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tv   C-SPAN Weekend  CSPAN  January 30, 2011 6:00am-7:00am EST

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the second area is restoration. the data for this event is april night, 2010. if we define we have missed an enormous opportunity. and frankly the gulf on april 19 was a degraded area. it has suffered for decades of misuse and most dramatically shown by the marshes of louisiana, which have been receding at a rate of over one but caulfield every 30 minutes. -- one football field every 30
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minutes. . . nation. we have recommended that 80% of the fines and penalties that we anticipate will be assessed under the clean water act the direct did at gulf restoration. that will require your approval. only congress can make that commitment of those fines and penalties. but we believe it would be money well spent. we recognize that it will require a significant amount of time, probably an average of 20 to 30 years to complete restoration. we believe these funds would be the basis of a major down payment towards that objective. i'd like to conclude my remarks. i got the signal, mr. chairman.
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that truly is inherently risky. we can never reduce it to zero, but we believe the steps we recommended will substantially reduce the probability of other repeat of macondo and should that happen, will significantly enhance our capacity to restrain its consequences. mr. chairman, i will submit my full report and they appreciate my willingness to receive it. i look forward to responding to your questions. >> i think the both of you. for the record, and it would not be the query of my throat that you responded to. nevertheless, i appreciate that. and i did allow -- it did want both of you to finish your remarks and they allowed that to which you want to stay as close as we can. i just have an observation and a question that i want to ask
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right from the get go. when the event happens and i was asked to respond, i sort of been on the order, number one, we need to stop the leak. number two, winning two of epa accountable and number three, we need to make sure that the restoration can get that part of the country back to normalcy however you describe it. and i've been saying that right from absolutely say one. you spent a great deal of time on the report. most of your testimony talked about what should be done in the future. and i alluded to this in my opening statement that the key both to respond to it. we still don't know what caused the explosion unless we miss some rain. by the vop would cost the case. if there may be a time in the
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future when are going to answer that or we wait for other reports to come in before we draw conclusions? whoever wants to go first, i'd like both of you to respond to that. >> will cover what we know is the event occurred and we know a great deal about why the event occurred. we've identified in our report nine instances, nine human decisions that were made in the hours before the macondo explosion, which we think was the precipitating cause of this immediate event. it is true that no one at this point have had the benefit of the full forensic examination of the ball preventer. it has had a massive facility in new orleans being closely examined. what we do know is that it didn't perform as it should
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have. if it had been able to perform ad hoc to my model, it's questionable whether that would have avoided the explosion because gas and dirty cotton beyond the ball preventer at the time that it would have gone into effect. so i believe that i report that adequately, accurately and comprehensively addresses both the immediate cause in the context in which that occurred and which was a long period in which government had done a very inadequate job of regulation, which the industry had on into this culture of complacency and what the consequences have been an enormous economic and environmental cost of the people of the united states.
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>> i would just add, mr. chairman, we know enough. we know what happened. we know that in the negative pressure tests, which was supposed to determine whether cementing had sealed off well, we note inconsistent inconsistent information came from the kill line and the drill pipe. in the good news was except to what the conflicting information was rechecked it in the drill pipe itself, indicating there had not been a sealed. the cementing had failed. we know that. we know the disgusted rise in the drill pipe, it was not noticed although we have documentation of the instrumentation, the record that should've been recognized by a professional monitoring that instrumentation to indicate gas was coming up the race here. it was not recognized until it was too late. so we know those things. those are a couple of examples. a number of decisions are made by people who are not alive and
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we cannot speculate on how they came to make some of those decisions were to miss some of the information that they did have. and if you look at page 125 of our report, with less about nine decisions, seven of which had a corollary benefit of saving time. no doubt they were identified as more efficient ways to proceed with the two alternatives to most of them and they were chosen. so these were -- the immediate proximate cause was a series of bad decisions, very hard to understand decision on the day of april 20th and leading up to with respect to halliburton supply of cement, which failed three of its own test and i'm subjected to by our commission by chevron's laboratory for testing demand. so we do know those things. and i'm quite confident we've established the facts here. >> attend is running out. i would just this observation
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against which you've alluded to both of you as somewhere along the line is something wasn't right. we heard that in testimony from the industry when they were here shortly after. they said we don't know what happened, but we suspect that this is going to be the case and that you have confirmed. but we still don't know what mechanically or whatever else the town. i thank you for responding to that. mr. martin. >> thank you, mr. chairman very much. thank you for this report. this report is a blistering, scalding indictment of pratt says engaged in by the industry and by regulators that created the conditions that made this accident possible. my question to you is if your recommendations are not a top did or provisions similar to those which you recommend, do
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you think we run the risk of repeating that catastrophe once again in the waters of the night states? >> yes. as i said, even if all the recommendations for a top did, no one could issue an insurance policy that there would be no repetition. what i could issue an insurance policy that the likelihood of the repetition and the consequence of the repetition will be significantly less if these recommendations are a top bid. one of the things they care erases these recommendations is they are not from outer space. most of them are from the north sea, a place which has a more punishing environment in the gulf of mexico, yet has a dramatically different record in terms of fatalities. we believe that some of the experience they are, ironically the same companies that are
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operating in the polls are operating under those standards in the north sea. so it is not a mystery or a new set of standards to those companies themselves. and as i said in my report, i am learned that if we do not, if were cameras and if we have an enhanced likelihood of an event similar to the macondo, that we are all going to be pointed out as to why we were unable to recognize why we were unwilling to act in the public interest. >> do you agree? >> i do agree. i would add this is a very dynamic industry, which has transformed over the last 25 years estimate from shallow buttered deepwater which is a much more high-risk environment. it has not adapted its own to
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either prevent or respond to a problem of this support. i'll play one of the things -- well, it is free assuring that the rle adam hasner restrict good regulations to govern a lot of the things in the future. frankly speaking, we don't consider that agency as it is now staffed, formed, trained and adequate to the tasks that they have. if it's not strengthened, i suspect we will see an incongruity between the sophistication of the industry and the dynamism and the failures of inspectors to understand some of the basic technologies to stand top of it. >> was a follow-up on that then. good demonstrations that can be implemented administratively by the obama administration. their other recommendations here that really need congressional action and so we change the
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laws. do you think it would be wise for us to not act legislatively to give that authority to the government so they can change business as usual? would be running the risk if we did not pass legislation? >> i think you'd be running a big risk. there's true crucial moves i believe the congress has to take. one is to reorganize the interior department, simply to ensure that leasing revenue concerns that the sort that animated the agency over several administrations and three mms directors testified to before a commission, that those no longer in effect safety and environment regulation. the way to do that is statutorily on any kind of sustainable basis by creating a luff regulator within the department of the interior, the term apartment for the director. the second requirement in the first of the cost anything. second requirement is to adequately fund the omr we to
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carry out the responsibilities that it has. >> just a note here, bp has 760 osha fines versus one for exxon mobil. so we can understand there's something fundamentally wrong that they were allowed to continue to operate. senator graham, your recommendation on legislation? >> i would agree with those two points and then the third is the one i made relative to restoration. only congress can designate a portion of the fines and penalties for the specific purpose of restoration, which we think in terms of the national interest in this region of america, the fact that many of the problems that have led to the degradation of the gulf of mexico at the federal government at least as a part or if not the primary indicted figure.
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>> just very quickly, some people say it's just bp and the other is an play a role, including the government, the other companies didn't play a role. >> in the area of response, it was not just repeat. at the same thing at happen on virtually any of the riffs in the gulf, would have had the same response because we would've had inadequate, unplanned capabilities that meet this such a unnecessarily significant impact on the economy and the environment in the gulf of mexico. >> i thank the gentleman. mr. alaska. >> thank you, mr. chairman. i think the witnesses. mr. chairman, i reviewed the report and i've also reviewed the members of the commission. and i have statements from every one of the members of the commission that do not support
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offshore drilling, including the two witnesses in divorce. and that concerns me because i can't figure out how this can be a report that was supposed to look for the cause is now trying to pass legislation when their basic goal is against offshore development. in your statements, you said you know the importance. one gentleman said we can establish 75 years of the goal for independence. to meet that goal we have to reduce reduction, not reduce it. in the sincerity of really seeking a solution to a needed commodity, which is oil. i personally have another question because this administration. from either one of you, from a technical perspective, what makes deepwater drilling so significant and are these conditions typical of the u.s.
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ocs? what is different between the gulf and alaska? >> the difference between the gulf and alaska, 5000 -- a >> that i know and i appreciate your answer. i appreciate your answer. as they reach a report from your position on arctic drilling with the president is we have stepped forward with caution. we have to make sure it can't be done to rapidly et cetera et cetera. but it's 150 versus 200 some odd feet -- 18,000 feet. and i worried about this country. we're going to spend about $400 again to buy our oil. in this commission are all against the development of offshore drilling. and i'm sure, by the way. some of the commission against opening in animal order.
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we are facing bankruptcy because we have not been able to develop our fossil fuels. and yet the commission, the majority, in fact all of them, our intent is not to a fossil fuels. and i think that's inappropriate. lastly, if i can suggest one thing, mr. chairman, we have drilled in the polls about 42,000 wells including about oil wells. and nowhere do you report in your report or suggest why that was successful. we have one big spokesman hanna-barbera. now, how do we as a lack? was there any credit given for was done before and for those who did it? question, answer? >> to refer to sunday masses of oil and well. many contributed to the accident
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in several two fatalities. that's the record we have for the gold. deny, and he spills? >> i don't know how many spills were associated with those, but if you look at the list in the report that they were exposed to were near misses and close calls and enough to kill people. >> driver down the street, slipping on the ice. >> say it again. >> it's like driving down the street, slipping on the ice. there is no failsafe way to do anything. it can be done better as senator graham said. you cannot eliminate us. you can reduce it significantly. i would point out to you, mr. young, the first of all when you what we really believe, what we really believe is in this report. we have a lot of authority and documentation behind the recommendations and findings in here. so i actually would suggest a method of interpreting comments made by commissioners perhaps in
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an earlier time without this mission, you look at this as the definitive record of where we really stand and we are for offshore oil and development. we think it can be done safely we also specifically recommend moratoria and alaska. >> that means you want us to go forth? >> what you express that in your report? >> this commission believes we can go forward to drill in the offshore and sees, but it recommends a series of scientific analyses of coast guard search and rescue movement, of the range of activities that will have to be supplied either by government or the industry to ensure over the long-term it would be done safely. but we don't recommend that you specifically say that would not be a barrier to moving forward. >> it does say you're supporting arctic drilling in the report? >> yes, sir. you setting your remarks you recommend it be done with caution and that is certainly
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true. the distinctive set of challenges represented there. >> that's what happens. for 40 years we've been drilling in the arctic, we've been drilling or when we had the path for her. we have the two line operation. we been doing the drilling and we've done the study. we've done the work. and all the sudden we have the moratorium and place by someone who doesn't believe in fossil fuels. you heard them last night on the floor. he doesn't believe in fossil fuels. and i think i want all forms of power, but all of a sudden we've got a commission report i don't believe that really suggests we can do it with delay, but will send money overseas. mr. chairman, my time is up. >> thank you very much, mr. chairman. mr. stallone from new jersey.
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>> thank you, chairman hastings and ranking member marquee for having the hearing today. the report in front of us today is cleared, in my opinion, that we cannot kill safely off our shores under the current system and our coastal communities the production from untrustworthy big oil. on the big oil would claim that we control faithfully and expand drilling in the wake of our country's worst environmental disaster and the fighting of the systematic failures. as the deepwater rising disaster, the president has reversed course and thankfully taken drilling in the atlantic off the table at least for the next five years and i commend him for that action and believe he must make the policy permanent. only than 20 feet from the greed of the oil industry. also, house democrats passed a clear tube oppose the legislation, saying we need to wait for the commission's report. now that we have it, it's time to take action to prevent
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pickler from wreaking havoc on our environment and that's why introduce the new new drilling to prevent the expansion of usher drilling, which i believe must be the policy at least until we can be certain another deepwater rising incident will not happen again. i represent a drastic along the jersey shore. i live along the jersey shore as well, have all my life. and one of the things i want to ask the two members, the two members of the panel, as i believe very strongly that the further you go out in the deeper you were, the more dangerous it becomes. and arguing against the need for reform can't oil and gas industry likes to make the argument that the bp spill was like an outlier and they point to long history of drilling in the gulf. in reality, is that to the vast majority of the oil gas and issues in the gulf has been shallow water? were drilling is much less complicated than an ultra deepwater with a deepwater rising was operating. it's a basically as we go
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further out and certainly my understanding is the authentic is strictly deepwater, not shallow water, that the danger is greater and that's even one more reason why what your recommendations that she put forth are crucial. i'd ask either of you could answer that question. >> the answer is clearly there's a relationship between danger and risk the deeper you go. and it is also true that up until about 1890, virtually all of the drilling that is ever taken place in the gulf of mexico within waters of less than 1000 feet, which is the definition of shallow drilling. the circumstances have dramatically changed. and at the same time that the industry was developing a tech policy that can frankly only be analogized to detect knowledge he and his sophistication, there was an enormous burst of the offensive capability to drill in
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deeper areas. there was not a commensurate increase in the defensive capability to respond should there be an accident and to create the safety environment that would reduce the prospects, not 20, but to the degree possible, that there would not be access in the materials that have been distributed, there is a chart, which is called mms budget and gulf of mexico crude oil production 1984 to 2009. it's on page 74 of our report. you can see the degree to which the production in the gulf of mexico has gone from being shallow water production now not only to deepwater, but the greatest increase has been in what described as ultra deepwater, where the risks are even more significant.
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>> mr. riley coming did you want to respond? >> now, i think just to reinforce what senator graham said, that the formations are deeper in the deepwater. that is they are well under even very often certainly the case of macondo they were 18,000 feet which is 13,000 feet below the month level. the formations are under much greater pressure, something up in the range of 30,000 pounds per square inch, which means all sorts of things in terms of the complexity of dealing with a well situation that also involves of course robots come which are the only way you can monitor and maintain and improve a repair technology down at that level. so for all these reasons, it's a much more challenging enterprise and that's why the industry in our view needs to improve its
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capacity, recognize they are in a different era from the one the character a shadow what are drilling and establish the kind of safety and institute would recommend. >> thank you, gentlemen. >> thank you, gentlemen. >> ima to thank both of the distinguished witnesses for being here today giving your testimony. you said earlier that you do not know why the love preventer did not work. contemporary concerns that you didn't even wait until a cute new what the cause of it not working was before issuing your report. why did she wait until we knew why the blowout preventer didn't work? is a key element in this whole chain of events. >> as was clear from the start of the president created up with the mexican border created a timetable of six-month period we made clear to them we didn't expect the blowout preventer to
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be before they bachus would it was taken up and still hasn't been frantically analyzed. so it was always understood the blowout preventer would not be part of our report. we did not have access to it and make any judgments about it. the failure of the blowout preventer to work himself known as to specifically why it didn't work. it remains to be seen. i think i'll are there aspects of the bill were subject to investigatory analysis and we were able to make the judgments they give us confidence, but we know would have been. wow, thanks for the answer, but i think you are the president should have had the patience to know why it didn't work and the report would've been much more significant had we had that information. >> as commissioners, we didn't have that option. >> okay. secondly, "the wall street journal" editorial from two weeks ago, takes on a single member of your commission is a drilling engineer for expert in
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oil exploration technology or practices. don't you think the commission would've been improved had you had people with that kind of expert background on your board? >> frankly i think i was a relevant question to ask in the summer of 2010. today we've submitted an almost 400 page report. we would like our confidence to be judged on this report. and if there are areas that you think demonstrate a lack of capacity to make the judgments that we did, we would be pleased to know what those are and we would attempt to provide a response or an admission of our naïveté. i would say that i believe even if you took the most extreme explanation of why the blowout
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preventer failed to function, that doesn't trump the other 95 yours that we've identified, that were contributing causes to this. so while i'm curious to know what the gop did, i don't think you would change the findings of the recommendations we have made. we certainly would not withdraw our recommendation that the oil and gas industry should adopt the nuclear power industry has some form of internal capability to assess safety. we would not change our position that we need to have an effective, competent, federal agency that could oversee the industry. we would not change our recommendation that the agency should be protected by independence within the department of interior. those are our key safety recommendations and i don't think there's any evidence
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that's going to come from the forensic examination that's currently going on in a facility in new orleans at the blowout preventer that would enable those. >> okay, i'll move on to my next question here. in its undertaking of the investigation of the deepwater horizon and today, the national academy of engineering and the national research council announced that they would not be issuing their final report until it has been peer-reviewed, which is their standard practice for reports issued by the national academies. has your report been submitted for peer review to any other kind of body or experts? >> is a public document. so it's not just submitted two peers. it submitted to the american people for their comments and evaluation. >> i would -- i would just say that it's been pretty well reviewed and pretty well received and commented on by experts in the field.
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and i also want to note that we say in our formal testimony that a senior technology and science advisors on this enterprise was richard sears who is 33 years of experience, senior experience with shell oil. he was present throughout our deliberations on technology. i'd also like to acknowledge publicly we have strong cooperation from industry, three companies that spent several hours with us. chevron, shell and exxon mobil and cooperation obviously from the department of the government , for mr. bromwich and secretary salazar. widowed for range of inputs and plenty of opportunity on the scientific agencies, noah, coast guard, to ensure that what we say is grounded in good science and respectable technology. and i don't think so far. i must say we've become a little impatient, bob and i with the
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criticisms of our confidence or criticism of our commissioner, which maybe was okay to raise six months ago. but the proof is here. is there something wrong or if there are people who have objections to the findings are think they are wrong, we would be very happy to debate on that point. but it seems to me now a little churlish to refer back to them without power there related to the advocacy for their park from which no one seems to be doing. >> thank you. >> thank you, mr. chairman. john amend, the offshore policies is based on some similar assumptions as i understand it. one was the blowout preventer's actually work. that was an assumption. the assumption was the industry have the ability to contain spills. the assumptions were that spills offshore won't ever hit onshore.
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there was an assumption based at our rate operated as safe as possible. and as they read through your report, that brought into question those assumptions. and so as a result and just for both of you gentlemen, don't we have two be right our offshore policy based on the fact that we don't have assumptions we can make right now? senator? >> well, i think some of the assumptions are that drilling in the offshore is going to be a continuing and increasing part of america's energy supply. number two, that its acceptability to the american people will be closely aligned with the safety. you may recall that when
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three-mile island blue almost 25% of america's electricity was coming from nuclear power and there was an expectation that the percentage was going to grow, and maybe even to where frances, which is over 70%. but that one can vent so show the public towards a nuclear power that we had effect of lake a 30 year hiatus of any expansion and therefore the percentage of the tri-city from nuclear power is dramatically less than it was 30 years ago. now whether to continue to do these in the gulf, macondo could have more effect as an island as a nuclear power industry, we can all speculate. but i think it's in everybody's interest that we can do this industry to the high standards. would anyone answer the question why should drilling for offshore
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oil in the gulf of mexico p. at a lower standard for safety and environmental protection than it is in the north he? is there some explanation as a matter of public policy by we should accept a lower standard, then i think we could have a very -- a very good debate. no one has come forward with making that assertion. >> the other point i think you called the liability cap arbitrary of the report, the question is lifting the cap entirely as a means to assure that the tax payer doesn't get stuck with any bill beyond the cap. and two, as incentive to meet the highest standards of the senator just mentioned for drilling. any reaction to no cap at all on my abilities?
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>> would have recommended that the cap be lifted and we did not go beyond that. clearly the $75 million cap, which is now 21 years old, just the sheer change in the value of money as a result of inflation over 21 years would cause you to believe the 75 million was not adequate. i can, as bill pointed out, when that cap was established, virtually all of our offshore drilling was known comparatively safe, low pressure areas and today the larger share of our jelly is in much riskier, deeper water. i am now going beyond what the commission recommended and just saying own feeling is that if we have liability caps, the rationale is to maintain a competitive marketplace in the gulf of mexico, that we don't
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want only the largest oil companies in the world to be able to drill. but we also don't want to have financially incapable company of causing enormous consequences. so that would lead me to feel that the congress might be able to fashion a policy built around liability limits in relationship to risk. it's one thing to have liability limit for 100 feet of water than 18,000 feet of water. today the law applies to the same standard to both of those two cases. >> that which is that if i that, congressman, that the establishment of some kind of liability caps at both ensures a continuing capacity of independent to operate in the gulf, that doesn't just restrict to leasing for getting to a future majors, but also protects
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the public against being handed a bill for major damages caused is something that is going to take more time than we had in the six-month and probably more involvement of the insurance industry said i assume an insurance consortium of some sort would be necessary to address this. and i also would note that the liability cap in canada's $35 million. if he gets 50 million pounds in britain and it does strike me with respect to those resources, such as a goal for me are sick or other countries activities are also involved, there may be some merit in working at a uniform system of liability which applies systematically to all oil and gas development in these areas. >> mr. fleming from louisiana. >> thank you, mr. chairman and thank you, panel members, for being here today and your service. there is no question about it this was a disaster.
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and like any disaster, even though we don't own the precise cause of the blowout, we know that some things have been better typical of disasters. because this is a high-risk operation, much like many other things we do, travel in space, flying in airplanes, rarely is one thing the cause of the disaster. it's usually a number of different situations and make occurrence in bad situations that align themselves from which probably over time have occurred, but because some of backup redundancy the disaster was prevented and that can sometimes be a bad thing because what happens is we become, in your words, complacent. if i make a mistake as a backup system that will solve that problem for me. and obviously that is something on the industry side in the government side mini to bear in mind going forward.
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it was a disaster to louisiana, my home state in two ways. one comments were ecology, no question about it. but maybe even worse and longer term and jobs. louisiana has now left tens of thousands of jobs because these rates are so expensive, they have left our shores in some cases and more will calm to go to brazil and africa and other places. what is interesting as they are going to other parts of the world that have less standards than we do. so i think that's a real issue we need to look at. now, the president lifted the moratorium. and i've been researching this. i can't find one single permit for deepwater drilling that's been issued since the lifting of the moratorium. but we don't know when they ever will. so what i'm concerned about and i would like to have your reaction to this as i see recommendations for more legislation, but i think we need
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to be careful about just moving the chairs on the deck. for one thing, we're asking noaa to sign off on things and that's a good thing, but is that going to make the permit process for difficult and slower? i'd love to have the reaction from both of you gentlemen. is this really going to get us where we need to be and how is this going to affect the job which are so desperately needed and finally the price of gasoline and oil that going up because of the lawson supplied. >> i would say two things. i would agree with you completely to the degree that we restrict our own domestic production. we are essentially given our demand on supply, intending to get more oil and gas from risky places like the delta or venezuela. that's a given. that's an international perspective and recognize that
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in those places counts to the delta, some 25 accidents over the last 10 years. so that's a perfectly fair point. i think it's one that ought to underlie our approach many of these questions. with respect to the moratorium of, senator graham and i were specific early on. we did not understand it. but it was xcessive in considered a more selective approach that did not penalize those companies with good records come particularly once they have been -- after they had once been a did as they all were in the weeks following the trend for disaster. once those few infractions that were found were directed for, it struck us that it would've been reasonable to resume drilling at that time. but that is not happened. i would say going forward to the decree that we continue to fund her staff, underprepared, under form, underfinanced the regulatory agency, we are
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probably going to find that it is more like it to issue permits, less confident about finding the name to a permit unless able to get us back into business. >> do you have a response? >> i would just add to what bill said he had happens to be the position of the major petroleum companies in great britain, that they actually affirmatively support a strong well-financed competent regulator as a key part of their ability to do their business. i believe they are right and i hope that we will calm to the same conclusion as to the industry here in the united states. >> can i get a commitment from you and mr. reilly yesterday suggested that the president not only lifted the official
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moratorium but allow permits, do away with what we have now which is a de facto moratorium. would you vote for the president should move forward and allow the issuance of permits? >> as i understand it and in fact there is a new story today that the orla vista primary reason for the delay in issuing permits for those rigs that has met the individual standard, rick by rick contessa industry has not demonstrated that it has the capability to respond and contain or if it does, those standards have not yet been incorporated in the permit applications. if that the case, that actually, in my judgment, is a positive signal that were now down to essentially one issue and there also is some indication that the
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ability to meet that standard of adequate response and containment is near at hand. >> thank you, gentlemen. >> thank you on mr. chairman. i want to thank members of the commission for being here today and for your work. thank you: mr. reilly, senator graham. as mentioned earlier there were some questions about the qualification of the commission i want to say i have a high regard for the members of the commission. senator graham -- chairman graham of the intelligence committee and my father were chaired the intelligence committee about the same time that we have a warm regard for you in your work. so i want to thank you for your service. i want to touch on a couple of things that were coming in now, in this book do we have here before us. i think the vast majority of the recommendations, actually a lot of the industry would say they don't really have a problem
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with. and you know, you're listening to someone who is a big supporter of the oil and gas industry coming from oklahoma. but some of meant that burbridge, sometimes even just the word -- just to pick out of the report again about some concerns about. one was the use of the term systemic, that there are these systemic problems in the industry. and if you look at the 30 year history, you know, over the last 30 years, the history of offshore oil and gas reduction, there have been demint, but i think a major incident is very rare. if you compare with the airline industry for the commuter train industry or any other industry, the oil and gas industry has done quite a good job. the last few years we have seen documentaries like gas land on hydraulic fracturing. a lot of lists about there is driven by emotion.
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it really is driven by fax or science. and so i'm really concerned to read your comment even the state of the human life and about the oil and gas companies are making all this money, was through smart tags on them. there's a lot of good quality jobs created in states like oklahoma, louisiana, all across this country. and they want to do the right thing. i want to do the right thing for the environment as do most americans. a couple of questions, really one question i do have about the clear act regulation legislation brought out earlier about the cap on liability. i've got independent oil and gas producers in oklahoma that have this question. we've been talking quite a bit about this, but given such liability requirements, did your staff for the commission asked the insurance industry of any independent operators would be able to obtain an insurance policy under such guidelines or
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circumstances? the reason why asked the question is i'm worried any kind of touched on this earlier with mr. grijalva, if we only have one or two u.s. companies that do the drilling, the chinese are going to be the only folks that can drill these wells, i'd like to see -- i'm not talking about a mom-and-pop company. i'm talking about devin energy is a huge company in oklahoma, you know, but it's not as large as some of the big majors. these are thousands of employees covered very well capitalized. these are types of companies that could do this drilling without any problem. are you worried about that? in the shootout to the insurance industry about whether or not these smaller companies could in fact do this? >> we are worried about it and that's what we did not elect a member with respect to an increase. we said it be increased or we didn't say how much. we do what was required
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insurance company consultation and advice and help you didn't think we have time to get it. so we did not meet with the insurance industry on the liability cap. but for all the reasons you mention and our own sense that use a valued contribution that independent operators make to the economy, to the culture, industry and the gulf, we did not want to make the irresponsible choice without adequate should not take inhibitor dignities or possibly even cause them to move to other jurisdictions for the liability cap is lower even than it is in the united states. >> i would agree with that statement. we try to operate within our areas of competence. and so the specific recommendations we made, we are prepared to defend them, weren't issue without sight of what we thought was a regional competence, such as the role of insurance come to me in
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determining the liability caps and how the role of -- of the role of insurance come any night you means of giving some assurance that we would not be limited to just a handful of companies. we didn't feel competent to comment on that. we did feel that on its face the $75 million liability cap across the board for activities that are disproportionately risky and shallow in ultradeep fodder needed to be lifted in re-examined. we also were aware that the congress is going to make that ultimate decision and we did not feel that we had anything -- in the corporation for secure.
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i know your district son. i served on the board of an oil company who half of which used to be based headquartered in cartersville. senior executives they are -- >> are stunned by the use of the term systemic. and it perfectly willing to acknowledge they didn't see this coming, were prepared for, didn't think it could have been and how to response plan which the chairman acknowledged was embarrassing to him because it had the same characteristics as the other response plan. so i would just say we do not by any means intend to disparage safety or environmental standards of some of her leading iconic oil and gas companies, whether the majors with the independent. but the facts i think speak for themselves with respect to this particular disaster in the latest report what we did. >> thank you, mr. chairman. mr. mcclintock, california.
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>> tournament coming thank you for being here today. -- failed catastrophically. the rogers administration was impaneled with particular experts. it painstakingly recovered the wreckage from underneath the ocean it determined. a reassembled by package and then determine the precise cause of the disaster and then recommended changes so that the space program could move forward. the one thing we know for sure in this or was that the blowout preventer failed. let me ask you quite directly. she determined by the blowout preventer failed? >> the answer is no further reason that we gave you. >> did you like -- >> can i finish answering the question. >> it's a yes or no question. it's nighttime, senator. if i'm at it, so please.
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did you even look at the blowout preventer? >> no. >> most of the time or where it would've taken a robot to take us down and get there. >> let me read you "the wall street journal" particular part for ideological bias, and lack of expertise, credibility, lack of thoroughness. and this is what they said. unable to name were called the well fill your results to a hodgepodge of speculations. adding to the confusion, it acknowledges he could find no evidence of bp's contractors and shows the risk of alternative and so forth. the commission didn't even wait to get not topsy of the field will preventer and again coming from "wall street journal," which is resting on the louisiana talk. why should we take your report seriously if you've not even made that modicum of effort to determine the actual cause of the disaster? >> well, as mr. reilly said to
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an earlier question, we had a presidential six months charter. we knew early on that charter was going to run out before the forensic examination -- >> did you ask for an extension of your deadline? >> we did not. >> cu participated in a rush to judgment without even looking at the cause of the failure they created this entire disaster? >> well, i would just direct your attention to page 125 of our report, which lists the nine steps that we assessed that contributed. >> again, don't you understand how good the rogers commission issuing a report without looking the record. >> is cementing failed at this matchup failed to contain the well free from hydrocarbons.
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we said that. >> when i look at the question of ideological bias. this is also an engagement in "the wall street journal" editorial. they said the conclusion to report were quote all too predictable given the political history of commission members. former democratic senator bob graham fought drilling off florida. william reilly cited the anti-drilling world wildlife fund and francis mckeever in the natural resources defense council, which is supposed to carbon fuels. not a single member with a drilling engineer or expert in oil exploration type knowledge your practices. >> congressman, i would say the use of the word predictable as surprising to me because what was predictable in a few of "the wall street journal" when they wrote their first critical editorial was that we would recommend against future offshore oil and gas development, which we very definitively did not. >> you are recommending a whole new level of iraq or see top of an obviously already failed to
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perceive that the obvious aim and indefinitely delaying of the production of our nation energy reserves. how much -- what is the economic damage caused by this disaster? do we have a figure on that? >> we know it's in the tens of billions. >> i have an estimate here of worst-case and base case analysis of the economic damage caused by the moratorium and it runs from 279 billion on the way up to $341 billion. billion? >> alien i believe. i haven't seen those numbers. i would only say with respect to the bureaucracy question, he made clear my opening statement
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that the report and the detail on every organization of the interior department should be cause that we do want to segregate the functions from the environment safety regulation. that's a matter straightforward reorganization. second light, the degree to which we add the ending is intended to provide more capability, more expertise, more professionalism and agencies. and i would fully expect based on my own environmental protection agency of facilitating a better regulatory oversight of the industry. i don't think that it could work to delay. >> i think it would work to improve and create mo next, "washington journal."
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at 10 a.m., north carolina congressman patrick mchenry. then president obama delivers his state of the union address, and then republican paul ryan gives the response. >> this weekend on book tv, almost ten years after the attacks on the world trade center, cnn national security peter bergen looks at the longest war. also this weekend, william hartonk and david eisenhower on the grote of the military complex. and edward mcclellan on president obama's run for the illinois state. >> tonight we'll talk with former president bush about his life and book.
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>> you're through with politics. >> yeah. >> define that. >> i don't want to go out and campaign for candidates, i don't want to be the money raiser, i don't want to be on talk shows giving my opinion. i think it's bad for the country, frankly, to have a former president criticize his successor. look, it's tough enough to be president as it is without a former president undermining the current president. plus, i don't want to do that. in other words, i don't want to be on tv. >> it's about over. >> it is. but i like -- i tell people that one of the interesting things, sacrifice. i don't think you sacrifice to run for president but to the extent you do you lose your anonymity. and i like the idea of trying to regain anonymity to a certain extent. and being out of the press, at least in this stage


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