One day after President Obama neglected to mention the Deepwater Horizon incident a single time in a 62-minute speech, the chairmen of the committee he assembled to investigate the tragedy are scheduled to attend hearings in front of House and Senate oversight committees.
The reception they’ll get will directly depend on the party of the receivers.
1:20 p.m. – The hearing is opening now. It’s live on C-SPAN 3, or you can watch it online at http://naturalresources.house.gov/live/.
House Natural Resources Committee Chairman Doc Hastings (R-WA) is opening things up by noting the Oil Spill Commission was made up of a bunch of people who know squat about drilling and whose backgrounds indicate they’re hostile to it. He’s also saying it’s a bad idea to use Deepwater Horizon as an excuse to stop drilling.
1:30 p.m. – Hastings notes that Gulf oil production is set to drop by 220,000 barrels a day this year, and references a study by the American Petroleum Institute which says 680,000 barrels a day can be lost by 2019.
Then he turns it over to Ed Markey, the moron Democrat from Massachusetts who used to run this committee until his party was blown out of its majority last November, who proceeds to savage the entire offshore oil industry as unsafe because we’ve had more fatalities per capita (counting Deepwater Horizon) than anywhere else – as though those numbers are accurately reported in China or Nigeria.
1:40 p.m. – After Markey proceeds to dredge the CLEAR Act back up and suggest the Republicans pass it in this conference, like THAT’S gonna happen, Hastings introduces William Reilly, who used to chair the EPA. He’s the Republican member of the oil spill committee.
Reilly starts by saying of oil and gas, “We need the resource.” He recognizes domestic oil is necessary, he recognizes that deepwater is where it’s hot. But he says the country’s “confidence” in deepwater drilling has been shattered (geez, wonder why?).
He says when Tony Hayward tells him there is no containment mechanism for oil spills (there sure is now, though), that the environmental plans discuss walruses in the Gulf, and so on, that complacency exists. He then says the problems are systemic and a result of the atmosphere surrounding Gulf drilling and not BP.
He doesn’t provide a lot of support for that thesis, but that’s what he’s got.
Then he launches into a bunch of big-government regulatory solutions surrounding Gulf drilling and suggests applying them to the Arctic as well. He says the recommendations are generally cheap.
This is the friendly guy to oil on the oil spill commission.
1:52 p.m. – Now Bob Graham, the former Florida Democrat senator, is set to give his testimony. Graham says the commission managed to make just about everybody mad at them but they looked at things on behalf of the American people. Then he says that while they were criticized for not knowing anything about oil drilling, their work product speaks for itself.
Graham then launches into a distinction between offshore and onshore drilling – while onshore drilling happens largely on private land, offshore drilling puts the federal government largely in the role of a landlord as well as a regulator.
And then it’s time to talk about the response. Graham trashes both BP and the federal government for not having decent plans in advance of the Deepwater Horizon spill. He decries the fact that no technological advances in cleaning up oil were made between the Exxon Valdez spill and Macondo. And he says a new plan needs to be made that doesn’t involve walruses and polar bears in the Gulf.
Now Graham gets into the coastal restoration issue. He recommends that 80 percent of the Clean Water Act fines assessed to BP be spent on coastal restoration, which is something pretty much everybody will likely agree on.
He concludes drilling is inherently risky, but he says their recommendations will make another spill less likely and if one does happen it’ll be less damaging.
Hastings now opens the questioning. He says when all this went down three things needed to happen – stopping the leak, holding BP accountable and speeding the recovery of the Gulf Coast ecologically and economically. Along those lines, he asks whether anybody knows why the well exploded and what happened to the blowout preventer.
Graham says there were nine events preceeding the accident which contributed to it and that the blowout preventer is undergoing examination at a NASA facility in New Orleans, then he babbles a little.
Reilly steps in and says “we know what happened.” Mentions the stuff everybody has talked about, like gas in the riser, a bunch of bad/hard to explain decisions.
Hastings answers that everything Reilly says is what the industry told them last summer. All he’s done is confirm what we already knew.
1:58 p.m. – Now Markey steps in and says the commission’s report is “scalding” and throws in a bunch of other adjectives. Then he asks whether, if the recommendations aren’t implemented, if another Deepwater Horizon is coming.
Graham says yes, more or less.
Reilly then says the Interior Department can’t handle the job as is and needs reorganization and more money.
Markey mentions BP had a zillion fines compared to only one by ExxonMobil. Not sure what that means; does he think Exxon should have had more fines? He asks how BP could have been allowed to drill.
Then Markey and Graham get into a back-and-forth about how it’s not just BP. Graham says if anybody else had a spill, they’d have the same problems containing it.
2:05 p.m. – Now Rep. Don Young (R-AK) is mentioning that he’s got a whole bunch of quotes from folks on that commission who don’t like drilling, period. He asks why Gulf deepwater drilling is so different from anywhere else.
Reilly starts to answer, but Young cuts him off and launches into the fact that it’s inappropriate to have people who don’t want to drill at all. He notes there were 42,000 wells drilled with no major incidents.
Reilly mentions 79 incidents of well control. Young says that’s like driving down the street and slipping on the ice. Nothing’s failsafe. Reilly says the commission believes in drilling offshore but wants it done safely. Young says he didn’t read that in the report. Reilly says we said so, just we need caution. Young essentially says that’s BS.
2:07 p.m. – Frank Pallone (D-NJ) is now reading a statement saying that “Big Oil” can’t drill safely offshore and thus shouldn’t be allowed to drill at all. We’re not going to pay much attention to this clown.
2:15 p.m. – Doug Lamborn (R-CO) asks why this report is out and they don’t even have a full forensic report on the blowout preventer and why it didn’t work. Reilly says that was always part of the deal. Lamborn isn’t impressed by that, and Reilly says it wasn’t an option – go ask Obama, essentially.
Lamborn then wonders how come nobody on the commission knows squat about drilling. Graham says “we put out a 400 page report, if you have a problem with anything we wrote let us know.” He touts the stuff they came up with that led to the accident, and it won’t really matter what the final verdict on the BOP turns out to be. He doesn’t think any of their recommendations would change if they had petroleum engineers on the commission.
Lamborn looks like he’s ready to shoot himself.
He then moves on to the fact that the commission’s report hasn’t been offered to peer review by the National Academy of Engineers, and Reilly says everybody who’s read the report seems to like it. Then he talks about how much input and cooperation they got from the oil industry. And he says he’s out of patience with the questioning of the credentials of the committee, calling it “churlish.”
2:20 p.m. – Now Raul Grijalva (D-AZ), best known for advocating a boycott of his own state because of its illegal immigration law last year, is now babbling questions about how “we were told all this was safe and now it’s not.”
Graham answers him by bringing up Three Mile Island and how it destroyed the nuclear power industry, and applies that to Gulf drilling, asking why the standard shouldn’t be as high as that of the North Sea.
Grijalva then asks about the liability cap and whether it shouldn’t go away altogether. Graham says they recommended the cap be done away with and certainly $75 million was way too low. Now he’s talking on his own – he says that having a cap in the first place makes for a more competitive market, so maybe there should be liability limits scaled to the level of risk.
Reilly says sorting this stuff out would take longer than the commission had. He says the $75 million cap is actually larger than what’s in place in Canada, and the cap in the U.K. is 50 million pounds.
2:25 p.m. – John Fleming (R-LA) is now up, and he’s opening his questioning by noting that complacency could actually be a result of redundancy; if you screw up something else will catch the problem, so screwing up isn’t that big a deal. Now he’s talking about the fact that losing the rigs to the Third World actually makes for lower standards of drilling in places where the jobs aren’t being filled by Americans.
He asks whether bringing NOAA in won’t just kill off a bunch of jobs given that not a single deepwater permit has been issued.
Reilly says he agrees. He doesn’t think getting oil from Venezuela or the Niger Delta is any good for the environment either. He says neither he nor Graham were in favor of the moratorium in the first place, and the folks who were inspected and the few flaws that were found were corrected, there was no reason not to resume drilling.
Reilly blames the underfunding of the BOEMRE is why they’re not issuing permits. They’re scared stiff to issue any, as they don’t have the confidence to properly regulate it.
Fleming cuts to the chase and asks both witnesses whether they support just getting rid of the moratorium and start issuing permits. Graham says the industry hasn’t demonstrated they’re safe but that’s a good thing since there is really only one issue keeping the permits from being issued.
2:35 p.m. – Dan Boren (D-OK) takes issue with the use of “systemic” in the report, and he notes a dearth of incidents in the Gulf compared to something like air travel, commuter trains and so on. He mentions the documentary film Gasland (which is a pack of lies) and its treatment of fracking, talking about how most of this is driven by emotion.
He starts talking about the liability cap and he says the higher it goes the bigger the danger that the Chinese will be the only ones drilling. He mentions Devon Energy and how they’re no fly-by-night operation, but a sky-high liability cap might drive them out of drilling. And whether they’ve taken into consideration what effect all this would have on rig operators being able to get insurance.
Reilly says he agrees, and concern for the independents is why they didn’t put a number on where the cap should be.
Graham starts to answer something about insurance, then his mike cuts off.
Reilly attacks the issue of the word “systemic” and notes that he knows folks in the oil patch who don’t like that word either. He says he doesn’t want to trash the whole industry but the facts speak for themselves.
2:40 p.m. – Tom McClintock (R-CA) asks a yes-or-no question: did you determine why the BOP failed? Graham tries to weasel an answer and McClintock says “It’s my time” and demands a yes or no. Graham says no. Then he asks whether they’d even looked at it. Reilly said most of the time it was at the bottom of the Gulf. McClintock then notes the Wall Street Journal hammered them for just that reason. He asks whether they’d asked for an extension.
Graham said no.
McClintock asks why anybody should take them seriously given that, and he’s quoting the WSJ again, that Graham fought Gulf drilling in the Senate and Reilly is the past chairman of the World Wildlife Fund. Reilly protests that they aren’t in favor of shutting down drilling. McClintock accuses them of touting the addition of more bureaucracy on top of a failed bureaucracy.
Not much of an answer.
2:50 p.m. – It’s now Manny Lujan’s (D-NM) turn, and he’s friendlier. He’s reading a statement calling this an “epidemic failure throughout the industry.” It more or less goes downhill from there; he touts all the work they did last year on the CLEAR Act, and he starts in with some fancy speechifying about the “plumes of oil” and so on, and says it’s in everybody’s interest to prevent this from happening again.
Now he’s talking about BP’s misleading flow-rate calculations, and how it was in BP’s interest to low-ball the flow rates, and how it’s necessary to come up with an independent bureaucracy charged with flow rate measurement. Reilly says that’s consistent with the commission’s report.
2:55 p.m. – Chuck Fleischmann (R-TN) asks about all the small businesses across coastal Louisiana who are being crushed by the moratorium, and Graham responds by talking about how the seafood industry and the tourism business took it in the shorts as well. He says again that he thinks we need an offshore industry and that he hopes they can get everybody back up and going soon.
Reilly says he was at a restaurant in New York in September and ordered oysters, asked if they were from the Gulf and was reassured they’d “never” serve Gulf seafood. Then he talks about hotel occupancy in Biloxi and Key West. Not really what Fleischmann was asking about.
Graham then says the MMS’ budget has fallen as the industry has grown, citing 1993 figures.
3:00 p.m. – Donna Christensen, who is a Democrat delegate from the Virgin Islands, is now speechifying that 28 permits for shallow water driling have been given out and that it’s the oil companies’ fault no deepwater permits have been issued. And that we ought to have the strictest standard in the world for offshore drilling.
She asks whether this “systemic” business means everybody. Graham says it basically means the other oil companies didn’t do a good enough job of self-policing and ratting each other out to the MMS. He also says they should have worked together to develop capabilities to deal with a spill like this – which of course is something that would have happened following Macondo with or without the government’s demanding it given the losses BP has taken.
Reilly says changes come as a result of catastrophes, and that the reason the standards are so high in the UK is because of the Piper Alpha incident which killed 160 or so people on an offshore rig explosion.
3:05 p.m. – Mike Coffman (R-CO) asks a good question – did adequate regulations exist but weren’t enforced properly? Would this have been fixed beforehand if the regulatory agency was worth a flip?
Reilly calls the recommendations that BOEMRE has made are “desirable.” But he doesn’t think the inspectors have a clue. He thinks better training and better pay are necessary. And in 3-5 years what training they do get will be outdated because the technology moves so fast.
Graham agrees and he says BOEMRE needs to be something like the FBI; it’s susceptible to political interference and it needs more independence. What he doesn’t say is that sword cuts both ways – you put a bunch of Ed Markeys to work at the BOEMRE and independence is no longer such a great idea.
3:10 p.m. – John Sarbanes (D-MD) takes up for the report, defending it on the BOP question and the layers-of-bureaucracy question. he doesn’t say anything of significance. He then mentions the proposed requirement that the corporate CEO personally certify that offshore drilling plans are adequate and how that would eliminate the need for bureaucracy.
Reilly answers that Tony Hayward knew next to nothing about the Macondo well or its circumstances because the company is so big. Sarbanes asks whether that might change if he could be personally liable, but Reilly says he’d have to certify scores of plans in that case and he’s not sure there’s any more liability than is already in place. He stipulates that Rep. Waxman loved that idea but it doesn’t do much for him.
Graham, given 15 seconds to answer, goes way over that time to say “we ought to look at it” and praises Sarbanes’ father, of Sarbanes-Oxley fame, for making that possible. Yay, Sarbanes-Oxley!
3:15 p.m. – Jeff Duncan (R-SC) notes that since everything else has been put off limits, the only places to drill are deepwater Gulf and deepwater Arctic Ocean. And that maybe if drilling elsewhere would be allowed we wouldn’t just have to drill in deep water where it’s so dangerous.
Now he’s asking about the firefighting question, and whether the oil should have been allowed to burn or whether putting that fire out ended up sinking the rig.
Graham says we were unprepared, and that includes firefighting. But he goes back to the initial point and he says that there’s no oil offshore anywhere because it’s depleted – something that he might have trouble arguing for since nobody has drilled in the Atlantic OCS, for example, since the 1960’s. Duncan cuts him off and asks about the fire.
Reilly responds that he thinks maybe something could have been done for well control early on, but once the fire started there was nothing much anybody could do. He does mention there was a lot of chaos and the emergency drills didn’t prepare anybody.
3:20 p.m. – It’s Jeff Landry’s turn. Here comes trouble.
He opens by saying he was talking about credentials of the commission back in Louisiana in June; he doesn’t know whether anybody in Washington was talking about it back then, but he sure was.
He asks whether any economic studies were done as part of this report. Both answer yes. He seems surprised.
Now he’s asking about economic impact studies and whether any were done to justify the commission’s recommendations, as is federal law.
Graham starts stammering, and says economics did play a part in their survey. Then he says while there are great players in the Gulf the overall industry stinks, and our fatality ratio is higher than in Europe.
Landry asks whether he’s aware that generally speaking the reporting standards for accidents in America are considered to be superior to those in Europe. Graham is stumped by that. Reilly says while the accident standards as a whole are sketchy the fatality numbers are not. “It’s a lot harder to hide the bodies.”
3:30 p.m. – Bill Flores (R-TX) notes that Graham mentioned Three Mile Island, and he thinks that’s appropriate since Three Mile Island generally ruined nuclear energy for 30 years without a whole lot of justification and based on everything that’s happened since Macondo looks a lot like it.
He quotes from the report that essentially what happened at Macondo was a management failure at three companies, and from that they’ve said this is a systemic failure, and what happens if the BOP analysis comes back saying a $10 bolt could have prevented the whole thing. Since the number of wells drilled to accidents like Macondo is a nearly infinite ratio.
Reilly says he doesn’t think this is a one-shot deal. He says there was a cement failure in an offshore well in Australia and that Transocean does business all over the place. Then he says they asked Norway if they’re going to do anything about BP, and the Norwegians said no, because they don’t have problems with the North Sea.
Sounds like famous last words.
3:40 p.m. – David Rivera (R-FL) mentions that Graham is his constituent down in Miami, and that gets a laugh. Then he brings up the drilling off Cuba and what’s that going to mean vis-a-vis oil spills. Graham says the Cubans don’t have experience to manage it and some of the companies they’re bringing in are slouches. He says he thinks we need to have a Gulf-wide standard for drilling safety, and Reilly has told him the Mexicans saythey can be an interlocutor to bring the Cubans on board. He says we have to have the highest standards of the bunch because otherwise nobody will listen to us.
Not sure how that works.
Steve Southerland (R-FL), who’s a freshman congressman from Panama City, asks how much responsibility these guys think the government bears for BP having had 790 previous violations and not having policed them harder. And also how much the Jones Act screwed the response up.
Reilly says they dealt with the Jones Act, and their conclusion was that the Coast Guard didn’t have the capability to process Jones Act waivers.
Southerland goes off. He says he’s angered by the government’s incompetence and the lives it’s destroying, and he’s bothered that the bureaucracy hasn’t done its job. This is a highlight moment. He brings up this CEO certification business and says he wants Ken Salazar to have to sign the same certification.
Reilly blabbers through a response about fixing agencies/rearranging deck chairs. Graham talks about being proactive, and saying how can we deal with the next disaster.
3:45 p.m. – Glenn Thompson (R-PA) applies the commission’s standards to the airline business and basically says if they held up in that industry one plane crash would shut down every airport in the country. He also says he just came from a hearing where he talked to Bob McDonnell, the governor of Virginia, who’s losing out on $365 million a year in economic impact because they won’t let the Virginians drill offshore.
He asks whether it’s a lack of science and engineering which caused Macondo, or crappy application of those. In other words, bad management. Both agree.
Then he asks how big the review was. Was it just the three companies involved in Macondo, or everybody. Reilly brings up that 79 well-control incident number again, but Thompson isn’t having it. Graham jumps in and talks about how we have four fatalities in the Gulf to every one in the North Sea. Thompson reclaims his time and says Americans would be irate if one plane crash led to a shutdown in the air travel industry.
Reilly says the commission isn’t defending the moratorium.
3:55 p.m. – We’re in the second round, and Landry is back. He’s not too pleased with this inference that because Transocean and Halliburton do a lot of work in the Gulf that it necessarily means the whole batch is lousy. He mentions that every company has different well designs, so practices are done differently depending whose well is being drilled.
Reilly says the Macondo well stunk. Landry asks if they looked at other well designs that didn’t blow up, “2500 or so.”
Reilly says yes, and now he’s pissed. He says 1 in 2500 is not so impressive. He’s trying to big-boy Landry and says when he was running EPA the standard is one in a million. Landry says maybe he should look in the eyes of the folks who have been drilling since 1947 for whom safety is number one and tell them that. Reilly now says he’s not here to defend the moratorium.
Landry says “I’m gonna put your name in to take Miz Browner’s place, then.” Laughs everywhere around.
Graham is also pissed. He takes issue with Landry’s characterization of another level of bureaucracy as costing hundreds of millions of dollars, and he says “that was not our intention.”
This is the best part of the whole hearing so far.
4:00 p.m. – Flores returns now, and he’s back on the “systemic” question. He wants to know if this is a management failure with BP, Transocean and Halliburton or if it’s everybody. He asks them to pull the word “systemic” or “system-wide” from the report.
Reilly answers by bringing up the walruses. He says that speaks for itself. He says everybody was complacent.
Flores says maybe there was a regulatory failure, everybody can agree on that. But he takes absolute issue with the characterization of the industry in the report in light of what the government is doing to offshore drilling. Reilly says what’s going on with permitting has nothing to do with the commission’s report – which is a bit disingenuous given that the White House is going to use the report to hold up permitting.
4:05 p.m. – Thompson is back, and he’s asking a question about various federal agencies getting involved in the regulatory process. Graham makes the point that the government is a landlord here, and if you own a strip mall you don’t want a tenant who trashes the place.
Graham says NOAA can bring the best science into the mix. Thompson says one of the things that appalled him when he got to Congress was the lack of an energy plan; after all, the Department of Energy was created to eliminate dependence on the Saudis. Graham says he agrees.
Now Grijalva is back. He asks if the Republicans want to make all these spending cuts, how is BOEMRE going to get more money? Does a dedicated revenue stream need to be created to fund it?
Graham likes that. He says it’s not in the interest of the American people not to have standards for drilling. But Grijalva keeps asking an either-or question, and Graham doesn’t know what he’s talking about. Reilly jumps in and touts what the Brits do, and how BP lobbies Parliament for more money for regulators and how ExxonMobil’s CEO had said the same.
In other words, the question was largely nonsense, and the answers reflected that.
4:15 p.m. – McClintock’s second round, and he looks like he hasn’t been amused by the proceedings. He enters the API’s study on offshore drilling and the impact of administration policies on the economy into the record, as well as the WSJ piece he was talking about earlier.
He compares this commission to the Rogers Commission which analyzed the space shuttle disaster, and says that while that was an engineering study done on an engineering problem this is a bureaucratic study done by bureaucrats with little or no engineering. And without going down to Louisiana and tearing the BOP apart piece by piece to find out what happened, it’s worthless.
Reilly says the BOP was like a seatbelt. The accident would have happened anyway. An imperfect analogy, to be sure.
Hastings now comes in to close things out. He says that long-term, we’ve got to have a robust energy industry and a balance has to be struck. And that’ll end it.