [applause] >> jeff fox were the, you know what you are a republican when you threaten the life of j

demint. i wanted to get the panel's call on the conventional wisdom in the establishment circles that the two-parea party cost the republicans the majority in the sete. >> they would of had to completely run the table to win. it was theoretically possible. i do not think it was realistically possible. i think what you had was the tea party. a former senator explained this to me, and i think he is right. you had existing candites and existing politicians who latched onto the tea party because they thought it could get them support that they cannot have. christine o'donnell had run to for office before.

neither was a good candidates. ron johnson is a more pure tea party candidates in the fact that he had never thought about running and that is because he saw the energy and concern th he began to think about it. to me, candidates quality mattered more than anything. there were a couple of races that republicans may be could have picked up that ey did not, but if you look a nevada, for example, i was out there and i got the sense that angle was going to win by a tiny amount, and that was wrong. if you look at the three finalists, i do not think any of them would have been a great candidate, nor would they have been carriharry reid.

>> the gop never offers poor- quality candidates. and [laughter] got that stuck in my throat. sorry. billie knows that better than anybody. athe whole establishment got behind charlie crist. he was a terrle candidates. there will always be candidates to fall short. -- who fall short. just to give you a perspective on the actual idea what happened, in 1974 after wargate, when the republican party had to go to a midterm election three months after their president had to resign on national television and then gerald ford pardoned him after that, the democrats picked up 49 seats in the house and three seats in the sene. granted they were the majority.

this was a fairly-monumental win. you can go to any election and say that there were poor candidates in good candidates and that election cycle, and i think when you take a look at the totality of what happened on tuesday, you cannot walk away saying somehow the tea party costs as sometng. you can quibble about nevada or delaware, but with although tea out the tea party we would not be having this discussion. >> i would like to save the gop cost us some races. -- i would like to say the gop cost the summary says. [laughter] iad to goome and tell my dad that. i thought he would throw me out

of the house. i supported republicans my entire life, but i am a tea party person now. there were many states where we heard the stories. we talked. it there were some -- there were some goper's that would not get behind the party. you do not want to make hazmat and florida. when mama ain't happy, ain't no bodbdyody happy. they could have taken more seats had to work with the tea party and the local races. >> think other countries are

looking very rigid were very interested with what will happen in congress. -- i think other countries are very interested with what will happen in congress. you give the long list of guidelines. had there been any discussions on the ground about the issue of dissipation, whether you can keep t momentum going? also, the relationship with the gop going forward. what about 2012, the presidential race -- have there been any discussions on the ground about this? to go where it after the election that everyone might go away. -- >> we were read after the election that everyone might go away. but we all have our individual sites and we are all reporting people are still joining. we're still steer.

-- here. >> your relationship with the gop going forward. >> we love the gop. it will be one of cooperation and working with them we are here. if they do not call us, we will call them. we have people better already starting to get out there in america. we have that all kinds ohad alld teams reaching out to us. we're waiting to see who the candidates are. we will be part of the 2012 election. >> there has been a lot of analysis and talk about the ability of the tea party candidates who are now in congress to govern, and a lot of

analysts are saying we're just looking at gdlock. what is your take on this two- ea party block in congress? >> i did many of them would be gridlock as progress. [laughter] a lot of the platform was negative. it was to repeal obama care and stop doing what the administration had been doing. they certainly believe if they can get a handle on spending, make sure tax cuts are extended that they can make a difference and bring around jobs. we will see what happens on that score. i sthink if they see

leadership working hard and passing things in keeping up with issues, if not all of them get through the senate, they will understand that. they understand the way the system works. the question is will house republicans be working hard on their issues? >> if you go to heritage.org you will find a checklist that will hopefully guide the next congress. it involves appealing -- repealing obama care, and reining in government, mostly on the regulatory side. you can go to heritage.org to see the details. >> all three of you have mentioned that in order to have a niche of reform, we need to

cut back on entitlements. if they are the motivation, the courage, and the desire to go into that fight to cut social security, medicare, and all of those programs? >> yes, and we have had discussions about that, because we know it is a problem. again, the american people are smart, and the tea party members are smart. we know we cannot do away with spending without looking at the entitlement programs. the word we do not like is to say that social security is entitlement. people are sick that, and it want that changed. they paid into a system that was set up by this gornment, again, sort of like this health care. it was not entitlement. the problem is corruption happened and it did not do with the money what they were pposed to do with the money. we are willing to work on that issue, but we're not willing to

give it all up because they screwed it up. does that make sense? when it comes to entitlements for people that are not willing to work, absolutely we're willing to talk about that as well. there are a lot of good people that can get to work, but they are on the dole of the government, and we cannot have that. we're willing to negotiate. we're going to take care of the people that paid into the system. i have an 85-year-old mother in law th paid into the system and she will get out what she is entitled to. she is willing to the of a little, and not everything for people who are uilling to work. -- she is willing to give up a little, but not everything for people who are unwilling to work. >> medicare is an utter disaster just waiting to happen. adding obama care to it made it

even worse. you cannot get around that. it will be a measure of the seriouess of the people we just sent to washington whether or not they will address that. people like paul ryan who are willing to address it in stark realistic terms. people were willing to talk about what you actually need to do to restructure the system, otherwise it will-- go to heritage.org for the list -- but otherwise it will eat up trillions and trillions of dollars. everyone knows that. that was not sort of wisdom i got off the internet. every sile person in this town knows that precisely. whether they're willing to do something about it or not

will be a function of people holding them accountable. >> there was a debate as they drafted their pledge to americans about what to include about entitlement spending. it did not end up being . my guess is you will not see any serious action on entitlement reform. >> we have time for one last estion, and we will go to the very back. >> a question about 2012, the presidential candidates. will the gop and tea party candidates be behind the same candidates? >> i cannot speak to that. it depends on who the gop gives us. >> i agree. it depends on the candidates. i think there will be a number of interesting candidates, that

we've seen before. i think you will see fresh faces come out. >> [inaudible] [laughter] >> i will ask two questions, who do like in the 2012 field -- who do you like in the 2012 field? . . >> please join me in a warm round of applause for our panelists. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> tomorrow, thea lee of the nfl-ceo, will talk about come -- of the afl-cio, will talk about companies that send jobs overseas. "washington journal" is every morning at 7:00 a.m., here on c- span. later, a discussion of the role of money in campaign politics. it is hosted by the group common

cause. live coverage begins at 10:00 a.m. eastern. with most election results final preparinginners to govern, use the c-span library to see what the candidates said on at the campaign trail. it is washington your way. >> witnesses testified that deepwater horizon workers were pressured to complete work on the well leading up to the april 20th explosion and oil spill. the commission on the oil spill is next. we will hear from energy company executives. >> good morning, everybody, and welcome to day two of this, the fifth ny of the national commission on the bp deepwater

horizon oil spill and offshore drilling. i'm hereby calling this meeting to order. my name is chris smith and 90 designated federal official for this commission. i'm also the deputy assistant secretary at the united states department of energy. i will be guiding us through a busy day of panel today. before we proceed i would like to familiarize everybody with a safety procedures. in case of emergency or fire, you will see the exits to my left, to your right. please proceedut to the left that up the escalators come and go be a security personnel that will escort you out to the street. so that's the procedure in case of emergency. we would also like to ask everybody to turn your blackberries, cell phones to vibrate or silent. the president astonished this bipartisan commission to examine the root causes of the bp deepwater oil disaster, and provide recommendations on how we can prevent future accidents offshore and mitigate their impact, should they occur.

this committee is conducting its work, which has a high standard for and transparency. and as such today's hearing will be held here in this public forum and broadcast live via video feed. beforehand, -- beforehand of the event over i would like to provide a quick summary of day's agenda. this morng we'll be hearing from a panel of experts on oil well drilling and operations, featuring panelists from by you petrophysics, shell energy resources, seldovia marine services and louisiana state university. we wl break folunch at 12:30, and at 1:00 we will reconvene with two panels on regulations featuring panelists from the pure of osha management regulation and enforcement, followed by a panel on industry safer -- safety culture featuring palis from the shell oil company and from exxon mobil. starting at 4:00 we'll be

hearing wrapup comments from the commission's chief counsel, mr. fred bartlit. and a senior science engineering advisor, richard sears. following closing remarks are to co-chairs, there will be public comments made from 5:00 to 5:30. in addition, any member of the blic who is pushing to make a public comment to this commission may do so in writing via the committee's website, which is www.oilspillcommission.gov. again, that is www.oilspillcommission.gov. and at this point i would like to end the floor over to our to go chairman, co-chairman, senator bob graham and the honorable william reilly. >> thank you, chris. mr. chairman. >> good morning. presentations and examinations yesterday uncovered a suite of

bad decisions. failed cement tests, premature removal of blood under balanng the well, a negative pressure test that failed but was judged as a success. apparent inattention, distraction, or misreading of a key indicator that gas was rising toward the rig. our investigator team did not ascribe motive to any those decisions, and reported that they found no evidence th those flawed decisions were made to save money. they didn't rule out cost, just said they were prepared to attribute mercenary motives to man who made, who cannot speak for themselves, because they are not alive. but the story hey told is ghastly. one bad call after another. whatever else we learned and saw yesterday is emphatically not the culture of safety on that

rig. i referred to a culture of complacency yesterday, and speaking for myself, all three companies we heard from displayed it. and to me, the fact that each company is responsible for one or more each courageously bad decisions, we are closing in on answer to the question i posed at the outset of yesterday's hearing, and that is, whether the horizon macondo disaster was a unique event, the result of some special challenges, and particular circumstances, or indicates something larger, a systemic problem in the oil and gas industry. bp, halliburton, and transocean are major respected companies operating throughout the gulf. and the evidence is that they are indeed of top to bottom

reform. we are aware of what appeared to be a rushed to completion of the macondo well, and one must ask, where the drive came from that made people determined that the couldn't wait for sound cement, or for the right centralizers. we know as safety culture must be led from the top, and permeate company. the commission is looking beyond e rig, and not just to yesterday in what haened on april 20, but to the months and years that preceded it. bp has been notoriously challenged on matters of process and safety. other companies may not be so challenged. and today we will hear from to whose reputation for safety and environmental protection are exemplary. they will tell us, i believe,

that safety and efficiency reinforce one another, and that their safety cultures have contributed to their profitability. both companies and their safety and risk management systems have received extensive examination by the commission staff in meetings i have attended. they are very impressive. nevertheless, their rigs have been shut down in the gulf ths summer, just like those other companies because of the performance to which they had not been implicated, the performance of bp transocean and halliburton. this has led us and the commission to learn from the nuclear industry, which has an institute tha promotes best practices, reinforces government regulation, and police is the laggards. so if yesterday we heard from

the laggards, if yesterday we looked back, today we hope to learn from the leaders, and to look forward. and to look at companies which have learned from their own crises and disasters, and rose to become standard barriers. thank you. >> thank you, mr. reilly. as co-chairman reilly has just said, today we will be focusing on the future, not the past. at the future is always influenced by our past experiences, and so will we be. yesterday, we had a very detailed description of the well drilling operation, as well as the details of intercompany decisions and how those decisions played out and

contributed to the ultimate disaster. there was in the news reports of yesterday's hearing, a statement that i think was stated in too broad a term. the statement was that there was evidence that they were conscious decisions made to trade off safetyfor profit. i agree with that statement as it relates to those things that occurred on the oil well read itself. those men whose lives were going to be in the safety risk equation, there is serving no evidence that they degraded their own mortality. i think the larger question is the one that co-chairman rlly has just focused on, and that is the reality is thre we a series of almost inexplicable

failures in the hours leading up to the disaster. they were a series of actions which are difficult to explain in this environment, to just select one, the fact that there re three different temporary abandonment plans adopted in the week before final execution of the plan is illustrative of the fact that the lack of consistent planning for safety. the problem here is that there was a culture that did not promote safety, and that culture failed. leaders did not take serious risks, risks serious enough. did not identify risks that proved to be fatal. today, we will be looking at the

same issues as yesterday, but from a fferent perspective, including the perspective of somebody, tho within the industry with the best reputations for an effective safety culture. i hope that in the course of this, that we might have some new perspectives on what happened at macondo, what were the motivations that led to various decisions be made. i might say one specific issue that i'm going to be interested in, is why was the date april 20 so, such a committed date? and there were multiple reasons why it would have seemed prudent to have delayed the final actions until various safety measures, some of which were within a few hours of completi

completion, could have been available for consideration as to the wisdom of moving forward to the next step. that is just one of the questions which i hope we will get some dditional intelligence upon today. with that, we will turn to the first component of our program today, which is panel to comment experts on oil well drilling and operations. and for this presentation, mr. e. c. thomas, consulting petrophysicist and owner of bayou petrophysics. mr. thomas.

also, mr. steve lewis of advanced drilling technology implementation engineer, seldovia marine srvices. mr. cichon rogers smith, associate professor, department of petroleum engineer at lsu, and darryl bourgoyne director of louisiana director louisiana state university petroleum engineering research and technology transfer laboratory. mr. thomas? >> yes, sir. >> do you have an opening statement? >> commission, if i could for a moment. >> panel members here this morning, we also have charlie williams of the shell company, who will be answering questions

today. is to give you a sense of what the format will be, this morning we're going to hear from five different deepwater and non-deepwater drilling experts in two separate panels. on various subjects relating to well designed and deepwater drilling issues, generally, as well as macondo and the blowt. we will be splitting the panels into too. one in the first more recession which includes the individuals, commissioner graham has just introduced. and we will then have a second panel and a second morning session. while each of the expert is focuseon a particular topic, we will be asking them to comment on other topics of various points during the presentation. and unlike yesterday, we expect the commissioners, if you have questions of any of these experts, to please go ahead and ask those questns. just to orient the commission, the topics for discussion today

for the first morning session will be deepwater geology and formation issues at macondo. mr. thomas will be speaking principally to that issue. well design, generally, not specifically at macondo. mr. williams i believe ill be speaking to that issue. and then finally, drilling operations and implementation of well design. not only generally, but at macondo, mr. lewis will be speaking to the issue. in the second morning session, just to ive you a preview, we will have a discussion, once again, with mr. lewis, on pre-cementing issues that you saw some of yesterday. we'll also be speaking with some other experts on the negative pressure test, tporary abandonment procedures. and, finally, we will be speaking with one of the experts on kit detection and response, both generally and at the macondo well.

>> i will begin the process by asking the question of the experts that we have. we can switch over to my presentation here. again, we have dr. e.c. thomas, consulting petrophysicist. yesterday to experience in the field. charlie williams, chief scientist for well engineering and production technology for shell, and steve lewis, four years of field experience in drilling operations in areas places that i want to start by talking a little bit about deepwater and what makes deepwater different, special, with mr. thomas. mr. thomas, what do you do for a living? >> i may consulting petrophysicist. >> and can you tell us all little bit about your experience in the oil industry? >> i worked as a research physicist, then management of

that department, then i went to new orleans to be a field engineer and then i served as the leaer of those sections, went ahead office training and taught petrophysics in both beginning, intermediate and advanced sessions. and then went to head office to be a technical advisor to the vice president of technology. >> is your experience including deepwater experienced? >> yes, it does. >> i'm going to put up against the slide that we should yesterday, orienting people to what deepwateright actually mean. so do you agre generally with this picture of where the boundary of deepwater would be in the gulf? i'm not asking you to be sure about every specific, but is that the accepted generally accepted boundary line? >> it is generally accepted at

1000 feet of water. >> wended industries are moving to drill wells in deepwater? >> in the 1980s. >> we heard me suggestion in the media and elsewhere that one of the reasons that industry went to deepwater is because of concerns raised by environmentalist in shallow water. is that too in your the? >> of saluting not. >> why did the industry go to deepwater? >> to put itsimply, that's where the oil was. unique geological opportunities there. >> speakg of those unique geological opportunities, i'm wondering there's anything that comes a tent with his opportunities, any challenges you face in deepwater? >> absolutely. the good thing is that we have high velocity and high permeability, but that carries with it then rocks that are weaker, and that we end up with a much narrowr margin beteen

the pore pressure gradient and the fracture gradient of those rocks. >> so am i right though that th narrow pore pressure in fracture gradient that you're talking about is some of the same, the same fracture that makes it so attractive? >> it crtainly provides the ability to have high reservoir energy, and, therefore, high flow rates from the wells. >> can you give me a sense, in order of magnitude level, of the different production from a deepwater well to a well inside that line? >> roughly is in the order of magnitude, say, from 2000 barrels a day, t 20,000 barrels a day. >> i'm going to move to a slide about the gradient at macondo. have you reviewed this chart or anything about the pore pressure

at macondo? >> yes, i have. >> when you start drilling a well like macondo, do you know ahead of time with the pore pressure and fracture gradient will look like? >> we can only estimate it. >> so the numbers then change over the course of drilling the wes? >> yes, they do. >> how does that affect your operations at the wells? >> we continually have to monitor all the signs that give us the clues as to well, we're going to be exceedingly fracture gradient, or not, being over pressured. and we have to stay within that window. >> and how there was the window in numerical terms at macondo? >> by the time they were at their final point, there was about 1.8 or 1.7 pounds per gallon muddy equivalent. >> and that's the difference between the pore pressure and the fracture gradient, am i

correct? >> that's correct. >> i don't have -- many people who don't have a sense of whether that is a small number. is that a small number to you? >> it is a small number to make. >> what's the rule of some for what you would like to have? >> will come in general we would like it to be as large as mother nature can make it, but if we can, we are happ to have at least two pounds per gallon separating the two. >> so what is having a 1.8 pounds per gallon differential mean to you in terms of the complexity of the situation you were dealing with? >> basically, they were getting very close to not being able to drill any further at all. >> we discussed an e-mail yesterday from mr. bobby bowden act at bp what he talked about a lot of these explaining the partners at the well, the addition to call total depth early and it was this it was this wanted as a drilling a hate any further would unnecessarily jeopardized the well bore. what does that mean to you?

>> in this case i think he was referring to the fact that they had planned to make this well a producer, therefore, if they wanted to go any further, to their stated td, then they would have to set a lineup that if they set a headliner at this stage, then they would not have been able to have had the well bore size to make the pursuit they wish to have. >> another issue we talked about yesterday was lost returns. on april 3, at this well. are lost returns an indication of a narrow pore pressure and fracture gradient? >> it is one, yes. >> and how did they respond to the loss return problem he at macondo?

>> as you can see, when we say lost returns, we are talking about that reservoir is taking mud, and to offset that, we inject materials that try to plug that up. and not only do they use regular lost circulation materials, but they use some very advanced polymer materials to try to plug it. >> and is that a typical approach or appropriate approach? >> sure. yes, it is. >> does it get you back to the original state before you had a fracture or a loss return? >> generly, no. once you have parted the greens, then it makes it easier to do t the second time. >> so would it be fair to say then that somethg like a band-aid, you doing this but your never going to be quite where you were before? >> yes, that's a good analogy. >> but nevertheless, having that

fix in place, is that sufficient to allow you to continue to drill? >> yes, it is. >> do you have an opinion on whether the well was actually stable after they finished drilling a total depth, at least in your review of the materials? >> in my opinion, it was table. they had managed to stay within that window. at td, they had a stable well for four days. and made several trips in between to remove debris from the well come and they did that without any incident. >> so when you say the well was stable at this point, ds it mean that th have solved their problem and that from then on they would've been okay? >> well, they have solved that problem of getting down, but they could never ignore the fact that they are and a geological environment that had a very narrow pore pressure fracture gradient window.

>> and does that mean, for exampl i think about their process including cementing and running casings, those are issues they would have to -- >> they would be paramount. >> and how does having a narrow pore pressure fracture gradient window a fact that cement job? >> they would have to pay particular attention that they were not exceed the fracture gradient due to the weight of the cement. >> and is that why they chose come in your view, to use lighter foam cement in this job? >> i believe that's so. spent and you heard me describe yesterday that cement job based on e-mails and reports of bp, a complex cement job, and a complex well bore. haveyou evaluated in your professial experience wells that were as complicated as macondo? >> yes, i have. >> where they drilled safely? >> yes, they were. >> and what is it that made macondo complicated that was similar to those of the wells?

>> just repeat myself, it is really the very narrow margin between pore pressure and fracture gradient, and the very high deliverability of these blocks. so it's a unique geological environment really spent and on the other wells were describing that were drilled safely, that were drilled safely, they were able to in there'll, they were able to negotiate these narrow pore pressure and fracture gradient concerns? >> yes. if you pay attention to the drilling you can certainly do that. >> if people want to go to the gulf of mexico to get more oil, where do they have to go? >> they're going to have to go to deepwater. >> is that becau of the podunk issue that you described earlier that they produce more? >> that's just about the only filled acreage that is left. >> is inevitable when you go to deepwater you will have to face these narrow pore pressure and fracture gradient concerned. >> yes is, bcause othe geological environment that has put the rocks in that particular

location. >> given that environment, does that necessarily drive you to more complicat well design wells? >> yes, it does. >> thank you, mr. thomas. i want to turn out to mr. charlie williams from shell. let me first ask charlie, what do you do for a living for sean? >> on the chief scientist for well engineering and production technology, and i'm a technical consultant and technical advise her and advise on different major projects, and also do speal technical projects and i also advise. >> at shell, do you guys also a similar view about the relative productivity at deepwater wells versus shelf wells? >> yes. >> do you consider deepwater to be a more challenging drilling environment than shallow water? >> in general. i mean, you can have challenging wells in either environment, but in general, you know, there's a

unique challenges in deepwater. >> would you agree with mr. thomas' view that narrow pore pressure and fracture gradient is one of the challenges of? >> that's correct. >> what are some of the other challenges deepwater proposes? >> there's many, but certainly one aspect is simply because it's in deepwater. so you have currents, you have water depth, you have conditions you have to design for big so you can do up with these dynamically positioned anchors or rigs, and it's a challenge to have the technology to do all of that correctly. it's a challenge because you have this long riser. you need to i think you need to deepwater. anand in most wells businesses d that we talk about that is so important to have in the well and maintained correctly, now exist not only in the well but in the riser. so managing, you know, but in the riser and managing that total system, total circulated system is different simply

because you have 10,000 feet, or 2000 feet of riser to contend with. and then, of course, you have your blowout preventers on the ocean floor, quite a depth down. they have to do all of the work on those remotely with rovs. you have to, you know, if you want to do maintenance or repairs, you have to pull those back out of the water over a considerable distance in the water depth. there are many challenges like that that aren't of course based on a shallow water or on short. >> and doesn't show therefore use different size teams ago to deepwater? >> yes. >> how many people typically professionals working to deepwater will? >> so typically you have a three drilling engineers. by the lead going into, to drilling engineers. you have the people that are going to be operationally on the rig, so usually six operations staff that are involved in planning the wells also. and you have any order of six to

10 subsurface people. so that would be better physical people, reservoir engineers, geophysicist, geologist and all the people that look at what the prospect looks like and actually help determine the location of where you're going to do. then you will be part-time people, technical people to come in as well. >> in a typical team with the operating staff, you know, would bes much as 20 answered at least 15. >> and how long does it take this kind of a team to put together a plan to drill a deepwater will? >> it depends on what you're doing an exploration well where you have to do, you don't know as much about the environment and you have to determine those things in advance versus a development well where you already know a lot about the geology. but to answer the question, it's anywhere from eight months to as

much as, you know, i hear, depending on the coplexity. >> during the course of that time is the norm of the design would change? >> yes. >> and how does shell usually or how is your best practice the process of change those designs during the course of the process of? >> is a defined collaborative process. as i mentioned the team is large, and so we bring in all these technical groups, including the operational people that will be involved in drilling the well. and they work, start out on what's the location of the wilner going to drill and start looking at all the complexities and challenges that we have to deal with in various designs that they really hold that design over is period we talked about come and see if you could change the position of th well, or yu could change other aspects of the design, and would it be more optimum and could be bettereet the challenges. and that involves over that whole period of time, and then

at different stages in their we had even bigger reviews. and we will have a review, you know, recently i was we involved in a review. we brought in the entire contract rig crew, and ty also looked at the well design. and so we looked for the maximum collaborative cooperative environment. at the end of that process when we had chosen the design, then it's approvd, and then it becomes the design that was used to execute the well. >> so you do involve the rig crew then at least sometime in the design process? >>orrect. >> how about the well site leaders? >> correct. >> and when you make changes, i assume there are some kind of changes that don't require this kind of process? >> yes. justice dr. thomas mentioned, as you're executing the well there are certain things you don't know exactly, for instance, the good predicting pore pressure but it may e different as you

drill. and so as these things occur, you know, there are certain operational things that you do, like might change the mud weight two-tenths of a pound, go up or down, and there are certain routine operational changes. those made b the shell drill site leader, makes those kinds of operational changes that if we make a change to the design bas of the, what we call the prognosis, that goes through the same approval process as a proven the original pron. agosta the same kind of consultation, back with the people in the office that did the original approval. and that people in our we note operating centers are also consulted when changes are made. and any particular, if it's changes that involve changing the head, so i guess we go back into these approvals the same way you approved the original design. >> would change the procedures for temperate abandonment process fall on one side or the other of the spectrum of major

and minor? >> well, it would be particularly read doing those kinds of changes because it involves establishing barriers and one of our key design philosophies is maintaining the barriers and will. that includes the various they going to the temporary abandonment. >> i want to put up a slide here that i think y gave me. and move the discussion over a little bit to to the trapped annuals issue i described yesterday. do we have the laser pointer somewhere? you can always count her chief scientist to have a laser pointer. [laughter] it's a little dim but i think it will work for purposes of illustrating.

the well we have, the well drawn we had which was very simple by drawing, doesn't show a trap and is in a deepwater drilling? >> that whitespace that is is above the cement and between the two cross-sections of white. >> so it's that white section in there, and this is theinside of the well bore come and then the space outside between inside casing and the next for the outside casing, is that right? >> yes. >> thank you. so it's the space writer, correct? and here we are illustrated this is the well head, here is the mud line, so this would be the ocean floor here, ad this is the formation into which we are drilling. >> and the important feature is it is sealed at the bottom and sealed at the top. >> so we discussed a little bit yesterday the prospect of heeding this space up, and can you describe briefly what makes that space heat up when you're producing a deepwater well like this?

>> yes. the temperature in the zone you are producing, there's a temperature gradient that increases with depth like the pressure gradient. so that the heat in his own you're producing the temperature is hard. when you put the well of production, it's bringing up this hot production relatively high production. and then the heat is transferred from that hot production into all of these two dealers that are on the outside of the well. and i heats up this space along with everything else. >> so any get well because of whether it is in deep water, can have been annular pressure build up issued? >> correct. and what's unique to deepwater is your ability to control that pressure because of the seal th is in the well had housing. >> we talked a little yesterday, you may have seen about some of the methods for controlling this annular pressure build up. our burst discs one of those methods of?

>> correct. >> and what do they actually do functionally? >> the first disc, they took a whole in the casing. and in that the service desk and the thickness and shape of that disc is designed to failed passionate fellow at a certain pressure and to relieve the pressure to the next outer string. >> so it would be a whole functioning, in this casing has? >> yes. >> are there any drawbacks of using that kind of approach to managing any pressure build a? >> you know, there's advantages and disadvantages to all of the techniques. one of the complications with using first disc is that you are limited pressure in the casing is then limited to the burst discs. so can you have a higher pressure in that casing, then you know you delimited by the burst disc, not by the design rating in the casing which was higher than the burst disc.

>> and why might you want to have a higher pressure in that casing? >> you know, if you have certain kinds of problems on the well where you wanted to cirulate out, for instance, pressure that gotten in there and you want to circulate that out and re- kill the annuals or refill the annulus with the control fluid, you could be limited by what pressure the burst disc. >> so burst discs are one pressure -- methods. are there other methods of the with it as well? >> the other techniques involve a limiting amount of heat that is transferred. to one of the very common ones is to insulated two beings so the two being that goes inside this final casing would be insulated. and that would allow the heat to travel with the production and limit the heat transfer to this annulus and thus the pressure build up. another possibility is putting an insulating fluids into that limit e heat transfer, and also you can put in different

kinds of fluids and materials that have more compressibility than a liquid. >> in this space you should put in a compressible material? >> correct. >> going to a different issue, i wanted to talk about the choice between using long strings and liars in deep well. you often have to make that choice between using a line and a long string? >> yes, it's accommodation. we use both long strings, fighters a tie back. the choice is, like all the other design choices you make on the well, it depends upon many factors, but in particular it depends on the uniqueness and the unique charactistics of the particular well that you're designing for. and some of the considerations are things like how lng it would take you to run a long string versus a liner, compared to the condition of the well at the bottom of the hole, and

whether certain things occurred on the bottom hole ondition. you know, whether you have high confidence that you can get a lo string run all the way to the bottom of the whole, because you know, you have to install the this on the top of a long string and you want that specs are have to get all the way down to the bottom of the hole. >> you want to anger to be in the right place. and sometimes you want to be able to roll take -- rotate the price because of your decide that it's difficult to rotate a long string. string. to be easier to rotate a liner. >> what is that? >> it really turkey lies the cement and certain cases can make this a bit more because it essentially a version of mixing down home. >> so that sounds like it's an issue about cementing. are there other issues about cementing a long string versu cementing a line of?

>> the other key thing you look at in making this choice, and other geometry consideration because you surge that the cement down, you know, through whatever you're running the whole. if you run the long string or if you run the line it will go to your drill string and you lie when you circulate it. and just the size and spaces affects the pressures that you ciulate out. so you do look at that. but back to your question about the cement, if you have concerns that you might lose returned or partially lose returned string for cement job, the thing about a liner is that you can reestablish our barrier by putting a mechanical seen device or multiple mechanical sealing device on top of the letter. or squeeze will because we cementing which would be forcing cement down from the top of the liner. and this, the procedure is sometimes, in my opinion, more effective than perforating holes in the pipe which would be your other alternative.

even though it is done both ways. >> would you saving in general it's a situation where you have a tough cementing situation to the formation is easy to cement a line in than a long string? >> if you're concerned that you will lose returned or might lose returned when you're cementing, or running the liner, in my view, more straightforward on reestablishing the brriers. >> speaking of barrieri want to ask you about the barriers that use during temporary abandonment phase is of a well. in your view, when you temporary adntage and welcome what kind of barriers can you leave in place? what should you leave in place? >> well, typically in wells, typically in wells in deepwater, you know, our procedure would be to have a plug near the bottom. and when we say a plug, we normally set a mechanical plug

with cement. and we would put that close to the bottom of the well, in particular we might want to put that if we have a liner top, put that above the liner top. and then we would put another one that's at an intermediate depth, and they would always have one at the service. one of the intermediate depth would also have a mechanical device plus cement. the one at the surface would have a resin type plug. and also cement again. so it normally, you know, in our temperate abandonment feature, and for america procedures have 3.6 sometimes it may be as many as five logs depending on what you want to isolate. >> you have as many as five logs? >> a more typical with three. >> you spoke briefly, i want to inform the commissioners on this about the mechanical plug and the other partner can you explain the difference between those? >> i think people have seen in the diagra, about running a

packer or bridge plug. i think it is beeneferred to. these are not quite exactly the same, but for practical purposes it will be similar to what is caed a bridge plug. so it would be a device that has slips on that bite into the casing and hold it in place, and then has a metallic mandrel inside it, and it allows you to the cement below it and then you can close, there's an internal valve and you can put cement above it. >> doesn't rely on cement to achieve a barrier? >> no. you actually effectively have to, because you have a mechanical barrier also pressu seal in addition to the cement. >> doesn't make it easier to use the cement plug as well? >> yeah, it gives you a positive placement of your plug because you can put your top cement on top of this device, this mechanical device. so where it is placed, you know, you know exactly where it is placed in exactly the dimensions of it spent can you please

mechanical plugs using mod? >> yes. >> can you placed cement box in my? >> yes. >> do have a few where the cement plugs can be set in synthetic oil based logs? >> yes. >> is as good as putting them in sea water? >> you know, you have to worry about, you have to be concerned about spaces. it's done routinely in both. >> so to explain that, how do you in your view used a cement plug safely and since i -- synthetic oil based logs? >> you would want to have a space or between cement and the sense that it oil based mud to avoid the mixing. but it's routinely done on primary cementing and similarly, you can routinely do it when you place these plugs. common operation that successful. >> what's the advantage of leaving the mud in the well bore as a temporary?

>> well, when your temporary abandoning the well obviously it's never out of balance during this entire september and abandonment procedures. so you have, you leave that to wait much in there, all of these operations you do, the well is under control just by virtue of to kill weight mud in there? we've heard a lot, and i want to sort of move back to a given point that relates, you heard a lot yesterday, maybe did a lot yesterday about negative test procedures. do you consider a negative test procedures to be an important test to the well? >> i do. >> do you do it on every well before you had the temprate abandonment? >> no. >> no. what kind of wells do not do it on? >> well, you know, our common practice on a typical deepwater well where we drilled this single well with a floater, we do the temporary, you know, we do this temporary abandonment and then we leave the kill weight mud in the well and the

plugs in the well. we come back for the completion and drill out these plugs. and we do all of our displays and testing at that point in time. we test the plugs, but doing things like underballast testing, we do later in the completion face. so we do it full of the kill weight mud specs are you are leaving the well overbalanced in the temperate abandoningface, greg? >> correct. that's our design choice. >> if you are primary cement job fails in the kind of situation, at's the effect of having a primary cent job figure? >> if it happened or you're a temperate abandonment, the kill weight mud would keep the well under control. >> thanks, mr. williams. i'm going to move on now to mr. lewis and asking a few questions. mr. williams was kind of to come to us from shell to explain some tactical areas in which he is highly experienced, but he has not reviewed the details of the macondo well design of the

macondo process. mr. lewis, by contrast was asked to look at precisely some of those issues. mr. lewis, what materials relevant to the macondo well design have you reviewed? >> i have reviewed t complete sequence of drilling plans that re developed internally for this well, starting with the flange in 2009, before the marianas moved off of the well, continuing through the final plans for the temporary abandonment and the internal operations notes that were sent back and forth between the rig, and the office in town for those modifications. i' also reviewed the habitations or permit to go, for the applications for modifications that was abated to

the mms. and i have reviewed the bp incident reports, specically with emphasis on tir review of the casing design for the original well plan. did that because that is the best access to the design, basis of design information that i can find. i've also reviewed the daily drilling reports, but primarily in the ddr review, concentrated on the last months of the well, witspecial emphasis on the last two weeks. >> based on your view, d you feel familiar wit the process of the design of macondo well? >> i'm very familiar with the documentation of that design. i have some insight into the

process, because the organization that mr. williams here described is similar to many that i have functioned in, and the basic philosophy of design as a circular process where one comes up with an initial design, the value which the application of that design on the ovell objectives of the well, are consistent to the industry. so yes, i would say i have an understanding. >> and looking specifically at the design choices that they made, is it fair to say, would you agree with chaie wiliams i should say, that there are lots of in pressure built like a? >> yes, there are. >> and were burst disc one of the methods? >> yes. the dp design of this well includes worst disk. >> in your view what impact do burst discs have on the function of the well overall? >> as mr. williams indicated,

the first discs essentially be rate the pressure capacity of that string of casing. and if nothing goes wrong, that's not a problem. but if you find yourself in a scenario where you have an unexpected or suspected even ingress of pressure into that angelos, actually eithr annulus that piece of casing is exposed to, you then have to rethink all of your actions at the lower pressure rating at the burst disc as opposed to pressure rating of that string of casing. operationally, the burst discs aren't a problem, if nothing goes wrong. >> so good burst discs have an impact on the way that you contain wells if something does go wrong? >> absolutely. >> are you going with the of protective casing any deepwater well such as this been?

i believe i protective casing you're referring to what i call an intermediate casing, but yes, i understand that concept. and that basically is, that by design, your last string of casing before yr production casing would be a long string going from just above your production zone all the way back to your wellhead without liners hung in that string. >> what's the value of that protective casing? >> it gives you a more continuous pressure rating through that interval, and it eliminates the possibilities of failures at locations such as liner hangers. >> was there any education in your view that bp used a protective casing at macondo? >> no, and this design there was not what we would call a protective casing in that definition. >> you also heard, you heard

mr. williams described his practice of leaving wells overbalance when you temporary abandoned mine. having reviewed the progress of the macondo well, was bp planning to leave the well overbalanced? >> no, they were not. >> is there any downside to using the kill weight mud approach to overbalance a well as was described? >> there's a operational downside, no. there is a requirement for time and materials to accomplish that. >> is there any upside to leading a well underbalanced? >> in my mind, there's an extreme upside, in that you have the basic laws of physics then controlling that wl for you as opposed to a mechanical. you are either statically overbalanced and you never bring the well underbalanced that it cannot float. >> i asked if there any advantage of leaving the well under ballast that am i correct passionate.

[inaudible] >> no. none whatsoever. >> you also heard mr. williams described a number of plugs, mechanical and cement plugs he would typically use in a well, a deepwater well. how many plugs get bp -- bp used to use before it abandoned the wealth >> the design called for four. >> could have used more cement plugs in this will? >> yes, they could have. >> was that any opeational downside to adding mechanical plugs or cement plugs in this will? >> the only operational downside becomes once again, time and materials. and then time and materials required to remove those floats when one returns to complete the well. >> i want to move over to talk all of it about well design. when you in your practice first design a will, how much detail do you put into the original initial well design?

>> it's my thing that a well design needs to include as much detail as is technically as possible. the first thing one needs to define is what the well is going to accomplish. that tell you what e basic well should look like or whether it's an expression well or at production well. and in each element of that wealth needs to go through a complete design cycle, going into the next element with complete design cycle that goes back and checks the application of that design, both on the previous abortion and the future portn of the well. so what should be, into my experience, a pretty complete engineering process. >> when you place some unplanned events in the case of a well, how does that affect your design? >> that implies the necessity to go back and completely we evaluate the design, both the portion of the well that is

already been completed and what you had in mind for contingencies for compensating for those unplanned events. but you should go through that same design cycle of looking from top to bottom, and looking at the entire lifecycle of the well, and considering the implications of those decisions. >> are you suggesting if you haven't unplanned event and you have to do with a contingency, you are partially redesigned the well from scratch it's because you're redesigning the well from that point forward, but back checking against the previous design to make sure that those two are compatible. >> is having an unplanned event like lost returns for example, impose any, make any changes to e way you think the rig cre should be operating as well in the field of? >> and unplanned event should reinforce the level of vigilance onhe rig, and hopefully move people into hinking, looking

ahead, thinking about what the next steps in the procedure are going to be. and mking sure that they have the right equipment and the right personnel lined up to accomplish those steps. and making sure that they have the right equipment and the right personnel lined up to accomplish those steps. nosteps. and making sure that they have the right equipment and the right personnel lined up to accomplish those steps. no, rather than focusing you on solving that the media problem, should also broaden your scope of vision to looking towards the future of that well. u. . the immediate benefit is to guarantee the efficiency of the well. you also have to opportunity at

that point to bring in everyone else's eyes and see if, from the other aspects of their interest in the well, you have done anything that would compromise their efforts. >> how about operations logistically? >> operational logistics is half the -- of drilling well. by that, i mean, you have to have the right equipment and people there at the right time to do the job. unplanned events imply an immediate need to pre-evaluate your logistic in the structure. condo now, in yourview having reviewed the initial design of the macondo well, was it adequately detailed? >> the initial design was adequately detailed for an exploration well. >> and how about the later design you saw as they evoed? >> i felt that they were deficient in detail, especially

in light of the fact that by that point it had become fairly apart that this well was -- apparent that this well was going to be completed as a production well. >> and if you had additional detail, what would that have helped to do? >> it would have helped, i believe, focus both the field and theoffice staf on the difficult and almost marginal nature of what they were attempting to accomplish here, brought in a heightened level of vigilance, allowed for proper timing to mobilize equipment and materials and possibly allowed further discussion of options. >> and that further discussion you're talking about, you heard

mr. williams describe the process of involving the well site leaders and the rig crew in those design discussions. is that your view of how things should be done? >> absolutely. it's my feeling that the people executing that plan should understand the basis of design that it came from and be able to suggest and input modifications if from their perspective and experience they're appropriate. >> and, again, in your view the subsequent design that bp did for this well, they include the kind of detail that would have allowed people in the field to think about those assumptions. >> this i do not believe they did. >> you heard yesterday from some of the explanations thai gave that bp didn't run a numberf additional centralizers at one point because they believed or at least they ddn't or believed they didn't have the right kind of centralizers available. having reviewed the process of the design at this point, was there enough time after bp chose to use the tapered long string to get enough centralizers of the proper kind?

this >> if they had properly managed their materials acquisition process, yes, they had ti to do that. >> so is it fair say based on your comments about the value of design that the lack o centralizers couldave been the result of an inadequate design process? >> at least the result of inadequate communication about that design process, yes. >> you also heard me talk about the modeling of the cement design that was done and the decision not to rerun that model in the very last few days. is there any reason, in your view, not to rerun that model in the last few days before cementing the well? >> actually, in my view it's exactly the opposite. there's very many reasons to redo that design. >> now, in the last phase of the macondo well they were worried about the loss returns and the prsures in the bottom of the well, is that correct? >> that's absolutely true.

>> in terms of well design, what are the different ways that you can keel with those -- deal with those kinds of bottom hole pressures? this. >> there are basically three elements that you can manipulate to adjust bottom hole pressure, and those are the weight your fluids, the density of your fluids, the speed with which you pump those fluids which controls the frictional pressure that that's producing and then you can adjust the geometry of the well bore through your design. >> so did you see evidence that bp was thinking,ing at least, about some of those things when they dealt with the bottom hole pressures that they had at macoo? >> actually, there's evidence that they thought about all those things. >> is it -- adjusting one of those things can influence the other things? this. >> definitely. it will have influence on the other aspects. >> and what happens, your review of the redesign process, is it proper to evaluate all those

things at the same time? >> yes, absolutely. it's critical. this is an interdependent system. it's a machine, and if you change one cog in that machine, you have to consider whether or not it meshes with the others. >> and are there implications in the changing those cogs for the eventual value of the cement job at the bottom of the well? this. >> yes, there are. >> you describ, i think, an iterative design process here. i'm wondering if you think that design process also applies to the procedures that are ed to build the well. >> they should, yes. >> and in particular, how about temporary abandonment procedures? >> those definitely should be designed to the same degree of rigor. >> the, some of the slides that sean showed the commission yesterday discussed through different temporary abandonment procedures that were used at macondo, and those three changes, i think, were all made within a week or so of the blowout. in your view, is that a lot of changes to be making in the final week?

>> that's an unusual number of changes to make that close to the execution, a portion of a well that is, a, that critical and, b, been known to be a requirement for quite some time. >> so is there anything that would have prevented them from establishing the temporary abandonment procedures earlier in the life of the well? >> no, there's not. >> do you think it would have helped if they had thought about it earlier? >> it would have allowed people to give the matter more thought in a less time-sensitive environment, a i think that would have been beneficial. >> and more generally, what are some of the other things that you consider essential at the end of a well activity to make sure that the process goes smoothly? >> well, a well is, is actually a pressure vessel. the design function is to control and contain the fluids that we are attemptg to

extract, and in the process especially of a temporary abandoent, but in every aspect of the well's construction process containment is paramount. at the end of a well operation, there is, there are many things that need to be done in order to move forward, and there's also a natural human tendency to look towards the future operation and a tendency to lose focus on what we've just accomplished. it seems to me that at the end of a well it's even more important to maintain that vigilance and focus.

>> have you ever worked on a well where you felt the vigilance or focus tapered off the end of a well process? >> absolutely. >> is that just the way it works sometimes? >> it's the way it works sometimes, it's also an extremely variable thing. it can occur in any organization that i've been associated with on the basis of the flow of both bad individual well operation and the other wells that the organization is dealing with at the same time. >> but i take it from your earlier comments that yo would prefer a higher level of vigilance or at least a maintained high level of vigilance during those end-of-well procedures. >> yes, i would. >> what do you have todo with an organization to make sure you have that vigilance? >> you have to have, obviously, the resources in terms of

manpower available. you need those same resources when you're designing a well, but you have to have the commitment to maintaining the mental focus on, on what you're doing. you have to have the commitment to paying attention to the present time as opposed to worrying too much about the future. >> is there, in your view, sometimes a tendency for engineers to move on, think about the next job near the end of a well? >> yes, there is. it's a natural thing. >> mr. lewis, do you consider yourself an expert in if deepwater drilling? >> not really an expert in deepwater drilling. an expert in drilling generally, yes. >> have you drilled wells in deepwater? this. >> yes, i have. >> andave you followed at least the professional interest, the industry's move in the deepwater in the gulf of mexico and other -- >> yes, i have. >> what's your view of the industry's ability to deal with the risks and challenges

presented by deepwater? this. >> i'm confident that the industry can meet those risks. >> and do you believe that the industry has done everything it can to meet those risks? >> no, i don't. i feel that the industry has done very credible job, in fact, a somewhat amazing job of being able to move into that environment and correctly, safely drill and complete a well. where i feel we have been remiss is in our development of the capability to respond to failures in that environment in a timely and safe manner. i al think that we have as an industry failed to cooperate internally in the development and adoption of appropriate best

practice. there's, this is a very, very competitive industry, and more so than anything that i know of. of course, it's the one i know. [laughter] but the willingness to exchange technical information is limited in that that technical information is a tool to use in our ultimate goal of, bacally, making a profit for the owners. the need for that exchange of information, however, increases with the technical difficulty of our operations. the willingness as a gro to define and adhere to best practices will require a

acceptance across the industry spectrum owhat is an acceptable level of risk. we've had one example described today of what i consider a very conservative but very appropriate abandonment procedure -- >> and that's the procedure mr. williams -- >> mr. williams' discussion there of multiple barriers and, more importantly, never leaving the well underbalanced. i have worked in areashere regulatorily you cannot leave a well underbalanced. >> what are some of those areas? >> well, alaska, for instance. state regulations require it. and in norway where i have abandoned wells, you're required to leave wells overbalanced there also. it's not required in our environment in the gulf of mexico by either practice, generally-accepted practice or regulation. so it's going to take, to my mind, an evolution of the industry to recognize and uniformly accept that the bar

s to be raised here. have to work to a higher standard of protection in this environment. >> if those things are done, do you think deepwater drills can be drilled safely? >> yes, i do. >> thank you, very much, mr. lewis. with that, i'll ask the commission to proceed with any questions it has for this panel. >> chairman lowy? >> dr. thomas, are there, are there reservoirs with such concentrations, great concentrations of high pressure oil and gas that they just cannot be controlled when you tap into them? >> not to my knowledge. >> so any pressure situation can be managed successfully to ec tract hydro-- extract hydrocarbons? >> i'm not prepared to say any, but -- >> you've not seen any? >> not seen evidence of any. >> so there's no such thing as a

well situation that, or a geological situation that poses too large a problem to even attempt to drill? this. >> not from a standpoint of pressure so far, but i can imagine cases where there might be very narrow margins between poor pressure and fractured radiant such that they could not be drilled, but you would stop before you get there. >> and you would, you would be able to go some distance before you got there. you would not encounter that gradient problem initially right at the mud line, say, or at the formation, beginning of the formation? >> that is correct. >> do you, would youay anything about the formation of this well and the characteristics that has and

how it might compare to non-deepwater environments? we had a spill, a very long-lasting one, in mexico, and that was in something like 140, 50 feet of water some time ago. is it your information that relatively shallow wells with formations relatively near the surface, also, can present just as many problems to manage as the deep ones? >> i have not reviewed that particular well, so i don't know the environment that they were drilling in. there are always possible geological complications that if one doesn't pay attention to, then all sorts of things can happen.

but i think in the environment that we are in deep water, the geological environment while somewhat hostile yet at the same time is very uniform. >> do you have any observations impressions about alaska and the challenges that are presented there? that's relatively hallow water -- shallow water and relatively high formations and low pressure. is that, are there issues there that you think with respect to drilling are particularly difficult or challenging? >> i'm not an expert in alaska, sir. i do know that they have drilled wells successfully there without any incident. so i wouldn't expect there to be any problem, but i would have to defer to someone who's actually worked that environment. i have not. >> when you train people in industry, do you --

>> [inaudible] >> pardon me? >> i'm sorry to interrupt that we do have someone on the panel who has extensive experience in alaska, and without leaving your question, you might want to direct it to mr. lewis. >> fair enough. >> fair enough, right. >>perationally below the portfolio o.p. -- b.o.p., alaskan drilling is not unusually hazardous. in fact, in many areas of the state it's fairly straightforwar the remote environment does imply some constraints. those can be managed through proper program planning and proper development of response technology. but on a subsurface basis, no, we were not in the areas that i

have drilled which is actually extensive, i've drilled all over the state both onshore and offshore. it's not particularly tough country. >> i want to come back to an issue, i won't ask you, mr. williams, what you think about alaskan drilling. i think i know. [laughter] when yu, dr. thomas, when you train people in industry, when you train them to drill wells, do you, do you highlight or establish routine responses or protocols for certain kinds of experiences that they might encounter? do you teach them, for example, about how to recognize kick in theystem just to cite one example? and i wonder if there are others. >> i'm afraid i'm going to have to defer simply because i train

in petro physics, i do not train -- >> in operations. >> -- people in drilling. so if someone else would like to answer tt, i think they'd be more qualified than iould. >> okay. no further questions. >> are there other questions? >> yes. >> [inaudible] >> thank you to the panel for providing additional insight for us this morning. i sncerely appreciate it. i found it very useful in the putting into perspective some of the things we heard yesterday, so thank you very much. i direct this question to mr. lewis, but if others on the pal wish to address it, that would be fine. yesterday we heard many things that raised questions that were not directly answered, but of all of them the two mysteries that were described i'd like to put before you and ask you if you have opinions about them. the first mystery was why in the world bp changed its temporary abandonment plan three times in

the last week and what implications that had for safety. and secondly, why the experienced trilling crew and all of the others -- drilling crew and all of the others who were on this rig did not see the pattern of anomalies one after another after another after anothe heightened sense of concern that they should have had? i know it's easy in retrospect, but mr. bartlit laid out a dozen things that should have put people on high alert, the final the negative pressure test which, obviously, failed but was declared positive. in retrospect, one has to sort of ask for both of these mysteries were they being driven by a sense of we're in a hurry, we have to finish this job, let's get on with itlouding one's ability to adequately assess the risk and put a

premium onafety? i mean, that's one plausible answer, perhaps there are others. and i would just ask you from your many years of experience, mr. lewis, on rigs and doing drilling, why else then a sense of let's get this job over with would drive people to change the an at the last minute given how important that plan was to the safety of this temporary abandonment and why else would the rig crew ignore all of these anomalies that should have put them on high alert? >> we were going to do this. i can speak both generically to the drilling command and control

structure, and i can speak to a certain extent to bp in that i have worked for bp both as a well site leader and a drilling engineer. i am around bp continuously on the north slope of alaska. they dominate what goes on in the industry there. and i have read a number of internal communications from both field level to fairly senior management from the last year inside the bp structure with respe to the macondo well. and i've been there and done this in terms of designing, drilling and finishing a well. your question as to the changes of the abandonment plan over time, the only explation i

have for that is that it's a detail of the plan that was not necessarily known to be required when they first started the well. th was an exploration well with a possible production completion. my suspicion is that -- well, it's not my suspicion, it's my belief that that detail was left unattended to probably due to the lack o availability of mental resources, engineering time. until it became apparent that it was going to happen, and then there was what i would have to describe as scrambling to catch up on that design.

that opinion is based largely on the documents that i see and the fact that there was no, no real detail of abandonment in the initial plans. and then the -- thank you. thank you very much. the final plans and the operations note while the engineering may have been adequate in those, the operational detail, to my mind, was totally deficient. what was sent to the rig did not include a procedure. it was simply accomplish these major steps however you feel like you want to. that's, that's totally inadequate in this environment. the only thing i can attribute that to is lack of engineering resources and lack of command and control of the process. process control breakdown. the question of why the people in the field did not twig to

this e wednesday of questionable events -- sequence of questionable events and raise flags is much more difficult to address in that many of those individuals were killed in the incident. and th other individuals whose positions one would think would require that cognitive process have not been available for answering those questions. i know that there was pressure on this group of people to get done and move on. i have seen internal bp communication at senior management level inquiring as to whetheor not the well was going to be done in time, whether or not the rig would be

released in time. and by in time in this case they had commitments to wells' regulatory commitments that were required to maintain, in one case, a viable lease that required well work. the rig was needed on those wells to protect the assets of that other piece. the -- whether or not that concern at senior management level was verbally communicated down to the people in the field i cannot say, but pressure to move, to make progress is actually inherent in the

business, and it takes a spaded conscious management presence to counter that. as i mentioned, we're very competitive. trillioner -- drillers drill against each other. we want to be the fastest, best driller there is. and our natural tendency is to want to be making progress. to that end, sometimes we focus too narrowly on the immediate step, and we don't step back and look. the complexity of these wel and this new -- i say new, in the last 20 years -- involvement of the design team and e field team together provides a check and balance against that tendency. was said, none of these guys

made the conscious decision that okay, i'm going to this because it's faster, but it's not as safe. don't believe they did that. but the overall impetus to make progress and to, in some cases of design and execution, choose a route that was quicker, that involved fewer steps, that part of it does come from management. so i can't tell you why they continued step after step after step to miss the point, to not go into high alert, to not go shutter down. we don't know what's going on here, we've got to get this figured out. i can't tell you that. but i can tell you that there is continuous pressure to move forward, to make progress. to get'er done. >> mr. lewis, i appreciate your candor and, i guess, for those

of us who have never worked on a rig, we can only imagine all of the complexities of these things that are happening all at the same time as well as the pressure to get it done. what i am curious about and particularly because our commission's mission is to really think about what we can recommend that will change the balance between the pressure to get it done and the pressure to do it right and be safe is i'm trying to think through what it is that could be required either of the industry by way of best practices, as you've described, or by government in tes of regulation that would up the ante on the safety equivalent si. you mentioned that in alaska and in norway you're required to leave wells overbalanced. obviously, that must be a regulation that doesn't apply in the gulf of mexi. do you think that would be helpful, that kind of thing. not necessarily just the overbalance, but that kind of additional requirement by government to put additional pressure on the industry to be

able to assure the safety when these wells get closed down? this. >> i think there's a balancing point. i think that some of the mms regulatis, i'm sorry, i'm still stuck in the old terminology here. i'm not even sure i know the new acronym for the agency. [laughter] their regulations, i feel, are inadequately specific both in definition of the intent of some of them, but more importantly, in their continuous use of qualifications where they say or as the operator in their best judgment decides.

anxample is maximum anticipated surface pressure. it says you have to bring us a casing design and show us what the maximum ancipated surface pressure is, and then it never says anything about how you calculate the maximum anticipated surface pressure. and there are an innumerable ray of assumptions that you can use in that calculation which will drive that number from either total reservoir pressure or total formation fracture pressure to zero depending on how you want to play with the input. now, the regulation says that the mms will review your data and see if it's appropriate. the reality is that they have neitherhe staff, nor the tools, nor the financing to do that. if we're going to talk about increang regulation, we need to talk first about increased financing and increased staffing and increased technical competence of the pple who are charged with enforcing those

regulations. i think that a very important part of today will be this afternoon when we hear from two of the major companies with respect to their safety cultures, and it might be interesting to ask those people how they feel about melding that with a regulatory environment that together induces best practices. >> thank you. >> i was just going to add the comment on that. you know, i agree that, you know, we have to have a regulatory environment that has some requirements, obviously, some specific requirements. i think it also needs to be performance-based because, you know, i think that, you know, to deliver the kind of safety performance and industry performance that we wa it has to be this integration of safety culture and, you know, and the specifics of safety. you have to have a safety culture of performance, and just

like mr. lewis' discussion about drilling fast, you know, certainly, you know, one of the key things is optimally, you know, drilling. but as we, you know, all know if, you know, if you y and drill too fast, you end up having hole problems and lost returnand actually, you know, it's not only effecting the safety, it actually then ultimately effect your efficiency. so i think it was mentioned earlier, i think chairman reilly mentioned it, you know, this, you know, good performance also is good safety and good safety culture. so i think it has to be a combination of those two things. >> mr. bosch. >> yes. mr. lewis, you indicated that one reason for the changing plans for the tempora abandonment within the last week might have been as a result of the lack of previous attention to converting this well, making

sure thisell was available for production well. when in the process of drilling this well was it determined that this would be lefas a production well. >> well, that final decision would not have been made, would not have been finalized until they had evaluated the logging data that was run after they td'd the well. however, i believe that there was a fair degree of confidence in their geoysical interpretation that it would be completed. the drilling of that section of the well would have given you your preliminary confirmation of that in that we are now essentially logging while drilling to a certain extent.

however, the point of this is that the amount of time available from that decision point which was ten days, two weeks from the failure is totally inadequate to obtain the materials necessary to achieve this abandonment, totally inadequate to achieve the materials to complete the well with. you're talking lead times here of months to sick or eight months -- six or eit months to a year for some of these items if you have not designed for them before that point in time, not only are you going to be rushed with the design, you're going to be running in circles trying to find stuff to do it. i may have lost the thrust of your question there. have i adequately covered that for you? i think you responded it was not until maybe two weeks prior to the incident that the

determination, the information was available to make the determination that this would be a production well. and i think i got that from your your -- what yual said there was one thing that was thrown into this design at the last minute, and that's the use ofmaterial as a spacer. that decision was a last minute change and was driven by a

attempt to simplify a disposal issue that would have been considered a hazardous waste and required shoreside transportation and disposal if it had not been used in the manner that it was used. >> was there, was there material suitable for use as a spacer that is a type of more readily available in use spacer on the rig? >> there most likely was. i would expect there to have been. normally, what you would have ed is simply a vis cosfied fluid, possibly weighted. a standard procedure is to use a spacer that's about halfway between the fluid yo displacing and the other fluid in terms of density. your waiting materials, your vis cosfiers and your weight fluid all should have been available on the rig, yes. >> great, thank you.

>> we're now going to take a ten-minute break. we'll reconvene at 10:48.

>> this panel may be more technical than the first. can we go to my computer? we are going to have these individuals testifying to some more of the issues related to the well.

i would like to introduce our panel members. first, dr. john s. smith has been on the faculty of l.s.u. since 1998. he teaches courses on drilling and operation for well control. he has over 20 years of experience as an engineer and researcher, primarily off shore and with the drilling of focus. he is a member of the well control committee.

sorry, a technical difficulty. back to professor smith. i did not want you to see the e- mails passing up -- popping up in the corner, so i wanted to turn that off. he has testified in written reports for the joint investigation into the bp oil spills. beyond testifying here today for

this commission, he has already testified for the joint investigation panel looking into the oil spill. he has written extensively on, among other subjects, the pressure test at the well. our second in new panelist is also at lsu. he is the director of a full- scale petroleum engineering laboratory and has been so for the past eight years. he instructs courses in well control, both undergraduate and industry courses. he holds an m.s. and bs in petroleum engineering from lsu. he also has eight years of experience related to deep water well control operation and modeling. much of that was in the gulf of mexico. he spent three years as a well site leader for chevron in the gulf of mexico.

we are going to be asking these panelists questions on a variety of subjects. each of them has been prepared to focus on one. so, i would like to start with mr. lewis, to talk a little bit about floats equipment. you will recall that yesterday during the presentations, he discussed the troubles that the crew had at the well actually converting the floating equipment. as you will recall, flowed equipment are basically two, what are otherwise wind-way valves -- one-way valves, the have been audited in them. -- that have an auto-tubed in them. you want to convert these

valves to a 1-way valve. the way to do that is to drop a ball into the tube, build the pressure up, and at some point, the tube should converge. -- convert. that is just to reorient you to what this conversion is. is that about accurate, mr. lewis, my description of the equipment and the valve? >> it is a good start. >> what does it mean to say flow to a valve conversion? >> that is what you just described. it means that the valve is held open to its function as a one- way check valve. >> how is an auto-phil float valve converted? >> there is a differential pressure across that to which

causes -- across the that tuba -- across that tube which has some pins in it that will break at a given stress. how you adjust pressure for those is either by adjusting the number or the strength of the pins, or by changing the size of the orifices at the bottom. it is an adjustable tool, but you have to make that decision in advance, of course, of putting it together in your assembly. >> to the point that you want to convert the float equipment, this ball drops down, and then you apply pressure to that ball, and when the pressure gets great enough, it will convert to the

equipment? >> actually, what you apply is a differential pressure that is created by flows through the middle ports there by the ball until you have to flow through those ports. until then, you have no differential pressure. >> how much differential pressure was a necessary at this well? >> by the manufacturers data tables provided in the graphical presentation, it would have taken between 500-700 csi to convert this valve -- ts piti -- tsi to convert this valve.

i calculated right at 600 when i did the numbers. >> that is the differential pressure you would expect. >> yes. >> looking at this equipment, when you drop the ball, it comes to this whole been the bottom, but there are two additional -- this hole in the bottom, but there are two additional holes through which mud can afloat? >> you have to pump blood through those holes at around 6 gallons per minute if not more to guarantee that you have shared pressure and have converted the valve. the flow rate is the only thing that is important. the pressure at the service is actually irrelevant. the mechanism that activated is

differential pressure. the tool is described and labeled a flow-active open. >> what flow rate would have been necessary for this to convert from two-way valves 21- way valves -- to one-way valves? >> 600 barrels -- 6 barrels per minute. subsequent to running the casing, the flow rate it did not exceed that. >> so at some point, they reestablished circulation in the system. >> that is correct. >> when they were trying to

convert, and pressuring up, was there any flow into the system at that point? >> there would have been none. >> so there would have been zero per minute beryl's float through those holes. -- barrels flow through those holes? >>. correct. the maximum rate achieved that i saw from the cementing record was 4.3 barrels per minute. >> did the flow rate ever exceed at any point in time, after the attempted conversion, 6 barrels per minute? >> no, it did not. >> to you have an opinion as to whether the flow e