[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
INNOVATIONS IN SAFETY SINCE
THE 2010 MACONDO INCIDENT
=======================================================================
OVERSIGHT HEARING
BEFORE THE
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
Wednesday, April 22, 2015
__________
Serial No. 114-3
__________
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COMMITTEE ON NATURAL RESOURCES
ROB BISHOP, UT, Chairman
RAUL M. GRIJALVA, AZ, Ranking Democratic Member
Don Young, AK Grace F. Napolitano, CA
Louie Gohmert, TX Madeleine Z. Bordallo, GU
Doug Lamborn, CO Jim Costa, CA
Robert J. Wittman, VA Gregorio Kilili Camacho Sablan,
John Fleming, LA CNMI
Tom McClintock, CA Niki Tsongas, MA
Glenn Thompson, PA Pedro R. Pierluisi, PR
Cynthia M. Lummis, WY Jared Huffman, CA
Dan Benishek, MI Raul Ruiz, CA
Jeff Duncan, SC Alan S. Lowenthal, CA
Paul A. Gosar, AZ Matt Cartwright, PA
Raul R. Labrador, ID Donald S. Beyer, Jr., VA
Doug LaMalfa, CA Norma J. Torres, CA
Bradley Byrne, AL Debbie Dingell, MI
Jeff Denham, CA Ruben Gallego, AZ
Paul Cook, CA Lois Capps, CA
Bruce Westerman, AR Jared Polis, CO
Garret Graves, LA Vacancy
Dan Newhouse, WA
Ryan K. Zinke, MT
Jody B. Hice, GA
Aumua Amata Coleman Radewagen, AS
Thomas MacArthur, NJ
Alexander X. Mooney, WV
Cresent Hardy, NV
Jason Knox, Chief of Staff
Lisa Pittman, Chief Counsel
David Watkins, Democratic Staff Director
Sarah Parker, Democratic Deputy Chief Counsel
------
CONTENTS
----------
Page
Hearing held on Wednesday, April 22, 2015........................ 1
Statement of Members:
Bishop, Hon. Rob, a Representative in Congress from the State
of Utah.................................................... 2
Prepared statement of.................................... 3
Capps, Hon. Lois, a Representative in Congress from the State
of California.............................................. 7
Prepared statement of.................................... 9
Grijalva, Hon. Raul M., a Representative in Congress from the
State of Arizona........................................... 4
Prepared statement of.................................... 5
Lummis, Hon. Cynthia M., a Representative in Congress from
the State of Wyoming....................................... 6
Prepared statement of.................................... 7
Statement of Witnesses:
Coatney, David, Managing Director, HWCG LLC, Houston, Texas.. 51
Prepared statement of.................................... 52
Hopkins, Holly, Senior Policy Advisor, Upstream, American
Petroleum Institute, Washington, DC........................ 37
Prepared statement of.................................... 38
Questions submitted for the record....................... 44
Murawski, Steven, Professor and Peter Betzer Endowed Chair of
Biological Oceanography, University of South Florida,
Tampa, Florida............................................. 54
Prepared statement of.................................... 55
Salerno, Brian, Vice Admiral (USCG, Retired), Director,
Bureau of Safety and Environmental Enforcement, U.S.
Department of the Interior................................. 10
Prepared statement of.................................... 11
Questions submitted for the record....................... 16
Williams, Charlie, Executive Director, Center for Offshore
Safety, Houston, Texas..................................... 47
Prepared statement of.................................... 48
Additional Materials Submitted for the Record:
List of documents submitted for the record retained in the
Committee's official files................................. 78
OVERSIGHT HEARING ON INNOVATIONS IN SAFETY SINCE THE 2010 MACONDO
INCIDENT
----------
Wednesday, April 22, 2015
U.S. House of Representatives
Committee on Natural Resources
Washington, DC
----------
The committee met, pursuant to notice, at 9:35 a.m., in
room 1324, Longworth House Office Building, Hon. Rob Bishop
[Chairman of the Committee] presiding.
Present: Representatives Bishop, Gohmert, Lamborn, Wittman,
Lummis, LaMalfa, Westerman, Graves, Newhouse, Hice, MacArthur,
Mooney, Hardy; Grijalva, Costa, Tsongas, Huffman, Torres,
Dingell, Gallego, and Capps.
The Chairman. I will call this committee meeting to order
to hear the testimony on innovations in safety since the 2010
Macondo incident.
I am going to have one piece of business I am requested to
make formal right now. I just want to note, as far as decorum
of our hearings are to be maintained, that there be no applause
or any other kind of disruption regarding the testimony that is
given here today. It is important that we respect the decorum
and rules of the committee, and also the House, and allow
Members and the public to hear our proceedings.
So, the Chairman does have an option at any point to halt
the hearings and request the hearings come to order. Once the
Chairman has restored order, if a second outburst is noted, or
if order is not maintained, the Chairman does have the
discretion to have those creating the disturbance removed.
Under Committee Rule 4(f), oral opening statements at the
hearing are limited to the Chairman and the Ranking Minority
Member and the Vice Chair, and a designee of the Ranking
Minority Member.
Mr. Sablan still is not healthy, right? OK. We hope that
happens very quickly.
This will allow us to hear from our witnesses sooner, and
help Members to keep their schedules. Therefore, I ask
unanimous consent that all other Members' opening statements be
made part of the hearing record if they are submitted to the
clerk by 5:00 p.m. today.
[No response.]
The Chairman. Hearing no objection, it will be so ordered.
Let me recognize myself, if I could--beginning with my opening
statement.
And before I begin, I have two acknowledgments that I would
like to do. I think this is the first time we have met since
Representative Duncan's father has passed away. And we remember
him and give our sympathy to Mr. Duncan at this time, as well.
I also think it is appropriate to acknowledge the 11
workers who lost their lives in the Macondo tragedy and their
families. I am sure that every time we have another
anniversary, their families relive those agonizing days. They
have our sympathy and our prayers at the same time.
It is appropriate to acknowledge the damage that was
caused. Hopefully this oversight hearing will provide important
information on how the government and the industry are and will
continue to work together to protect lives and the environment
and prevent such tragedies from happening in the future.
STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF UTAH
The Chairman. It has been 5 years since the Macondo spill
in the Gulf, and a great deal has been accomplished in that
period of time. Moving forward, improvements to safety and
responsible offshore energy development will require the
continued involvement of both the private and the public
sectors working collaboratively. And that is the key word.
Today's hearing will certainly cover this important
interchange, and our discussions will focus on the industry
innovations, which have been the initial driving force behind
most, if not all, of the regulatory and operational changes
that have occurred in the industry since 2010.
Early on, American energy producers immediately took action
to develop new standards, recommended practices, and audits
related to safety and environmental management systems. This
week in Houston, Secretary Jewell applauded the work of the oil
and gas industry in improving offshore drilling safety. We
appreciate her recognition of that fact.
The Department of the Interior's response, however,
involved subagencies dissecting into separate subagencies,
resulting in the revenue collection office now known as the
Office of Natural Resource Revenue, the Bureau of Ocean Energy
Management (BOEM), and the Bureau of Safety and Environmental
Enforcement (BSEE). So I don't mean to say that the Department
of the Interior spent all its efforts of the past 5 years
rearranging the deck chairs, even though it is questionable if
all these efforts really have resulted in improved safety and
environmental protections. Unfortunately, that is a subject for
a different day.
But, for today, following the industry's lead, the
Department has issued several regulations, including a drilling
safety rule, workplace rules, and, a couple of weeks ago, what
we referred to as the blowout preventer rule.
As we hear testimony today from the witnesses, I and others
will be listening carefully to the witnesses' opinions on
whether this Department has struck the right balance, in its
proposed and final regulations, between ensuring safety,
protecting the environment, and enabling the private enterprise
to responsibly develop the Nation's resources for the benefit
of taxpayers.
After all, the offshore bonuses and rental payments and
royalties, if you totaled them all together, that is 7.4
billion--with a ``B''--in 2014. And, without that money, the
Federal Government would simply be forced to make up that
revenue, either in increased taxes, or increased deficits.
So, rather than seek responsible balance, Federal
regulatory agencies tend at times to overreach, having the
ultimate impact of that overreach: stifling innovation,
undermining safety, and restricting development. So I hope in
this hearing we can see if that is, indeed, the case, and if it
needs to be remedied.
Additionally, Congress has often been criticized for not
doing enough in the aftermath of this incident. It is a cute
argument, it is a demagogic argument. And, in many cases, it is
simply a myth. Congress has enacted laws that have set policy.
Federal agencies have promulgated regulations. Congress funds
those initiatives. Federal agency promulgates rules after
extensive public input. Sometimes it is important for Congress
to actually go deeper into understanding and recognizing what
the rules will be, to try to make sure that we are moving in
the proper direction.
Industry participants conduct their business in compliance
with the regulations, or they face the penalties for failing to
do so. Congress does conduct oversight hearings of the Federal
agencies to determine if the agency is in compliance with the
enabling statutes, and it is incumbent upon regulated
industries to take it upon themselves to self-regulate, as
well, through the issuance of their standards and their best
practices. Sometimes we need to make sure that those changes
take place faster than the agencies themselves can react.
So, just relating to the Macondo incident itself, this
committee alone has had 16 hearings since the incident, ranging
from budget matters for the Department to the restoration of
the Gulf. And as we focus on the innovations in safety since
2010, the title of this hearing, we are going to have to give
credit where credit is due, and look for opportunities to
improve, as new technologies are made commercially available
and as safety innovations are going to be developed.
So, I look forward to the hearing. I look forward to those
witnesses who have been here, and our guests, and I appreciate
all of your attention and efforts.
[The prepared statement of Mr. Bishop follows:]
Prepared Statement of the Hon. Rob Bishop, Chairman, Committee on
Natural Resources
Five years since the Macondo spill in the Gulf, there is widespread
recognition that a great deal has been accomplished to address safety
and environmental issues raised by this tragedy. Moving forward,
improvements to safety and promoting responsible offshore energy
development will require the continued involvement of both private and
public sectors working collaboratively.
While today's hearing will certainly cover this important
interchange, our discussion will focus on industry innovations, which
have been the initial driving force behind most, if not all, regulatory
and operational changes that have occurred in the industry since 2010.
Early on, American energy producers immediately took action to develop
new standards, recommended practices, and audits related to safety and
environmental management systems. This week in Houston, Secretary
Jewell applauded the work of the oil and gas industry in improving
offshore drilling safety.
The Department of the Interior's response, however, involved
subagencies dissecting into separate subagencies, resulting in the
revenue collection office now known as the Office of Natural Resources
Revenue, the Bureau of Ocean Energy Management (BOEM), and the Bureau
of Safety and Environmental Enforcement (BSEE).
I do not mean to suggest that the Department of Interior spent all
of its efforts these past 5 years rearranging the deck chairs, even
though it is questionable if all of that effort really has resulted in
improved safety and environmental protections. But, that is a subject
for a different day.
Following industry's lead, the Department has issued several
regulations, including the drilling safety rule and the workplace
safety rule and its updates (SEMS I and SEMS II). Within the past
couple of weeks, the Department released its Well Control Rule,
commonly referred to as the ``Blowout Preventer Rule.''
As we hear testimony today from the witnesses, I and others will be
listening carefully to the witnesses' opinions on whether the
Department has struck the right balance, in its proposed and final
regulations, between ensuring the safety of the offshore workplace and
protecting the environment, and enabling private enterprise to
responsibly develop our Nation's resources for the benefit of the
taxpayers.
After all, offshore bonuses, rental payments, and royalties totaled
approximately $7.4 billion in 2014. Without that money, the Federal
Government would be forced to make up revenue through either increasing
taxes elsewhere or adding to mammoth deficits. Rather than seek
reasonable balance, Federal regulatory agencies tend to overreach,
having the ultimate effect of stifling innovation, undermining safety,
and restricting development. I look forward to hearing from the
witnesses to see if that is indeed the case.
Additionally, Congress has been criticized for not doing enough in
the aftermath of the Macondo incident. A brief reminder about how the
process is supposed to work is in order. Congress enacts laws that set
policy and empowers Federal agencies to promulgate regulations for the
more detailed governance and enforcement. Congress funds the
initiatives. The Federal agencies promulgate rules after extensive
public input from all stakeholders willing to participate.
Industry participants conduct their business in compliance with
those regulations or face the penalties for failing to do so. Congress
conducts oversight of the Federal agencies to determine the agencies'
compliance with the enabling statutes. It is incumbent upon regulated
industries to take it upon themselves to self-regulate as well through
the issuance of standards and best practices.
Just relating to the Macondo incident, this committee alone has
held 16 hearings since the incident, ranging from budget matters for
the Department to restoration of the Gulf. As we focus on the
``Innovations in Safety Since the 2010 Macondo Incident,'' the title of
this hearing, let's give credit where it is due and look for
opportunities to improve as new technologies are made commercially
available and new safety innovations are developed.
______
The Chairman. And, with that, I will turn to the Ranking
Member for any opening statement he may wish to give.
STATEMENT OF THE HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Grijalva. Thank you, Mr. Chairman, and thank you for
holding this hearing.
The Deepwater Horizon catastrophe was a topic that we
didn't get a chance to discuss very often in the previous
Congress, so I appreciate your willingness to open this
conversation back up on the fifth anniversary of the spill.
Unfortunately, the title of this hearing, and the testimony
of some of today's witnesses makes me feel like it is a big
pat-on-the-back session, rather than real oversight. We have
three industry witnesses here to tell us what a great job
industry has done, one agency witness to tell us what a great
job the agency has done, and one witness to tell us about the
impacts of the greatest environmental disaster in our country's
history.
If we really want to look at whether the industry is safer,
we would invite the families of the aforementioned 11 workers
who perished aboard that rig, or the families of the 12
offshore workers who have been killed by offshore accidents
since Deepwater Horizon. We would invite the oystermen who have
seen their harvests decline by two-thirds since the spill. We
would invite the fishermen who are still pulling up red snapper
with skin lesions, and shrimp with no eyes. We would invite the
hotel and restaurant owners who still find massive tar mats on
the beaches, and who are more vulnerable to floods and
hurricanes after years of barrier islands shrinking. We would
invite the people suffering health impacts from the persistent
oil that keeps appearing in their waterways and on their
shores.
I don't doubt there have been some improvements in the past
5 years. But we need to ask ourselves how prepared are we for
the next human error or the next failed piece of machinery, not
just how hard we are working to prevent Deepwater Horizon from
repeating itself. We shouldn't be lulled into a false sense of
security. There were 40 relatively quiet years after our first
major offshore blowout. We were assured that this showed how
safe everything was. So, 5 years without a blowout isn't the
end of the story. It certainly doesn't convince me that we
should allow offshore drilling in the Arctic or in the
Atlantic. We should not be playing Russian roulette with our
environment and coastal tourism economies.
And where drilling is occurring, there is a lot more that
we can do. While industry and the Interior Department may be
patting themselves on the back, Congress should be working
overtime to make up for its failure to act after the Deepwater
Horizon disaster. That failure is not something we should be
proud of. We need to raise the liability limit for oil spills
and enact tough penalties for offshore safety and environmental
violations.
Unfortunately, industry will always have an incentive to
cut corners and expand into more hostile environments, and the
efforts of regulators will always be uneven. I do not believe
that offshore drilling will ever be safe enough to rest on our
laurels. The Majority might want this hearing to be the last
chapter in this saga; if we are not careful, it could just be a
prelude.
We should be moving toward renewable, carbon-free
technologies like solar, geothermal, and offshore wind.
Unfortunately, this is not the direction we seem to be going.
Hopefully, there will be time to change before the next great
offshore disaster occurs.
And, with that, Mr. Chairman, thank you, and I yield back.
[The prepared statement of Mr. Grijalva follows:]
Prepared Statement of the Hon. Raul M. Grijalva, Ranking Member,
Committee on Natural Resources
Thank you, Mr. Chairman, and thank you for holding this hearing.
The Deepwater Horizon catastrophe was a topic that we didn't get a
chance to discuss very often in the previous Congress, so I appreciate
your willingness to open this conversation back up on the fifth
anniversary of the spill.
Unfortunately, the title of this hearing and the testimony of some
of today's witnesses feel like a big pat-on-the-back session rather
than real oversight. We have three industry witnesses here to tell us
what a great job industry has done, one agency witness to tell us what
a great job the agency has done, and only one witness to tell us about
the impacts of the greatest environmental disaster in our country's
history.
If we really wanted to look whether the industry is safer, we would
invite the families of the 11 workers who perished aboard that rig, or
the families of the 12 offshore workers who have been killed by
offshore accidents since Deepwater Horizon.
We would invite the oystermen who have seen their harvests decline
by two-thirds since the spill. We'd invite the fishermen who are still
pulling up red snapper with skin lesions and shrimp with no eyes. We
would invite the hotel and restaurant owners who still find massive tar
mats on the beaches and who are more vulnerable to floods and
hurricanes after years of barrier islands shrinking. We would invite
the people suffering health impacts from the persistent oil that keeps
appearing in their waterways and on their shores.
I don't doubt there have been some improvements in the past 5
years. But we need to ask ourselves how prepared we are for the next
human error, or the next failed piece of machinery, not just how hard
we're working to prevent Deepwater Horizon from repeating itself.
We shouldn't be lulled into a false sense of security. There were
40 relatively quiet years after our first major offshore blowout. We
were assured that this showed how safe everything was.
So 5 years without a blowout isn't the end of the story. It
certainly doesn't convince me that we should allow offshore drilling in
the Arctic or in the Atlantic. We should not be playing Russian
roulette with our environment and coastal tourism economies.
And where drilling is occurring today, there is a lot more we can
do. While industry and the Interior Department may be patting
themselves on the back, Congress should be working overtime to make up
for its failure to act after the Deepwater Horizon disaster. That
failure is not something we should be proud of.
We need to raise the liability limit for oil spills and enact tough
penalties for offshore safety and environmental violations.
Unfortunately, industry will always have an incentive to cut corners
and expand into more hostile environments, and the efforts of
regulators will always be uneven. I do not believe that offshore
drilling will ever be safe enough to rest on our laurels. The Majority
may want this hearing to be the last chapter in this saga; if we are
not careful, I fear it could just be a prelude.
We should be moving away from offshore drilling and toward cleaner,
safer, carbon-free technologies like solar, geothermal and offshore
wind. Unfortunately, that is not the direction we seem to be going.
Hopefully there is still time to change before the next great offshore
disaster occurs.
Thank you Mr. Chairman, and I yield back.
______
The Chairman. With that I now turn to the Vice Chair, Mrs.
Lummis, for her opening statement.
STATEMENT OF THE HON. CYNTHIA M. LUMMIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WYOMING
Mrs. Lummis. Thank you, Mr. Chairman. And thank you for
holding this hearing on the safety in offshore energy
production. As has been said, this marks the 5-year anniversary
this week of the horrific tragedy aboard the offshore oil
platform, Deepwater Horizon, where the explosion took 11 lives
and devastated families. The ecological damage was extensive.
The tragedy was like a shot heard 'round the world, in terms of
how we look at offshore energy safety, and rightly so.
Fixing the safety shortfalls that led to the explosion
isn't just the right thing to do for those workers, their
families, and the environment. It is a necessity, going
forward, because offshore energy production is a necessity.
Offshore energy production is essential for the United States
to achieve lasting energy security, which also brings about
economic security, national security, and job security for the
men and women in the offshore industry.
So, the answer is not to hold up offshore energy
production. The answer is to make offshore energy production
safer than it has ever been in history for both the people and
the environment. We must proceed deliberately and responsibly
toward safety improvements, relying on science, innovation, and
measurable results. We need to encourage creativity and
innovation that is ingrained in American culture and tradition.
I thank our panels for coming today to discuss strides made
both by industry and the regulatory community since Deepwater
Horizon occurred. We must make sure the Federal regulatory
framework that was developed in response to the tragedy stays
nimble and keeps pace with the technological innovation that
has occurred since then. Striking this balance between worker
and environmental safety and our energy security will be an
ongoing challenge, but America is up to the challenge, as I
believe today's panel will begin to reveal.
Thank you. Mr. Chairman.
[The prepared statement of Mrs. Lummis follows:]
Prepared Statement of the Hon. Cynthia M. Lummis, a Representative in
Congress from the State of Wyoming
Thank you Mr. Chairman, and thank you for holding this hearing on
safety in offshore energy production.
April 20 marked the 5-year anniversary of the horrific tragedy
aboard the offshore oil platform known as the Deepwater Horizon. The
explosion took the lives of 11 Americans. The ecological damage was
extensive. The tragedy was a game changer in terms of how we look at
offshore energy safety, and rightly so.
Fixing the safety shortfalls that led to that explosion isn't just
the right thing to do for the workers, their families, and the
environment. It's a necessity, and that is because offshore energy
production is a necessity. Offshore energy production is necessary for
the United States to achieve lasting energy security, which also means
economic security, national security, and job security for the men and
women in the offshore industry.
Holding up offshore energy production is not a solution. A solution
is rolling up our sleeves and persevering to make offshore energy
production as safe as possible, both for people and the environment. We
must proceed deliberately and responsibly toward safety improvements,
relying on science and measurable results. We need to encourage the
creativity and innovation that is ingrained in American culture and
tradition.
I thank our panels for coming today to discuss the strides made
since the Deepwater Horizon tragedy by both industry and the regulatory
community. We must make sure the Federal regulatory framework that was
developed in response to the tragedy stays nimble and able to keep pace
with technological innovation. Striking this balance between worker and
environmental safety and our energy security will be an ongoing
challenge, but America is up to the challenge as I believe today's
panels will show.
Thank you Mr. Chairman. I yield back.
______
The Chairman. I thank the Vice Chair.
At the request of the Ranking Member, I will now recognize
Mrs. Capps to--for an opening statement.
STATEMENT OF THE HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mrs. Capps. Thank you very much, Mr. Chairman, and thank
you, Ranking Member Grijalva, for giving me this opportunity to
speak. And I want to thank each of you for acknowledging that
this is roughly the 5-year anniversary of the tragic Deepwater
Horizon spill. And I also want to acknowledge that this is
Earth Day, and that is an annual occurrence on this date every
year that came about after Senator Gaylord Nelson visited my
coastline, the coastline that I am privileged to represent, in
1970 and saw, even a year later, the tragedy that was the 1969
oil spill of Platform A that I represent.
So, I do represent a district that experienced the brunt of
the 1969 Santa Barbara oil spill. Our coastline still has
multiple oil platforms visible from our shoreline. And many of
my constituents and I have a very strong and personal interest
in offshore drilling safety.
One of the issues that I do not want to lose sight of in
this discussion today is the importance of safety in both
deepwater and shallow water drilling. The Interior Department
and industry have understandably focused most of their efforts
in the last 5 years on improving deepwater drilling safety,
because we saw firsthand just how unprepared we were for
something terrible to happen 1 mile under the ocean. As
companies continue to move into deeper and deeper water, they
will encounter more and more dangerous conditions and greater
technical difficulties. So continual focus on deepwater
drilling is absolutely essential.
But the industry still works in shallow waters, as well.
And that is what I don't want to lose sight of in this hearing.
After Deepwater Horizon, we were told by industry that, while
new safety standards might be appropriate for deepwater, things
were much safer in shallow water operations. While the rest of
the country watched oil billowing uncontrollably into the Gulf
of Mexico, wondering whether offshore drilling could ever be
done safely at all, shallow water drillers criticized the
Interior Department for focusing more on responding to the
spill than issuing new drilling permits. For the record, I
think the Department of the Interior made the right choice, and
the only choice, in that situation, but clearly, not everyone
agreed.
However, in November of 2010, barely 7 months after the
blowout began, an executive for a shallow water drilling
contractor named Hercules Offshore wrote an editorial touting
the safety of their operations. In this editorial he wrote, and
I quote, ``We've been drilling shallow water wells safely and
without major incident since 1949.'' The contractor was
apparently referring only to waters in the U.S. portion of the
Gulf of Mexico, because both the 1969 Santa Barbara and the
1979 Ixtoc blowouts occurred in water less than 200 feet deep.
But he went on to say, again I quote, ``Shallow water
drilling takes place in mature, predictable, well-known
reservoirs. We use proven technologies and well-controlled
equipment with our blow-out preventers located right on the
rig, allowing for immediate access and constant inspection and
maintenance.'' This sounds great. But I would like permission
to show you something.
[Slide]
Mrs. Capps. If you can see it, this is--despite the initial
similarities, this is not a picture of Deepwater Horizon. It is
a picture from July 2013 of a blowout and explosion on a
shallow water rig operated by Hercules Offshore, the same
company whose executive wrote that editorial about the safety
of shallow water operations. The pictured rig, which you see
behind me, was operating in 154 feet of water, using proven
technologies and a blowout preventer right on the rig that
could be immediately accessed and constantly inspected.
Thankfully, no one was killed during this event and there
was not a major oil spill. But this was only one of several
major shallow water incidents we have seen in the past 5 years,
and lives have been lost in some of those incidents. And
because these operations are much closer to the shoreline, if a
spill does occur on one of them, the impacts on wetlands and
wildlife could be so much worse. Shallow is simply not a
synonym for safe. All companies should be required to meet the
same stringent safety standards that were put into place after
the Deepwater Horizon disaster.
Mr. Chairman, I hope we can agree that safety should always
be our top priority. I am looking forward to working with you
and my colleagues to support common-sense safety measures that
are clearly needed. And I yield back.
[The prepared statement of Mrs. Capps follows:]
Prepared Statement of the Hon. Lois Capps, a Representative in Congress
from the State of California
Thank you, Mr. Chairman, and thank you, Ranking Member Grijalva,
for giving me this opportunity to speak.
Representing a district that experienced the brunt of the 1969
Santa Barbara oil spill and still has multiple platforms visible from
our shores, I have a very strong and personal interest in offshore
drilling safety.
One of the issues that I do not want to lose sight of in this
discussion is the importance of safety in both deepwater and shallow
water drilling. The Interior Department and industry have
understandably focused most of their efforts over the past 5 years on
improving deepwater drilling safety, because we saw firsthand just how
unprepared we were for something terrible to happen 1 mile under the
ocean. As companies continue to move into deeper and deeper waters they
will encounter more and more dangerous conditions and greater technical
challenges, so continual focus on deepwater drilling safety is
absolutely essential.
But the industry still works in shallow waters as well. After
Deepwater Horizon we were told by industry that, while new safety
standards might be appropriate for deepwater, things were much safer in
shallow water operations. While the rest of the country watched oil
billowing uncontrollably into the Gulf of Mexico, wondering whether
offshore drilling could be done safely at all, shallow water drillers
criticized the Interior Department for focusing more on responding to
the spill than issuing new drilling permits. For the record, I think
the Department of the Interior made the right choice--and the only
choice--in that situation, but clearly not everyone agreed.
In November of 2010, barely 7 months after the blowout began, an
executive for a shallow water drilling contractor named Hercules
Offshore wrote an editorial touting the safety of their operations. In
this editorial he wrote, ``We've been drilling shallow-water wells
safely and without major incident since 1949.'' The contractor was
apparently referring only to waters in the U.S. portion of the Gulf of
Mexico, because both the 1969 Santa Barbara blowout and the 1979 Ixtoc
[ICKS-tock] blowout occurred in water less than 200 feet deep.
But he went on to say, ``Shallow-water drilling takes place in
mature, predictable, well-known reservoirs. We use proven technologies
and well-control equipment, with our blowout preventers located right
on the rig, allowing for immediate access and constant inspection and
maintenance.'' This sounds great, but I want to show you something...
[Display picture of Hercules rig on fire]
Despite the initial similarities, this picture is not of Deepwater
Horizon. This is a picture from July 2013 of a blowout and explosion on
a shallow water rig operated by Hercules Offshore, the same company
whose executive wrote that editorial about the safety of shallow water
operations. The pictured rig was operating in 154 feet of water, using
proven technologies, and a blowout preventer right on the rig that
could be immediately accessed and constantly inspected.
Thankfully, no one was killed during this event, and there was not
a major oil spill. But this was only one of several major shallow water
incidents we have seen in the past 5 years, and lives have been lost in
some of those incidents. And because these operations are much closer
to the shoreline, if a spill does occur, the impacts on wetlands and
wildlife could be much, much worse. Shallow is simply not a synonym for
safe. All companies should be required to meet the same stringent
safety standards that were put in place after the Deepwater Horizon
disaster.
Mr. Chairman, I hope we can agree that safety should always be our
top priority. I look forward to working with you and my colleagues to
support common-sense safety measures that are clearly needed.
I yield back.
______
The Chairman. Thank you. Now it is my pleasure to introduce
our first witness, Vice Admiral Brian Salerno, who is the
Director of the Bureau of Safety and Environmental Enforcement.
Happy to have you here.
I will remind you, you have been here before, you know the
rule. Your oral testimony is limited to 5 minutes, but your
entire written testimony is part of the record. And I think you
understand how the lights go there. As soon as it is red, you
have to stop in mid-sentence. Thank you.
Admiral Salerno. Yes, sir.
The Chairman. The Chair recognizes Mr. Salerno now for your
testimony.
STATEMENT OF BRIAN SALERNO, VICE ADMIRAL (USCG, RETIRED),
DIRECTOR, BUREAU OF SAFETY AND ENVIRONMENTAL ENFORCEMENT, U.S.
DEPARTMENT OF THE INTERIOR
Admiral Salerno. Thank you. Chairman Bishop, Ranking Member
Grijalva, and members of the committee, thank you for the
opportunity to appear before you today to discuss progress in
offshore safety since the Deepwater Horizon incident.
As you know, the blowout explosion and resulting oil spill,
which began on April 20, 2010, resulted in the loss of 11
hardworking men on the Deepwater Horizon, and one of the most
significant environmental disasters in U.S. history. The
aftershocks of that fatal day will forever reverberate with the
families left behind, as well as for all those whose lives and
livelihoods were affected by the environmental damage caused by
that spill.
This event had a profound effect on the public, on the
industry, and upon us, as a regulatory body. The Bureau of
Safety and Environmental Enforcement was created in direct
response to that event, to provide a laser focus on safety, and
to reduce the risk of a similar event from ever occurring
again. Establishing this new organization allowed for greater
mission clarity, and helped remove the sometimes-conflicting
priorities within its predecessor organization, the Minerals
Management Service. Congress also provided new resources
necessary to fulfill the Bureau's regulatory responsibilities.
In the 3\1/2\ years since it was established, BSEE has
worked diligently to earn public confidence in our oversight
activities, while at the same time promoting safe and
responsible energy development. We have approached our
responsibilities in a number of ways, including strengthening
our permitting procedures to ensure more stringent safety
analysis of well design; increasing our staff of inspectors,
engineers, and scientists to allow for more meaningful
oversight; updating our regulations to reflect current
operating conditions, industry standards, and workplace safety
best practices; enhancing oil spill response capabilities,
especially subsea containment capability; and, most
importantly, we placed a strong emphasis on establishing a
culture of safety among all those who work on the Outer
Continental Shelf.
Regulatory enhancements are important, and they continue to
form the foundation of our approach. But, in addition, we
continue to engage stakeholders from academia, from industry,
from non-governmental organizations, and other government
agencies to improve our approach to system reliability and
human decisionmaking.
In 2013, BSEE funded the startup costs for the Ocean Energy
Safety Institute, which provides an independent forum for
dialog, shared learning, and cooperative research among
stakeholders. BSEE is also in the process of establishing an
engineering technology assessment center to be located in
Houston, Texas, which will be a bureau-wide focal point for
emerging technology evaluation.
Looking ahead, BSEE intends to pursue a risk-based approach
to our inspection responsibilities to better match our time and
resources to the greatest risks. In the near future, we will
establish a near-miss reporting system modeled after a similar
system used in commercial aviation, and which will help us
understand safety trends, and allow us to better focus our
prevention efforts. And we will continue to refine our
organization to achieve greater transparency, consistency, and
effectiveness in our mission performance.
A lot has occurred in the last 5 years to make the Outer
Continental Shelf safer. However, incidents still occur.
Complacency is our greatest adversary. Our commitment is to
remain focused and vigilant, to do everything we can, working
with all interested parties, to reduce risk to the lowest
practical level, while allowing industry to responsibly develop
energy resources.
I would like to thank the committee for inviting me to
appear here today, and I look forward to your questions.
[The prepared statement of Admiral Salerno follows:]
Prepared Statement of Brian Salerno, Director, Bureau of Safety and
Environmental Enforcement, U.S. Department of the Interior
Chairman Bishop, Ranking Member Grijalva, and members of the
committee, thank you for the opportunity to appear here today to
discuss the regulatory reforms that the U.S. Department of the Interior
(DOI) has implemented since the Deepwater Horizon (DWH) tragedy where
11 offshore workers lost their lives and oil flowed into the Gulf of
Mexico (GOM) for 87 consecutive days resulting in millions of barrels
of total oil spilled.
Over the last 5 years, the DOI has launched numerous reforms that
represent the most aggressive and comprehensive changes to offshore oil
and gas regulation and oversight since the enactment of the Outer
Continental Shelf Lands Act. One of the most immediate reforms included
the division of the Minerals Management Service (MMS) into three
independent entities:
1. Bureau of Ocean Energy Management (BOEM) ensuring the balanced
and responsible development of energy resources on the
Outer Continental Shelf (OCS);
2. Bureau of Safety and Environmental Enforcement (BSEE) ensuring
safe and environmentally responsible exploration and
production through vigorous regulatory oversight and
enforcement; and
3. Office of Natural Resources Revenue ensuring a fair return to the
taxpayer from royalty and revenue collection and
disbursement activities.
The creation of BSEE out of the former MMS provided for an
organization with a distinct mission focus on ensuring safe and
environmentally responsible OCS operations through development and
promotion of safety standards and processes, along with rigorous
compliance and enforcement. BSEE has pursued its oversight mission by
implementing a series of comprehensive regulatory reforms;
strengthening its internal capacity by improving processes related to
inspections, investigations, and enforcement programs; funding research
in spill preparedness and response, and technological advancement; and
engaging in strategic interagency, international and industry
engagements.
assessing and managing risk
Managing risk provides the basic framework through which BSEE
approaches safety on the OCS. BSEE pursues this objective through a
comprehensive program of regulations, technical assessments,
inspections, and incident investigations. In addition, we place great
emphasis on the establishment of a safety culture throughout industry,
the cornerstone of this effort being the Safety and Environmental
Management System, or SEMS. SEMS is performance based, and forms a
necessary counterpart to our more traditional regulatory oversight
activities. We believe this hybrid approach is the most comprehensive
way to take safety to the next level.
To further support this overall approach, the Bureau is focusing on
building its capacity for analyzing data gained through incident
reporting requirements, near-miss reporting, and real-time monitoring.
For example, in November 2013, BSEE and the Bureau of Transportation
Statistics (BTS) signed an interagency agreement (IAA) to develop the
Voluntary Confidential Near-Miss Reporting System (Safe OCS) for use on
the OCS. Safe OCS, which will be managed by BTS, has the potential to
help identify safety concerns and support collective measures that will
help prevent catastrophic incidents that endanger lives and the
environment. The trend information will be shared with BSEE, the
industry, and the public and provide essential information about
accident precursors and potential hazards associated with OCS oil and
gas operations.
The Bureau also works with recognized scientific organizations,
other international regulators, and the industry to identify and
quantify operational risks. These activities, along with increased data
collection, will further contribute to BSEE's ability to target the
components, operations, and activities that present the highest risk to
safety and the environment and ensure that mitigation measures are in
place. Through these initiatives and others, the Bureau will continue
to ensure that offshore development occurs in a safe and
environmentally responsible way.
major regulatory enhancements to date
In the immediate aftermath of the DWH tragedy, it was clear that
existing regulations had not kept pace with the advancements in
technology used during offshore activities. The regulatory reforms that
BSEE has initiated and implemented cover a wide range of subjects, all
focused on increasing safety and reducing the risk throughout offshore
operations. BSEE continues to use a hybrid approach--prescriptive
regulations and performance-based measures--focusing on rules that will
provide for the greatest enhancement in safety and environmental
protection. As offshore operations expand and move into new
environments and require new technologies, BSEE will continue to adapt
its regulatory approach and oversight responsibilities. Over the last 5
years, BSEE's regulatory enhancements include:
Promoting Safety Culture and Continuous Improvement at All Levels
of Industry--As noted above, the Safety and Environmental Management
Systems (SEMS) program is the cornerstone of BSEE's hybrid regulatory
approach. The goal is for the SEMS program to encourage the offshore
oil and gas industry to look beyond baseline compliance with
regulations and move toward a safety culture that promotes continuous
improvement in safety and environmental performance. The SEMS program
is meant to be a tool through which companies actively manage and
improve safety performance related to human behavior, organizational
structure, leadership, standards, processes, and procedures--not simply
a compilation of required documentation. It also requires industry to
maintain an active integrated program that empowers industry workers to
participate in safety management decisions. BSEE issued regulations in
2010 and 2012 and will continue to refine the program in future years.
Drilling Safety Rules--Following the DWH tragedy, several immediate
actions were taken to address specific offshore safety concerns
involving drilling operations. The regulations that were issued in 2010
and 2012 required new standards for well design, casing and cementing,
and the third party certification of designs. These rules represented
an important first step in addressing regulatory gaps in the offshore
program. BSEE engineers have since reviewed, analyzed, and approved a
total of 579 new well permits for drilling in the GOM that meet these
more stringent well-construction standards. Further, despite the new
standards recent statistics indicated that new wells are reviewed and
approved on average under 60 days.
Access to Subsea Containment Capability--As a condition for
approving deepwater drilling operations, BSEE evaluates an operator's
capability to contain a subsea blowout. BSEE also evaluates an
operator's access to all necessary equipment for subsea containment
including a capping stack. As a result, there is now containment
equipment available for industry deployment. In addition, BSEE has
required the providers of the containment systems to demonstrate
successful deployment of the systems in the field.
ongoing reform efforts
Proposed Production Safety Systems Rule--In August 2013, BSEE
published a proposed rule to address safety systems that prevent the
release of hydrocarbons and protect the personnel on the 2,500 OCS
production facilities. This will be the first significant revision of
these critical regulations since 1988. The proposed rule will address
new technology that has been developed in the past 25 years, upgrade
requirements for critical safety equipment, and ensure the use of best
available and safest technology. The Bureau is currently working to
finalize the proposed rule.
Proposed Arctic Rule--In February 2015, BSEE and BOEM published the
proposed rule for drilling operations in the U.S. Arctic OCS. Using a
combination of performance-based and prescriptive standards, the
proposed regulations codify and further develop current Arctic-specific
operational standards that seek to ensure that operators take the
necessary steps to thoroughly plan for and conduct safe exploratory
drilling operations within the Beaufort Sea and Chukchi Sea Planning
Areas.
The proposed regulations have been developed with significant up-
front public input from the state of Alaska, North Slope indigenous
communities, industry and non-governmental organizations. The proposed
regulations are currently open for additional public comment to ensure
transparency and solicit feedback from all stakeholders. Interior will
continue rigorous stakeholder engagement as well as formal tribal
consultation in the region.
Proposed Well Control Rule--BSEE has reviewed over 400
recommendations following the DWH tragedy. On April 13, 2015, BSEE
announced proposed Well Control regulations to address some of the key
recommendations. This proposed rule includes provisions that increase
equipment reliability and build upon enhanced industry standards for
blowout preventers (BOP) and, in a comprehensive way, addresses the
multiple systems and processes critical to well control operations. The
proposed rule requires more stringent design requirements for critical
well control safety system equipment and traceability through the
lifecycle of the BOP and other well control equipment, ensuring
operability of the equipment. Finally, the rule will provide continuous
oversight of deepwater operations through onshore real-time monitoring
and additional requirements for third party certification of the
performance of critical equipment.
Other Reforms--In 2014, BSEE published an Advanced Notice of
Proposed Rulemaking related to aviation safety. In the near future,
BSEE plans to publish a proposed rule that will incorporate updated
industry safety standards for cranes on fixed platforms; the Agency
also expects to solicit comments on approaches to improve the existing
SEMS regulations.
Increased Limits of Liability--In coordination with BSEE, the
Bureau of Ocean Energy Management (BOEM) has taken action to better
ensure responsible parties are held accountable for OCS pollution
incidents in the future. BOEM has increased the limit of liability for
oil-spill related damages from $75 million to approximately $134
million for offshore oil and gas facilities--the maximum allowed under
the law--and has established a process for future increases to keep
pace with inflation.
bolstering bsee's capacity to reduce risk offshore
Human Capital
Following the Deepwater Horizon tragedy, it was determined that
there were significant skill and staffing gaps in career fields crucial
to ensuring safe and environmentally sound exploration and development.
The Bureau has taken a number of actions to address long-term hiring
and retention challenges including offering a suite of available hiring
and retention incentives. BSEE has worked diligently to hire and train
new inspectors and engineers, but continues to face significant
challenges in recruitment and retention within certain job
classifications. BSEE will continue to implement its Human Capital
Strategic Plan, which addresses anticipated workforce changes and gaps
in critical skills and competencies.
Inspection Program
BSEE's efforts to reinforce its inspection program have been
threefold: increase its inspection and engineering workforce, enrich
the training of inspectors and engineers, and apply a risk management
methodology to conduct inspections. The number of inspectors in the
BSEE Gulf of Mexico Region has increased from 55 in April 2010 to 92
currently. BSEE inspectors now specialize in either well or production
operations; this specialization allows for more training and time
devoted to a specific area of inspection. The engineer workforce in the
Gulf of Mexico Region has increased from 106 at BSEE's inception in
October 2011 to 129 currently. This allows for the increased review of
permits which requires more analysis to ensure compliance with the
enhanced standards.
To ensure that our inspectors and engineers are able to fully
assess the latest technological advances, BSEE has implemented a
comprehensive training program that ensures they receive the best
training currently available. In FY 2014, BSEE offered 79 training
courses that resulted in 23,396 contact training hours for 177 BSEE
engineers, 113 BSEE inspectors, as well as 20 Coast Guard personnel.
By applying a risk management methodology, BSEE is beginning to
shift its inspection program to a risk-based program that more
effectively uses the available inspection and enforcement resources.
BSEE will in the future target higher risk operations and facilities
for supplemental oversight in order to increase the overall performance
of offshore operations.
With the increased inspection workforce, BSEE is now positioned to
ensure full implementation of the new standards for BOP testing. BSEE
inspectors witness BOP testing to observe the skill level of the
drilling crews, and to become more involved with the crew's handling of
the BOP function. Since October 2010, BSEE inspectors have witnessed
169 on-site BOP tests. Inspectors also conduct detailed reviews of BOP
test results; 409 of these detailed reviews have been completed since
October 2010. BSEE is considering options that would provide additional
oversight using remotely sensed data and real-time monitoring from
onshore facilities.
Investigation and Enforcement
BSEE has also taken steps to strengthen its investigation, data
analysis, and compliance and enforcement programs. BSEE has reevaluated
how it conducts investigations of incidents and potential violations
occurring during oil and gas operations on the OCS. Should a safety or
environmental incident occur, BSEE has a duty to investigate and
determine the causal elements/factors and the appropriate corrective
actions. The implications of such determinations will apply to the
operator(s) involved in the incident, potentially their contractors and
subcontractors, and also may extend to industry-wide practices. These
determinations also may have implications for BSEE's own regulatory
procedures and standards.
The goal is to improve safety on an operator and company basis, as
well as on a system-wide level as appropriate. For the most serious
incidents that occur offshore, BSEE conducts in-depth panel
investigations, resulting in detailed findings and recommendations.
Some panel investigations lead to recommended enforcement actions and/
or referrals to other enforcement authorities. BSEE incident
investigations can also lead to the issuance of safety alerts, a
vehicle to inform industry participants about the circumstances
surrounding an incident (or potential incident). For example, in
February 2015, BSEE and the U.S. Coast Guard (USCG) issued a Joint
Safety Alert addressing a dynamic positioning incident involving an
Offshore Supply Vessel which resulted in a loss of position. The alert
identified the potential hazard so that other operators could minimize
the chance of a reoccurrence.
technological innovation and assessment
BSEE has continued to engage stakeholders from academia, industry,
non-governmental organizations, and other governmental agencies to
enhance the knowledge base of BSEE's technical personnel and enabled
them to better identify regulatory gaps, promote innovative
technologies, and encourage risk-based decisionmaking.
BSEE funded the startup costs for the Ocean Energy Safety Institute
(OESI), which provides an independent forum for dialog, shared
learning, and cooperative research among stakeholders. Although OESI
was established by BSEE, it is not an extension of the Bureau. Rather
the OESI is a neutral ground for the exploration of issues of offshore
risk that are of common concern to industry and regulators. The BSEE
operates as one of many participants, with others coming from industry
and academia.
In a separate initiative, BSEE is in the process of establishing
the Engineering Technology Assessment Center (ETAC or Center) in
Houston, Texas. The ETAC will also strengthen BSEE's ability to assess
novel and emerging technologies by keeping pace with an increasingly
complex industry. In 2015, projects will focus on the evaluation of BOP
technology and the determination of Best Available and Safest
Technology. Through the Center, the Bureau will work more closely with
original equipment manufacturers and participate more fully with
standards-setting bodies. The Center will serve as the primary liaison
between BSEE and the OESI, and BSEE anticipates that the ETAC engineers
will work with OESI on joint industry projects.
Research
BSEE is leveraging the resources of our interagency partners and
working with others to conduct important research related to new and
emerging technologies, as well as operations in frontier areas to
further our efforts to reduce risks across all offshore operations. The
Technology Assessment Program supports research associated with
operational safety and pollution prevention and is providing regulatory
tools to assist in the evaluation of high temperature/high pressure
equipment and materials and cutting edge issues involving BOPs and
cementing practices.
BSEE is the principal Federal agency funding offshore oil spill
response research that focuses on improving the methods and
technologies used for oil spill detection from aerial and subsea
platforms and vehicles, surface and subsea containment, treatment,
recovery and cleanup. The Bureau operates the National Oil Spill
Response Research and Renewable Energy Test Facility, known as Ohmsett,
where many of today's commercially available oil spill cleanup products
have been tested. Government agencies including the USCG and the U.S.
Navy as well as private industry and oil spill response organizations
from around the world train their emergency response personnel with
real oil and their own equipment.
Preparedness
BSEE continues to focus on improving the Nation's response
capabilities through rigorous oversight and research opportunities.
BSEE reviews oil spill response plans to verify that owners and
operators of offshore facilities are prepared to respond to a worst
case oil discharge. BSEE requires that plans be updated at a minimum of
every 2 years or when key changes to an operator's preparedness posture
or worst-case discharge scenario change.
In 2014, BSEE conducted 11 unannounced complex table top and/or
equipment deployment exercises. These exercises tested operator's oil
spill response plans and their ability to respond effectively and
efficiently to hypothetical spill scenarios.
Interagency Coordination
BSEE's responsibilities for the regulation of offshore energy
development on the OCS are shared in some cases with other Federal
agencies. The Bureau leverages its limited resources through agreements
with Federal partners and other agencies through memoranda of
understanding or agreement (MOU, MOA) and IAA. For example, BSEE and
the USCG have closely aligned jurisdictional and regulatory
responsibilities for offshore inspections, incident response and
investigations. Under an overarching MOU and six MOA's the two
organizations have collaborated extensively to reduce redundancy and
ensure consistency and clarity for the regulated community. BSEE has
also entered into agreements with other Federal partners including the
U.S. Department of Energy (DOE), U.S. Department of Transportation,
Pipelines and Hazardous Materials Safety Administration, the U.S.
Environmental Protection Agency, and U.S. Army Corp of Engineers.
BSEE signed an interagency agreement with the DOE in 2014. Through
the formal Memorandum of Collaboration, BSEE works with Argonne
National Laboratory and the National Energy Technology Laboratory on
areas of spill prevention research, risk modeling, renewable energy
initiatives, and technology research.
BSEE also participates in the Interagency Coordinating Committee on
Oil Pollution Research (ICCOPR), which provides a forum for research
collaboration that looks at oil spill prevention, preparedness, and
response. The ICCOPR, a congressionally mandated body which is
comprised of staff from Federal agencies, provides a venue in which
agencies share their latest research, regulations, and policies;
explore opportunities for collaboration on research; and, identify
emerging issues that need national attention. BSEE currently serves as
the Co-Chair providing leadership and coordinated research efforts
throughout the Federal oil spill research community. BSEE also sits on
the Scientific and Technical Committee of the National Response Team.
International Collaboration
BSEE's commitment to reducing risk throughout the offshore industry
is not limited to the U.S. OCS. Through various multilateral and
bilateral relationships, BSEE is helping to share U.S. standards and
best practices for safety and environmental protection internationally
across a global industry. Bureau experts are routinely requested to
provide technical assistance and training to other nations who are
working to develop their offshore energy resources in a safe and
environmentally responsible manner. BSEE engagements include policy
assistance, bilateral and multilateral engagements, standards
development, international agreements, and participation in
international fora. Notable multilateral engagements include BSEE
participation in the International Regulators Forum (IRF),
International Offshore Petroleum Environment Regulators, Arctic
Offshore Regulators Forum, and the Caribbean Oil Spill Cooperation
Forum.
BSEE is actively involved in several working groups of the Arctic
Council. For example, as a member of the Emergency Prevention,
Preparedness, and Response Working Group, BSEE is engaging
international partners in joint research activities to better protect
resources that could be impacted from spills in Arctic waters.
Through the implementation of the U.S.-Mexico Transboundary
Hydrocarbon Agreement, BSEE continues to work with Mexican officials to
exchange information and craft procedures for a joint inspections
program that supports the safe and responsible exploration and
development of hydrocarbon resources along the maritime boundary.
conclusion
The efforts outlined throughout this testimony represent important
milestones in BSEE's ability to achieve its mission to ensure offshore
safety, and to protect life, property, and the environment while
serving as a significant source of energy for the Nation. In calendar
year 2014, OCS leases in California, Alaska, and the GOM provided 528
million barrels of oil and 1.3 trillion cubic feet of natural gas,
accounting for more than 16 percent of the Nation's oil production and
about 5 percent of domestic natural gas production. BSEE will continue
to support domestic energy production from the Nation's offshore
resources, while actively working to reduce risk in order to ensure
safe and environmentally responsible operations on the OCS.
It is my belief that our work as regulators--on behalf of the
American people--is never finished. As our commitment and duty to the
American people, we will remain vigilant in instituting reform efforts
and lessons learned since the tragic DWH event. We will continue to
work cooperatively with the regulated community to promote best
practices and to support a robust culture of safety within industry. I
thank the committee for inviting me to appear today. I would be pleased
to answer any questions.
______
Questions Submitted for the Record by Chairman Rob Bishop to Director
Salerno, Bureau of Safety and Environmental Enforcement
Question 1. In the hearing, you responded that the lessons learned
in the Gulf of Mexico will be employed in new areas, such as the
Atlantic, and that exploration and production can be conducted safely.
Can you explain where BSEE intends to have a regional office to better
regulate this prospective development and how the Bureau intends to
oversee operations?
Answer. No decision has been made at this time regarding the
location of a regional office to oversee exploration and production
activities on the Atlantic Outer Continental Shelf (OCS). If regulatory
or technical issues arise before the office is established, staff from
our Headquarters and Gulf of Mexico offices will assist.
Question 2. Can you please elaborate on the criteria used to
furnish the economic analysis of your rulemakings.
Answer. The criteria used to furnish economic analyses of BSEE's
rulemakings are established by statute, Executive Orders and guidance
from the Office of Management and Budget (OMB) for all Federal
regulatory agencies. Most of these criteria are found in Executive
Order (E.O.) 12866 and E.O. 13563, and associated guidance in OMB
Circular A-4,``Regulatory Analysis'' (Sept. 2003). In addition,
agencies are required by the Regulatory Flexibility Act of 1980 to
consider the economic impact of regulations on small entities, and
agencies are required under the Unfunded Mandates Reform Act of 1995
(UMRA) (Public Law 104-4) to assess whether the effects of the
regulation would include a mandate involving additional annual
government expenditures of $100 million or more.
BSEE looks at all available sources of data and uses a variety of
data sources for its economic analyses. These include BSEE's own
electronic databases, especially TIMS, which include information
collected from industry reports and/or compiled by BSEE inspectors and
other staff in the course of their duties. Other data are acquired from
publicly available statistics from several agencies, such as energy
prices and volumes from the Department of Energy, industry statistics
from the Department of Commerce, and wage rates and the Consumer Price
Index from the Bureau of Labor Statistics. Additional data are acquired
from trade association and professional association (e.g., Society of
Professional Engineers) Web sites, and, where appropriate, from
inquiries to knowledgeable and reliable sources within the affected
industry, including BSEE's own subject matter experts with direct
knowledge of relevant facts.
Data provided through public comment on proposed rulemakings also
are invaluable sources of information that allow the agency to refine
its economic impact analysis.
Question 3. Given the complexity of the well-control rule and how
it will work in concert with the proposed Arctic rule, can you provide
a schedule for expected implementation?
Answer. Both the Arctic rule and the well control rule are proposed
rules published for public comment. All relevant comments will be
reviewed and considered by the Department before any final rulemaking
decisions are made. During the comment review and preparation of the
final rules, the Bureaus will reconcile any potential overlap in the
rules and will consider the appropriate implementation schedules for
both rulemakings.
Question 4. How is BSEE working with industry to encourage further
safety innovations for future operations?
Answer. For decades, BSEE and its predecessor bureaus have
communicated with industry to encourage safety innovations through
Regional and Headquarters administered programs and functions. These
interactions occur through any number of fora including formal review
processes, sharing the results of significant permit reviews and
incident investigations, participation in conferences and technical
fora and through technical research projects focused on operational
safety and pollution prevention.
For example, BSEE uses the results of incident investigations and
data analysis to identify incident causes and trends. Appropriate
actions are then identified to prevent the recurrence of these
incidents and to enhance safety and environmental protection on the
OCS. These actions may include publishing Safety Alerts, initiating
technical research, developing new/revised regulations or standards,
enhancing inspection strategies, and holding safety workshops. BSEE
uses these tools and practices to inform the offshore oil and gas
industry and our international counterparts of the circumstances
surrounding an incident or a near miss, and to provide recommendations
to help prevent the recurrence of such an incident on the OCS.
BSEE and industry also engage with each other in technical forums,
meetings on specific topics or practices, regulations workshops, and
the development of technical standards. At the present time, BSEE
incorporates over 100 technical standards into its regulatory program.
The standards include equipment specifications, operating practices,
equipment manufacturing, and hydrocarbon measurement. Currently, BSEE
is working with industry on a variety of standards-related issues to
improve safety on the OCS. These standards include deepwater
operations, Safety and Environmental Management Systems, cementing,
cranes and lift operations, operations in high pressure high
temperature environments and safety valves.
While BSEE continues to promote new technologies and safety
innovations through these means, more recently BSEE has broadened its
exposure and influence through new and evolving programs, such as:
The Best Available and Safest Technologies (BAST) program. As part
of the initiative, BSEE engineers continuously identify and assess new
and emerging technologies that have been recommended for or have the
potential for use in the OCS. BSEE engineers engage designers, Original
Equipment Manufacturers, service providers, distributors and others to
assess the capabilities of technology as potential BAST and, where
possible, witness qualification testing to assess performance and
risks.
Safety and Environmental Management System (SEMS). As part of our
implementation of the SEMS program, BSEE has formulated over 20
questions on how SEMS can be used to encourage further safety
innovations in OCS oil and gas operations, and has asked the Ocean
Energy Safety Institute (OESI), a research consortium sponsored by BSEE
and run by Texas A&M, University of Texas and University of Houston, to
conduct workshops and forums with industry and other stakeholders, to
provide BSEE with answers to those questions.
Ocean Energy Safety Institute (OESI). In 2013, BSEE established the
OESI, a consortium of the University of Texas, University of Houston
and Texas A&M. It is housed in the Texas A&M Mary Kay O'Connor Process
Safety Center. The OESI was established to facilitate research and
development, training of Federal workers on BAST, and implementation of
operational improvements in the areas of offshore drilling safety and
environmental protection, blowout containment and oil spill response.
The OESI provides a forum for dialog, shared learning, and
cooperative research among academia, government, industry, and other
non-governmental organizations, in offshore energy-related technologies
and activities that ensure safe and environmentally responsible
offshore operations.
______
The Chairman. Thank you, I appreciate that. Stayed in the
time limit too, I appreciate that.
We will now turn to questions. Let me turn first to Mr.
Lamborn, if you have questions for the Director.
Mr. Lamborn. Yes, thank you, Mr. Chairman. Thank you for
holding this hearing. And, Director Salerno, thank you for
being here today.
This week Secretary Jewell said that offshore drilling is
safe, especially under the Federal reforms that have been put
into place since Macondo. Do you agree with her statement?
Admiral Salerno. I believe it has gotten safer, sir, yes.
Mr. Lamborn. No, I am glad to hear that. But is it safe?
Admiral Salerno. It is comparatively safer, yes. And I
think the reforms that have been put in place have contributed
to that, as well as a number of other factors.
Mr. Lamborn. Now, I imagine that the reforms will carry
forward into all of the new areas that this committee hopes to
see developed in the coming years, such as the Arctic and the
Atlantic. Is it your belief that offshore exploration and
development can be done safely in the Arctic and the Atlantic?
Admiral Salerno. With the proper oversight and controls, I
believe it can be done safely.
Mr. Lamborn. Thank you. I would like to touch on two of
your most recently proposed regulations, the Arctic Rule and
the Well Containment Rule. The Well Containment Rule focuses on
the high pressure and high temperature environment of the
deepwater Gulf of Mexico. And, from what I know, the areas put
forward for Arctic development are in a low pressure, low
temperature, and shallow water environment. How would these
rules work together, or work in tandem with two very different
environments?
Admiral Salerno. The Well Control Rule does include high
temperature, high pressure, as you indicated. But it is
actually more inclusive than that. It also addresses activities
in shallower water, and it also is meant to apply to Arctic
activities, as well.
Mr. Lamborn. And does the Arctic Rule include provisions
for a second ship to be available to start drilling a relief
well, in case there is a problem?
Admiral Salerno. The Arctic Rule does propose a second rig,
which would be available to drill a relief well, should one be
required. That rig can also be used for drilling activity.
Mr. Lamborn. How long would it take to start and finish
drilling a relief well, if such a thing were necessary?
Admiral Salerno. We estimate--well, we built into the
proposal a 45-day window at the end of the drilling season to
allow sufficient time for a relief well to be drilled. And that
would include time to reposition a second rig to the site.
Mr. Lamborn. So you don't think there are better ways,
faster ways, of tackling the issue than what would take up to
45 days with a second drilling rig doing a relief well?
Admiral Salerno. To permanently kill an out-of-control
well, our best understanding is it will take a relief well.
Most wells are permanently killed in that fashion. So that is
why we included it in the proposal.
Now, we have asked the industry in this proposal for
alternative technologies, and we would welcome input from the
industry along those lines.
Mr. Lamborn. OK, thank you. Also, my understanding is that
the comment period is going to be limited to 60 days, which, to
me, sounds like a very short time. What are your thoughts on
that?
Admiral Salerno. The Arctic Rule has just been extended an
additional 30 days, for a total of 90 days. And our initial
comment period for the Well Control Rule is 60 days. Should
there be a need to extend that, obviously, the Department can
evaluate that and extend it, if necessary.
Mr. Lamborn. Well, I would ask you to consider that,
because these are very technical, as you know. And that
additional time could be useful to the people wanting to make
comments.
OK, thank you. I appreciate that. Mr. Chairman, I yield
back.
The Chairman. I thank the Subcommittee Chairman for those
questions.
Turning to Mr. Grijalva, I realize you already have the
monitor aimed toward you. You are taking over here. Do you have
questions?
Mr. Grijalva. I would defer to the----
The Chairman. Ms. Tsongas, defer to you for the questions.
Ms. Tsongas. Thank you. And thank you, Vice Admiral
Salerno, for being here. It is great to have you here.
You know, I come from the coastal state of Massachusetts.
And, like many of the Gulf states which were so deeply impacted
by the BP oil spill, the health of our ocean, the Atlantic,
directly impacts the health of many communities in
Massachusetts, as well as the other New England coastal states.
And we depend on the ocean and coastal areas for shipping, for
commercial fishing and tourism, as well as for alternative
energy development.
In fact, Massachusetts is home to the most profitable port
in the Nation, New Bedford, Massachusetts, which brings in over
$400 million a year in commercial fishery landings. The New
England region, as a whole, brings in over $1.1 billion in
commercial landings annually, which, obviously, has a ripple
effect on our entire regional community.
As you know, the Department of the Interior recently issued
the draft 5-year Outer Continental Shelf Oil and Gas Leasing
Program, which included a proposed lease sale in the Atlantic
Ocean. The BP oil spill underscores the real risks associated
with offshore drilling. And, despite testimony today, I remain
concerned that safety reforms are insufficient. I strongly
oppose this proposed lease sale, and hope it will be removed
from the final plan.
In your written testimony about agency reforms, you said
that BSEE approaches safety on the Outer Continental Shelf by
assessing and managing risk. You also said that the Bureau
works with scientific organizations and industry to identify
and quantify operational risks. We have not had drilling off
the coast of the Atlantic in decades, and the most recent wells
were abandoned because they were not commercially viable.
So, my question is, as you are relooking at the way in
which you do work, given the risks that we know are real, has
BSEE ever conducted any assessments of drilling safety off the
coast of the Atlantic?
Admiral Salerno. We have not looked specifically at the
Atlantic. We look at drilling activity in and of itself, you
know, the nature of drilling, the technology that is used in
drilling, the environment where drilling takes place--
particularly, for example, in the Arctic, where we need special
conditions. But we focus on the technology, the techniques, the
practices that are used by the industry, and everything that
goes into preventing mishaps and accidents on the Outer
Continental Shelf. But it is not necessarily geographically
specific for the Atlantic.
Ms. Tsongas. So are you basically depending upon industry
assessment?
Admiral Salerno. No, we are not. We are focusing on our own
assessments of industry practices and the technology that is
being used in place.
We really focus on the design of the well, making sure that
there is proper integrity there, there are proper barriers in
place, so that anything that conceivably could happen has a
safety barrier, multiple safety barriers. That is how we
approach the management of risk.
Ms. Tsongas. Well, should the Atlantic lease sales be
included in the final 5-year plan, what do you expect to be the
biggest safety concerns?
Admiral Salerno. We will certainly take a close look at any
unique characteristics, but a lot of it will be depending on
the geology, what we anticipate in the geological formations,
what risks they impose, the temperatures, the pressures, and
certainly any operating conditions regarding meta-ocean data.
You know, anything that might affect activity on the surface.
Ms. Tsongas. And do you imagine that the precautions in the
Atlantic would be different from those that are in the Gulf or
wherever else you may be considering lease sales?
Admiral Salerno. Potentially. I think it will be a result
of all of the factors I just mentioned.
Ms. Tsongas. Well, as I said, I remain very opposed to
having the Atlantic included in these proposed lease sales, and
I do hope that it will be taken off the list. Thank you, and I
yield back.
The Chairman. Thank you. Now I will turn to Mr. Graves,
this is your back yard. Do you have questions for the Director?
Mr. Graves. Thank you, Mr. Chairman. Put the slide up,
please.
[Slide]
Mr. Graves. Director, this slide here shows--the blue bars
there show the volume of oil that was spilled in various years,
dating back to 1973. And the red shows the number of
incidences.
You know, my takeaway, looking at that, is that you see a
trend of, number one, decreasing incidences, which I think is
fantastic. When I refer to incidences, I am talking about
spills. Number two, you see a volume, significant volume drop.
You see a bump in Valdez. You see a bump in 2005, as a result
of the extraordinary hurricane activity that we had. But the
trends are exactly what I think all of us want to see: fewer
incidences and extraordinary reduction in the volume of oil
that was spilled.
If you were to take the oil that was spilled in Deepwater
Horizon, you could take that max year that looks like it is
1975, and by some estimates you could multiply that times 10 or
20. OK? And that takeaway is over 2,000 separate spills. So I
will say again, you can take the spills, over 2,000 separate
spills, total volume, you can multiple it times 10 or 20.
I realize that the District Court said it is 3.19 barrels
that were spilled. That is under appeal by Department of
Justice. And I think there is other documentation out there
which may indicate that the spill volume was much higher.
I guess you would concur that this is a good direction and
good trends that we are seeing.
Admiral Salerno. Yes.
Mr. Graves. You understand that, in the case of Deepwater
Horizon, that the judge determined that there was gross
negligence and that there was willful misconduct. And I would
consider that to be somewhat of an anomaly, meaning that the
operations in that particular situation were an anomaly. In
fact, the judge says that there was an ``extreme deviation from
the standard of care, and a conscious disregard of known
risk.'' He also said that the operators decisions were
``profit-driven.''
I am all for ensuring that we are safe in operation of
offshore. But I also think it is really important for us to
recognize this: gross negligence, willful misconduct. The fact
that we have had billions of barrels of oil that have been
produced in the Gulf of Mexico, and trillions of cubic feet of
natural gas, and we haven't had incidences. We haven't had
serious spills. And this is an anomaly. And I think it is very
important that that be taken into consideration.
Whenever you go ride a motorcycle, you put a helmet on.
Whenever you go whitewater rafting, you put on a PFD or a life
jacket, because there are additional safety risks. I will say
that, with the corners that were cut in Deepwater Horizon,
absolutely the capture measure, the capping the recovery
measures, were insufficient, based upon the risks that those
operators, that those RPs, were taking. But I am concerned that
what is happening now in some cases--that the safety regs are
going to go beyond, and you are going to punish some of those
that have actually been good operators in the Gulf of Mexico.
And I just want to place that in the record, and I want to ask
you to please consider that we have had safe, good operators in
the Gulf.
Ask you a question. Right now--and you can certainly come
up with various estimates; I think it is difficult to get an
accurate prediction--but you can easily conclude that today--
that there are multiple times more oil in the Gulf of Mexico
than there was spilled during the entire Valdez spill. Do you
believe that the cleanup efforts have been sufficient? I know
it is outside your box.
Admiral Salerno. Yes, that is outside my box. They are
continuing. I think the cleanup efforts were a remarkable job,
they did a remarkable job. But it is ongoing. It is not done.
There is still oil out there, and the unified command continues
to exist, to the best of my knowledge, for that purpose.
Mr. Graves. Director, the fact that, here we are, 5 years
later, and we are still seeing the same headlines as we saw 5
years ago, extraordinary volumes of oil that are still being
recovered--I can take you out there today, I can take you out
there any day you want to go, and I can show you oil. I will
tell you I think it is ridiculous. I think it is absolutely
ridiculous that we still have the volumes of oil that are out
there today, and that the Coast Guard and the Feds are not
being more vigilant in requiring the RPs to be more aggressive
in the recovery efforts. And I think that much, much more can
be done.
To see the President hide behind environmental concerns and
oil spill concerns on Keystone Pipeline, yet in this case allow
the extraordinary volumes of oil to infect one of the most
sensitive and productive ecosystems on this continent I think
is absolutely unacceptable.
Thank you, Mr. Chairman.
The Chairman. Thank you. Mr. Huffman.
Mr. Huffman. Thank you, Mr. Chairman. I have come to
associate these oversight hearings with the very colorful and
sometimes lurid titles about government overreach and water
grabs, and things like that. So I was kind of surprised to see
this very technical, academic title today: ``Innovations in
Safety Since the 2010 Macondo Incident.'' I didn't even know
what the Macondo Incident was.
Turns out the Majority's messaging department has once
again been very on-message. The message with this milestone
anniversary of the tragic Deepwater Horizon spill is to not
talk about that spill. In fact, we are even renaming it. We are
calling it the Macondo Incident. And we are going to talk
euphemistically and wishfully about all the advances in
innovation that have made deepwater drilling and other
exploration safe now.
It is a great attempt at messaging. But, unfortunately, it
is not very accurate. There is a lot that we could be saying on
this milestone about what happened with the Deepwater Horizon
rig. We could be talking about the inherent dangers of oil
drilling and exploration, the loss of life that continues to
happen, the exploding trains that we are experiencing all too
often around the country, the inherent environmental damage and
risk that we see with our unhealthy reliance on oil. We could
talk about the full extent of the environmental damage from the
Deepwater Horizon spill.
We could talk about the Barrier Islands in Louisiana that
have eroded and begun to disappear because of the loss of
vegetation, as the mangroves were encased in oil. I was
watching a show last night where somebody took a boat up to one
of these islands, and just the propeller action from that boat
started stirring up oil that was beneath the surface.
We could talk about the massive oil mats that are being
found beneath the surface that nobody talks about. They are not
visible from the surface. But I was glad Mr. Graves raised this
issue, because if we are going to commemorate this important
milestone, we need to be honest about it. We can't whitewash
the full consequences of our unhealthy reliance on big oil, and
the inherent dangers of some of these drilling operations.
Now, I know that the Majority would like to have that be
the narrative today, how far we have come, how safe drilling
and exploration is, because, obviously, there is an agenda to
take drilling and exploration into the Arctic, onto the
Atlantic Coast. But we need to think very carefully about that,
and make sure that we are drawing the right lessons from our
own very recent history.
So, Director Salerno, I just want to ask you about the
Arctic, for example. Would you agree that the Arctic is
probably one of the more hostile climates that we could attempt
to do oil exploration and drilling in?
Admiral Salerno. It is a hostile environment. It is not
impossible, but it would require very special considerations
and capabilities to be brought to the scene.
Mr. Huffman. Choked with pack ice 8 months of the year, 25-
foot seas, gale force winds, a lack of nearby equipment and
staging locations. All of these things are going to seriously
complicate an attempt to do drilling in a place like the
Arctic, wouldn't you agree?
Admiral Salerno. I liken it to a moon shot. You really have
to bring what you need with you, which gets to the whole
question about the relief rig. And it also gets to the special
capabilities of the equipment that is brought to the scene.
Mr. Huffman. Now, Shell Oil Company tried to get into that
area in August of 2012. And it is my understanding it didn't go
so well. Are you familiar with that effort?
Admiral Salerno. I am.
Mr. Huffman. Would you tell us a little bit about what went
wrong?
Admiral Salerno. There were elements of the overall
operation which did not pan out as Shell had planned. The
environmental response capabilities were not brought to bear.
That resulted in a restriction in what drill was allowed to do
in their drilling activity. They were not allowed to enter into
an oil-bearing zone, as a result.
And then, as was well publicized, the marine transportation
portion of their operation failed bringing the rig out of the
Arctic. This actually occurred down by the Aleutian Chain,
where they lost a tow line, and were unable to recover the tow.
Mr. Huffman. They had an underwater containment vessel that
they claimed could bottle up a gusher. What happened to that?
Admiral Salerno. That was not functional. And that was the
reason they were not allowed to drill into an oil-bearing zone.
They did not have that capability readily available.
Mr. Huffman. And they had two drilling rigs that they lost
control of. One of them crashed on the rocks and had to be
rescued by the Coast Guard. Is that your understanding, as
well?
Admiral Salerno. I believe they did drag anchor, they did
have some marine problems, and the Coast Guard addressed those.
Mr. Huffman. All right, thank you. I think we need to be
very careful before wishfully assuming that everything is safe
with oil exploration. Thank you, Mr. Chair.
The Chairman. Thank you. The Arctic is hostile, but they
are not in a drought.
Mr. Gohmert, let me turn to you. And I want you to know
that I am trying to follow your lead, but I only have a can, I
don't have a bottle, I am sorry.
Mr. Gohmert. You can get your can out, but that is----
The Chairman. You are up.
Mr. Gohmert. Thanks. Director, thanks for being here. Do
you know, I don't have it in front of me, but do you know how
many egregious safety violations British Petroleum was cited
with before the blowout of the Deepwater Horizon?
Admiral Salerno. I do not have that at my fingertips, sir.
I can get it for you----
Mr. Gohmert. Yes----
Admiral Salerno [continuing]. For the record.
Mr. Gohmert. Well, it seemed like it was right at 800
egregious safety violations. That sound about right, in that
area?
Admiral Salerno. Again, sir, I would have to check the data
on that.
Mr. Gohmert. Do you know of any offshore production company
that has come anywhere near 800 egregious safety violations?
Admiral Salerno. Not offhand.
Mr. Gohmert. Because we have had hearings on it before, and
it seemed like some may have had one, some two, and British
Petroleum had, as I recall, nearly 800. And some of us were
just scratching our heads. How in the world were these people
allowed to keep operating with those kind of egregious
problems?
And, having graduated from Texas A&M, that is known for its
petroleum engineering and other petroleum degrees, I have had
friends, many that have worked out in the Gulf of Mexico, and
they have told me about BP back before the blowout, the
Deepwater Horizon, that they had a reputation for trying to cut
corners. So, many of us just wondered how in the world the
Obama administration allowed them to keep operating.
And I read an article that, on the day of the blowout, BP
officials were meeting with Senator Kerry at that time about a
big coming-out party announcement, where BP was going to
announce their big support for the cap and trade bill. So I
didn't know if maybe their favorable position on cap and trade
got them some special consideration, at least the
Administration looking the other way.
Since you were not familiar with how many egregious safety
violations there had been, and you are in charge of the Bureau
of Safety and Environmental Enforcement, do you not pay
attention to who the egregious safety violators are?
Admiral Salerno. Oh, I absolutely do.
Mr. Gohmert. But you just don't know----
Admiral Salerno. I don't have that number at my fingertips,
no.
Mr. Gohmert. Do you have any idea how many egregious safety
violations British Petroleum has had since the Deepwater
Horizon blowout?
Admiral Salerno. Not at my fingertips.
Mr. Gohmert. So, we really don't have to worry about them.
We know, surely, they would never let something like that
happen again. Is that the approach that your bureau takes?
Admiral Salerno. Not at all. Not at all, sir. They, you
realize, were debarred for several years. They were not allowed
to----
Mr. Gohmert. So who is the most egregious safety violator
that we have in the Gulf of Mexico right now?
Admiral Salerno. There are a number of companies that we
have on what we call performance improvement plans because of
unsatisfactory performance----
Mr. Gohmert. Which ones are those?
Admiral Salerno. I can get you a list of those, sir.
Mr. Gohmert. But you don't know, just off the top of your
head.
Admiral Salerno. I do have----
Mr. Gohmert. Is that somebody else's responsibility?
Admiral Salerno. I was trying not to use up your time, sir,
but----
Mr. Gohmert. Well, that is all right. I am really curious.
Admiral Salerno. We have had--I am sorry here----
Mr. Gohmert. So have you personally had dealings with any
of the egregious safety violators in the Gulf of Mexico?
Admiral Salerno. Yes, well BP, in particular. They are
under court-ordered safety----
Mr. Gohmert. So they continued to have egregious safety
violations since----
Admiral Salerno. We had regular meetings with them, and
they are subject to a heightened degree of scrutiny.
Mr. Gohmert. So they have continued to have egregious
safety violations, or this is still from Deepwater Horizon?
Admiral Salerno. No, we did not see egregious safety
violations.
Mr. Gohmert. OK. But they are just on watch from that
original one.
But what about other egregious violators? Do you have
direct dealings with any of those, or do you just leave that to
somebody else, to deal with egregious safety violators?
Admiral Salerno. No, I do meet with them.
OK, the ones on special--that we watch very closely are ERT
Talos, BT, Pogo. Those are three.
Mr. Gohmert. OK.
Admiral Salerno. We have----
Mr. Gohmert. Nothing like good staff to hand us notes to
help us out. So that is very helpful.
But I was curious about you, personally, whether you were a
hands-on kind of person that really wanted to stop egregious
violations.
I see my time has expired. But I would encourage you to
take a personal interest in who the egregious violators----
Admiral Salerno. I assure you, I do.
Mr. Gohmert. OK. Well, I will look forward to having better
answers next time, since you do. Thank you.
The Chairman. Mrs. Capps.
Mrs. Capps. Thank you, Mr. Chairman. And thank you,
Director Salerno, for your testimony, and also for the
impressive amount of work you have done on new drilling and
safety regulations following the Deepwater Horizon incident.
But it also highlighted serious weaknesses in our ability
to actually remove oil that has been spilled into the water.
That is the topic I would like to focus on a bit.
I witnessed myself the 1969 Santa Barbara oil spill, and I
vividly remember the booms that were used to contain the oil,
and the workers who mopped--literally mopped--up the oil with
their bare hands, and got it all over themselves, as well as
the wildlife. Watching the Deepwater Horizon response unfold, I
was struck by how little the spill response technology itself
being used in 2010 had advanced since the Santa Barbara spill
40 years earlier.
Director, have these technologies improved at all in the
past 5 years? And is BSEE--now that this structure is in place,
are you planning on making any updates to your oil spill
response regulations, which I believe were last updated in
1997?
Admiral Salerno. Yes, thank you. You are correct. Between,
say, the Exxon Valdez and Deepwater Horizon, there was not very
meaningful improvement in oil spill response technology. In the
last 5 years there has been--I would call it marginal increase
in mechanical spill recovery techniques. There have been some
new skimmers that have been designed, and we have participated
in that, predominantly through our test facility in New Jersey,
which is the largest test tank in the country. And they have
developed skimmers that are several times more efficient than
previous models.
There have been improvements in boom technology, as well,
so that booms can be towed by vessels at greater speed, which
helps collect and corral oil. So there are improvements there.
And I think, as you know, for deepwater there are the spill
containment capabilities.
Mrs. Capps. Thank you.
Admiral Salerno. I think you will hear more about that on
the second panel.
Mrs. Capps. Right.
Admiral Salerno. R&D is ongoing. Our Bureau invests, I
think, more Federal dollars than any other Federal agency in
R&D and spill response technology to, in a coordinated way with
other Federal agencies, to enhance preparedness.
Mrs. Capps. Right. That is encouraging to hear.
You know, we have seen over the past decades that most
action on drilling safety--and I think this is human nature--or
spill response has been taken reactively, both in agencies and
here, in Congress. When you have an accident, when there is a
spill, the issue comes to the forefront, people respond, and
then, in a few years, complacency tends to return, and no new
advances are made until the next disaster.
As you note in your testimony, the production safety system
rules were last updated in 1988, and that is more than 25 years
ago.
Another question: Beyond trying to predict risks in future
technologies, how is the Agency working to be more proactive?
You mentioned a test area. Maybe you would like to highlight a
little bit more of that. To keep regulations in line with
technology before something goes wrong.
Admiral Salerno. Well, we are doing the R&D work involving
industry and academic sources. We use our test facility. We are
in the process of updating our regulations for spill response.
I would anticipate some time next year a proposal would go out
along those lines.
A lot of activity, a lot of R&D activity, focusing on the
Arctic for obvious reasons.
Mrs. Capps. Good.
Admiral Salerno. On how oil could be recovered from
underneath ice, how in-situ burning or dispersants might be
used in ice-choked areas, as well as the ability to spot and
detect oil in low-light situations.
Mrs. Capps. And in BSEE's production system rule, the
Agency proposed to strengthen the requirements for companies to
use the best available and safest technology. And that is a
proposal I understand the industry--I suppose, again, human
nature--tends to push back on.
I asked you about this proposal a few weeks ago, and you
said you hoped the rules would be completed. And this would be
the rules for industry itself to push technology forward, in
terms of potential problems as they drill. You hoped the rules
would be completed some time this spring. Could you give us an
update? Where do things stand with this effort? Are things
still on track this spring?
Admiral Salerno. Yes, ma'am. The production safety rule is
taking a little bit longer than we would like. We still hope to
get that out, probably this summer.
The vast provision of that rule, the requirement will still
be in the rule, but the definition of how it will work is
something that we have been working on separately. We have been
engaging with academia and with industry, a number of industry
groups, on----
The Chairman. I am sorry to cut you off, but--I am not
sorry, you are over time.
Turn to Mr. Wittman.
Dr. Wittman. Thank you, Mr. Chairman. And, Director
Salerno, thank you so much for joining us.
As you know, in Virginia, the vast majority of our
congressional delegation and state officials are in favor of
offshore energy development. I see that in the proposed 2017-
2022 draft 5-year plan that Virginia Lease 220 is in
consideration. I hope that that continues in consideration,
more than just the exploration, but into the development phase.
I can tell you that we feel very strongly that energy
production in Lease 220 can take place safely, especially at 50
miles offshore. We believe in those areas it can take place
very, very safely.
Let me ask this. I know an earlier question was similar,
but I want to ask specifically to the lessons learned from the
Deepwater Horizon disaster, understanding not only where
technology was not applied properly, but also where there was a
breakdown in decisionmaking, both for the drilling company,
both in BP, and within the regulatory community. There was a
whole slate of things. If you look at that historically, you
can see it at different points. There were problems that led to
that particular disaster.
Having learned what happened in studying the Deepwater
Horizon disaster, understanding where those problems exist and,
as you spoke of, and Secretary Jewell spoke of, the lessons
learned, and how those lessons learned today are being applied
to safety standards for the industry in both drilling and in
the development of that energy, do you believe, with those
lessons learned, that in Lease 220, that drilling can take
place safely, and that we can apply those lessons learned in
those areas, particularly within that lease area?
Admiral Salerno. I do. Thanks. You raised a very important
point. One of the most critical elements going forward is the
culture of safety, how people make decisions. It is not solely
relying on the technology and the data that they receive, but
what they do with it, and whether they stop work if unsafe
conditions present themselves. That has been a noticeable
change in the last several years.
Many of the companies that I do interact with--and I meet
with all the major companies, and a lot of the smaller
companies--this is what we talk about, how they make decisions.
So that is where we will take safety to the next level. It was
the focal point of our safety and environmental management
system. We had two rules that have come out since Deepwater
Horizon to really get at that human element and human
decisionmaking.
Dr. Wittman. I think that is a great point: the human
element is important. The technology is also important, to make
sure that we properly apply technology.
There have been some comments made by Members of Congress
to say that technology does not exist today for oil drilling
offshore in the Outer Continental Shelf to be done safely. Is
that a correct statement? Does the technology not exist for
that to be done safely?
Admiral Salerno. There are some areas where technology is
really at the cutting edge: the high temperature, high pressure
well. They can drill the well, but to actually create the
producing systems, that technology is still being developed.
And there are joint industry projects underway to do that. We
are working very closely with those companies, because they are
really out ahead of our regulations, they are ahead of industry
standards. So this requires very, very close contact with the
industry, to make sure that all of the safety barriers are in
place, and the technology is well understood.
Dr. Wittman. Got you. So, not only is it a situation where
the technology does exist--in fact, the industry is pushing the
envelopes of technology, and you all are trying to keep up to
make sure that it is applied properly--but can that technology,
even on the cutting edge, can not only be applied properly, but
can decisionmaking now take place within that realm of new
technology, to make sure that we do mitigate the risks? This is
not a zero-risk operation. It never will be. But there is
nothing on the face of this earth that really is zero risk.
Give us a perspective about the risk of today's technology,
where it is going, and how you all have integrated better
decisionmaking, both at your agency level, but also with the
folks that you permit to do the drilling, and to apply that
technology.
Admiral Salerno. Well, since Deepwater Horizon, we have
established a technical assessment team in our Gulf of Mexico,
which does exactly that. And it is also the reason why we are
putting a technology assessment center with a bureau-wide focus
in Houston, right in the heart of the industry, to work with
equipment manufacturers in the industry to understand this
technology.
The best companies that I have interacted with are applying
the principles of high reliability organizations, the same
types of principles that are used in the space program and the
airline industry, where they really look at everything that
could potentially go wrong, they assume that it will, and then
they build in the barriers to see that it doesn't happen. Or,
if it fails, it will fail safe. That is the approach----
Dr. Wittman. So you believe, then, that what they are doing
is applying technology to minimize risk to the lowest
possible--under current technology?
Admiral Salerno. At the leading edge, yes, that is what I
am seeing.
Dr. Wittman. Thank you, Mr. Chairman.
The Chairman. Thank you. Mrs. Dingell.
Mrs. Dingell. Thank you, Mr. Chairman. Thank you, Director
Salerno, for joining us today. I know being here isn't probably
the way you wanted to spend your Wednesday morning.
One of the things, though, that we have learned from the
Deepwater Horizon oil spill is that we are not very good at
getting the oil out of the water. And I want to build on what
Representative Capps was talking about, because--and I know you
spoke about improved technology.
But even though many people think of oil spill response as
going out there with the booms and the skimmers and taking it
all out of the water--and you say it has gotten better, but I
have been told the estimates are that only about 3 percent of
the oil released by the Macondo well was collected that way.
For the rest we either had to burn it, which took care of only
about 5 percent, or use millions of gallons of chemical
dispersants, which don't actually remove the oil from the
water, and as we all know, have their own side effects and
things that we become very worried about, what is happening
when those chemicals are in the water.
And it appears that our ability to physically remove oil
from water is no better now than it was decades ago. And,
obviously, we have all been talking about how that concerns us,
and I know that you are working on it. It is a threat to all of
us, and each of us is also worried about the regions that we
come from.
In 2010, the largest inland oil spill that has occurred in
our Nation's history occurred in Marshall, Michigan, and it
resulted in 843,000 gallons polluting the Kalamazoo River. This
heavy crude oil, as you know, was difficult to clean up, and
although all portions of the river are finally open to the
public for use, nearly 4 years after the spill we still don't
fully understand the impact of what the spill has had on the
ecological systems of the regions. And there are issues, as you
know, and we are all talking about it.
One problem in particular that matters in the Midwest is
our existing cleanup equipment, and how it will work in icy
conditions, if an oil pipeline spill were ever to happen in the
Great Lakes, which, God forbid, will never happen. But we keep
praying these things aren't going to happen, and they do. The
Coast Guard has been conducting equipment deployment tests in
icy waters off the northern coast of Michigan in recent years,
but those tests don't look at how well this equipment can
remove oil when ice is present.
What is BSEE doing to improve our ability to respond to oil
spills in icy conditions? And do we have assurances that we
will be able to get more oil out of the water than we did when
the Deepwater Horizon occurred? Which I know you talked a
little bit about when Lois was asking you this.
Admiral Salerno. Your numbers are accurate. Mechanical
recovery in open water is not very effective. You are correct
about in-situ burning, dispersant use. Probably the most
effective technique was capture at the well head. But no
response technology is 100 percent effective, and they are all
very much dependent on conditions.
So, you are right, additional R&D needs to be done. We need
better equipment, we need better techniques. And work is being
done, certainly by BSEE, also the Coast Guard, NOAA, EPA, on
how to improve response capability in the ice. And, in fact, we
have used our on-site facility in New Jersey with that. We have
even choked it with ice to test equipment in those conditions.
But it underscores the point that our best approach here is
to keep the oil in the tube. We double down on prevention. That
is why we are putting so much emphasis on working with the
companies, understanding the technology, and making sure the
barriers are there so oil doesn't get in the water in the first
place.
Mrs. Dingell. Well, I applaud that. And, as I say, we all
hope that that happens. But life doesn't tend to happen the way
we want it to be. So I am glad that you are working on it, but
I think the point is that we are very far away from being
effective, and being able to clean up oil spills. And oil
spills in icy conditions is really frightening.
And I hope, Mr. Chairman, that the committee will continue
to focus on this issue as we move forward. I happen to believe
we need to be doing much more, in terms of oil spill response
and preparing for future incidences. One of the many proposals
from the President's Oil Spill Commission that Congress has
ignored so far is encouraging more private investment in oil
spill response technology, through the use of public-private
partnerships. And it seems that this is a model that we could
make work here.
Could you please discuss the current level of private
investment in oil spill response technology, and whether you
think more is needed?
Admiral Salerno. Well, most of the Nation's response
capability is in the private sector. There is government
capability. Naturally, the Coast Guard has some, EPA has some.
But, by and large, it is oil spill response organizations that
are relied upon to provide this technology. And, certainly
since Deepwater Horizon, for----
The Chairman. I am sorry, I was interested in that, too,
but we will have another round here.
Admiral Salerno. Happy to continue.
Mrs. Dingell. Thanks, Mr. Chairman.
The Chairman. Love the private sector.
Mr. Hice.
Dr. Hice. Thank you, Mr. Chairman, and appreciate you being
here, Director. I think we owe it to the 11 individuals who
lost their lives to be here and discuss and examine safety
improvements, and I appreciate you being here.
It is fair to say that it is absolutely not possible to
eliminate all risk from the industry. Is that correct?
Admiral Salerno. That is correct.
Dr. Hice. So, that being the case, what you are all about,
and what the industry is trying to do as a whole, is to develop
regulations, protocols, standards that, as much as possible,
eliminates as much risk as possible.
Admiral Salerno. Correct.
Dr. Hice. OK. So, I know so many questions, we have gone
down this, but based on that, do you personally believe that
the stakeholders, as well as the industry as a whole, is taking
that charge seriously, to, as much as possible, eliminate as
much risk as possible from every perspective possible?
Admiral Salerno. I would say it is a mixed bag. I have met
with some companies that are the leading lights in this that
have really put a lot of emphasis on it, and are doing a
wonderful job in managing risk. I have encountered some others
where I question their commitment to safety.
And mention was made earlier about some of the accidents
that have occurred, and we have seen accidents that have
occurred, and fatalities that have occurred since Deepwater
Horizon, where it was a complete absence of a safety culture.
So we are working to remedy that. That is one of the reasons
why we are approaching a risk-based approach to inspection, so
that we can look at individual company performance, and tailor
our resources and energies to address the greatest risks.
Dr. Hice. So, with those companies that are not taking
safety seriously, what percentage would you say, just off the
top of your head, are those type of companies?
Admiral Salerno. I would say there is maybe 10 percent of
the ones that I have interacted with that are worrying me, that
I felt that they did not have the proper safety culture, they
did not communicate safety messages to their workforce, they
did not interact meaningfully with their contractors. And much
of the work that is done offshore is done by contractors and
subcontractors. So when you have these disconnects, you set
yourself up for----
Dr. Hice. So what is being done to those--other than just
communication, is there anything to help pressure them to----
Admiral Salerno. Yes. We do meet with companies and review
their performance. If performance has been substandard, we
visit them more frequently. And we are working to develop a
much more refined, sophisticated risk management model, working
with one of the national laboratories, so we can make this
whole process much more----
Dr. Hice. So all that is taking place is meetings. There is
no----
Admiral Salerno. No, no, that is not what I am saying. We
visit more frequently. We have greater oversight where we have
areas of concern. So we visit more frequently, inspectors going
out to the----
Dr. Hice. And what if they don't comply?
Admiral Salerno. If they don't comply, we have a range of
enforcement options. The most serious cases, we could order
them to shut-in.
Dr. Hice. OK.
Admiral Salerno. And we do that.
Dr. Hice. All right. Thank you for that. According to the
current 5-year plan by the Department of the Interior, all this
includes some potential Atlantic lease sale type things, which
is very important to my district, as a whole. How have the
regulatory changes, including the proposed blowout preventers--
has that in any way impacted or changed the potential offshore
lease in the Atlantic?
Admiral Salerno. They would apply to any lease holding
activity that eventually takes place. But it doesn't directly
affect the lease sale itself.
Dr. Hice. So that can still go forward?
Admiral Salerno. Right.
Dr. Hice. OK.
Admiral Salerno. The two are separate.
Dr. Hice. All right. So, just as an overall summary, I
guess, what are some of the lessons, both from the
stakeholders, industry as a whole, that have been learned to
ensure that safety--that the new areas utilizing the latest
technology and so forth for safety is in place?
Admiral Salerno. Well, obviously, we have the new rules
that will go out. They don't take effect right away. However,
the industry itself has set standards in place and, for
example, forward blowout preventers. And many of the companies
that are building new rigs are applying those standards in
their design specifications for new blowout preventers and new
rigs. So, we are already seeing some of that taking effect.
As far as safety management systems, that is, again, an
area of continued emphasis by us, and by the leading companies
in the industry.
Dr. Hice. Thank you, Mr. Chairman.
The Chairman. Thank you. Mrs. Torres.
Mrs. Torres. Thank you. Director Salerno, in the aftermath
of the Deepwater Horizon disaster, a number of safety reforms
have been enacted or implemented, including the establishment
of the Bureau of Safety and Environmental Enforcement, as a
separate entity charged with regulating drilling operations on
the Outer Continental Shelf. This has led to improvements. I
should say much improvement in processes for inspection,
investigating, and enforcement.
But we have also heard about the role human error and
inadequate training programs played in this tragedy. A
competent and highly trained workforce will play a key role in
preventing these types of disasters in the future.
My two questions for you are, can you expand on the
challenges the Bureau is facing regarding the recruitment and
retention of skilled workers? And, two, which job
classifications are the most difficult to staff? And what steps
is the Bureau taking to remedy the situation? Included in that
is pay scale.
Admiral Salerno. Yes, thank you. And, actually, that is one
of the greatest strategic challenges we face, is attracting and
retaining a quality workforce. We struggle with that. We are in
competition with industry for the same talent. Many of our
people we hire from industry. But many of them go back to
industry, because we cannot compete on a salary basis. We offer
other advantages, and many people, thankfully, are motivated by
a desire to serve.
We have had help from Congress on salaries for engineers
and for scientists, so we have had some special salary rates.
That gets renewed in our budget every year. We are hoping to
make that permanent. Inspectors, we do not have that authority,
but we have been able to do some things internally to help
boost salary rates there. We are working with the Office of
Personnel Management to try to make some of these things a
little more permanent, but this will be an ongoing challenge.
And looking to the future, we are very much engaged in
reaching out to youth groups, to high schools and colleges,
really trying to motivate them to consider public service. And
certainly returning veterans are a prime source, as well.
Mrs. Torres. And, if I may suggest, incentives for years of
service may be an area where you can look at.
I would like to yield the rest of my time to Congresswoman
Dingell to allow you time to finish answering her question.
Mrs. Dingell. Thank you, Mr. Chairman. I will just go back.
And if you could talk more about--we just, as part of the
discussion, said that we hadn't made the progress we want to,
in terms of the technology. And I understand the private sector
is whose technology you are using. But are they investing in
research? Where is the research happening? And are we doing
enough research, public or private, to improve the technology
for cleanups when we need them?
Admiral Salerno. Right. Well, I think I left off talking
about subsea containment capability, and that is where there
has been a tremendous amount of research and investment, and
capital investment in creating capabilities to address the
kinds of problems we had in the deepwater during the Deepwater
Horizon event.
Mrs. Dingell. Now, is that government doing it, or the
private sector, or both?
Admiral Salerno. That is private sector investment. There
is a government requirement that capability be developed. It
was a performance requirement. And then industry responded,
essentially, by forming a consortium so they could pool
resources and develop the capability to meet that requirement.
As far as----
Mrs. Dingell. And you think they are investing enough in
it?
Admiral Salerno. Yes, I have been down and I have looked at
it, at the two major companies that provide that capability in
the Gulf of Mexico, and I have also looked at the capability
that will be deployed in the Arctic, personally. So, yes, the
investment is being made.
Mrs. Dingell. Thank you, Mr. Chair.
The Chairman. Thank you.
Mr. Hardy.
Mr. Hardy. Thank you, Mr. Chairman. Thank you, Mr. Salerno,
for being here.
Most generally, in other disasters, we see a lack of
communication across different Federal agencies, or stove-
piping, as one of the points of failure. For instance, the
issue of the 911 Commission report. In the wake of the Macondo,
the response was opposite. The split-up of the former Materials
and Management Service into three separate agencies, splitting
up the revenue collection into a separate bureau makes sense.
However, I believe the mission of safe offshore operations is
not exclusive to BSEE or BOEM. Also, the factor of safety into
leasing decisions and revenue exploration plans.
Would it not be beneficial to have these two agencies
working in concert together, given the missions, while
different, have the same end goal? Safe and measured offshore
energy deployment--in fact, would safety be further enhanced by
having these two agencies interact more regularly, especially
because BOEM is reviewing exploration plans and BSEE is
reviewing application permits? Both of these documents set
plans developing prospect of the overall goal of safety does
not end at the agency's doorstep.
Admiral Salerno. I think the emphasis that each agency has
is an appropriate breakdown of responsibilities. As far as
coordination goes, it is very good. In every location where I
have a regional office, there is a counterpart, BOEM regional
office. I am colocated with the BOEM Director.
You are absolutely correct, we do share information:
geological information, scientific, permit information, and so
forth. That is occurring back and forth. So, I don't foresee a
real problem, going forward, with the way we are structured.
There are certain things that we will do. I think we will even
enhance the ability to share information, some IT tools and
business management capability that will facilitate easier
movement of data across bureau boundaries. But the personnel
connections are very strong.
Mr. Hardy. Another way of looking at this for me is what
kind of interaction do we have between the agencies and the
offshore development folks, being as how they should be the
ones paying for the cost of these incidents? Are they working
with you, with the agencies, to help come up with a better
mousetrap, so to speak? Is that being utilized, their
expertise, also?
Admiral Salerno. As far as the private sector?
Mr. Hardy. The private sector----
Admiral Salerno. Yes, absolutely. My feeling is I could not
be an effective regulator if I did not interact in a meaningful
way, in a regular way, with the industry that I regulate. So I
have to understand where they are going, from a technological
standpoint, what their plans are, and the equipment that they
plan to use. So that is ongoing, and it permeates our entire
organization. We have to understand it.
Mr. Hardy. Thank you, Mr. Chairman. I yield back.
The Chairman. Thank you. Mr. Grijalva.
Mr. Grijalva. Thank you very much. And thank you, Director,
for being here.
A quick question. So in that interim 5 years, much of the
discussion that we have had at this committee level has been
about opening up new areas--Arctic, Atlantic--the issue of
increasing the number of leases, processing that. Spent a lot
of time on the 5-month time-out and what the motivation behind
that really was. But the issue of safety, which we are dealing
with to some extent today, and the issue of accountability
haven't been the top point of discussion. Had to do with the
Administration, primarily, how to embarrass that
administration. And long after that 5-month time-out, we still
kept talking about that subject.
But I want to ask you. The companies in the interim still
enjoy an extremely low oil spill liability limit. They face
minimal negligible fines for violating regulations. And I know
that Interior has done what it can to account for inflation.
But let me ask you, as then-Secretary Salazar testified in
2011, the issue of civil and criminal penalties increasing the
issue of raising the liability limits, and the consequential
fines of violations of regulation all being something that he
felt was very important in the comprehensive look at safety and
accountability. How do you feel about that?
Admiral Salerno. Well, I do believe that, for example, the
civil penalty provisions that we currently have available to us
probably made sense when the law was written. They look pretty
mild, by modern standards: $40,000 per day for a violation is
really not that much for this industry.
We look at civil penalties as one of a range of tools. You
know, our goal is to get people to comply. If we have to use a
tool to get their attention, we will do that. But that probably
could stand a fresh look.
Mr. Grijalva. And that fresh look can only be accomplished
by Congress at that point.
Admiral Salerno. Yes----
Mr. Grijalva. I think the Secretary talked about that not
only as a preventative tool, but also as a deterrent. So I
appreciate your answer, and I yield back.
The Chairman. Thank you. Director, let me ask you a couple
of questions. If I could follow up on what Mrs. Torres started
with you, in your testimony you did say that your skill in
staffing gaps at the agency are significant, they are crucial
for you in being effective in your mission. GAO reports said
that your attrition rate is about double that of the typical
average agency. Why is that double?
Admiral Salerno. It is very difficult, competing with
industry on salary. That is, I think, a big part of it. I
think, particularly my inspectors, their entry level is like a
GS-7. Once they are skilled and trained up, they are much more
valuable in the private sector, and, quite honestly----
The Chairman. OK. Well, let me finish on that, then.
Admiral Salerno. OK.
The Chairman. Where do you go to recruit? Are you
recruiting in colleges, or are you recruiting from the
industry?
Admiral Salerno. All of that. And returning veterans, as
well. So I have--probably my inspector staff, close to 90
percent of them have some industry background. Many of them,
probably half of them, are veterans. And we routinely visit
colleges, petroleum engineering schools and so forth.
The Chairman. So are you getting more from industry than
you are losing to industry?
Admiral Salerno. It is two steps forward, one step back,
really. We hired, I think, about 100 people last year. I think
our net gain was probably about 29, just because, you know,
people come in, and then they leave.
And I am also losing people due to retirements. The Baby
Boom generation, people that have been around for many years
are stepping down. So, as I bring people in, even fresh faces,
I am losing some of the older hands.
The Chairman. We are not doing enough in petroleum and
energy engineering education, are we? That is rhetorical. That
is a statement.
In 2012, Congress gave you the authorization for special
pay authority to hire and keep these people. Is that working?
Does it need to be continued? Does it need to be upgraded?
Admiral Salerno. Absolutely needs to be continued, and I
would love to see it upgraded. Without it, we would be in far
worse shape.
The Chairman. So what specifically do you need to be more
competitive, then, that Congress can give you in that
appropriations process?
Admiral Salerno. That continued authorization to pay
special salary is vital. So if that could be continued, it
would be extremely helpful.
The Chairman. But if we tried to up it in some way to
assist you in maintaining or at least limiting your attrition
rate, what would you recommend that be?
Admiral Salerno. Can I get you more specific information on
that, sir, rather than give you an off-the-cuff answer? I think
it would be helpful to increase that. Salary is the biggest
selling point for anybody looking for a job. And we have been
trying to supplement our salary offering with other benefits of
Federal service, but it doesn't always put food on the table.
The Chairman. OK. That would be--I recognize that. It would
be helpful, although I am not an appropriator. Other than that,
it still would be helpful.
With that, do you have any other questions?
Mr. Grijalva. No.
The Chairman. Director, we appreciate your time and your
patience to be with us here. I thank you for coming.
Under our rules, there may be other questions that other
Members who may or may not be here have of you. The rule asks
that our hearing record stay open for 10 days for responses. We
would appreciate it if you would be responsive to any other
questions that we may send to you.
With that, once again we thank you for joining us. And we
would like to call up the second panel, which includes Ms.
Holly Hopkins, who is a Senior Policy Advisor for Upstream and
American Petroleum Institute; Charlie Williams, who is the
Executive Director of the Center for Offshore Safety; Mr. David
Coatney, who is the Managing Director of HWCG; and Dr. Steven
Murawski, who is a professor at the University of Southern
Florida.
And if you could join us, I would appreciate that, as well.
[Pause.]
The Chairman. We thank you for coming the great distances
that you have come, and also for your patience with us so far.
I have to remind the witnesses--same rule as was applied
earlier--your oral statements are limited to 5 minutes, but
your entire statement here is on the record.
And, once again, you have the clock in front of you. When
it hits red, that means the 5 minutes have elapsed, and I would
like you to end at that time.
I can give you just a second to get prepared. Ms. Hopkins,
are you ready to go? All right, let's start with you, and I
will recognize you for your 5-minute testimony.
STATEMENT OF HOLLY HOPKINS, SENIOR POLICY ADVISOR, UPSTREAM,
AMERICAN PETROLEUM INSTITUTE, WASHINGTON, DC
Ms. Hopkins. Thank you. Good morning, Chairman Bishop and
Ranking Member Grijalva, and members of the committee. My name
is Holly Hopkins. I am a Senior Policy Advisor at the American
Petroleum Institute. My responsibilities include advocating for
and advancing offshore safety.
Following the Macondo incident, I managed two of the four
joint industry task forces that were created to make
recommendations to further enhance offshore safety. I am also
extensively engaged in the development of API standards that
promote safe and responsible development of the Nation's
offshore oil and natural gas resources.
API has more than 625 member companies which represent all
segments of America's oil and natural gas industry. Our
industry supports 9.8 million American jobs, 400,000 jobs in
the Gulf of Mexico alone, and 8 percent of the U.S. economy. We
appreciate the opportunity to participate in today's hearing.
I would like to take a moment to remember the 11 workers
who lost their lives on April 20, 2010, as well as their
families. These husbands, fathers, sons, and brothers are a
reminder that we must continue to improve safety in our
industry. While the industry is committed to a goal of zero
fatalities, zero injuries, and zero incidents, our industry
takes any safety and environmental incident as a call to learn
and to improve technology, training, operational procedures,
and industry standards and best practices.
Given the limited time for my opening statement, I refer
you to my written testimony, which goes into further detail
than I will be able to present today.
Immediately after the Macondo incident, the U.S. oil and
gas industry launched a comprehensive review of offshore safety
to identify potential improvements in offshore operating
procedures, equipment, subsea wall control and containment, and
oil spill preparedness and response. Four joint industry task
forces were formed to focus on critical areas of Gulf of Mexico
offshore activity. Teams were comprised of industry expert
members at API, the International Association of Drilling
Contractors, the Independent Petroleum Association of America,
the National Ocean Industries Association, and the U.S. Oil and
Gas Association.
Sessions began in early spring of 2010 to provide
recommendations to the U.S. Department of the Interior. The
joint industry task forces were not involved in a review of the
incident. Rather, they brought together industry experts to
identify best practices with the definitive aim of enhancing
safety and environmental protection. The ultimate goal for
these task forces was to improve industry drilling standards,
to form comprehensive safe drilling operations, well
containment and intervention capability, and oil spill response
capability, not only through evaluation and revision of
industry guidelines and procedures, but also active engagement
with regulatory processes.
Many of the improvements have been made through creation or
revision of API global standards. The API standards process is
accredited by the American National Standards Institute, and
all API standards are reviewed on a regular basis to ensure
they remain current. API standards are developed in an open and
transparent process, and are the most widely cited oil industry
standards from Federal, state, and international regulators.
API has 224 exploration and production standards that
address offshore operations. And since 2010, we have published
over 100 new or revised E&P standards. Some of the highlights
include new documents on deepwater well design and
construction, well construction interface guidelines, subsea
capping stacks, high-pressure, high-temperature design
guidelines, personal protective equipment selection for oil
spill responders, and then revised and updated standards on
blowout prevention equipment systems, isolating potential flow
zones during well construction, remotely operated tools and
interfaces on subsea production systems, sub-surface safety
valve equipment, and choke-and-kill systems.
The Macondo incident was a tragedy that cost 11 lives, and
the result was a call to action to industry to identify and
develop multiple improvements in offshore equipment, operating
procedures, well design, well control equipment, and overall
safety systems. These changes have significantly enhanced the
industry's ability to prevent, contain, and respond to any
potential incident or spill. These activities have created a
model safety program in the Gulf of Mexico and beyond for
workers and the environment.
As always, standards and best practices will continue to be
reviewed on an ongoing basis in order to protect the
environment and promote the safe and responsible development of
energy resources that help fuel the American economy. The oil
and natural gas industry and the Federal Government have,
together, taken great strides to protect workers and the
environment to improve the safety of offshore drilling
operations. As the co-chairs of the President's Oil Spill
Commission said in 2014, ``Offshore drilling is safer than it
was 4 years ago.'' The industry stands committed to safe and
environmentally responsible development.
Thank you. That concludes my statement.
[The prepared statement of Ms. Hopkins follows:]
Prepared Statement of Holly A. Hopkins, Senior Policy Advisor, Upstream
and Industry Operations, API
Good morning Chairman Bishop, Ranking Member Grijalva, and members
of the committee. My name is Holly Hopkins, I am a Senior Policy
Advisor at the American Petroleum Institute, and my responsibilities
include advocating for and advancing offshore safety. Following the
Macondo incident, I managed two of the four Joint Industry Task Forces
that were created to make recommendations to further enhance offshore
safety. I am also extensively engaged in the development of API
standards that promote safe and responsible development of the Nation's
offshore oil and natural gas resources. API has more than 625 member
companies, which represent all sectors of America's oil and gas
industry. Our industry supports 9.8 million American jobs and 8 percent
of the U.S. economy. We appreciate the opportunity to participate in
today's hearing.
I'd like to take a moment to remember the 11 workers who lost their
lives on April 20, 2010, as well as their families. These husbands,
fathers, sons and brothers are a reminder that we must continue to
improve safety in our industry. While the industry is committed to a
goal of zero fatalities, zero injuries and zero incidents, our industry
takes any safety or environmental incident as a call to learn and to
improve technology, training, operational procedures, and industry
standards and best practices.
Immediately after the Macondo incident in the Gulf of Mexico (GOM),
the U.S. oil and natural gas industry (Industry) launched a
comprehensive review of offshore safety to identify potential
improvements in spill prevention and intervention and response
capabilities. Four Joint Industry Task Forces (JITFs) were assembled to
focus on critical areas of GOM offshore activity: the Joint Industry
Offshore Operating Procedures Task Force (Procedures JITF), the Joint
Industry Offshore Equipment Task Force (Equipment JITF), the Joint
Industry Subsea Well Control and Containment Task Force (Subsea JITF),
and the Joint Industry Oil Spill Preparedness and Response Task Force
(OSPR JITF). Teams were composed of industry expert members of the
American Petroleum Institute (API), International Association of
Drilling Contractors (IADC), Independent Petroleum Association of
America (IPAA), National Ocean Industries Association (NOIA), and the
United States Oil and Gas Association (USOGA). Sessions began in early
spring of 2010 to provide recommendations to the U.S. Department of the
Interior (DOI) in the areas of prevention, intervention and oil spill
response. The JITFs were not involved in the review of the incident;
rather they brought together Industry experts to identify best
practices in offshore drilling operations and oil spill response, with
the definitive aim of enhancing safety and environmental protection.
The Procedures, Equipment, and Subsea JITFs, as they are called, all
issued final reports in March of 2012 while the OSPR JITF released a
progress report in November of 2011 and has projects lasting into 2015.
The ultimate goal for these JITFs is to improve Industry drilling
standards to form comprehensive safe drilling operations, well
containment and intervention capability, and oil spill response
capability; not only through evaluation and revision of Industry
guidelines and procedures, but also active engagement with regulatory
processes.
The JITFs worked with trade associations, DOI's Bureau of Safety
and Environmental Enforcement (BSEE) and Bureau of Ocean Energy
Management (BOEM), U.S. Coast Guard (USCG), U.S. Environmental
Protection Agency (EPA), National Oceanic and Atmospheric
Administration (NOAA), National Response Team (NRT), the independent
Presidential commission (National Commission on the Deepwater Horizon
Oil Spill and Offshore Drilling), the Chemical Safety Board (CSB), the
National Academy of Engineering (NAE), Members of Congress, and others
as they considered the Macondo incident and potential changes in
Industry regulation.
SUMMARY OF JITFs
Joint Industry Offshore Operating Procedures Task Force
The Procedures JITF reviewed critical processes associated with
drilling and completing deepwater wells to identify gaps between
existing practices and regulations and Industry best practices. Their
recommendations focused on the following five areas: cementing; loads
and resistance; fluid displacement and negative testing; abandonment
and barriers; and safety case. Their recommendations were intended to
move Industry standards to a higher level of safety and operational
performance and resulted in either revision or new development of API
guidelines, which are considered Industry best practices for global oil
and gas operations.
Joint Industry Offshore Equipment Taskforce
The Equipment JITF reviewed current BOP equipment designs, testing
protocols and documentation. Their recommendations were designed to
close any gaps or capture improvements in these areas and focused on:
safety case regime; a robust management of change (MOC) process;
accessing shear data; remotely operated vehicle (ROV) interface; and
acoustic reliability. After submitting its recommendations, the
Equipment JITF formed three subgroups to evaluate information regarding
BOP shearing capabilities, BOP acoustics systems, and BOP/ROV
interface. These subgroups each produced white papers regarding their
topics in January of 2011.
Joint Industry Subsea Well Control and Containment Task Force
The Subsea JITF reviewed technologies and practices for controlling
the release of oil from the source of a subsea well where there has
been a loss of control. These include equipment designs, testing
protocols, research and development (R&D), regulations and
documentation to determine if enhancements were needed. The JITF
identified five key areas of focus for GOM deepwater operations:
Well containment at the seafloor;
Intervention and containment within the subsea well;
Subsea collection and surface processing and storage;
Continuing R&D; and
Relief wells.
The Subsea JITF focused primarily on potential operational
scenarios after a well blowout has occurred. Consideration was also
given to containment of hydrocarbons that may leak from subsea
production system equipment (e.g. subsea production well) and casing
stubs at the seafloor. The task force did not review blowout preventers
(BOPs), Emergency Disconnect Systems (EDS), autoshear systems, deadman
systems, or ROV/BOP interfaces (pumps and hot stab). These items were
reviewed under the Equipment JITF.
The Subsea JITF developed 29 recommendations on specific steps to
enhance the Industry's subsea control and containment capability,
including 15 immediate action items.
One of the first recommendations implemented was to provide near-
term response capability for well containment. This was achieved
through the establishment of collaborative containment companies such
as Marine Well Containment Company (MWCC) and HWCG, LLC founded in 2010
to provide containment technology and response for the unique
challenges of capping a well. These companies develop and operate
quickly deployed systems that are able to stem the uncontrolled flow
from a well either by sealing it or directing it into storage vessels
on the surface. More information on these companies can be found at
http://www.marinewellcontainment.com and http://www.hwcg.org.
Joint Industry Oil Spill Preparedness and Response Task Force
http://oilspillprevention.org/oil-spill-research-and-development-cente
The OSPR JITF was formed to review the industry's ability and
capacity to respond to an oil spill of national significance. The task
force addressed both the preparedness for response and the actual
response to crude oil or related oil products after they have escaped
containment during Exploration & Production activities and entered into
the surrounding environments (e.g., subsea, surface, shoreline, etc.).
Following the September 3, 2010, OSPR JITF preliminary
recommendations report, the API Oil Spill Preparedness and Response
Subcommittee (OSPRS) convened to address the recommendations made by
the JITF. The OSPRS was tasked with leading Industry efforts to develop
and implement plans that addressed the report recommendations while
staying abreast of related initiatives. The OSPRS has maintained and
enhanced collaboration with international organizations (e.g.,
International Association of Oil and Gas Producers-Global Industry
Response Group (IOGP-GIRG) and the Arctic Response Technology Joint
Industry Program (JIP)), well containment companies, Oil Spill Response
Organizations (OSROs), and academic institutions such as Coastal
Response Research Center (CRRC) and the Gulf of Mexico Research
Initiative (GOMRI). The subcommittee also reviewed and commented on
emerging materials related to oil spill response, such as the
Presidential Commission Findings, Incident Specific Preparedness
Review, draft NRT subsea dispersant guidance, BOEM/BSEE planning
guidance, and a number of scientific reports (e.g., Operational Science
Advisory Team Report).
The OSPRS spent several months developing and prioritizing project
plans to address each preliminary recommendation, and subsequently
received approval and Industry funding commitment for a multi-year work
program. The OSPRS divided the recommendations into seven categories,
or work streams, as outlined in the original report, specifically:
Planning
Dispersants
Shoreline Protection and Cleanup
Oil Sensing and Tracking
In-Situ Burning
Mechanical Recovery
Alternative Technologies
Within each category there are a number of projects being worked by
individual project teams. These individual project teams are led by a
member of the OSPRS. The teams have developed scoping documents and
project plans complete with milestones and are in the process of
implementation. In some cases projects have endorsed budgets for one or
more years to allow access to contractors/consultants or other support
services to complete studies, research, workshops, etc.
These projects envision collaboration among Industry, government,
and academia. Some project teams will carry out large-scale research
studies while other teams will assume a monitoring and engagement role
if similar initiatives are being conducted by other entities (such as
the Federal Government).
API and the oil and natural gas industry have established a robust
oil spill response research and development program that oversees more
than 25 projects in the eight areas previously outlined (planning,
mechanical recovery, dispersants, in-situ burning, remote sensing,
shoreline protection, alternative technologies). While a great deal of
attention continues to be given to offshore incidents, further focus is
also being directed toward near-shore and inland spill response, and
industry continues to engage with Federal stakeholders, science and the
academic community on these areas of focus.
Based on the assessment conducted immediately after the Macondo
incident, a number of publicly available reports and guidance documents
have also been created, including:
Spill Response Planning:
-- API Training and Exercise Guidelines
-- Guidelines for Offshore Oil Spill Response Plans
-- Personal Protective Equipment Selection for Oil Spill
Responders
-- Net Environmental Benefit Analysis (NEBA) Graphical
Briefing
Oil Sensing & Tracking
Remote Sensing Planning Guidance
Dispersants:
-- Dispersants Fact Sheet 1--Introduction to Dispersants
-- Dispersants Fact Sheet 2--Dispersants and Human Health
and Safety
-- Dispersants Fact Sheet 3--Fate of Oil and Weathering
-- Dispersants Fact Sheet 4--Toxicity and Dispersants
-- Dispersants Fact Sheet 5--Dispersant Use Approvals in the
United States
-- Dispersants Fact Sheet 6--Trade Offs
-- Dispersants Fact Sheet 7--Aerial Vessel
-- Dispersants Fact Sheet 8--Subsea and Point Source
Dispersant Operations
-- Dispersant Fact Sheet 9--Dispersant Use & Regulation
Timeline
-- Dispersant Fact Sheet 10--Dispersant Use in the Arctic
Environment
-- Industry Recommended Subsea Dispersant Monitoring Plans
-- API JITF Subsea Dispersants Injection Newsletters
-- The Role of Dispersants in Oil Spill Response
-- SINTEF Dispersants Effectiveness Report--Phase I
In-Situ Burning
Mechanical Recovery
Deepwater Horizon Mechanical Recovery System Evaluation
Technical Report 1143
Shoreline Protection:
-- Oil Spills in Marshes
-- Subsurface Oil Detection Report
-- Subsurface Oil Detection Field Guide
-- Subsurface Oil Detection and Delineation in Shoreline
Sediments Phase 2--Final Report
-- Shoreline Protection on Sand Beaches (aka Berms and
Barriers) Report
-- Shoreline Protection on Sand Beaches (aka Berms and
Barriers) Guide
-- Mechanized Cleanup of Sand Beaches Report
-- Tidal Inlet Protection Strategies (TIPS) Report
-- Biodegradation & Bioremediation on Sand Beaches Report
Alternative Response Technologies
Evaluation of Alternative Response Technology Evaluation
(ARTES) Technical Report 1142
Educational Media: Dispersants Role in Biodegradation
Video; Net Environmental Benefit Analysis Instructional
Video; Principles of Oil Spill Prevention and Response
Instructional Video
Spill Prevention YouTube Channel
OilSpillPrevention.org Website
Guidance on the creation of offshore oil spill response
plans
An evaluation of the mechanical recovery systems used at
sea during the Macondo incident
A report (and associated field guide) for spills on sand
beaches and shoreline sediments, including protection
techniques and detection and response capabilities
An evaluation of the process by which alternative
technologies are reviewed for use during an oil spill
The industry has also invested in two international oil spill
preparedness and response programs focused on improving industry
operational capabilities in all parts of the world including the
Arctic. These two programs are coordinated with API's activities, and
together, they represent a comprehensive, global approach to continued
advancements in oil spill preparedness and response. A newsletter
providing periodic updates on these activities can be found at http://
www.api.org/environment-health-and-safety/clean-water/oil-spill-
prevention-and-response/api-jitf-subsea-dispersant-injection-
newsletter.
The full suite of industry reports and recommendations are
available at http://www.api.org/oil-and-natural-gas-overview/
exploration-and-production/offshore/api-joint-industry-task-force-
reports.
PREVENTION: INDUSTRY STANDARDS
Reviewing and improving industry standards has always been a top
priority. Since 1924, API has been the leader in developing industry
standards that promote reliability and safety through the use of proven
engineering practices. The API standards process is accredited by the
American National Standards Institute (ANSI), which is the standards
authority here in the United States and accredits similar programs at
several national laboratories. As part of API's accredited process all
API standards are reviewed on a regular basis to ensure they remain
current. API standards are developed in an open and transparent process
which includes subject matter experts from Academia, Government and
Industry and are the most widely cited oil industry standards by
Federal, State, and International Regulators.
API has 224 exploration and production standards that address
offshore operations, covering everything from blowout preventers to
comprehensive guidelines for offshore safety programs, and more than
100 have been incorporated into Federal regulation. Since 2010 API has
published over 100 new and revised exploration and production
standards; key standards include the following:
New Documents:
RP 96, Deepwater Well Design and Construction, 1st
Edition, March 2013
In June 2010, an API work team held a kick-off meeting
to outline initial content for the new API RP 96. This
document provides well design and operational
considerations to safely design and construct deepwater
wells with maximum reliability. There was coordination
with the Subsea JITF and the API Standard 53 workgroup
to ensure their recommendations were addressed in the
document as well.
Bulletin 97, Well Construction Interface Guidelines, 1st
Edition, April 2011
In July 2010, the Procedures JITF held a kick-off
meeting to outline initial content for Bulletin 97.
Bulletin 97 provides guidance on information that is to
be shared regarding well construction and rig-specific
operating guidelines. It is intended to align the lease
operator's safety and environmental management system
(SEMS) with drilling contractor's safe work practices
(CSWP). The WCID-SEMS is a bridging document that
includes the elements identified in API 75 within the
context of well construction activities. It is
understood that work processes vary between operators
and contractors, which should be honored in the
development of the WCID document.
Specification Q2, Quality Management System Requirements
for Service Supply Organizations for the Petroleum and
Natural Gas Industries, 1st Edition, December 2011
RP 17W, Subsea Capping Stacks, 1st Edition, July 2014
In August 2011 a workgroup was formed to create a new
document on subsea capping stack recommended practices
for design, manufacture, and use. The document applies
to the construction of new subsea capping stacks and
can be used to improve existing subsea capping stacks.
The document can aid in generating a basis of design
(BOD) document as well as preservation, transportation,
maintenance, testing documents, and operating
instructions.
TR 17TR8, High-temperature, High-pressure Design
Guidelines, 1st Edition, February 2015
This technical report is to provide design guidelines
for oil and natural gas subsea equipment utilized in
high-pressure high-temperature (HPHT) environments.
RP 17V, Recommended Practice for Analysis, Design,
Installation, and Testing of Safety Systems for Subsea
Applications, 1st Edition, February 2015
RP 98, Personal Protective Equipment Selection for Oil
Spill Responders, 1st Edition, August 2013
This RP was developed from a recommendation of the
OSPRS and provides general information and guidance for
the development of oil spill responder personal
protective equipment (PPE) control measures. Although
an extensive amount of information has been developed
on the topic of PPE for emergency responders, this
document focuses on the PPE selection process as well
as its technical evaluation based on the hazards
present.
TR 1PER15K-1, Protocol for Verification and Validation of
High-Pressure and High-Temperature Equipment, 1st Edition,
March 2013
This report focuses on an evaluation process for HPHT
equipment in the petroleum and natural gas industries
which includes design verification analysis, design
validation, material selection considerations, and
manufacturing process controls necessary to ensure the
equipment is fit-for-service in the applicable HPHT
environment.
RP 2SIM, Structural Integrity Management of Fixed Offshore
Structures, 1st Edition, June 2013
Revised Documents:
Standard 53, Blowout Prevention Equipment Systems for
Drilling Wells, 4th Edition, November 2012
Based on the Equipment task force's recommendations,
an API work team began development on the fourth
edition of API RP 53. The purpose of the document is to
provide requirements on the installation and testing of
blowout prevention equipment systems on land and marine
drilling rigs (barge, platform, bottom-supported, and
floating). The fourth edition was updated to a
Standard.
Standard 65-2, Isolating Potential Flow Zones During Well
Construction, 2nd Edition, December 2010
API Recommended Practice (RP) 65--Part 2 was first
published in May 2010. API then revised the document
based on (1) lessons learned from the Macondo incident;
and (2) alignment with the planned Deepwater Well
Design and Construction RP (discussed below). The
revisions resulted in the API RP becoming API Standard
65-Part 2, second edition. The document contains best
practices for zone isolation in wells to prevent
annular pressure and/or flow through or past pressure-
containment barriers that are installed and verified
during well construction. Well construction practices
that may affect barrier sealing performance are
mentioned along with methods to help ensure positive
effects or to minimize any negative ones.
RP 17H, Remotely Operated Tools and Interfaces on Subsea
Production Systems, 2nd Edition, November 2014
Based on recommendations from the Equipment JITF the
first edition of API 17H was revised. The second
edition provides recommendations for development and
design of remotely operated subsea tools and interfaces
on subsea production systems in order to maximize the
potential of standardizing equipment and design
principles.
Specification Q1, Quality Management System Requirements
for Manufacturing Organizations for the Petroleum and
Natural Gas Industry, 9th Edition, June 2013
Specification 14A, Subsurface Safety Valve Equipment, 12th
Edition, January 2015
Specification 16C, Choke and Kill Systems, 2nd Edition,
March 2015
Standards Under Development:
Specification 16A, Specification for Drill-through
Equipment, 4th Edition
Standard 16AR, Repair and Remanufacture of Blowout
Prevention Equipment, 1st Edition
Specification 16D, Control Systems for Drilling Well
Control Equipment and Control Systems for Diverter
Equipment, 3rd Edition
Specification 16F, Specification for Marine Drilling Riser
Equipment, 2nd Edition
Recommended Practice 16Q, Design, Selection, Operation and
Maintenance of Marine Drilling Riser Systems, 2nd Edition
Specification 16R, Marine Drilling Riser Couplings, 2nd
Edition
Specification 16RCD, Drill Through Equipment--Rotating
Control Devices, 2nd Edition
Recommended Practice 16ST, Coiled Tubing Well Control
Equipment Systems, 2nd
18 Life Cycle Management, 1st Edition
Government-referenced and safety-related standards may be freely
viewed online at http://publications.api.org.
SUMMARY
The Macondo incident was a tragedy that cost 11 lives, and as a
result, was a call to action to industry to identify and develop
multiple improvements in offshore equipment, operations, well design,
well control equipment targeted at prevention and containment and new
procedures and tools for responding to oil spills. These activities
have created a model safety program in the GOM and beyond for well
operations crews and the environment. Active participation from and
coordination with the public sector, academia, and other stakeholders
has been fundamental to turning initial recommendations into genuine
plans of action and enhanced safety guidelines. As always, standards
and best practices will continue to be reviewed on an ongoing basis in
order to protect the environment and promote the safe and responsible
development of energy sources that help fuel the American economy.
The oil and natural gas industry and the Federal Government have
together taken great strides to protect workers and the environment and
to improve the safety of offshore drilling operations. As the co-chairs
of the President's spill commission said in 2014, offshore drilling is
safer than it was 4 years ago. The industry has placed a particular
focus on increasing its ability to (1) prevent spills from occurring,
(2) intervene to halt any spill that does occur, and (3) respond to
spills with the most effective mitigation measures possible.
The industry stands committed to safe and environmentally
responsible development.
______
Questions Submitted for the Record by Chairman Rob Bishop to Ms. Holly
Hopkins, Senior Policy Advisor, Upstream
Question 1. In your testimony, you mentioned the many regulations
which the Department of the Interior put into place following the
Macondo Incident. Are there any examples of regulations that, in the
rush to implement, may have impaired safety, contrary to their original
intent? Are there any regulations, proposed or otherwise, now that do
so?
Answer. Our primary concern with the Department of the Interior
(DOI) regulations is that the Bureau of Safety and Environmental
Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM)
continue to specify procedures and add approval requirements rather
than identifying objectives and allowing companies to select the
methods that are best for their operations and circumstances, and best
for ensuring safe operations. Regulations are seldom the optimal means
of achieving safety objectives. They are difficult and lengthy to
promulgate, need continuous updating, do not address all circumstances,
and foster a compliance mentality. Further, excessive prescription and
direction by the regulators discourage individual and corporate
innovation, initiative, and complicate efforts to develop the safety
culture needed for sustained safety performance excellence.
The key to continuous safety improvement, effective risk
management, and the timely application of new technology and procedures
is collaboration between government regulators and industry.
An outstanding example of successful collaboration in the OCS
regulatory program was the industry-government response after
Hurricanes Ivan, Katrina, and Rita damaged offshore drilling and
production facilities in 2004 and 2005. Following the 2005 hurricane
season, DOI held a meeting with industry leaders and identified issues
of concern. Industry representatives added to the list and developed a
plan for addressing all issues in a timely manner. DOI and United
States Coast Guard (USCG) personnel participated in the work groups.
This collaborative effort yielded remarkable results. The most pressing
Mobile Offshore Drilling Unit (MODU) mooring issues were effectively
addressed in 6 months with new standards and risk assessment tools.
Improved structural, met-ocean data, pipeline, and platform equipment
standards followed. Had DOI attempted to develop regulations to address
all of these issues, it would have taken several years and accomplished
far less.
Following Macondo, DOI chose to identify and address issues by
promulgating new regulations rather than working with the companies
that conduct the operations and develop the technology and procedures.
As a result, progress has been delayed and there is much confusion
about where the offshore regulatory program is headed. For example,
BSEE was unable to propose new BOP requirements until this spring--5
years after the blowout. This created uncertainty and complicated
corporate planning. Industry comments on the BOP Well Control rule are
still being developed, but some of the new requirements are less than
optimal. Completion of this rule will be a complex and challenging
task, and further delays (and the associated uncertainty) are likely.
Industry groups and individual companies can effectively address many
of the items covered in the proposed rule, and a collaborative effort
would have facilitated information sharing, reduced uncertainty,
ensured that all safety issues were addressed in an integrated and
systematic manner, and accelerated progress. In short, the current
prescriptive regulatory model is underwhelming and fails to achieve
results in a timely manner.
With regard to specific requirements that increase safety risks,
three prominent examples are identified in our comments on the proposed
Arctic regulations. We believe the Same Season Relief Well requirement
compromises safety by prohibiting or altering safety-critical
operations at the end of the drilling season. No risk data were
provided to justify this requirement, and there are far more effective
means of achieving the objective. BSEE and BOEM underestimate the cost
of the proposed rule and the economic analysis put forward
significantly and systematically underestimates the potential impact to
industry. The Arctic rule also proposes, without any technical
justification, to increase the frequency of BOP pressure testing to
every 7 days. DOI studies have demonstrated that this increased
frequency does not improve BOP reliability. It will, however,
unnecessarily expose personnel to safety risks associated with the
interruption of operations and the additional handling of pipe and
equipment that is necessary to conduct the tests. Finally, the proposed
Arctic regulations contain several new proposals that together would
have the effect of shifting responsibility for operational decisions
away from the rig to company personnel or even agency personnel not
working onsite. Onsite personnel have the best understanding and most
complete picture of the current operation, key risks and critical
considerations. In addition, their experience in active operations
provides them with the judgment to make effective real-time decisions
within the bounds specified by the Operators governing procedures and
operations integrity guidelines. This responsibility includes full
control of the operations and the full authority to stop activities at
any time.
In summary, we believe DOI's response to Macondo would have been
much more effective if the Department had worked collaboratively with
industry to identify the issues and ensure they were addressed in the
most effective manner. While communication with BSEE and BOEM has
greatly improved, the bureaus are continuing to promulgate prescriptive
rules that have unclear objectives and completion schedules, lack
justification, have technical deficiencies, and fail to address
operations in a systematic manner.
Question 2. How has the division of BOEMRE into two separate
agencies enhanced safety? Can the missions of these two agencies
coexist in one agency and still ensure the utmost safety in operations?
Answer. There has been no evidence that the division of BOEMRE into
two separate agencies has enhanced safety. Yes, BSEE and BOEM could
exist in one agency and still ensure the utmost safety in operations.
Additionally one agency would ensure coordination, consistency and
efficiency between the two agencies and avoid redundancy and
duplication.
BOEMRE's predecessor, the Minerals Management Service (MMS), was an
effective regulatory agency with highly competent, professional, and
dedicated staff. The MMS's combined resource management and regulatory
mandates were an organizational strength, not a weakness. While we
understand the rationale for moving the minerals revenue functions to a
separate office, the division of responsibilities between BSEE and BOEM
is confusing and illogical. The announced intent was to establish an
offshore leasing and science agency (BOEM) and a single offshore safety
and environmental regulator (BSEE). This objective, while
understandable, is extremely difficult to achieve given the substantial
overlap between the resource management and regulation of operations
responsibilities. It was that overlap that led to the consolidation of
these function in MMS in 1982.
The potential for conflict and overlap increased greatly when DOI
elected, without consultation with industry or other experienced
observers of the OCS program, to assign plan approval responsibilities
to BOEM. These plans are operational documents that would more
appropriately be under the purview of the regulator (BSEE), not the
leasing and science bureau (BOEM). BOEM has thus assumed the role of a
second OCS regulator within DOI. This contradicts the post-Macondo
recommendations by the National Commission and others which called for
a consolidation of regulatory responsibilities in a single agency.
Concerns about too many offshore regulatory agencies and the associated
complexity, overlap, and confusion have thus been further exacerbated.
BOEM is becoming increasingly involved in the regulation of
operations by adding conditions to plan approvals. These conditions are
the equivalent of regulations without public review and comment. Some
items must be submitted to both BOEM and BSEE. Further evidence of the
overlap and potential conflict is found in the proposed Arctic Rule
which includes contradictory BOEM and BSEE relief well requirements.
There also appears to be a general absence of coordination among the
DOI bureaus in the development of rules. For example, BOEM's Bonding
ANPRM and that Office of Natural Resource Revenue (ONRR) valuation
rule, both of which will have significant effects on the economics of
deepwater projects, were not developed in consultation with the other
bureaus.
We believe that offshore safety and environmental protection would
indeed be strengthened and improved by combining BOEM and BSEE in a
single bureau. Scientists, engineers, inspectors, and others must work
together without the stovepipes inherent in the current organizational
framework. In addition to enhancing safety and environmental
protection, a combined bureau would have far more cost-effective and
efficient. We do endorse the separation of the royalty management
functions, and believe that production measurement inspections should
be conducted by ONRR, not BSEE. Per its 2014 Annual Report, BSEE is
currently conducting more metering inspections than any other type of
inspection. This is entirely inconsistent with the objective of
separating the revenue and safety functions.
Question 3. Can you provide any examples of rulemakings or
regulations, either proposed or final, that have hindered technological
innovations in the field of offshore safety?
Answer. Our primary concern, as noted in our response to the first
question, is DOI's persistence in attempting to mitigate risks with
prescriptive regulations, without necessarily enhancing the safety of
operations. Risk management and mitigation is a continuous iterative
process, and must be managed in a systematic manner in order to most
effectively improve safe operations.
Widespread concerns about counterproductive regulations were
included in our comments on the proposed Arctic regulations. Additional
concerns will be raised in our comments on the Well Control NPRM.
Historically, the most successful elements of the OCS regulatory
program have been performance and risk-based, operator-managed, and
flexible. For example, Deepwater Water Operations Plans (DWOPs), the
principal regulatory instruments for deepwater production facilities,
provide for effective risk management with minimal prescription. The
DWOP approach has helped drive the innovation needed to safely produce
in record water depths.
In contrast, deepwater drilling has been regulated in a more
traditional manner, with prescriptive rules, continuing regulatory
direction and approvals, and limited flexibility. In our view, BSEE
should manage drilling operations in a more systematic manner, similar
to the approach that is taken with the DWOP program. Unfortunately,
BSEE's recent Well Control and Arctic NPRMs demonstrate that DOI still
thinks safety can be achieved through detailed prescription and
regulator direction.
In summary, we believe the DOI regulatory approach could be
improved with more goal-setting, less prescription, and improved
collaboration to foster a stronger safety culture that promotes
innovation.
______
The Chairman. Thank you, I appreciate that.
Mr. Williams.
STATEMENT OF CHARLIE WILLIAMS, EXECUTIVE DIRECTOR, CENTER FOR
OFFSHORE SAFETY, HOUSTON, TEXAS
Mr. Williams. Thanks to the committee for this opportunity
to talk to you about the Center for Offshore Safety.
Following the Macondo incident in the U.S. Gulf of Mexico
there has been renewed focus on promoting the highest level of
safety for the offshore oil and gas industry. Based on Macondo
studies and regulatory changes, SEMS became a requirement, a
regulatory requirement right after Macondo. The focus in the
United States has been on both enhancing and developing
performance-based safety and environmental management systems,
or SEMS.
These are assessed by third-party auditing, to make sure
that they are effective, and they are actually delivering what
is expected of those kinds of systems. And they also are
sustainable learning systems, where the feedback from what has
been learned is fed back into how can we make improvements to
make these systems even more effective. So, safety is dependent
on the technology, it is dependent upon the standards, and it
is dependent on how you manage, plan, and execute the projects.
And there was a lot of discussion about this earlier today in
the committee.
So, why has this focus really been so much on SEMS? And
that is the sole mission for Center for Offshore Safety, is how
to make SEMS more effective, and how do we learn and feed back
into SEMS processes.
The first part, like I said, is that it changes the--it has
a focus on embedding safety into how you plan, how you execute,
how you implement, how you define hazards, and how do you
maintain barriers. It embeds this thinking into your management
processes. It also changes to performance-based, which says
that companies will--there is a certain basic framework
companies will say how they are going to respond to this
framework, and then they will be assessed against how effective
and how well they are doing what they said, and how effective
those safety management systems are that they have embedded. So
it really drives accountability also, in a different way.
There also must be--a key part of this is norms and
motivations for leadership and decisionmakers to constantly
think about safety, and behave in ways that maximize safety.
The Center for Offshore Safety was formed as a
collaborative effort in the industry, but it was also part of
the Presidential Commission recommendation. It was part of the
industry studies looking at what other groups had done that
looked at SEMS, and making SEMS effective in other industries.
So, we were put together to collect the information, to do the
analysis, and to develop good practices to close any gaps or
opportunities that we saw.
The COS and the industry members and the industry are
committed to improving SEMS performance, and we are doing that
in several ways. The first one is people that are members of
the Center for Offshore Safety make commitments to certain
performance requirements. But the most important thing that we
have is a collaboration opportunity, where the industry can get
together and share and learn about safety environmental
management systems and collaborate.
And also, through the audits and through other performance
measures, like safety performance indicators and learning from
incident data that we collect, we can learn together. You know,
we can find opportunities to improve and continuously improve.
So that is one of the main opportunities that we have here.
And since this is a continuous learning process, it is
really beneficial; there are companies that have had SEMS for a
long time, have been doing really well. There are a few
companies that were new to SEMS after the regulation. This
process allows all companies, even companies that were running
good plans, to learn how to make those good plans even better,
and to focus on those improvements.
We have developed a lot of tools that are already in place
right now. We have issued our first annual report that I have
here that talks about what are the areas we are going to focus
on for improvement in the future, based on the data that we
have collected. And we have also developed and have in place
tools for accrediting third-party auditors and for making sure
third-party auditors have the correct training, and the third-
party auditors have the correct background to deliver good
audits, and deliver the information that we have developed.
So, our focus is and always will be this focus, laser
focus, on safety and environmental management systems, what we
can learn about them, and how we can make those better for the
industry. And certainly our thoughts will always remain with
the families and with the people that were lost in the Macondo,
but it is a key driver, it pushes us ahead on making the
improvements that need to be made in these management systems.
Thank you.
[The prepared statement of Mr. Williams follows:]
Prepared Statement of C.R. (Charlie) Williams, Executive Director,
Center for Offshore Safety
America's offshore oil and natural gas industry is safer than
before, but our goal will always be zero accidents and zero spills.
A significant enhancement in safety and environmental protection in
the oil and natural gas industry post-Macondo was the creation and
ongoing work of the Center for Offshore Safety (COS). COS was created
by the industry for the industry, and is devoted entirely to
continually assessing, learning about, and improving the safety and
environmental management systems (SEMS) implemented by operators in the
OCS.
SEMS has the following benefits:
Shifts execution and oversight strategy from a
prescriptive rule-based approach to one that is proactive
and performance-based
Manages safety with the same principles of planning,
organization, implementation, and controls that we expect
from other business functions
Drives both Process and Personal accountability up and
down the organizational structure
SEMS requires mechanisms that:
1. Specify what is needed for safe operation
2. Check to see that these specifications are being followed
3. Build competency by developing individual knowledge and skill
COS is entirely focused on Safety and Environmental Management
Systems (SEMS) and how their effectiveness can be continually evaluated
and enhanced.
SEMS is intended as an active-learning safety and environmental
management system that establishes and manages barriers, takes a
systematic approach to all parts of offshore safety, has active
monitoring via safety performance and other indicators, uses
independent verification via third-party auditors, and focuses
continually on operationalizing and enhancing safety and environmental
management. Most significantly, SEMS focuses on the importance of
leadership and the interaction of management with staff to deliver a
positive safety culture.
The COS mission is promoting the highest level of safety for
offshore operations through effective leadership, communication,
teamwork, use of disciplined management systems and independent third-
party auditing and certification. Sharing data and lessons learned
throughout the industry is an essential part of the work COS does to
continually enhance safety.
Through the COS, industry members are committed to improving SEMS
performance by subscribing to the following principles:
Industry leaders demonstrate a visible commitment to
safety
Operators, contractors, and suppliers work together to
create a culture of safety
Decision making at all levels will not compromise safety.
Safety processes, equipment, training and technology
undergo continual examination and improvement
Members share learnings and apply industry standards, good
practices and promote continual improvement
COS broadly represents the oil and natural gas business on the U.S.
Outer Continental Shelf with members from all aspects of the upstream
offshore oil and natural gas industry including operators, drilling
contractors, equipment manufacturers and service contractors. The COS
has a full-time staff that works in conjunction with industry task
groups to address specific SEMS issues. In addition, COS has a
governing board made up of senior management of the industry member
companies.
The COS is responsible for:
Assuring that third-party Audit Service Providers and
their auditors meet the goals, objectives and requirements
for conducting SEMS audits
Compiling and analyzing SEMS data and other safety metrics
to find areas for enhancement
Creating Good Practices to close gaps found through the
safety data analysis
Coordinating COS-sponsored functions designed to
facilitate sharing and learning processes regarding SEMS
and good practices
Identifying and promoting opportunities for industry to
continually improve SEMS and safety
Developing outreach programs to facilitate communicating
with government and external stakeholders regarding SEMS
COS has developed processes and documents in the following areas:
COS SEMS Toolkit--SEMS Audit Protocols, Operator-
Contractor interface documents, staff Knowledge & Skills
worksheets, and other products for SEMS.
SEMS Audit Service Provider (ASP) Documents, protocols,
and guides
COS Auditor Qualification and Training, SEMS Certification
for Operators and Contractors, and ASP Accreditation
Documents--Suite of documents that outline the
qualification and training requirements for third-party
auditors performing COS SEMS audits, COS SEMS certification
requirements, accreditation requirements for ASP performing
third-party audits and COS Standard Audit Report worksheets
and template.
Skills and Knowledge Management System Guideline (SKMS)--
Tools and techniques to provide industry with a common
process for the verification and development of employee
and contractor skills and knowledge
Leadership Site Engagement--Good practice guidance for
senior managers and leaders to demonstrate visible safety
and environmental commitment during visits to offshore
operating sites, as well as enhancing accountability and
safety culture
COS is actively working in the following areas:
Audit Service Provider Accreditation--Develop an enhanced
set of COS-endorsed standards for accrediting Audit Service
Providers and their auditors to support the COS SEMS
certification program.
SEMS Certification Program-Operator Certification--
Certification of operator SEMS programs via accredited
third-party audit.
SEMS Certification Program-Contractor Certification--
Third-party SEMS Certification of drilling contractors and
offshore service/supply companies in order to provide
assurance to operators and regulators that a system is in
place which meets applicable requirements and demonstrates
contractor workers have skills and knowledge to follow safe
work practices.
Safety Performance Indicators (SPI) Program--Clearly
defined indicators to evaluate safety performance and aid
in identifying safety trends. This includes new leading
indicators of SEMS effectiveness.
Learning from Incidents (LFI) Program--A process and
methodology to identify, assess and communicate high value
learning incidents to promote cross-industry learning. This
includes identifying SEMS elements that were ineffective
and contributed to the incident and how the possibility of
the incident will be minimized in the future.
Information and Knowledge Management--An information and
knowledge management framework to gather, manage and share
information to enable the industry to continually improve
SEMS performance.
COS Safety Events--Plan, develop and coordinate annual COS
Safety Forum, Offshore Technology Conference Technical
Sessions, SEMS Audit Workshops, and other events to
facilitate sharing knowledge and promoting opportunities to
continually improve SEMS and safety.
COS has recently published its first Annual Performance Report
detailing the initial round of data and lessons learned from the Safety
Performance Indicator Program, Learning from Incidents Program and SEMS
audits described above. This report is available via the COS Web site.
The oil and natural gas industry is committed to operating in a
safe and responsible manner while minimizing our impact on the
environment. Protecting the health and safety of our workers, our
contractors and our neighbors is a moral imperative and core value of
our industry.
No incident is acceptable. Our industry takes every incident
seriously. Continued vigilance is essential in helping to prevent
future incidents.
In the 5 years since the Macondo incident, the oil and natural gas
industry has methodically examined every aspect of offshore safety
measures and operations to identify potential improvements in safety
management. COS was established by the industry to ensure that this
continues and is effective, that there is a single group exclusively
focused on SEMS, and that there is a group responsive to supporting a
culture of safety.
We worked with the U.S. Department of Interior, the Presidential
Oil Spill Commission, other Government Organizations, and industry
experts as we developed the mission, programs, and tools of COS.
But COS did not start from scratch. Offshore exploration and
production has long been focused on safety and delivering remarkably
safe and successful technology and operations. The industry is
committed to ensuring that SEMS is continually enhanced and that the
COS organization is in place to focus on this and share industry
knowledge of SEMS and safety.
Despite industry's history of safety dedication and performance, it
was understood that the balance between personnel safety and prevention
of major incidents had to be enhanced and the focus on continual SEMS
learning, as well as operationalizing those learnings, must be
maintained. The oil and natural gas industry has dedicated the past 5
years to using the lessons learned from Macondo to enhance safety and
operational practices.
Our strong culture of safety continues to grow along with advances
in technology and industry standards. So long as there is any room for
improvement, our work at COS will never be complete. This is our
livelihood, and our work is critical to America's new energy
renaissance.
Every incident is both one too many and a powerful incentive for
COS and industry to improve SEMS, the learning process, skills and
knowledge, operating procedures and standards, and effectiveness
measures and audits. Our thoughts will always remain with the families
of all those who lost their lives in this tragic accident. And the
industry, and the industry through COS, stands ready to continue to
work with government and regulators to improve safety.
______
The Chairman. Thank you very much.
Mr. Coatney.
STATEMENT OF DAVID COATNEY, MANAGING DIRECTOR, HWCG LLC,
HOUSTON, TEXAS
Mr. Coatney. Thank you, Chairman Bishop, Ranking Member
Grijalva, members of the committee. I appreciate the
opportunity to testify before you today. My name is David
Coatney, Managing Director of HWCG LLC, a deepwater well
containment consortium, formerly called Helix Well Containment
Group. I appreciate the opportunity to share with the committee
the oil and gas industry's capacity in general, with specific
focus on HWCG for quickly and comprehensively responding to a
deepwater well blowout for the protection of people, property,
and the environment.
First, a little bit about me. I am a fourth-generation
family member of southwest Louisiana and I have been working in
the oil and gas industry for 40 years. I received my petroleum
engineering degree from Louisiana State University in 1977, and
commenced working for Marathon Oil Company in the Gulf of
Mexico. I have worked in multiple positions, drilling,
completions, and production operations, offshore and on, USA
and international. I was the offshore installation manager in
the North Sea, managed the giant Yates Field in west Texas, and
held positions of engineering manager and international
production manager.
I provided field development coordination for Rocky Gas
development projects during reconstruction, and was Swift
Energy's Vice President of Production. Finally, I have been
HWCG's Managing Director since early 2011. Throughout my
career, a focus on industry and professional standards in the
promotion of safe, efficient, and soundly engineered
developments has been the baseline.
Five years ago, the deepwater oil industry suffered a loss.
Many focused on the released oil. And while the environment
costs were significant, we will never forget the loss of those
11 people, and will continue to do all we can to avoid another
incident.
While I believe the industry has always been safety
conscious, the Macondo tragedy represented a defining challenge
that forced all of us to become even more cognizant of safety.
Through concerted efforts of the Bureau of Safety and
Environmental Enforcement, the U.S. Coast Guard, and
consortiums such as HWCG, we have focused on leveraging the
collaborative powers of thousands of man-years of industry
experience to set a new bar for response to a deepwater
containment event.
Months of the Deepwater Horizon well releasing oil into the
Gulf was a hardship on all. It would have been a greater loss
if we had stopped deepwater production all together. The
industry took an introspective look to improve, and confirmed
need for immediate access to certain large-scale equipment,
including special purpose equipment called capping stacks. The
Deepwater Horizon response success capping the well is a
blueprint for HWCG's well containment plan.
HWCG, a consortium of 16 deepwater oil and gas companies,
was developed through collaborative efforts of members and
industry-servicing entities in close cooperation with the BSEE
and the U.S. Coast Guard. The greatest improvement in emergency
response since Macondo is maintenance of an integrated
comprehensive response solution, trained frequently across the
year with members ready for immediate deployment.
There are two containment consortiums in the Gulf, others
for international and multiple capping stacks, matching
pressure and flow requirements of wells. HWCG's solution is
founded on a model anchored on fit for purpose, with
collaboration and mutual aid as cornerstones, is based on
tried-and-tested equipment proven on Macondo, is supported by
frequent meetings of technical experts, contains a detailed
well containment plan, and has established response protocols
with conformance to NIMS guidelines.
HWCG has over 250 mutual aid subject matter experts
available to assist each other during a response. And finally,
HWCG's equipment is immediately deployable and technology
current through daily use in support of ongoing exploration and
development projects. HWCG was tested by the regulators in
2013, through an actual deployment of a capping stack on the
seafloor in the Gulf in 5,000 feet of water. Even with a
weather hold, it took less than 6 days--a vast improvement,
considering the Macondo deployment of nearly 90 days.
HWCG's solution, with capabilities of 130,000 barrels per
day, many times Macondo's flows, is a comprehensive well
containment response model made up of equipment, people,
procedures, and processes.
Thank you for the opportunity to share our story. I would
be happy to entertain questions.
[The prepared statement of Mr. Coatney follows:]
Prepared Statement of David Coatney, Managing Director, HWCG LLC
Thank you Chairman Bishop, Ranking Member Grijalva and members of
the committee. I appreciate the opportunity to testify before you
today.
My name is David Coatney. I am the Managing Director of HWCG LLC, a
deepwater Well Containment Consortium, formerly called Helix Well
Containment Group. I appreciate the opportunity to share with the
committee, today, the offshore Oil and Gas Industry's capacity, in
general, with specific focus on HWCG for quickly and comprehensively
responding to a deepwater well blowout in the Gulf of Mexico for the
protection of people, property and the environment. But first, a little
bit about me . . .
I have been working in the Oil and Gas Industry for 40 years,
second generation in that line of work. I received my Petroleum
Engineering degree from Louisiana State University in 1977 and
commenced working for Marathon Oil Company at that time in the Gulf of
Mexico operations. I've worked in multi-disciplinary capacities
including drilling and completions and production operations--offshore
and onshore, USA and international. I was the Offshore Installation
Manager (OIM as you oftentimes hear it) in the North Sea operations;
managed the giant Yates Field in west Texas; and held positions of
Engineering Manager and International Production Manager. Since
retiring from Marathon in 2003, I've provided field development
coordination for the USA-awarded Bechtel Iraqi gas development projects
during reconstruction and was independent producer Swift Energy's VP-
Production. Finally, I have been HWCG's Managing Director since its
organization in early 2011.
Throughout my career, focus on Industry and professional standards
in the promotion of safe, efficient and soundly engineered developments
has been the baseline.
Five years ago the deepwater oil industry suffered a loss. Many
focused on the released oil and while the environmental costs were
significant, we will never forget the loss of those 11 people and will
continue to do all we can to avoid another incident.
While I believe the industry has always been safety conscious, the
Macondo tragedy represented a defining challenge that forced all of us
to become even more cognizant of safety. Through concerted efforts of
the Bureau of Safety and Environmental Enforcement (BSEE); the U.S.
Coast Guard (USCG) and consortiums such as HWCG LLC, we have focused on
leveraging the collaborative powers of thousands of man-years of
Industry experience to set a new bar for response to a deepwater
containment event.
The months of the Deepwater Horizon well releasing oil into the
Gulf of Mexico was a hardship on all. It would have been a greater loss
if we had stopped deepwater production altogether. The industry took an
introspective look to improve itself and confirmed the need for
immediate access to certain large scale equipment, including special
purpose subsea blowout preventer equipment called capping stacks, as
well as, dedicated surface flowback equipment. The Deepwater Horizon
response success in capping the well is a blueprint for HWCG's well
containment plan.
HWCG LLC is a consortium, comprised of 16 deepwater oil and gas
companies, that was developed through collaborative efforts of its
members and over 34 Industry servicing entities in close cooperation
with the BSEE and USCG. This yielded an integrated response solution
capable of capping of a deepwater well in less than 7 days.
The greatest improvement in emergency response since Macondo is
maintenance of an integrated and comprehensive response solution,
drilled frequently across the year with its members, and ready for
immediate deployment. Today there are two containment consortiums for
activities in the Gulf; others for international operations and
multiple capping stacks matching pressure and flow requirements of
wells. HWCG's response solution is founded on a model which: (i) is
anchored on a ``fit-for-purpose'' concept with collaboration and mutual
aid as cornerstones; (ii) is based on the utilization of tried and
tested equipment proven on the Macondo event; (iii) is supported by
frequent meetings of technical experts; (iv) contains a detailed Well
Containment Plan; and (v) has established emergency response protocols
with baseline conformance to NIMS guidelines. HWCG has a members'
database of over 250 mutual aid subject matter experts available to
assist each other during a response. And . . . finally, HWCG's
equipment is maintained ``immediately deployable'' and ``technology
current'' through its daily use in support of ongoing exploration and
development projects--the final key to the HWCG program.
HWCG Consortium was tested by the regulators in 2013 through one of
our members, Noble Energy, through an actual deployment of capping
stack to a location on the seafloor of the Gulf in 5,000 ft. of water.
The deployment, even with a weather hold, took less than 6 days--a vast
improvement considering a Macondo-deployment of nearly 90 days.
HWCG's Response Solution with capabilities of 130,000 BPD, many
times the requirements of Macondo flows . . . A comprehensive well
containment response model--made up of equipment, people, procedures
and processes--Ready to be activated immediately in the event of a
deepwater well control incident . . .
Thank you for the opportunity to share our story. I would be happy
to entertain any questions.
______
The Chairman. Thank you, I appreciate that.
Mr. Murawski.
STATEMENT OF STEVEN MURAWSKI, PROFESSOR AND PETER BETZER
ENDOWED CHAIR OF BIOLOGICAL OCEANOGRAPHY, UNIVERSITY OF SOUTH
FLORIDA, TAMPA, FLORIDA
Dr. Murawski. Chairman Bishop, Ranking Member Grijalva, and
the committee members, thank you for the opportunity to provide
testimony today. My name is Steven Murawski, and I am an
environmental scientist at the University of South Florida in
St. Petersburg. Today I appear before you to summarize some of
the environmental consequences of the Deepwater Horizon
accident, and propose some steps to address the ongoing
challenges we face in ensuring safer marine hydrocarbon
production.
The Deepwater Horizon event was both unprecedented and
unanticipated. Up until the accident, oil spills were thought
of as two-dimensional events: oil spilled instantaneously over
a two-dimensional grid. Deepwater Horizon event was a four-
dimensional spill, leaking almost 5 million barrels of crude
over an 87-day period, a mile deep in the ocean. It, therefore,
presented many unique challenges which required inventing new
techniques, some on the spot, to cope with the new challenges
arising from that spill.
In the 5 years since the spill, we have gathered an
enormous amount of information on environmental effects, the
efficacy of measures used to fight the spill, and have learned
a number of important lessons that need to be put into use in
fighting the next deep spill.
Five years ago, a well a mile deep was a novelty. Now the
industry is drilling in 2 miles of water depth, and even
deeper. Should a blowout occur in 2 miles of water depth, many
of the conditions encountered during the Deepwater Horizon
would be fundamentally different, resulting in yet a different
spill scenario. For example, hydrate formation conditions will
be altered and more critical when determining the utility of
containment technology and the rise rate of droplets. These
differences need to be carefully considered, before or if the
Deepwater Horizon playbook is used once again.
With respect to the environmental consequences of Deepwater
Horizon, a number of important impacts have emerged from the
work of NERDA and independent scientists. For example, oil and
gas from the ruptured well created dense clouds of fine,
neutrally buoyant droplets that never surfaced. The key and yet
unresolved aspect of this problem is the role, if any, that the
addition of dispersants injected at the well head played in
keeping that oil volume from surfacing. This is a fundamental
problem of enormous practical importance that can only be
answered through high-pressure experimentation and modeling.
The combination of oil, gas, dispersants, dead plankton,
and fine clay from river inputs conspired to form a dirty
blizzard comprising between 4 and 10 percent of the Deepwater
Horizon oil volume, which coats the bottom of the Gulf in a
1,000-square-mile area today.
Monitoring the fish populations on the Continental Shelf
since the spill has revealed a number of important effects.
Declines in growth of red snapper and other reef fish have been
accompanied by coincident declines in recruitment of red
snapper in the Eastern Gulf, which has important implications
for fisheries rebuilding.
A host of other environmental issues have emerged from
monitoring the various components of the ecosystem, including
the deaths of hundreds of thousands of shore birds, severe
health issues with bottlenose dolphins, impacts on marsh flora
and fauna, and impacts on deep biota, including cold-water
corrals and other invertebrates. The Exxon Valdez experience
shows us that it can take a half-decade or more for ecological
change to become apparent. Therefore, continued vigilance is
warranted.
What do we need to note in the advent of another large,
deep spill? We need better baseline contamination information
for sediments, water, and biota associated with the
approximately 4,000 oil and gas facilities in the Gulf. Oil
spill planners need to understand what resources are at risk
from a potential spill at any location in the Gulf, and how
surface and subsurface oil spills move, at what rates, and in
response to what factors. These and other issues should be
viewed as critical known unknowns in the oil spill response,
and finding their answers should be a priority.
How can we close the critical knowledge gaps that we have?
I will highlight three recommendations I have in my written
testimony.
First, literally every environmental scientist I know that
has worked in the Gulf has lamented the lack of comprehensive
pre-spill environmental baselines, making the job of assessing
oil spill effects needlessly complicated and expensive.
Congress and/or the Administration could stipulate that all
existing and planned oil and gas production facilities be
monitored for such baseline data.
As well, we need to invest in independent science through
the existing environmental baseline studies and oil spill
preparedness. I recommend that you consider significant
increases in funding for the environmental studies program at
BOEM, as well as funding research recommendations of ICCOPR.
In summary, increased government oversight, better
equipment, higher regulatory standards, et cetera, are
important, but they are not the only factors that are critical
here. As we remember the legacy of Deepwater Horizon, we should
redouble our efforts to anticipate, prepare, and train for the
next disaster.
Thank you very much, and I appreciate any questions you
might ask me.
[The prepared statement of Dr. Murawski follows:]
Prepared Statement of Steven A. Murawski, Ph.D., Peter R. Betzer
Endowed Chair of Biological Oceanography, University of South Florida
Chairman Bishop, Ranking Member Grijalva, and committee members,
thank you for the opportunity to again provide testimony to this
committee on issues important to management of the Nation's natural
resources. Today I appear before you to summarize some of the
environmental consequences and propose some steps to be taken to
address the ongoing challenges we face resulting from the Deepwater
Horizon oil spill, and in enabling safer drilling in the future.
My perspectives in providing this testimony are two-fold. During
the Deepwater Horizon (DWH) oil spill I served as a senior science
advisor to the Under Secretary for Oceans and Atmosphere at the
Commerce Department for issues related to the oil spill. I did so from
my position as the Director of Scientific Programs and Chief Science
Advisor at the National Marine Fisheries Service. I saw firsthand the
difficulties in responding to the unprecedented volume of oil released
continuously over an 87-day period in the deep, cold recesses of the
Gulf of Mexico.
Subsequent to the spill, I retired after 34 years of service from
NOAA to become a Professor of Biological Oceanography at the University
of South Florida, in St. Petersburg, Florida. In my current capacity I
direct a large, multifaceted and multi-institutional research program
concerned with understanding oil spill impacts and increasing
preparedness to deal with deep spills of the future. The work of my
colleagues and me is funded through a grant from the Gulf of Mexico
Research Initiative (GoMRI), which was in-turn funded via $500 million
from BP in the early days following the spill. The goals of our Center
for Integrated Modeling and Analysis of Gulf Ecosystems (C-IMAGE;
http://www.marine.usf.edu/c-image/) are to address fundamental
questions of science with respect to response procedures and to help
understand the long-term consequences to natural resources and people
of toxic components of oil in environment.
An Unanticipated and Unprecedented Spill
``We are fighting an omnidirectional, almost indeterminate threat
here. We are trying to protect the entire Gulf Coast at the same
time.''
Coast Guard Commandant Thad Allen, May 18, 2010 before
the Senate Committee on Commerce, Science, and Transportation.
In the years prior to the Deepwater Horizon incident, the offshore
oil and gas industry had progressively migrated offshore into the
deeper parts of the Gulf of Mexico, and elsewhere around the world, as
easier to obtain formations were explored and subsequently played-out.
The advent of ``ultra-deep'' drilling (>5,000 feet water depth) has
accounted for an increasing and now significant portion of production
in the last decade, despite the relatively high costs of production
there. While Deepwater Horizon was located in over a mile of water
depth, it is by no means the deepest well drilled in the Gulf. As the
quote above from former USCG Commandant Admiral Thad Allen (cited in
Lubchenco et al. 2012) indicates, despite the practice of drilling in
such extreme depths, the industry and government regulators were
unprepared for the advent of a massive spill occurring at the water-
geological interface. Even now there is considerable dispute as to the
specific conditions that conspired to cause the accident, the efficacy
of response measures--many of which were essentially made up on the
spot--and the full set of environmental effects of DWH.
In the intervening years since the spill, government regulators and
the industry have become more safety conscious regarding deep drilling,
as attested to by the witnesses in today's hearing. However, as with
the Deepwater Horizon incident, we must ask the question--are we
preparing for the circumstances for the last spill or anticipating the
conditions that will occur during the next major spill? Remember that 5
years ago a mile deep well was a novelty, now the industry is drilling
in 2 miles water depth and even deeper.
The volume of oil and gas released during Deepwater Horizon into
the environment and the conditions under which that release happened by
were unprecedented at the time. Although deep blowouts and their
characteristics were previously and presciently considered (Ross 1997;
NRC 2003), practical spill response measures for such a unique
scenario, such as sub-surface containment, dispersant use in the deep
sea, and prediction of fate and effects, were not brought into
operational spill response planning prior to DWH (McNutt et al. 2012;
Lubchenco et al. 2012).
Should a deep blowout occur at 2 miles water depth, many of the
conditions extant during the DWH spill will be fundamentally different,
resulting in yet a different spill scenario. Hydrate formation
conditions will be altered and more critical in determining the utility
of containment technology and the rise rate of oil droplets. Different
gas/oil ratios (GORs) will result in altered turbulent mixing of multi-
phase jets of oil, gas and water. As well, the ``family'' of oil
composition will likely differ resulting in a heavier/lighter or
sweeter/more sour crude being released. All of these differences need
to be carefully be considered as to impacts and efficacy before, or if,
the Deepwater Horizon ``play book'' is used once again.
What People Ask Scientists in the Gulf about DWH
In order to design a hydrocarbon extraction policy that is safer
for the workers and the environment, it is contingent on us to
carefully assess the risks of accidents of various types and volumes.
Risk is a combination of the probability of a particular accident or
phenomenon happening and the significance of the consequences should
that particular event occur. In the case of DWH, the frequency of a
deep spill may be low (as compared to accidental low level releases
associated with surface operations), but the sheer volume and extent of
the spill may have consequences that last for decades or that result in
threshold-level changes to the ecosystem that are unrecoverable.
Understanding the totality of these risks requires that we evaluate
spill effects from many perspectives. State and Federal regulators,
representatives of various use sectors and the public all consider the
spill from a variety of different lenses. Gulf scientists are often
asked about many aspects of the spill that reflect these multiple
perspectives of risk. The questions that most often recur include:
Where is the oil now? When will it be gone?
How toxic is (was) the oil?
What about dispersants?
Is the seafood safe to eat?
What are the short- and long-term impacts on biota
(marshes, fish, birds, marine mammals)?
What will be the human health impacts, and on human use of
natural resources?
Are we (as a society) better prepared now to respond to a
spill of the magnitude of DWH?
Is such a spill less likely to occur now than it
(apparently) was in 2005?
Designing an acceptable oil spill risk policy for the Nation
requires that we understand better the answers to these and other
questions so that we can improve the system to minimize the frequency
and mitigate the impacts of future spills along these and other
dimensions. Improvements to the current system for risk reduction have
real costs to the industry and society, and balancing those costs with
the goal of minimizing the risk to levels well below those that existed
in 2005 should be our ultimate goal. In order to do so, we need more
and better science to address the trade-offs of risk to cost. Thus, in
the wake of the DWH incident it is critical that we carefully evaluate
the questions above, and others, as we plan for the next disaster
response and build more risk aversion into the current regulatory
system
What Do We Know Now That We Did Not Know Then?
Because of the generous funding of organizations such as GoMRI, the
National Science Foundation, various state and Federal agencies, and
other sources, we now have partial answers so some of the key questions
vexing responders during the DWH spill. For example, we now know the
following:
Oil and gas from ruptured well will create dense clouds of
fine, almost neutrally buoyant plumes in 900-1,200 meters
of water and never surface--even without the addition of
chemical dispersants. The key--and yet unresolved--aspect
of this problem is the role, if any, the addition of
dispersants injected at the well head played in keeping oil
volume from surfacing. This is a fundamental problem of
enormous practical importance that can only be answered
through carefully controlled high pressure experimentation
and modeling (e.g., Paris et al. 2014). These studies are
ongoing (funded by API, GoMRI, BSEE, and others) but have
yet to be concluded and independently peer reviewed.
Oil does not, in all circumstances, float, and large
quantities of the DWH oil remain trapped in sediments of
the deep Gulf. The oil took many paths; some sank, some
floated to shore, and other quantities were consumed by
bacteria while in the water column. Estimates of oil in the
deep ocean sediments range from 4-30 percent of the volume
exiting the well. Additional DWH oil can be found near
beaches in the form of tar patties and tar balls, and in
some of the coastal marsh habitats.
A combination of oil, dispersants, dead plankton and fine
clay from river inputs conspired to form a ``dirty
blizzard'' which coats the bottom of the Gulf in a >1,000
square mile area (Valentine et al. 2014; Schwing et al.
2015), and which also occurs in the deep waters off Mexico
following the IXTOC-I blowout in 1979-1980.
High resolution satellite and aircraft imagery and
airborne sampling can be used both to track surface oil and
to measure its thickness and therefore quantity, as well as
the chemical composition of oil.
The composition of oil residues in fishes can closely
resemble that of the crude oil that taints them (Murawski
et al. 2014).
Different species can exhibit vastly different
contamination levels, even if taken in the same location,
due to differences in contamination vector and physiology.
Due to a combination of aggressive fishery closures and
intensive seafood inspections (Ylitalo et al. 2012) no
tainted seafood apparently reached the market following
DWH.
The over 400 scientific papers published in the wake of the DWH
disaster have done much to close the knowledge gap, and the lessons
from these studies need to be folded into disaster response strategies.
Impressive as the pace of scientific understanding of spill dynamics
has been in the past 5 years, there remain a number of key scientific
uncertainties that are critical to resolve prior to the next deep
spill:
What Do We Need To Know (That We Do Not Know Now)?
What are the baselines of contamination in sediments,
water and biota associated with the 4,000 oil and gas
facilities in the Gulf (and pipeline fields as well)?
How do the depth of the water and specific oil composition
affect the efficacy of response measures?
What resources are at risk from a potential oil spill at
any location in the Gulf?
How would surface and sub-surface oil spills move, at what
rates, and in response to what factors?
What are the environmental consequences of oil spill
response measures (burning, dispersants, sand berms, water
releases)?
Will deep plumes form without the addition of any
dispersants at all? What value is added by the use of deep
dispersants (if any), what is their environmental
consequence?
Can ultra-deep drilling and production be accomplished
with greatly reduced risks of environmental damage?
Resolving these and other issues should be viewed as critical
``known unknowns'' in oil spill response. Below I focus on a few
approaches that Congress and the Administration could collaborate on in
addressing them.
Steps We Can Take to be Better Prepared for Future Spills
(1) Address the Lack of Adequate Environmental Baselines:
Currently there are literally hundreds of environmental scientists,
students and citizens conducting studies to determine the impacts of
the DWH spill on the environment and biota of various types. These
studies are used both to assess penalties in the litigation phase of
the accident, but also to understand the spill's implications for
public safety and long-term environmental sustainability in the Gulf.
We can discover much about these impacts by evaluating contaminants
locked in the sedimentary record before, during, and after the spill
(Stanschi et al. 2001; Schwing et al. 2015), monitoring the recovery
process (Murawski et al. 2014) and by comparing resources in the spill
zone to control areas far from the spill. However, literally every
environmental scientists that I have spoken with has lamented the lack
of comprehensive pre-spill environmental baselines as making the job of
assessing DWH effects needlessly complicated and expensive. For
example, one of the only baseline studies of hydrocarbon residues in
sediments, water and fish comes from a study (funded by MMS) conducted
in the early 1990s, over 300 miles west of the DWH accident (McDonald
et al. 1996). Had the record of PAH contamination of the environment
surrounding DWH been periodically monitored, the process of
disentangling DWH effects from background contamination would be much
more straightforward than it is today.
Maintaining adequate baseline studies and periodically assessing
changes due to energy exploration and development activities is clearly
within the purview of DOI/BOEM, as specified in the Outer Continental
Shelf Lands Act (OCS) of 1973:
``The Environmental Studies Program \1\ now managed by BOEM was
first established in 1973 by the OCS Lands Act, which directed
the Secretary of the Interior to--
---------------------------------------------------------------------------
\1\ This section quoted directly from: 2015. BUDGET JUSTIFICATIONS
and performance information for 2016, The U.S. Department of the
Interior, BUREAU OF OCEAN ENERGY MANAGEMENT: http://www.doi.gov/budget/
appropriations/2016/upload/FY2016_BOEM_ Greenbook.pdf.
Establish information needed for the assessment and
management of impacts on the human, marine, and coastal
environments of the OCS and potentially affected coastal areas.
Predict impacts on marine organisms resulting from a
variety of factors: chronic low level pollution or large spills
associated with OCS production; discharge of drilling muds and
cuttings, as well as pipeline emplacement; and onshore
development.
Monitor human, marine, and coastal environments to
provide time-series and data trend information for
identification of significant changes in the quality and
productivity of these environments.''
Clearly, despite these stated mission goals for DOI, gathering the
``information needed for the assessment and management of impacts on
the human, marine, and coastal environments of the OCS . . .'' is a
priority not currently being met. Given the continuing development of
ever deeper petroleum reservoirs in the Gulf of Mexico, as well as the
schedule for expanded leasing activities along the Atlantic Seaboard
and off Alaska, there is an increasing need for these environmental
baselines and associated studies. The budget for BOEM and BSEE within
the Department of the Interior have been stagnant for years and are
inadequate to meet existing and new responsibilities of these agencies.
One way to assure adequate baseline data are obtained is to require
such data be collected periodically. Congress and the Administration
could stipulate that:
The Department of the Interior shall require (at the expense of
the operator) that all existing and planned marine oil and gas
production facilities be monitored at no more than 5-year
intervals to provide baseline and ongoing contamination
assessments of sediments, the water column, and marine life
(e.g., invertebrate and fishes) in the vicinity of these
facilities. The Department shall develop scientific protocols
for such activities and make the data publicly available on a
continuing basis.
Such a requirement not only would make assessing the impacts of any
new spill much more direct, but would potentially help the industry
demonstrate the facts about environmental pollution associated with its
routine operations and if a company was responsible for environmental
damage from an accident. For example, in the case of the Hercules #265
gas rig explosion in July, 2013 off the Louisiana coast, baseline
information on fish contamination was available for the vicinity from
post-DWH studies. Sampling in the aftermath of the Hercules event
showed no increase over the baselines in the concentration of low
molecular weight polycyclic aromatic hydrocarbon (PAH) metabolites in
red snapper bile, although high molecular weight PAHs, resulting from
burning hydrocarbons, did increase.
There is ample precedent for industries such as oil and gas to pay
for routine monitoring of the environmental consequences of their
operation, under the supervision of Federal agencies. For example,
under the Clean Water Act, permittees are required to monitor, at their
expense, wastewater discharges into public waterways, including the
ocean. Similarly, some fisheries, regulated under the Magnuson Stevens
Fishery Conservation and Management Act pay for 100 percent observer
coverage to assure compliance with catch quotas and bycatch limits
(e.g., the Bering Sea groundfish trawl fleet). I believe that similar
routine and infrequent monitoring of the environments surrounding oil
and gas facilities is both consistent with provisions of the Outer
Continental Shelf Lands Act, and is cost effective.
(2) Invest in Independent Science through Environmental Studies and Oil
Spill Preparedness Programs
The Bureau of Ocean Energy Management (BOEM, representing parts of
the former Minerals Management Service), maintains its Environmental
Studies Program (ESP) to conduct research and provide critical
information on a wide variety of subjects ranging from the impacts of
seismic exploration on marine mammals, deep coral and chemosynthetic
community mapping, alternative energy development, archeological relic
preservation and contamination studies. The spatial domain of study has
increased to include the Arctic and, with impending lease sales in the
Atlantic, to that region as well. The budget to cover the wide scope of
issues and increasing spatial domain of development is only about $35
million per year--far too little to make effective progress and support
national policy initiatives. I recommend that Congress and the
Administration consider a significant and commensurate increase in the
Environmental Studies Program budget at BOEM.
(3) Invest in Interagency Oil Spill Research
One of the important, but often overlooked, lessons of DWH is the
key roles that coordinated actions among the relevant Federal agencies
play in addressing the ``omnidirectional'' threats resulting from
massive and unique oil spills (Lubchenco et al. 2012; McNutt et al.
2012). Congress anticipated the importance of the synergy among
agencies in writing OPA-90 by establishing the Interagency Coordinating
Committee on Oil Pollution Research (ICCOPR). Housed within the U.S.
Coast Guard, ICCOPR has membership including all agencies dealing with
aspects of oil spill response. However, while OPA was authorized in
1990, there has been no recent funding directed to ICCOPR to address
the long list of interagency research priorities identified by that
group. Other that some Federal funding spent under very restrictive
stipulations of the Oil Spill Trust Fund, there is no funding to
coordinate disaster response strategies among agencies, and to close
critical research gaps identified by them. I recommend that Congress
and the Administration collaborate on funding directed specifically to
address the research priorities identified by ICCOPR.
This research potentially bears not only on the response measures
to a spill but can help identify (through resource mapping studies
combined with four-dimensional hydrodynamic modeling) drilling
locations that may present an inordinate risk should a large accidental
spill occur. In this case, regulators may deem drilling in these
locations unacceptable. While these and other research projects are
clearly worthy of priority they remain essentially unfunded.
(4) Increase Transparency and Collaboration among Industry, Government
and Academic Scientists
``The worst time to be exchanging business cards is during a
crisis''.
Quoted by Dr. Marcia McNutt, former Director of the U.S. Geological
Survey and current editor, Science Magazine (McNutt 2015).
In responding to the unprecedented nature of the DWH spill, a
number of ad hoc committees were formed to help answer thorny technical
problems, devise new solutions and to review data and analyses to be
made public. While initially made up of government and industry
scientists, all of these committees eventually entrained independent
academic scientists. This is because the expertise necessary to solve
the problems resided outside pre-arranged communication channels, and
because the scale and scope demanded high levels of transparency in
decisionmaking and in the conclusions being reached. The inclusion of
academic scientists was not without controversy or problems, but on
balance better decisions were ultimately made because of it (McNutt et
al. 2012; Lubchenco et al. 2012; McNutt 2015). Problems in using
independent scientists in this role were exacerbated by the lack of
organization of the large, diverse community with specialized
expertise, and the unprecedented nature of the interagency working
groups as established. Since the DWH spill the academic community in
the Gulf has formed the Gulf of Mexico University Research
Collaborative (http://gomurc.usf.edu/) with the goal of establishing a
clearing house to rapidly identify pertinent expertise in the event of
a large-scale spill. As well, the U.S. Coast Guard has formed
partnerships with the academic community, including establishing new
memoranda of understanding to enhance such collaborations.
A number of key scientists and policy advisors, both within and
outside agencies, have also been working to better define the roles and
advantages of enhanced collaborations among responders and academic
scientists through the Science Partnerships Enabling Rapid Response
project at the Center for Ocean Solutions,\2\ at Stanford University.
Rather than being seen as antagonistic, such collaborations among
industry, government and academia are a positive development and such
collaborations should therefore be nurtured and supported.
---------------------------------------------------------------------------
\2\ www.centerforoceansolutions.org/project-science-partnerships-
enabling-rapid-response.
---------------------------------------------------------------------------
(5) Re-Authorize OPA-90
It has been nearly 25 years since the Oil Pollution Act of 1990 was
passed by Congress and signed into law. The industry has evolved
considerably, and drilling and production have become much more
complex, especially with the advent of ultra-deep drilling. While the
current law is a vast improvement over what existed when the Exxon
Valdez spill occurred, like most legislation, it needs to be updated
and expanded as circumstances have changed. A vigorous, open and
collaborative debate on provisions of a re-authorized law can carefully
consider provisions to reduce or eliminate inordinate risks in
hydrocarbon production while carefully considering the costs of various
proposals to the industry and the public. As an example, the process of
such an open and transparent debate preceded the 2007 reauthorization
of the Federal Magnuson Stevens Fishery Conservation and Management
Act, resulting in near unanimous passage of landmark legislation that
sets the global standard for fishery conservation and sustainability.
We should have no less comprehensive model legislation regulating oil
pollution for the United States. I will not discuss specific proposals
for new provisions of a reauthorized OPA but suggest the process of
considering reauthorization will result in a thorough debate on the
merits of various regulatory approaches.
(6) Improve International Aspects of Oil Spill Preparedness and
Response
As the oil and gas industry in the Gulf expands to ever deeper
waters of the Gulf it has edged closer to the boundaries of the U.S.
Exclusive Economic Zones (EEZ) with Mexico and Cuba. Likewise, the
Mexican state oil company PEMEX has initiated ultra-deep drilling near
the U.S. EEZ, and Cuba has been conducting exploratory drilling in its
waters. A large spill near the boundaries of EEZs in the Gulf will
likely affect all. The next deep spill in the Gulf will thus likely
have a more international component to both oil spill effects
(distribution across international boundaries) and in coordinated oil
spill response. To their credit, the U.S. Coast Guard, NOAA, BSEE, EPA
and the U.S. State Department have been reaching out to these nations
to coordinate response activities in the advent of a spill impacting
multiple jurisdictions. More needs to be done, however, in harmonizing
safety standards, collaborating on international response, joint
cleanup and training and exercises and in setting of mutually
beneficial extraction policies. The international aspects will be
evident as well in the Arctic as exploration and production activities
are expanded there as well. There is much to be gained from more direct
engagement on such international collaborations, and Congress and the
Administration can set the tone for positive engagement with
international partners.
Summary
Increased government oversight, better equipment, higher regulatory
standards determining when and how to drill, and heightened awareness
on the part of the industry are important factors in assuring that deep
drilling becomes safer for workers, the public and for the environment.
However, while these steps are necessary they are not, in and of
themselves, sufficient to reduce risk of harmful spills to a negligible
degree, as was the operating assumption prior to Deepwater Horizon. The
marine environment is a publicly-owned resource. All operations
conducted on public lands need to be carefully monitored, in an open
and transparent way, to assure the public that oil and gas operations
do not harm the asset value of the full portfolio of ecosystem goods
and services (Ocean Studies Board 2013) owned by all of us. Likewise,
in the advent of another deep oil spill, measures used by the industry
to clean the environment and mitigate damage should not compound the
toxic effects of the spill itself. More research on innovative methods
to interdict spills and clean them up are urgently required. As we
remember the legacy of DWH we should redouble our efforts to
anticipate, prepare and train for the next disaster. The events earlier
this month when workers were killed and injured aboard a Mexican
production platform in the Gulf of Mexico should remind us of the
dangers of complacency. Guarding against such complacency by doing more
to make ocean drilling safer for people and the environment honors the
legacies of the 11 workers killed as a result of the Deepwater Horizon
disaster.
Thank you for your attention, and I will answer your questions to
the best of my ability.
References
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Anastas, S. Chu, and T. Hunter. 2012. Science in Support of the
Deepwater Horizon Response--An Introduction. Proceedings of the
National Academy of Sciences 109(50): 20212-20221.
McDonald, S.J., K.L. Willett, J. Thomsen, K.B. Beatty, K. Connor,
T.R. Narasimhan, C.M. Erickson, and S.H. Safe. 1996. Sublethal
detoxification responses to contaminant exposure associated with
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McNutt, M., S. Chu, J. Lubchenco, T. Hunter, G. Dreyfus, S.A.
Murawski, and D. Kennedy. 2012. Applications of science and engineering
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McNutt, M. 2015. A community for disaster science. Science (April
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Murawski, S.A., W.T. Hogarth, E.B. Peebles and L. Barbeiri. 2014.
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concentrations in Gulf of Mexico fishes, Post-Deepwater Horizon,
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SPILL in the Gulf of Mexico. National Academies Press, Washington, DC,
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D.-P. Wang, V.H. Kourafalou, and A. Srinivasan. 2014. Evolution of the
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Research/Oil-Spill-Response-Research/Reports/200-299/287AA/.
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Baskaran. 2001. Historical contamination of PAHs, PCBs, DDTs, and heavy
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and D.J. Hollander. 2015. A decline in benthic foraminifera following
the Deepwater Horizon event in the Northeastern Gulf of Mexico. PLoS
ONE 10(3): e0120565. doi:10.1371/journal.pone.0120565.
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S.P. Sylva, and M.A. Woo. 2014. Fallout plume of submerged oil from
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Ylitalo, G.M., M.M. Krahn, W.W. Dickhoff, J.E. Stein, C.C. Walker,
C.L. Lassitter, E.S. Garrett, L.L. Desfosse, K.M. Mitchell, B.T. Noble,
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20279.
______
The Chairman. Thank you. I appreciate the testimony from
all four of you.
Mr. Newhouse, you didn't have a chance to ask the Director
a question. Do you want to start us off with the questions this
round?
Mr. Newhouse. Well, I appreciate that, Mr. Chairman. Thank
you very much.
After listening to the testimony that I was able to hear
today--first of all, appreciate you guys being with us this
morning--I certainly would not agree that this is just a pat-
on-the-back hearing, but I think it is a very important session
that we are having this morning. I appreciate that this is a
necessary look at where we are today, how we could advance
needed energy production, while at the same time being as
certain as possible to have requirements in place so that
industry meets and follows safety requirements for personnel,
as well as the environment.
So, along those lines, just a couple of questions, if I
may. And certainly this could be for anyone, but I was thinking
perhaps Ms. Hopkins and Mr. Coatney first.
First of all, there are timelines involved throughout the
offshore energy process, from leasing, to exploration, to
drilling, production, and more. But in the last couple of
years, the industry has had to adhere to an ever-growing number
of regulations meant to help ensure that production is
conducted in the most safe and environmentally responsible
manner possible, a goal that, clearly, everyone shares.
Industry, for its part, needs to be certain that it is
feasible to meet all the regulatory deadlines before embarking
on something as capital-intensive as offshore production.
Without that certainty, it seems the industry will decrease
operations in the long run, which would hurt production and
have a negative impact on America's energy security.
Do you think the timelines contained throughout the
statutes still give industry enough time to do its job, even in
view of the ever-growing number of boxes that need to be
checked before operations can happen?
Ms. Hopkins. So thank you. Yes, I believe that what is
important is that the industry has a consistent, predictable,
reliable regulatory framework under which to act and to explore
for and develop energy and natural resources, oil and gas.
Mr. Coatney. Thank you, Representative. From HWCG's
perspective, in well containment--well containment being
certainly a new advent since 2010--the NTLs, as they exist, and
the opportunity to build the containment consortiums to be able
to meet those, is very workable. And we are able to continue to
develop the necessary components to have an effective and
comprehensive response to any containment event.
Mr. Newhouse. Thank you very much. Mr. Williams and perhaps
Ms. Hopkins as well, the Department has just proposed a well
control rule that would incorporate the latest industry
standards for blowout preventers and to Federal regulation. It
seems the Federal Government has recognized industry has made
some serious changes since the incident in 2010.
Can you talk a little bit about what some of those changes
are that will be included in the new rules, and how they have
made systems safer?
Ms. Hopkins. Certainly. So, one we spoke about, it is in my
written testimony, as well, is API updated our BOP standard in
2012 to prioritize consistent procedures, preventative
maintenance, inspection, and testing. And BSEE does, in the
proposed rule, incorporate, or proposes to incorporate,
Standard 53 in its entirety into the regulations. That is one
example.
In addition, there are, I believe it is approximately 11
other, or 10 other, documents that are incorporated by
reference by BSEE, many of those related to our BOP equipment
specifications. So, yes, we have updated and revised many of
our documents and created new documents since the incident.
Mr. Newhouse. Thank you.
Mr. Williams. So I would like to also mention one section
in there is on SEMS, safety and environmental management
systems, relative specifically to the blowout preventers. And,
as I talked about, SEMS talks about how if you planned, how if
you established barriers, what is your plan for maintaining
those barriers to keep them in place and assuring that they
exist. So it talks about actually adding--looking at SEMS
specifically on the blowout preventers, and the long-term plan
for how you maintain the barrier.
Mr. Newhouse. Thank you very much. Thank you, Mr. Chairman.
Appreciate the opportunity.
The Chairman. Thank you. Appreciate that.
Mr. Grijalva.
Mr. Grijalva. Thank you very much. And if I may, Mr.
Williams, what percentage of the industry belongs to your
organization?
Mr. Williams. So, we are a membership organization, but we
have open participation. So when we do our task group work on
our different----
Mr. Grijalva. If you were to give me a percentage, what
would it be?
Mr. Williams. Well, there are 13 operators, and there are
roughly 86 operators that did SEMS audits.
Mr. Grijalva. It is my understanding that maybe 55 percent
of those operating companies covering 55 percent of the Gulf
leases are members, which is part of the point of discussion
today.
Did the company that caused the explosion, are they a
member of your organization?
Mr. Williams. BP? Yes.
Mr. Grijalva. OK.
Mr. Williams. Oh, Hercules?
Mr. Grijalva. Yes, Hercules.
Mr. Williams. No, they are not.
Mr. Grijalva. And let me follow up with one other question.
Mr. Williams, you, in your testimony, and this is just
because Ms. Hopkins talked about predictability, in terms of
regulations. You mentioned in your testimony that the Center
for Offshore Safety certified SEMS programs for drilling
contractors, as well. Currently, SEMS regulations do not apply
to contractors. But, given your certification program, do you
believe it would be appropriate for BSEE to extend SEMS
regulation to those contractors, as well, and make it part of
the package?
Mr. Williams. So, we have both contractors and drilling
contractors that are members. And, being a member, you are
committed to doing a SEMS audit, even if it is not a regulatory
requirement. And we have already had one drilling contractor
voluntarily do this and become certified. So the path that we
are on is having the contractors voluntarily do that and become
certified.
Now, the regulation currently requires the operators assure
that the contractors have the adequate plans in place. But I do
believe that contractors need to voluntarily do this, and they
are.
Mr. Grijalva. So it shouldn't be a requirement on the part
of the agency.
Mr. Williams. I think if it is done voluntarily, and you
use third-party auditors, and it is certified through a sound
process, that that is good.
Mr. Grijalva. I was just pointing to uniformity and
predictability. That is why I asked the question.
Ms. Hopkins, the former commissioners of the President's
Oil Spill Commission, that commission on the Deepwater Horizon
have stated repeatedly they believe that the Center for
Offshore Safety needs to be fully independent, a fully
independent organization. But it is still part, as I understand
it, of the American Petroleum Institute. Are there any plans to
make the Center independent, that was recommended by the
Commission?
Ms. Hopkins. So the Center for Offshore Safety was
developed by the industry for the industry, with the purpose of
adopting standards of excellence to ensure continuous
improvement and safety in offshore operational integrity. This
purpose is being effectively carried out by the COS in its
current state. This is self-evident in the tremendous progress
and success of the COS----
Mr. Grijalva. Should it be independent or not, if I may,
because I am running out of time, and I need to interrupt you.
Do you feel it should be an independent agency, separate from
the Institute?
Ms. Hopkins. As I said, the COS is currently carrying out
its mission in an effective manner.
Mr. Grijalva. So it doesn't need to be.
Ms. Hopkins. It is currently working as intended.
Mr. Grijalva. I would take that as no, it doesn't need to
be.
The last question, Ms. Hopkins, is to what extent does the
institute use independent science? By that I mean science that
the industry isn't funding itself, science that would help
determine the impacts from oil spill response methods,
particularly the use of dispersants on the scale that we saw
during the Deepwater Horizon response.
Any comment or thought on the point and the question I just
asked?
Ms. Hopkins. So I might need clarification on your
question, but I believe you are asking if API and the industry
does do research in these areas.
Mr. Grijalva. Independent, having independent science make
the analysis and make the studies. I was thinking in particular
of dispersants that were used throughout the Deepwater Horizon
cleanup.
Ms. Hopkins. OK. It----
Mr. Grijalva. Has any thought--any thought, in terms of the
Institute, utilizing----
Ms. Hopkins. Yes----
Mr. Grijalva [continuing]. Independent parties to do that?
Ms. Hopkins. Certainly. API encourages and is supportive of
research designed to provide useful and valuable information to
regulatory agencies, a response--decisionmakers and affected
communities. And, in fact, the industry has and continues to
engage with research organizations.
The Chairman. OK, I appreciate that, thank you. Sorry to
interrupt.
Chairman Lamborn.
Mr. Lamborn. Thank you, Mr. Chairman. For either Ms.
Hopkins, Mr. Williams, or Mr. Coatney, does the proposed well
control rule create additional cost and bureaucratic red tape
that is either, one, unnecessary, or two, would lead to the
loss of future production?
Ms. Hopkins. So, obviously, the rule was just released,
published, a few days ago. So we are still currently reviewing
the rule and all of its requirements and revisions to changes
in the current requirements. There obviously is, as the agency
has pointed out, a cost associated with implementing the new
proposals. We will also be looking at that economic analysis
that they have done, and providing our own information
regarding the economics of the rule.
We will be looking at the provisions that they have
proposed to ensure that they are provisions that will increase
safety, and that they will be of benefit, and not just a
regulatory burden, as you mentioned.
Mr. Lamborn. Either one of you two gentlemen want to
comment on that? Mr. Williams or Mr. Coatney?
Mr. Williams. I would just add what I did before. I mean,
like Ms. Hopkins said, we are going to focus on--does it
benefit safety? And I know one provision in particular,
relative to SEMS, is aligned with what we think is an important
part of adding safety.
Mr. Coatney. And, Representative, I believe all I would
make a statement to is that certainly our members are reviewing
the rule, as well, as it has come out, to understand its
impacts. For deepwater well containment, our focus is primarily
on the fit-for-purpose capacity of the capping stacks that were
used. So, they are a slightly different use, if you will, than
what the rule has.
Mr. Lamborn. OK, thank you. Now, in the last 5 years, what
did industry do on a voluntary basis, in addition to what the
regulators in our government did to create more safety?
Ms. Hopkins. So, thank you for the question. And more
extensive details are in my written testimony, but immediately
following the incident, the industry formed four joint-industry
task forces to focus on operating procedures, operating
equipment, subsea wall control and containment, and then oil
spill preparedness and response. Each of those four joint
industry task forces produced recommendations that were
provided to the Department of the Interior. Many of those
recommendations were incorporated into the Secretary of the
Interior's safety report that was issued at the end of May in
2010.
Out of those recommendations came many revisions, a
creation of new documents. So we created a new document on
deepwater well design and construction. We created a new
document on well construction interface, which is a bridging
document between the operator and the drilling contractor. We
revised our RP53, as I mentioned earlier, which was originally
a recommended practice. We upgraded that to a standard, and
that is on blowout prevention equipment systems.
In addition, we have begun revising, and in different
stages along that, various equipment specifications on blowout
preventers. We published a new document on procedures, and
updated that, as well, into a standard at a later date. We put
together a recommended practice for protected personal
equipment for oil spill responders. So, we have done a number
of, over 100 documents have been either created or updated
since 2010 in response to this incident, and that was all
voluntary.
Mr. Lamborn. Thank you. And last, how do our safety
standards compare to other countries that allow drilling off
their coasts in the Atlantic, such as Mexico, Canada, Brazil,
or even Cuba?
Ms. Hopkins. The Gulf of Mexico does have a very strong
safety--or, I am sorry, the U.S. Outer Continental Shelf and
our regulations are a very strong regulatory framework. Many of
the regulations are based upon API standards, and many
international governments, as well, incorporate API standards
into their regulations, as well.
Mr. Lamborn. Would either one of you other gentlemen, Mr.
Williams or Mr. Coatney, want to comment on that?
Mr. Coatney. What I would say is that, in the well
containment category, the developments that have arisen in the
Gulf of Mexico applications, as a result of Macondo have been
transferable to other entities around the globe, such that
there are capping stacks located throughout the globe and
organizations that are able to deploy that response solution in
their applications.
Mr. Lamborn. OK, thank you very much.
The Chairman. Thank you.
Mr. Huffman.
Mr. Huffman. Thank you, Mr. Chairman. My question is for
Dr. Murawski. The 5-year anniversary of this horrific oil spill
has brought us some very slick television ads from British
Petroleum, showing healthy wildlife and pristine waters,
talking about the unprecedented mitigation efforts, suggesting
that all is well in the Gulf.
But what we don't see are pictures of a place such as Cat
Island, Louisiana. And I have a poster here, too. One is before
the Deepwater Horizon spill on the left. So what you see there
is a well-vegetated barrier island providing all sorts of
ecosystem and hurricane safety services for that area. And on
the right what you see is a completely de-vegetated and,
actually, shrunken barrier island that has reduced in size,
because all the vegetation was killed. The vegetation was
holding the land in place, and it has begun to erode and,
literally, disappear before our eyes.
Could you speak to this, and perhaps some other barrier
island impacts that we don't see in those slick BP TV
commercials?
Dr. Murawski. Thank you for the question. I haven't been to
Cat Island specifically, but I have spent a considerable amount
of time in Barataria Bay, and places like Bay Jimmy, where, as
Mr. Graves said, the oil still exists.
One of the phenomena we see there is that most of this oil
exists a few feet into the marsh. And what has happened over
time is, because of the toxicity of the oil, it actually kills
the roots of the marsh grass, and the roots of the marsh grass
are basically a matrix that keeps the land in place. So, we
have seen accelerated erosion off of those marshes, as the
marsh grasses died back. And that certainly is occurring in
those places where it is most oiled, and probably occurring on
these barrier islands, as well.
Mr. Huffman. And when you see offshore islands like this
literally disappearing because of that erosion, what does that
mean, in terms of storm surge and potential impacts from events
like hurricanes?
Dr. Murawski. Well, honestly, you know, when we talk about
the role that the natural world plays in environmental
protection, and particularly hurricane protection, the so-
called green infrastructure, this has been a very effective way
to mitigate the effects of storm surge over time. And we see
land use practices that have defeated that.
We can assume that, if this is the cause, that that would
accelerate the loss of this, and degrade the green
infrastructure protection that we see in storm surge.
Mr. Huffman. I am also interested in something I read about
just in the last week. In the wake of Hurricane Ivan, an
offshore platform owned by Taylor Energy in the Gulf was
toppled because of a subsurface mudslide. Apparently, the
apparatus down there was buried in so much sediment that, even
now, more than 10 years later, it is still leaking, and neither
the industry nor Federal officials nor anyone else has any idea
of really, at this point, how they are going to stop it from
leaking. I believe it is one of the longest-running oil spills
that we have ever seen. And recent data suggested the volume of
what has spilled is 20 times higher than the figure originally
put forward by Taylor Energy.
What would be the consequences if an event like this,
which, of course, the industry would like us to believe is no
longer possible--but if it were to happen in a place like the
Arctic, what would be the consequences, given how hard it would
be, in a difficult location like that, to deal with an undersea
leak in a very remote location?
Dr. Murawski. I am familiar with the Taylor situation
there. And, of course, what that is providing is a chronic
moderate-level exposure that is out in the environment. And, as
you said, the circumstances are so difficult, it is almost
impossible to deal with.
In terms of the implications for an Arctic spill on those
lines, the Chukchi Sea is a very difficult place, even without
the drilling. So, the effects of a long-term spill like that
would be probably devastating to the wildlife and the
subsistence livings that people make on the North Slope.
Mr. Huffman. Great. Thank you very much for your testimony.
I yield back, Mr. Chairman.
The Chairman. Thank you.
Mr. Hice, do you have some questions?
Dr. Hice. Thank you, Mr. Chairman. I appreciate each of you
being here, and the testimony that you have given regarding the
various changes that have been made in the last 5 years.
But, for the sake of the committee members, Mr. Williams,
let me go to you. Would you expand some on the concept of stop
work authority?
Mr. Williams. Yes, I would. So, it is another key part of
safety and environmental management systems. But, basically, it
says that every person has the right and the responsibility to
stop work if they think something is unsafe, or they don't
understand what is being done, that the work can be stopped. It
is one of the key barriers that people are using right now in
managing safety.
Dr. Hice. How often is that utilized?
Mr. Williams. I don't know, exactly. But it is not
infrequent that people do it. And companies have really been
pushing hard to change the culture, where people do want to do
it. And, in fact, some companies are rewarding people that do
it, even if it is subsequently found out that it wasn't
necessary to do. They reward the behavior.
So, it is not infrequent, but most of it is not related to
major safety items.
Dr. Hice. It is not related to major safety items?
Mr. Williams. That is correct.
Dr. Hice. So it is minor issues like what?
Mr. Williams. Well, I mean, a real common one is around
safe lifting, for instance. So safe lifting is an issue, but
often people actually find things in lifting operations, and
then they stop them before it is a problem. So it is actually a
good thing.
Dr. Hice. So, if companies are rewarding individuals for
reporting unsafe environmental or--environment within the
workplace issues, that would be a significant help on safety,
overall.
Mr. Williams. Yes, sir.
Dr. Hice. You would certainly think so.
Mr. Williams. Yes, sir.
Dr. Hice. In addition to that, before I change the subject,
can you comment a little bit on some of the investments--I will
use that word--made by the industry to help improve safety?
Specifically, Ms. Hopkins, as you mentioned a moment ago on
incident prevention, containment response, those types of
things. I know you mentioned four areas. Let me, I will just
direct this to you, Ms. Hopkins. You mentioned four areas. But
can you just go more specifically on the investments made here,
and the impact that is resulting from that?
Ms. Hopkins. Unfortunately, I don't have any dollar figures
that I can share with you. We know, at least in one instance,
for the Marine Well Containment Company that was established,
it was a $1 billion initial investment when it was started up.
Obviously, that has increased over time.
You do have several million dollars that was spent, or that
was budgeted, by the American Petroleum Institute specific to
oil spill response studies and research. You also have the
creation of the Center for Offshore Safety, and then,
obviously, the membership dues are additional expenditures that
have been made by the industry to improve safety.
So again, I apologize, I don't have an overall number. But,
as you point out, in all of these areas investments have been
made and have been----
Dr. Hice. So it is fair to say, though, that billions of
dollars are being spent. It is not a small amount of money. So
there is a significant investment to address these issues.
Ms. Hopkins. Yes.
Dr. Hice. Let me ask you while I have you here. In my home
state of Georgia there is conversation about the potential of
offshore energy in the Atlantic. And so, with that, a lot of
constituents are talking about it. Can you please comment on
the benefit that offshore exploration would have in the
Atlantic, as well as the degree of certainty that you would
have regarding the safety of that operation, compared to, say,
2010?
Ms. Hopkins. So, you know, the industry is committed to a
goal of zero fatalities, zero injuries, and zero incidents. And
we do believe that the offshore oil and gas industry is safer
than it was 5 years ago. That would extend to the Atlantic,
considering that the current OCS regulations apply to all of
the OCS, not just the Gulf of Mexico, not just deepwater. So,
all of the safety improvements that have been made would apply
to any activities that were to occur in the Atlantic, and
certainly the Arctic, as well.
We do have, very near our shores we see other countries--
Canada, Cuba, and the Bahamas--pursuing or considering
development of offshore oil and natural gas resources. And
rather than sitting idly, and watching other nations secure
these benefits, the United States should seize the opportunity
and bring economic stimulus to the Atlantic Coast and our own
economy.
Dr. Hice. OK. Thank you. Thank you, Mr. Chairman.
The Chairman. Mr. Costa.
Mr. Costa. Thank you very much, Mr. Chairman and members of
the committee, and thank my colleague from California, Lois
Capps, for allowing me to ask some questions. I have another
appointment I need to get to.
Obviously, we have discussed here today, under the category
of lessons learned, 5 years later, what we have done to deal
with the challenges of deepwater exploration, and the
definitions of deepwater exploration now, with new science and
technologies, is far greater depth of drilling range than ever
imagined, probably, 20 years ago. But with that comes risks,
and we saw those risks, you know, in the worst way develop 5
years ago with the spill in the Gulf.
We, obviously, have a great deal of drilling activity
taking place, and expansion of proposed drilling in various
parts of the Atlantic and Alaska, as was noted.
I am wondering, Mr. Williams and maybe Ms. Hopkins, what
the takeaway is here. I mean we have seen the changes of how
the Department of the Interior has implemented both safety
standards on the drilling safety rule, workplace safety rule,
blowout preventers, production safety rule. Supposedly, one
person can stop a production well if they believe something is
amiss.
Under the category of lessons learned and takeaways, what
would you say was the greatest? And can you imagine in the
future--the environmental impacts, obviously, in the Gulf are
still being felt. But what would you describe, Mr. Williams,
under the category of lessons learned, notwithstanding the
changes in the--I had been one that had argued for years we
ought to change the Mineral and Management Services, and
obviously, the Administration did do that. Is it operating
better now, under the new reorganization?
Mr. Williams. They have put a very significant effort into
managing across the new organizations. That was part of the
work that they did when they divided up into the three groups.
And I think, for them to do a good job, they need to make sure
they ensure that and do that effectively.
Certainly, the focus of BSEE on environment and
enforcement, the interaction with me in that regard, has been
good.
Mr. Costa. Do you think the enforcement has been strong?
Mr. Williams. I think the enforcement has been strong. But
what I would say is that I think one of the--the key thing that
I am focused on is making sure that people have the effective
planning, and keep their barriers in place, and manage safety,
and that we have methodologies for measuring the effectiveness
of that.
Mr. Costa. And provide the oversight.
Mr. Williams. Correct.
Mr. Costa. Ms. Hopkins, you commented a moment ago on the
previous questioning that, with the expansion, or proposed
expansion in the Atlantic and Alaska, that these lessons that
we hope have been learned will be applied, and these new safety
rules will be in place for any further expansion or drilling.
Is that correct?
Ms. Hopkins. Correct.
Mr. Costa. And what is the takeaway for your industry, in
terms of 5 years later, and the coordination and the response
by energy companies to what was a very devastating accident
that--11 lives were lost and, obviously, the changes have
occurred in the industry.
Ms. Hopkins. So, yes, there have been extensive changes
that have occurred in the industry. As you mentioned, the
industry came together jointly across all segments, operators,
drilling contractors, service supply companies, equipment
manufacturers----
Mr. Costa. Is it true within any of your companies that one
person on a rig can halt production because something may be
amiss?
Ms. Hopkins. So, as Mr. Williams referred to, the stop work
authority and the safety and environmental management systems
rule, yes.
Mr. Costa. Any other suggestions, you think, in looking
down the road, that we can do a better job?
Ms. Hopkins. We are always looking to continuously improve
safety.
Mr. Costa. Under best management practices?
Ms. Hopkins. Yes.
Mr. Costa. And how do you do that?
Ms. Hopkins. Well, the API develops standards accredited by
the American National Standards Institute. Our process is
audited every 5 years by ANSI. It is based on openness,
balance, consensus, and so we follow that process to ensure
that our standards, and they are regularly updated on a 5-year
review cycle, we ensure that those recommended practices,
standards, and specifications do keep up with current
technologies, and are reviewed every 5 years.
Mr. Costa. All right. My time has expired. Thank you,
Congresswoman Capps, for your kindness. And thank you, Mr.
Chairman.
The Chairman. Actually, I am the one that recognized you,
not her.
[Laughter.]
Mr. Costa. Well, I was thanking you, too.
The Chairman. OK. I will just----
Mr. Costa. I always thank you.
The Chairman. Just so we get that in the record.
Mr. Costa. No, I want it on the record. Thank you, Mr.
Chairman.
The Chairman. Mrs. Capps, go ahead.
Mrs. Capps. I will give you all the credit that you would
like, Mr. Chairman.
[Laughter.]
Mrs. Capps. You know, we have already talked about the
Deepwater Horizon spill, one of the worst environmental
disasters in our history. And it superseded the previously
worst spill, which is off the coastline I represent, in 1969,
in Santa Barbara, Platform A burst, and devastation was
enormous.
I know that it can take, because I live there in that area,
and I did at the time, I know it can take decades to fully
recover from an oil spill of this magnitude.
The Gulf's famed oyster industry still has not bounced back
from the damage caused by the spill. And research shows that
other fishery resources may have been impacted in the long
term. This includes our red snapper stock, which virtually lost
its entire 2010 and 2011 year classes.
Dr. Murawski, what have been the impacts of the spill on
Gulf fisheries and fishing communities, including the offshore
and near-shore habitats that support them?
Dr. Murawski. Thank you. The impacts on the fisheries have
been varied. We hear a lot of reports on the local scale,
particularly in the near-shore areas, where fisheries for
crabs, oysters, and the other critters, some of those areas are
closed today because of the presence of oil. So that can have a
significant impact at the local community level.
When you look at the Gulf of Mexico level, many of the
industrial fisheries actually can move around. You know, for
example, a shrimp fishery, because of the large closure due to
seafood safety concerns, that moved off to Texas. And so the
landings in Texas increased, but that reduced the volume of
shrimp coming ashore in Louisiana, and particularly Alabama and
Mississippi, that had their landings cut by half.
So, in that regard, we see a mobile workforce that is more
resilient than a local community, in terms of their fisheries.
And that seems to be the way things are playing out.
You mentioned oysters before, and it is an important point
to make. If you look at the total level of oyster production in
the Gulf of Mexico, it is about what it was before the spill.
But what has happened is there has been a major switch between
the oyster production from natural beds, as opposed to
aquiculture. So, aquiculture production in Louisiana has
increased dramatically, and we have many reports of the natural
oyster populations being depressed.
Mrs. Capps. We know that the Deepwater Horizon spill caused
billions of dollars of damage to the Gulf Coast economy, and
that efforts to clean up just the most visible damage from the
mess will cost billions more.
We also know that there are ongoing costs in terms of lost
fisheries, productivity, diminished coastal resiliency, and
human health.
So, another question to you, Dr. Murawski, isn't it true
that scientists are still uncovering new impacts of the spill
on the Gulf ecosystem that it may be years before we can fully
understand the impact, economically, of these many different
kinds of costs?
Dr. Murawski. That is true. And, as I said in my verbal
testimony, it took quite a while for us to realize the full
implications of Exxon Valdez: the collapse of the herring stock
in Prince William Sound. And, as you mentioned, we have seen
repeated year classes of red snapper in the Eastern Gulf
declining. It was an improving stock. It's improving in the
Western Gulf, but the recruitment seems to be declining in the
Eastern Gulf.
We also know that there is a substantial fraction of that
oil that is still in the environment, and so it is still having
impacts. So, it really is premature for us to conclude things
on the sort of macro level----
Mrs. Capps. Right.
Dr. Murawski [continuing]. At this point.
Mrs. Capps. And, as I conclude my time, Mr. Chairman, even
as BP released its 5-year report hailing its efforts to clean
up its own mess, others were shining a light on all the damage
that remains unrepaired and undiscovered.
I would like to submit for the record a National Wildlife
Federation report titled, ``Five Years and Counting.'' This
report documents ongoing damage to the Gulf natural resources
resulting from the BP spill. Everything from brown pelicans to
bluefin tuna to sperm whales has been harmed by this spill. And
we, according to this study by the National Wildlife
Federation, we are a long way from restoring the Gulf
ecosystem.
This is an ongoing problem, and we must continue working on
it. I hope we can revisit this topic, and I yield back.
The Chairman. Thank you. Without objection, we will add
that to the record, as well.
Mrs. Capps. Great.
The Chairman. I know the Ranking Member has a couple more
questions, but let me have a shot at a few of them, here.
Mr. Coatney, if I can start with you, who invented the
capping stack technology. Was it the government?
Mr. Coatney. No. The capping stack technology was a
collaborate effect of the industry participants that are
operating in the deepwater environment.
The Chairman. The company consortiums. Who paid for it? Was
it the government?
Mr. Coatney. No, sir. It is paid for by the members
themselves, the industry members themselves, and those of the
consortiums.
The Chairman. So it was an industry-driven innovation that
came up with this technology that your company employs to make
the shores safer.
You said that you are a resident of the Gulf area, so I am
assuming you take all of this very personally.
Mr. Coatney. Yes, sir. I must admit I do. Fourth-generation
family member of southwest Louisiana, my members have been
there for a long time, and I have walked the marshes and very
much enjoy them. Therefore, I do want to protect them.
The Chairman. Thank you. So if there were an incident
tomorrow, could you spend maybe a minute of my time and walk us
through how your company would work to deploy that capping
stack?
Mr. Coatney. Yes, sir. What would occur is that the
responsible party, the operator that was having the incident,
he would make a call accordingly to regulatory agencies, as he
is compelled to do. But as for containment, he would make a
call into a central number. That number would contact key
people at any point, 24 hours a day.
They then--with HWCG as an example, HWCG personnel would
then interface with the operator himself, as the responsible
party, and initiate actions upon his guidelines to basically
effect a movement to get equipment moving and resources moving,
to include an incident command facility where the source
command services would occur from, to mobilizing a capping
stack with some initial protocols of testing the capping stack
prior to loading it on to a vessel, and then transporting it to
the site, at which time, once it got on site, along with
ancillary equipment that would be there, that would be landed
on to the well that was experiencing the problem, and then
other vessels that will have been mobilized simultaneously
would be put there to effect capture, to the extent that it had
to flow and could not be shut in effectively and safely at the
time, to capture the flow and put it in storage.
The Chairman. Thank you. I appreciate that. I am an old
history teacher. I almost understand what you were telling me.
That was good.
Ms. Hopkins, Mr. Williams, you know, Plato said that
necessity is the mother of all inventions, and we saw after
Macondo innovations that came from the industry as a necessity
for that. Could you just speak very quickly, each of you, to
some of the reforms industries have realized right away in the
wake of Macondo, and how you put them into place and work with
the Federal regulators to bring safety to this issue?
Let me start with Ms. Hopkins and Mr. Williams.
Ms. Hopkins. OK, certainly. So, as I mentioned, the four
joint industry task forces were formed. Recommendations were
made, both to the government and then within the industry
itself. Several, as I mentioned, over 100 API-recommended
practices, specifications, standards have either been created
or revised since the incident.
In addition to those standards and documents that were
created, we obviously created the Center for Offshore Safety,
which I will let Mr. Williams speak to, and then, obviously,
the containment companies, HWCG and MWCC, and I will let Mr.
Coatney speak to that.
Additionally, we did spend a great, as I mentioned, a
number of millions of dollars on oil spill preparedness and
response--over 25 different work groups were created.
All of that information is available on our Web site. It
does include dozens of reports that have been developed on
dispersants, mechanical recovery, in-situ burning, all of the
different tools in the toolkit related to oil spill response.
So a great deal of work has been done to improve safety and in
terms of, also, prevention, most importantly, but then
containment and response, if we do have an incident.
The Chairman. Thank you. Mr. Williams, look, I only have 13
seconds. So I am going to have another round, I am going to
come back. That will be the first question I ask. Is that OK?
Mr. Williams. Yes, sir. Thank you.
The Chairman. All right, thank you. Mr. Grijalva, do you
have some more questions?
Mr. Grijalva. Excuse me, Doctor, following up on some of
the questions that were being asked by Mrs. Capps, during the
BP spill, emergency responders--and I was asking about that
earlier--used an unprecedented amount of dispersant to keep the
massive oil slicks from forming and then going to the surface
and coming ashore. We know these chemicals made the oil less
visible, but it didn't make it go away, it didn't make it
disappear.
The questions I have--where is this dispersed oil? And what
effect is it having on the marine environment? That is number
one.
Do we know what the effect of these chemicals, these
dispersants are, what the impacts are, long-term? And do we not
know? And do you think it is wise for oil companies to assume
that dispersants are the answer to mitigating the damage from
an oil spill?
Dr. Murawski. Sorry, let me take the middle question first.
In terms of the impacts of dispersants, dispersants are tested
with EPA criteria and protocols. EPA is actually revising,
taking comments on a revised rule on those testing procedures.
The types of testing they do are to something called the
lethal dose 50. That is, at what point do you have a dose that
kills 50 percent of the test animals? One of the issues that
recurs is the test animals that are used in these standardized
tests are not necessarily the most sensitive animals in the
real world, particularly in the environment that they were used
in the Gulf of Mexico.
We know that, for example, fish eggs and larvae and the
larvae of deep corals are much more sensitive to low levels of
both oil and dispersants. So, if one really wanted to
understand the toxicity of those chemicals, one would do it in
a more realistic setting.
The other thing about dispersants is they are what we would
call a mildly toxic detergent, right? Taken by themselves, they
have certain levels of toxicity, which are considered to be
low, and lower than the crude oil. But taken as a binary, the
oil and the dispersant itself, they act in combination to
create much more toxic mixes, and there have been a number of
experiments done since the Deepwater Horizon spill to indicate
that.
In terms of the use of dispersants and what consequence it
had, as far as the oil goes, as I said before, we know that a
substantial amount of the oil lies trapped at the bottom of the
sea, due to this marine snow event. We also know that there is
oil at the toes of many of these beaches that is bound up with
sand. And so, every time there is a large storm in the Gulf, we
see tar balls and tar mats coming to shore. And we also see
some of the oil in the marsh, as well.
In terms of the dispersants, the individual components
degrade rather quickly over time. There are some components
that are more persistent. But they are generally, by
themselves, not particularly toxic.
In terms of the industry's response in using dispersants,
we need to be quite discriminate in their use, particularly
since we don't know some of these questions about the impacts
on real-world organisms. Certainly the theory there is you are
trying to break up oil droplets into tiny bits that are more
easily digested by bacteria, and that certainly worked. The
real question is, what is the environmental trade-off, fighting
those oil spills offshore, as opposed to fighting them on land?
And it really is a Hobson's Choice that we have.
Mr. Grijalva. Let me follow up on that. I think a study
published in February, where massive spill deposits had been
recovered, that between 6 and 10 million gallons of BP oil
remains in the floor of the Gulf, or just beneath the surface
of the lands and the waters around the Gulf Coast. What does
that mean for future cleanup, and what does that mean for
future restoration efforts?
Dr. Murawski. The offshore oil--there is no effective way
to clean up what lies on the bottom. Much of that is quite
deep, and it is somewhat dispersed over a 1,000-square mile
area. Trying to clean that up would do more damage than letting
it rest and eventually landfill, you know--that is sediment
deposits over the top of it. It will keep having impacts on the
biota there.
And we know this because we have sampled down off Mexico,
where the Ixtoc spill was, 35 years ago, and we see that Ixtoc
spill in deepwater landfilled under about 4 inches of sediment.
Interestingly, it is still intact, because the biota there does
not bioturbate, or actually use that sediment, because it is
still toxic.
The Chairman. Let me interrupt here for a second. Do you
still have other questions?
Mr. Grijalva. No.
The Chairman. Does anyone else have other questions for
this final round?
[No response.]
The Chairman. Then, if not, do you want a couple more
seconds to finish the answer?
Mr. Grijalva. Yes, the----
The Chairman. Finish that one.
Mr. Grijalva. On the lands--if I may, Doctor, the lands and
the shores, what does that do to cleanup and restoration
efforts?
Dr. Murawski. Honestly, when oil gets into the marsh, there
are no effective cleanup mechanisms you can use----
Mr. Grijalva. OK.
Dr. Murawski [continuing]. That you wouldn't do more damage
to the marsh, than if you let it rest there. And, of course, it
will weather over time. But, as I said before, it takes quite a
while for that to weather out.
Mr. Grijalva. Thank you.
The Chairman. All right. I have two more questions for Mr.
Williams and Mr. Murawski. Let me go to him first, and then I
will come back to the original one. And I have an additional
one for you, as well.
Mr. Murawski, you wrote an editorial--I think it appeared
on Friday--talking about, and you mentioned part of it here
about the baseline, but also the paying for studies that are
proposed, and that you proposed that the industry should pay
for those studies as they go on.
What about people--about things like stormwater,
agricultural/industrial run-off, excess development,
overfishing, the dead zone, municipal/industrial discharges
that have some kind of impact? Do they get a free pass, and
only the deep pockets of the industry are the ones that should
pay for this?
Dr. Murawski. Well, the editorial that we had in the Tampa
Bay Times basically looked at the principle of polluter pays.
And, you know, one of the interesting things about this
is----
The Chairman. So these other people should be paying, as
well, in your mind?
Dr. Murawski. Well, certainly, in terms of inshore
pollution, we know that, for example, water treatment
facilities need to pay their monitoring costs, as well.
The Chairman. So you are calling for them, as well.
Dr. Murawski. Well, most of them actually do. I guess my
point with the offshore industry is that we have constant
reference to, well, it's a dirty Gulf, and so, therefore, it
was dirty before the oil spill, and it is hard to figure out.
The only way we really can understand that is to try to have
some baseline information. And, frankly, I think it is in the
industry's best----
The Chairman. I appreciate that. I am not arguing about the
baseline, it is just who should be paying for this? Do we have
a deep pocket industry that you feel should be paying for it?
But maybe even more less who pays for it, I am assuming,
becomes insignificant. I am assuming you don't believe that the
quality or the results of the research would be anyway flawed
because of who was paying for this, or who does not pay for it.
If the industry were to fund your research, as they are doing,
I don't think you are arguing that that would have a flawed
impact on your research results, would you?
Dr. Murawski. I think it bears thinking about how you set
up the independence of the research. You know, certainly, you
have situations where industry can pay to have these done by
certain consulting firms under the guidance of the government--
--
The Chairman. You are telling me you could be bought off?
Dr. Murawski. Sorry?
The Chairman. Are you telling me you could be bought off?
Dr. Murawski. No, sir.
The Chairman. OK.
Dr. Murawski. What I am saying is that they can be done
under certain standards and replication of samples, et cetera.
The Chairman. OK. Well, let me go back to Mr. Williams,
then, if I could.
Go with the original one. I cut you off and you didn't have
enough time to deal with that. Some of the reforms have been
put into place.
Mr. Williams. Yes, sir. So, the Center for Offshore--the
regulation did change, where the companies were required to
have SEMS. You know, many companies already had SEMS in place.
But what the industry voluntarily did and put in place was
create the Center for Offshore Safety, create this place where
we could collaborate, work together, learn together about how
to make things better.
We also developed the audit protocols, we developed the
auditor qualifications, we did the auditor certification. All
of this was done by the industry voluntarily, plus other
indicators on the effectiveness of management systems. And
those all have been collected, and go into an annual report as
we learn about these systems, learn how to make them better.
The Chairman. So I am intrigued by that, because there are
some voices out there that would say that this sort of
interaction degrades safety. But what you are talking about is
the impact that comes from the collaboration process that
actually moves us forward.
Mr. Williams. Yes, sir.
The Chairman. And I think it was kind of what Costa was
starting to ask you about here. There is what we are hoping
for, some kind of balance, as we deal with the issues of
safety, as we also deal with the issues of how can we be
productive in this area, and we can move forward in that. It
seems, as in the past, we are looking as if we are moving in
that direction. But maintaining that balance is always a
difficult task to do.
I am making the assumption we can't legislatively say,
there will always be a balance in here. What is important is
making sure that the industry has an active voice, and the
industry becomes a part of it. And I think you have all
demonstrated how the industry comes up with innovations, even
ahead of where the agency comes up with regulations. And I am
assuming that is part of what you are telling me with your
testimony today.
Mr. Williams. Yes, sir. And one of the key things, in fact,
we work on is this balance, particularly this balance between
prescriptive and performance-based safety, and between
personnel safety and safety management systems. And it is all
about making the technology and the standards and the safety
management work together to deliver a safe result.
The Chairman. And I am assuming you have some kind of
incentive for doing that within the industries, as well.
Mr. Williams. Yes, sir.
The Chairman. OK. I thank you for that. With that--I have
to go to my last line. There are magic words I am supposed to
say right now. And until I find out what my magic words are, I
do want to thank all four of you for coming great distances and
being with us today, and for your testimony.
And there may be other, here it is--there may be other
questions the witnesses will be asked from other Members in
writing. And, once again, we have 10 business days for these
responses.
Once again, I do appreciate your time and willingness to be
with us. Thank you so very much. I appreciate the committee's
interest. We will be talking about these issues again in the
future.
And if there is no other business, without objection, the
committee stands adjourned.
[Whereupon, at 12:12 p.m., the committee was adjourned.]
[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]
[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S
OFFICIAL FILES]
-- National Wildlife Federation Report--Five Years & Counting:
Gulf Wildlife in the Aftermath of the Deepwater Horizon
Disaster
[all]