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Summary of Hearings on Energy (9/28/10)

  • September 23, 2010: House Committee on Science and Technology Markup of Nuclear R&D Bill (H.R. 5866) and Rare Earth Materials Bill (H.R. 6160)
  • July 27, 2010: House Committee on Environment and Public Works Subcommittee on Water and Wildlife hearing on "Assessing Natural Resource Damages Resulting from the BP Deepwater Horizon Disaster"
  • July 20, 2010: House Committee on Energy and Commerce Subcommittee on Oversight and Investigations and Subcommittee on Energy and the Environment Hearing on “The Role of the Interior Department in the Deepwater Horizon Disaster”
  • July 15, 2010: House Transportation and Infrastructure Committee Subcommittee on Railroads, Pipelines and Hazardous Materials Hearing on “The Safety of Hazardous Liquid Pipelines (Part 2): Integrity Management”
  • July 15, 2010: House Energy and Commerce Committee Markup on the Blowout Prevention Act of 2010 (H.R. 5626) and Disclosure of Documents Relating to Yucca Mountain (H.Res. 1466)
  • July 14, 2010: House Committee on Science and Technology Markup of H.R. 2693 and H.R. 5716 on Oil Spill Research
  • June 29, 2010: House Armed Services Committee Readiness Subcommittee Hearing on “Wind Farms: Compatible with Military Readiness?”
  • June 23, 2010: House Committee on Science & Technology Energy and Environment Subcommittee Hearing on "Deepwater Drilling Technology, Research and Development"
  • June 17, 2010: House Committee on Natural Resources Subcommittee on Energy and Mineral Resources Hearing on “The Deepwater Horizon Incident: Are The Minerals Management Service Regulations Doing The Job?”
  • June 15, 2010: House Energy and Commerce Committee Energy and Environment Subcommittee on "Drilling Down on America's Energy Future: Safety, Security, and Clean Energy"
  • June 15, 2010: House Committee on Natural Resources Subcommittee on Insular Affairs, Oceans and Wildlife Hearing on “Ocean Science And Data Limits In A Time Of Crisis: Do NOAA And The Fish And Wildlife Service Have The Resources To Respond?”
  • June 10, 2010: House Natural Resources Subcommittee on Insular Affairs, Oceans and Wildlife Hearing on “Our Natural Resources at Risk: The Short and Long Term Impacts of the Deepwater Horizon Oil Spill.”
  • June 9, 2010: House Science & Technology Energy and Environment Subcommittee Hearing on "Deluge of Oil Highlights Research and Technology Needs for Effective Cleanup of Oil Spills"
  • June 9, 2010: Senate Environment and Public Works Committee Hearing on “S.3305: The Big Oil Bailout Prevention Liability Act of 2010”
  • May 27, 2010: House Natural Resources Committee Hearing on “Outer Continental Shelf Oil and Gas Strategy and Implications of the Deepwater Horizon Rig”
  • May 26, 2010: House Natural Resources Committee Hearing on “Outer Continental Shelf Oil and Gas Strategy and Implications of the Deepwater Horizon Rig”
  • May 18, 2010: Senate Energy and Natural Resources Committee Hearing to Receive Testimony From the Administration on Issues Related to Offshore Oil and Gas Exploration Including the Accident Involving the Deepwater Horizon in the Gulf of Mexico
  • May 11, 2010: Senate Energy and Natural Resources Committee Hearing to Review Current Issues Related to Offshore Oil and Gas Development
  • April 20, 2010: Senate Energy and Natural Resources Committee Hearing to Receive Testimony on Carbon Capture and Sequestration Legislation, including S. 1856, S.1134, and other Draft Legislative Text
  • March 18, 2010: House Committee on Appropriations Subcommittee on Energy and Water Hearing for the Department of Energy FY 2011 Office of Science and ARPA-E Budgets
  • March 17, 2010: House Committee on Appropriations Energy and Water Subcommittee Hearing on the Department of Energy FY2011 Budget Request for EERE, FE, and Electricity Delivery and Energy Reliability
  • February 4, 2010: Senate Committee on Energy and Natural Resources Hearing to Receive Testimony on the U.S. Department of Energy’s Budget for Fiscal Year 2011
  • January 27, 2010: House Committee on Science and Technology Hearing on “The Advanced Research Projects Agency – Energy (ARPA-E): Assessing the Agency’s Progress and Promise in Transforming the U.S. Energy Innovation System”

Energy Hearings from 2009
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House Committee on Science and Technology Markup of Nuclear R&D Bill (H.R. 5866) and Rare Earth Materials Bill (H.R. 6160)
September 23, 2010

The House Committee on Science and Technology met on Thursday, September 23, to mark up a bill to provide grants for nuclear research and development (R&D), as well as a bill authorizing loan guarantees for the exploration and processing of rare earth elements (REE). Both bills received positive comments from the majority and minority parties.  “[These bills] will help America capture the lead and achieve a clean energy economy,” Chairman Bart Gordon (D-TN) stated in his opening comments.  The Nuclear Energy Research and Development Act of 2010 (H.R. 5866), introduced by Representative Dahlkemper (D-PA), was marked up first, and was followed by the Rare Earth and Critical Materials Revitalization Act (H.R. 6160), introduced by Representative Gordon.

All of the proposed amendments for the Nuclear R&D Act passed the committee by oral vote, and no major provisions were removed from the bill. The success of the provisions reflects the high level of bipartisan support for the original bill. “We need to accelerate the licensing of small modular reactors,” posited Representative Ralph Hall (R-TX), the Ranking Member on the committee. Through R&D grants, the bill is meant to address the high capital costs and the unresolved waste issues associated with nuclear energy. It authorizes grants for fuel cycle R&D and efficiency improvements to existing nuclear technology. The former should not only expand the amount of usable nuclear materials to include spent fuel, but it should also decrease costs associated with disposal of nuclear materials. “We’re turning waste into a feedstock,” Representative Roscoe Bartlett (R-MD) added, emphasizing that such technology is important to the U.S. asserting its competitiveness in the nuclear energy industry.

The bill authorizes a Small Modular Reactor (SMR) Program, as described by Committee Chairman Bart Gordon (D-TN) “to bridge the gap between the nuclear energy industry and the private investing community.” Section 5 addresses this need by amending the Energy Policy Act of 2005 to create the SMR program under the Department of Energy (DOE). The subcommittee report describes SMR’s as reactors with a capacity of 300 MW equivalents or less, including where multiple such reactors are constructed and operated at a single site. Through the SMR program, the Secretary of Energy may cooperate with industry to support the development of SMR designs with specific goals in mind. This portion of the bill was met with great enthusiasm by the members who were present. “I would prefer to replace every section that says ‘the Secretary may’ with ‘the Secretary will’” Representative John Garamendi (D-CA) emphasized. Garamendi also supported an amendment to identify state level obstacles to the construction of nuclear reactors, noting that California won’t pay for nuclear, but it’s willing to build coal-fired power plants in other states. Representative Bill Bray (R-CA) justified introducing that amendment: “[Nuclear raises] interstate commerce issues not just of air quality, but of climate change.”

Garamendi expressed dissatisfaction with another Republican amendment, this one reiterating that the DOE is the responsible authority for disposing nuclear waste. “This may become a lightning rod,” Garamendi petitioned. “The people in Nevada don’t need another poke in the eye regarding Yucca Mountain,” he said, urging that the Yucca mountain geologic waste repository be avoided in this bill, in order to avoid a partisan debate on the House floor or in the Senate. Another amendment approved by the committee charged the Secretary with preparing a report that compares the plans for the Yucca Mountain repository with the recommendations to be set forth by the Blue Ribbon Commission on America’s Nuclear Future. The amendment forces the DOE to consider the Yucca Mountain repository within the framework of what an ideal repository would be. Many members of Congress are concerned with the President’s request to terminate development of the Yucca Mountain geologic waste repository and are seeking additional consideration by DOE and the administration.

“We’ve already made a large investment [in Yucca Mountain],” Representative Inglis (R-SC) reiterated, citing the $10 billion spent over 23 years to develop the nuclear waste repository. “Any alternatives should be compared to the investment we’ve already made.” The amendment sparked a round of commentary considering the language of the bill. “We’re not disposing, we’re storing,” Representative Ehlers (R-MI) stated. Despite the controversy, the measure passed with an unrecorded vote. Most amendments to the bill passed with unanimous support, including oral agreements to revise the text where necessary, to further address concerns of the minority.

The second bill discussed – the Rare Earth and Critical Materials Revitalization Act (H.R. 6160) – passed with bipartisan support but faced greater opposition due to concerns over budgetary impacts and international data sharing. “I’m uncomfortable supporting passage of this bill,” Representative Hall admitted, citing a shortage of time to consider the statutory language and amendments. Other Republicans on the committee challenged the federal government’s support of an industry whose product value has spiked in recent years, due to demand for wind turbines, rechargeable batteries, and defense equipment.
Democrats countered by emphasizing the importance of rare earth (RE) materials, and the overwhelming dependence of the U.S. on Chinese imports of these materials. It was reiterated that 95% to 97% of the RE materials used in the U.S. come from China.

“Sincerely, this is a national security issue. We’re dealing with a monopoly,” Representative Gordon declared during a particularly divisive discussion. Despite the imperative suggested by Gordon, Republicans were able to push through several expense-cutting amendments. The most significant of these, offered by Representative Dana Rohrabacher (R-CA), removed the $15 million authorized annually in the bill. Without these authorizations, the DOE would be required to divert funds from other projects to support this program. Another cost-cutting measure removed the development of a “Research and Development Information Center” to coordinate information sharing among entities involved in the program. In addition, an amendment from Representative Judy Biggert (R-IL) decreased the window to make loan guarantees such that it expires in FY 2015, rather than FY 2018. All three of these Republican-backed amendments were approved by the committee.

Notably, however, two other Republican amendments were denied by committee vote, including an amendment to remove an “International Collaboration” provision and an amendment to restrict the industry activities which are applicable to receive grants. The “International Collaboration” amendment proved to be especially divisive and required a recorded vote in the committee room. That amendment was struck down after a vote of 9-14 in which several Democrats entered the chamber as the final vote was being called. The other amendment introduced by Representative Paul Broun (R-GA) restricted the loan guarantee program, excluding those projects which would “likely be” or are “currently being undertaken by the private sector.” Under the urging of Chairman Gordon, this amendment also failed by an oral vote.

Once all amendments were considered, the committee unanimously passed the bill and referred it to the House floor. Despite a move by Representative Broun to send the bill to the House Natural Resources Committee, the bill may be scheduled on the floor within days, according to an aide for the committee. A related bill, the Rare Earths Supply Technology and Resources Transformation Act of 2010 (S. 3521), is scheduled for a hearing in the Senate Committee on Energy and Natural Resources this Thursday, September 30th. Senator Lisa Murkowski (R-AK) introduced this legislation, which must first pass committee before being scheduled on the Senate calendar.   

The committee’s press release regarding the markups, as well as a list of amendments can be found on the committee’s web site. Full versions of all of the bills, H.R. 5866, H.R. 6160, and S. 3521 can be found on Thomas.

SenateCommittee on Environment and Public Works Subcommittee on Water and Wildlife hearing on "Assessing Natural Resource Damages Resulting from the BP Deepwater Horizon Disaster"
July 27, 2010

Witnesses
Cynthia Dohner
Regional Director, Southeast Region, U.S. Fish and Wildlife Service
Tony Penn
Deputy Chief, Assessment and Restoration Division, Office of Response and Restoration, National Oceanic and Atmospheric Administration
Eva Pell
Under Secretary for Science, Smithsonian Institution
Robert Spies
President, Applied Marine Sciences, Former Chief Scientist, Exxon Valdez Trustee Council
Stanley Senner
Conservation Science Director, Ocean Conservancy
Erik Rifkin
Interim Executive Director, National Aquarium Conservation Center
John Young Jr.
Chairman, Jefferson Parish Council

Subcommitee Members Present
Benjamin Cardin, Chairman (D-MD)
Frank Lautenberg (D-NJ)
Jeff Merkley (D-OR)
Sheldon Whitehouse (D-RI)

Full Committee Members Present
James Inhofe, Ranking Member (R-OK)
David Vitter (R-LA)

The Senate Environment and Public Works Committee Subcommitee on Water and Wildlife held a hearing on "Assessing Natural Resource Damages Resulting from the BP Deepwater Horizon Disaster." The purpose of the hearing was to discuss the assessments that need to be performed in order to quantitatively describe the natural resource damages resulting from the Deepwater Horizon oil spill. The resounding message of the hearing was articulated by Chairman Benjamin Cardin (D-MD) in his opening statement when he said that "if we are going to get the restoration work done right… then we need to get an accurate and complete assessment of the damage." The committee and witnesses alike expressed a desire to see BP held fully responsible for all damages.

Robert Spies, the former Chief Scientist to the Exxon-Valdez Trustee Council, testified on the lessons learned from the management of the Exxon-Valdez spill, stressing the importance of an ecosystem based approach for determining the overall health of the impacted system. In the case of the Exxon spill, environmental impacts continue today, long past the end of Exxon damage payments. Spies explained that oil continues to have an effect on the Alaskan environment (particularly on fish), even when oil concentrations are as low as parts per billion, and that quantifying these effects is difficult but necessary in the process of restoration.  Spies addressed the Oil Pollution Act (OPA) of 1990. The purpose of the law is to improve the nation’s ability to prevent and respond to oil spills by providing money and resources necessary to respond to spills. The effectiveness of the OPA in dealing with the Deepwater Horizon spill has been limited, in part because of the unique nature of the BP spill.

Senator Frank Lautenberg (D-NJ) used the hearing as an opportunity to introduce a draft bill (S. 3661) on dispersant safety regulation that would require better testing, approval and disclosure of the health effects of dispersants used in response to an oil spill. Lautenberg added that “we don’t know if they’re safe for sea life,” and we have become “participants in a dangerous science experiment” because of BP’s extensive use of untested dispersants. Later, Lautenberg pushed Tony Penn, Deputy Chief of the Assessment and Restoration Division at National Oceanic and Atmospheric Administration (NOAA), to admit that by extensively using dispersants, we might be introducing a cure that enlarges the danger, and we need to know more about dispersants toxicity in general. In his opening statements, Lautenberg expressed support of the offshore drilling moratorium.

In order for a Natural Resource Damage Assessment (NRDA) to be performed, baseline pre-spill conditions need to be determined. Witness Eva Pell, Under Secretary for Science at the Smithsonian Institution, spoke on the Smithsonian’s Gulf region near shore sample collection and the institution’s desire to make it publicly accessible. The Smithsonian Environmental Research Center (SERC) has an extensive collection of near shore invertebrates of the Gulf of Mexico region. Pell described this community of near shore invertebrates as a “robust environmental indicator of the broader ecosystem structure and function.” SERC also houses the National Ballast Information Clearinghouse and samples from salt marshes and mangrove ecosystems around the Gulf, both of which may be useful to baseline studies. The National Museum of Natural History has extensive physico-chemical, oceanographic, sedimentary, and biodiversity data for the Gulf region. The coral sample collection in particular will be important in determining Gulf toxicity before the spill, but much of the collection still needs to be digitally archived. With a budget of only $200,000 annually, progress on the digitizing of sample data has been slow. Chairman Cardin suggested that BP should contribute financially to the effort, with the goal of establishing an objective pre-conditions data set that could help avoid future disagreements.

Cynthia Dohner, the Regional Director of the Southeast Region with the U.S. Fish and Wildlife Service of the Department of the Interior (DOI) said that DOI is working to assemble baseline data by gathering data from many federal agencies, including the U.S. Geological Survey. Penn addressed NOAA’s role in assessing damages to the Gulf. NOAA is “monitoring fish, shellfish, birds, marine mammals, turtles, corals, marine sediments, and wetlands” as well as assessing baseline data like DOI and the Smithsonian in order to “determine how to restore damaged natural resources.”

Objectivity within the DOI’s Natural Resource Damage Assessment was another highly discussed subject throughout the hearing. BP has provided $45 million to federal agencies to conduct environmental assessments, while simultaneously funding $500 million to conduct their own assessments. BP is hiring top scientists under non-disclosure agreements to perform these assessments, and Chairman Cardin expressed concern that the credibility of the DOI NRDA will be lessened because the nation’s top scientists will be involved in the BP report instead of the DOI report. Dohner reassured Cardin that there is “some concern” about the non-disclosure hirings, but the DOI remains confident that they have the “expertise to move forward” while still maintaining a high “standard of independence and objectivity,” despite receiving funding from BP for assessment work. Chairman Cardin applauded witness Eric Rifkin, Interim Executive Director of the National Aquarium Conservation Center, for the work that his group is doing to establish an independently funded, objective natural resource damage assessment.

The National Aquarium Conservation Center, in partnership with the Mote Marine Laboratory and Johns Hopkins University, is conducting a comprehensive study designed to ensure that the “pre- and post- Deepwater Horizon oil spill impact status of Sarasota Bay (western FL) is documented as rigorously as possible.” The project is being funded by the National Aquarium, independent from both governmental and BP funds, and will monitor petroleum accumulation in bottom dwelling organisms, rays, dolphins, sediment, the water column, and in “virtual fish” containing membranes that mimic bioaccumulation. The project will focus on modeling of the movement of toxins through the food chain, as well as performing acute and chronic toxicity tests.

John Young Jr., the Chairman of the Jefferson Parish (LA) Council, testified on the federal response to the oil spill and local efforts to reduce environmental damage in the Gulf. “In contrast to successful state and local efforts, the federal government and various federal agencies have not only not helped us but, in some cases, have actually hindered our efforts to protect ourselves.” Young cited three instances where the local Louisiana government put forth plans to protect their coastline that have been rejected or extensively delayed by the federal government, saying that various federal agencies have “hamstrung our state and local governments” efforts to protect themselves. Young opposes the moratorium on offshore drilling, as well as BP’s extensive use of untested dispersants. Senator David Vitter (R-LA) responded by saying that the “federal government has been completely unprepared” and had no model for response to a spill of this magnitude. Senator Sheldon Whitehouse (D-RI) pushed some of the blame back on the Louisiana state government, saying that rock jetties and sand berms should have been included in oil spill contingency planning so that extensive scientific testing of these structures could have taken place before the spill. On NOAA’s role in the delays to sand berm installation, Penn added that “we didn’t want to stand in the way of the berms, we wanted to monitor them and weight the ecological benefits with the ecological harm.”

The committee emerged from the hearing with no clear timeline on completion of natural resource damage assessments, but with the reassurance that NOAA, DOI, and the Smithsonian Collections are working to push forward Gulf pre-condition surveys.

An archived webcast and witness testimony can be accessed here.

-KW

House Committee on Energy and Commerce Subcommittee on Oversight and Investigations and Subcommittee on Energy and the Environment Hearing on “The Role of the Interior Department in the Deepwater Horizon Disaster”
July 20, 2010

Witnesses
Gale Norton
Former Secretary, Department of the Interior 2001-2006
Dirk Kempthorne
Former Secretary, Department of the Interior 2006-2009
Ken Salazar
Secretary, Department of the Interior

Subcommittee Members Present
Edward Markey, Chairman (D-MA)
Bart Stupak, Chairman (D-MI)
Al Green (D-TX)
G.K. Butterfield (D-NC)
Lois Capps (D-CA)
Donna Christensen (D-VI)
Diana DeGette (D-CO)
John Dingell (D-MI)
Mike Doyle (D-PA)
Charles Gonzalez D-TX)
Jane Harman (D-CA)
Baron Hill (D-IN)
Jay Inslee (D-WA)
Doris Matsui (D-CA)
Jerry McNerney (D-CA)
Charlie Melancon (D-LA)
Jan Schakowsky (D-IL)
Betty Sutton (D-OH)

Full Committee Members Present
Henry Waxman (D-CA)
Joe Barton (R-TX)

Other Members Present
Parker Griffith (R-AL)
Robert Latta (R-OH)


Fred Upton, Ranking Member (R-MI)
Marsha Blackburn (R-TN)
Michael Burgess (R-TX)
John Gingrey (R-GA)
Joseph Pitts (R-PA)
Steve Scalise (R-LA)
John Shadegg (R-AZ)
John Shimkus (R-IL)
Cliff Stearns (R-FL)
John Sullivan (R-OK)
Ed Whitfield (R-KY)

 

 

 

 

 

 

In a joint subcommittee hearing, the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations and Subcommittee on Energy and the Environment met to discuss “The Role of the Interior Department in the Deepwater Horizon Disaster.” The purpose of the hearing was to examine the Interior Department's actions leading up to and following the Deepwater Horizon explosion on April 20, 2010. Current Secretary of the Interior Ken Salazar was joined by previous Secretaries Gale Norton (2001-2006) and Dirk Kempthorne (2006-2009) in testifying before the subcommittees. It was the first time the three have appeared together in front of Congress, as well as the first time that Kempthorne has spoken publicly on the disaster.

The Obama Administration, Bush Administration, Department of the Interior (DOI), and BP all faced harsh criticism during committee members’ opening statements. Chairman Edward Markey (D-MA) and others discussed the role of former Vice President Cheney's Energy Task Force Report in the lead-up to the disaster. There has been widespread concern from House Democrats that the report prioritized speed rather than safety in the offshore drilling permitting process. Markey went so far as to describe the task force report as the “first condition for this disaster.” Representative Joe Barton (R-TX) countered that the panel should look into the role of DOI and the Obama Administration, asking “(who) was watching what was going on at the drilling operation?”

In further opening statements, committee members expressed interest in identifying the causes of the tragedy so that problems  may be avoided in the future, while avoiding unnecessary finger pointing. "This shouldn't be about playing the blame game" said Representative Jane Harman (D-CA). There were many comments on the moratorium on offshore drilling, with committee members Steve Scalise (R-LA), John Shadegg (R-AZ), Marsha Blackburn (R-TN), Baron Hill (D-IN), Robert Latta (R-OH), Al Green (D-TX), John Sullivan (R-OK) and others supporting an end to the moratorium . Charlie Melancon (D-LA) added that abandoning wells mid-way through the drilling process has the potential to be very dangerous, and that “moratoriums are ill-advised.” In his testimony, Secretary Salazar addressed his reasons for reissuing the moratorium through November 30, 2010.  Salazar said that the moratorium will remain in place until he is satisfied that drilling can continue in a safe manner, with adequate plans to deal with blowout containment issues, and with adequate oil spill response capability. There was concern expressed by several committee members that jobs would be leaving the gulf as drill rigs find other areas to drill outside of the United States. Norton agreed, saying that “you don't ground all the airplanes because there was one problem,” it is time to do a complete inspection of all rigs, address any issues, and put the rigs back to work, because “once they are moved… then they tend to stay in those locations… and it will be very hard for that industry to be rebuilt.”

In her testimony, Norton emphasized that it has been nine years since her time at the helm of the DOI, and spoke primarily on her work in responding to Hurricane Katrina. Norton and Kempthorne defended the ethics of the former Minerals Management Service (MMS), with Kempthorne saying that “99.9% of DOI employees are ethical, well intentioned.” When reports of misconduct at MMS surfaced during Kempthorne's tenure, he fired, disciplined, or retired the guilty parties. Both former secretaries were very critical of the recent MMS restructuring. Secretary Salazar signed a secretarial order splitting the MMS into three offices in order to avoid conflicts of interest, but Norton pointed out that “if you let the idea of having a strong separation between industry and employees go too far, you cut off the lines of communication…you have to have very high ethical standards, but you can't… only hire people who have no experience and no real understanding and expertise about what decisions need to be made.” Norton later said that federal regulators must be able to work with industry experts who are on the cutting-edge of technology. Salazar, however, criticized this close relationship between federal officials and industry experts, saying that the former Royalty in Kind program at MMS in particular had become a “magnet for…corruption.”

Both previous secretaries addressed the 40-year record of success that the offshore drilling industries had enjoyed before the Deepwater disaster, and the impact this had on DOI's management strategies. The witnesses agreed that this period of success resulted in fewer inspectors than were necessary to ensure safety of the increasing number of offshore drill rigs. Salazar also addressed this idea, saying that “prior administrations and this administration have not done as much as we could have done relative to making sure that there was safe production along the continental shelf… (we) were lulled into a sense of safety.” Kempthorne also noted that the Environmental Impact Assessments (EIA) that were in place for offshore drilling were based on the probability that an oil spill was low, and clearly future EIAs will not be able to make these same assumptions.

With regard to the recently proposed bull-head kill or static kill option for stopping flow from the Macondo well, Salazar said that he is relying on the directors of all of the National Labs and the head of USGS for direction, and will “allow science to lead us to the appropriate conclusion” on whether or not to perform a static kill of the well.

Joe Barton (R-TX) questioned Salazar on the blowout preventer tests that are supposed to occur every two weeks on offshore drill rigs. Salazar explained that the tests are conducted by companies, and that as current regulation stands, inspectors from MMS are not actually present for the tests. Salazar hopes that with new regulations, inspectors should not have to take the word of the company on the results of these important tests. Barton also asked why the Jones Act was never waived in the initial management of the clean-up. The Jones Act, also known as the Merchant Marine Act of 1920, is a vestige of WWI when U.S. shipping was vulnerable to German U-boats. The act restricts coastal shipping between U.S. ports to U.S.-built vessels owned by U.S. citizens, which may prevent foreign aid during disasters like Deepwater Horizon. Salazar explained that the Jones Act never got in the way of getting the international community “on board,” though Salazar did not provide an answer as to why international aid has allegedly been refused in the management of the disaster. Kempthorne added that he did not believe that all of the available international assets were used.

While the hearing retained an air of mutual respect between former and current secretaries and the committees, it was clear that the committee members hold DOI leadership decision-making in the last ten years partly responsible for the Deepwater disaster. What was also clear, as former secretary Kempthorne stated, is that “this will forever change offshore drilling regulation.”

-KW

House Transportation and Infrastructure Committee Subcommittee on Railroads, Pipelines and Hazardous Materials Hearing on "The Safety of Hazardous Liquid Pipelines (Part 2): Integrity Management"
July 15, 2010

 

Witnesses
Panel 1
Cynthia Quarterman, Administrator, Pipeline and Hazardous Materials Safety Administration
Panel 2
Richard Kuprewicz, Public Member, PHMSA’s Technical Hazardous Liquid Pipeline Safety Standards Committee
Greg Jones, Senior Vice President, Technical Support Division, Alyeska Pipeline Service
David Guttenberg, House District 08, Alaska State House
Richard Adams, Vice President, U.S. Operations-Liquid Pipeline, Enbridge Pipelines

Subcommittee Members Present
Corrine Brown, Chairwoman (D-FL)

Bill Shuster, Ranking Member (R-PA)

Harry Teague (D-NM)

 

Elijah Cummings (D-MD)

 

Tim Walz (D-MN)

 

Albio Sires (D-NJ)

 

Mark Schauer (D-MI)

 

Leonard Boswell (D-IA)

 

Laura Richardson (D-CA)

 

Other Committee Members Present
James Oberstar, Chairman (D-MN)

Don Young (R-AK)

Subcommittee Chairwoman Corrine Brown (D-FL) opened the hearing by informing everyone that the hearing was the second in a series of oversight hearings held by the subcommittee as it looks towards reauthorizing the Department of Transportation’s (DOT) pipeline safety program. The congresswoman discussed the success of the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) integrity management program, citing over 31,000 repairs that have been made to hazardous liquid pipelines since the initiation of the program on February 1, 2000. Brown did express concern, however, over a recent incident in which the Alyeska Pipeline Service’s pipeline leaked and spilled over into a containment area. She welcomed the witnesses and asked for their assistance in answering subcommittee members’ questions.

Cynthia Quarterman, the administrator of PHMSA, a division of the DOT, emphasized in her testimony the transformation that PHMSA has undergone. She admitted that historically regulations were mainly prescriptive measures. However, upon the advent of the integrity management program, the regulations now maintain high consequence areas as a priority, promote a more rigorous and systematic management of pipeline operators, and continue the government’s prominent position as the oversight regulator for the industry. All of these objectives combined have resulted in an increase in the public’s confidence in pipeline management. She explained that PHMSA strives for transparency, and that safety is the priority within her division and within the DOT as a whole.

Richard Kuprewicz, member of PHMSA’s Technical Hazardous Liquid Pipeline Safety Standards Committee, disagreed with Quarterman, and asserted that the methods for assessing pipeline operations are not adequate. He opined that higher standards are needed for both high consequence and non-high consequence areas, and asked Congress to play a more active role in safety efforts.

Greg Jones, senior vice president of Alyeska Pipeline’s Technical Support Division, affirmed that the current regulations set by PHMSA are both rigorous and appropriate. He cited the improved safety and environmental performance of the Trans Alaska pipeline as supporting evidence for his statement.

David Guttenberg, the representative of District 08 in the Alaska State House, informed the committee of his concerns of safety of the pipeline as a result of Alyeska’s decision to transfer the majority of its employees stationed in Fairbanks to Anchorage, where the workers will be distanced from the pipeline and unable to respond quickly should there be an emergency. Guttenberg questioned the integrity of Alyeska, and offered the opinion that the safety record could be a result of low standards.

Richard Adams, the vice president of U.S. Operations-Liquid Pipeline for Enbridge Pipelines agreed with Jones that the current regulations are effective. He cited the reduction in accidents, but emphasized that the industry’s goal is always to have none. He extended his support for the focus on high consequence areas and concluded by saying that Congress and industry have been on the right path to reduce risks.

Members focused many questions on the quality of the integrity management program. Representative James Oberstar (D-MN) asked how to keep risk management from slipping into paper management. All of the witnesses agree that superficial inspections or measures, which may not assess risks closely enough, are hazards that can occur with risk management. Kuprewicz maintained that prudent pipeline companies do not relax standards and become complacent, even with a decent safety record. Jones explained that technology, with proper implementation can help in risk management, giving the example of needing to use cleaning pigs frequently to avoid corrosion in pipelines. Guttenberg cautioned the committee that no matter the intentions of a company, a budget will always influence programs, and risk management can take cuts as a result of this. Adams emphasized the need to take an individualized approach to risk management.

Quarterman, after being asked a similar question by Representative Tim Walz (D-MN), explained PHMSA’s risk management process: the operator testifies to the integrity of a pipeline and inspectors with a pipeline engineering background can assess the pipe by taking the individual characteristics of the pipeline into account (size, material transported, and other properties). Representative Elijah Cummings (D-MD) questioned Quarterman on the validity of an operator’s word. The witness replied by reminding the congressman that after an operator signs a certification, he can be brought up on criminal charges if the pipeline proves to be faulty. Cummings followed the question by asking how PHMSA verifies these certifications, reminding Quarterman to keep the recent BP situation in mind. She responded that there are some field inspection spot checks that are performed.

Representatives Harry Teague (D-NM), Albio Sires (D-NJ) and Brown questioned Quarterman more closely on the regulatory process that PHMSA follows. Teague asked if all pipelines have been tested, if PHMSA was present during the tests and when PHMSA receives the results of these quality control tests. Quarterman informed him that all pipelines in high consequence areas have been tested, that PHMSA is not present during the test, but that someone inspects the pipeline after the test. She also clarified that PHMSA does not hold the test results, and just inspects them on site. Sire wondered if it would be more prudent to test pipelines more frequently in highly populated areas, and if PHMSA could make more inspections. The witness’ answer was that within the time frame it is the operator’s responsibility to test the pipes more frequently, and that PHMSA does not have the resources to make more inspections. Brown questioned Quarterman on the penalties an operator or company faces for not complying with standards. She answered that they pay fines, which are returned to the treasury.

Representative Don Young (R-AK) and Ranking Member Bill Shuster (R-PA) applauded the industry for the decrease in accidents. Young called the containment at Pump Station 9 of the Trans Alaska Pipeline a success, asserting that a failure happened, and the technology that was in place kept the spill contained. Shuster reprimanded the committee for calling witness Jones in immediately before Alyeska Pipelines undertakes a scheduled maintenance shut down of its major pipeline. Both Young and Teague asked about BP’s involvement in the Alyeska company. Jones testified to the independence of Alyeska from BP, stating that BP represents only a minor part of the company and cannot overwhelm any decisions made by Alyeska.

The hearing concluded with the subcommittee intending to continue to examine the pipeline industry. The members agreed that integrity management is very important, and believe that a proactive approach will prevent a disaster like the one in the Gulf of Mexico from occurring. Testimony from the chair and the witnesses, along with a video archive of the hearing, can be found on the subcommittee’s web site.

-EH

House Energy and Commerce Committee Markup on the Blowout Prevention Act of 2010 (H.R. 5626) and Disclosure of Documents Relating to Yucca Mountain (H.Res. 1466)
July 15, 2010

The House Energy and Commerce Committee met to consider a series of bills, including the Blowout Prevention Act (H.R. 5626), and a resolution of inquiry requesting documents relating to the use of Yucca Mountain as a high-level nuclear waste repository site (H.Res. 1466).

The Blowout Prevention Act of 2010 was introduced by Chairman Harry Waxman (D-CA), though members of both parties were instrumental in drafting and amending the bill. The “BP Act” would require oil companies to demonstrate that (1) the blowout preventer (BOP) and other well control equipment are capable of preventing a blowout from occurring; (2) an oil spill response plan is in place that ensures the company has the capacity to promptly stop a blowout; and (3) the company has the capacity to begin drilling a relief well within 15 days of a blowout and complete drilling a relief well within 90 days of a blowout. The text of the bill also clarifies the minimum requirements for BOPs and regulates well casing design and cementing procedures. Before drilling of a high risk well can begin, the company must obtain third-party certification of these redundant safety features. The bill also requires periodic unannounced inspections and in-person observation of tests by federal inspectors.

To ensure the mechanical requirements and regulations are realistic and reliable, the bill establishes an independent Well Control Technical Advisory Committee to review and comment on proposed regulations, respond to requests for advice from the appropriate federal official, and provide annual reports assessing implementation of the act. An amendment, introduced by Representative Jerry McNerney (D-CA) and passed by a voice vote, requires that this expert panel be drawn from diverse sources, including the national laboratories.

The bill was amended to include a block of amendments introduced by Representative Steve Scalise (R-LA). These changes replace the definition of “high risk well” with the term “covered well” to ensure the bill does not apply to onshore high risk wells (which are under state regulations) and modify the definition of “appropriate federal official” to limit it to the Secretary of Energy or the Secretary of the Interior. A final amendment that passed by voice vote establishes a one-year study on the economic and other impacts of drilling a relief well in tandem with the exploratory well in deep water. With these amendments, the legislation was reported out of committee favorably by a 48-0 vote.

Two amendments failed to pass the committee, including one that would have required oil companies to deploy 60 percent of their vessels and personnel listed in their emergency response plan within 12 hours of a spill, and an amendment that would have barred companies with egregious safety violations from obtaining federal permits for outer continental shelf wells. The Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act of 2009 (H.R. 3534), reported favorably by the House Natural Resources Committee on July 15, 2010, includes an amendment aimed at denying new leases to BP because of its poor safety and environmental records. Many members feared that the Blowout Prevention Act may be merged with the regulation in the CLEAR Act on the House floor.

The committee also considered a resolution of inquiry requesting the President and directing the Secretary of Energy to release documents regarding the potential use of Yucca Mountain as a high level nuclear waste repository. The resolution, which was drafted by Representative Jim Sensenbrenner (R-WI) who is not a member of the Energy and Commerce Committee, follows the Department of Energy’s withdrawal of its Yucca Mountain construction authorization application from the Nuclear Regulatory Committee (NRC) and the NRC’s Atomic Safety and Licensing board ruling that DOE does not have the legal right to withdraw the application.

While many members (both Democratic and Republican) reiterated the need for a centralized location to store the nation’s high-level nuclear waste, Congressman Bart Stupak (D-MI) and other members argued that it is not accepted procedure to enact a resolution of inquiry without attempting to informally obtain the requested information first. It is unclear whether Sensenbrenner has attempted this, although Representatives Ed Whitfield (R-KY) and Michael Burgess (R-TX) insisted a number of Republicans have requested information and have not received a reply from DOE or the President’s office. Despite Burgess’ comments that they have “run into a brick wall at the DOE,” H.Res. 1466 was reported without recommendation by a voice vote. In its place, the majority party made a commitment to join with the minority to write a letter requesting information and reserve the right to issue a resolution of inquiry as a last resort.

In this session, the committee also took up the Truth in Fur Labeling Act of 2010 (H.R. 2480), the Guarantee of a Legitimate Deal Act of 2010 (H.R. 4501), and the Carbon Monoxide Poisoning Prevention Act (H.R. 1796), all of which passed favorably. More information, including opening statement from the chair and the text of the bills can be found here, as well as a video archive of the entire markup.

-EB

House Committee on Science and Technology Marup of H.R. 2693 and H.R. 5716 on Oil Spill Research
July 14, 2010

The House Committee on Science and Technology met to markup two oil spill research and development bills, H.R. 2693 and H.R 5716. The April 20 BP oil spill in the Gulf of Mexico has brought attention to the lack of funding for safety and prevention technologies. Both bills address this issue by directing funding for safety, prevention and mitigation technologies.

The Federal Oil Spill Research Program Act (H.R. 2693) amends the Oil Pollution Act of 1990 to direct the president to create the Federal Oil Spill Research Committee. The interagency committee is tasked with coordinating a comprehensive program for oil spill research, assess oil spill prevention and response capabilities, and develop a federal oil spill research plan. It directs the Administrator of the National Oceanic and Atmospheric Administration (NOAA) to award grants to universities and research institutions to advance research and develop technologies to mitigate oil spills. The bill requires that NOAA work with the National Academy of Sciences to evaluate and report the status of federal research and development for oil spill response.

The committee passed many amendments to clarify the language and intent of the bill. Other amendments addressed four primary issues: area of focus for research, communication and coordination, assessment and evaluation, and protection of people, communities and environments affected by spills. Ranking Member Ralph Hall (R-TX) submitted an amendment that ensures containment of oil, should a spill occur, as a focus for research, while Representative Dana Rohrabacher (R-CA) insisted that natural seepage and spills resulting from transportation of oil be included. Due to the expertise that comes as a result of working in the industry, Representative Lamar Smith (R-TX) presented an amendment that requires the facilitation of advice from a third party industry employee for research plans. Representative Judy Biggert (R-IL) addressed the area of coordination and communication as well, amending the bill to include a provision for a report to be submitted to Congress from the interagency committee on the advances made in clean up technology. All four amendments were passed.

Representative Brian Baird (D-WA) emphasized the importance of considering human error as an area of research. After some discussion, the committee approved amendment that named human errors as a research focus area. Congressman Daniel Lipinski (D-IL) introduced an amendment that would require a “probabilistic risk analysis” to evaluate potential problems. Lipinski’s amendment passed with no opposition. Representatives Eddie Bernice Johnson (D-TX), Kathy Dahlkemper (D-PA) and Baird addressed the effect of spills on the public. Johnson presented economically disadvantaged communities as an area of focus, Dahlkemper asked for consideration of protection to people cleaning up spills, and Baird submitted a requirement that already published findings of federally funded research pertaining to spills be available to the public. All three amendments passed. The amended bill was reported favorably by the committee by a voice vote.

The Safer Oil and Natural Gas Drilling Technology Research and Development Act (H.R. 5716) amends Section 999 of the Energy Policy Act of 2005. Under Section 999, research is conducted by the Department of Energy (DOE) and a public-private consortium called the Research Partnership to Secure Energy for America (RPSEA). RPSEA’s members come from industry, academia, and government organizations. Following the recent oil spill, concern arose that there was not enough focus on spill prevention and mitigation technology. The Safer Oil and Natural Gas Drilling Technology Research and Development Act shifts the focus of Section 999 of the Energy Policy Act of 2005 to development of technology designed for safety and accident prevention.

The amendments to the Safer Oil and Natural Gas Technology Research and Development Act focused on agencies included in the advisement process for research and on reinforcing safety in oil and natural gas production. Chairman Bart Gordon (D-TN) proposed that only individuals who are qualified to advise may be included in the decision making process. Representative John Garamendi (D-CA) expanded on this amendment by stating that these individuals may come from any federal agency. Representatives Michael McCaul (R-TX) and Bob Inglis (R-SC) reinforced the focus on safety. McCaul asked that research and technology be aimed at reducing environmental impacts of oil and natural gas production, while Inglis proposed that RPSEA present awards for safety to companies and employees, as well as a requirement that RPSEA includes prevention efforts in its annual report. Both representatives’ amendments passed. The committee voted to return the amended bill favorably by voice vote.

A webcast of the markup can be found on the Science and Technology Committee’s web site. The full text of H.R 2693 and H.R. 5716 are available from Thomas.

-EH

House Armed Services Committee Readiness Subcommittee Hearing on "Wind Farms: Compatible with Military Readiness?"
June 29, 2010

Witnesses
Dorothy Robyn
Deputy Under Secretary of Defense, Installations and Environment, U.S. Department of Defense
Lawrence Stutzriem
Major General, United States Air Force, Director, Plans, Policy and Strategy, North American Aerospace Defense Command and U.S. Northern Command
Nancy Kalinowski
Vice President, Systems Operations Services, Air Traffic Organization, Federal Aviation Administration
Stu Webster
Co-Chairman of the Siting Committee, American Wind Energy Association

Subcommittee members present
Solomon Ortiz, Chairman (D-TX)
Carol Shea-Porter (D-NH)
Larry Kissell (D-NC)
Randy Forbes, Ranking Member (R-VA)
Mike Conaway (R-TX)

Full committee members present
Henry Johnson (D-GA)

Other members present
Debbie Halvorson (D-IL)
John Garamendi (D- CA)

The House of Representatives Committee on Armed Services Readiness Subcommittee met to discuss the compatibility of military readiness and wind farms. Wind farms can impair the ability of radar systems to monitor and detect small aircraft when farms are found within line of sight or in close proximity to radar stations. This can impact long range radar airspace surveillance and flight training missions. Ultimately all parties involved agreed that most conflicts could be resolved with increased communication between the wind farm industry and federal agencies, though questions of financial responsibility of radar upgrades remained.

Chairman Solomon Oritz (D-TX) began the hearing by emphasizing his commitment to renewable energy and its benefits, despite the lack of a “coordinated, well-established review process within the Department of Defense (DOD) to provide timely input” for these projects. Ranking member Randy Forbes (R-VA) added that he is excited to use the “abundant excess of wind” found around the nation, but that it is important to evaluate placement of wind farms and the resulting impact on national defense and military readiness.

Stu Webster, Co-Chairman of the Siting Committee, American Wind Energy Association, spoke on the benefits of wind energy, stating that wind energy is “domestic, inexhaustible, clean, and affordable… (and) important for our national security.” Webster listed updates to radar software and hardware, as well as conscientious citing of future wind arrays as potential solutions to the radar problem, but stressed that there should not be a “one-size fits all” solution. Webster also requested that the committee invest in significant research and development to validate mitigation options and explore alternative mitigation tools such as stealth composite turbine blades.  

Lawrence Stutzriem, Major General, United States Air Force added that tuning, repositioning, and maintenance of radar currently in place should reduce noise from turbines, as should software and hardware improvements to the radar.

Nancy Kalinowski, Vice President, Systems Operations Services, Air Traffic Organization, Federal Aviation Administration, described the current system for obtaining a wind farm permit through the Federal Aviation Administration (FAA). The current system is online and potential projects need to register 30 days before construction begins. Since January, the FAA has received 19,000 permit requests, and in the last year it supported 89% of proposed projects. The Shepherds Flat wind farm was a notable exception where the Pentagon asked the FAA to delay its final permit because of concerns for the nearby US Air Force radar system. Witness Kalinowski stated that the FAA may be able to improve the filing and evaluation process in order to avoid future conflicts and delays.

Robyn stressed that the Department of Defense believes that it “can and must minimize the occurrence of events like Shepherds Flat, where DOD’s mission needs conflict with the development of renewable energy.” Robyn clarified that while individual conflicts may be unavoidable, the nation does not need to choose between national security and the development of renewable energy. Robyn cited adjusting the timing of FAA authorization and insertion of better radar technology as possible solutions.

This question of national security in relation to renewable energy was debated at length during the hearing. Representative Randy Forbes (R-VA) repeatedly asked witnesses if, with timing and budgetary concerns, “(congress should) accept a decrease in military readiness in exchange for energy initiatives.” Robyn repeatedly answered that the committee would never have to make this kind of decision if appropriate steps were taken to resolve the issue.  Ultimately, however, Robyn admitted that the “U.S. cannot accept a significant decrease in military readiness.” Webster answered that the wind farm industry does not want to be seen as viewing itself as more important than national security, but that the potential is there for wind farm development without decreased national security, as long as political will-power can resolve the current conflict with radar systems.

Representative Debbie Halvorson (D-IL) attended the hearing in order to present the case of K4, a wind farm within her district that has been given the same Notice of Presumed Hazard that Shepherds flat was given. Representative Halvorson asked Robyn what upgrades can be made to existing radar systems nationwide so that these problems are ameliorated. Robyn responded that the Shepherds flat case was unique because of time restrictions that are not present in the Illinois case. Representative Halvorson suggested that one of the major problems in the K4 case may be the lack of updates in the DOD’s land cover and terrain model data since 1990, and asked the DOD to review the case further.

Representative John Garamendi (D- CA) asked if there are any studies currently being undertaken that look at how to resolve the issues with flight control radar interference by turbines. Robyn cited a British study that found that wind turbines did not interfere with specific long range radar systems. This sparked discussion on the financial burden of radar updates.

Despite the general consensus among members and witnesses alike that turbines and radar can coexist, the question of financial burden of radar updates remained unanswered. Representative Conway stated that taxpayers should not have to pay to update radar so that wind farm developers can prosper. Robyn suggested that the wind industry foot the radar upgrade bills, but added that there may be technical or legal barriers to the concept. Kalinowski had previously stated that the current, older radars serve the FAA’s mission well, and updates in technology were not needed from their standpoint.

Representative Forbes requested that Webster determine the number of turbines in use currently and the projected number of turbines in the future, so that the committee can determine the scope of the problem it is facing. Representative Forbes also requested the committee be presented with the concrete dollar amount for radar upgrades, so that it knows what the “cost differential between buying energy one way and by putting something in a bill that is going to cost us more, so that we can determine how many planes we have to give up to do that.”

Chairman Oritz asked the DOD to generate an interim report on current wind farm and radar conflicts, particularly the Kingsville wind farm, within thirty days. Oritz additionally requested that the FAA take steps towards moving the formal permit-process for wind farms to earlier in the planning process. Kalinowski responded, saying that the process will take formal rule-making within the FAA, but the support of the Armed Services Committee will be key in ensuring the change in permitting process.

Testimony from the chair and some panelists can be found here, as well as a video archive of the entire hearing.

--KW

House Committee on Science & Technology Energy and Environment Subcommittee Hearing on “Deepwater Drilling Technology, Research and Development”
June 23, 2010

Witnesses
Mr. James Pappas
Vice President, Technical Programs Research Partnership to Secure Energy for America
Dr. Benton Baugh
President, Radoil, Inc.
Mr. Erik Milito
Group Director of Upstream and Industry Operations, American Petroleum Institute
Dr. Greg McCormack
Director of the Petroleum Extension Service, University of Texas at Austin

Committee Members Present
Brian Baird, Chairman (D-WA)

Ralph M. Hall, Full Ranking Member (R-TX)

Bart Gordon, Full Chairman (D-TN)

Vernon J. Ehlers (R-MI)

Daniel Lipinski (D-IL)

Roscoe G. Bartlett (R-MD)

Eddie Bernice Johnson (D-TX)

Dana Rohrabacher (R-CA)

Paul D. Tonko (D-NY)

 

Ben R. Lujan (D-NM)

 

John Garamendi (D-CA)

 

Russ Carnahan (D-MO)

 

At the opening of the hearing, Chairman Brian Baird (D-WA) took a moment to express his disappointment over the June 22nd primary loss of incumbent Representative Bob Inglis of South  Carolina. The Republican is the ranking member of the subcommittee and a supporter of science and technology.

Following the brief discussion of Inglis, Baird reminded the committee of the purpose of the hearing: to understand the technology and best practices of the offshore drilling industry. He related his experience when the subcommittee visited the Gulf Coast to witness the response effort firsthand. Baird asked workers what the members could do to help, and was informed that the best thing Congress could do to help is tell the public what good is being done in the response effort. Baird asked all of the members to keep this story in mind as they listened to the witnesses’ testimony.

Hall called for a measured response to the oil spill. He believes the blanket moratorium is a knee jerk reaction, and reported estimates of 40,000 jobs that could be lost because of the administration’s moratorium. Hall suggested that the moratorium will result in greater oil imports, and that tankers have spilled more oil than offshore wells. Hall looked for an alternative to the moratorium, and instructed his colleagues to rely on the witnesses to “tell us the greatest good for the greatest number of people.”

James Pappas, the vice president of technical programs for the Research Partnership to Secure Energy for America (RPSEA), began by informing the subcommittee that RPSEA is a partnership of public and private agencies that conducts research on ultra-deepwater and unconventional drilling in the United States. Pappas stated that RPSEA’s goal in response to the recent incident is to create better safety methods that consider environmental impacts for future drilling efforts. RPSEA was formulated as part of the Energy Policy Act of 2005.

Dr. Benton Baugh, the president of Radoil, Inc., argued that the current subsea technology used in offshore drilling provides an adequate level of safety for drilling operations. He cited the required routine tests, certifications and multiple agency inspections as examples of the safety standards.

Erik Milito, Upstream Director at the American Petroleum Institute (API), declared that API maintains best practice standards for the industry to follow, and that these standards are reviewed every five years, if not more frequently. He affirmed that API is constantly looking to elevate the standards to strive for a goal of zero incidents, accidents and fatalities.

Greg McCormack, the director of the Petroleum Extension Service at the University of Texas (PETEX) focused on the importance of training. McCormack suggested that training has not developed as quickly as technology has. He argued that training, as important as it is, is not a substitute for experience. McCormack also addressed the challenges of training a multi-generational workforce, and the difficulties of this task as technology advances more rapidly and training programs are cut.

Representative Eddie Bernice Johnson (D-TX) inquired about the semantics of the Horizon rig and Macondo well. McCormack clarified that the well was not considered high risk because it is the deepest—it is in 5,000 feet of water, while others have drilled in 10,000 feet—but because it is an exploratory well, a well drilled in an unexplored area. In response to a question regarding a moratorium on deepwater wells that would exclude shallower wells, Milito informed the congresswoman that companies need to drill for oil in areas that contain oil, and that shallower areas have been tapped for the most part. Pappas added that the shallow wells are used mostly in gas production.

Baird asked Baugh about the adequacy and safety of the existing drilling technology, essentially questioning his earlier testimony that deepwater offshore operations in the Gulf are safe. Baugh maintained that equipment ensures safety during operations, and that the equipment fails when human errors occur. He did concede that the current technology needs to continually advance to maintain safety standards. Representative Dana Rohrabacher (R-CA) questioned the witnesses further on the maintenance of drilling equipment. Pappas offered the possibility that the blowout preventer valves had not been properly inspected, but that a full assessment needs to wait for the investigative report to be completed. Milito added that the industry and government cannot rely solely on the media reports, and agreed with Pappas that the completion of the investigative report is necessary before drawing any conclusions.

Representative Daniel Lipinski (D-IL) addressed the lack of enough risk management and response support within the offshore drilling industry. He pondered the risk that the public would accept, if the industry would release a more reasonable estimate of risk for a drilling operation. Pappas, when asked by Representative Paul Tonko (D-NY), informed the subcommittee that eight of RPSEA’s 71 projects are devoted entirely to safety and environmental concerns. Rohrabacher commented that the government’s priorities were as much to blame as the industry’s priorities, stating that the Department of Agriculture’s spending on global warming research was 16 percent higher than the Department of Energy’s (DOE) funding for oil and gas research and development.

Representatives Vernon Ehlers (R-MI) and Roscoe Bartlett (R-MD) focused on the failures that led to the oil spill. In response to Ehlers’ inquiry on BP’s reputation within the industry, Baugh admitted that BP is known to be a more aggressive company, and McCormack concluded that disasters result from continually choosing not to follow a more conservative plan. Bartlett took the responsibility further, asking if the federal government is part of the shared guilt for the disaster. McCormack replied that the Minerals Management Service (MMS) inspector was inexperienced and may not have known what to look for. Representative Russ Carnahan (D-MO) looked to the future of the safety technology for offshore drilling, asking the witnesses if two blind shear rams need to be present as a backup method. Baugh replied that his company liked to have two blind shear rams on a rig because it eliminated a single point of failure.

Congressmen Tonko and John Garamendi (D-CA), looked to a future of reliance on alternative energy, rather than fossil fuels. Tonko argued for alternative energy on the basis that the oil supply is running out. Garamendi supported the moratorium, imparting that the continuation of offshore drilling without understanding the failures of the Deepwater Horizon rig would be irresponsible. Garamendi stated that it is time to move past oil, calling a redirection of focus on alternatives as “fundamental.”

The chairman closed the hearing by stating that gathering this information from the witnesses would serve to prevent a disaster like this from occurring again in the future. The committee agreed that more communication and training seemed necessary for safety within the offshore drilling industry. The witnesses’ testimony and statements from the subcommittee members, along with a video archive of the hearing, can be found on the subcommittee’s web site.

-EH

House Committee on Natural Resources Subcommittee on Energy and Mineral Resources Hearing on “The Deepwater Horizon Incident: Are The Minerals Management Service Regulations Doing The Job?”
June 17, 2010

Witnesses
Panel 1
Bob Abbey
Acting Director, Minerals Management Service, Department of the Interior
Mary Kendall
Acting Inspector General, Department of the Interior
Frank Rusco
Director, Natural Resources and Environment, Government Accountability Office

Panel 2
Kenneth Abbott
Former Contractor, BP Atlantis

Panel 3
Christopher Mann
Senior Officer, Pew Environment Group
Alan Spackman
Vice President, Offshore Technical & Regulatory Affairs, International Association of Drilling Contractors
Erik Milito
Group Director, Upstream and Industry Operations, American Petroleum Institute
Danielle Brian
Executive Director, Project on Government Oversight
Steve Maley
Operations Manager, Badger Oil Corporation

Subcommittee Members Present
Jim Costa, Chair (D-CA)
Doug Lamborn, Ranking Member (R-CO)
Martin Heinrich (D-NM)
Niki Tsongas (D-MA)
John Sarbanes (D-MD)
Eni Faleomavaega (D-AS)
Rush Holt (D-NJ)
Dan Boren (D-OK)
Cynthia Lummis (R-WY)
John Fleming (R-LA)
Bill Cassidy (R-LA)
Louie Gohmert (R-TX)

Full Committee Members Present
Doc Hastings (R-WA)
Raúl Grijalva (D-AZ)
Edward Markey (D-MA)

Other Members Present
Gus Bilirakis (R-FL)

The House Natural Resources Subcommittee on Energy and Mineral Resources met to discuss whether the Minerals Management Service’s (MMS) regulations on Outer Continental Shelf (OCS) oil and gas drilling are adequate and the proposed reorganization of MMS. On May 19, almost a month after the explosion of BP’s Deepwater Horizon rig in the Gulf of Mexico, Interior Secretary Ken Salazar announced the administration’s plan to break MMS into three separate agencies: the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue.

Chairman Jim Costa (D-CA) spoke of the importance of striking a proper balance between government regulators and private industry. He said, “Too little regulation can result in unsafe conditions that can ultimately result in the tragedy that we are facing today. But also, too much regulation can be a problem, as operators begin to expect the government to do everything and absolve themselves from their own safety responsibilities.” In response to Salazar’s plan for restructuring MMS, Costa expressed his hope that the changes are not simply “rearranging the boxes.” He expressed his support for offshore drilling, calling it a necessary part of America’s energy future if it is done safely. This view is shared by Ranking Member Doug Lamborn (R-CO), who criticized the 6-month moratorium placed on deepwater drilling, claiming drilling is safe and the moratorium is exacerbating the economic crisis in the Gulf.

Erik Milito of the American Petroleum Institute claimed that the oil and gas industry is generally safe and highly regulated. He called for a more constructive relationship between the government and the oil and gas industry. Steve Maley of Badger Oil Corporation, based in Louisiana, joined Milito in calling for an end to the moratorium on drilling, claiming it is harming small oil companies like his own.

Bob Abbey, acting director of MMS since Liz Burnbaum resigned, assured the subcommittee that the Department of the Interior (DOI) is sensitive to the effects of the moratorium. He also expressed his support for the changes to the DOI and MMS, calling Salazar’s changes “a bold new direction.” DOI Acting Inspector General Mary Kendall and Frank Rusco, director of the Natural Resources and Environment Office at the Government Accountability Office, focused on MMS’s short fallings. Kendall spoke of MMS’s difficulty recruiting and retaining rig inspectors and their lack of training. Rusco stated that MMS lags behind industry in technological expertise.

Christopher Mann, senior officer of the Pew Environment Group, testified that the spill is a result of environmental shortcuts, and industry and the federal government are at fault. He said drilling technology has advanced greatly over the past 30 years, but MMS expertise and their regulations have not kept pace. Danielle Brian, the executive director of Project on Government Oversight, faulted the revolving door of employees between industry and the regulating agencies, as well as an overdependence on industry for expertise. She said that a partial solution for these problems would be increased pay for federal inspectors.

With respect to the proposed changes to MMS, Costa asked whether the changes would also apply to the Bureau of Land Management (BLM), the agency in charge of regulating onshore drilling. Abbey, who is the current director of BLM, responded that the DOI is working on creating a “special office” to increase communication between MMS and BLM, but the major organizational changes will be restricted to MMS. Abbey also stressed that the reorganization will provide each agency with a “clear, distinct function.”

In response to questions about potential problems with restructuring MMS, Rusco told the committee that it will be difficult for DOI to restructure MMS while simultaneously responding to the ongoing oil spill in the Gulf of Mexico and enacting new regulations on current drilling projects. Brian warned that the proposed changes are not enough to limit the revolving door of employees working for both the industry and the DOI.

Since the April 20 explosion of BP’s Deepwater Horizon rig and subsequent oil spill in the Gulf, President Obama enacted a 6-month moratorium on deepwater drilling. The moratorium is supposed to temporarily halt only wells in the drilling stage in water 500-feet or deeper, meaning producing wells and shallow water drilling should not be affected. However, there has been some confusion about whether the moratorium applies to shallow water drilling and some companies have had trouble getting permits from MMS since the moratorium began. Abbey stated that while there is not a moratorium on shallow water drilling, there are new regulations and a meeting was held to clarify these new regulations.

Some subcommittee members, including Ranking Member Lamborn, maintain that the moratorium is unnecessary and harmful to the Gulf coast economy. Lamborn claimed that some peer-reviewed engineering documents opposing the moratorium were “edited by political operatives” to be used as evidence to support the moratorium. In response, Kendall said that her department was not currently investigating these claims, but it is in their realm of work.

Bill Cassidy (R-LA) joined Lamborn in calling for an end to the moratorium, claiming that the entire industry is being punished because one company cut corners and did not follow safety protocols. In response to Abbey’s remark that the moratorium is necessary because of the extent of the environmental damage, Cassidy stated, “We certainly still fly airplanes after there’s a bad accident.”

Maley, an employee of a small oil and gas company that only drills in shallow water, said that his company will likely fold in the next months because they have been unable to secure shallow water drilling permits since the moratorium started. Maley said that there will be transient impacts and permanent impacts of the spill, stating, “This is not a Valdez spill, it is a much lighter grade crude, it’s 50 miles offshore, it took it a month to make it to shore, and once it’s in the marsh it’s a terrible thing, and I’m not trying to minimize it, but mother nature has ways to take care of it.” In contrast, he said that rigs and jobs that leave the Gulf because of the moratorium will be gone forever.

While the moratorium was talked about in depth, the hearing also focused on what MMS did wrong leading up to the blowout. Martin Heinrich (D-NM) asked whether BP should have received a permit to drill in the first place because their spill response plan stated that they could respond to a worst case scenario spill of 300,000 barrels per day, which they clearly cannot do. Gus Bilirakis (R-FL) asked whether the spill response plans were even reviewed by MMS. Abbey responded that this was a result of both MMS and the industry becoming “complacent and overconfident,” and that spill response plans were being reevaluated now. Niki Tsongas (D-MA) suggested that BP and others should not have received permits simply because of the depth at which they drill. She claimed that the risks of drilling in deepwater out weigh the benefits.

Other members questioned whether MMS has enough resources and the workforce necessary to regulate offshore drilling. Eni Faleomavaega (D-AS) expressed his outrage that there are only 50 or so MMS inspectors overseeing 4,000 rigs in the Gulf. He said, “Why are we surprised that [this event happened] with a department that has a $13 billion dollar budget to oversee hundreds of billions of dollars of our nation’s resources?...It’s quite obvious that the Interior Department doesn’t have the resources.” Faleomavaega also asked whether this issue was taken into account when Obama announced his plan to expand offshore drilling earlier this year.

There is also concern that MMS does not have the expertise to regulate a highly technical, constantly evolving industry. John Sarbanes (D-MD) said, “If I’m the industry, MMS is like a fly buzzing around my head. It’s a joke.” Abbey stated that MMS does have capable engineers, but they are understaffed. Cassidy questioned whether MMS has the technology to regulate the industry, lamenting the fact that MMS does not even have direct uploading of data, a relatively basic technology.

Cassidy also struggled to understand a way to get inspectors to the same level of expertise as people working in the industry. He said, “The guys who are actually doing the work on the rigs are about a mile ahead of the inspectors in terms of knowledge, the only way we’re going to give the inspectors that knowledge is to allow them to have [conferences with the industry]…on the other hand that’s held up as a perception of impropriety…I don’t understand how to reconcile that.” Cassidy pointed out that it is highly likely that rig workers and inspectors have ties through the universities they attend because there are not many petroleum engineering schools.

Kenneth Abbott, a contractor on BP’s Atlantis rig in 2008, also testified before the subcommittee. Atlantis is a deepwater rig, drilling 7000-feet below the surface of the Gulf (compared to Deepwater Horizon, which was drilling at about 5000-feet below the water’s surface). Abbott, who has been working in the oil and gas industry for 30 years, claims that BP Atlantis lacks “as built” engineering diagrams of the piping and electrical layout of the rig. When Abbott pressured his superiors about the lack of diagrams, he was told not to put pressure on the engineers and he was eventually let go from the company. Abbott claims that this is a problem unique to BP that he never saw with other oil companies that he did contract work with.

The subcommittee members were interested to know whether MMS requires drilling companies to have engineer reviewed as built diagrams of their rigs. Abbott said that MMS does not review them, although the diagrams do have to be available for MMS to look at, a process that would only take a few days per rig according to Abbott. He said, “The regulators need to regulate, and the oil companies need to know that in the end there are regulators that are serious about it.”

Testimony from the chair, ranking member, and all panelists can be found here, as well as a video archive of the entire hearing.

-EB

House Energy and Commerce Committee Energy and Environment Subcommittee Hearing on "Drilling Down on America's Future: Safety, Security, and Clean Energy”
June 15, 2010

Witnesses
Mr. Rex Tillerson
Chairman and Chief Executive Officer, ExxonMobil
Mr. John Watson
Chairman and Chief Executive Officer, Chevron Corporation
Mr. James Mulva
Chairman and Chief Executive Officer, ConocoPhillips
Mr. Lamar McKay
President and Chairman, BP America, Inc
Mr. Marvin Odum
President, Shell Oil Company

Committee Members Present
Edward J. Markey, Chairman (D-MA)

Fred Upton, Ranking Member (R-MI)

Henry A. Waxman, Full Committee Chair (D-CA)

Joe Barton, Full Committee Ranking Member (R-TX)

Bart Stupak (D-MI)

Parker Griffith (R-AL)

John D. Dingell (D-MI)

Ed Whitfield (R-KY)

Mike Doyle (D-PA)

Ralph M. Hall (R-TX)

Jay Inslee (D-WA)

Mary Bono Mack (R-CA)

Doris O. Matsui (D-CA)

Cliff Stearns (R-FL)

Jerry McNerney (D-CA)

Roy Blunt (R-MO)

Gene Green (D-TX)

Joseph R. Pitts (R-PA)

Lois Capps (D-CA)

Steve Scalise (R-LA)

Jane Harman (D-CA)

Michael C. Burgess (R-TX)

Tammy Baldwin (D-WI)

John Shimkus (R-IL)

Mike Ross (D-AR)

John B. Shadegg (R-AZ)

Peter Welch (D-VT)

John Sullivan (R-OK)

Jim Matheson (D-UT)

 

G.K. Butterfield (D-NC)

 

Charles A. Gonzalez (D-TX)

 

Eliot L. Engel (D-NY)

 

Anthony D. Weiner (D-NY)

 

Other Members Present
Sheila Jackson Lee (D-TX)

Anh “Joseph” Cao (R-LA)

 

Subcommittee Chairman Edward Markey (D-MA) opened the June 15, 2010 Energy and Environment subcommittee hearing on America’s energy future by reminding the subcommittee that the BP “environmental nightmare” was continuing after 57 days. He argued that it was blind faith that brought everyone to this point, stating that BP had reassured us that “they could handle an Exxon Valdez sized spill everyday—they couldn’t.” He asked the subcommittee to remember this fact while everyone is looking for assurances. The oil companies have virtually identical response plans that assume, in Chairman Markey’s words, a “zero chance of disaster” which in turn leads to “zero disaster planning.” He called for legislation regulating clean up of oil spills, and pushed for a transition to clean energy.

Ranking Member Fred Upton (R-MI) called for BP to create an escrow account to pay for damages and claims, declaring, “the polluter will pay, not the public.” Ranking Member Upton implored the subcommittee to keep the focus on the current situation, and not use the current circumstances to push a political agenda promoting clean energy and climate change legislation.

Full Committee Ranking Member Joe Barton (R-TX) shared Upton’s sentiments, comparing the outer continental shelf to a hospital patient. He pointed out that doctors do not kill a patient because he becomes sick, they work to heal him. Barton maintained that similar action should be taken in the Gulf of Mexico.

Other Republican members voiced similar opinions. Representative Michael Burgess (R-TX) counseled the committee to remain focused, stating the oil spill must take priority over any ideas about clean energy, stating such “job-killing legislation” would “cripple the American economy.” Congressman Parker Griffith (R-AL) argued that offshore drilling needed to be continued in the U.S. where it could be regulated, and opined that the moratorium was a “knee jerk reaction that has no place in a serious issue.” Congressman Roy Blunt (R-MO) expressed the need for better understanding of where the industry as well as the federal government failed. Representative Ralph Hall (R-TX) again lamented the administration’s decision to blame the Bush presidency for the environmental disaster.

On the other side of the aisle, Democrats demanded new legislation. Full Committee Chairman Henry Waxman (D-CA) renounced the effectiveness of the “cookie cutter response plans,” and declared that it was time to end America’s addiction to oil. Representative Bart Stupak (D-MI) expanded on Chairman Waxman’s statement, saying that while these “response plans are great for public relations; they are worthless in an actual spill.” Congresswomen Doris Matsui (D-CA) and Lois Capps (D-CA) wanted oil companies to invest in cleaner alternatives and transition away from fossil fuels. Congressman Jay Inslee (D-WA) went so far as to say “every single oil well is an oil spill,” linking it to carbon dioxide emissions and ocean acidity. Representative Charles Gonzalez (D-TX) added that it seemed that the administration could not win in this situation, observing that the people who typically demand less government involvement are blaming the federal government for not controlling the oil spill response closely enough.

Mr. Rex Tillerson, chairman and CEO of Exxon Mobil, noted the necessity of understanding what caused the problem in order to improve the safety of the industry, and cited the Exxon Valdez spill as an example of an environmental disaster that resulted in a “new commitment to safety.” Mr. John Watson, chairman and CEO of Chevron Corporation, echoed Mr. Tillerson’s sentiments, admitting that this situation is a humbling experience for the oil industry and stating the need for all oil companies to follow best practices to ensure that no more environmental disasters occur. Mr. James Mulva, chairman and CEO of ConocoPhillips, informed the committee that his company is not in a position to know what went wrong, but thought this incident would lead to “necessary changes” within industry standards. He added that change will take time, but for now it is the oil companies’ job to continue to provide energy. Mr. Marvin Odum, president of Shell Oil Company, assured the subcommittee that Shell would implement any lessons learned into its own standards, and stated that while he understands the moratorium, he also understands there will be consequences.

Mr. Lamar McKay, president and chairman of BP America, expressed his sorrow and regret over the loss of life and the oil spill. He emphasized his company’s intention to comply with all government requests, and reminded the committee of BP’s decision to ignore the liability cap and pay all legitimate claims. Mr. McKay affirmed that BP is striving for transparency, and is taking an “all of the above” approach to solving the spill in coordination with federal agencies and the administration.

Chairman Markey questioned the effectiveness and pertinence of the oil companies’ response plans. Not only do they all look very similar, he argued, they contain some of the same errors. Markey questioned the panel about these plans, asking dryly why they listed a plan for walruses, saying, “As I’m sure you know, there are no walruses in the Gulf Coast, and there haven’t been for three million years.” To further prove the inadequacy of the spill response plans, Chairman Markey inquired why a telephone number is listed for a specialist who had died five years ago. The panelists could only reply that science does not die when a scientist does, before acquiescing that the plans do need updating.

Representative Griffith countered the frustration over the response plans by reminding the committee that similar plans should be expected, given that these companies are some of the best in the industry, and in turn have the best technology, which translates into similar spill response plans.

Members questioned the witnesses from Shell, Exxon Mobil, ConocoPhillips and Chevron about what BP did incorrectly and what they would have done differently had they been in that situation. When Mr. Tillerson informed Congressman Stupak that he would have activated Exxon’s response plan, Stupak expressed exasperation over the similarity of plans and the amount of oil the plans claim to be able to handle. Mr. Tillerson could only reply that no company is equipped to deal with this kind of disaster, and that the Minerals Management Service (MMS) and the Coast Guard provide the methodology for calculating the numbers. Mr. Watson said Chevron would not have had this issue because its employees exercise “stop work authority,” which he defined as the right and responsibility of every employee, regardless of position, to stop an operation if he or she sees something that is not right.

Ranking Member Upton asked the witnesses which region has the highest safety standards for offshore drilling. While Mr. Tillerson maintained that standards are not as important as personnel competency, Mr. Mulva answered that the North Sea—the United Kingdom and Norway—have the highest standards. Mr. Odum argued that the United States has the best standards, and only small specific regulations vary from country to country.

The witnesses informed the committee, at Representative Shadegg’s (R-AZ) request, that their companies have offered all of their help and technology to BP. They stated that they do not know of any ways to stop the spill that have not already been tried.

The oil executives made it clear to the committee that if the moratorium continues for an extended period of time, they will have no choice but to move rigs to other areas of the world to keep up production and meet petroleum demands. Mr. Watson, in response to Full Committee Ranking Member Barton’s query about redeployment of rigs, stated that Chevron will lose about $1 million each day that the rigs sit idle in the Gulf of Mexico. Mr. Tillerson said Exxon Mobil would also need to move elsewhere to work. When asked by Representative Sullivan (R-OK), Mr. Odum informed the committee that he believes the moratorium will not help anything, saying that America will need oil for decades. Mr. Mulva added that the removal of the offshore drilling industry would result in loss of jobs and increasing concern for national security due to dependence on imported oil.

Mr. McKay, president of BP America, received special attention from the committee. Mr. McKay maintained that BP is pushing for transparency and working with the administration and with other federal agencies throughout the process of cleaning up the spill. Despite demands from Representative Peter Welch (D-VT) and Ranking Member Upton, Mr. McKay refused to give consent to start an escrow account for oil spill response. Despite prodding from Chairman Markey, he would not apologize for his company’s “incompetency in reporting flow rates,” as Chairman Markey phrased it. Instead, he expressed his sorrow for the lives lost and his regret for the entire spill.

Representative Anthony Weiner (D-NY) doubted BP’s willingness to pay all legitimate claims. He mused that BP’s assessment of what claims were legitimate seemed inherently contradictory. Mr. McKay repeated again and again that BP would pay all legitimate claims. He did not elaborate on the plan, and would not agree to an external agency determining the legitimacy of claims when it was suggested by Representative Anh “Joseph” Cao (R-LA).

Representative Cao demonstrated the extent of some members’ frustration with BP when he informed Mr. McKay that he should be given a knife, and following the Asian tradition Hari-Kari, commit suicide. Compared to Representative Cao’s statement, Representative Cliff Stearns (R-FL) call for Mr. McKay’s resignation seemed tame.

The hearing came to a close with increasing frustration levels, as no immediate solution to the oil spill was apparent. For testimony from committee members and the witnesses, along with a video webcast of the hearing, visit the House Energy and Environment subcommittee hearing web page, located on the House Energy and Commerce web site.

-EH

House Committee on Natural Resources Subcommittee on Insular Affairs, Oceans and Wildlife Hearing on “Ocean Science And Data Limits In A Time Of Crisis: Do NOAA And The Fish And Wildlife Service Have The Resources To Respond?”
June 15, 2010

Witnesses
Panel 1
David Kennedy
Acting Assistant Administrator, National Ocean Service, National Oceanic and Atmospheric Administration
Marcia McNutt
Director, U.S. Geological Survey
Jonathan Coddington
Associate Director for Research and Collections, National Museum of Natural History, Smithsonian Institution
Merv Fingas
Committee on Oil in the Sea, National Research Council

Panel 2
Chris Reddy
Director, Coastal Ocean Institute, Woods Hole Oceanographic Institution
Robert Weisberg
Professor, College of Marine Science, University of South Florida
Valerie Ann Lee
President, Environment International Ltd.
Denise Reed
Professor, Department of Earth and Environmental Sciences, University of New Orleans
Christopher D'Elia
Professor and Dean, School of the Coast and Environment, Louisiana State University

Committee Members Present
Madeleine Bordallo, Chairwoman (D-GU)
Bill Cassidy, Ranking Member (R-LA)
Carol Shea-Porter (D-NH)
Dale Kildee (D-MI)
Gregorio Sablan (D-MP)
Robert Wittman (R-VA)
John Fleming (R-LA)

Other Members Present
Gus Bilirakis (R-FL)

The House Natural Resources Subcommittee on Insular Affairs, Oceans and Wildlife met to discuss whether the federal agencies, including the National Oceanic and Atmospheric Administration (NOAA) and the Fish and Wildlife Service (FWS), have the necessary resources to respond to the crisis in the Gulf of Mexico and oversee restoration efforts. Chairwoman Madeleine Bordallo (D-GU) acknowledged that the lack of investment in ocean sciences has hindered response efforts. Ranking Member Bill Cassidy (R-LA) raised many questions, including: “Why haven’t we learned anything from previous spills?” and “What haven’t dispersants been tested in deepwater?” He also lamented the fact that the academic community has not been given the chance to help or provide input.

David Kennedy, acting assistant administrator of the National Ocean Service at NOAA, and Marcia McNutt, director of the U.S. Geological Survey (USGS), outlined what their agencies have been doing since the spill. They also stressed the need for immediate and long term research. Kennedy noted that “strong science is critical to effective decision making and to minimize the ecological and economical impacts from, and to mitigate the effects of, oil spills on coastal and marine resources and associated communities.” McNutt said that understanding the physical properties that control the oil’s movement and enhanced observations of the Gulf to track the movement of the slick and underwater plumes is essential.

Jonathan Coddington, associate director at the National Museum of Natural History, added that baseline data on the pre-spill environment will be essential to determine the impacts of the spill, but the time to gather this data is quickly running out. Chris Reddy of the Woods Hole Oceanographic Institution echoed this sentiment, calling on NOAA to make collecting evidence from the “crime scene” a high priority.

Of particular importance was whether budget cuts and downsizing at federal agencies are hindering response efforts. Kennedy acknowledged that, at the moment, NOAA is relying on additional funding from the Unified Command, the joint response organization that includes BP, Transocean and various federal agencies, which is not a permanent or long term source of funding. NOAA has also brought about 10 people out of retirement and has significantly shifted their workforce to effectively respond to the ongoing spill. Kennedy said that developing a 3D trajectory model, an essential tool in predicting the movement of the spill, has been slowed down by a lack of funding.

Another set of questions focused on the lack of preparation and denial that an accident like this could occur. Robert Wittman (R-VA) asked Kennedy and McNutt, “What directed both of your agencies to say, ‘You know, we’re not going to put any more resources to understand what a catastrophic spill may look like in a deepwater area.’?” Kennedy responded that the Oil Pollution Act of 1990 (H.R.1416) was effective at preventing large oil spills, and without the media attention and momentum that a large event provides, there was no reason to think an event like this could happen or there was reason to study it. McNutt highlighted the USGS’s vigorous hazards program, stating that industry is usually very interested in being prepared for hazards such as earthquakes and floods. However, according to McNutt, the oil industry has never acknowledged that deepwater drilling is hazardous and has not been willing to cooperate with a hazards preparation program.

Ranking Member Cassidy and John Fleming (R-LA) questioned why there were no lessons learned from past spills that could have provided the agencies with a clear plan of action. Valerie Lee, president of Environment International Ltd, echoed this sentiment, likening the response plan to “building a fire truck in a fire.” Kennedy stressed that we have learned a lot about marsh clean up from past spills, but every spill is unique. For example, weathered oil acts differently than fresh oil, crude is different that processed oil, salt water poses different challenges than fresh water, etc.

Since the spill began on April 20, the Unified Command has stated that the rate at which oil is flowing into the Gulf is not important because they are responding to a worst case scenario. Gus Bilirakis (R-FL) and Bordallo wanted to clarify whether the flow rate is important, or negligible. There was consensus from the witnesses that the flow rate absolutely matters. McNutt, who led a task force to estimate the flow rate, said that it is important to know the flow rate so that we can make sure all oil is accounted for in clean up. Reddy agreed, stating that McNutt’s estimate is robust. He also said that Woods Hole researchers were never contacted by BP after they offered to take the measurements to calculate a flow rate.

Dispersants have been used heavily since the spill began, including in the sub-sea. In response to Cassidy’s questions about dispersants research, Merv Fingas from the National Research Council Committee on Oil in the Sea stated that sub-sea dispersant use was not envisioned. Fingas expressed his concerns about sub-sea use of dispersants and his belief that there are clouds of “chocolate mousse” in the sub-sea. Kennedy refuted this claim, stating that the majority of the oil in the sub-sea is dispersed.

Bordallo asked whether this dispersed oil effects fish and other sea creatures. Christopher D'Elia, a professor at Louisiana State University, explained that measuring the effects is difficult because you cannot constrain the dose or exposure time and the dispersed oil can have different effects depending on the life stage of the fish.

The subcommittee expressed concerned that the federal agencies and BP are not doing enough to engage the academic community and, at worst, are ignoring their offers of help. Professor Robert Weisberg of the College of Marine Science at the University of South Florida stressed the importance of the academic community, stating, “We must marshal all the talent and resources that exist to deal with the environmental crisis at hand…The academic community has an essential role in bolstering the resources available to NOAA and the FWS, and the agencies cannot do this by themselves.” Professor Denise Reed agreed, saying that university researchers are ready to help. Cassidy acknowledged that local researchers and academics will be the ones who continue to research the Gulf over the next years and decades, so they should be actively engaged now.

Cassidy worried that data was not being shared between researchers or being made available to the public. Weisberg and Reed testified that Unified Command has not made data available, although Reed acknowledged that the web site www.geoplatform.gov is working on posting data.

The subcommittee also considered the importance of federal funding in academia’s ability to respond to the spill and provide valuable data and insight. Dale Kildee (D-MI) offered his support to the witnesses and the research community, stating, “Research itself and the funding of research is very important…The more we know about the Earth…what it’s made up of, what it’s various living organisms can do, the more that can help us in addressing problems.” In response to Bordallo and Cassidy’s questions, D’Elia suggested NOAA implement a rapid grant program, like the one at the National Science Foundation. Cassidy and the other subcommittee members were very supportive of this idea and promised to see it forward.

Testimony from the chair, ranking member, and panelists can be found here, as well as a video archive of the entire hearing.

-EB

House Natural Resources Subcommittee on Insular Affairs, Oceans and Wildlife Hearing on “Our Natural Resources at Risk: The Short and Long Term Impacts of the Deepwater Horizon Oil Spill.”
June 10, 2010

Witnesses
Panel 1
David Westerholm
Director, Office of Response and Restoration, National Oceanic and Atmospheric Administration
Jane Lyder
Deputy Assistant Secretary, Fish and Wildlife and Parks, Department of the Interior
Robert J. Barham
Secretary, Louisiana Department of Wildlife & Fisheries
Timothy J. Ragen
Executive Director, Marine Mammal Commission

Panel 2
Brenda Dardar Robichaux
Principal Chief, United Houma Nation
Aaron Viles
Campaign Director, Gulf Restoration Network
Michael Fry
Director for Conservation Advocacy, American Bird Conservancy
Carys Mitchelmore
Associate Professor, University of Maryland Center for Environmental Science Chesapeake Biological Laboratory
Mike Voisin
CEO, Motivatit Seafoods
David Cresson
Executive Director and CEO, Coastal Conservation Association Louisiana

Panel 3
John Williams
Executive Director, Southern Shrimp Alliance
Ryan Lambert
Cajun Fishing Adventures
Joanne McDonough
Nature Tourism Specialist, Gulf Shore Convention and Visitors Bureau
Anne Rolfes
Executive Director, Louisiana Bucket Brigade

Committee Members Present
Madeleine Bordallo, Chairwoman (D-GU)
Bill Cassidy, Ranking Member (R-LA)
Diana DeGette (D-CO)
Ron Kind (D-WI)
Lois Capps (D-CA)
Pedro Pierluisi (D-PR)
Donna Christensen (D-VI)
Carol Shea-Porter (D-NH)
Dale Kildee (D-MI)
Don Young (R-AK)
Robert Wittman (R-VA)
John Fleming (R-LA)

Other Members Present
Ben Luján (D-NM)
Joseph Cao (R-LA)
Charles Boustany (R-LA)
Gus Bilirakis (R-FL)

The House Natural Resources Subcommittee on Insular Affairs, Oceans and Wildlife met to discuss the short and long term impacts of the Gulf oil spill on the plants, fish and animals in the region. Chairwoman Madeleine Bordallo (D-GU) stressed that they need to consider the impacts on the natural environment and the local communities that depend heavily on commercial and recreational fishing. Ranking Member Bill Cassidy (R-LA) echoed this sentiment, adding that the government has the power to mitigate or worsen the effects on the communities. He urged the subcommittee not to have any “knee jerk” reactions that compromise the future of offshore drilling, something so economically important to states like Louisiana.

David Westerholm, the director of the Office of Response and Restoration at the National Oceanic and Atmospheric Administration (NOAA), spoke about NOAA’s role in the response efforts following the April 20 explosion of the Deepwater Horizon rig, and the continuing oil spill. He stated, “NOAA is fully mobilized and working tirelessly to lessen the impacts, and will continue to do so until the spill is controlled, the oil is cleaned up, the natural resource damages are assessed, and the restoration is complete.” Bordallo worried that because of downsizing, NOAA was not able to effectively respond to this disaster. Dale Kildee (D-MI) asked, with hindsight, what changes would have been helpful to have in NOAA’s response plan. Westerholm acknowledged that NOAA could have been more prepared to respond to a sub-sea spill.

Jane Lyder of the Fish, Wildlife and Parks department at the Department of the Interior, Robert Barham from the Louisiana Department of Wildlife & Fisheries, and Timothy Ragen from the Marine Mammal Commission spoke of the impacts on the wetlands, migratory birds and sea life. Lyder stressed that the long term impacts on the food chain are unknown and warrant more research. She reminded the subcommittee that because the oil will potentially remain in the wetlands for years, bird and fish reproduction will be impacted for a long time. Ragen spoke of the effects of oil and dispersants on marine mammals, noting that while they survived short term exposure, the long term effects are unknown.

One thing troubling the subcommittee is that very little research has been done on the effects of dispersants and dispersed oil, especially in the sub-sea. Cassidy questioned Westerholm and Lyder about the lack of research in these areas, especially since the National Research Council recommended these areas be studied in 2003. Westerholm assured Cassidy that these recommendations were not ignored and explained that a lack of funding and regulations that make releasing oil at depth difficult (even for scientific purposes) impeded this research.

Cassidy also asked what we learned from the 1979 Ixtop oil spill off the coast of Mexico and the 1997 pipeline spill in Lake Barre, Louisiana. Cassidy noted that the fisheries in Mexico recovered reasonably well, as did the marshes in Lake Barre. Both Westerholm and Barham noted that there was almost no research done after the Ixtop spill and no comparisons can be drawn between the current spill and the Lake Barre spill. Barham stated, “I don’t think there’s a lot of comparison between them…That would have been processed oil for one thing and that was in a very enclosed environment…This is spread across a whole system, you’re talking about a whole food chain potentially impacted by this.”

Of particular interest was the use of dispersants and their effects on sea life. Barham stated that by using dispersants meant for use on the surface in the whole water column, “BP conducted an experiment that had never been done before.”  He went on to say, “One has to suspect that their position was ‘out of sight, out of mind.’… If it didn’t appear on the satellite photograph, a lot of folks would say, ‘Well, it doesn’t look like it’s that bad to me.’” Barham lamented that BP had failed to give the Louisiana Department of Wildlife & Fisheries the composition of the dispersant Corexit. Because they don’t have this information, they cannot test seafood for traces of dispersants.

Carys Mitchelmore, associate professor at the University of Maryland Center for Environmental Science Chesapeake Biological Laboratory and a specialist in dispersants’ effects on sea life, agreed that BP’s use of dispersants in the sub-sea is experimental. She stressed that the effects on wildlife may be underestimated because of disruptions in the food chain. The organisms most at risk are the plankton at the bottom of the food chain, who can mistake droplets of oil for food. Therefore, the dispersants may have negative effects on the birds and fish they are meant to protect in the first place. She also noted that while the dispersants may not be harmful, when combined with oil they are much more toxic.

Diana DeGette (D-CO) likened the use of dispersants to “trading the devil we know for the devil we don’t know.” She asked the panel whether anyone can conclude that using dispersants is less or more harmful that not using them. Westerholm called the use an “environmental tradeoff” and said that there is not consensus on this issue. As of now, the decision on whether to use dispersants is made on a day to day basis.

Another technique being used to protect the shores and marshes is the construction of 6-foot high sand berms in front of the shore. According to Barham, the state of Louisiana asked for permits to build 128-miles of berms, and recently received permits from the Army Corps of Engineers and funding from BP to build 45-miles of them. The targeted berms will provide protection for the most ecologically sensitive stretches of shoreline. DeGette stressed the importance of these berms and urged the subcommittee to do anything in their power to make sure there are no hold ups in their construction.

The hearing also focused on the short and long term economic impacts of the oil spill. Brenda Dardar Robichaux, principal chief of the United Houma Nation, testified that this spill is the greatest disaster their community has ever faced. Many of the Houma citizens rely directly on fishing or tangentially in areas like net making. She said that the older generation has barely any education because of former discriminatory laws and have no other prospects for employment. The Houma Nation does not receive any federal emergency funds because they are not officially recognized.

The communities that rely on fishing (both recreational and commercial) are especially at risk. Barham warned that there will be a ripple effect through the coastal economy, affecting fisherman, their suppliers, restaurant owners, bait shops, and marinas. He said that while BP is responding to claims, the process is very slow, and the checks will not come with any regularity.

President Obama’s controversial 6-month moratorium on exploratory deepwater oil and gas wells is also affecting the coastal economies. Charles Boustany (R-LA) called the moratorium “arbitrary and irresponsible,” saying it will cost the state of Louisiana millions of dollars.

Testimony from the chair, ranking member, and panelists can be found here, as well as a video archive of the entire hearing.

-EB

House Science & Technology Energy and Environment Subcommittee Hearing on "Deluge of Oil Highlights Research and Technology Needs for Effective Cleanup of Oil Spills”
June 9, 2010

Witnesses
Panel 1
Mr. Douglas Helton
Incident Operations Coordinator, National Oceanic and Atmospheric Administration
Dr. Albert Venosa
Director of Land Remediation and Pollution Control, Environmental Protection Agency
Captain Anthony Lloyd
Chief, Office on Incident Management and Preparedness Chief, U.S. Coast Guard
Ms. Sharon Buffington
Engineering and Research Branch Chief, Minerals Management Service

Panel 2
Dr. Samantha Joye
Professor, University of Georgia
Dr. Nancy Kinner
Co-director, Coastal Response Research Center at the University of New Hampshire
Dr. Jeffrey Short
Pacific Science Director, Oceana
Dr. Richard Haut
Senior Research Scientist, Houston Advanced Research Center
Mr. Kevin Costner
Partner, Ocean Therapy Solutions

Committee Members Present

Brian Baird, Subcommittee Chairman (D-WA)

Ralph M. Hall, Full Committee Ranking Member (R-TX)

Bart Gordon, Full Committee Chairman (D-TN)

Vernon J. Ehlers (R-MI)

Lynn C. Woolsey (D-CA)

Judy Biggert (R-IL)

Ben R. Lujan (D-NM)

Mario Diaz-Balart (R-FL)

Paul D. Tonko (D-NY)

Pete Olson (R-TX)

Eddie Bernice Johnson (D-TX)

Brian P. Bilbray (R-CA)

Jim Matheson (D-UT)

Dana Rohrabacher (R-CA)

Lincoln Davis (D-TN)

 

John Garamendi (D-CA)

 

Suzanne M. Kosmas (D-FL)

 

Kathy Dahlkemper (D-PA)

 

On June 9, 2010, the Energy and Environment Subcommittee of the House Science & Technology Committee held a hearing to identify research and technology needs for oil spill cleanup in light of the April 20th Deepwater Horizon oil spill. Subcommittee Chairman Brian Baird (D-WA) opened the hearing by stating that he was frustrated by the Gulf oil spill and the lack of advancement in cleanup technology, adding that “we’re using essentially the same tools in the Gulf as we were using in 1989 in Prince William Sound in Alaska.” He noted that there has been some progress in oil spill clean up legislation, taking a moment to briefly thank Representative Lynn Woolsey (D-CA) for her sponsorship of the Federal Oil Spill Research Program Act (H.R.2693) in 2009.

Full Committee Ranking Member Ralph Hall (R-TX) voiced his support for continued offshore drilling and called for federally funded research and development to help industry drill responsibly and more effectively clean water and land following spills. Hall noted that “it’s much more desirable to prevent a spill than to deal with the aftermath of one.”

Full Committee Chairman Bart Gordon (D-TN) noted that the Energy and Environment subcommittee held the first hearing examining the scientific and technological tools needed to clean up the ongoing oil spill. He declared that “we must push the envelope of research and technology to learn how better to respond to these incidents.”

Mr. Douglas Helton, Incident Operations Coordinator for the Office of Response and Restoration within the National Oceanic and Atmospheric Administration (NOAA), affirmed that the research priorities from past hearings are still current. Helton indicated that there are three primary roles NOAA plays during spills: providing science advice to the Coast Guard, conducting damage assessments, and representing the Department of Commerce in spill response. He concluded with a reminder that the public has high expectations of the technology, and more research is needed to meet those expectations.

Captain Anthony Lloyd, Chief of the Office of Incident Management and Preparedness for the U.S. Coast Guard, explained that the Coast Guard has led the effort in oil spill response since 1968. Lloyd emphasized the need for a team based approach to spill response, declaring that collaboration ensures progress.

Ms. Sharon Buffington, Chief of the Engineering and Research Branch of the Minerals Management Service (MMS), explained that while MMS has made advances in spill cleanup research through the Ohmsett testing facility, a 600 foot long test tank used for full-scale spill response experiments, additional research is necessary.

Dr. Albert Venosa, Director of Land Remediation and Pollution Control at the Environmental Protection Agency (EPA), supported an investment in additional research, saying scientists need to refocus their efforts, and there is a need for better understanding of spills “based on high quality and sound science.”

During the second panel, Pacific Science Director for Oceana Dr. Jeffrey Short expressed his concern that the U.S. lacked effective means to apply the technology that scientists have developed. He added that improved communication between federal agencies could bolster this.

Dr. Samantha Joye, a professor at the University of Georgia, advocated for a “big picture” perspective examining the long term impacts as well as the impacts on the coastal and marine environment.

Dr. Richard Haut, a senior research scientist at the Houston Advanced Research Center, imparted his opinion that there needs to be a focus on clean energy and balance between human and natural systems. In terms of the Gulf oil spill, he suggested a system or structure that would allow local universities to share research on the Gulf and spill response.

Dr. Nancy Kinner, co-director of the Coastal Response Research Center at the University of New Hampshire, testified that while the road of response was “paved with good intentions,” there are still many issues that need to be reviewed. Her vision included a new umbrella agency controlling the operation with input from many different parties.

The final witness, Ocean Therapy Solutions partner Mr. Kevin Costner, implied that the country has been fumbling through this environmental disaster and reminded the committee that oil is easier to clean up in the ocean than it is on land. Using the metaphor of an old lifejacket on a yacht, he emphasized that this technology should already be in place.

Baird began the questioning by expressing his concern for the country’s short attention span. He noted that spills are important while they are occurring, but not enough is done in between spills. He implied that drilling began before the full effects of offshore extraction were known. Representative Vernon Ehlers (R-MI) shared this concern, asking why there was no preparation when it seemed to him that often “anything that can go wrong will go wrong.” Venosa informed the members that it is a brand new approach, but there is always a risk-benefit assessment before beginning an operation. Buffington added that research gaps hinder full preparation, and MMS needs to examine these gaps.

Congressmen John Garamendi (D-CA), Jim Matheson (D-UT), and Mario Diaz-Balart (R-FL) questioned the failures that caused the Gulf spill. While Lloyd maintained that the response plan created after the Oil Pollution Act of 1990 was still effective, Garamendi expressed some doubts based on the current situation. Diaz-Balart intoned his disbelief that the technology was not available and tested prior to the spill. Buffington informed Matheson that the Ohmsett facility had provided training necessary for oil spill response, but added that there are lessons to be learned when Matheson mused on the effectiveness of the training and the surrounding failures of MMS.

Representatives Dana Rohrabacher (R-CA), Brian Bilbray (R-CA), and Hall brought government failures to the committee’s attention. Hall noted that the administration had not stepped in when necessary and seemed insistent on blaming the previous administration for the nation’s dependence on oil. Rohrabacher pointed out that the agenda the House Science & Technology Committee set was more focused on global warming than oil spill research, stating “we have spent 28 million dollars annually through interagency coordination on oil pollution research, at the same time we have been spending 2.5 billion dollars on global warming research.” Bilbray also pointed out that while many people are concerned with the toxicity of the dispersants being used; these dispersants are approved by the federal government, which Venosa confirmed.

Congressman Pete Olson (R-TX) asked the witnesses about other countries’ responses to oil spills. Lloyd and Buffington informed him that while other countries such as Australia, the United Kingdom, Norway, and Canada have regulations, none are as strict as the United States.

Representative Lynn Woolsey (D-CA) asked the witnesses who should be the umbrella agency in charge of spill response research and development. Helton admitted that while NOAA would be able to contribute data, the agency does not have the skill required to design better safety systems. Lloyd responded that the Coast Guard is responsible for coordinating efforts presently. In Kinner’s vision, an umbrella agency would need to be broken into two departments: one working with scientific data, and the other working on technology and implementation.

Chairman Gordon and Judy Biggert (R-IL) questioned the witnesses on the need for better communications between agencies and scientists. Kinner expressed the importance of improved communication between responders and researchers who cannot always envision the practicalities of responding during an environmental disaster. Haut explained the need for more communication online, as well as face-to-face communication. He described a balance between the two, but warned that even these two forms are not enough.

Joye and Short testified to the damages the Gulf spill had inflicted on the marine life. Short informed the subcommittee that dispersants need to be re-examined, and many have a “shaky basis.” Joye implored the committee to think not only of the coastline and wetlands, but of the marine environments as well. Since the long term effects are still unknown, she pointed out there is much more information to gather.

Costner lamented the lack of success his company has had when offering its services to spill responders, though the company’s device to separate oil from water had never been tested in a real world situation previously. Kinner, taking a cue from Joye, explained to the committee that it is a difficult call to allow untested equipment into the water during a disaster. While Baird appreciated Kinner’s perspective, he opined that Costner’s invention seemed fairly low-risk, and that testing new technology that can be considered low risk during a spill may not be a bad idea.

At the conclusion of the hearing, the committee seemed to agree that more research into spill response is necessary, and communication between all parties involved in research and response needs to be improved. For testimony from committee members and the witnesses, along with a video webcast of the June 9 hearing, visit the House Science & Technology web site.

-EH

Senate Environment and Public Works Committee Hearing on “S.3305: The Big Oil Bailout Prevention Liability Act of 2010
June 9, 2010

Witnesses
Panel 1
Robert Menendez
United States Senator (D-NJ)
Bill Nelson
United States Senator (D-FL)

Panel 2
DT Minich
Executive Director, Visit St. Petersburg/Clearwater
Mike Frenette
Captain, Venice Charter Fishing
RJ Kopchak
Cordova District Fishermen, United and Prince William Sound Science Center
Kenneth Murchison
Paul M. Hebert Law Center, Louisiana State University
Barry Hartman
Partner, K&L Gates
Ron Baron
Executive Vice President, Willis Global Energy, Willis of Texas, Inc

Committee Members Present

Barbara Boxer, Chairwoman (D-CA)
James Inhofe, Ranking Member (R-OK)
Max Baucus (D-MT)
Thomas Carper (D-DE)
Frank Lautenberg (D-NJ)
Benjamin Cardin (D-MD)
Amy Klobuchar (D-MN)
Sheldon Whitehouse (D-RI)
Jeff Merkley (D-OR)
Tom Udall (D-NM)
David Vitter (R-LA)
Christopher Bond (R-MO)
Lamar Alexander (R-TN)

The Senate Environment and Public Works Committee met to debate the “Big Oil Bailout Prevention Liability Act of 2010” (S.3305), which increases oil spiller’s liability from $75 million to $10 billion plus clean up costs. The bill was introduced by Senator Robert Menendez (D-NJ) after the April 20 explosion of the Deepwater Horizon rig and subsequent oil spill in the Gulf of Mexico. Although BP, the operator of the failed rig, has stated that it will ignore the liability cap and has promised to pay all costs, including restitution for out-of-work fisherman, many members of Congress feel that the liability cap is too low. Others feel a greater liability cap would put small oil companies out of business.

One concern about the low liability cap is that it does not encourage safe drilling. Menendez pointed out that BP makes around $94 million a day, far higher than the current liability cap. Benjamin Cardin (D-MD), co-sponsor of the bill, called the current liability cap, “no real discouragement against irresponsible behavior.” Economically, he proposed, it makes more sense to take greater risks because implementing redundancies like back-up blowout preventers costs more than $75 million.

Chairwoman Barbara Boxer (D-CA) reminded the committee of the aftermath of the 1989 Exxon Valdez oil spill in Prince William Sound, Alaska. After fighting the charges for 20 years, Exxon ended up only having to pay $15,000 to each victim of the spill, mainly fishermen. RJ Kopchak of the Cordova District Fishermen United and Prince William Sound Science Center estimated that he alone lost $650,000 of income in the years following the Exxon Valdez spill. Frank Lautenberg (D-NJ) and Amy Klobuchar (D-MN) joined Boxer in expressing fear that a low liability cap will cause the same fate for the victims of the Gulf oil spill.

DT Minich, executive director of Visit St. Petersburg/Clearwater, and Captain Mike Frenette of Venice Charter Fishing testified about the losses their businesses have incurred since the April 20 accident. Minich recalled a minor spill in Tampa Bay in 1993 which took the tourist industry 2 years to recover from. He feared that the impacts of this spill, the largest in U.S. history, could last for decades. He also pointed out that after the Exxon Valdez spill, the tourism industry received no restitution. Frenette reminded the committee that 30 percent of U.S. seafood production is in the Gulf and that fishing and recreational activities bring in billions of dollars a year.

Ranking Member James Inhofe (R-OK) warned that Congress needs to avoid making an emotional response to the Gulf spill and not use this incident to advance their political agendas. He especially disapproved of how some members and the President are using the spill to push for a cap and trade bill. He asked, “How would cap and trade, a massive energy tax on consumers, stop the spill?” He was joined by Christopher Bond (R-MO) in denouncing Menendez’s bill, asserting that it rewards big oil companies. Bond explained that because the cost of insurance would be higher if the liability cap was raised, small oil and gas companies that cannot self-insure would be forced out of the offshore drilling. He went so far as to call S.3305 “The Menendez Big Oil Monopoly Bill.”

In response to these claims, Menendez stressed that “this is not a question of small vs. big companies; this is about safe vs. unsafe companies.” He explained that any company with unsafe practices or a lack of redundant safety measures would rightly have to pay higher insurance rates, while a company with a higher safety standard would not be as risky to insure. He also pointed out that, under the current liability cap, if the recent blowout and oil spill had occurred on a rig operated by a small company only worth $500 million, then the American taxpayers would be responsible for the majority of clean up costs.

David Vitter (R-LA) introduced his own bill (S.3461), which has been endorsed by republican senators. It removes BP’s liability cap for this incident and sets up an expedited claims process for those seeking restitution from BP. Vitter and his republican colleagues insist that this bill will pass and provide immediate assistance for those in the Gulf, as well as assuring BP is held responsible. However, it only pertains to this particular incident, and leaves the $75 million liability cap for future spills.

Boxer and Menendez questioned the legality of this bill. Boxer worried that the bill provides protection for a few states, while leaving others unprotected. Menendez doubted whether it is legal because it is retroactive. In an attempted compromise, Boxer suggested adding a clause to Vitter’s bill that states that all future spills will be treated in the same manner. However, while Vitter expressed his concern that the liability cap is too low and should be raised, he stressed that that would require months of debate before it could pass. He maintained that passing his bill is the only way to ensure immediate assistance to the Gulf.

Barry Hartman, partner at K&L Gates, and Ron Baron, executive vice-president of Willis Global Energy, consider raising the liability cap a moot point. They maintain that there are other laws that cover liability, including individual state’s laws (which do not have a liability cap) and the Alternative Fines Act. Hartman also doubted if an unlimited liability cap could be technically possible because companies must show that they have the funds available.

Testimony from the chair, ranking member, and panelists can be found here, as well as a video archive of the entire hearing.

-EB

House Natural Resources Committee Hearing on “Outer Continental Shelf Oil and Gas Strategy and Implications of the Deepwater Horizon Rig”
May 27, 2010

Witnesses
Panel 1
Representative John Garamendi (D-CA)
Member of Congress

Panel 2
Lamar McKay
Chairman and President, BP America, Inc
Steven Newman
President and CEO, Transocean Ltd.

Panel 3
Randall Luthi
President, National Ocean Industries Association
Jack Gerard
President and CEO, American Petroleum Institute
Michael Hirshfield
Senior Vice President, North America and Chief Scientist, Oceana
Michelle Michot Foss
Head of the Center for Energy Economics and Chief Energy Economist, University of Texas

Committee Members Present

Nick Rahall, Chair (D-WV)

Joe Baca (D-CA)

Doc Hastings, Ranking Member (R-WA)

Stephanie Herseth Sandlin (D-SD)

Dale Kildee (D-MI)

John Sarbanes (D-MD)

Eni Faleomavaega (D-AS)

Carol Shea-Porter (D-NH)

Frank Pallone (D-NJ)

Niki Tsongas (D-MA)

Grace Napolitano (D-CA)

Don Young (R-AK)

Rush Holt (D-NJ)

John Duncan (R-TN)

Raúl Grijalva (D-AZ)

Jeff Flake (R-AZ)

Madeleine Bordallo (D-GU)

Louie Gohmert (R-TX)

Jim Costa (D-CA)

Doug Lamborn (R-CO)

Martin Heinrich (D-NM)

Adrian Smith (R-NE)

George Miller (D-CA)

Robert Wittman (R-VA)

Edward Markey (D-MA)

Paul Broun (R-GA)

Peter DeFazio (D-OR)

John Fleming (R-LA)

Donna Christensen (D-VI)

Mike Coffman (R-CO)

Diana DeGette (D-CO)

Jason Chaffetz (R-UT)

Ron Kind (D-WI)

Cynthia Lummis (R-WY)

Lois Capps (D-CA)

Tom McClintock (R-CA)

Jay Inslee (D-WA)

Bill Cassidy (R-LA)

 

 

Other Members Present

 

Ben Luján (D-NM)

 

The House Natural Resources Committee met to discuss what implications the April 20 Deepwater Horizon rig explosion and the subsequent oil spill in the Gulf has for the future of outer continental shelf (OCS) oil and gas drilling. Chairman Nick Rahall (D-WV) began by defending the President’s response to the spill and demanding more oversight from the Department of the Interior and the Minerals Management Service. Ranking Member Doc Hastings (R-WA) expressed his concern that President Obama is not focused on the task of stopping the spill, but is instead acting hastily to stop OCS drilling altogether. He stressed the need for American made energy, stating, “The leak must be stopped, the oil cleaned up, and then we can get to the bottom of exactly what happened so that informed educated and permanent reforms can be put in place to ensure that American drilling is the safest in the world and a spill like this won’t happen in the future.”

Congressman John Garamendi (D-CA) introduced the West Coast Protection Act (H.R. 5213), which would impose a permanent moratorium on OCS oil and gas drilling off the West Coast. Garamendi insisted that “what can go wrong, will go wrong,” and that the economies of California and Oregon depend on their coastal environments. Bill Cassidy (R-LA) reprimanded Garamendi and fellow moratorium supporters for their “emotional response,” stating that most spills occur from tankers, not rigs. John Fleming (R-LA) seconded Cassidy’s remarks, expressing his disappointment that people are using this disaster to advance a political agenda. However, Martin Heinrich (D-NM), Lois Capps (D-CA), Jay Inslee (D-WA), Frank Pallone (D-NJ) and Diana DeGette (D-CO) lent their support to Garamendi and the call for a moratorium on OCS drilling.

Also present were Lamar McKay, Chairman and President of BP America, Inc, and Steven Newman, President and CEO of Transocean Ltd. Both McKay and Newman ensured the committee that they are doing everything they can to stop the leak and mitigate the environmental impacts of this “horrendous accident.” McKay insisted that they will learn from this event and that OCS drilling will be safer in the future because of it. Newman reaffirmed the need for an independent investigation to determine exactly what went wrong.

Throughout the hearing, committee members questioned the leaders of BP and Transocean about what happened in the hours and days before the rig explosion that could have caused the event, or what could have been done to prevent it. Of particular interest was an argument between a BP employee and a Transocean employee on the rig the day of the explosion. Both McKay and Newman insisted they knew nothing about this argument and said it would be looked at in the investigation. When pressed by Peter DeFazio (D-OR), both men admitted that they have not spoken personally with the men on the rig, but that their investigative teams have.

Other questions focused on the actual rig construction. Inslee questioned why only 6 centralizers were used prior to cementing, when normally 20 are used. DeGette asked why a cement bond log test was not done and whose decision it was to move forward without doing this test. Cassidy asked whether there were warning signs in the form of pressure readings hours before the explosion and why seawater was used in the place of heavier drilling mud in the rig construction. Madeleine Bordallo (D-GU) speculated that BP and/or Transocean were rushing the construction of the rig because they completed in 2 days what should have taken 8 days according to their April 18 permit. To all of these questions and accusations, McKay insisted standard procedures were being followed, and, after a thorough investigation, these questions will be answered.

In response to Ranking Member Hastings’ and Jim Costa’s (D-CA) questions about who had the authority to stop work on the rig, Newman explained that every Transocean employee has the “opportunity and obligation to stop work if it is unsafe.” According to McKay, under BP’s operating procedures, any BP employee on a rig also has the authority to stop the work being done if there are signs of trouble.

While McKay insisted that BP has changed leadership and is more committed to safety now than ever before, Ben Luyán (D-NM) speculated that, according to BP, “an occasional fatal accident is part of doing business.” George Miller (D-CA) suggested that this accident and past accidents, including a 2005 refinery explosion in Texas City, Texas that killed 15 people, show that BP tolerates deviations from safety practices. Carol Shea-Porter (D-NH) and Ron Kind (D-WI) joined in this condemnation of BP’s safety record, insisting that BP was cutting corners to save money.

Despite accusations that BP is negligent when it comes to following safety procedures, many committee members do not wish to see an end to OCS drilling. Doug Lamborn (R-CO) cautioned Congress against being too quick to rush to judgment and that they should wait for the facts before taking a stance on the future of OCS drilling. Hastings reminded the committee that there are 36,000 OCS wells and that this is the first accident since 1969.

Since the explosion over 6 weeks ago, BP, with the assistance of many federal agencies, has tried without success to stop the flow of oil into the Gulf, to the frustration of many members of Congress. Martin Heinrich (D-NM) expressed this frustration when he asked, “Why wasn’t there a ready-to-go Plan B, Plan C, Plan D, the next day? Why did it look like you were winging it days, and even weeks into this accident?” Rush Holt (D-NJ) called the lack of planning for a worst case scenario “arrogant” and admonished BP for “experimenting for the last 6 weeks.” While McKay insisted that there were plans in place, he explained that the exact configuration of the accident could not be anticipated and planned for.

In addition to stopping the continuing flow of oil, there is the problem of cleaning up the Gulf and the affected shorelines after the largest oil spill in U.S. history. In response to questions from Louie Gohmert (R-TX) and John Duncan (R-TN), McKay explained that BP’s surface response plan was enacted immediately to mitigate the damage and that the affected marshes could possibly be cleaned with hoses, sending the oil back out to the Gulf to be skimmed. He conceded that, in some cases, the best thing to do is to leave the marshes alone and let them recover naturally.

In their clean-up efforts, millions of gallons of dispersants have been used to break up the oil in the subsurface and on the surface. Last week, the Environmental Protection Agency (EPA) told BP to find a less toxic alternative to the most widely used dispersant, Corexit 9500. Congressman DeFazio questioned why BP chose to use Corexit 9500, even though it is 9 times more toxic and 5 times less effective than other dispersants available. McKay insisted that Corexit 9500 is the most effective dispersant readily available, but that they would follow the EPA’s instructions.

While this hearing was taking place, a panel of government scientists tasked with estimating the flow rate of the spill, announced that oil is spilling at a rate of 12,000-19,000 barrels per day. This is far higher than BP’s estimate of 5,000 barrels per day. Edward Markey (D-MA) accused BP of underestimating the spill rate because, in terms of liability, they have a financial incentive to do so. McKay thoroughly denied this claim, insisting that BP has only ever quoted government figures on the spill rate.

BP has pledged to pay for the entire cost of cleaning up the spill and any repercussions it has on the local economies, despite the liability cap of $75 million. However, according to Newman, Transocean has stuck to the liability cap as instructed by their insurers. When asked by Cassidy, McKay also committed to helping the families of those who died in the rig explosion. Despite this promise, McKay was hesitant to answer Raúl Grijalva’s (D-AZ) question about whether Congress should eliminate the liability cap altogether.

A summary of the third panel of the hearing may be available at a later date. Testimony from the chair, ranking member, and all panelists can be found here.

-EB

House Natural Resources Committee Hearing on “Outer Continental Shelf Oil and Gas Strategy and Implications of the Deepwater Horizon Rig”
May 26, 2010

Witnesses
Panel 1
Ken Salazar
Secretary of the Interior
David Hayes
Deputy Secretary of the Interior
Panel 2
Mary Kendall
Acting Inspector General, Department of the Interior
Panel 3
Rear Admiral James Watson
Deputy Commander, Coast Guard Atlantic Area Command
Dr. Jane Lubchenco
Chief, National Oceanic and Atmospheric Administration
S. Elizabeth Birnbaum
Director, Minerals Management Service

Committee Members Present

Nick Rahall, Chairman (D-WV)

Doc Hastings, Ranking Member (R-WA)

George Miller (D-CA)

John Fleming (R-LA)

Don Young (R-AK)

Louie Gohmert (R-TX)

Dale Kildee (D-MI)

Rob Bishop (R-UT)

Frank Pallone, Jr. (D-NJ)

Bill Shuster (R-PA)

Grace Napolitano (D-CA)

Doug Lamborn (R-CO)

Rush Holt (D-NJ)

Robert Wittman (R-VA)

Raul Grijalva (D-AZ) 

Paul Broun (R-GA)

Jim Costa (D-CA)

Mike Coffman (R-CO)

Martin Heinrich (D-NM)

Dan Boren (D-OK)

Edward Markey (D-MA)

Bill Cassidy (R-LA)

Donna Christensen (D-VI)

Jeff Flake (R-AZ)

Ron Kind (D-WI)

Cynthia Lummis (R-WY)

John Sarbanes (D-MD)

 

Madeleine Bordallo (D-GU)

 

Lois Capps (D-CA)

 

Diana DeGette (D-CO)

 

Peter DeFazio (D-OR)

 

Ben Ray Luján (D-NM)

 

The House Natural Resources Committee met to investigate what factors lead to the Deepwater Horizon oil spill on the Gulf coast and what actions are being taken to clean up the spill in the first of at least a seven part hearing on Wednesday, May 26. Chairman Nick Rahall (D-WV) began the hearing by saying that although the “blame game was in full force,” he hoped to use the testimony presented in the hearing to better understand the issue at hand. Rahall stated that one purpose of the hearing was to help determine the future of offshore oil drilling. Ranking Member Doc Hastings (R-WA) added his sentiments as well, explaining that the committee would be looking for answers to such questions as: what was done improperly, was there an immediate response, was everything done that could be done, and what are the impacts of the spill on the environment, the wildlife, and the community.  Hastings noted the need to investigate failures within the Minerals Management Service (MMS).

Interior Secretary Ken Salazar emphasized in his statement that the oil spill on the Gulf coast is the top priority for the Interior Department, and stated repeatedly that the response to this spill is the “single largest response to any spill in the United States.” Salazar informed the committee that BP, the company responsible for the spill, was not hiding behind a liability cap, and will pay for damages and the cost of the clean up. In regard to MMS, Salazar reminded the Natural Resources Committee that many of the infractions within the organization occurred under the previous administration, and while progress has been made, there are still more problems within the agency that need to be solved. He closed by emphasizing the need for “organic legislation” to deal with MMS, an agency that collects royalties and provides oversight for all offshore resources.

Acting Inspector General Mary Kendall informed the committee that the previously identified weaknesses within MMS were a result of the inherent conflicts within the agency, and she is concerned about the ease for MMS employees to move into industry jobs. She stated that the individuals involved in the exchange of gifts were childhood friends, and that many of the industry employees at MMS are good employees.

Rear Admiral James Watson, Deputy Commander of the Coast Guard Atlantic Area Command, explained that the Coast Guard has been working around the clock and has been forced to take extraordinary measures because of the complex and growing issues. He stated that the Coast Guard’s objectives are to stop the leak, fight the leak offshore, protect environmentally fragile areas, and mitigate the environmental impact of the spill.

Dr. Jane Lubchenco, chief of the National Oceanic and Atmospheric Administration (NOAA), followed Watson. She updated the committee on the current Gulf coast situation, explaining that according to oil trajectory maps, the oil should go no further than the Mississippi Delta, and remain in the Gulf of Mexico. Furthermore, NOAA is monitoring the seafood from the area, and that the data needed to understand the scientific and environmental impact of the spill is being collected.

The final witness, Elizabeth Birnbaum, director of the MMS, stated simply that the goal for MMS was to stop the flow immediately, and in order to do so, MMS is overseeing BP’s efforts to stop the oil leak. As to the issues within MMS, Birnbaum insisted that the agency be split into three groups in order to counteract the conflicts within the organization.

Over the course of the hearing it became clear that the House Natural Resources Committee has two primary concerns: efforts to stem the oil spill and efforts to address the failures of the MMS to provide proper oversight and avoid future catastrophic spills. Representative Jeff Flake (R-AZ) suggested we have not learned anything from previous spills, and Representative Rush Holt (D-NJ) thought those in control of the spill response had no answers, “or even what questions to ask.”  Congressman George Miller (D-CA) expressed his dismay at seeing the same basic response towards an oil spill, with the same methods and technology, as he saw in Santa Barbara in 1969. Salazar responded to these concerns by stating that a group of scientists, formed in the past couple weeks, is helping to formulate a response to the oil spill, and that BP, under the administration’s directive, is pushing for transparency as the company tries to stop the leak.

When asked about NOAA’s delayed investigations of the leak, Lubchenco informed the committee that the NOAA vessels needed to be outfitted with new equipment for this purpose. Elizabeth Birnbaum, Rear Admiral Watson and Dr. Lubchenco agreed that more communication between MMS, NOAA and the Coast Guard would help to create a more efficient response as well.

The congressmen from Louisiana, Representatives Bill Cassidy (R-LA) and John Fleming (R-LA), brought the concerns for their communities to Salazar’s attention. They argued that local fishermen, along with scientists from LSU, are being ignored when they offer their services or request more information about coastal closures. Fleming asked when Louisiana would receive an answer to the proposed construction of barrier islands to protect the coastline. He expressed concern that if an answer was delayed for too long, it would be too late to take any action. Deputy Secretary of the Interior David Hayes, speaking on behalf of Salazar, could not give a definite time, but did say that it would be soon.

Representative Robert Wittman (R-VA) asked about drilling off the coast of Virginia, which is being planned through MMS, but may face delays in light of the recent oil spill. He called for better safety and planning, but still supported drilling offshore of Virginia. Representative John Sarbanes (D-MD), wanted a clean up plan for every drilling site, and called for new leases to be further examined so that no drilling would occur in an environmentally sensitive area. Salazar agreed that this was necessary, and cited the hold on drilling in Alaska to demonstrate this type of examination was already being carried out.

Representative Mike Coffman (R-CO) summed up the environmental concerns by stating that there needed to be a balance between safety, the environment and the economy. Congressman Edward Markey (D-MA) interjected that he felt the American people were growing concerned with oil companies’ “gambling with the environment in their offshore casino” and quipped that it appeared that the “drill baby, drill” mantra had turned into “spill baby spill.” He voiced his concern that although Salazar kept emphasizing BP’s desire for transparency, BP had not been straight with the American people, as exemplified by the contradictions in the amount of oil leaking each day.

The committee appeared to feel that irresponsibility within MMS contributed to the delayed response to the oil spill. The MMS has received poor publicity from this incident, and Markey even reassigned the initials of MMS to stand for “Misconduct and Mismanagement of Spills.” Representative Lois Capps (D-CA) questioned Birnbaum on the plans and technology MMS had before the spill in case there was a leak in this offshore drilling well, and lamented that the drilling technology is far more advanced than the clean up technology. Birnbaum replied that MMS has a department that conducts research, but would consider increasing the funding and research in light of the current situation. Representative Jim Costa (D-CA) followed this question by asking how MMS develops its safety operations, and whether it is true that MMS relies on the American Petroleum Institute to write safety procedures. Birnbaum explained that the safety operations are written with many different groups’ contributions in mind, and that while a small section may come from the American Petroleum Institute, it was written with other research as well. Birnbaum also implied that the correct safety procedure may not have been followed by BP during the drilling process. There is a specific procedure to follow, and the order of some of the steps in the drilling operation is being questioned. A failure to follow the standard procedure could have resulted in a destabilization of the drill, and in turn cause the leak.

The committee turned to questions involving the internal conflicts of MMS. It has been uncovered that MMS employees were caught accepting gifts (such as a private jet ride) equivalent to large monetary sums. The culture and environment within the company is something the committee focused on. Representative Cynthia Lummis (R-WY) noted that changing the atmosphere within an agency is always difficult, and recognized the progress MMS has achieved so far. Representative Dale Kildee (D-MI) asked what had been done to fix the “reprehensible” actions taken by MMS employees and reasoned that while jail serves well as punishment, it does not undo the damage. Salazar and Birnbaum both attested to increased ethics personnel, and Inspector General Mary Kendall stated that new ethics rules would be implemented. These rules would have more defined boundaries on the acceptance of gifts. Kendall also maintains that many employees of MMS are ethical and hardworking, and in relation to the plane ride, the two people in question had known each other since childhood.

Birnbaum, Salazar and Kendall indicated that MMS should be split into three separate departments, to remove conflicts of interest, ethical lapses and any problems with the effectiveness of the agency. Birnbaum stated that it is necessary to separate the conflicting goals of the agency. Salazar agreed with Birnbaum’s statement, but did make note that the actions the committee cited happened under the previous administration. When asked by Representative Louie Gohmert (R-TX) about her involvement in the reorganization of MMS, Birnbaum replied that although she had given recommendations, she would not be a part of the planning process. She said that it was important for her to be removed from the process so that new eyes could look at the situation. Birnbaum could not answer if the three new organizations would be unionized.

The House Natural Resources Committee closed with the intention of continuing the investigation in the next few weeks.  Written testimony and opening remarks from members can be found here, as well as a video archive of the entire hearing.

-EH

Senate Energy and Natural Resources Committee Hearing to Receive Testimony From the Administration on Issues Related to Offshore Oil and Gas Exploration Including the Accident Involving the Deepwater Horizon in the Gulf of Mexico
May 18, 2010

Witnesses
Ken Salazar
Secretary, Department of the Interior
David Hayes
Deputy Secretary, Department of the Interior
Wilma Lewis
Assistant Secretary for Land and Minerals Management, Department of the Interior
Liz Birnbaum
Director, Minerals Management Service

Committee Members Present
Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
Byron Dorgan (D-ND)
Mary Landrieu (D-LA)
Ron Wyden (D-OR)  
Robert Menendez (D-NJ)  
Mark Udall (D-CO)  
Maria Cantwell (D-WA)
Bernard Sanders (I-VT)
John Barrasso (R-WY)
Jeff Sessions (R-AL)
Richard Burr (R-NC)
Jim Bunning (R-KY)
Robert F. Bennett (R-UT)

The Senate Energy and Natural Resources Committee met to question officials from the Department of the Interior (DOI) and the Minerals Management Service (MMS) on the role regulatory failure played in the April 20, 2010 explosion of the oil rig Deepwater Horizon and subsequent oil spill in the Gulf of Mexico. Committee Chairman Jeff Bingaman (D-NM) called the MMS standards on offshore drilling inadequate and “worse than not having standards at all.” He further questioned what role the MMS should play in regulation and questioned its “cozy relationship” with the oil industry. Ranking Member Lisa Murkowski (R-AK) in turn speculated on how the DOI can rise from this disaster.

Interior Secretary Ken Salazar applauded the comprehensive response to the oil spill, commending the Coast Guard, President Obama and the Department of Homeland Security for their quick and thorough response. He noted that over 17,000 people and 750 vessels are working to mitigate the spill and its environmental and economic impact. He stressed that while pointing fingers will get us nowhere, there is a “collective responsibility” between the DOI, the MMS, BP, Transocean and Halliburton, and that no conclusions about who was at fault could be made without further review of the incident and the events leading up to it.

Salazar stressed the need for domestic energy reform, calling the Deepwater Horizon rig explosion a “wake up call…to move forward with a new energy future.” While he stressed the importance that domestic drilling will play in this future, he acknowledged that there are a “host of opportunities that can help us grasp this new energy future,” and that the MMS has an important role to play in the implementation of these new technologies.

In regards to the questions from Murkowski and others about the MMS’s relationship with the oil industry, Salazar assured the committee members that while there were inappropriate relationships noted as recently as 2008, those involved have been removed and under his leadership there is zero tolerance for that type of behavior. However, Salazar did note that some of the best scientific and engineering expertise is in the industry and it would be foolish not to accept input from organizations such as the American Petroleum Institute.

Senators Ron Wyden (D-OR), Jim Bunning (R-KY), and Jeff Sessions (R-AL) questioned whether the MMS adequately regulates offshore drilling, or if its enforcement of regulations was lacking. Wyden berated the MMS for not requiring BP to have an emergency plan or an environmental impact plan before drilling began, suggesting that the MMS “hasn’t done its job.” Salazar responded that while this industry is the most regulated in the world,  that does not mean there is not room for improvement. Salazar also agreed with Senator Bunning that the MMS and DOI may have gotten lax about enforcing regulations because there has not been a major offshore oil spill in decades.

In response to many committee member’s questions about how the April 20th incident happened and who was at fault, Salazar stressed that multiple groups will conduct reviews of the incident, including an independent presidential commission. Salazar said, “The facts will tell us a lot when these investigations are done…they will tell us about what happened about whether there was negligence or other culpability here and by whom, whether it was the companies, whether [it was] the inspectors, whether there were other factors that were involved.” He stressed that no blame could be laid until these reviews took place.

Senators Mary Landrieu (D-LA) and Robert Bennett (R-UT) expressed concerns that this disaster would do to the offshore oil industry what the incident at Three Mile Island did to the nuclear industry. Landrieu stated, “If there ever was an opportunity to run out the backdoor on offshore oil and gas drilling or expanded drilling this would be it.” She commended the Obama Administration for not taking this route. Salazar reiterated that while the “pause button” has been hit and no further offshore oil drilling permits will be granted until a review of the Deepwater Horizon rig explosion has been conducted, oil drilling remains a “player” in America’s energy portfolio.

Senator Bennett suggested that this incident be used as a catalyst for the DOI to consider expanding onshore drilling, especially on Utah’s public lands. Salazar stated that we need to make sure drilling is being done safely onshore as well and that it is “done in a way that respects the environment.” He repeatedly stressed the importance of pursuing other energy sources.

Senators Robert Menendez (D-NJ) and Bernard Sanders (I-VT) took the opposite view on offshore drilling. Menendez questioned whether the MMS adequately assessed the risks associated with offshore drilling and called for reopening the comment period on Obama’s plan to open the Atlantic coast to drilling. Sanders repeatedly demanded to know whether Salazar thought the risks associated with offshore drilling in the Gulf of Mexico were worth the three cents a gallon it will save the U.S. in 2030 and he called for a moratorium on all new offshore oil platforms. Salazar reiterated his position that the U.S. is dependent on oil and gas and cannot halt production.

Senators Mark Udall (D-CO) and Maria Cantwell (D-WA) pressed Salazar on the confusion about how much oil is leaking into the gulf each day. Cantwell pointed out that the Woods Hole Oceanographic Institute offered their services, but they were declined. Salazar assured the committee members that a group of scientists, including Marcia McNutt, director of the U.S. Geological Survey, are working on an independent analysis of the spill rate.

Testimony from the chair, ranking member, and panelists can be found here, as well as a video archive of the entire hearing.

-EB

Senate Energy and Natural Resources Committee Hearing to Review Current Issues Related to Offshore Oil and Gas Development
May 11, 2010

Witnesses
Panel 1
Dr. F.E. Beck
Associate Professor of Petroleum Engineering, Texas A&M University
Mr. Elmer Danenberger
Former Chief, Offshore Regulatory Program, Minerals Management Service

Panel 2
Mr. Lamar McKay
President and Chairman, BP America, Inc.
Mr. Steven Newman
President and Chief Executive Officer, Transocean Limited
Mr. Tim Probert
President, Global Business Lines; Chief Health, Safety and Environmental Officer, Halliburton

Members Present
Jeff Bingaman, Chairman (D-NM) Lisa Murkowski, Ranking Member (R-AK)
Byron Dorgan (D-ND) John Barrasso (R-WY)
Debbie Stabenow (D-MI) Jim Risch (R-ID)
Mary Landrieu (D-LA) Jeff Sessions (R-AL)
Ron Wyden (D-OR)  
Robert Menendez (D-NJ)  
Blanche Lincoln (D-AR)  
Mark Udall (D-CO)  
Jeanne Shaheen (D-NH)  
Maria Cantwell (D-WA)  

Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) called a hearing to review the April 20th offshore explosion of the oil rig Deepwater Horizon and subsequent oil spill in the Gulf of Mexico. Bingaman called the incident a “disaster that never should have happened.” He cautioned the witnesses that it is not enough “to label this catastrophic failure as an unpredictable and unforeseeable occurrence,” saying, “I don’t believe it is adequate to simply chalk what happened up to a view that accidents just happen.  If this is like other catastrophic failures of technological systems in modern history – whether it was the sinking of the Titanic, Three Mile Island, or the loss of the Challenger – we will likely discover that there was a cascade of failures: technical, human and regulatory.

Ranking Member Lisa Murkowski (R-AK) called for “decisive and correct” decision-making. Offshore drilling has risks to marine life, oceans, and people; however Murkowski pointed out that the U.S. still needs domestic oil for economic and national security. She called on the government and industry to not become complacent with offshore drilling regulations. With the industry often touting strict environmental standards and safety regulations for offshore drilling in the U.S., she warned this claim “will ring hollow if stringent laws are not enforced equally stringently and objectively.”

Dr. F.E. Beck, a petroleum engineering professor at Texas A&M University, and Mr. Elmer Danenberger, former chief of the Offshore Regulatory Program at the Minerals Management Service (MMS) first explained the oil rig failure from their point of view. Then Danenberger gave some insight from the perspective of MMS, the federal agency responsible for oversight of offshore drilling.

Beck explained that standard practice for high pressure gas wells is to have multiple barriers, continually monitored. For a blow-out to occur, as happened on the Deepwater Horizon, many barriers have to fail. As Beck explained to Senator Byron Dorgan (D-ND), the “complexity of deepwater systems are extreme.” He called the well “difficult,” but not the most difficult the industry has ever faced. Though these are extreme pressures and conditions, they are doable in the industry. Dorgan concluded, as Bingaman had, that this is “clearly a failure of systems” and not an unusual situation.

Danenberger made recommendations on how to streamline the regulation process and ensure the best safety practices are in place. Senator John Barrasso (R-WY) asked Danenberger about Interior Secretary Ken Salazar’s proposed plan of splitting MMS into two agencies: one in charge of inspections and regulations and one in charge of leasing and royalties. Danenberger agree this would make the agency more independent and more aligned with systems in other countries. Senator Debbie Stabenow (D-MI) asked why MMS does not have standards for best practices now. Danenberger said standards are currently in place, they just need more work in areas like well cementing.

Senator Jeff Sessions (R-AL) stated that he thinks MMS is fraught with “laxity, complacency, or overconfidence” since there have not been any major blow-outs in the Gulf in a very long time. Senator Robert Menendez (D-NJ) said, “It does not take a rocket scientist to figure out there is no such thing as too safe to spill.” Menendez wanted to know, with so many barriers that failed, how this rig could even pass the testing. Senator Jim Risch (R-ID) felt that the U.S. is more reliant on fossil fuels because of concerted efforts by environmentalists to stop nuclear energy. Given that the U.S. is still dependent on the fossil fuels, he implied the U.S. needs to continue with offshore drilling. However, the lack of preparation on the part of the federal government and industry concerned him. This is a whole industry problem, he said, and recommended a private agency to respond to these disasters. Beck and Danenberger disagreed that a private agency could be tasked with this, and Danenberger defended the federal government’s response.

Industry executives from the three major companies involved in the spill shifted the blame amongst each other. Mr. Lamar McKay of BP America, the company who was leasing the rig at the time of the explosion, explained that he did not yet know what caused the failure. He was cooperating in all investigations into the incident, and said Transocean was responsible for safe drilling of the well. Mr. Steven Newman of Transocean, the company who owns the drill rig, is conducting interviews with the employees on the rig to try and figure out what happened. He claims the well casing or cement or both failed suddenly giving the crew little time to react, though he is unsure of exactly what caused the sudden failure. Mr. Tim Probert of Halliburton, the company tasked with casing and cementing the drill well, pointed to a blow-out preventer (BOP) failure. He claimed Halliburton had finished cementing 20 hours earlier though the final plug was not set. He was confident in the cementing work, and said if the BOP had functioned properly it would have stopped the catastrophe.

The hearing focused mainly on the root of the incident and what, if any, mistakes or poor practices occurred. The senators asked about the BOP, the cementing of the well, and a last-minute switch from drilling mud in the well to seawater. Probert told Bingaman that switching to seawater is a common practice, but many committee members questioned the decision. Probert told Murkowski that the final cement plug, which would have been the final barrier to a blow-out, was not set when the explosion occurred. There had been no direct test done on the cement before the blow-out. Two preliminary tests were completed, and the final would have been the direct test. Probert was unsure of the results of the second test. Senator Blanche Lincoln (D-AR) said 18 of the 39 blow-outs since 1992 have been due to cementing issues and asked what role did cementing play here. MMS reported it has standards for the composition of the cement, but no “fall tree” or standards for what to do when cement fails. The witnesses deferred comment until the investigation was complete. As the investigations move forward, Bingaman asked what data was available from the rig. BP and Halliburton have a daily log of data that is preserved offsite. Transocean have a log until 3pm that day, but the rest is hand-written logs that were destroyed.

Once it was clear the cause of the failure would not be determined without further, in-depth investigation, the committee focused on the spill and future mitigation. Murkowski told the panel, “We are all in this together” because it will affect development of energy production in this country. “If we can’t continue to operate and convince people we can operate safely” it will affect all parts of the industry, she continued. BP has a history of poor safety practices, and the committee wanted assurance that something like this would not happen again. Ron Wyden (D-OR) wanted to know what BP had done since the last time they promised to toughen safety measures. McKay said BP has a board level safety and environmental committee and top level, standardized safety and operating measures. He declared the BP “operating system in Gulf is as good as anyone’s…I can’t point to any deficiencies.”

The committee asked about cleaning up the oil spill and mitigating spills in the future. “No one is really doing research to address deepwater spills,” lamented Senator Mark Udall (D-CO) indicating this is something that needs to be addressed. Jeanne Shaheen (D-NH) asked how much money BP is spending on deepwater spill research. McKay said they work with federal agencies on the research, but could not say what BP spends. Shaheen suggested the U.S. be more proactive in this research.

Sessions asked why the industry was not better prepared, asking again if it was due to complacency. He wanted to know why a containment structure was not already built. McKay this was a unique combination of BOP, riser, and other infrastructure that needed to fit in the structure. BP, even if they had built a containment structure ahead of time, would not have predicted the trough design they ultimately built would have been needed. But, McKay indicated BP would work on having better mitigation techniques ready in the future. Menendez pointed out they were in same room where hearings were held on the Titanic disaster and said, “At that time we had a ship supposedly so technologically advanced that it could not sink, and here we have a rig that the industry has told us so many times is so technologically advanced it supposedly could not spill and unfortunately despite these claims both technologic marvels ended in tragedy.”Menendez accused the witnesses of not adequately preparing for the worst case scenario, and said their newest plan of plugging the leak with “junk” like golf balls “sounds like you’re making things up as you go along.”

Senators Maria Cantwell (D-WA) and Mary Landrieu (D-LA) were most concerned about who would pay for the clean-up costs. With estimates hovering around $14 billion, they wanted confirmation that BP would pay it all. McKay said BP would pay all “legitimate” claims, and that the “entire resources of BP are behind this.” Cantwell was dissatisfied with the answers, and remained skeptical of BP’s promise. She concluded with, “Well, for one opinion, what I’ve learned from this situation is I think it is time for us to diversify off of oil.” Landrieu instead figured the wells just need to be safer, and requested regulations for these deep wells that give people confidence that they can be drilled safely. Landrieu explained that 2,259 deepwater wells have been drilled since the start of deepwater drilling, and offshore drilling now accounts for 60 percent of oil production. The last spill was in 1991, and was not even close to the magnitude of the Deepwater Horizon spill. With Americans using 20 million barrels a day, she continued, any constriction of production will shift problems to other countries which might not be equipped to deal with deepwater drilling and possible catastrophes that arise.

The video archive of this hearing, as well as the written testimony of all the witnesses, is available on the committee site. Chairman Bingaman’s press release on the hearing and Ranking Member Murkowski’s press release are also on the site.

The investigative hearings into the explosion of Deepwater Horizon and the Gulf of Mexico oil spill continued in the afternoon with the Senate Environment and Public Works Committee. The video archive of that hearing is here.

-CCD

Senate Energy and Natural Resources Committee Hearing to Receive Testimony on Carbon Capture and Sequestration Legislation, including S. 1856, S.1134, and other Draft Legislative Text
April 20, 2010

Witnesses
Panel A
Jim Markowsky
Assistant Secretary of Fossil Energy, U.S. Department of Energy
Anne Castle
Assistant Secretary for Water & Science, U.S. Department of the Interior

Panel B
Mr. Robert Hilton (on behalf of Ms. MacNaughton, CB)
Vice President, Power Technologies for Government Affairs, Alstom Power
Ben Yamagata
Executive Director, Coal Utilization Research Council
Mark Brownstein
Deputy Director of the Energy Program, Environmental Defense Fund
Kurt House
Chief Executive Officer, C12 Energy
Adam Vann
Legislative Attorney, American Law Division, Congressional Research Service

Members Present
Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
John Barrasso (R-WY)
Richard Burr (R-NC)
Jeanne Shaheen (D-NH)
Byron Dorgan (D-ND)
Robert Casey (D-PA)
Jim Bunning (R-KY)

A hearing was held today to discuss carbon capture and sequestration (CCS) technologies in the Senate, as well as ownership issues that have arisen in conjunction with CCS development. Two bills were discussed: the Responsible Use of Coal Act of 2009 (S.1134) sponsored by Robert Casey (D-PA) and a bill to amend the Energy Policy Act of 2005 to clarify policies regarding ownership of pore space (S.1856) sponsored by John Barrasso (R-WY). The senators felt the development of CCS showed promise, especially since there is a projected increase in coal use in the coming decades. The main legal issue the committee sought codification on was pore space ownership. Barrasso touted coal as an American energy, but felt that before CCS development could go further it was necessary to clarify pore space ownership and develop a legal framework. S. 1856 would provide government ownership of pore space below federal lands.

Casey said his bill, S.1134, would provide funding for research and development (R&D) and deployment of CCS technology. He hoped it would encourage the further application of clean energy technologies, and would provide the research necessary to protect the industry from carbon leakage, and produce critically needed CCS datasets. Ranking Member Lisa Murkowski (R-AK), a proponent for developing domestic energy resources, said “it makes sense to ask more of a cheap fuel source in light of a changing climate.”

Jim Markowski updated the committed on Department of Energy (DOE) CCS efforts. The main goals, using recovery money and fiscal year (FY) 2010 federal funds, are establishing parameters for the best long-term geological reservoirs, and also to increase the efficiency of coal pants. He also discussed current work on DOE’s FutureGen project, which is seeking to be the first near-zero emissions coal plant in the world sequestering carbon directly emitted from the plant. He said the process was not currently cost-effective, but hoped for greater public and private sector input in the future, and hoped that there were be 8-10 CCS projects by 2015.

Ann Castle, from the Department of the Interior (DOI), could only discuss S.1856. She felt that the codification of pore space ownership was warranted and relevant since ownership was becoming an issue DOI was encountering. She was concerned what the implications would be for surface owners, such as those affected by the carbon dioxide pipelines used to transport the carbon for sequestration. Her other concern was about the preexisting materials present at sequestration sites. She suggested perhaps the U.S. Geological Survey (USGS), using current CCS geological assessments, could recommend geologic criteria to answer these questions.

Senator Jeff Bingaman (D-NM) was curious about the implications pore space ownership had on existing mineral estate laws. Castle felt that this issue would need further codification beyond the amendment S. 1856 because pore space is not necessarily owned by the mineral estate. Castle noted there would a conundrum if carbon dioxide is listed as a “mineral” in the future because it is unclear who would be the rightful owner.  

Senators Murkowski, Byron Dorgan (D-ND) and Jim Bunning (R-KY) all expressed frustration over the DOE’s spending schedule. Murkowski cited that 0.5 percent of the stimulus money for CCS projects has actually been spent. Markowsky said the delay resulted from the CCS project selection process, but project selection was near completion and the DOE was on track to start obligating monies by September 2010. Markowsky continued by stating that the process of developing CCS will take four years of just background research and construction. Bunning was the most concerned of the trio, stating the DOE rate of development was unacceptable and that China and India were laughing at the U.S.’ sluggish pace.

Dorgan, who firmly agreed with Bunning, also inquired about ways to generate money to offset the expensive costs associated with CCS development. Markowsky said that the DOE would support any source of yearly funding, and would like to explore fundraising options.

Barrasso, who was appreciative of the DOI’s support of CCS research, asked if there was anything better congress could be doing. Castle responded that since the Bureau of Land Management (BLM) handles all applications for site characterizations, they may need more funding depending on the popularity of the CCS program. Also, the laws giving BLM authority for such projects were written in 1920 and 1976. So Castle suspected they would need updating to accommodate CCS.

A second panel was interviewed and represented private industry and government. They all felt CCS would be a powerful technology and economic driver in the future. Adam Vann, of the Congressional Research Council agreed that language in S.1856 was ambiguous when it came to pore space ownership.

Dr. Kurt House, a geoscientist from Harvard touted to the committee that “geology matters” when it came to CCS, and getting the geology right for CCS was also a safety issue. House also felt that the “checkerboard” pattern of federal lands over the western U.S. would pose a threat CCS success.

Witness testimony and an archived web cast of the hearing can be found here.

-MNM

House Committee on Appropriations Subcommittee on Energy and Water Hearing for the Department of Energy FY 2011 Office of Science and ARPA-E Budgets
March 18, 2010

Witnesses
Dr. Steven E. Koonin
Under Secretary for Science, Department of Energy
Dr. William F. Brinkman
Director, Department of Energy-Office of Science
Dr. Arun Majumdar
Director, Advanced Research Projects Agency-Energy (ARPA-E)

Committee Members Present
Ed Pastor, Chairman Pro Tempore (D-AZ)
Rodney P. Frelinghuysen, Ranking Member (R-NJ)
Steve Israel (D-NY)
Lincoln Davis (D-TN)
Michael K. Simpson (R-ID)

“Although, American science is still arguably the best in the world,” Chairman Pro Tempore Ed Pastor (D-AZ) began, “our margin of leadership is neither as wide nor as clear-cut as it has been in the past.” The House Appropriations Energy and Water Subcommittee continued hearings on the Department of Energy (DOE) fiscal year (FY) 2011 budgets, focusing on the DOE Office of Science and Advanced Research Projects Agency-Energy (ARPA-E). Pastor was concerned about redundancy in DOE programs, especially since the FY2011 budget requests a 4.4 percent increase in “tough times.” Ranking Member Rodney Frelinghuysen (R-NJ) had similar concerns, requesting the panel give the committee tangible results of how appropriated funds had been used successfully, and demonstrated a good investment of U.S. tax money.

Dr. Steven Koonin, Under Secretary for Science at DOE, discussed DOE’s plans to develop strategic mission-oriented science, applying decades of research to help solve current energy questions. This includes projects developed using American Recovery and Reinvestment Act (ARRA) funding, such as Advanced Research Projects Agency-Energy (ARPA-E). The Office of Science climate and Earth system modeling programs have proposed increases of $15.8 million from FY2010. Koonin, arguing for the increase stated, “While current generation of models are more than sufficient to prompt concern over rising greenhouse gas levels, we must work to reduce model uncertainties and refine scientific understanding.”

Koonin clarified the differences between the ARRA-funded DOE programs: Energy Frontier Research Centers (EFRCs), Energy Innovation Hubs, and ARPA-E. Science. EFRCs, he explained, are university-based and problem-oriented groups aimed at overcoming scientific obstacles. Hubs are goal-oriented research centers that house teams of scientists and researchers to answer “ripe” multidisciplinary questions using a side-by-side integration of science and engineering to facilitates early commercialization of the research. ARPA-E is discovery-oriented and “on the hunt for new technologies” by focusing on high-risk, high-reward research. He argued that science integrated knowledge about the natural world into useable descriptions for engineering applications while engineering research designs and manufactures technologies to serve a specific function. The EFRCs, Hubs and ARPA-E will cover the entire spectrum from science to engineering.

Dr. William Brinkman, the director of the Office of Science, said the Basic Energy Sciences (BES) would receive a 12.1 percent increase to $1.835 million. The gas hydrate research program would be moved from the Office of Fossil Energy to BES. BES will investigate the natural and engineered stability of gas hydrate formations in the Arctic and the Gulf of Mexico through controlled experiments and multi-scale models.

Brinkman also discussed the Biological and Environmental Research (BER) program, which would receive a 3.8 percent increase to improve climate model resolution. BER will support continued data collection to improve understanding of atmospheric aerosol feedback cycles and ecosystem response to climate change. Brinkman underscored the importance of a rigorous peer-review system to DOE climate research efforts.

ARPA-E Director Dr. Arun Majumdar discussed the growth of ARPA-E since its inception a year ago. ARPA-E seeks to leapfrog over current approaches and create technologies where none currently exist to reduce dependence on foreign energy sources, reduce energy-related emissions and ensure U.S. technological leadership. Projects funded through ARPA-E have been identified as too risky for private industry, but have potential for high-reward. Majumdar highlighted how fast the first round of grant submissions was funded, and an ARPA-E workshop that brought together 1,700 leaders in research, industry and government. “We are living through the Sputnik moment of our generation,” and Majumdar emphasized that “we must step up our clean energy efforts. Business as usual is not a viable option.”

Pastor asked about current innovative energy projects and how an EFRC, Hub, or ARPA-E would approach it. Majumdar responded that ARPA-E supports research and development (R&D) efforts of the small teams located at an EFRC, Hub or even National Lab, and teams from different research centers may collaborate. Following initial R&D, ARPA-E will leverage results to develop a product in a timely manner. Pastor acknowledged the efforts of the panel members to reduce redundancy in their programs, however he reminded the panel that it was the job of the appropriators to make sure they received the greatest return from American tax dollars.

Frelinghuysen was interested in the role private industry was playing, noting the DOE was not DOE Inc. All three panelists shared personal narratives of how small businesses and large corporations used DOE money to move forward by applying the scientific principles investigated in federal labs. Majumdar summarized the efforts saying programs, like ARPA-E, allow businesses to get venture capital that would otherwise come from private industry.

Lincoln Davis (D-TN) summarized some of the points the panel made, saying American R&D was like an agricultural garden where “you plant the best seeds hoping many of them will grow.” He suspected the efforts made through such rigorous funding would allow R&D efforts to “move faster than greased lightning.” Davis asked the panel how the U.S. was going to keep its competitive edge through simulations. Koonin and Brinkman both lauded and extolled the potential of supercomputing national labs because further data collection will lead to more predictable model variables.

Michael K. Simpson (R-ID) was curious about the goals between the private sector and the government, noting the private sector’s bottom line was always profit. Majumdar said ARPA-E has a commercial ready team that reviews the portfolios on what can be done to help a company and to enable business. Simpson and Pastor questioned whether business actually needed these programs. Simpson also had questions on gas hydrates, but he submitted these to the record.

Steve Israel (D-NY) reminded the audience that America had a history of fantastic scientific achievements, like putting a man on the moon. He asked about projects and progress on batteries. All three panelists agreed that U.S. battery research efforts are 10-15 years behind where they need to be. Majumdar said the lithium ion battery was invented in the U.S., but U.S. only accounts for 1 percent of global lithium ion battery production. Following ARRA investments, the U.S. now holds 15 percent. However Brinkman said, regardless of the U.S. investment, the Chinese are still spending more on R&D.

Noting the current statistics were ominous for the U.S., Frelinghuysen asked the panel, “What keeps you awake at night?” Majumar responded, “Innovation is not the issue, rather how do we sustain and scale these projects.”

Witness testimony and Pastor’s opening statement is available on the subcommittee web site.

-MNM

House Committee on Appropriations Energy and Water Subcommittee Hearing on the Department of Energy FY2011 Budget Request for EERE, FE, and Electricity Delivery and Energy Reliability
March 17, 2010

Witnesses Present
Kristina Johnson
Under Secretary for Energy, Department of Energy
Cathy Zoi
Assistant Secretary for Energy Efficiency and Renewable Energy, Department of Energy
Dr. James Markowsky
Assistant Secretary for Fossil Energy, Department of Energy
Patricia Hoffman
Principal Deputy Assistant Secretary for Electricity Delivery and Energy Reliability, Department of Energy

Committee Members Present
Ed Pastor, Chairman Pro Tempore (D-AZ)
Rodney Frelinghuysen, Ranking Member (R-NJ)
Marion Berry (D-AR)
Chaka Fattah (D-PA)
Steve Israel (D-NY)
Tim Ryan (D-OH)
Lincoln Davis (D-TN)
John Salazar (D-CO)
Dennis Rehberg (R-MT)
Rodney Alexander (R-LA)

Vice Chairman Ed Pastor (D-AZ) opened the energy hearing, which focused on fossil and renewable energy, energy efficiency, and energy delivery, by noting the U.S. economy relies heavily on fossil energy – most of which is imported from other nations. He was very interested in how the Department of Energy (DOE) would develop a low-carbon economy using U.S. coal and natural gas. Ranking Member Rodney Frelinghuysen (R-NJ) discussed these issues, and was particularly interested in how DOE efforts affected both private- and state-level job creation.

Kristina Johnson, Under Secretary for Energy at the Department of Energy (DOE), echoed the President’s State of the Union address, stating it was the administration’s hope that the U.S. would become the global leader in clean energy technology, and such an effort will spur the next industrial revolution. Rather than “business as usual” at the DOE, Johnson discussed the many ways the DOE hopes to utilize “new and inspired research” to achieve this goal. The DOE fiscal year (FY) 2011 budget request includes research and development (R&D) funds for Energy Frontier Research Centers (EFRCs), the Advanced Research Projects Agency for Energy (ARPA-E) and Energy Innovation Hubs. Johnson discussed overall cuts in the Fossil Energy budget and the DOE’s commitment to the development of renewable energy resources and improving energy efficiency technology.

Cathy Zoi, Assistant Secretary for Energy Efficiency and Renewable Energy (EERE), discussed the DOE programs developing renewable energy resources and increasing energy efficiency. Requests for EERE in FY2011 total $2.355 billion, or a 5 percent increase from FY2010. Several R&D programs received increases, including the Geothermal Technologies Program, which would receive $55 million, an increase of 25 percent over FY2010. Part of those funds will be used to develop seismic imaging tools at Sandia National Laboratory, test nano-tracers at Stanford University, advanced spallation drilling processes, and electricity generation capacity with the hot water waste products co-produced at geothermal sites. The Water Power Program, which is developing and testing marine and hydrokinetic power systems and developing open-ocean renewable energy test facilities, would receive $40.5 million, a 19.5 percent decrease from FY2010.

The Fossil Energy (FE) program request was $760 million, or a 20 percent decrease from FY2010. James Markowsky, FE Assistant Secretary, discussed the program highlights for FY2011. The FE program is very interested in focusing on U.S. reserves of coal and natural gas, and continuing carbon capture and storage (CCS) research. FE R&D requests for FY2011 were $586.6 million. Markowsky discussed progress on the nine large scale Regional Carbon Sequestration Partnerships for long-term geologic storage of carbon dioxide, several of which will begin carbon dioxide injections in FY2011.

FE funding for unconventional oil and gas technologies were zeroed out in FY2011, a savings of $20 million. Johnson’s testimony justified these decisions by stating the administration felt industry was capable of continuing this research. Markowsky explained gas hydrate research was zeroed out because it was moved to the Office of Science.

Patricia Hoffman, Principal Deputy Assistant Secretary for Electricity Delivery and Energy Reliability discussed the DOE’s efforts to increase the reliability of the grid, advancing grid modeling and enhancing cyber security.

Pastor and Frelinghuysen were interested in how the DOE had aided in job creation, and what oversight existed for DOE funds. They were concerned with the proportion of government jobs to private sector jobs, fearing the consequence of under-supporting private sector economic stimulation. Johnson explained a large percentage of private sector jobs were maintained and created by American Recovery and Reinvestment Act (ARRA) funds. Zoi and Johnson explained a lag existed for reported jobs and fund use. As of December such numbers appeared low, but Johnson explained the DOE had not yet finished FE and Smart Grid grants.

Dennis Rehberg (R-MT) described the FY2011 budget as “one size fits all” and felt it may not be applicable to the entire U.S. “Quite frankly the budget angers me,” he exclaimed, frustrated by the funding cuts in FE. He explained his state uses all energy technologies, with the exception of offshore drilling though he joked, “When the big one hits California we’ll have offshore drilling too.” He asked the DOE to not turn its back on fossil fuels. Markowsky responded there was tremendous potential in clean carbon. Markowsky believed it feasible to remove 90 percent of carbon dioxide in the short term, although he felt it was imperative industry be involved to create a market for CCS.

John Salazar (D-CO) agreed with Rehberg that the budget should not discriminate so heavily against fossil fuels. Salazar asked about a discrepancy between what ARRA funds had been reportedly spent and the appropriated amount. Johnson explained 100 percent had been obligated, and it was DOE policy not to pay until a full bill had been issued to them. Salazar was also interested in what technology ARRA funds had been used for. Johnson discussed an all-liquid battery project funded through ARPA-E, but Salazar wanted a timeframe. Johnson responded, “If I knew when this technology will take off, I would quit my job and invest in these companies.”

Rodney Alexander (R-LA) inquired about the possibility of tax incentives for natural gas exploration, citing the advances in natural gas recovery technology and gas hydrates. He wondered if the President was even aware of the large discoveries made in the U.S. Markowsky, not wanting to comment for the President, suspected President Obama was aware, citing increased domestic natural gas and coal production. Markowsky assuaged Alexander’s frustrations, saying natural gas will undoubtedly have to play a role in the development of a clean energy economy. Alexander also focused on hydraulic fracturing and potential impacts on groundwater. Markowsky said more information was needed and the method of natural gas extraction required further investigation. He was unaware of any known impacts or potential regulatory policies.

Lincoln Davis (D-TN) felt the current budget continued to move further away from  hydrogen vehicles. The last administration had touted the potential benefits of a hydrogen fuel cell, but it was absent from the FY2011 budget. He also wondered why the DOE did not fully utilize nuclear power, saying a $1.2 trillion investment for 300 nuclear plants would provide 60 percent of U.S. energy needs and would be a low-carbon alternative. He suggested, before the hearing ended, that the DOE fully examine their portfolio to determine if all methods of low-carbon energy production were receiving the appropriate attention.

Witness testimony and the vice chairman’s opening statement are available from the subcommittee web site.

-MNM

Senate Committee on Energy and Natural Resources Hearing to Receive Testimony on the U.S. Department of Energy’s Budget for Fiscal Year 2011
February 4, 2010

Witness
The Honorable Steven Chu
Secretary of Energy, U.S. Department of Energy

Committee Members Present
Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
John Barrasso (R-WY)
Richard Burr (R-NC)
Blanche Lincoln (D-AR)
John McCain (R-AZ)
Bernard Sanders (I-VT)
Mark Udall (D-CO)
Jeanne Shaheen (D-NH)
Ron Wyden (D-OR)
Byron Dorgan (D-ND)
Debbie Stabenow (D-MI)

The Senate Committee on Energy and Natural Resources met on February 4, 2010 to receive testimony from U.S. Energy Secretary, Steven Chu on the FY2011 Department of Energy (DOE) budget. The DOE received $36.7 billion in American Recovery and Reinvestment Act (ARRA) funds in 2009 and asked for a $1.8 billion increase in the FY2011 budget. Chairman Jeff Bingaman (D-NM) approves of the continued development of energy programs throughout the country, including nuclear energy, which he feels is “headed in the right direction.” However, he was concerned that oil and natural gas research and development (R&D) budgets were zeroed-out in the President’s request. The recent discoveries of large natural gas deposits in the U.S. would seem to support more R&D in Bingaman’s view. Finally he expressed strong concern over the withdrawal of the Yucca Mountain Nuclear Waste Repository license application.

Ranking Member, Lisa Murkowski (R-AK) felt that the FY2011 budget was “centrist and all encompassing,” and she was happy to see the energy budget expanded to include other low-carbon energy resources, such as nuclear. However, she found the withdrawal of the Yucca Mountain application very “troubling,” and worried its withdrawal “exposes taxpayers to billions in liability for the government’s breach of contract.” She felt the FY2011 budget “picked winners and losers” within the fields of renewable energy by providing increased funding to some industries (e.g. geothermal, solar and wind) while slashing funding for others (e.g. hydropower). She found it difficult to understand why the DOE was requesting an increase while having spent only $2.1 billion of the ARRA funds, citing information retrieved on the DOE website in her opening speech.

Chu started his testimony fervently agreeing with the President’s stance that the country which leads with clean energy technology will be the global economic leader, and approval of the DOE FY2011 budget will help “harness the power of American ingenuity.” The budget would allot $2.4 billion for energy efficiency and renewable energy resources. The request would increase research, demonstration and deployment of wind, solar and geothermal energies while pursuing carbon capture and sequestration.  About $495 million has been requested for nuclear research and development and $55 million for the Regaining our ENERGY Science and Engineering Edge (RE-ENERGYSE) program. RE-ENERGYSE in partnership with the National Science Foundation would help educate and train the next generation of scientists and engineers. In an effort to protect taxpayers, $2.7 billion in tax subsidies would be terminated in the President’s request for the oil, gas and coal industries.

Chu stated the ultimate goal of this budget is to continue the transition to a low carbon economy, and he favors approaches involving energy research centers. The FY2011 budget request includes investments in Energy Innovation Hubs, Energy Frontier Research Centers, and the Advanced Research Projects Agency-Energy (ARPA-E).

Bingaman’s first question was about the role of the Energy Department in developing carbon capture and sequestration (CCS). Chu explained how the DOE and Environmental Protection Agency (EPA) would co-chair CCS research. The research would focus on developing CCS technology and an “aggressive storage program” is currently researching geologic sites capable of storing large quantities of carbon over long periods of time; a task Chu finds important given the numerous coal reserves in the U.S. and globally.

Murkowski addressed the formal withdrawal of the application for the Yucca Mountain Nuclear Repository Site, and expressed her frustration over the rationale. Chu explained that “more is known now than in 1982, when the Nuclear Waste Act was written,” and Chu believes there are better solutions than Yucca Mountain. To assess alternative sites, a Blue Ribbon Commission will consider alternatives to Yucca Mountain. Murkowski asked about the requested cuts for hydroelectric energy generation, citing Chu’s previous statements on the Administration’s support of hydroelectric technologies. Chu answered he felt hydroelectric was an integral part of the future of American energy, but difficult choices were made this year. The funds allocated for hydroelectric energy would be focused on projects already in development to improve their efficiency, rather than to begin new large-scale projects. Chu apologized for not being able to respond further on both questions and offered to meet with the senator later with more information.

Mark Udall (D-CO), who was generally happy with the FY2011 nuclear energy budget inquired about how the DOE planned to apply research being done at National Labs and universities. Chu responded the DOE hoped to improve the decision making process in order to speed up the implementation of nuclear energy research to the development of new nuclear power plants. Richard Burr (R-NC), however, was less enthusiastic and expressed his displeasure over the withdrawal of the Yucca Mountain application. Burr wanted to know how the private sector could invest in a technology that lacks a waste removal option, though; he continued his remarks before Chu could answer.

Bingaman asked if Chu and the DOE enjoyed the large sum of money they received from the ARRA, to which Chu admitted the extra money helped fund some projects that would not have otherwise been funded. There was concern among the senators that only a small amount of the ARRA funds had been utilized. Jeanne Shaheen (D-NH) asked how the DOE was making ARRA funds accessible to the public. Chu recounted many ways the DOE is attempting to make government recovery money available to the proper parties. For instance, he said the DOE is attempting to personally communicate to cities, or local governments, on ways to prepare impact statements to avoid delays because of misunderstandings regarding the National Environmental Policy Act (NEPA). Also, Chu remarked the DOE is trying its best to respond to inquiries about ARRA grants within 24-48 hours, emphasizing it is the DOE’s goal to get ARRA funds out as soon as possible. 

Murkowski said she was very interested in DOE efforts to develop methane hydrates as an alternative fuel source. She noted that funding would be cut for unconventional fossil fuels in FY2011 reducing the budget from $50 million to $18 million for research and she would like to work with Chu on this issue. Chu nodded in agreement, but because of time limits could not respond.

John Barrasso (R-WY) brought up uranium transfers from a site in Ohio, asking if their addition to the FY2011 budget implied that the transfers would be suspended. Chu stated that this item was added to the FY2011 budget to reorganize funds for this program to prevent the government from violating mining statutes. Chu was unable to specify an official end date, but stated the government was no longer going to be transferring or bartering excess uranium. Barrasso was grateful for the acknowledgement of these statutes but continued by asking why loan guarantees for clean coal had been terminated. Chu explained the DOE had re-examined preexisting policies and that there was unused loan guarantee money in fossil fuels. Instead of asking for more money, the DOE would exercise “authority it had already been given” by pulling it from a resource that was undersubscribed to focus funds on other government programs like ARPA-E which was 100 times underfunded. Barrasso concluded that he would submit written questions about base funding cuts at the Rocky Mountain Oil Field Testing Center.

Although several senators found aspects for the President’s request questionable, many expressed desire to work with Secretary Chu individually on such issues, and concluded the hearing by saying they would be submitting written questions to him also.

Testimony documents and a webcast of the hearing can be accessed here.

-MNM

House Committee on Science and Technology Hearing on “The Advanced Research Projects Agency – Energy
(ARPA-E): Assessing the Agency’s Progress and Promise in Transforming the U.S. Energy Innovation System”
January 27, 2010

Witnesses
Dr. Arun Majumdar
Director, Advanced Research Projects Agency – Energy (ARPA-E)
Dr. Charles Vest
President, National Academy of Engineering
Dr. Anthony Atti
President and CEO, Phononic Devices, Inc.
Mr. John Pierce
Vice President, Dupont Applied Science – Biotechnology
Mr. John Denniston
Partner, Kleiner, Perkins, Caufield & Byers

Committee Members Present
Bart Gordon, Chairman (D-TN)
Ralph Hall, Ranking Member (R-TX)
Brian Baird (D-WA)
Kathy Dahlkemper (D-PA)
Donna Edwards (D-MD)
Vernon Ehlers (R-MI)
Marcia Fudge (D-OH)
John Garamendi (D-CA)
Gabrielle Giffords (D-AZ)
Suzanne Kosmas (D-FL)
Frank Lucas (R-OK)
Dana Rohrabacher (R-CA)
Adrian Smith (R-NE)
Paul Tonko (D-NY
Lynn Woolsey (D-CA)
David Wu (D-OR)
Charlie Wilson (D-OH)

On January 27, 2010, the House Committee on Science and Technology conducted a hearing to follow up on the progress of the Advanced Research Projects Agency - Energy (ARPA-E). ARPA-E was developed as a high-risk, high-reward program in response to the recommendation provided in the National Academy of Sciences “Rising Above the Gathering Storm” report. The main goal of ARPA-E is developing clean energy technology within the United States as an alternative to fossil fuels, to reduce emissions and to compete with developing clean energy markets globally – such as those in China. Chairman Bart Gordon (D-TN) hopes that ARPA-E will spur innovations like its similar predecessor the Defense Advanced Research Projects Agency (DARPA). Ranking Member Ralph Hall (R-TX) expressed reservations about ARPA-E’s approach because there was a lack of clarity about the scope of the agency. Hall highlighted possible dissension over funding for ARPA-E and America COMPETES which have similar goals.

ARPA-E Director, Dr. Arun Majumdar testified on the successes and future challenges of the agency following its first year of funding. The agency has moved rapidly to fund transformative research projects using stimulus funding. In the first funding phase, 37 projects out of 340 proposals received about $151 million (The average award was about $4 million over 3 years; 45 percent was distributed to small businesses, 35 percent to educational institutions and 20 percent to large industries). About 600 proposals were submitted for $100 million in funding for the second phase and 30 to 40 awards will be announced in the spring of 2010. Additional workshops are being planned to provide guidance regarding future funding opportunities, including a major summit in Washington DC on March 1-3, 2010. The announcement of opportunity for the third phase of stimulus funding is expected in the spring with awards announced in September 2010. The ARPA-E young fellows program has started and will provide an opportunity to early career scientists to work on these high-risk, high-reward projects.

Majumdar mirrored the concerns raised by Hall over the scope but expressed optimism that there will be markets for these new technologies soon. Given that the federal government is the largest energy consumer, he thought the government should develop contracts to use the new technology. Majumdar concluded his testimony proudly sharing that, “Energy is now receiving attention from the best minds in America.”

Dr. Charles Vest, President of the National Academy of Engineering, said that ARPA-E has great potential to help develop markets in the U.S. Vest went on to laud the program for already bringing together people in academia and entrepreneurial communities who would not normally focus on the topic of energy. Dr. Anthony Atti, President and CEO, Phononic Devices, Inc., testified as a member of the entrepreneurial green-tech community mentioned by Vest. Atti, having worked with the DARPA program, saw first-hand how such a program model can be immensely successful. He shared successes and concerns he has faced working in green-tech. His biggest challenge was convincing investors to fund high risk technology, something ARPA-E helps bypass.

In his testimony, Mr. John Denniston, a partner in Kleiner, Perkins, Caufield & Byers, wasted little time in stressing that the United States is behind in the development of clean energy markets whereas China has made the development of clean energy markets “mission critical,” – a point that engaged many of the representatives. He noted the dual benefit of developing U.S. clean energy markets will be reducing greenhouse gas emissions. His conclusion was that, although DARPA and ARPA-E have implications for national security, “ARPA-E’s status and funding are uncertain.”  Final testimony was given by Mr. John Pierce, Vice President, Dupont Applied Science – Biotechnology.  Pierce gave first hand examples of how his company has used ARPA-E money to fund a high-risk program that had been shelved because of investor insecurity.

One of the major concerns expressed by many members was how to keep the technology developed by ARPA-E, and funded by taxpayer money, inside the U.S. Denniston replied that ARPA-E is creating opportunities, through funding, that do not currently even exist because of consistently underfunded programs. ARPA-E funds will help to create the opportunities to get to the manufacturing “Next level,” or as he put it, giving U.S. citizens more “at bats,” to develop better energy technology. Pierce remarked that his experience had shown him that all the ARPA-E money will likely be used on near-term goals, to simply figure out the next step and will likely not be significantly used abroad.

Representative Brian Baird (D-WA) expressed concern how the U.S. develops core technology, only to see it outsourced to other countries, like China, for manufacturing. Representative David Wu (D-Or), added that, although the technology for electric cars was developed in the U.S., related aspects of it, such as the battery are manufactured in China. Majumdar agreed with Baird and Wu, and reminded the committee that the upcoming summit will help to create an ARPA-E community and demand for the technology. Denniston suggested that manufacturing could be located near the research and development jobs.

Representative Dana Rohrabacher (R-CA) raised many concerns over the ownership rights of the technology developed under ARPA-E in the private sector, and if the government could actually impose tariffs on exported technology and manufacturing. Majumdar responded that the Department of Energy has some rights over how the company uses the technology it develops, however, proprietary rights remain with the company. The ARPA-E grant states that about 90% of manufacturing must be done in the United States, and that to export any technology, an ARPA-E company is required to obtain a government waiver. Representative Rohrabacher queried about why ARPA-E funds were being used to help develop projects in multi-billion dollar companies. Pierce, explained that the engineers and scientists at Dupont saw the potential of the technology, but because of investor insecurity, were never granted money to develop it, until ARPA-E.

Representative Adrian Smith (R-NE) was curious about how the private money has preceded the public money in green-tech. Majumdar, said that ARPA-E represents a novel concept in the development of American clean energy, because until now, very little private money has been invested. ARPA-E is an example of public money being used to invest in upstream technologies to help generate a market for them. Representative Smith expressed hope that this may encourage innovation but was concerned that the U.S. is trying to regulate something into existence. Denniston replied that ARPA-E is not regulating something into existence, because as he said, “The markets already exist, but they are overseas and right now, the US isn’t in the game.”

Hall, was curious how ARPA-E was going to prioritize development of green technology versus limiting greenhouse gas emissions and U.S. dependence on foreign oil. Majumdar explained the interconnectedness of ARPA-E research and development, and that the goal is to pick proposals that would tackle the most problems.

American science, technology, engineering and mathematics (STEM) education was brought up by Representative Marcia Fudge (D-OH). She noted that 50 percent of Chinese college graduates were STEM majors while the U.S. only graduated 15 percent STEM majors, wondering if this had any impact on the investor community.  Atti informed her that the issue keeps him up at night because he is worried about how to staff his company. He did note that his investors felt that new standards are coming, and there is desire to start posturing to take advantage of them.

Representative Kathy Dahlkemper (D-PA) was excited at the prospects of ARPA-E creating jobs in the U.S., and asked about best practices to transfer new technology to the entrepreneurial community. Majumdar said that the ARPA-E staff is in the process of developing “Regional Innovation Clusters” that will be used to bring ARPA-E grantees together to discuss openly what practices are leading to success, and to create a business ecosystem. Atti agreed with Majumdar, and said his experience in green-tech is that the traditional boundaries in business are breached. Representative Gabrielle Giffords (D-AZ), asked about the potential for growth of the solar industry. Majumdar noted there was tremendous opportunity for ARPA-E money to be used to bring down the average cost of the solar cell.

Representative Garamendi expressed concern about how national security would be affected by not developing competitive clean energy markets and Representative Ehlers asked if, despite being behind in the clean energy market, there is a new spirit at the Department of Energy because of ARPA-E.  Majumdar responded with enthusiasm that ARPA-E is a great opportunity for the U.S. Denniston concurred and noted that ARPA-E is providing Americans  “at bat” opportunities to develop a robust clean energy market.

-MNM

SEPARATION BAR

Sources: Hearing testimony.

Contributed by Corina Cerovski-Darriau, Government Affairs Staff; Clint Carney, 2009 AGI/AAPG Spring Intern; Rachel Potter, 2009 AGI/AIPG Summer Intern; Stephanie Praus, 2009 AGI/AIPG Summer Intern; Joey Fiore, 2009 AGI/AIPG Summer Intern; Mollie Pettit, 2009 AGI/AAPG Fall Intern; Maureen Moses, 2010 AGI/AAPG Spring Intern; Elizabeth Brown, 2010 AGI/AIPG Summer Intern; Elizabeth Huss, 2010 AGI/AIPG Summer Intern; Kiya Wilson 2010 AGI/AIPG Summer Intern. .

Please send any comments or requests for information to AGI Government Affairs Program.

Last updated September 28, 2010

 

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