i will conclude my remarks by making a simple and obvious point that is often forgotten when we talk about offshore drilling, and that is again that these properties belong to all of us. they belong to the people of the united states of america. it is our goverent's responsibility to ensure that exploration and extraction incur in ways that are beneficial to the ccountry. drilling offshore is a privilege to be learned not a right to be exercise by private corporations. our recommendations offer a path to that destination. much has changed in the months since the blowout. we have learned a great deal about how to contain spills at deepwater.

industry has a new appreciation of the risks associated with deepwater drilling. the commission of plots all of these efforts -- applauds all of these efforts, but they are not enough. drilling offshore is inherently risky and we will nev reduce the risk to 0, but as a nation we can take concrete steps that will mitigate the chances of another blowout and reduce the consequences should another even such as that occur. the commission believes that these steps are vitally necessary. without such response we will continue to play safety for workers, the apartment and the regi at an acceptable risk. if dramatic steps are not te and i am afraid that at some point another failure will occur

and we will wonder why did the congress, why did the industry, why did the american people allow this to occur again. the people of the gulf have suffered so much that they deserve to know that their government and the industry are going to and are committed to the high standards of safety and protection o the environment. ank you. >> mr. reilly. >> thank you, bob. i wanto first recognize that one of our distinguished members is ill today and very unfortunately could not be with us. she understood in ways that none of us the rest of us probably here to the specific technologies and engineering realities that helped us explain what happened on april 20. i want to also emphasize, as bob

just did, that this report is unanimous, came in under budget , and also on time. i understand that is the first time in the history of commissions that anybody has not asked for wartime. i s told by one member of congress that this is something we should advertise and take credit for and another one that said we set a terrible precedent for washington. i am very proud of the commissioners i served with. none more than my longtime friend, statesman, and co-chair, bob gramm. this has been an enmously satisfying enterprise. the report has the quality it has and did get completed on time is a tribute to a marvelous interdisciplinary staff, as great as i have ever worked with recruited by prof. richard lazarus.

senator gramm has charactered what happened on april 20. he has explained a proximate cause, the bad decisions, the blunders, the inexplicable -- explainable choices and the root cause as the president and his executive order directed us to do. the culture of complacency, governme and the industry. i think the reality is that none of us were prepared for this. obviously government and certnly should have been. the early response to this spill is evidence, and this commission is critical, even harsh about some of the faults in the early efforts to get a grip on the problem, identify the flow rate, to contain the following well. having said that, having visited

the gulf, i have to say there is very impressive about the response of this. tens of thousands of people work day and night to try to clean it up. they m have incurred cost of time and energy into even health, but they did the job. after a slow start our government respond qte effectively to this spill. even in th case of finally determining the flow rate with ingenuity. make no mistake about it, despite allegatns, this was not obama's katrina. however, we have identified ps that lead us to recommend important recommendations to the congress, administration come into industry. to congress we say, it is time

to exercise serious oversight over the department of the interior and the bureau of oceans management that has succeeded mms. oversight that has not been characterized by a previous congressional responses and attention to that agency. we recommend as a first priority the resources be allocated by the congress to ensure thathis agency is capable, is a match for the people they are inspecting and regulating every day. they have not been. they have been overmatched. they have been under resource, underfunded, and undertrained. they're going to have to get resources from the congress. they will have to have a compensation system that allows more recruitment of able people, who unlike so many to reveal to

us in the course of the investigation, did not understand key technologies like centralizes and-t negative touch sensors. we did a lot of questions about whether congress will pay a lot of attention to west. one congressman was paying a lot of attention yesterday when i briefed him based on the verbatim speech that later came from him. we can take some encouragement from that i think. the fact that the building operation at interior, now under way in quite effectively so, is going to take time points to an important reason why industry, ich cannot wait, needs to pick up its own game.

one thing is the chemical industry. when the nuclear industry after a three-mile island established the institute for nuclear power operations. there are other examples. the oil and gas industry, which may not have been a high risk industry when it is in shallow waters, have you so after ts incident her yen we have identified and documented as systemic problem in this industry. that observes -- that deserves observation. i am aware and heard from ceos of companies who dislike, who are revolted by the idea of being painted with the same brush, companies that had

exemplary records for safety and environmental protection. i fully understand that. we do not say those companies have been remiss. what we say is that the likelihood of those that drill are at risk because of this result. in order to believe this is not a systemic problem, one has to believe that halliburton would only has supplied faulty cement to bp. irrespective of whether industry except our analysis that this is a systemic problem, b halliburton and transmission are operating in all of the world's ocean for all of the oil and gas

industry, even if you do not accept that, it seems to be indisputable that the solution of the problem must be industrywide. industry has to stop thinking that it is sufficiento have a state of the art best practice safety and management system and that is the end of the story. several companies, quite outstanding companies, presented their safety and management systems to the staff, meetings at which i was present. chevron, exxon mobil, shell. at the conclusion of the meeting i do not think it occurred to any of u to ask what are they doing, what should be done now? nevertheless, i asked the question how did you manage the risk that your rigs might all be shut down in the gulf? to that they have no question. going forward they need such a question. therefore assayed the institute, which is entirely manned by

industry, which enforces best practice, which evaluates, audits the performance of rious companies is what we recommend. i strongly encourage the most exemplary practitioners of good safety, the internment of protection, to leave the rest of the industry, which i know is a complicatedndustry and more complicated one than the nuclear industry. it is also technologically capable of well-financed industry to follow that course. i guess one of the rea tragedies but also the opportunities presented by this experience, and a tragedy like this does openness to be open to new directions, is the poor of the gulf of mexico. we have long known that th resourceare a profound

resource. louisiana has something like 30 percent of all of the country's wetlands. there silently eroding away. they are disappearing because of sea level rise, but also dredging, and generations of oil and gas activity. for a long time we have known what needs to be done there. there are many projects, many that are authorized, that are standing by for support. for the first time in my career as a conservationist, we have the prospect of serious money to do what needs to be done. if the fines and penalties that are to be assessed under the clean water act are deployed, 80% at least, to the restation, the country owes that to the gulf and a very much hope congress will agree to appropriate the funds and direct them to the gulf.

finally, the problems that we confront in energy in the oil and gas industry are like so many environmental problems, we cannot solve them alone at the country even. the gulf of mexico is shared to a very large degree with mexico. cuba has also expressed interest in possibly drilling 14 wells, some of them 50 miles off the coast of florida. i have already opened conversation with the mexicans, as has secretary salazar about their need to enter an agreement with the united states. one hopes to but n be drawn into this conversation as well so that all of us practice the same level. -- one hopes cuba can be drawn into this conrsation as well so that all of this practice the same level. the same with arctic. it is a punishing environment. it is beset by whether the like

of which one does not see in the gulf, except maybe in the occasion ever hurricane. it will acquire special care and attention and the kind of regulations that are effective in the gulf will not be acceptable in the arctic. russia, canada, norway, denmark has already begun last summer to drill two wells, -- all will want to develop those resources and so will the united states. we recommend the state department engage those countries and a common standard -- in a common standard going forward. those are some of the highlights of our recommendations. they are by no means all of them. we believe if these recommendations are followed and that if the course we have set out is taken, will go a long way toward restoring the faith

of the country in a vital enterprise. thank you. >> questions? >> as you pointed out, mr. reilly, the oil and gas industry, when it operated in shallow waters was not the ticket rate a high-risk industry. some in the energy industryave colained that the reason they are drilling of 5,000 feet is the government has barred drilling in shallow waters. with the commission recommend or did you discuss the possibility of getting the shallow waters open so they do not have to go into deeper waters? >> we understand fully that the notices to lease is five and six are recurring some attention and the certification of equipment.

there are necessarily some adjustments that will take time before full resumption of drilling ochres and shallow waters, as well as in the deep waters. senator gramm and i have been critical of the moratorium, which we thought was excessive and last a toed too long. that aside, the real reason we are in deep water is because that is where the oil is. if you look at debt reserves that are estimated to exist, they're not only in the deep water, they are in the deeper and deeper water. we are where now plans to g down 10,000 feet. to the extent that oil and gas is in deep water, that is where the industry will go. not just here but in brazil and other parts of the world as well. alas is shallow water. 140 feet or so. that presents its own set of problems. fundamentally this is a hopeful

message. we believe this is a problem that cane managed, and in the interest of everyone to manage it. >> sir? >> matt clover with cns news. you said this was an interesting wide problem. do you have any evidence that you could share with us that the same mistakes are being made right now? are they being made in u.s. waters and whe are they being made? >> the commission did that document these problems and other places. we are perfectly aware of blowout preventers that did n work in other environments. i would cite just once a cystic -- a statistic. the fatality rate for 100 million hours worked in the united statess five in united states wer in the gulf. in the north sea and in europe it is one.

that needs an explanation and points for problem. i think it points to a system- wide problem. sir? >> as early as last week jack girard, the president of the american petroleum institute said that he felt the american people believed macondo was an isolated incident. as you know, there is significant resistance on the part of industry to create the safety institute europe called for. on the government side, congress last year tried to pass an oil spill legislation that contained a lot of the things you a call for. that legislation went nowhere. what are you when to do to make sure your report, as the row as it is come is not ignored by congress and industry? >> well, we're want to make a

lot of noise. we're testifying on the 26 and january in the morning. -- 26 of january in the morning. we suggest there will be more attention to the kind of thing we have suggested, a more detailed research. we do not say really what we do not know here. we know this is a systemic problem given the pervasiveness of the contractors, the right manager, owner, the largest in the world, halliburton, which is operating vtually everywhere servicing the oil and gas industry. the only thing i would say is i do not think one should assume that industry will not support a safety institute bed upon the private conversations i have had, they are seriously deliberating on the possibility. i have every hope and expectation that they will in fact establish one. >> all the way over here.

john beckman with energy daily. a week or so ago the interior recently relaxed and are meant to reduce for a number of of offshore cru water drillers that had already had their operations pertted prior to the drill. what was your response to that? >> immediately after the all of the companies i am aware of step down. investigated, inspected each of the companies, certainly the 33 that were shut down. the exploratory rigs down seven or nine violations. i think one can have confidence decisionssecretary's are defense will and wont to go ahead on tho rigs.

>> one of the underlying themes of our report is particularity. we are rommending that drilling on specific sites be evaluated in terms of riskiness. it was our feeling that rather than throw a blanket over 33 that were affected by the moratorium that it should be a evaluated on the company by company, rig by rig. when a company and itsechanics were shown to be in compliance with the higher standards that have now been established, they should not be held back because there were others that had failed to comply with the new standards, and i believe that is the essentially -- that is

essentially the policy the administration has ccurred with. >>i. i am with the "fiscal times." you have talked about funding and compensation. can you tell me where the funding is coming from and where, if you have a time when or specifics on how quickly you want this established? >> e of the areas where i think the funding should come from is the lease itself. what is special about offshore drilling as compared to on shore, where much of the drilling takes place on privately owned land, all of the land in the gulf of mexico is public land that belongs to the people of the united stas or to the people that belong to the five gulf states.

we believe it is appropriate that in the decision to allow a company to have access to the publicly and, there should also be a provision requiring the company to pay a fee significant to cover the regulation as it executes that lease. this is not a new concept. in fact, but offshore industry is almost an allied air. regulatedmajor reg industry pay for the regulation through some sort of sfee. we think that should be the case with the oil and gas industry, and believed the lease is one of the means of doing so. in doing so in a way that would ensure a sustained it, predictable source of funds for regulation so that the kinds of

competencies can be met. >> over here. we have one. >> "washington post." can you talk about how the lack of subpoena power may have affected the ability to look into accountability high up as some of these companies? >> terry garcia. we were able to through the very able efforts of archie cancel to chief cancel able to ascertain the answers to the questions the president asked. that does not mean there were people we did not interview, but

we were able to obtain the information that was necessary for us to do our work. i want to follow up on something that the senator and bill had said about the question of whether this was an industry wide issue. what was not in doubt and what is not disputed is that the industry was not prepared for this. what is not in doubt is that industrywide research and development efforts had not been undertaken to address this sort of event. what was very clear was there was an utter lack of ability when this occurred for the industry to effectively respond and then to contain this event. it was industrywide in that sense. >> sir. >> gentleman, one of your recommendations deals with the

liability of offshore oil spills saying that 75 million is totally inadequate. to you have a range in mind? why did you not say lift the cap all together as some in congress have proposed? >> we looked at the qstion of liability and the recommendation is that the cap be lifted. we did not recommend that it be lifted to and unlimited liability. we could not reach an agreement on that. we did identify the ad to be lifted in the per incident. this is also the recommendation that the of magician s made, and it is really of to congress to address this. it is really one of the things that does require congressional action. just to put a point on one of the earlier questions, there are many recommendations in this report that can be enacted by the administration. the agencies to have authority. as we call on congress to act and called on industry to act as

well, there are actions thacan be taken by the federal government using agency authority to strengthen oversight and regulation and we're calling on the administration to do that as well. >> thank you. libby casey with the alaska public radio. i was wondering if you could elaborate more about arctic. should there be a moratorium until oil spills in icy water can be cleaned up with proven technology? >> the commission is notsking for a moratorium in alaska. recognizing that there are very important questions still ahead for us to be answered through additional research and investment in the arctic specific technology. we feel that research that has a specific time when it and focus research that will help answer questions for the private sector and public sector iseally what

is required. another very important recommendation of the commission as it relates to arctic development is we are asking congress to fund the coast guard so that they are adequately prepared for god forbid an oil spill, but also search and rescue. as ice retreats and we see more and more traffic in e arctic, it is essential but the coast guard, and for that matter, the navy, at the essence necessary to be able to respond in the arctic. for us to be able to move forward with oil and gas development and in the other development, we need to be prepared as a nation. a number of studies have indicated that the coast guard does not have adequate capabilities to be able to respond appropriately and arctic. there are a number of things, additional research in terms of the environment, the international protocols that

bill mentioned earlier with other arctic nations, additional investment in the coast guard, and i would add something we have not talked a whole lot about of this point, empowering local people to be part of the decision making process. after the exxon valdez oil spill regional citizens' advisory committees were created in alaska. our commission recommends doing something very similar in the gulf of mexico to empower the people to be active participants in the planning of l and gas development, in reacting to proposals, reviewing a oil spill response pla, in training so that if there is this bill they are able to be part of the work force and a better prepared way. we recommend the same thing for the arctic. we think all of these things will better position the united states to be able to take advantage of the resources of the arctic, but we do not feel as though we should sit back and wait indefinitely for that to happen.

we're challenging congress to put funding into both the research and the capabilities for the coast guard and other agencies so that we can move forward. >> yes, sir. >> randy showstack. i would appreciate if you could explain or elaborate on why science has not had a significant lead at the table and way made -- what may be the relationship between that and the initial difficulties determining oil flow rates and other problems. >> the lack of understanding of basic environmental processes in the gulf of mexico was striking as a result of this incident. for example, there were lots o confusion about whether there were submerged deepwater plumes of oil. there was a lack of understanding of where those

plumes were going and what the effects may be. the science can answer these questions. some of the first results of science that have been conducted on this have been very revealing a very -- a number of very important blications. it should be done in advance so that we understand opeting environment in a comprehensive way. in the past investments in science related to support the offshore development program have been oriented towards completing the minimum, identify potentially sensitive environmen for development of environmental impact statements, rather than comprehensively and distending the effect of oil and gas that might be released into the system. ourecommendations are still up the scientific research community, elevate it

so that it can bring the fruits of the research to bear on the environmental assessments to support the leasing decisions. and as part of that process to involve other very important powerful science agencies, both to bring theusgs best science to bear on this environmental decision making. the second area where science will be very important is, as mr. wright the indicated, we recommend doing substantial investments of the penalties of the clean water act violations to go to the environmental restoration. these restoration assessments can only be effective if they are guided by the best science to directed to the priorities of restoring brazilians to the system and making sure that we're using the best methods to assess the outcome. in both of those areas in terms

of the assessment of the risk going forward, with respect to oil and gas development, as well as the investments in restoration we think a solid scientific program is essential. >> down here. >> russell from "corporate crime reporter." nowhere in your report to question whether a crime was committed. i am wondering if you believe there should be increased resourceso criminals and in our mental enforcement to help detour -- deter this type of behavior? >> when we first met with the

president and he gave us the assignment, there was an understanding that our purpose was to develop the factual record upon which this event occurred, that it would be for others, specifically the department of justice, to determine if those facts constituted a criminal act, and if so, for what specific purpose? we did not undertake the issue of attempting to dermine criminal liability. i will leave it to the readers of the reports of of whether they believe they can find it in our factual program. nor did we look specifically at the question of the resources necessary to reach a judgment as to whether a crime had been committed. >> all the way back there. >> amy harder with "national

journal." you said you did not recommend unlimited liability. i understand that oil spill liability trust fund already does that. two questions. why did you not recommend an unlimited liability removing the cap entirely, and you did -- did you consider the concept where companies producing in the gulf would pay into that? >> we do recommend a significant increase in liability. we frankly are sensitive to what we do not know. we know that canada has a much lower liability maximum. $35 million. the united kingdom that has one that is not muchore. we do not really know how the insurance company would address issues of liability were we to propose some kind of straightforward insurance pool.

we have a lot of sympathy for the fact that there are 185 independentperators in the gulf. the truth is we did not have time to get in to conversation with the insurance industry. we assume, though we do not know, that some kind of insurance pool can deal with the special problems of the independence. we have been clear in meetings with them that on one hand we respect what they do, have a concern to ensure that they continue to be operating competitive for all the economic and cultural reasons that they represent, but it is also unreasonable to expect they can inflict billions of dollars of damages that that bill will not be sent to the public. some kind of compromise has to be worked out on that, and our position on this one is close to the administration in that we recommend a significant increase in the liability cap, without specifying exactly what it should be. >> if i can supplement what bill

has said, the question that there should be a single member that covers all instances, if there is one thing we have learned is that there is a dramatic difference in the risks and consequences of that risk the deeper and deeper you drill into more dangerous high you're pressured or geologically challenging ars. -- or higher pressured or geologically challenging areas. it could be dramatically different for well-known as shallow waters, as opposed to the unknown of the old toward deep into which we are about to commence operations. that at raises the issue ba

the state the case as a new mode of regulation, i do not expect that will become familiar very rapidly in this country where it has not been the practice before, though a couple of companies to already use it in the gulf and is required to use in the north sea. what that says is on the foundation of prescriptive regutions come each company goes beyond that to assess those dangers and threats that are inherent in a specific well information orig design situation. the advantage of that is a put a lot of initiative on the industry to focus specifically, not just to get the box is checked for compliance, specifically on a given place with its given challenges. one thing we hope it will do is avoid the prescriptis, which may be perfectly applicable today and the year after that,

but the given -- but given the rate that this industry progress is, become obsolete in threeo five years. the state the case would guard against that. we're recommending the interior department promote the in the industry can operate and do that in our own waters as well. >> what are the top priorities for congress that you will be recommended when you testify? >> i think the top priority is to first of all give resourc to the interior department to enable it to provide oversight job that has. secondly, to ensure that the majority of the clean wat act penalties go to the gulf restoration, which i think is a top priority of ours. third, to lift the liability cap and really address that issue so that any future spill that

happens in u.s. waters the public is protected. >> one question -- >> you are? >> [inaudible] one of the proposals was calling for more time to assess the applications. there is argument of about whether they can do that with existing authority or whether they can extend the 30 day window they currently operate under. i am wondering if there has been a determination reached about whether this is is an existing authority? >> our position is that congress hato act. and that the clock starts running once the application is complete. >> yesk si, sir. >> jonathan tyler from "the tribune."

how do you square that with the finding that the disaster was a result of systemic problems that could repeat? >> the way i would swear it is that the companies that have not been implicated in this specific spill and that had been carefully inspected by mms immediately following the spill were judd to be in compliance with all known requirements and to have had an exemplary safety records are ready. over here. edward falker with "energy guardian." the they determine it was inherently unsafe formation and should not have gone as far as it did? that at some point they shoul have abandoned the macondo well? >> i do not think we did

conclude that. i know that is not the opinion of the industry. tom? >> as the well was drilled, operator recognized that there were inherent dangers to go further in drilling the well. so they stopped short of their ultimate target and deced to complete the well there then at that point. there is every reason to think in terms of the investigation that the well could have been completed and abandon safely at that point. there were, however, a chain of mistakes, errors in judgment made, as they went about that process. each of which could have been easily prevented. i think our assessment of the investigative team was that this will could have been completed and abandon safely and came back and produced at some future time. theres, however, a recognion

that as one trills the well even with the best geological reconnaissance information available, that the company will find unusual risks and challengess they go deeper down the well. part of that is the safety case is to assess that in advance and a comprehensive way, while other than being surprised as one goes down and drilled the well. --ather than being surprise as one goes down and drills the well. ith the "l.a. times." there is a serious and regulatory sentiment in congress. i was wondering if you could tell us, given the priorities that you have that you will present to congress, what kind of reaction you have gone so far privately from members of congress to the recommendations that you are making? we will obviously ask them

ourselves today but i wanted to get insight from you given this time it on where you expect to push back? >> i would say the answer is that as there are 535 members in congress, there are close to that in terms of their response to your question. i believe this issue and the searing impact at the deepwater horizon has had on a conscious of americans is such that it will override an ideological preference for less government, less government intrusion, less government cost. what makes that level of optimism i think credible is the fact that membe of congress understand that this is not just a typical example of government regulating of private enterprise. this is government regulating

land of that the government and the people of the united states own, and that it must be treated as we are stewards of public assets, and valuable public assets, the gulf of mexico. and that recognion will cause, in spite of the reticence to accept additionalegulatio this to be an exception. second, as has been said, we think a substantial amount of the recommendations that we are proposing can be adopted without congressional action, that is it is in the hands of particularly the department of interior and administration to execute. and from the comments we have had thus far from the obama administration, i am very hopeful they will take advantage

of that opportunity. >> let me add to things. the congress can reorganize the department of interior to make a safety enterprise totally walled off from general -- revenue generation. that can be done. it does not involve more regulation. that is as simple initiative they c take. we think it will be a guarantor in the future against revenue driving this program. we document through several of ministration's that it has. german upton, a german hastings, chairman hastings and bingaming have allnm expressed ierest and we believe will follow through with

the recommendations. >> i wanted to ask you guys to talk about the recommendations you made with regard to epa. it seems after an event happened. was there any sense of given them a more up front role rather than leaving everything after the incident? >> e va has a national response center and has a role in preparing for any response. we believe there are structural changes that need to be done with respect to the area wide councils, and those are detailed in the report. one of the real surprises here, to me, is having overseen much of the response to exxon valdez in 1989, the status of the dispersant question was still unresolved. i did not permit the dispersant to be in many of the sensitive areas because of fear that

getting into the water column will contaminate the fish. remarkable to me that we finally have a spill, and they are predictable, that we then have e argument about whether it is toxic? does it persist in the vironment? does it depend how deep it is injected or how much is? we make strong recommendations that epa seriously begin to test toxics, the toxicity of dispersants and their effectiveness, and to do so in real time situations. i can perfectly well understand why you when an application may go in through epa to deposit oil on the water and see whether something works to contain it or dissolve it, that is probably ot left at the top of in bobox, nevertheless we think it needs to be done.

particularly recommended be done in the arctic to find out how it would work in the icy waters. >> it has a major role to play in restoration efforts and recommendations that we have made and the secretary made. as you are aware, the president has asked the administrator lee said jackson to head a task force. she has been set up to make progress in an interim basis. she is leading that effort involving other agencies and the states. they will have a major role to play and the restoration programs. specifically one of the areas we point out is the alleviation of the so-called dead zone in the gulf of mexico. this has to involve management and regulation and pollution sources. it is an area much larger than

was actually affected by this oil spill on an annual basis. if we're going to restore the resilience of the gulf oil spill, this is one area we should undertake in this restoration efforts, and the epa has a leadership role in that regard. >> to be clear and contrary to my initial assumption going into the issue, we believe secretary jackson made a quite sound decision in the way to use dispersants in the way that she did. >> >> thank you. i'm from blue bird news. the recommendation, how does this compare to how secretary salazar said we will do? >> secretary saws are made

recommendations that are in direct response to the kinds of concerns that weave. he has now made separate leasing and revenue generation and a report to two separate secretaries. we respect that move. we think it is not enough. those two secretaries still report to racing will separate it -- deputy sretary and that deputy secretary reports to the secretary. we are supposing that there be a walled off enterprise that is headed by someone who is appointed for a term, someone who has industry knowledge or experience, engineering capability and training, and cannot be removed or politically interfered with. we think for the long term, that is the only way to ensure that revenues do not again become excessively influential in decisions relating to non- revenue items such as the safety and environment.

yes, ma'am? >> i am with reuters. i was wondering, with all of the ditional regulations i you are calling for and things of that nature, is there any concern about rther delays in the gulf? already, there are complaints that there have not been deepwater drilling permits and that drilling could be delayed until next year. is that something you took into consideration when you were planning for it, and is it a concern now? >> senator gramm? >> yes, we did take into account. as commissioner by niki jus mentione we recommended an increase of time that the department of interior agency should have to reviewe applications, but it was not an indefinite amount of time. it was 30 to 60 days.

we are sensitive to the fact that there are costs, both financial costs and time costs, involved in these decisions. but think of the enormous liability that the industry has just brought upon itself as a result of the failure of -- failure to attend to the basic safeties, and thus, deepwater rise in. we think that the long-term viability of the industry in the gulf and its economic successes in the gulf are very closely tied to a new standard of safety and environmental protection, which is what our report will, i think, establish a path toward bree -- toward achieving. >> we will take couple of more. yes, sir? >> john kingston from plats.

how do you deal with the fact that if they hired a regulator, someone who understands the industry, the compensation package will never be on the level that the private industry can pay for and then presumably take that person away from boem. >> i will tell you two ways. the we've got to get the competition of for those highly trained, special-specialty, technical people. it is possible there are other agencies, like nasa, that have a pay scale that permit that. whether we can get it up to a level comparable to that of industry remains to be seen, but that is one thing that i think the regulator can be helped by having a safety institute with industry people who are evaluating, auditing and inspecting, and who do have comparable compensation, as in the nuclear power industry.

the people in the nonprofit industry that the industry has set up are every bit as eligible for pay also as those who are in the inspecting. and enforced regular will give us much more protection. >> in fact, i think the united states is the exception to the role. the fact is that most of the countries where there is a substantial amount of oil and gas exploration do compensate their professional regulators at a level that would allow them not to be out man. and interestingly, in great britain it has been said that if there is one issue tt ignites -- that unites the industry, it is the desire to have that strong, professional regulation,

because the industry understands that it -- that its continued success, particularly in the north sea, is a direct function of how well it performs and that is, in turn, directed -- affected directly by the quality of regulation. >> last question. >> bill gibson with the sunset. please forgive me if you have covered this. what are the lessons learned from this experience in terms of allowing areas in which oil drilling should be expanded? should it be brought closer to florida's shores? >> [laughter] you are now asking me but a policy in a parochial question. -- both a policy and a parochial question. i believe one of the issues that this has raised is the issue of the future of energy policy in the united states. at the current level of proven

reserves and at our annual consumption of petroleum if amera were to go to a drill- baby-drill philosophy, we would exhaust our reserves by approximately 2031. if we continue at the current of using 48% domestic and 52% imported, we will stretched that to the year 2068. i think that those numbers indicate the imperatives of having as part of our energy policy that we need to be holding back some areas that have potential for future generations. and the absolute imperative of moving aggressively toward reducing america's almost insatiable appetite for

petroleum, and appetite which today is consuming 22% of all sea,petroleum from the north africa, australia, as well as the united states. we're using 22% of it. those numbers are not sustainable and i believe our policy toward reaching out to areas that are not currently being exploited has to be within that context. >> and effective summary and conclusion airey statement. >> thank you.

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