committee to come together and agree that it is important that we keep pace with american workers and we do not compromise on our core values of standing up for worker's rights. we did it on korea. we need to do it on panel and colombia. >> thank you. >> mr. mcdermott. >> thank you, mr. chairman. welcome ambassador. it is good to see you. i was on a historical event -- i was all -- in five150 the dozens will be ending their trade adjustment region 150,000 american workers will be entering -- ending the trade adjustment.

it is not on the calendar today. this is wednesday. is it going to pass through the senate by monday so 150,000 workers do not lose their assistance? if you are serious about trade and want to ignore the workers, you are going to have a tough time, but let me move to another issue, because i think there are other things. how are we going to focus on the issue in china. they continue to be long on promises and short on

performance. it practically did not come off when a president who was here -- president hu was here. it practically did not come off. it seems to me the chinese serve very clever in hong they have moved around, but the chinese audit's authority has the of ability to check how much money is being spent. that is helpful, but it does not piracy. it does not affect whether the software used is legal or not you're a good -- or not. what do we need to do to help you enforce the good words that come out of phase jane? they are nice words, but we

would like to know how we --- fourth the good words that come out? they are nice words. >> it is a key part of our dialogue with china, and i would only add one correction to your introduction. this issue did come off as with the visit to president obama. we recently convened the joint committee. we did get a commitment from the government of china to begin to address more rigorously the absence of using legitimate software.

visit,president hu's they said they will provide money for it. now they did not give their government in the resources to purchase legitimate software. we did get a commitment to make some honor thought. our commitment is important, complex, and there's a reason we have regular commitments as well as strategic and economic dialogue, and we will see as vigilant as you say the chinese are crafty in making sure they honor and respect of american intellectual property, because that is an extraordinary opportunities. >> if there are things you would

like to do, i hope you will let us know. we know through passive during the bush administration the free trade agreement after may 10. you are about to table something in chile, and i hope you do not weaken the things that were agreed upon that made possible the agreement, particularly the access to medication. i think the thing is one thing the slips under the table. sometimes the access to medication gets lost, and i hope that will be part of what you table on monday when you get to chile. >> i do not know if we are at

that point. may 10 represents of bipartisan agreement. we have the opportunity and if there are some areas but were not addressed like indigenous innovation and state-owned enterprises, and the to something we are striving for. >> mr. brady is recognized. as >> i would like to insert my statement for the record. i would like to thank you. this committee is going to

conduct a trade agenda focused on finding customers, resisting protectionism here and abroad, where weekend take down barriers to american producers, and -- we can take down barriers to american producers, and finding ways to move this cheaper around this world. your presence we think is key to those schools, and we look forward to you as a partner. we look forward to moving forward on trade. i congratulate you on successful improvement.

three points i hope you will take with you. the time is of for colombia and panama. they have gone far beyond, signing the original agreement with the united states. then they amended eighths in of 5 per concern greeted they amended it in a bipartisan agreement. they went beyond that, with a

treaty that addressed more labor issues. it is time for panama. colombia has improved the rule of law, and they, too, have been waiting to meet our demands, and i think it isn't harassing we have not moved forward, so i hope you will understand these three trade agreements need to be submitted in the first four months. is about making sure america does not further embarrass itself by turning its back on our partners and our workers. i think there are tremendous benefits to moving them to a rules-based global system, but

as a priority, i think it is imported to recognize there is a virtually no chance they will be moved ahead of china and colombia. i think it is critical those three signed by the president before we take him up. panama and colombia can be measured by years and years. the of ministration is looking at trade and exporting efforts. i think the thing is very important, an -- i think that is very important. it is a very nimble agencies of requires all that. i am not interested in turning it from a cougar into a hippo. and i would like to comment on those points as well as the job

opportunities moving forward if you're a good -- moving forward. can you address those issues hamas and -- those issues hamas >> and we very much look forward to working with you on .he subcommittee' also, we really are looking at the logistics side of these barriers to make it easier to move fifth caves around, so the is a good part of what we are doing -- to move goods around, so the kids a good part of what we are doing. we are ready to get started. i am privileged to lead an agency that provides the best bang for the buck.

we do an extraordinary service negotiating. we want to keep that, but we know if you don't examine what you're doing, you're losing ground. we'll make sure we don't lose what makes us special and our ability to create jobs. >> welcome to the committee. virtuallyu everyone has asked you about specifics with colombia and panama. we have not heard specifics. they do exist, though we still

don't know what they are. you mentioned pittsburg, detroit not benefiting, and i wonder how do those communities not benefit from the trade agreements? >> i think all families benefit from trade, when we make it easier to provide the most advanced electronics, but there are those that have been harmed more than helped. west of the mississippi,

democrats and republicans want us to move forward. an overwhelming majority disagree that trade has been good for us. >> when it comes to panama and colombia, they have access to our markets, and we do not have texas to theirs. we would if this was a defense -- we do not have access to theirs. what do you want us to do? they have gone beyond. inc. in --xplicitly the international trade organization in this agreement, so what is the obama

administration asking colombia and panama to do before the president will submit these to be approved by congress? >> there are different elements in it? -- in panama and colombia. in columbia we are primarily focusing on labor rights, violence and some workers. there has been some progress. there is a fairly strong divergence in this community, and they have made progress in putting forth changes to provice basic rights. we are not asking them to strengthen judiciary and law

enforcement to bring those to justice. we want to take advantage of fact finding. we are going to do everything we can so we can agree. >>aren't these outside the confines of the trade agreement of 2007? >> they are but they are issues americans sink are sacrosanct to us. the biggest concern is no one plays by the rules but us. we have addressed that, but the onther thing is people are

concerned we will sign an agreement with anyone. the is where we think it is important to address about an -- to address the, and we're not just creating incentives to move jobs to other countries that might not respect workers. going to obama is go to brazil. i think it is a positive step, but for the colombian trade agreement to be sitting there, i don't know how much credibility he will have if he is asking

for things that go beyond the rules of engagement. i will submit a question on the mexican trucking issue. >> ross f seriousor >> -- thanks for giving me five minutes. i would like to go back to china. there was a letter asking you to look into what was going on, and it is my understanding you decided to file a case, and you said you lacked the tools and

resources. tell us what you need to do this in a more timely fashion. we want to make these things work for our economy. >> a petition was filed regarding china's policy. the good news is we were able to successfully involve the majority by engaging china. we did initiate consultations on china's subsidies. i want to be careful in this

environment, in which i know you are horribly constrained,, and i know it is too easy for all of us to say, give us more resources. we are not all lawyers. if we are going to have the robust enforcement we have engaged, one thing we are going to look into is how we can strengthen our resources. we are short on the investigative side. we would have to rely on resources of other agencies.

we exhausted our translation budget in three months, beca use the money for translaters. we would be happy to make sure we can stand up for our rights. w >>e have talked about the korean free trade agreement. i would like to talk about positive impacts. give us an idea of what you anticipate will be the positive impact on the economy. it seems like a much bigger deal, but where is that going to

happen on the economy? we >> do not do economic data. we think that is fairly conservative, because it is not as precise with services. this is going to be good for all american manufacterrs. we are seeing 80% of korean exports in manufacturing. we are now exporting almost $five hunter and million -- 500

million. where we really see an opportunity is in korea's service market. we are going to have access to that. we think $10 billion is compelling. it gives a foothold in one of the most economically dynamic areas in se asia. >> thank you for being here

today. the president has talked about doubling of exports. can we do the? >> it would be difficult. our exports are about 17%, of both the 15% needed. if we can get it done it will meet that goal. >> it means going to be consummated. there's a ton of cynicism for trade, and there is a disconnect between trade and export king. -- exports.

there is a farmer named john davis, and he is cynical as well. if you set in his home during the election, you would have seen a candidate, talking about repealing so superior -- repealing. you would have seen more money than i have ever since and in central ohio of love as the cincinnati market about how trade has cost hundreds of thousands of shopjobs in our state. if you are john davis and you want to hear about cynicism, how do you stop that when we have people making trade the boogey

man. can double, otherwe agriculture exports from the us, which means more healthy farmers, but that is the minority. it is because all they see is that trade costs jobs. that puts pressure on us when we try to tell them exporting and trade is going to grow the economy, and i think the president is disadvantaged,

aidause he is one who sia trade has cost us jobs. canada is a great ally, so how he you help bridge t disconnect that trade is good, trade can grow our economy, and it can create more jobs and a better america for all of us? try to govern myself that the truth is an

option. one thing we are doing is going to places like cleveland and talking about the promise of trade, but we have to hear those who need help. we do need to pass trade adjustment assistance, and we can make the case and help them understand trade can help create jobs. >> if we are going to double critical we itis is pass colombia and panama.

>> i would like to comment about the japan insurance issue, wic hich is a matter of concern. this issue is very important to us insurance companies. i know you have worked hard and i am concerned about its committment. we support your efforts and hope you can reach a solution. i would like to hear your thoughts on the geopolitical issues of panama and colombia.

they are key allies in the region. panama and colombia are key links in the drug trade. we are allowing someto question our committment in the region. i am concrned the failure to move the agreements could mean a setback. >> we have engaged the relationship from every standpoint. the only reason the office exists is because congress

mandated we look at this from a commercial standpoint. we fully understand the strategic importance. that's why i think it's important we are willing to find bipartisan compromise. everywhere i have gone, panama is getting ready to take advantage of the widening of the canal, so we have examined all elements, and i think it

creates an imperative. >> the concern i have -- you have been dealt a difficult hand. you understand the benefits of trade. we talk about concern for colombians. we have had their militaries come and plead to bring the agreements about, and labor leaders have pleaded to have us bring this forth. advocates have chosen to ignore

them. rhetoric think this is dissonant, that we need to agree it needs to move forward? >> we need to address all the concerns. i appreciate the concerns, but i enjoy the work i have. we have demonstrated how we can win, by having trade agreements that are enforcable, and the longer we want to decide

which party is to blame, that's how you end up with them being stalled. let's stop pointing fingers and figure out how to move this forward. >> we will move to three minutes of questions. >> i want to thank you for being here and for your service. we have heard about delays. is it better to rush to gather and getmtent or to wait it right?

i am very concerned about mental issues,ne and some of these are problems in colombia. talkall right to talk the , but sometimes we need people to walk the walk. there are too many killings, too many people disappearing. our trade policies should reflect values. could you elaborate.

what are you going to do to see people of colombia do the right thing? if we do not stand for something, we will fall for anything. >> you are a hero for so many of us. we think there has to be a way for us to respec tthe sense of urgency, so we can say to the farmer, here is an opportunity to grow, but we have to keep

pace with the people. we have to be responsive. weeksow you have spent devoted to the issue. we are greatly encouraged by the tone, and that is part of what is driving the president. annow for some there is unacceptable level of violence, but we think we can work with the administration and come up with a path forward that allows us to address your

concerns. >> my did not take my five minutes. i think they to go about 3. i have enjoyed working with you, and to you to enjoy -- you do enjoy your job. i think you are delivering the message loud and clear. i am pleased to be part of the initiative, and the goal is to create 2 million jobs by doubling exports. we haven't doubled exports since

1995-2007, and then we passed nine trade agreements. i was going to ask whether you thought passing it would impact the double exports agreement, and your answer is it is difficult. i appreciate your addressing canada. the importance of korea, as the 4th largest trading partner -- so what impact do you think it might have on meeting goals, and

do you believe we ill lose hundreds of thousands of jobs? we know china has already increased imports by 200%. if the is true, and we are going to lose thousands of jobs. the son of a hold true for the animal? >> thank you -- doesn't cut hold true for panama? >> the answer is yes. it is important to note four years ago we were a number one exporter in the korean market.

today we are no. 4. you can say we passed it. if we don't pass it, we put at risk 270,000 jobs, and i would say i think it is easier to look at korea. important, so they represent opportunities for some small farmer or business. important to's move forward on those. >> i appreciate the work done. i know it is going to help grow

jobs. rice was excluded. we know no trade agreement is perfect. i know it is time to move forward on this agreement. our commodities our improved. we have seen us exports plummeted, because other countries have moved forward. i hope we stop hurting the farmers and get moving.

you and the president have talked about enforcement. i have a midsize company that cannot get payment on products sold to china. i believe having a robust agreement with china is importang. we need a robust dispute mechanism, and i think we are falling behind. what is the delay in moving forward with china?

>> this year america's exports were up dramatically. they forecast 2011 could be our highest year ever. we will be looking to address some of your concerns. we are seeking a bit with china. we are moving on parallel tracks. we began a process because it hadn't been revised. we have had consultations with our committees, and there are

other issues that remain to be resolved. we can get those moving with india as well. >> i want to weigh in on the issue of japan. we have gone back and forth over a number of years, and i hope you will pursue that. our friends suggested there has been delays we constructed. teral wasst bilate

emblya, and the ass speaker was alleged to have murdered an american soldier. we cannot say we are going to dismiss bad behavior for republicans and insist it ought not to be an issue for democrats. can you give us an indication on what has happened that might ensure an easier path? >> one reason panama stalled was the head of the assembly

that had been removed. we then began to engage panama on issues. then we were engaged with the previous demonstration. that administration told us, if you are telling us we need an exchange agreement, we are not sure we want the deal. we have made great progress on a number of fissues. i understand they initialed the

agreement. there is legislation that needs to be addressed, but we are making good progress. >> this committee's history has been largely bipartisan, and i ensure thent to language makes certain going forward would be bipartisan. appreciate your effort. from a state with almost 50%

unemployment, it is important. trade has helped nevada since its inception. we went from 0 trade to $1.5 billion. it increased 266 % in just 9 years. the president is charging us to double exports. nevada has already done that. we did this by taking advantage of fast markets, helping them

access this. china was the 24th largest, then the 3rd largest. trade has always been important for states like nevada. trade is going to play an important role. mining is important in nevada. we have some miners in the building, and their concern is they have takent he lead based on encouragement from the

gov, but they are finding corruption in the government in panama has made it hard to make a profit. address this ? they pay the fees, and it is making it difficult for them to make a profit. how would you respond? how would you be able to give them soem encouragement. >> i would want to get more

statistics. american companies do not pay bribes, but we could have a conversation afterwards. one of the values of all these agreements is we haave them in an environment where we can address these issues. we don't talk about travel. that is one element we are looking at. it is refreshing to see the tourism and dollars they bring.

>> i appreciate the effort to resolve the issues so we can move forward. the chair recognizes mr. austin. >> you said you were going to move forward in weeks. that cna mean weeks or months? >> for us weeks means weeks. >> less than 30 days? >> there is a fairly structured

process, and you begin your mock hearings. we want to maek sure we get this passed. >> the common understanding is less than a month. how about colombia? >> you may have missed my introductory remarks, but the president has directed us to intensify our negotiations, and we have had an exhaustive

discussion, and we are going to try to find some common ground. we will send a team to colombia next week. we are encouraged with new leadership. we are going to move forward. >> i will follow up with a letter. a corporation is involved in a nightmare scenario. i think it is a serious example of manipulations of some in china that are taking advantage.

i think it is an area where you can work to defend american manufacturers. it sounds like the wild west. i will get thse to your consideration. >> i recognize mr. rangell. > > it is a great pleasure to see you hear and hear the progress in korea. i cannot believe the advances

they have made economically, and it is much more difficult to alter agreements, and you have done a fantastic job, and i am pleased to hear that. you know when you say trade, people believe you are selling out. i don't think we do a good job of identifying where is the job creation. if you were selling anything, what's in it for me? that's how you sell things.

doesu'd ask me what this to america, when you see this type of pain, you know if it is good for detroit, it is good for the rest of us, but what about agriculture. i hear it from the chamber of commerce, business people, because we have to trade to survive, but how do we reach out to see what jobs are going to be

created. that response. >> thanks for your service. provide thatike to data. we can get data for each one, and i can tell you there is not a member here that does not have tens of thousands of workers that won't benefit. we tend to overlook the fact that many beneficiaries are small businesses or suppliers, and they not realize they are

benefitting, but we would like e have, you data wwe and maybe you can educate us. >>thanks for testifying. when you talk about trade, the first thing that comes up is china. .

regulators. this is two hours and ten minutes. >> good morning. a joint subcommittee will come to order. this is the first meeting on the subcommittee on coast guard maritime transportation i want to welcome all of our members and congratulate ranking member. can't tell you how thrilled i am that you have that position

rick and i have a long time working relationship. we are going to be off to aúbúbb great start and will be a greatb session working together and i certainly look forward to working with all the members of the committee. the subcommittee on the coast guard maritime transportation is meeting guard commandant and national incident for the oil spill. the bp depwater horizon spill was unprecedented in its size and duration. elected tremendous natural and economic disaster on its weight. the joint coast guard and part of interior investigation into the cause of the explosion and sinking of the deepwater horizon as well as the failure of the blowout preventer to contain the spill is still ongoing. the subcommittee will examine the findings of these officials

investigation once it is compte. while we await findings of the investigation, the commission on the bp deepwater horizon oil spell as well as the report of the national incident commander has helped highlight significant questions regarding the best methods for the industry and the federal government to use to prevent and respond to future oil missiles to read this hearing provides the subcommittee with the opportunity to hear recommendations of the commission and the national incident commander o the changes needed to the federal law and regulation to help reduce the likelihood of a similar event happening in the future. i'm concerned with the findings of the commission and the national incident commander that officials tall levels of government work and familiar with the national contingency plan. ou nation's 42-yer-old blueprint for how to respond to oil skills. but i am particularly alarmed that the senior leaders of the department of homeland security were either unaware or simply

misunderstood how the plan functions. i am troubled that the failure of the leadership to recognize and accept and follow the plans and that slowed the command and the control and the days after is bill undermined public confidence and the government and may have impeded their three sons. but this begs the larger issue of the subcommittee has been concerned but since theoaxed guard was transferred to the department of homeland security, and that is the department does not understand nor appreciate the traditional missions of the coast guard. something we've talked about, something we will worry about, and unfortunately something we see happening. while critically important for security accounts for only 20% of the coast guard does on a daily basis, the remaining 80% our traditional missions like oil spill response. these missions require the department leadership to understand that the need to commit adequate resources and attention as well as participate

fully in preparedness activities. unfortunaty, that wasn't the case with the bp deepwater horizon insipid. nearly 20 years ago the oil act of 1990 was created and was a national framework for preventing and responding to the oil spills in u.s. waters. since the passage of the act there have been significant changes in the offshore production storage and transportation of petroleum produc and with these changes the requirements to respond to potential incidents have grown more complex. thisill demonstrates that we may need to reexamine the requirements under the current law to ensure they are applicable to the present day operations. finally, i would be remiss if i didn't take this opportunity to remeer the 11 transocean members who were lost as a result of this tragedy and to express y sympathy to their families, friends and co-workers

with that i would like to yieldñ to the ranking member mr. larso for any comments you may have. >> thank you, mr. chairman, and i as well excited to be a ranking member and working with you. we do have a good working relationship last several years in congress and look forward to working on them here in the coast guard maritime said commission with you. thanks. i want to thank for conducting a joint subcommittee hearing and welcome the opportunity to discuss the recommendations today. today the message is clear. undertaking deepwater drilling requires a deeper understanding of the risks that accompany the benefits of the deep water drilling. now that we have these recommendations in hand, congress should ask our policieú offered a rigorous safeguard workers, they benefit the economy and protect the environment. to many lives are at stake and to many jobs are at risk for the congress to feel to act. if we cannot cap the offshore resources in a way that protect lives and the environment there will be pressure to restrict the

resources. the would be devastating to the maritime industry and the jobs that support the economy as a whole. we also need to have the federal agencies with adequate resources to prevent another tragedy such as this from happening again an respond, should we have to respond. i would welcome admiral ellen to the subcommittee and appreciate your willingness to serve as commandant of the oast guard as well as the commander of the response effort even fall in your retirement. i look for to you and your obrvations and recommendations. the deepwater horizon oil still is a human and environmental disaster of unprecedented proportions. as the representative islanders and how devastating oil skills would be to the coastal region. and i want to do everything we can possible to prevent oil spills from any source is occurring in liberia of the country or any other aea of the country. e commission report today demonstrates we have a long way to go t prevent similar disasters from occurring again. unfortunately congress is proposing cuts and the muscle and bone of investments needed for growth and to protect our

environment. if nothing else, the bp still shows the need for the more robust public capacity to respond quickly and safely to ú oil spells and that's reflected in the report. the public depends on the agencies to ensure the safety of deepwater drilling and the safety of the men and women who work on these platforms @ about the risk of the drilling

we should put the pieces in place to ensure the highest level of safety. the report revealed many of us expected to learn about this bill. first the federal government oversight of the offshore and oil gas drilling was lax. it didn't do the job. second the federal agencies and the industry were inadequate to effectively stalled contract, contain and clean up the spill of the magnitude. there, we learned that the jones act that protects and supports the domestic maritime industry was not a hindrance to the federal government response of the environmental calamity and we will hear this leader and i know that the commsion report and admiral allen will concur. i proposed last year alog with many other subcommittees may 19 hearing on the split the country take a step back to ensure that any future offshore drilling in the gulf of mexico lives up to claims of safety and reliability to get anything, the commission's report only confirms my -- reaffirms my commissions but i look forward to evaluating the commission's recommendations in the expect our witnesses this morning will

provide additional insight on these points. congress responded with the oil pollution act. now 22 years later the bp still demonstrates the need to amend and strengthen that act. @ i stand ready to work with the german lobiondo and with our ranking ú democratic member congressman rahall and with mr. bishop and the other members of the committee in shaping legislation to strengthen the nation's oil spill response and prevention law. mr. chairman, the deepwater horizon stilexposed the risks and cost of energy production and alter continental shelf. @ we have before us an opportunity to make unnecessary course correction in our production of offshore energy. i urge we not let the current debate on the federal government or the regulations toward us ú from making the necessary investments to ensure the offshore drilling can be done safely, efficiently and with minimal harm to our environment and to the workers who work on the platforms in the gulf. thank you, mr. chairman.

>> thank you, mr. larsen. i would now like to yield to the chairman gibbs of the water resources subcommittee and environment for his statement. >> thank you, mr. chairman, and i look forward to working on the transportation committee and also the chair of the water resource environment as we wo to improve our infrastructure and also oversight in this agency to work on the infrastructure in dealing with water. there are two federal laws that relate to oil spill is like the one in the gulf mexico last year. the oil pollution act and the clean water act. the oil pollution act of 1990 was largely enacted in response to the exxon valdez spill oil spill and improved the nation's ability to prevent and respond to the oil spills. under opa, the coast guard takes the lead in organizing federal oil skill responses and prevention efforts and tidal waters, while the epa is responsible for coordinating efforts in the long title and inland waters. opa authorized the use of the oil spill ability trust fund,

which is capitalized by a per barrel tax paid by the oil industry and penalties paid by the responsible parties. that trust fund is used to pay for the cost of responding to and removing oil spills. the second flaw is the clean water act, which is the principal federal statute for protecting navigable waters and shorelines from pollution. specifically, section 311 of the clean water act addresses pollution from oil and hazardous substances releases providing the epa and the coast guard of 40 to establish a program for preventing presenting for and responding to the speed and spills occur in the navigable waters of the united states. the act clearly estalishes the responsibility of the federal government, states and maritime transportation industry and i carry out cleanup restoration and rehabilitation of the natural resources that were damaged as a result of the oil spill. weigel the pp oil skill was a monumental disaster and caused

the tragic loss of 11 dedicated oil field workers we must ensure we do not use this as a catalyst to halt or hinder domestic energy production. rather, the nation requires a safe, secure domestic supply of energy product now more than ever. the national commission on the deepwater horizon oil still has studied this recent oil spa and made several recommendations regarding the federal response. many of the proposals by the commission or worth careful review and consideration as we move forward. thank you, mr. chairman. i look for to the testimony of witnesses. >> thank you, mr. gibbs. i would like to yield to ranking member bishop for his statement. >> thank you, mr chairman. thank you for holding this important hearing to review the recommendations of the commission on the bp deepwater horizon oil spill and offshore drilling. mr. chairman, in the last congress this committee held a series of hearings in the

aftermath of the bp deepwater harbor is a disaster to investigate what went on. what actions are being undertaken by bp and other responsible parties to stop the ongoing flow of oil and restore the lives and livelihood of thosimpacted by this bill and what measures were necessary to restore the gulf coast ecosystem. these hearings also focus on what efforts need to be undertaken by the federal agencies and the congress to ensure a similar preventable disaster could not occur in the future. last year members of the subcommittee on the water resources and the coast guard were called to similar joint hearing on the subcommittee's of the subcommittees on the tenth anniversary of the oil pollution act of 10 and the warnings given by federal agencies and other stakeholders that our nation was rapidly becoming a prepared to address future oil skills. specifically, wiesses testified about the than growing concern that the technologies to extract, process and transport oil will well outpacing the development of technology to quickly and safely control and

clean up potential oil spills. over the intervening years, our subcommittees also received testimony from representatives of the oast guard that currently liability limits for both vessels and facilities such as the deepwater horizon were falling desperately behind the levels nessary to adequately address a worst-case release of oil. unfortunately, this committee didn't heed the warnings given to it over a decade ago, and this nation grew complacent the future oil disaster was unlikely to occur again. fast-forward ten years, and unfortunately our complacency proved wrong. in the summer of 2010, our nation was again faced with a massive oil spill, although this time the relief wasn't from the ground of a ship, but from a seemingly limitless release of oil directly from the sea flor. again the questions arose on how this could have happened, why it was taking so long to stop the flow of oi, and whether this tragedy that resulted in 11 lives lost and impact countless families along the gulf coast

should have been prevented. mr. chairman in the days following the deepwater horizon disaster this committee took aggressive action to understand what happened and what changes were needed to take to prevent a similar disaster in the future to read this committee drafted and moved legislation to address many of the shortcomings identified in the aftermath of the deepwater horizon disaster. this legislation reported from this committee by a voice vote was later combined with proposals from our colleagues on the natural resources committee under the than leadership of the new ranking member mr. rahall and was passed by the house in early summer. unfortunately, no further action was taken on that bill. hower, it was the beginning of the new congress, we had the opportunity to start anew. today, mr. chairman, we will hear testimony from representatives from president obama's national commission. in my opinion, we shouldn'be surprised by the findings of the commission to the likely causes of the deepwater horizon disaster or the systemic failures of the oil industry that contributed to tis

incident. many of these findings are consistent with what we heard during hearings before this committee in the last congress. similarly, many of the statutory and administrative changes recommended by the commission are consistent with those included in both this committee's bill and the consolidated land, energy and clich resources act of 2010, were the clear act that was approved by the house last year. mr. chairman, in my view, the prudent choice is for this commtee to once again move legislation to address the warnings raised by this commission and other stakeholders on the very real threat of future oil still disasters. while some of the recommendations of the commission can be addressed administratively, we all know that several critical issues, such as the currently inadequate liability and financial responsibility limit and issues related to maritime safety can only be addressed by the congress. preventing the next exxon valdez or deepwater horizon is far too important to allow complacency to take over again. as noted by one of the witnesses

last congress, we cannot lack the months that have pssed without a massive oil still give us a false sense of security that everythg is fine. we must recognize the vulnerabilities remain and take decisive action to address the recommendations made by this commission this year. thank you mr. chairman. i yelled back. >> thank you mr. bishop. i would like to recognize mr. rahall, the ranking member of the full committee. >> thank you. i commend you and ranking member larsen for conducting this hearing today. we will hear from the presidential commission examining the deepwater disaster and the retired admiral thad allen regarding additions for ensuring the offshore gas development in the u.s. is far safer now and in the future and that the devastation of the deepwater horizon is not repeated. certainly want to commend our witnesses, you and in particular admiral allen and the commission called people for presenting our government at all levels for the around the clock work they did

and for the country and for trying to ensure the safety and return to the wellbeing of so many of our citizens. while the round-the-clock television of zero oil spewing into the gulf long since faded to black the urgency we felt to take the steps necessary to minimize the likelihood that it happen again should not fade with theoverage. this truly cannot become a case of out of sight out of mind. we cannot forget the 11 good man but lost their lives and families that lost their income when the fishing grounds were shut down d tourists canceled their visits to the gulf. we cannot forget the environmental and economic impacts of this bill but will last long after the oil can be seen floating on the surface of the sea. yet, in the weeks since the commission released its broad range of recommendations to the reforms and business practices, regulatory oversight and broad policy concerns, we've heard an outcry of the nation from those who claim that it is too soon to

take action. that we must wait until every aspect of every investigation has been completed, that we do not need to wait to know that we were not prepared for this type of blowout, that our ability to clean up oil spills is woefully inadequate, that regulators were too cozy with the industry and that a70 million cap on liability is too small. that is why in my for our capacity of natural resources' chairman to which mr. bishop has referred, i did lead the house and writing to passage the clean air act last summer that legislation but have provided for a major overhaul of offshore jeweling operations and regulations. decreasing the chances that another blowout what happened in the future and making sure we could do a better job of containing one this it did. many of my friends who voted against the bill argued we shouldn't act until the presidential commission had completed its work. well, the recommendations are now before us.

and again and again, they urge us to do the exact same things we did in the clear act. recently been introduced a new bill to implement all the commission recommendations, but again, we are told by some that we need to wait. but we cannot wait. the commission itself said, and i quote, an action runs the risk of real cost and more lost lives and brought damage to the regional economy and its long-term viability and further tens of billions of dollars of avoidable cleanup costs, andof quote. we should not wait to reform the ranks of inspectors who are supposed to be keeping an eye on the and not playing around with industry operators in the gulf. we cannot wait to reform e walls of the government continent, response and clean up spills or to improve the technologies that these activities rely upon. nor should we wait to improve safety and environmental protection provisions that will

ensure the long-term sustainability of this industry as well as the other industries could coexist in the gulf and other areas of the country where offshore energy development continues. we have a responsibility. we have a responsibility to the families of those that lost loved ones in the gulf, lost business is in the aftermath of this disaster and to the american people. we need to act on these recommendations. restore the economy and the ecosystems of the goals and make sure that offshore drilling is done in an efficient and safe manner. no one should have to risk their lives to earn a livelihood. thank you, mr. chairman. >> thank you, mr. rahall. we are going to -- we will entertain brief opening statements from members if they so choose. i will try to limit them to three minutes if you can do that in less than that i would appreciate it. so we can get to the meat of the hearing. are there --

>> thank you, chairman lobiondo and ranking member gibbs and senator bishop for holding the center this hearing. welcome, admiral allen. it's good to see you, sir, and thank you for your service top# the country. well. in light of the difficulties our country has faced attempting to cap the bp oil still, it's imperative that we increase our ability to prevent future spill# and expand the country's capability to respond contain a oil spell in order to prevent another regionwide catastrophe. immense technical difficulties involved in capping the bp deepwater blowout, i am hopeful we can apply the lessons learned from the b oil stelle and never again have 87 days of the oil spewing into the water and have a government bureaucracy repeat (kcovery in the extremep situation.p/ in closing, would just like toj extend my sympathy and concern for the american families on the gulf coast that have suffered mightily from the effects of the

bp oil still, but also becausea of the loss of jobs to the h+0,ú&ú0" kç over the last couple of sessions and welcome your remarks. >> thank you and congratulations i want to thank the chairman of the subcommittee and coast guard and maritime transportation subcommittee on what resources to congressmen lobiondo and congressman gibbs and ranking to examine recommendations of the to commit to thank thedoctor, president of the university of

missiles alliance and mr. terry gaia for the service on the national commission on the bpç deepwater horizon. further i take a moment to thank admiral thad allen for his service on managing the deepwater horizon incident and of course service as the commandant of the coast guard. it's good to have the admiral appear before us today. during a 111th congress as the chairman of the coast guard subcommittee, i convened a subcommittee hearing to examine the vessel operations in the exclusive economic zone and the infrastructure convened to separate hearings to examine the deepwater horizon accident and i traveled to the gulf and had the opportunity to observe the operations in the macondo site at the macondsite several times. and i appreciate the thoroughness of the commission report and the fault fullness of the commission's recommendations. last year under the leadership of the then chairman rahall and

the reforms with which the commission is calling for today including increasing the offshore responng to the issues we examine the coast guard subcommittee, this legislation would also have required all of vessels involved in the resource development in the eec owned by the u.s. citizens who would pay u.s. taxes. the legislation will also have required such vessels to be crewed by u.s. citizens, a further, to help tse in the8 claim processing system. the legislation include the provision of i offered that would have reduced from 90 days to 45 days they have to settle be presented for the life of the trust fund.

act is a kind of strong that our law and regulations are equal to the risk and the offshore drilling. my belief is only reconfirmed by recommendations. and i look forward to our testimony and thank the witnesses for being with us and for that mr. chairman i yield back. i&h"ñ?z?>"v

to being on the transportation i would also at that time chair of the emergency communications> preparedness response with the homeland security committee, so i actually visited the gulf several times to observe the progress from a multiple areas. within those visits, there were some key things that i wuld like to acknowledge.:z the millions of gallons of crude oil that was streaming into the? shores. but i think when we look at the observations i made a report myself of that i want to underscore the large challenges that the response teams face an the lessons taught to be learn in the aftermath of thisz catastrophe. for example, the failure of the? confusion about the number of

booms and skimmers that werex? located and where they needed to be placed. the confusion surrounding the chain of command was exacerbated by the number of governorñ?: agencies that comprised the unified resnse. and moreover, the magnitude of the disaster rendered many of the federal government agencies contingency plans almost inoperable. i represent california's 37 congressional district. we have offshore drilling in my district, and i concerned about what happened there and how it can happen again.> finally, i brought forth legislation securing health for the ocean resources and its environment act called the shor act. one, to look at improving the the spill response and account team and prevention capacity. number two, better to find the coordination between the federal, state and local response is. and i am disturbed to say that the same problems we had with her can katrina didn't seem toz? be resolved in our response of federal, state and local elected officials. to clarify the existingñ?

authority to receive funds from the oil spill liability trustj fund, to double the amount that coast guards may receive ach year with a percentage dedicate towards its oil spill research and development. to mandate the improvements and the frequency and quality of th? coast guard safety inspections and certification requirements, to require prom posting by the> coast guard unified command of oil spill incident plansñ publicly utilizing all resources not depending upon cable tv to tell the message and finally, to strengthen the coastal state still planning and response. i plan on free introducing this legislation, but more importantly i am also veryn thankful for the report that all of yu did, and we look forward to working together. i yield back. 64, congressman miller? >> thank you, chairman, and with all deference sitting next to a great marine, duncan hunter, and my dad was a marine and my son-in-law is a marina and my

dad was in the air force, hats off to the coast guard and i'm looking forward to hearing admiral adel to -- admiral allan. i just want to echo what has been said. just a quick point mr. chairman in regard to the jones act, which is i think it's right to becoming up in the witnesses' testimony and i sure there will be some questions about that today i personally believe it's the jones act is a jury critical component of america's maritime heritage, and during this tragic incident in the gulf, the jones act suffered from an unfortunate misguided on true media campaign against the jones act and they re singing the jones act ndered cleanup efforts and created a lot of the confusion in the gulf and actually looking through the admiral's testimony in regards tthe applications of the jones act there was a misperception that the jones act and he did the use for the deepwater horizon response

operations and in reality the jones act had no impact on the operation and just one other quick quote from the of reports that we all have in front of us. we did not reject because of the jones act restrictions. these restrictions didn't even come into place for the vast jority of the vessel's operating because they acted not as foreign vessels from loading or unloading oil more than 3 miles off the coast and when the act did aply, the national incident commander of your staff granted waivers and exemptions when requested. so i would point that out and i think this hearing is a great way to explore everything that happened in the gulf and in partular set to rest a lot of mierceptions many people in the country and the globe found out that the jones act as we see now i had no negative impact to read again, thanks for calling this hearing, mr. chairman. >> thank you. the gentle lady from hawaii. >> thank you.

odd, too, would like to thank the coast guard for everything they do. they are a major part of our response teams in hawaii. and i also would like to echo the sentiments of congress when miller and her explanations of the impact of the jones act and the misinformation that a rose above the jones act as a result the bp disaster. what strikes me about the commission's report moving on to that is that this disaster could have been prevented, and the companies that were involved in certain things of commissions and omissions thatwe really need to ensure never happens again, and as far as i am concerned there should be some major accountability by these companies and the follow-up of the disaster. and so, what i'd like to see the committee do is move forward and support the recommendations of the commission. with tat, i yield back. >> we have the gentleman from coastal louisiana who wants to

say something. mr. landrieu, the you are. okay. >> thank you, mr. chairman and chairman gibbs for calling the hearing today.

>> every day we fail to utilize our own energy resources in the gulf of mexico and it's a day america is heldaptive by ongoing crisises in the middle east, the turmoil in the rest of the world, and i wish the commission's report would have addressed the economic impacts of this moratorium. i'm also concerned with the commission's recommendations to increase the liability cap in financl responsibility requirements. make no mistake. i don't believe this should cause damage in the economy. however, i also believe that small oil and gas producers have a role to play in the gulf of mexico. in any action which drives these producers away will ultimately hurt thisation. i'm confident that a system can be implemented that violates the health of the gulf while still

ensures drillers are not pushed out the industry. more broadly than the recommendations, i disagree with the commission's stance that the entire offshore industrcan be characterized by mistakes or failures that happened on april 20th that have been more than 50,000 wells drilled in the gulf of mexico, 3200 in deep water. of these wells, macondo was the first major incident. i believe we should keep in mind, and i agree with the commission's report that we should keep in mind the safety of the men and women who apply their trade in the gulf of mexico. with that, i yield back the balance of my time. >> thank you mr. landreu. >> i appreciate the chance to serve with you on this committee and look forward to working with you. i look forward to the testimony from the distinguishes membered of the commission here on this

bp deepwater horizon spill. the spill was for 86 days, a human and economic environmental disaster. it's unparalleled in our country's history, but it was foreseeable and preventable. thanks to the swift response of admiral allen, the administration, and rovery workers in the gulf, negative impacts were reduced, but still great. as a result of the work performed by this commission, we have a better understanding why this spill occurred and how to prevent similar tragedies in the future. the valdez taught us some things, but that was about environmental damage. there were not a loss of lives. in this situation, we're dealing with the loss of human lives. we lost 11 individuals on that rig, and we owe it to those individuals and to the thousands of americans who risk their

lives every day to heed the warnings and fry to prevent future -- try to prevent future tragedies by looking at the recommendations and passing them. there are tens of thousands of people in the gulf area who had livelihoods devastated, den we owe it to them as well, but mainly those who lost life. if you don't fix history, you're doomed to repeat it. if there are people who die in the future and we didn't do anything to protect those workers, their blood will be on our hands. there are improve. -- there are improvements that no longer protect the health and well being of the people and economy. i lope the congress will heed the warn signs, respond with legislation that will save live the in the future as well as the economies. i thank the witnesses for their work in safeguarding the people in our environment, and i look

forward to hearing their testimony in looking forward to try to see american vessels in the future are safer, and they they are american vessels, and not necessari ones flagged in the marshall islands. >> thank you. any other members we missed who wanted to have a few opening remarks? seeing none, we'll now go to our witnesses, and our witnesses today include two members of the national commission on the bp deepwater horizon oil spill and offshore drilling. dr. donald boesch is environmental of scien joined by fell loy commissioner jerri garcia, the executive vice president for the mission programs for the geographic national society. thank you, and please proceed. >> [inaudible] >> could you put your mike on, i think? >> mr. chairman, and members of the subcommittees, thank you for giving me and my colleague,

jerry garcia a chance to testify. it's an honor to present the findings regarding the explosion and spill as well as recommendations in u.s. policy concerning offshore drilling. as innative o louisiana and having lived through the difficult decade of the 80s, i understand the importance of the oil and gas industry in the local economy and the nation's energy supply. anyone from the region understands the need to maintain a thriveing industry. it was deeply personal to me to witness the damage done to the coast and wetland and communities as a result of the spill. in may of last year, president obama created our commission and asked us to determine the causes of the deepwater horizon disaster, evaluate the response, and advise the nation about

future energy exploitation that could take place responsibly. as you know, on january 11, exactly one month from today, we released our final report. as chairman bob graham noted, our report was submitted on time and under budget. our final report offers suggestions add the administration, congress, and history to improve safety of drilling and substantially reduce the risk of something like this happening again. today, however, i want to focus my opening remarks on the equally important portion of our recommendations, ways to improve the government's oil spill response and containment capabilities. in their response to the deepwater horizon, let's face it,oth the government and the industry fell short. although many responders acted ickly, and in some cases

heroically, and admiral allen provided effective and valuable leadership during this response, the commission concluded that neither bp nor the federal government was adequately prepared to respond to a spill of this magnitude and complexity. there was a failure to coordinate effectively with state and local governments and the lack of information concerning what response measures would be most effective. in addition, neither the industry nor the federal government has invest the in the research and development needed to have spill response and technology. much of the technology was the same used in the exxon valdez spill years earlier. at the outset of the spill, the industry was able to control the flow of oil from the well, and neither the government or the industry had sufficient expertise to determine at the rate of which oil was flowing. the lack of accurate knowledge impeded the efforts to determine the appropriate control technology and cap it quickly.

all of needs factors together made for a long response effort that at least in the early stes did not meet the standard of what the law prently requires in our report, the commission makes a number of recommendations to approve response andontainment. among the recommendations, first, the department of interior consults with agencs should develop a rigorous set of requirements for industry response plans anrequire companies to submit containment plans as well as oil response plans. second, epa should involve state and local governments to significant players in the spill response planning. congress should provide mandatory response for research and development. industries should fund a private organization to develop, adopt, and enforce the standards of cellence to ensure improvement in equipment for large scale response and containment and rescue, and finally, the federal government should ensure that it

has the needed expertise to oversea these industry containment efforts. commission's effort the are far reaching in this area. there's a role for congress for sure in improving capabilities. the's a role for congress also in conducting oversight as our government takes these actions. i'll conclude my remarks by noting the drilling offshore is inherently risky, the risk will never be reduced to 0, but as a nation, we can take concrete steps to reduce the chances of a another macondo blowout. that improves our ability to respond if this were to occur again. the commission feels these steps are necessary to the people of the gulf who deserve to know their government and industry are doing so. thank you for this opportunity. you he our written testimony and our report for the record. thank you.

>> good morning, mr. chairman, memberof the subcommittee. thank you for giving us this opportunity to testify concerning the findings and recommendations of the national commission on the bp deepwater horizon oil spill and offshore drilling. any severe catastrophe of significance like the explosion of the macondo well and the oil spill in the gulf of mexico strains public confidence, fosters widespread concern and anxiety, and creates an urgent need for caid explanation, but it can also create an opportunity bring renewed focus to challenges. as tragic as this was, it can play a positive role in the valuable ecosystem. i'd like to focus remarks on the commission's recommendations for e restorationf the gulf of mexico. as a result of the deepwater horizon spill, over 170 million gallons of oil went into the gulf with some portion remaining

in the ocean and seting on the floo before the highly visible damage is caused by the spill became clear, many crucial gulf resources, fisheries, transportation, tourism faced long term threats. first, more than 2300 square miles of coastal wetlands, and rare larger than the state of delaware was lost to the gulf. powerful hurricanes also a threat tohe region struck the coast in 2005 and 2008 causing more wetland loss. last summer before the spill, a massive dead zone extending up to 7700 square miles was forming in the gulf. finally, the deepwater hizon disaster made matters worse. 11 rig workers were killed, 17 were injured. many thousands of people were exposed to contaminated waters, coasts, beaches, and seafood. thousands out of work, animals kills, and significant habitats

destroyed. restoring the coast to the condition before the oil spill would improve the environment, but it's not enough. our goal should not be just to maintain the environment, but we believe the country should aim higher and that the region deserves better. that's why we've recommended that the federal government working closely with the gulf state make a renewed and national commitment to the gulf of mexico and its natural roirses. currently no funding source exists to have restoration efforts. estimates of the cost of gulf restoration vary widely, but according to testimony before the commission, totally restorying the gulf requires $15 billion. the litigation process related to the deepwater horizon spill will generate some of the needed funding, but congressional action would be required to ensure that those funds reach the gulf. the commission recommends that 80% of any clean water act

penalties and fines be directed to storation. should clean water punishments not be redirected, congress should consider other mechanisms for a dedicated funding stream not subject to annual appropriations. the commission also recommends that congress create an effective state federal authority to administer gulf ecosystem restoration policy. this counsel should implement a strategy for the region that is compatible with existing goals. if funding is to be sufficiently directed long term, a decision making body should see that binding priorities are set and funding criteria is adhered to. congress should say the decisions of the counselre informed by input from a citizen's advisory counsel that represents di veers stake holders and restoration decisions are rooted in sound science. coastal restoration is critical, we have to devote greater attention to the marine environment.

scientists emerged with more precise questions to investigate, swems a better -- as well as a better sense of monitoring needs. this should be a national priority. a commission recommends that as part of management and restoration efforts, greater attention should be given to new tools to manage ocean resource with the potential to improve overall efficiency and reduce conflicts. this country's need for oil will continue for the foreseeable future. the simple truth is that the bulk of new finds are offshore and in deep water of the gulf. we simply cannot walk away from the resources even as we remain cognizant of the real risks. because we know that drilling will continue to the gulf, it's vital to take this opportunity to invest in the valuable ecosystem and undo past damage and i want prove its resiliency. mr. chairman,hank you very much. >> thank you, mr. garcia. we're now going to go to admiral

thad allen. i want to take the opportunity to publicly thank you for your service to our country. very few people in our nation's history have been called upon to do what you've been called upon to do. one of the largest disasters in form of a hurricane with katrina that you were called into to put the pieces bag together, and had extremely high marks on the boferred, coming down on the coast guard at a critical time when they needed exceptional leadership, and you went above and beyond with that. certainly, the issue we're here with today. one the disasters that our nation could imagine to deal with, and you were asked and responded to serve your country. we owe you a debt of gratitude, and we thank you for being here today. >> thank you very much, mr. chairman, and chairman gibbs,

ranking member larson and bishop, thank you for letting me speak today. i'll limit my remarks here this morning. a couple caveats before i begin. i'm no longer in public service having retired from the coast gud on july 1, 2011 having departed government service as a senior executive on october 1. accordingly, my e associations with spill response and recovery activities and regulatory reviews and policy discussions regarding offshore oil and gas development is limited to information pretty much contained in the public reel. . i have been assisted by the coast guard with information regarding my duties, but that is guided by the antilobbying act and has been complied t fully. i'm employed as a senior fellow and teaching at george washington university, and my capacity here today is representing myself only and none of thosentities. i have reviewed the findings of

the commission, and i commend em for the detailed work and how they went about their business. i would say there's a number of inquiries as noted by ranking member ray hall earlier on that are in progress by the department of interior, coast guard, and others done by the department of justice. i realize there's attention on acting on what the commission reported, but i think there's information that will be developed in the inquiries that somehow should be taken into consideration given there are two phases associated with this, and commend to both committees it's my persol recommendation that subcommittees take advantage of the initial efforts to be included in legislation that may be considered going forwar for the purposes of my testimony here today, i'd like to focus on eight areas. there will be a federal on scene report coming out as well focusing on issues focused on my responsibilities as incident commanr. this came about when there's a

spill significance and where to focus when moving forward. the first is oil spill government and the role of the national response team. throhout the entire response, even before i assumed my duties as the national incident commander, there was significant misunderstanding about what the national plan is and what it does. a lot of that was jux posed against the staff ford act and what is done pursuant to an emergency declaration in relation to state and local governments and their jury dictions. we need to have a frank conversation about what that means. i think it's undenial we have to have greater participation of the state and local levels regarding our area planning process and oil spill exercising process. spills of narnl significance in the national incident command i believe going guard, we need to consider having a presidential declaration when the things are occurring in the subsequent things tokick in on automatic

authorities to be sought. these will be things like given authority and jurisdiction to act under the clean water act, the authority to reduce standby requirements or equipment elsewhere in the cntry, and make that available should we need it. there's already been comments made about oil spill prearptness and research and development. i can tell you the wor time to do research and development is during an oil spill. the research and development syem following the act of 1990 an inner agency formed to do that is something we need to seriously look at, age i highly commend the recommendations to reestablish a fund and have a robust -- research and development program moving forward. we did not make process in skimming and use when the legislation was passed after the excon more valdez.

there's talk about the trust fund, and we have to look at the limit of the trust fund that stands currently at $1 billion. it needs tbe looked out because there's a limiting factor on what the government could do if there was not a party. inner agency coordination was key. my goal as the national incident commander was to create unity of effort. we need to look at the role of the inarm response team moving forward and how they are employed. we establish an inner agency solutions group at the national incident command to hand m unique challenges handed to us like the flow rate problem. that these to be institutionized in the national response team and made part of the plan doctrine moving forward. assistance as previously stated, we accepted every reasonable our of the assistance from foreign countries, and regarding the applation of the jones act, there was no impact on the jones act on this response.

seven waivers were requested and never utilized. th were utilizedded in the event of heavy weather was required to bring them in waters. that was never utilized and was nots a factor. two final issues, one, air space coordination. we took a lessoned learned from highty. we took control of the gulf and that improved our performance. i would have done that on the first day. i'll answer any questions you may ha regarding the implication of the lessons for future operations of the arctic, and i thank the chairman for inviting me here today. thank you. >> thank you, admiral. i'll yield my time to mr. young. >> thank you, mr. chairman. i thank the panel and especially thank the admiral. in the aftermath of the deepwater horizon spill response was purely inadequate.

relearned from the exxon-valdez spill. i'm not excited about the commission's recommendations, and i thank you for looking at the rest of it because it doesn't give us the answer to why the explosion occurred, the deepwater horizon, and i think that's what we ought to address, what human factors were involved and whether it was mechanical, a criminal action, and until we find that out, i don't believe we should rush into writing legislation. actually, what we came out for valdez was harbours. we didn't have any protection until exxon-valdez. it wasn't good in the deep water area. they are going to require response capability of 400% of worsease scenario discharge, but yet how to ensure it, they say that's not our job. we're in the boat people. then the coast guard, all do

respect, you're no longer with them, they say that's not our job. our job is not to say how much oil gets picked up or how. our job is to ensure whatever method is employed is safe. as you can see, the's a gap, a regulatory gap, and as a result, the industry's left to police itself. the very thing and every reporter concluded is the major problem of the deepwater horizon. some are proposing to have the shipping fill that gap. abs does work for both agencies, and it does expertise in evalbaiting specifications in the equipment plans. what would you think about the usbs taking over that program? either one of you, all of you, i don't care. >>first of all, i think it's clear that it's third party inspection of drilling systems. we shouldn't be left to industry standard, d that's done by a variety of institutions. the abs has a process where they

drill that -- i'm sorry, inspect that, and review the plans. simple components of these drills systems have to be the subject of my view. the blue and yellow control pods, and choke and kill lines. >> right now, it's not being done. we could do that. we could set that up? i don't want the government to do it right now. >> right now, there's a certification. >> you guys agree with that? >> yes, that's consistent with our recommendation. >> glad to hear that. that's one of our biggest problem. last summer's spill reminded us of the association with risk. the are risks by the way. 42,000 wells drills, and that is the first blowout we having, and we did not have the capability to do it, but there was in mexico, there was a number of vessels nearby to assist in recovery and cleanup

immediately. what steps has the industry taken to reduce the spill in area areas of the arctic. i'm from the arctic, guys. i want to drill there, and your report is too enthuse yat tick about that, and i'm hearing other comments like we can't do it until we have proper ice breakers, ect.. by the way, we're not getting ice breakers out of this congress. i helped bui them, and two are in docks. we can have them leased as they should be at a cheaper rate. i've been pushing that for a long time than buying them k because we will not get the money for them. we need them in the arctic. what steps have beentaken by the industry like shell and ect. and the arctic that's different in the gulf to work on it? any steps? >> congressman young, we do address the arctic in the reports, and we do indicate in our report that drilling can be done in the arctic.

we are suggesting that there's certain steps that should obviously be taken before drilling commenced. you noted most of them which is industry should demonstrate it has the capacity to respond d contain blowouts. there's clear difference in the arctichan the lf. it's shallower than the gulf, but we were concerned about the governments d the industry's ability to respond. if they can show they have the capability of overseeing and responding to a spill, then drilling should commence. >> but my problem is it is shallower. it's low pressure; is that correct? >> yes. >> the chance of blowouts are minimum, and because i don't believe we've had one in the arctic anywhere, and iceland drilling, there's china drilling now, i believe russia i drilling now, greenland is drilling now. everybody's drilling in the arctic but us, and i want to

suggest respectfully that, mr. chairman, if we keep delaying this action, we are doing this country a disservice because they have done the job. as fars i can tell and i've reviewed their reports. now, we don't have the ice breakers. we need to figure out what can be done in the arctic. it may be easier to clean up in the arctic if there was a spill because the colder climate. i don't want to keep saying no, no, no because it's not failed safety. you said that, mr. garcia. >> yeah, i agree. there are clear differences, but also, as you know, in the arctic, there are challenges. e remoesness of certain -- remoteness of certain areas, the ability to stage personnel and equipment, the ice, darkness throughout much of the year, all of that is fobbing tored in. -- factored in. nothing in the report suggests we should not drill in the arctic. it's just saying the lessons

learned fm this incident should be incorporated to any decisions to move forward. if i can add one other thing. the report, and i just commend it to the record and to your reading, but the report does address the root causes and immediate causes of the blowout, and our chief counsel is coming out with a report next week that will be highly detailed going through each of the factors that caused the blowout of the macondo well. >> well, that may be, but, you know, i've checked the background of the commission and their support in the past, and i want you to know that, and i'm somewhat critical. we had two people before the natural resource committee, and i chewed on them a little bit. i haven't chewed on you, and i might. >> i appreciate it. >> i might. i think there is a prethinking process for offshore drilling, and gentlemen, we have a problem in this country. as you mentioned, we're not going to get off this kick for oil. there's no way for a long, long period of time, and i have, as

you know, talked about economical disaster in the gulf is really because the moratorium. that's the biggest hardship other than the oil. the lack of work has been lost. we're buying that from vennels venezuela now, and all our ships are going to brazil. we have to go to where the oil is and do it correctly. thank you, mr. airman, i appreciate it. >> thank you, mr. young. mr. larson. >> i want to get him some meat to chew on and leave the folks one that are testifying. >> you know me. [laughter] >> i want to thank the folks for testifying. also, i want to thank the employees at the bp refinery in cherry point, ferndeal, district

13, and the from epa region 10 out of seattle for being willing to take an assignment to go down to the gulf and help with response and cleanup during the response over the summer. before we get started, they are working side by side and hand in hand, everybody rowing last summer. i have questions regard to some of my opening statements, and that's about the cost and budget, and first off for admiral allen, y know, this congress is exploring deep cuts to discretionary spendg. assuming the coast guard funding is constant, there are recommended investment that take funds from other coast guard accounts. based on your experience with the coast guard, would that allow the coast guard to adequately perform missions if

we were to follow through on some of the recommendations we're looking at in congress? >> i'm not the commoner now, so any comments i have is reflected on my experience i had. i say as a general statement, you get faced with a choice in a constrained budget on what to do with capital investment, replace aging assets, and if you don't, there's a hollow force that collapses on itself. i made difficult decisions to make sure i sustain to what was possible, the acquisition fund and build cutters because we need those desperately. if you do that on a constrained budget, look at your operating accounts as an offset to do that. what is needed is a frng open conversation about the opportunity costs ofoing that. i talked in the budget developmeninside the administration about risk associated operations to make capital investment. there's nothing wrong with talking about that. we need a frank conversation

about what it is we're trading off. i think we have a real reluctant to talk about those things. my decision as it related to budget reflected my dmeedz to build coast guard cutters and operating companies, and you take a short term position managing with fewer resources, make sure you ensure the long term viability of the service. >> thanks. iknow that current admiral has made commentings rectly about the budget environment they are currently in about what might have to occur there with the coast guard coming into the future. for mr. garcia and mr. boesch, does the report -- did you look at the amount of the investment needed to implement your recommendations, but for the 80% of the -- >> we did -- our staff has done a general apprisal.

we're not recommending in terms of approving the capacity in the department of interior and studies and the like, but in a general stimtion to put it into context we can understand, i think, our estimate is that it might be a cost between 7%-12% or cents on a barrel of oil produced, anyou put it in terms of the gallon of gas, it's less than a quarter a cent for a gallon of gasoline. we recommended these fees not be recovered from the general taxpayers who are the land owners in this case paid by the oil companies for the right of exploiting the land and resources, but by the industry itself as much as the federal communications commission is funded by that industry, we think this can be done in a cost effective way that would actually increase the efficiency of regulation. right now, there's not enough

folks to review the permits that are there under this new standard, but also do it in a way that doesn't affect the federal tax situation that our own fiscal alth in this nation, but also a very modest cost easily affordable to the industry. >> admiral allen, just a few seconds left with the chairman's indulgence, perhaps you'll have an answer. you discussed the initial difficulties to work with state and local officials. perhaps because of the difference between how people approach the natural disaster versus a disaster like we see in the gulf. do you have specific recommendations we should be looking at in regards to the act or any other legislation? >> i do. first of all, the area contingency plan are applied to sensitive area and thousand they are protect -- how they are protected. i think it's absolutely essential that we get state and

local governments more involved in that. the heretofore representing the counties or the per riches. it was clear during the spill that t determinations made and priorities established in that planning process were not understood by the local leaders and areas impact. i can see no other way moving forward to solv that problem than to bring them into the process and consult them and let them have a role in it. >> thank you. thank you, mr. chairman. >> thank you, mr. gibbs. >> thank you. i wanted to thank admiral allen for his service to the country and appreciation for what he's done an your response coordination is something to look at. the first question i want to address to the other two witnesses, in your oral testimony you talked about ecosystems, restoration, and obviously, that's important, but i noticed in your oral testimony, you didn't mention

what was the root cause of the disaster. in your written port you do. the commission talks about there's several key human errors, engineering mistakes, and mechanic problems. pressure tests conducted that wasn't identified that the cementing was failure, fallout procedures in securing the well with the mud and getting the mud out of the well bore, apparent inattention to impending blowout, and i suppose, obviously, human errors and management and engineering errors. where i come from up in ohio, w don't have deep water drilling, but my experience in the legislate legislature we've had problems. somebody didn't do the rights thing. what's been bothering me is when you think of all the challenges

in deep water drilling and the technical challenges and l that and the amount of investment compared to just drilling, you know, a normal well in ohio, what is the function of the regulatory person? before i see in the one part of the report talks about creating a new regulatory structure. before i would support that, i need to know a deal like that there's no regulatory person on these rigs, or what's the oversight? can you expound on that a little? >> sure. thank you forthe question, congressman. one of the findings of the commissionas there was a failure of oversight. there was a serious failure. you had an agency that had an inherent conflict. individuals responsible for overseeing safety were also involved in the collection of royalties and making leasing decisions. we suggested that we need to

separate those functions, and the department of interior is moving in that direction. we think they should probably go much further. we suggested removing it from the political process within the interior department. inspectors from mms went out to visit rigs, but clearly the oversight w inadequate. we have a number of recommendations on how the government can be more effective as well as have the iustry being more effective in monitoring its activities and policing itself rather than hang the government be solely responsible for that. >> okay. so, yeah, independent agency oversees that? that's your response? >> an independent agency within the new mre, however they pronounce their new acronym, but also we have suggested that the industry follow the example of the nuclear industry and set up an industry watchdog that would

police its members to set stanrds of excellence so that an outlier would not be able to impact the entire industry a happened in this case. >> okay. my last question, mr. chairman, dealing with the commission's reasons why state and local authorities were not more involved in spill planning, and i think that can go to all three with the recommendations on how the coast guard can be more effective on working with local auorities in the response. >> i don't think there's disagreement between the commission's finding and with where i stand that if there's an effective local response of the local pitical leaders can't feel they are disenfranchised and didn't have a say in priorities. there was a plan made with the state representatives that they reflected the representation of the state and local governments. that was not the case especially in louisiana, and i think moving forward, there that there has to

be visibility on what's protected and preparedness, and most of all with local governments. >> i would add we heard a lot about this. i traveled through the gulf. clearly a better job needs to be done of bnging elected state and local officials in the planning process, and they understand what's happening, and so that was one the diskettes in this -- disconnects in ts incident. >> thank you. >> to mr. bishop. >> thank you very much, mr. chairman, and thank you all for your testimony, and admiral allen, thank you for your service. it's nice to see you again. i want to focus in on the issue of financial liability because i believe this is an area that the deepwater horizon disaster clearly demonstrates where our current law is insufficient. current viability limits for

deep water drilling is the responsible parties are responsible for the cost and cleanup, 100% that, and then for $75 million of other costs. that's the cap. thankfully and responsibly, bp indicated they will not be constrained by that cap. the legislation that we passed last summer, the clea act, had completely eliminated the cap. there was no cap that the responsible party would be responsible for all costs associated with the spill. the commission has recommended an increase in the liability to cap but without specifying it. my question is how exposed are we? wh are the consequences of our continued failure not to have passed legislation that addresses just that one narrow issue? >> they are pretty substantial exposure because if an incident like this or even much less than this occurred and the party was

not having the deep pockets of bp and made the commitments bp had, we would have been in a difficult situation. the commission did not recommend raising the cap. obviously, i think that was, you know, it was clear from what had gone on, we did not recommend unlimited liability nor a specific amount because this requires more analysis than we were able to do within information we had. specifically, the issues of insurance and how that insurance market would work, and secondly as was pointed out, there's specific companies involved in the industry, and we didn't want to, by making a recommendation without further analysis, exclude the participation of those companies in this industry. >> understood. admiral allen, you've indicated, i don't want to put words in your mouth, but i believe you indicated we should take a go-slow approach with respect to legislation, wait until we have the reports in hand and so on,

but in this area of liability cap, suspect it fair to conclude that we already know that the current liability cap is insufficient given the e norty of the -- enormity of the tragedy in the gulf, and at least that one area is an area that really demands that we move much more quickly? >> i think you can separate out what we know to a certain that it needs to be fixed right now and what we need to know from the detailed investigations and forensics going on right now with the joint investigative team. i don't know how that translates to the agenda you have regarding legislation, but there's a tension here. we just need to recognize it exists and the bets way forward -- best way forward. there's not an issue with the liability cap and total overall amount to spend on a response. the key is finding the balance and the small operators in the gulf that is represented and others. i think there needs to be some serious search done in that

regard on what the impacts would be on that liability. there was a case in the daware river several years ago where there was a vessel ran against an object in delaware bay, ther was a significant spill. the company walked and the government was insured. . we have to look at what's going on. under the pollution act of 19, we had certificates of speedometer for vessels entering u.s. waters carrying crude oil. there was a lot of talk at the time that might have a significant negative impact on the tanker business. it did not. we adjusted and moved forward. >> thank you. just to, you know, make the point more pronounced, mr. garcia, your testimony was fully restoring the gulf will require over 30 years an expenditure of $15 billion if we have the existing cap in place and the responsible party is not being as responsible as bp is doing.

that amount would very quickly dwarf the amount of money availability in the trust fund and the work remained undone would revert to the taxpayers; is that right? >>ctually what we're recommending is the penalties under the clean water act separate from the natural resource damages, and those penalties can be substantial. they are based on the amount of oil spilled in the water per day. >> those remain to be calculated; correct? >> correct. whatever the amount, 80% should be directed to the gulf. congress will need to take action to allow that to happen because if you don't, those funds would then revert to the treasury, so what we're suggesting is that congress authorize that 80% of the clean water act penalties from the incident be directed to theulf for restoration. >> a, that's requires

legislation? >> yes. >> thank you. i'll yield back. >> thank you, mr. chairman bishop. >> thank you, mr. chairman. one of the things i'm concerned about is a chain of command failure and break down. one of the i tngs was concerned about reading about this up in minnesota and one of the things i saw a governor enlisting 16 barges trying to save his shoreline, and they were shut down by the coast guard. admiral, who made that command? who shut those barges down? >> i'm not sure i know the specific incident, but it might have to do with the barges used as a protection at the harbors moved with incoming predicted weather associated with a particular hurricane. the coast guard has overriding gurs deers with the safety of waterways and there's a separate oil response responsibilities.

with hurricanes approaching -- >> this was not for hurricanes. it was because they didn't have fire extinguishers on board. >> oh, i understand now. i didn't know what barges you were talking about. they brought in barges and put backing trucks on the barges, took the barges out to skim oil. we wanted to make surthere was not a maritime accident associated with the fact that you put skimming trucks on barges. the company operators were completely sportive of making sure the inspections were done correctly and safe to operate before they did that. the states did not understand why we held them up, but there was an overriding safety need on those particular barges. >> was this an extremist situation that the government was tryi to work in? >> i believe that you don't complicate a problem by putting people's lives at risk in the middle of the response. >> was it an extreme ition

situation? >> it was, but we didn't want to people people's -- put people's lives at risk, sir. >> okay. the deepwater horizon spill was the first spill of significance. admiral allen was the first commander. the plan does little to define the roles of authority of the narnl incident commander or the additional resources and procedures necessary to mitigate the spill of national significance wh change, and i can ask all of you, what changes of the national contingency plan are necessary to better define the authority and chain of the command responsibilities during the spill? >> we dn't get into the specifics of all of that other than to indicate that obviously there was not sufficit forethought in definition of what the complexity ofs dealing with the spill of national

significan. admiral allen noted in written testimony that there have been plans to exercises that were engaging the government on the spill of national significance, that took place just a month before the incident, and there was not an adequate involvement of the appropriate officers at the right level in government to make that o get learning from that experience, so it's not only the question of having the cry criteria that would move it to that level of resnse, but also making sure the government is ready to actually eercise and perform under those capacities in an incident which could be once every decade or so. >> as i mentioned a moment ago, one of the big problems was the failure to involve and the planning process state and elected officials who clearly need to be involved in and understand the procedure when there's a spill of national significance, and we have recommended that steps be taken

to make sure that all levels of government are familiar with it. i would say though that the professional career oil spill experts and responders at both state and federal levels were fully trained in responding. it's just that many of them had to be moved aside because this thing was so big that elected state and local officials understandably wanted to be and had to be involved. >> i understand. i'm sorry, sir, go ahead. >> i think you're asking about the national incident commander and authorities needed. currently the protocol calls they designate a commander, and that's previously understood to be a two or three star commitment. we were in the process of the succession change in the coast guard, and i was designated. first of all, the commander should be pet issue designated. there should be a standing delegation of clean water authorities, once that is me, and that cmmander shld have

the authority to redistrict assets nationally and drop standby requirements to move response equipment where it is needed sir. >> thank you. i'm out of time, and i yiel back. >> thank you, mr. chairman. let me ask a question here of admirable allen who might be the appropriate party. the vessel was flagg under the rules of the marshall islands, and they have different standards than we have. do you believe that we should have all of these vessels under united states safety regulations and flagged by united states standards? >> sir, i woul submit to you there's an effect we need to achieve, and it is this. right now for those vessels to operate in the waters, they have to be with the mother time

organization. to do that, the coast guard does an organization of whether or not they met the national standards in certificate of compliance where we normally for a u.s. flag ship issue a certificate of inspection. we need to look at the protocols used for cruise ships that carry a large number of u.s. passengers and we do a control vefication examine that involves a physical inspection. there are two ways going forward. you can have the discussion whether they should be u.s. or not, but they certainly should be held to a higher standard and inspected, and i would say that the current regime w use to ensure the safety ofcruise ships is a good model to use for goaf shore drilling units. >> the marshall islands msed standards, and i think they had somebody perform the safety standards from that area, and it was like a 4-8 hour examination if i'm correct. if i'm wrong, correct my premise, but is that accurate?

>> i'm not sure what you're referring to, sir. what we do with a cruise ship is an expensive inspection while the ship was being built in the shipyard. there's an examine in the service and quarterly inspections. i've taken a part in those myself as a field cmanderment i think that type of regime should be applied to foreign and flag vesselsoperating in our waters, sir. >> you mentiod, i think, in response to mr. young's questions, and it might have been mr. gar garcia, i'm not sure. the government should not be the one to determine the standards. that's what i understood. what was it? mr. garcia, it was something mr. young asked and didn't think of the government should be the third party of the safety inspections? >> i think he's referring to certification of drilling systems. right now a blowout preventer is built by industry to certain standards issued by the american petroleum institute, and that constitutes the level of due

diligence applied to the construction and operation. i think what we're saying with vessel inspection and up dependent third parties like american bureau ships is classification societies to come in and verify especially a blout preventers, kill and choke lines, and blue and yellow pods on these operations. >> thank you. are there systems that make sure that there's not influences there to make those standards more to the industry's liking rather than maybe the public's need? in government, it's a bad rap, and government can and have proper regulations and proper oversight. that's one of the issues in this congress is about regulation and regulation hurting the govement or hurting business, and yet there's a lot of regulations here that need to be adopted and implemented, and these might cost, i don't know there's something about the reigns b agent, $00 billion and whether this is determined as

$100 billion, i imagine it would, and if you couldn't get the senate to go along with what the house had in some regulation on standards, we'd have no standards. >> yes, sir, if i could comment, there's an issue raiseed in the commission report and it's not alluded here yet today. if you look at the rest of the world managing oil exploration off the coast, thousand use a safety risk regime, and as part of the process, they have to submit a plan. that's the subject of detailed discussion. my personal view is you need a hybrid system in drilling systems and away to present risk and how they manage risk, but the commissioners may want to comment on that. in fact, that's what we recommended that there be a hybrid system where we need to obviously change and strengthen

the regulations. >> let me stop you for a minute because i have 12 seconds, and then you can go on. [laughter] if you had passed the act with regulations from the government that couldn't go into effect unless the house and senate approved them, you could have a disastrous oil spill because there's not regulations, and how much would that cost business in the gulf? fisheries, tourism, ect.. would the lack of ability to force rules and regulations cost business a lot of money? >> yes, sir, it would cost business a lot of money. >> gat answer. ..

safety case approach, and what that requires is that the operator and the driller must demonstrate on a site specific basis that they have put into place all of the adequate safeguds and measures necessary to properly drill in a particular place. further, we recommended that the industry, it's in the industry's interest that it should set up its own watchdog of the would be of and by and for the industry to provide oversight, similar to what the nuclear industry has done and which has been very effective. >> thank you, mr. sherman. >> thank you we are going to try to be accommodating in this committee, but i think it's

important in the initial session -- mr. cohen, he pointed out a good point in the last couple sessions i wasn't goingto cut off the witness is but that isn't fair to the folks who don't squeeze in a question right at the last moment, and it's really important we will go to a second round. we won't cut you off if you have your questions, but i would just ask the members to keep that in mind. >> thank you. i ha a judiciary committee hearing going on simultaneously, so i missed some of the testimony, but i appreciate the contribution the panelists made. mr. garcia, let me put this question to you. presidents moratorium on oil and gas drilling was technically lifted mid october i think. but m told that there have been very few permits granted. let me put to all the three part question. did the commission conclude deep water could be done safely, the

commission conclude deepwater exportation should continue to ensure our energy independence and national security in the third, how critical is the offshore drilling and gas industry to the economy in the gulf? >> [inaudible] the first answer to the first two questions is yes, it can be done safely and it is important to our energy upply, and finally it's very important to the economy of the northern gulf of mexico. what we -- we did not partaken the moratorium. we didn't act -- in fact two of our co-chairs spoke about it ill-advised to have a blanket moratorium. i understand the page plea is that in deep water during the one requirement, which is actually in our recommendation in the secretory interior is in play now is the need to demonstre, certify that one capacity to control a blowout if it occurs. i a stand from a comment made the day before yesterday by the head of exploration and

development of chevron that they are just days away of coming to that agreement, and on the basis of his comments, we anticipate the permits for the deep water drilling would be granted. for those companies that have actually met the standard pretty soon. >> thank you. admiral,et me put a three part question to you as well plea monday morning quarterback. if you believe the department of homeland security cingular leadership was fully aware of how the oil still as opposed to function under the master contingency plan, and i am told, admiral, some of the senior leadership at the dhs, and in me cases failed to adhere to the plan, and did their misunderstanding of a process affect all oil spill response efforts? >> let me start with a context will comment. the oil delusion act of 1990 and the contingency plan predate the

development of the homeland security act and establishment of the deptment of homeland security. the major incident command under which the secretary operates the homeland security presidential directive number five. from the start, we've never been able to align, integrate or d conflict the role of the secretary homeland security and incident management across the entire country with this is a doctrine called off in the national contingency plan. the first in polls by the political leaders is to go with what the understand and know. in this case it is the role of seetary under the age as pt five, since the was never d conflicted there was never a determination of what supersedes and healthier integrated. we worked that out, but one of the recommendations i have continued to make is going forward the differences in the two regimes and the authorities and accountability of senior leaderships' need to be resolved. >> thank you, sir. thank you, mr. chairman, and i yield back. >> mr. larsen, you have the

unanimous c yonsent request? >> mr. chairman, ask unanimous consent statement of the congresswoman johnson be entered into the record. >> without objection, so!h ordered. the gentleman from coastal louisiana, some questioned? >> is, thank you, mr. chairman. admiral ellen, you favor past [inaudible] told me to tell you hello to date. [laughter] >> tel dan hello. >> i have three questions and i appreciate you keeping the answer as short as possible. they are very important to read a lot has been said about the jones act, and my question to you, admiral ellen is do you feel the weight of provisions in the jones act provide sufficient flibility to the emergencies? >> yes i do. >> great. >> after reviewing the commission report, and this is for you, admiral allen.

based upon my experience and listening to people back home who have worked 50 plus years in oil and gas industry, it is apparent that there were regulations that were already in place that were being supervised by the mms that seemed to have been violated. in comparison i haven't seen that there were any regulations that were under the purview of the coast guard that caused the accident. would you agree with that? >> sir, that relates directly to my earlier statement, that we need to understand the results of the joint investigation team. if you think about it, what we had was a vessel that was attached by a riser pipe to a ll. at the bottom of the riser pipe was a system regulated by the department of interior. at the top of the riser pipe was

a vessel regulated by the coast guard. there were issues with well control, issues with a cement job, if she was with the gas that cannot. once the gas was released you have the gas rebuilding a vessel that was issued a certificate of compliance by the coast guard to see that they comply with international standards comes with a joint investigative team is going to be doing is not only looking at the cause of the loss of control of the well, but for instance, how did the gas that came up be brought into the intake system into the engine room -- >> so you're looking at the five-year and safety issues related to the vessel itself so it is much more complicated system because you have a floating platform connected to the well and the jurisdictional issues both into that. that's the reason i think we need to take a very, very close look at everything associated including the performance of the fire suppression systems on the vessel would sell. >> why hope not to have to get to the five-year suppression systems. my only point to you all is that

it seems as thouh the inspections and then by the coast guard out on the gulf of mexico are very sufficient. and the mms may have missed the boat on this, i guess you could say. the recommendations to build additional bureaucracies within the stadium department that oversight of mms, which is now the boem. i have a lot of confidence in the coast guard, i guess that's my point here. the last question very quickly. the motor vessel tashi was on location at the time, and of course this incident occurred in the spring when the water temperatures were certainly starting to warm up. but it isn't required to be at that platform, there is no her regulation that mandates that the vessel be there. if thadessel would not have been there and this would have

been in the wintertime, and te men and women who had to jump off of the facility would have ended up in the water do you believe we would have been able to recover all of those who did survive? >> sir, getting back to m original point we need to look to the entire event and the issue with the loss of life. >> do you believe -- >> whether they were capable of receiving all conditions is a different point. >> on september 2nd the platform had an accident where the ten gentleman ended up in the water. one of them without a life preserver. again, in the summer. it took ten hours. ther was no stand by. it took ten hours before we recovered. my question to you is this. if that would have happened in the winter, when all ten of those men have survived?

>> would depend on the procedures and if the safety suits and the systems they are supposed o use. >> fell one dhaka ended up in the life preserver. my question is you would agree that they can be -- that hypothermia can certainly affect them. >> is it can, -- >> and ultimately lead to death? >> yes. >> okay. >> a quick follow-up from the gentleman from the coast of louisiana. you indicated you felt like the waiver provision of the jones act was adequate to deal with the situation with my understanding was the weavers were taken ten days to get the process. you think ten days is a reasonable enough time in the event of disaster like this blowout or something like katrina? >> the waivers requested or stand by and then we had to move

the vessels to heavy weather so there wasn't an extremist or urgency situation attached to that. i have been involved another in frear mental response is in my career where we needed a timely weavers and receive them as part of an environmental rponse. >> great. item one of the other points that we talked about both in the arctic and drilling in the gulf of mexico is the united states isn't the only participant. the united states oil companiesç and there is land out there that isn't regulated by the united states and the gulf of mexicona you have gotten drilling from of cuba, and what i ee out of this report is a plethora of new regulations and taxes on th domestic oil companies with no happen in the event of an accident like this occurring on

but d.c. and do think the focus might be on developing more on developing better responses for domestic oil company had a competitive disadvantage. >> , chris minn, certainly there is a challenge right now and international waters, you' right. the gulf of mexico is shared by several nations and the arctic has a number of nations whose compies are bargaining -- beginning the possibility of drilling and we need to address that. some of the companies are very safety challenged. it would be a serious problem for us and the commission did in its report identified that has a problem. it's going to require a transnational solution. we did recommend changes for the u.s. industry. again, we think that there are changes that can be done that would involve minimal cost and

would make this industry safer. the commission's report was designed to get the industry back to work, and i think that if you have read it hopefully you would agr with that. was getting during some of the opening statements, but i haven't read it cover to cover and i look forward to reviewing there was also a comment regarding the fully restoring the gulf, and i would be the find, and as you know, the operations. obviously we have got a huge of time, but the fossil evidence in the arts and crafts indicate there is an ecosystem in place leave to

mother nature? >> first of all, let me if i can just amend the comment but also reflect to mr. yanna's point above the arctic development, oil and gas development taking place in the arctic nations. we have some specific recommendations for the arctic but also internationally that it is in the u.s. interest to work with those others, with the international industry but also the other nations to develop the common standards both in terms of safety as well as a response. and in the arctic, i want to point to the last part of admiral allen's testimony which he said a key part of that is the gratification, the u.s. ratification of the sea that is greatly supported by the industry, by the military command is -- we need to do it and have a level playing field to deal with these issues. specifically with respect to restoring the ecosystem and the we recognize you can't fully restore the evolvingnd changing gulf of mexico to the way that it was a certain time.

what we are interested in and we are recommending is that the environment be restored to th point where it recovers a certain resiience so that rather than in the current state of the function is able to function so if you have the future oil spells it is a much better capacity to withstand the impact and that is what free recommended terms of the restoration program to restore the longer term damages. there is the natural resource damage assessment which specifically addresses the correct those to the way that it >> finally, just for one second, the institute is incorporating state and local response is with the federal government. commend them to you as a resource. thank you. >> thank you. >> thank you, mr. chairman.

i have a background of medicine, i was a cardiovascular surgeon and one thing i learned from medicine is that the international community can be very valuable in understanding health care, and my question goes to the fact that they're obviously have been oil spills another part of the world that we have not been involved in, and other than from the government response has been from a regulatory standpoint or otherwise, are there things we have learned or could be learned about their platforms about how they actually end up the cleanup afterwards, and were those countries offering advice in our case that u.s. regulations prevented us from utilizing those resources and helping us? >> i will make a short comment and pass it to my colleagues.

first of all, the two best examples are probably norway and the u.k.. in the 1980's there were two serious accidents with significant to move to the safety case based system that we talked about earlier on the safety management systems. the was a recent blow out of the montara oil rick gough of the northwest coast of australia in 2009. they operate under the same system and the was operated as a part of the response, it still supports the safety case way to go forward as we said earlier and i am supportive of the system that would to get in touch of what we learned erseas with the requirement to third party delegation of the drilling systems. islamic i fully agree with the admiral. one of the other things we found is the industry was not sharing the best practices and informations of the industry could do a better job of that. and e congressman, if i could say on the board of the hart

institute so i agree with the statement. >> i and stand the changes from the government level, and what your comment about the industry sharing technology. are there cleanup methods that they have used that we could have used that our u.s. regulations prevented? ibm nigh e to those. that's not my area. and if there were, like i said in medicine, the informatn from the international community is usually very valuable, and i have always found as a citizen of the united states people always ask us to help, and we usually help, but when people asked we don't generally ask for as much help as we can come in and i think sometimes there are things to be learned and take advantage of maybe we ought properly utilize. that is my overall assessment. thank you. >> the overwhelming majority of the officers of assistance that we dealt withad to do with the actual fiscal equipment and this

had to do with how much we could get and how we needed it and how fast. usually involves scanning equipment and fire retardant and dispersive when we were using diersants. some of the more novel we might have used like the new technologies fallen to the comments i made earlier where because of the policy of the research settlement to place the last 15 years we were at the point we were trying to do research and development to bring the products to market. we can't allow that to happen again and the challenge was domestically to bring those technologies in and get them into the game. >> and sir, i would just say that one of the sad facts of this incident is that the industry simply did not have the response and continent technology that was adequate to contain this blowout in a reasonable amount of time. it took hem almost three months. >> just to comment and then i will finish.

again, going back to madison, i learned that there is inteational studies in health care especially in the heart surgery area related to the press that it devices and the like that have been utilized in europe and other areas around the world for many, many years that in the united states are prevented from being utilized by medical professionals based on our very slowly and very oners regulatory process. and so i guess i would -- my question was directed at are there things like that in your industry that are out there but that we wanted to roane or indy 500 and we don't rely on the international data, and that our structure really presents us from using for decades when there have been found to be effective in other areas. >> i guess i would say in rega to the containment of the well because it was operating offshore basically in waters outside state waters and bp and the industry were ones that had

the means to control the attwell and cap it that the free market was flowing just about what was working and could be used to that site. >> let me say also on that issue there are two organizations the industry is standingp to supply that capacity to contain a blowout well, and so that's representing some substantial investment that they know they now need and it's going to be based right there in the gulf of mexicon mr. landrieu's district, the capacity to stand by the research and development associated with it is part of the economy, each holding economy and e new world from the offhore leal and gas to the limit. >> thank you. >> mr. harris. >> thank you very much, mr. chairman. first call, admiral allen, thank you very much for coming and hearing and you are a great feast to the u.s. government really during the entire crisis and i thank you for that. dr. boesch, it's good to see you sitting on the environmental committee in the state of

maryland i've seen you many times and glad to see you here. >> called you senator >> that's right. let me just ask a question, i had the privilege of attending a briefing by senator gramm and the natural resources committee, and my colleague from alaska suggested at that time that the commission members call me have had an initial by yes against offshore oil eploration and drilling, and i was pleased to see that in the foreword to the report, it suggested on the last page offshore energy nterprise is threatened in the nation's econy security are threatened and i couldn't agree more wholeheartedly. of maryland, which is one of the frontier areas described in the last part of the book our coastal counties have an unemployment rate between ten to 18% of seasonal employment, but it's how i and i personally feel perhaps we should be looking at

offshore exploration drilling off the shore. in the chapter where yo talk about chapter 10 of the report, you do say that the biological and environmental factors are well understood in those areas unlike the arcic, and therefore my question is do you think if we implement what's found here, and this is specifically for dr. boesch d mr. garcia, do you think we should in fact, because of our nation's economy and security, go forward with the explorations of the midlantic coast? >> well, we take no specific position about the expansion of oil and gas production -- exploration and production outside the two areas we focus on other than to indicate that we need to approach it in a different way where there is more substantive analysis that engages the of your agencies in addition to interior, that in which the environmental -- potential environmental risks

are judged in the context of the amount of economic gain and benefit and with respect to the energy supply that maybe there. one of the things that focused our attention on alaska quite frankly, in addition to it unique and sensitivity is that the industry and the u.s. gse is saying that for most of the remaining oil is outside of the gulf, so there's going to be in the enormous pressure to develop it and we need those resources it can be developed safely. the other areas ae less rich in terms of resources and we have to do that analysis. >> mr. garcia. >> i would just add that the commission report was designed to provide recommendations on how to drill safely. where that juggng might take place would be up to the administration and perhaps the congress. >> let me get into it because dr. boesch comment indicate you didn't take the pition on the safety, i'm going to ask you not as the commission but personally

to address mr. young's qassam de fielder to implement the recommendations in the gulf is it safe to do it in the gulf? and should we in fact be doing it in the gulf? >> if the recommendations are implemented, yes, we have said you can safely drill and we believe this report sets that out, and i would also say in response to mr. young's point about whether there was a bias, i believe mr. reilly said we should let the report speaks for itself, and our position is contained in this report. >> let me take the next step. if your position is that yes, it should -- it safe to do in the gulf and perhaps should be done in the gulf, and in chapter 10 use a well, of the midlantic coast of biology and instrumental considerations are fairly well known. perhaps should be treated different than the arctic, and if there are reserves fell off the coast of maryland for instance or virginia both of which will help employment in my area in mydistrict, and would

you confirm should be done in thos areas also if there are reserves that are proven to be economical beneficial? >> as i understand, the president acted earlier last year with respectto the congress's lifting the moratorium are not the larger area saying that the u.s. is going to evaluate these questions whether the resources are there or the potential risks as well as the more detailed analysis of the existing data. what the comments were meant to suggest is that in those environments we are not talking ouwere suggesting that one needs five years of intense study and data analysis that we already know about those regions, a that information, just as the proposal should be brought into consideration and making that determination. >> thank you, mr. chairman. >> thank you, mr. harris, congresswoman edwards.

glad i made it back in the nick of time. thank you very much to the witnesses. the question i ave actually regards oversight issues that came up during the 111th congress and related to the smoke rate and the variations of the slow rate estimates and the impact on response coordination. there were some questions that came out in our oversight in the last congress about risk assessment and contingency planning and particularly, i raised issues related to the worst-case scenario which didn't even seem to come close to the scenario the was reached in this bill, and so i wonder if you can talk to me a bit about the recoendation that you have made and how we can improve the independence of theassessment that are done so they have a little bit more validity because that's also related to what the financial liabilits far as

well and so if you could shed some light on that, i would appreciate it. >> sure. first of all, you are right. if we did address this isue of the flow rate. first of all, with respect to the flow rate estimates, it probably had relatively little effect on the spill response in terms of the assets and resours that could be deployed. that is a function of where the oil is going. hover, what we concluded is there are two important lessons from that underestimation of the rate for so long. first is that it became very importanto the right side of design, the containment effort, the initial effort to try to control and contain the well were doomed to failure because the assumed the flow rate. so the containment is important. second, for confidence of everyone that the government is on top of this that diminished that confidence comes over the freeze alone. en finally as you pointed out the flow rate becomes important

with respect to the assessment of damages under the clean water act. >> conagra's woman, if i could just add, the good news is there are some simple fixes we have suggested in the report that would allow the government and the industry to be able to accurately estimate flow rates so you don't have this problem in the future. it's just a matter of putting some simple instrumentation to the blowout preventer, and it is a relatively inexpensive fix. >> kinetic comment please? first of all, i agree. very low in cost investment would give an accurate flow rate without any big dispute i think among the people involved. we've never had to deal with a well blowout at 5,000 feet and having to establish a flow rate that has never been presented to any response in this country's history. in response, when this became a matter of public concern and political concern, i basically took that function and gave it to the flow rate technical group as a spinoff of the group's

highest published in the incident command to have an independent government way to assess that with the means we have lcking the sensor data that should be there and that is using the high resolution and other means. once we did that that allowed the baseline to tell what bp had to go in terms of containment. >> last, if one of you could please comment on this question of the kind of risk assessment and contingency planning because both the estimates, and when i looked at the standards for what was essentially rubber stamped from the mms regardinthe risk assessments, it almost semed as though the industry ould kind of put a risk assessment in front of mms. there were few questions that were asked about it and they were all pretty much the same. that in itself i would gue had to contribute tremendously to the ability to project with the risk might be and to establish mechanisms that would allow for the appropriate contingency planning. >> congress woman, you are

right. we have suggested in the report that a better review begun of response plans. i think you're referring to the fact that most o the company essentially xerox and submitted the boilerplate to mms for their response plans and neither the government nor the industry apparently were paying attention since the referenced species that didn't normally make their homes in the gulf such as walruses'. so yes, a much better job needs to be done and again, it indicates the widespread failure of oversight as well as complacency within the industry. >> this is very important, because we have gotten some criticism by the use of the word systic problems, and by systemic we don't mean that all companies were equally negligent as bp. by systemic we mean all comnies were using those same irrelevant plans. none of the company's high

containment capacity. any number of things were widespread problems not only for the industry but the regulatory regime. >> thank you mr. chairman and the witness is particularly for the thoroughness and the expeditious manner in which you got this report done. with that, i yield. >> thank you. i just got some important questions i want to kind of -- let me just make a commt. i appreciate you all continuing to edit your comments on sestak -- i.t. you should go back and look, and mccaul l companies design and engineer the wells the same. so you are getting their, mr. boesch. [laughter] admiral allen, there are parts of this report - i am interested in helping to implement and one of them concerns the safety of the workers so i simply want to go back to those scenarios and

asked do you or don't you believe having standby vessels or a vessel within at least an hour's time where there are drilling activities of platforms does that or does that not create a safe environment for those workers? >> obviously having the vessel standing by is a safer environment regaing the threshold requirement i think those are the types of determinations we made by the current on going to try investigations. it's not only looking at the incident occurred itself with the performance of the system on the vessel and the lifesaving systems on the rig as of devotee was a logical areas for inquiry into the need to be adjusted as they should be. >> mr. chairman. >> mr. larsen? >> thank you, mr. chairman. just quickly page 142, won 43 of the commissn report discusses the jones act and says the

restrictions didn't even come into play for the majority of the vesels operated because the act isn't blocked foreign vessels from loading and unloading oil more than 3 miles off the coast when the appear to have granted waivers and exemptions in question. did i read that accurately? >> yes, sir. >> page eight of your testimony, admiral allen come in reality, the jones act had no impact on response operations; did i read that accurately? did my reading of those statements accurely reflect your thoughts as well? >> yes. >> with regards to the oil as built response recovery organizations, the osros, this is about wanting to get equipment but not really needing e equipment where the osrs

had equipment here in the u.s. and i wouldn't say that it was a scramble, but the folks in washington state and the district 13 and try and to identify who had what, what would be useful and how soon can you get there without impacting state based needs and operations do you have recommendations about the osros and oil skill recovery and how they can fit in better and create an inventory to know where this equipment is when we need it? >> i think we certainly do and we identify first of all the lack of capacity to respond to something with such wide scale lasting so long as the osros, but also related to that is our observations and conclusions about the lack of advancement of the technology that they've used and the degradation of their assets and capacity if they were

mainly dealing with smaller scale activities on the more routine basis then deal with something of this consequence. there were clearly not going in that sense, so we need a more effective way do that. perhaps admiral allen has -- >> i think what you're referring to is we went through an emergency rule making to allow us to lower the standby requirement for the conduct of operations at facilities that had oil skill responsive grumet but couldn't legally move it because it was a condition of operations. this became very, very complicated because the only way we could do that was to issue an emergency federal rule, and even then, there were residual issues with state law and state requements, in some cases personal why the devotees for the operators and facilities and commanding officers naval installations where they get the equipment up if something were to occur. i think moving forward we need to look at this because if you have this bill and you want to bring all available means we have emergency contacts between the states that alow the movement of resources when they need that. i think their needs to be

measured discussion and evaluation how we can do that and that's the reason i said if thers a national incident commander designated there should be a presidential designation and what it should come with is the authority to move the resources and if it is needed without coming to an emergency rule making process. that said, we need to understand the threshold of what needs to stay behind so you have a minimum level to respond if you have an incident. >> something along the lines of when the national guard might move from one state to the next four firefighting to help with the mutual aid. >> exactly, sir. >> with regards to the arctic, i will talk to mr. young afterwards, so i want to be sure i'm not -- we have a good relationship, and i want to be sure i talked to him about these questions, so i want to be clear about it. but he mtioned icebreakers who could we lease icebreakers th the arctic operations if we had to lose? >> well, sir, if i could take a

step back there's a defect and implicit assumption in his statement that we need icebreaking capability. how you stores that where you build or lease an icebreaker is a second step. we haven't even got to the point in this country where we recognize there's a capability requirement and we need to do something about that. the lease is just one way you could remedthat. i tried unsuccessfully for four years to get this on the agenda because we will have no floating capability to exert the command kunkel from the point where all must have the strength capable to do that. leasing could be one way to relating we need to have more organic capabilities inside the united states to do that, but regardless of that the issue is nobo's talking about the icebreaker capability problem and ey are staring us in the face. >> i understand russia, china, sweden all have icebreaker's probably none of them are willing to loan them to us or lease them unless they can recover the lack of-- recover the dollars for the lack of opportunity they would have to

use them for the same functions we would not use them for. >> the national science foundation leas the vessels to break out for the annual supply and stopped using the u.s. icebreakers. >> other questions? [inaudible] >> on the capacity of response from the arctic and can you comment on the capacity to respond to a situation in the arctic separate from an ice breaker issue? >> i'd be happy to -- >> plans, trains, automobiles? what you have? what's going on? >> if i could, and try not to infer there is a response capability the should be the decision whether or not to drill and these gentlemen already stated that theelves. >> absolutely. >> my premise has been because we used assets to alaska in the summer to see how they operate, there's the lack of

infrastructure footprint and accessibility the equipment up there to be able to stage a response and use command and control that you need to do that. if you were to go to robert, louisiana, new orleans or mobile and look at the command post established to try to deal with this oil still, there's no place on the north slope of alaska to put something like that. and i'm differentiating what a oil exploration company might have out there in terms of response vessels. the oversight that has to be done, the access to the air strips, all weather aircraft, all those are issues that come into play on the north slope of alaska, and from my standpoint as a former commandant, my concern was if i'm held accountable to conduct a type of oversight that would basically pulled through by this commission, there is a lack of a footprint out there to do that. this is independent of the merits associated with oil and gas exploration. it's been an absolute. let be clear i wasn't implying planes and utomobiles

would be part of this. i'm trying to talk about the broad range of infrastructure for response for the record everybody. thank you. >> admiral allen, we talked about this a little bit. oil pollution act required the federal government to conduct exercises every three years to give you prepared -- to be prepared, and we think that was a good idea. was the failure of these officials to participate in march 2010 and missed opportunity for them to better understand how oil spill response functions under the national contingency plan would work in your view? >> i do believe a was a missed opportunity, but i think we need to take a look at whether or not this was a problem or the commission. we ae under siege of the tyranny of the president. this isn't a tier one exercise. it didn't technically require the participation of cabinet level officers. so there was basically no foul, but we gave no benefit from having those folks exposed to

the doctrine. my recommendation contained in my testimony is to hold another drilling wthin one year, to have cabinet level officials involved and let's immediately test the premises and the notions contained in the commission report and what comes out of the investigations let's not wait until the cycle let's do one and figure whether or not we fix the problem petraeus benet i don't want to second-guess what you might say, but if the officials, whoever these officials might be, had participated that could have affected in a more positive way the response? >> you have to look who was called in when this occurred. when the gig sought to beat goes on, napolitano were in the office briefing the president on what had happened. the people who were in the office having the discussion or not the people because it wasn't a tier one exercise. it would have been involved in that in these international significance. that is the reason my premise would be moving forward to

schedule another and make it a tier one exercise on which the cabinet level officials will participate. >> ms. edwards? >> thank you, mr. chairman. to commissioner boesch and garcia, you've made some significant recommendations that really go to what you've indicated or the commission has indicated the failures and oversight and the regulatory structure, and you've made some very significant recommendations to improve the regulatory structure. i wonder if you could comment, please come as we are in environment in which there are deep cuts proposed to some of the agencies that you believe in your report need to step up in terms of their oversight of this industry and process at the department of interior come at nowak, epa and coast guard. do you believe ther is any inconsistency in the kutz

recommendein these agencies in the ability of the agency's then to fulfill the recommendations you have made to prevent both the safety concerns and environmental concerns that might come to pass if there were another spill of this kind of national significance? >> we certainly have indicated the changes need to be made in the agencies and the need to be adequately funded. one of the problems for the mms was the was underfunded and undermanned, and thus incapable of effectively and ley ovseeing this industry. now we have suggested that the new boem be funded through the fees that the industry pays, and right now the industry is paying just a tiny fraction of that agency's relatively small budget, and it wouldn't be unreasonable for the industry which is reaping large benefits

from this resource to pick up the cost of confident and effective regulator. >> dr. boesch? >> yes, we have been at this together, we think alike and finish each other's sentences, but one just to add to that is that the interior, secretary interior requested a congress appropriation for fiscal 2011 which would enhance the capacity of the former boem to meet these highest stdards and to process these applications, and so the lackof those funds obviously presents a handicabut only if implementing the recommendations but getting the industry back to business. >> if the congress is unable or is unwilling to impose the fees that are recommended, and inevitably the cuts that are proposed for the agency that

would have oversight and responsibility is this regulatory framework is simply unable to implement the regulations that you have put forward opening us up, you could comment, opening up to the possibility that we would have another bill of deep water that we would be unable to clean up and unable to properly project. >> conagra's woman, i would say this bill has cost tens of llions of dollars and the final price tag or the tab is not in yet. so to the extent the failure to properly regulate the industry would regulate the funding that would be a tragedy. >> i would just conclude and yield my time. i mean, it does strike me that there is a very significant inconsistency in our desire to make sure that both t