[Senate Hearing 112-372]
[From the U.S. Government Publishing Office]
S. Hrg. 112-372
FOREIGN OCS READINESS
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
TO
EXAMINE THE STATUS OF RESPONSE CAPABILITY AND READINESS FOR OIL SPILLS
IN THE FOREIGN OUTER CONTINENTAL SHELF WATERS ADJACENT TO U.S. WATERS
__________
OCTOBER 18, 2011
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
RON WYDEN, Oregon LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington MIKE LEE, Utah
BERNARD SANDERS, Vermont RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan DANIEL COATS, Indiana
MARK UDALL, Colorado ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
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STATEMENTS
Page
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................ 1
Bromwich, Michael R., Director, Bureau of Safety and
Environmental Enforcement, Department of the Interior.......... 3
Hartig, Larry, Commissioner, State of Alaska, Department of
Environmental Conservation, Juneau, AK......................... 46
Pinon, Jorge R., Visiting Research Fellow, Florida International
University, Latin American and Caribbean Center, Cuban Research
Institute, Miami, FL........................................... 25
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 2
Myers, Mark, Vice Chancellor for Research, University of Alaska,
Fairbanks, AK.................................................. 32
Salerno, Vice Admiral Brian M., Deputy Commandant for Operations,
U.S. Coast Guard............................................... 9
Schuler, Paul, President & CEO, Clean Caribbean & Americas, Fort
Lauderdale, FL................................................. 28
APPENDIX
Responses to additional questions................................ 51
FOREIGN OCS READINESS
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TUESDAY, OCTOBER 18, 2011
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:06 a.m. in
room SD-366, Dirksen Senate Office Building, Hon. Jeff
Bingaman, chairman, presiding.
OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW
MEXICO
The Chairman. Alright. Why don't we get started?
The hearing will come to order. Today we're going to
receive testimony from 2 panels of experts about an issue of
great importance to the committee. That is offshore oil
development. More precisely, we are focusing today's hearing on
examining the status of response capability and readiness for
oil spills in the foreign Outer Continental Shelf waters
adjacent to the United States to our own waters.
This activity presents a complex set of issues related to
its risks and its benefits. Last year we, the world, learned a
hard lesson through the Deepwater Horizon disaster. We learned
that there are tragic consequences for human life and
environmental quality and marine resources and the economy if
offshore development is conducted with anything but the highest
degree of skill and care.
For these reasons the committee spent a significant amount
of time in this Congress and in the previous Congress
considering issues related to oil drilling and development in
the waters of the United States. Obviously we need to continue
to be dedicated to ensuring that the activities in our own
waters are done safely and in a manner that protects the
environment. Additionally it's clear that with respect to
offshore activities the actions of our marine neighbors are
important to consider as well.
As many people have already said, oil spills do not respect
international boundaries. There are indications that several of
our neighbors are planning to increase offshore oil
development. Specifically Cuba and Mexico and the Bahamas and
Canada in both the Canadian Arctic and the Eastern Canadian
waters all have activities underway that could lead to
increased offshore development.
The complexities of these activities that exist for
operations in U.S. waters will obviously be faced by our
neighbors as well. In addition there are particular issues
related, for example, to the Cuban embargo and to the
challenges presented by oil spill response in Arctic areas. Our
goal is to consider these issues. Find the best means,
including international activities, that will allow us to
protect our shared marine resources and those whose safety and
livelihood depend on these resources.
Today we'll hear from some of our government experts on the
first panel, who are working to address these issues and then
also from other experts in oil spill response in the Gulf, in
the Caribbean and Arctic regions. I look forward to the
testimony and to continuing this committee's work to address
the risks and challenges involved in these complex, offshore
activities.
Let me turn to Senator Murkowski for her opening remarks
before we introduce the first panel.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman and thank you to
our witnesses that are here, not only those distinguished
witnesses on our first panel, but our second as well.
I want to extend a special welcome to my friend, Dr. Mark
Myers, who will be appearing on the second panel. He's from the
University of Alaska, and he's one of our top scientists on
these matters. He's previously appeared before this committee
as the Director of USGS.
I think this promises to be an interesting hearing. I am
amazed by how assertive so many of our neighbors have become in
exploring their offshore oil and natural gas. Cuba, I think, is
probably receiving the most attention because so many issues of
controversy arise with their development.
But I think it's very important to also recognize that our
Nation also shares maritime orders with Russia, with Canada and
with Mexico. All of those Nations are moving forward with major
plans to venture into new areas of their Outer Continental
Shelf. Some of those areas are not too far from our own
shorelines.
Neither geology nor ocean currents recognize our borders,
as the Chairman has said. So we really have both a shared
opportunity in terms of the benefits of resource development,
and also a shared risk in terms of spills or other impacts that
can occur.
It probably comes as no surprise that I believe that it
makes no sense for America to sit stubbornly in between active
drilling operations in neighboring waters with our arms folded.
It does us no good to complain that offshore drilling is too
risky for us to pursue as other Nations are clearly very busy
reaping its benefits right outside our front door. Yet that
position is precisely what some Senators and some groups would
advocate: that the U.S. stay out of this business entirely.
For the moment, I would ask that we set aside the
discussion about jobs, about revenue and security that we would
sacrifice. I would ask my colleagues to consider then, would we
even be able to lend expertise to our neighbors if the U.S.
hadn't taken bold steps into the offshore many decades ago? I
think the answer to that is, no.
The unfortunate reality is that oil spills, whether they be
from tankers or rigs, have occurred in our waters. These
incidents have taught Americans about contending with maritime
incidents. We know some of what works and much of what does not
work. Necessity has bred some invention as well, including the
Sub C containment mechanisms which put an end to the Macondo
blowout last year.
So we're here today to talk about what the U.S. can be
doing to keep its own shorelines and resources safe and well
managed in what is now, obviously, a global petroleum economy.
I'd argue that the more build-out that we can advance in terms
of offshore support facilities, aircraft, response, containment
assets, ice breakers and vessels of opportunity, the better off
we are. I'd argue that by training and re-training the best
personnel and expertise in this field, the better off we will
be in achieving a degree of comfort that a mistake next door
will not mean a problem at our own doorstep.
I'll close by saying that it's not realistic to expect
international compliance with anything close to U.S. standards
if the U.S. cannot demonstrate that those standards work in
both a profitable and a workable way.
I thank you again, Mr. Chairman, for holding the hearing.
Look forward to the discussion and the input from our
witnesses. Thank you.
The Chairman. Thank you very much. Let me introduce our
first panel.
Mr. Michael Bromwich, who is the Director of the Bureau of
Safety and Environmental Enforcement in the Department of
Interior. He's a frequent and regular testifier to our
committee. We appreciate him being back today.
Also, Vice Admiral Brian M. Salerno, who is the Deputy
Commandant for Operations in the United States Coast Guard.
Thank you very much for being here.
Why don't you proceed? Give us the main points we need to
understand from your testimony and the written testimony that
Mr. Bromwich has submitted, we'll just include that in the
record in its entirety.
Mr. Bromwich, why don't you start and then Admiral Salerno?
STATEMENT OF MICHAEL R. BROMWICH, DIRECTOR, BUREAU OF SAFETY
AND ENVIRONMENTAL ENFORCEMENT, DEPARTMENT OF THE INTERIOR
Mr. Bromwich. Thank you very much, Mr. Chairman and Senator
Murkowski and other members of the committee. I'm happy to be
here today to discuss the status of response capability and
readiness for oil spills originating in foreign waters that
might affect nearby U.S. waters and shorelines.
As you know the blowout and oil spill from the Macondo well
last year prompted the most aggressive and comprehensive
reforms to offshore oil and gas regulation and oversight in
U.S. history. Our new standards and other reforms are designed
to ensure that the exploration and development of oil and gas
resources in U.S. waters proceed safely and with appropriate
protections for ocean environments and our coastlines. But the
risks to U.S. waters and shores posed by offshore drilling, as
both you, Mr. Chairman and Senator Murkowski have noted, are
not limited to the activities on the U.S. OCS. As a result we
have taken steps to try to improve drilling standards and
practices for operations in foreign waters that could have an
impact on our coastline as well as focus on oil spill response
preparedness.
We are working with key agencies across the Federal
Government including the State Department, the Coast Guard,
EPA, NOAA and others, as well as with industry, oil spill
response and blowout containment companies and our
international counterparts in the Gulf of Mexico, in the Arctic
and along our maritime boundaries with Canada. In particular we
are working closely with other Federal agencies to address the
threat of an oil spill in neighboring parts of the Gulf of
Mexico that could affect U.S. waters, shores and interests.
Several other countries on or near the Gulf of Mexico are
expected to proceed with offshore drilling in their exclusive
economic zones in the near future.
As you know the Spanish oil company, Repsol, has announced
its intention to drill offshore wells in Cuba's waters using a
newly constructed, semi-submersible rig. In the near future
there also will likely be offshore drilling activity in the
EEZs of the Bahamas and Jamaica and continuing offshore
activity in Mexico's EEZ.
Now the U.S. Government is taking steps to protect our
waters and coastal resources by promoting drilling safety
through prevention and by preparing response contingencies in
the event of a spill. These activities include communicating
with Repsol to encourage its compliance with U.S. safety and
environmental standards, cooperating with our regulatory agency
counterparts in the region including Mexico through bilateral
and multilateral mechanisms to develop common safety standards
and taking steps to ensure that U.S. resources are available to
respond to an oil spill. As you know we do not have regulatory
authority over Repsol's activities in Cuba. But beginning in
February of this year, Repsol has voluntarily provided us
information regarding its drilling and oil spill response
plans.
We have had numerous contacts with the company. We have
made it clear that we expect it to adhere to the highest
environmental, health and safety standards and to have adequate
prevention, mitigation and remediation systems in place in the
event of an incident. Repsol officials have stated publicly
that in carrying out its exploratory drilling plans in Cuban
waters, it will adhere to U.S. regulations and the highest
industry standards.
Repsol has also offered U.S. agencies an opportunity to
board the rig that it intends to use in Cuban waters to inspect
the vessel and drilling equipment and to review relevant
documentation. To protect U.S. interests we have welcomed the
opportunity to gather information on the unit's operation,
technology and safety equipment. BSEE and the Coast Guard are
planning to coordinate a joint visit to the unit that would
occur shortly before the rig is scheduled to enter Cuban
waters.
Now in addition to keeping BSEE regularly informed of its
plans, Repsol has expressed a desire to keep U.S. regulators
and spill response planners apprised of its oil spill
preparedness activities offshore Cuba. Along with other U.S.
representatives, BSEE has already witnessed a table top spill
response exercise held at the Repsol office in Trinidad. During
the exercise Repsol spill management team mobilized to response
to a hypothetical spill and demonstrated response equipment
deployment capabilities.
Beyond our specific engagement with Repsol, BSEE has been
engaged with our regulatory counterparts in the Gulf of Mexico
in an effort to harmonize drilling safety standards in the
region. BSEE and its predecessor agencies have been
collaborating with officials from all levels of the Mexican
government since the late 1990s. This cooperation has increased
substantially in the aftermath of Deepwater Horizon and since
the creation of the National Hydrocarbons Commission, the
Mexican agency responsible for regulating offshore drilling
safety on Mexico's Continental Shelf.
BSEE and CNH, it's the name of the regulatory agency in
Mexico, are working toward a set of common safety and
environmental standards through a series of technical
workshops. If an oil spill from activities in the region were
to threaten U.S. waters or its coastline, the U.S. Government
would immediately use all appropriate resources and authorities
to conduct response operations. The Administration has engaged
State and local governments and private parties that might be
affected by such a spill to ensure awareness and mutual
cooperation. We will continue to actively support these efforts
to ensure that appropriate plans and resources are in place to
respond promptly and effectively to an oil spill that reaches
U.S. waters. In addition the U.S. is also taking measures to
ensure that the appropriate private industry parties are able
to respond quickly in the event of an oil spill in Cuban
waters.
Finally the Gulf of Mexico is not the only area in which we
are proactively working on issues relating to a potential oil
spill. My prepared testimony discusses the ways in which DOI
and BSEE, in particular, are engaged in a number of
multilateral and bilateral initiatives for oil spill
preparedness and response in the Arctic and with Canada. We
view engagement with our foreign counterparts in areas of
shared interests and concern whether it is the Gulf of Mexico,
the Arctic or along our maritime border with Canada as a
central part of our efforts to protect U.S. environmental and
economic interests. We are committed to continuing that
engagement.
Thank you very much. I look forward to your questions.
[The prepared statement of Mr. Bromwich follows:]
Prepared Statement of Michael R. Bromwich, Director, Bureau of Safety
and Environmental Enforcement, Department of the Interior
Mr. Chairman and Members of the Committee,
I am pleased to be here today to discuss the status of response
capability and readiness for oil spills originating in foreign waters
with potential effects on adjacent U.S. waters and shorelines.
As you know, the blowout and oil spill from the Macondo well last
year prompted the most aggressive and comprehensive reforms to offshore
oil and gas regulation and oversight in U.S. history. Our new standards
and other reforms are designed to ensure that the exploration and
development of oil and gas resources in U.S. waters proceeds safely and
with appropriate protections for ocean environments and our coastlines.
Because the risks to U.S. waters and shores posed by offshore
drilling are not limited to the activities on the U.S. OCS, the
Department of the Interior (DOI) and my agency have taken steps to
improve drilling standards and practices, as well as oil spill response
preparedness, for operations in foreign waters that could have an
impact our coastline. DOI and the Bureau of Safety and Environmental
Enforcement (BSEE) are engaged with the key agencies across the federal
government--including the State Department, United States Coast Guard
(USCG), Environmental Protection Agency (EPA), National Oceanic and
Atmospheric Administration (NOAA) and others--as well as with industry,
oil spill response and blowout containment companies, and our
international counterparts in the Gulf of Mexico, in the Arctic and
along our maritime boundaries with Canada.
STATUS OF RESPONSE CAPABILITY AND READINESS IN THE GULF OF MEXICO
DOI and BSEE are working closely with other federal agencies to
address the threat of an oil spill in neighboring parts of the Gulf of
Mexico that could affect U.S. waters, shores and interests. Several
other countries on or near the Gulf of Mexico are expected to proceed
with offshore drilling in their exclusive economic zones (EEZ) in the
near future. As you know, the Spanish oil company Repsol has announced
its intent to drill offshore wells in Cuba's waters using a newly
constructed mobile offshore drilling unit (MODU), the Scarabeo 9. In
the near future, there also likely will be offshore drilling activity
in the EEZs of the Bahamas, and Jamaica, and continuing offshore
activity in Mexico's EEZ.
The U.S. government is taking steps to protect U.S. waters and
environmental and economic resources by promoting drilling safety to
prevent spills in the first place and by preparing response
contingencies in the event of a spill. These activities include: (1)
communicating with Repsol to encourage its compliance with U.S. safety
and environmental standards; (2) cooperating with our regulatory agency
counterparts in the region, including Mexico, through bilateral and
multilateral mechanisms to develop common safety standards; and (3)
taking steps to ensure that U.S. resources are available to respond to
a spill.
1. Engagement with Repsol
While BSEE does not have regulatory authority over Repsol's
activities in Cuba, beginning in February of this year Repsol has
voluntarily provided us information regarding its plans related to
drilling and oil spill response. In our numerous communications with
Repsol, we have made clear that we expect it to adhere to industry and
international environmental, health, and safety standards and to have
adequate prevention, mitigation, and remediation systems in place in
the event of an incident. Repsol officials have stated publicly that in
carrying out its exploratory drilling plans in Cuban waters, it will
adhere to U.S. regulations and the highest industry standards.
Repsol has offered U.S. agencies an opportunity to board the
Scarabeo 9 rig that Repsol intends to use in Cuban waters to inspect
the vessel and drilling equipment and to review relevant documentation.
Given the proximity of drilling to U.S. waters, and considering the
serious consequences a major oil spill would have on our economic and
environmental interests, we have welcomed the opportunity to gather
information on the rig's operation, technology, and safety equipment.
BSEE and the Coast Guard are planning to coordinate a joint visit to
the Scarabeo 9 that would occur shortly before the rig is scheduled to
enter Cuban waters.
In addition to keeping BSEE regularly informed of its plans, Repsol
has expressed a desire to keep U.S. regulators and spill response
planners appraised of its oil spill preparedness activities offshore
Cuba. Along with other U.S. representatives, BSEE has already witnessed
a table-top spill response exercise held at the Repsol office in
Trinidad. During the exercise, Repsol's spill management team mobilized
to respond to a hypothetical spill and demonstrated response equipment
deployment capabilities. Repsol has subsequently invited BSEE and Coast
Guard officials to observe another emergency drill to be conducted in
Trinidad related to contingency planning for the drilling.
2. Regional Drilling Safety Initiatives in the Gulf of Mexico
In addition to our communications with Repsol, BSEE has been
engaged with our regulatory counterparts in the Gulf of Mexico in an
effort to harmonize drilling safety standards in the region. BSEE and
its predecessor agencies have been collaborating with officials from
all levels of the Mexican government since the late 1990s on issues
related to the safe and responsible development of oil and gas
resources in the Gulf of Mexico. This cooperation has increased
substantially in the aftermath of Deepwater Horizon and after the
creation of the National Hydrocarbons Commission (CNH), the Mexican
agency responsible for regulating offshore drilling safety on Mexico's
continental shelf.
BSEE and CNH are working towards a set of common safety and
environmental standards through a series of technical workshops.
Following a workshop held this summer in BSEE's Gulf of Mexico regional
office, the U.S. and Mexico developed an action plan to define subject
areas where the creation of common standards would be appropriate. CNH
officials will be returning to BSEE's offices in the near future for a
technical exchange about BSEE's Worst Case Discharge analysis.
In addition to this ongoing cooperation, Secretary of the Interior
Ken Salazar and I traveled to Mexico for a series of meetings with
Mexican officials to discuss the development of common safety and
environmental standards for offshore oil and gas exploration and
development in the Gulf of Mexico.
3. Spill Response and Preparedness
The U.S. government will immediately use all appropriate resources
and authorities to conduct response operations in the event an oil
spill from activities in Cuban waters or from activities in other
states in the region that threaten U.S. waters or its coastline. The
Administration has engaged state and local governments and private
parties that might be affected by such a spill to ensure awareness and
mutual cooperation and the adequacy of five different existing Area
Contingency Plans covering Florida where models predict varying
probabilities of U.S. shoreline impacts should a spill occur at the
planned exploratory drilling locations in Cuban waters. BSEE staff is
also engaged with District Seven USCG staff out of Miami in the
development of an International Offshore Drilling Response Plan and
will be participating in an upcoming workshop to validate the plan. We
will continue with active support of these efforts to ensure that
appropriate plans and resources are in place to respond in a rapid and
effective manner to an oil spill that reaches U.S. waters.
As part of this planning for possible oil spills from deepwater
drilling off of Cuba, NOAA, in cooperation with the Bureau of Ocean
Energy Management (BOEM), has run sophisticated trajectory models to
identify potential landfall areas along the U.S. coasts. Using worst
case discharge data provided by Repsol, coupled with computer model
results, the USCG is working with Area Committees in the areas that
potentially could be affected by such a spill to enhance Area
Contingency Plans--an effort that requires local and state
participation in the development of protection strategies and
establishing priorities for threatened resources.
The U.S. is also taking measures to ensure that the appropriate
private industry parties are able to respond quickly in the event of an
oil spill in Cuban waters. The Department of Commerce and the Treasury
Department have a long-standing practice of providing licenses to
address environmental contingencies in Cuban waters. The Department of
Commerce's Bureau of Industry and Security (BIS) has issued a number of
licenses for post-incident oil spill containment and cleanup items for
use by U.S. companies in Cuban waters. These items include booms,
skimmers, dispersants, pumps and other equipment and supplies necessary
to minimize environmental damage in the event of a spill. Several such
applications are currently under review by BIS, including applications
for a subsea well containment system and related equipment, such as
remotely operated submersible vehicles and subsea construction, dive
support, and well intervention vessels. In consultation with the
Department of State, the Treasury Department can issue licenses to U.S.
entities to prepare for and to operate in the event of an oil spill.
The Treasury Department has been issuing such licenses for over a
decade, including licenses for environmental response, maritime
salvage, and spill prevention activities.
Finally, BSEE is working closely with other federal agencies on a
number of regional initiatives with countries in the region, including
Mexico, Cuba, the Bahamas and Jamaica. For example, planning is
underway for a Regional Oil Pollution Preparedness, Response and
Cooperation Seminar to Focus on Developing National Plans for Marine
Pollution Preparedness and Response Related to Offshore Units and
Regional Cooperation. This seminar, which is sponsored and conducted by
the International Maritime Organization, will take place in the Bahamas
later this year and officials from the Bahamas, Cuba, Mexico, Jamaica
and the United States have been invited to participate. The seminar
will provide a valuable opportunity for participating countries to
learn about other nations' plans for emergency well control and oil
spill response, which will help us improve our own response planning
for upcoming offshore drilling expected in the EEZs of participating
states. We believe a multilateral approach that involves all parties in
the region contemplating drilling activities that could affect the
United States is the most effective means of safeguarding our
interests. We therefore intend to continue to vigorously pursue
continued multilateral engagements in the Gulf of Mexico.
STATUS OF RESPONSE CAPABILITY AND READINESS IN THE ARCTIC AND WITH
CANADA
In addition to our activities in the Gulf of Mexico, DOI and BSEE
are also engaged in a number of multilateral and bilateral initiatives
for oil spill preparedness and response in the Arctic and with Canada.
1. Arctic Council
The U.S. is a member of the Arctic Council Ministerial Meeting,
which is a high-level forum of eight nations--Canada, Russia, Norway,
Denmark, Iceland, the United States, Sweden and Finland--and their
indigenous peoples.
The Arctic Council's meeting in Nuuk, Greenland this past May led
to the creation of two important initiatives to address oil spill
prevention, preparedness and response in the Arctic. The first of these
is the Oil Spill Preparedness and Response Task Force, of which BSEE is
a member and which intends to develop an international instrument on
oil pollution preparedness and response in the Arctic. The Task Force
is meeting in Oslo, Norway this week. In addition, BSEE is
participating in the Arctic Council Emergency Prevention, Preparedness
and Response working group, which is developing recommendations on best
practices in oil spill prevention. The results of both initiatives will
be presented at the next Ministerial Meeting of the Arctic Council in
the spring of 2013.
2. Bilateral Cooperation with Canada
BSEE also participates in a number of bilateral initiatives with
Canada related to oil spill preparedness and response. BSEE's
Technology Assessment and Research Program has collaborated with Canada
in over 35 joint research and development projects, many of which
relate to improving oil spill response and preparedness. For example,
the bureau is collaborating with Canada's Department of the Environment
on a number of joint oil spill response research projects focusing on
remote sensing and measurement of spilled oil; chemical treating
agents; the properties and behavior of spilled oil; testing and
evaluating oil spill absorbents; cleaning up of oil from shorelines;
mechanical containment and cleanup of spilled oil; and validating the
window of opportunity for dispersant use. Another project has involved
collaboration with Canada's Department of Fisheries and Oceans on a
study of dispersants.
BSEE's predecessor agencies also initiated and conducted two
meetings of the US-Canada Northern Oil and Gas Research Forum (Forum).
The first Forum took place in October 2008 in Anchorage, followed by a
second Forum in December 2010 in Calgary. The forums focused on
technical, engineering, and scientific research concerning offshore
drilling safety, oil spill prevention and management, ice engineering
and transportation issues, as well as the environmental effects of oil
and gas exploration and development in the Arctic. These
multidisciplinary conferences brought together participants from
government, industry, academia, indigenous groups, and non-governmental
organizations to discuss research issues of relevance to the management
of oil and gas activities.
BSEE has also cooperated in joint projects with the Canadian Coast
Guard at the Oil and Hazardous Materials Simulated Environmental Test
Tank (OHMSETT), which is the U.S. oil spill response and renewable
energy test facility located in New Jersey. One project evaluated
remote sensing equipment to detect spilled oil; another evaluated the
oil containment performance of five different types of fire-resistant
booms. We will continue this engagement under the leadership of BSEE's
Oil Spill Response Division.
Finally, BSEE will participate in the yearly Arctic and Marine Oil
Spill Program (AMOP) Technical Seminar with Canada.The Seminar was
created in 1978 by Canada's environmental ministry to improve the
knowledge base and technology for combating Arctic and marine oil
spills. Since then, it has been a useful forum for cooperation and
information exchange providing BSEE with the opportunity to engage
researchers with similar Arctic response interests, learn about
emerging technologies and scientific discoveries, inform attendees of
findings from BSEE-funded research, and identify research gaps and
needs. In the last AMOP seminar conducted in October 2011, the program
included discussions on the use of Ohmsett for research related to
biofuel spill response and dispersant operational research conducted at
Ohmsett over the last ten years, evidencing the contributions that BSEE
has and will continue to make to improving oil spill response.
BSEE is also on the Executive and Planning Committees of the
International Oil Spill Conference which is held every three years--the
most recent being in mid-2011. The conference focuses on new
technologies and hosts exhibitors and participants from around the
globe.
As you can tell from this description of the activities of DOI and
BSEE, we view engagement with our foreign counterparts in areas of
shared interest and concern as a central part of protecting U.S.
environmental and economic interests.
Thank you and I look forward to your questions.
The Chairman. Thank you very much.
Admiral, go right ahead, please.
STATEMENT OF VICE ADMIRAL BRIAN M. SALERNO, DEPUTY COMMANDANT
FOR OPERATIONS, U.S. COAST GUARD
Admiral Salerno. Good morning, Mr. Chairman, Ranking Member
Murkowski, distinguished members of the Committee. I'm pleased
to have this opportunity to answer any questions you may have
on response capability and readiness for oil spills originating
in foreign waters adjacent to the United States that may affect
or threaten our Nation or our natural resources.
Protecting the marine environment from oil spills is an
important Coast Guard mission. Contingency planning, training
and exercises are fundamental to our readiness to respond to
oil spills. These in turn have their foundation in the National
Oil and Hazardous Substances Pollution Contingency Plan, known
simply as the NCP. That's a long title.
Contingency planning under the NCP occurs at several
levels.
Local level planning is conducted by an Area Committee
under the guidance of a Coast Guard Captain of the port, who is
also pre-designated as the Federal, on scene coordinator for
the coastal zone. The Area Committee brings together Federal,
State, local and tribal officials and responders to identify
risks, sensitive areas to be protected and protection
strategies.
At the regional level Coast Guard Districts participate
with other Federal agencies and State officials through the
Regional Response Team. They consider such issues as disperse
and use and insitu burning pre-authorizations.
Finally at the national level, the Coast Guard serves as
the Vice Chair of the National Response Team which is comprised
of 16 Federal agencies with environmental response functions.
Ensures national level capabilities are available, as needed,
to support response efforts.
Each of these organizational levels also has a role to play
in developing strategies and cooperative relationships with
foreign neighbors to enhance preparedness and response to
trans-boundary environmental threats. In particular, we have
well established relationships with Canada, Russia and Mexico
to achieve cooperation on potential pollution threats, the
identification of equipment and personnel needed to respond to
actual incidents and procedures and protocols for notification,
incident management and coordinated spill response. Each of
these cases involves cooperation in controlling the source of
the pollution as paramount in addressing the transnational
nature of the threat.
Without controlling the source you cannot get ahead of the
problem. So the facilitated movement of people and equipment to
the source is an essential component of these agreements.
Additionally these agreements include regular joint planning
sessions and exercises. They also help spawn bilateral
cooperation in oil spill research and development.
Under these agreements we've recently completed a major
bilateral exercise with Mexico held in San Diego this past
August. We also held a joint U.S. Coast Guard/Canadian Coast
Guard Environmental Summit this past month. Next month I plan
to meet with the Russian delegation here in Washington to sign
a bilateral Memorandum of Understanding that will expand our
current cooperative agreements to cover the entire U.S./Russian
boundary waters.
We're also working with Russia, Canada and the 6 other
Arctic Nations through the Arctic Council to produce an Arctic
wide, pollution preparedness and response instrument that will
build on our existing bilateral agreements to enhance
preparedness throughout the Arctic region.
In light of the growing interest in oil exploration in the
Northern Caribbean, we're also working hard to improve regional
cooperation there. The anticipated drilling off Cuban waters is
a salient example, but others like the Bahamas are also
considering deep water drilling operations. By working through
the International Maritime Organization, we've garnered support
for a regional, multilateral seminar to be held in December in
the Bahamas to which other Caribbean Nations will be invited,
including the Bahamas, Jamaica, Cuba and Mexico for the purpose
of discussing oil spill prevention and response issues.
Meanwhile we're working extensively with all of our
domestic response partners to update our contingency plans.
We're also engaged directly with Repsol, the Spanish company
which plans to drill the first well off Cuba starting in
January 2012, to better understand their response strategies,
their resources and their capabilities. In the event an oil
spill does occur within Cuban waters, the Coast Guard would
mount an immediate response under the NCP in partnership with
other Federal, State and local agencies. We would focus on
combating the spill offshore using all available response
tactics.
As was highlighted by the Deepwater Horizon spill, any
spill of national significance, regardless of its source will
require unity of effort across all levels of government,
industry and the private sector.
Thank you. I look forward to answering your questions.
[The prepared statement of Admiral Salerno follows:]
Prepared Statement of Vice Admiral Brian Salerno, Deputy Commandant for
Operations, U.S. Coast Guard
Good Morning Chairman Bingaman, Ranking Member Murkowski, and
distinguished Members of the Committee. I am pleased to have this
opportunity to answer any questions you may have on response capability
and readiness for oil spills originating in foreign waters adjacent to
the United State that may affect or threaten our Nation and our natural
resources.
SUMMARY
Protecting the marine environment from oil spills is an important
Coast Guard mission. Contingency planning, training, and exercises are
fundamental to our readiness to respond to oil spills. These in turn
have their foundation in the National Oil and Hazardous Substances
Pollution Contingency Plan (NCP).
Contingency planning under the NCP occurs at several levels:
Local level planning is conducted by an Area Committee,
under the guidance of the Coast Guard captain of the port, who
is also pre-designated as the Federal On Scene Coordinator for
the coastal zone. The area committee brings together federal,
state, local, and Tribal officials and responders to identify
risks, sensitive areas to be protected, and protection
strategies.
At the regional level, Coast Guard Districts participate
with other federal agencies and state officials, through
Regional Response Team, on such issues as dispersant use and
in-situ burning pre-authorizations;
And finally at the national level, the Coast Guard serves as
the vice chair of the National Response Team, which is
comprised of 16 federal agencies with environmental response
functions, and ensures national level capabilities are
available as needed to support response efforts.
International Partnerships
Each of these organizational levels also has a role to play in
developing strategies and cooperative relationships with foreign
neighbors to enhance preparedness and response to transboundary
environmental threats. In particular, we have well established
relationships with Canada, Russia and Mexico to achieve cooperation on:
potential pollution threats,
identification of equipment and personnel resources
available to respond to actual spill incidents, and
procedures and protocols for notification, incident
management, and coordinated spill response.
In each of these cases, cooperation in controlling the source of
the pollution is paramount in addressing the transnational nature of
the threat. Without controlling the source, you cannot get ahead of the
problem, so the facilitated movement of essential people and equipment
to the source is an essential component of these agreements.
Additionally, these agreements include regular joint planning
sessions and exercises; they also help sponsor and support bi-lateral
cooperation in oil spill research and development.
For example, we completed
a major bi-lateral exercise with Mexico in San Diego this
past August;
and a joint U.S. Coast Guard/Canadian Coast Guard
Environmental Response Summit last month.
Next month, I plan to host a Russian delegation here in Washington,
to sign a Bi-lateral Memorandum of Understanding that will expand our
current cooperative agreements to cover the entire U.S./Russian
boundary waters.
And we are also working with Russia, Canada and the six other
Arctic Nations, through the Arctic Council, to produce an Arctic Wide
Oil Pollution Preparedness and Response instrument that will build on
our existing bi-lateral agreements to enhance preparedness throughout
the Arctic region.
Preparedness in the Northern Caribbean
In light of the growing interest in oil exploration in the Northern
Caribbean, we are also working hard to improve regional cooperation.
The anticipated deepwater drilling in the Cuban EEZ is a salient
example, although others like the Bahamas are also looking at deepwater
drilling. By working through the IMO we have garnered support to
convene a multilateral seminar this December in the Bahamas that will
invite Caribbean nations, including the Bahamas, Cuba, Mexico, and
Jamaica, to discuss oil spill prevention and response issues.
Consequently, we are working extensively with all our domestic
response partners to update our contingency plans. We are also engaged
directly with REPSOL, the Spanish-owned company which plans to drill
the first well in the Cuban offshore starting in January 2012, related
to their response strategies, resources, and capabilities in support of
their drilling operations.
In the event that an oil spill does occur within Cuban waters, the
Coast Guard would mount an immediate response under the NCP, in
partnership with other Federal, State and local agencies. And we would
focus on combating the spill offshore using all viable response
tactics.
Conclusion
As was highlighted by the Deepwater Horizon Oil Spill, any spill of
national significance, regardless of its source, will require unity of
effort across all levels of government, industry, and the private
sector.
Thank you and I look forward to answering any questions you may
have.
The Chairman. Thank you both very much.
Let me start with a few questions.
I guess an obvious issue that is framed by this plan that
Repsol has to go ahead and drill in Cuban waters is what is the
capability of the U.S. or U.S. companies to respond if there
were a spill in Cuban waters? We were asked to respond, or to
assist in a response by the Cubans--I don't know if those
circumstances would ever occur, but if they did are there legal
impediments to U.S. companies responding, if requested, by the
Cubans, Mr. Bromwich?
Mr. Bromwich. Mr. Chairman, my understanding is that there
are long term licensing agreements that have existed to provide
such services. That the combination of the Treasury Department
and the Commerce Department has approved such licenses in the
past. Would in an expedited way approve applications for
similar licenses should the need arise.
So I don't anticipate that that would be a problem. I think
Commerce and Treasury have been looped into conversations in
the Administration. They understand very well of this
anticipated activity. I have a lot of confidence that if the
existing licenses were not sufficient to enable an adequate
response and the deployment of all substantial U.S. resources,
that those licenses would be granted very, very quickly.
The Chairman. OK. So that covers any problems with private
companies taking action in Cuban waters, if requested to do so.
What about with regard to your own department or any other
executive branch department? If you were called upon or if the
Coast Guard, Admiral Salerno, were called upon to assist in a
response to a spill in Cuban waters, are we able to respond or
not?
Admiral Salerno. We do not have immediate authority to
respond to a foreign source, in a foreign EEZ. We would have
to, at the request of that foreign government through the
approval of the State Department. If those permissions were
granted then we could do so.
We have sent people to respond to spills in other countries
in the past with the concurrence of the State Department.
The Chairman. But there, as far as you know, there's no law
that we've enacted here in the Congress that would in any way
prevent the State Department from going ahead and authorizing
you to take that action?
Admiral Salerno. Sir, I think, Cuba of course is a special
case. We would have to defer to the inner agency in the State
Department as to whether we would be authorized actually to go
to the source off Cuba.
The Chairman. OK.
Do you happen to know, Mr. Bromwich, if there is some kind
of legal impediment that would prevent the State Department
from authorizing the Coast Guard or your own Department from
taking whatever action was requested?
Mr. Bromwich. I'm not aware of any specific legal
impediments, Senator. But I can't say that I've looked at this
issue closely. I think other people in the Administration, in
other departments have including at the State Department and at
the Justice Department. I have confidence that they're working
to work through any such obstacles if they see any in current
law.
The Chairman. Mr. Bromwich, I understand from your
testimony that you feel reasonably confident that the drill rig
that is going to be used by Repsol will be inspected to the
standards that we would insist upon for any drill rig operating
on our own Outer Continental Shelf. That the necessary blowout
prevention equipment and all that sort of thing will also be
meeting those same standards. Is that a correct interpretation
of what you said in your testimony?
Mr. Bromwich. Yes. I want to be clear. We, together with
the Coast Guard at Repsol's invitation plan to conduct an
inspection of this rig. It's a brand new semi-submersible rig,
very advanced, very modern. We're aware of all of the
characteristics that the rig has and all the characteristics of
the blowout preventer.
So because of our relationship with Cuba we're going to be
doing the inspection outside of Cuban waters. We're going to be
doing it in a different location. Some of what we would
normally inspect, we would do on location including certain
types of tests relating to the BOP.
So we will do all available and possible inspections
including of the BOP that one can do when it's not on the site
where the drilling is going to actually take place. We have
been very satisfied in our conversations with Repsol that we
will be given access to all components of the rig. We will be
able to do whatever we feel is necessary with respect to the
blowout preventer. They have been extremely cooperative since
they first came to us last February. We have had many, many
conversations with them about how we would need to go about the
business of inspecting the rig.
The Chairman. Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
Admiral, I am pleased to hear you discuss the task force
that came about at the Arctic Council meeting in Greenland with
the Arctic Nations focused on oil spill response and
preparedness. I think that that's a good initiative going
forward in the Arctic. I'm pleased to see that a similar focus
is being made down in the Caribbean and in other areas.
As I mentioned in my opening statement we've got some
neighbors here not only in the North, but to the South. How we
work cooperatively, I think, is going to be critical as we see
greater developments within these areas.
The Chairman was asking about this authorization to respond
or the permission to respond from State Department. There's an
article in the Wall Street Journal just this morning indicating
that the U.S. is going to inspect the Cuban rig. But the
President of the International Association of Drilling
Contractors says that they would like to see some form of
blanket authority from the White House to allow any available
U.S. ship or equipment to help if there was a spill.
As I think back to the incident with the Deepwater Horizon
there was, I think, a fair amount of confusion because there
was response capability from other Nations but until that
approval was given and in some cases, was not given, we sat
without those assets. So is this a situation where the decision
is made on a case by case, day by day basis? In which case you
may see delay in your opportunity to respond quickly and
address the clean up?
Admiral Salerno. Just to maybe refer back to the Deepwater
Horizon, I think there are some misconceptions, Senator, about
the international offers of assistance. Some of the--what was
offered, quite honestly, was not useful. So there was some
technical determinations that had to be made as, you know, can
we actually use what's being offered. So that accounted for
some of the delays.
We had equipment from over 60 countries responding to
Deepwater Horizon. Most of it, quite honestly, was contracted
directly by the responsible party. Some of it was government to
government. But there was quite a bit that was there. Although
people were not fully apprised, I think, of some of the details
that went into some of those decisions.
As far as doing the same thing in a foreign EEZ, yes, we do
not have pre-authorization to do that. We would be very
dependent on the decisions made by the State Department and the
Treasury Department regarding the ability of U.S. companies to
offer their capabilities in Cuba's EEZ.
Senator Murkowski. But----
Admiral Salerno. In our discussions with them working with
the interagency, I'm very confident that people appreciate the
gravity of the situation. The fact that the clock is ticking
when an event occurs that close to our shores and that we would
need very expedient decisionmaking in those cases.
Senator Murkowski. That's where I would hope that if you've
got some protocols that have been put in place similar to what
we're looking at with the Arctic Council, and that task force
that is keying in on these issues as they relate to the Arctic,
that you could do something similar down in the South.
Let me ask you something, Mr. Bromwich, because you've
mentioned that good relationship with Repsol. They're going to
allow you to come in and inspect and that all is working well.
What about with the contractors? Have you had any
conversations? Have you met with the contractors? Because as we
learned, it's not just the company whose name happens to be at
the top of the letterhead. The contractors that are working
also have a great role to play. What discussions have you had
with them?
Mr. Bromwich. This is a somewhat different situation,
Senator. Most of the key positions on the rig from project
manager down to drilling supervisor, it's our understanding
they are going to be Repsol personnel. Obviously the companies,
the U.S. companies, that normally provide those kinds of
contracting services like the Halliburtons and the MW Swacos
and the Schlumberger, because of the embargo are not--do not
have employees that are going to work on this rig.
We are in continuing contact with Repsol. We have literally
asked them and in the last 48 hours to provide us a greater
level of detail about the contractors that they are going to
use. Certainly when we get that information we will make
further inquiries. But our understanding from the beginning is
that the key people on the rig are going to be Repsol
personnel. We have not been told that that's changed. So that's
been our guiding assumption as we move forward.
Senator Murkowski. Mr. Chairman, I've got some additional
questions. But if we have a chance for a second round we'll do
it then.
The Chairman. OK.
Senator Manchin.
Senator Manchin. Thank you, Mr. Chairman.
You know, Cuba's deep water development of its offshore oil
resources raises a number of troubling issues, as you can tell
by the questions you're getting asked. The Cuban government has
a history of actively working against the interest of the
United States. This is really why I've heard--have a hard time
believing that even if there was a desire to work cooperatively
to create offshore drilling standards and regulations between
Nations, could we truly trust Cuba to follow them?
So my question to both of you would be this. How do we
balance a desire not to provide an economic lifeline to a
Communist regime but still ensure that we're prepared for any
oil spills that may happen? If you were a Communist country and
you're looking and trying to take direction and we're trying to
intervene. They're going to say, you know, you all didn't do
too well with your own oil spill. So how are you going to
oversee and concerned about mine?
How would you all answer that?
Mr. Bromwich. Senator, it's a good question. I just want to
be clear that what we are focused on as a government is
protecting U.S. interests and not providing a lifeline to
anyone. This is all about protecting U.S. environmental
interests and economic interests.
Senator Manchin. Let me just ask this follow-up question
then. If something would happen, who would be paying for the
U.S. Government to go and intervene and clean this up? Are we
going to get reimbursed?
Mr. Bromwich. Those are a set of issues that the Justice
Department has already begun to look at. I'm sure----
Senator Manchin. It's a Communist regime. We haven't had a
good relationship with them. How would we expect them to----
Mr. Bromwich. I think the focus would be on getting
compensation from the operator, the way the U.S. regulatory
system works.
Senator Manchin. Why would the operator pay attention to us
as the United States trying to control that when they're
basically working in territorial waters that Cuba controls?
Mr. Bromwich. Repsol and many of the other countries that
explore in other countries exclusive economic zones have
interests in U.S. waters. Repsol has significant interest in
U.S. waters. I think that's played a significant role by----
Senator Manchin. So reciprocity----
Mr. Bromwich. As cooperative----
Senator Manchin. I got you.
Mr. Bromwich. As they have been up until now.
Senator Manchin. Do you think there's enough of a
retribution or reciprocity that if they would do something that
would adhere to what we would think they should, we could
basically sanction something they're doing here.
Mr. Bromwich. The evidence of our dealings with Repsol
strongly supports that. Absolutely.
Senator Manchin. You're saying even though they were
operating correctly in the waters of the U.S. and they did
something that you didn't believe was correct in the waters of
Cuba, you could retaliate with what they're doing even though
they haven't broken any laws in U.S. waters?
Mr. Bromwich. I don't want to use the word, retaliate. If
it turned out that we determined that they weren't operating
consistently with U.S. standards, that would be something very
troubling to us.
Senator Manchin. Does the Justice Department? Would they
support that? That we couldn't have restitution made because of
what they were doing in U.S. waters?
Mr. Bromwich. We review permits and operations of all
operators that operate in U.S. waters. If we saw, for example,
that there was a total failure that would adhere to those
standards and operations in other waters that would cause us to
re-examine our ability to sanction their continuing activity in
U.S. waters.
Senator Manchin. You can understand our concern. It sounds
like the American taxpayer could get left on the hook again.
Without using any other term, getting screwed again for holding
the bill for this if something should happen.
So I don't know how you work with a Communist regime.
That's the thing I don't know. Do you try to build other
relationships or basically go down the path that we've taken?
Mr. Bromwich. Our focus would be less on dealing with the
Cuban government on this and more on dealing with the operators
that we do have some leverage on.
Senator Manchin. So you think the operators--you think
basically the whole standard is going to be built around the
operators agreeing to perform and to this function, basically,
under the parameters that we've set not mattering--it doesn't
matter what waters we're dealing in in the world? Whether it be
the Bahaman waters or Cuban waters or Mexican waters, makes no
difference?
Mr. Bromwich. It does make a difference in that we're not
guaranteed that every operator who operates in foreign waters--
--
Senator Manchin. Sure.
Mr. Bromwich. Will adhere to our standards. In fact it's
our understanding that some of the companies that may be
drilling in Cuba are not ones that have----
Senator Manchin. That's my understanding too, is that the
Cuban government is sponsoring some of this State owned
drilling. What do you do in that case?
Mr. Bromwich. We do everything we possibly can to protect
ourselves.
Senator Manchin. But they're not drilling in our waters.
Mr. Bromwich. Right.
Senator Manchin. So you don't have that same----
Mr. Bromwich. We don't have the same kind of direct
regulatory authority.
Senator Manchin. You had before?
Mr. Bromwich. That's true.
Senator Manchin. Admiral, do you have any?
Admiral Salerno. I would echo what Mr. Bromwich said. We do
not have direct jurisdiction over a foreign rig operating in a
foreign EEZ. The questions you raised, Sir, about you know,
liabilities are very good questions. Our legal staff is working
with Department of Justice to see what legal avenues might
exist and for what we would call the responsible party.
For the response itself, outside of the Cuban EEZ in waters
that would directly affect the United States, we would access
our own pollution fund to fund the response as an immediate
response measure.
Senator Manchin. I also would have for a second round, Mr.
Chairman, on some economic conditions.
The Chairman. OK.
Senator Manchin. Thank you.
The Chairman. Senator Corker.
Senator Corker. Thank you, Mr. Chairman. Thank you for your
testimony and for what each of you are trying to do with
limited abilities.
Let me make sure I understand. I know there were a number
of questions that were just asked but right now the Justice
Department, Mr. Bromwich, is developing knowledge as to what
recourse we would have against the Spanish entity should there
be a blowout of some type.
Mr. Bromwich. That's correct.
Senator Corker. So we really don't know what recourse we
would have.
Mr. Bromwich. That's right. The Justice Department, it's my
understanding is exploring various theories for potential
recovery against the operator really for an impact of an oil
spill that had an impact on U.S. waters or shorelines.
Senator Corker. It seems to me that it would be odd that we
would not know that at present. I mean it just doesn't seem
like a new issue. I mean, what did other companies--what did
other countries have as recourse against us when the Black
water issue occurred?
Mr. Bromwich. I don't know. I don't know what research was
done. We have focused on the research that is done on this
specific set of issues, that is a spill in foreign waters in
the Caribbean that might have an impact on U.S. waters and the
U.S. coastline.
I'm not in the Justice Department, so----
Senator Corker. Yes. No, I understand that.
Mr. Bromwich. I'm aware that they're working on it and
developing potential theories of recovery. I'm not 100 percent
sure how far along they are or whether they've reached a final
conclusion.
Senator Corker. OK.
The inspection issue. I know that again you're limited
because of our relationship with Cuba and the fact that it's in
their international waters, but--or in their own waters. But it
does seem odd that we seem awfully confident about the
inspections when I would assume a big part of the inspections
that we have on our own rigs are after it's installed and just
ensuring that they're checking pressures and doing all the
things that need to occur. Yet we feel so confident that
Repsol, without any inspections, is going to be operating in a
perfectly pure way.
It's just odd that we would be so confident of that.
Mr. Bromwich. I don't want to overstate our level of
confidence.
We're given confidence by the openness that Repsol has
shown with us, their willingness to allow us to inspect their
rig. It's not optimal, Senator. There's no question that we
could do it better and a more full bodied inspection once the
rig is onsite. But this is a lot better than nothing in our
judgment and we think is the best way to protect U.S. interests
as best we can given the limitations.
Senator Corker. Let me ask you a question. Since well this
is obviously creating quite a paradox in U.S. policy. I mean we
have areas where we can inspect where we're not exploring. That
there are areas, you know, right off our shore that we cannot
inspect. Yet we feel semi-confident within our own abilities.
Is this, do you think, shaping policy at all within the
Administration to say, hey, look, this is kind of a ridiculous
scenario? I mean, we have things happening right off our shore
where we cannot inspect. Wouldn't it make sense to go ahead and
open up areas that we can inspect and go ahead and make use of,
you know, American energy that exists there since we have all
those type of inspection mechanisms in place.
Do you think this is helping the Administration maybe
evolve on their--on energy policy notions?
Mr. Bromwich. We're doing that, Senator. As you probably
know we're going forward with a lease sale in the Western Gulf
of Mexico in December, in the middle of December. We're going
forward with a major consolidated lease sale in the Central
Gulf of Mexico in May or June of next year. There's going to be
a new 5 year plan that will cover the years 2012 to 2017.
So this Administration is in fact, moving forward with a
safe and balanced energy production offshore, particularly in
the Gulf of Mexico, but also looking at the possibility of the
Arctic as well. So I think the Administration is moving
forward.
Senator Corker. Good.
Let me ask you, you know, the Ranking Member mentioned
something about the fact that the more we have in the way of
resources ourselves involved in exploration, the better we
could respond to something that might happen in waters that are
nearby. Is that a sensible notion that she laid out? That in
fact, the more we're producing and exploring off our own
intercontinental shelf, the better we could actually respond to
something that's happening in other country's waters.
Mr. Bromwich. I think Senator Murkowski is absolutely right
in stating that. I think we do have huge advantages based on
the number of decades that we've been involved in this business
of exploring and producing offshore. That doesn't mean that we
won't have blind spots as we clearly did prior to Deepwater
Horizon.
We didn't have Sub C containment capabilities which Senator
Murkowski mentioned in her opening statement. That was a huge
gap in our response arsenal. Which unfortunately it took
Deepwater Horizon to make everyone in industry and government
sit up and say, yeah, we need this. Safe and responsible
drilling in deep water can't go forward until we have it.
Senator Corker. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you.
Let me just remind folks we have a second panel of 3
witnesses. But we'll go ahead with a second round of questions
on this panel if members have questions.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman. I will try not
to use my full 5 minutes.
Just following up on Senator Corker's comments and the
statement that I made about developing our own resources to not
only assist others but really to build out that source of
expertise.
Admiral, are you aware of how many ice breakers the
Russians and the Canadians operate within their fleets right
now?
Admiral Salerno. Yes, Senator. I actually have some
statistics on that right here.
The Russians have 8 heavy ice breakers, 12 medium ice
breakers and 13 light ice breakers.
The Canadians have 2 medium ice breakers and 4 light ice
breakers.
Senator Murkowski. Of course the trick question then is how
many does the United States have? What is our ice breaking
capacity as a Nation?
Admiral Salerno. We have one operating ice breaker which is
a medium ice breaker, the Coast Guard Cutter Healy. We have 2
heavy ice breakers, the Polar Sea and Polar Star.
The Polar Sea is about to be placed in inactive status.
Polar Star is being refurbished. We expect to have her
operational in 2013.
Both of those Polars are at the end of their expected
service life. They're over 30 years old. So the Polar Star,
once refurbished, will probably produce about another 7 to 10
years of service.
That begs the question, you know, what will follow on? That
is the subject of ongoing analysis regarding the Coast Guard's
needs in the Arctic, the Nation's needs in the Arctic for a
permanent presence, particularly given the increase in human
activity in that region.
Senator Murkowski. I have suggested many, many times that
the current status of our ice breaking capacity as an Arctic
Nation just simply is unacceptable. I think that those in the
Coast Guard whose responsibility it is to have the oversight of
those waters would agree.
Within the studies that are coming up, is the Coast Guard
looking at the option then of perhaps leasing ice breakers
rather than dealing with the very major budget challenges that
we face with funding a new Polar Class ice breaker?
Admiral Salerno. Yes, Senator, that is a consideration.
There is an ongoing independent business case analysis looking
at the Coast Guard's needs in the Arctic and how best to
perform our missions. So leasing----
Senator Murkowski. I understood--I don't mean to interrupt.
But I understood that that business case study was due out on
the 15th of October. Do you have any idea when we might expect
to see that?
Admiral Salerno. It's still undergoing review, Senator. I
can get back to you on----
Senator Murkowski. OK. I'd appreciate it because we're
anxious to see it, as you can imagine. Thank you.
Admiral Salerno. Yes, Senator.
Senator Murkowski. Mr. Bromwich, on the Arctic side, as you
have mentioned, we are underway. Your Department is clearly
underway in the process of the review of the Chukchi
exploration plan. You committed to starting work on this when
the record of decision was filed on October 3rd. Previous
versions of the plan have won your agency's approval.
Where are we in terms of moving this along? What can we
anticipate? Will Shell be able to proceed in time for the 2012
exploration season? Where are we with that?
Mr. Bromwich. We're working hard on it, Senator. As I think
you know, we've had many, many contacts with Shell. The
President by Executive Order put together an interagency
working group to try to make more efficient the permitting
process and the review process. It's under the supervision of
Deputy----
Senator Murkowski. Can I ask you about that?
Mr. Bromwich. Sure.
Senator Murkowski. Because I understand that the spill
response plan is going to be reviewed separately from the
exploration plan. That the feedback is being solicited from
this interagency group. So is this actually helping it? The
fact that you've got 2 separate tracks could lead one to assume
that it might take longer.
Are we on track for both of those plans?
Mr. Bromwich. I think we're certainly on track to do an
effective, focused, efficient review where all of the agencies
get to look at the contingency plan, the spill response plan in
a timely way. That's really been one of the main focuses of the
interagency group. I'm not part of that, but my understanding
is that it's proceeding quite well.
Senator Murkowski. Again, I would ask the question whether
you believe that it will be completed in time to allow Shell to
proceed with the 2012 season.
Mr. Bromwich. Certainly do everything we can to do the full
review so that, if it's approved, they would be able to do
that.
Senator Murkowski. Admiral, did you want to chime in there?
Admiral Salerno. Yes, Senator. We have been in discussions
with Shell and with BSEE on the plans. It appears that Shell
has been doing its homework as to what is needed there.
As you know the logistical challenges are enormous. Most of
what needs to be provided will be sea based. We have provided
some feedback to BSEE which has the approval for the offshore
spill response plan on some areas we think need to be
bolstered. But at this point I do not think they'll be
unachievable by Shell.
Senator Murkowski. You believe that they will not be?
Admiral Salerno. No, I don't think they're unachievable.
Two negatives.
Senator Murkowski. OK.
Admiral Salerno. I think they are achievable.
Senator Murkowski. I thank you.
Admiral Salerno. Are achievable.
Senator Murkowski. Thank you, Mr. Chairman.
The Chairman. Thank you.
I know Senator Manchin has additional questions and maybe
Senator Corker does. But Senator Franken has come in. Did you
have questions for this first panel?
Senator Franken. I do.
The Chairman. Please go ahead.
Senator Franken. Thank you, Mr. Chairman.
This is for Vice Admiral. Thank you for your testimony.
The President's Spill Commission report noted that there
are a lot of challenges in responding to oil spills in Arctic
waters. The waters are so icy so the oil wouldn't break down as
quickly. We have fewer bases from which to stage cleanup
effort. As the Ranking Member was mentioning, we really lack
sufficient ice class vessels capable of responding to a spill.
What changes have the Coast Guard made since the release of
the Spill Commission report? Do you think that the Coast Guard
is ready to deal? I think you said that it was not
unachievable. But what changes have been made?
Admiral Salerno. Senator, a lot of the response capability
will be placed on Shell. They will have the equipment, the
vessels, the recovery vessels, on scene to respond to a spill.
The Coast Guard will have its obligation to oversee and direct.
We've been in discussions with our regional commander in the
17th Coast Guard District as to what capabilities we can
provide during the drilling season.
It will be very seasonal. They won't be able to drill year
round. So we are looking at buoy tenders which have minimal ice
capability to operate in the region during the drilling.
We will rely heavily on Shell for other capabilities such
as hangers, refueling for helicopters, aircraft, command and
control personnel. The region is very sparse in those
capabilities. Even hotel capabilities are very, very limited.
There were, if you compare Deepwater Horizon with the
46,000 responders we would exhaust the hotel capacity on the
North Slope with probably just a few hundred. So having people
housed at sea would be a major consideration. So we're placing
a lot of responsibility on the driller to--the operating
company, to provide that capability so that we can exercise our
oversight and management responsibilities should something
occur.
Senator Franken. In your opinion how did that work in
Deepwater Horizon?
Admiral Salerno. The overall response effort, in my
opinion, worked very well. Now that's separate and distinct
from how it played out in the media. But the response construct
where under our laws the spiller is responsible for mounting an
effective response. They did that with the direction of the
Federal Government to make sure that they brought all the
equipment to bear.
We do not have the equipment in our Federal inventory to
mount a response of that magnitude. It is predicated on the
industry having that capability and performing to our
satisfaction. So overall, sir, I would say it actually worked
quite well.
Senator Franken. You thought the response at Deepwater
Horizon worked quite well?
Admiral Salerno. Yes, I did. Now given the fact that there
were some obvious gaps at the beginning, we did not have,
nobody had, Sub C well containment capability to operate at
that depth. This was almost like a moon shot in terms of the
technology that had to be developed in the midst of crisis. But
that was done. Now we are better prepared for anything of that
nature.
Organizationally, yes, the proper elements did come
together. Now, was it perfect? No.
One of the key lessons we learned is, you know, although
we'd always planned, in conjunction with State officials, we'd
learned that we really need to drive that down to the county
level and the municipality level. So where there were some
chaffing in the response I think that was really the crux of
it.
We have now gone back and re-looked at all of our
contingency plans around the country to make sure that we are
including the local levels, the county levels, in that
planning, up front, identifying the sensitive areas, getting
their input and making them part of the overall decision
process in a natural response.
Senator Franken. But have far fewer resources up in the
North Slope than you would in the Gulf.
Admiral Salerno. That is correct. That is correct.
Senator Franken. So as well as it worked in the Gulf how
many barrels of oil were spilled or gallons of oil were spilled
in the Gulf from the Deepwater Horizon?
Admiral Salerno. I don't have that figure at my fingertips,
sir. But I can get that for you.
Mr. Bromwich. It's 4.9 million gallons.
Senator Franken. 4.9 million gallons. But you say that
you're capability in Alaska is not anywhere near what you had.
Admiral Salerno. It is not. It's the tyranny of time and
distance. Our closest air station is probably 1,200 miles from
the location in the Chukchi Sea where the drilling will take
place and maybe about 1,500 miles from the location in the
Beaufort Sea.
So that's a considerable distance to operate from. We
really would need some type of a forward operating location to
be effective. Same thing with ships, a ship, and the closest
port for a ship to operate from would be Dutch Harbor and
that's still a considerable distance from the location.
So time and distance is a significant problem operating in
that area.
Senator Franken. OK. Thank you. Thank you, Mr. Chairman.
Mr. Bromwich. Senator, if I could correct it. I said 4.9
million gallons. It's 4.9 million barrels. My mistake, I
apologize.
Senator Franken. Thank you.
The Chairman. Thank you. In order to stick with our rule of
trying to go back and forth, let me see if Senator Corker had
any additional questions.
Senator Corker. Yes, sir. I'll try to be brief.
Mr.--Admiral, if you would? There was a lot of confusion
the last time something occurred over the Jones Act and whether
it inhibited our ability to respond. Just since we're talking
about this issue now, I wondered if you might make any comments
regarding that.
Admiral Salerno. Sir, there was a lot of discussion about
that. The reality is it did not affect the ability of any
vessel to participate in the response. There were foreign
vessels involved.
The Jones Act, as you know, limits movement of cargo, even
valueless cargo between U.S. ports by a foreign vessel. That
was really not an issue in this response. If there were a need
for that there are provisions for waivers.
But there was actually sufficient number of U.S. flag
vessels to provide the needed services and there were also, as
mentioned, quite a few foreign flag vessels operating offshore.
There was no violation of the Jones Act.
Senator Corker. OK. Then second and briefly, I have,
personally, I have a lot of concerns about the Law of the Sea
Treaty which, you know, hasn't become part of the U.S. The U.S.
is not a part of that.
But is there anything regarding anything we're discussing
today where you would feel most people who do what you do
support the treaty. I wonder if there's anything regarding any
of the subject matter today where you feel like the Law of the
Sea Treaty would be of benefit to you.
Admiral Salerno. There are provisions in the Law of the Sea
Treaty which talk about cooperation between nations in
environmental issues. So there is application there, sir.
Senator Corker. Like what?
Admiral Salerno. Regarding cooperation on response for oil
spills.
Senator Corker. So like what? I'm not understanding what
you're saying. So are you saying between us and Cuba or us and
the Bahamas?
Admiral Salerno. Between any 2 countries if there's
provisions. I would have to get the text for you, Senator. It's
been quite a while since I've looked at that particular aspect
of it.
But response and cooperation between nations for an oil
spill that affects both or originates in one that affects
another.
Senator Corker. Again we have a lot of concerns. It's just
such a confusing document. But I would appreciate it if you
would respond as to how in this particular area there's
something that might be of benefit to our country. I thank you
both for you testimony.
Admiral Salerno. Thank you, sir.
The Chairman. Senator Manchin.
Senator Manchin. Thank you, Mr. Chairman.
Knowing firsthand the disasters of an oils spill like we
have with the BP in the Gulf and now that you've made very
clear, unless it's something--some company such as reputable
Repsol, who does work in America. I go back to Cuba. If Cuba's
interest is developing their own drilling, which we have no
input whatsoever.
With that being said, can either one of you tell me if this
Administration is looking at any, lifting any sanctions that
might give us a better opportunity to negotiate the oversight
and having standards that Cuba would adhere to other than just
the reprisal of force? I don't know how you intend to. I'm
having a hard time understanding how you intend to have Cuba
accept our standards without any retribution on them. They have
no stake in this except to explore their own.
Can either one of you tell me if we have anything in place?
Mr. Bromwich. We can't obviously direct Cuba to impose our
standards. So our, really exclusive vehicle, is through the
operator.
Senator Manchin. No, the question is, is the United States
looking at modifying any sanctions that we might have against
Cuba in order for a return for them to have to set these
standards or adhere to these standards?
Mr. Bromwich. I'm not aware of any such discussions. The
interagency group that Admiral Salerno's agency and mine have
been involved with----
Senator Manchin. So you're totally----
Mr. Bromwich. Have focused on the specific issues----
Senator Manchin. So we are totally depending upon a company
that does work in America for you to have a hammer on them to
do it right in Cuban waters?
Mr. Bromwich. That's our leverage, yes.
Senator Manchin. Knowing that some exploration will be done
by Cuban companies that have no interest in American waters,
correct?
Mr. Bromwich. No. Not Cuban companies. There are other----
Senator Manchin. Other countries that do not have any
interest in American waters. Is that----
Mr. Bromwich. It's our understanding that----
Senator Manchin. That's fair. That's a fair question.
Mr. Bromwich. Yes, it is.
Senator Manchin. OK. You have no oversight whatsoever. You
have no hammer. You have no leverage. Correct?
Mr. Bromwich. Correct.
Senator Manchin. We're at the mercy of the Cuban government
to make sure they do it right?
Mr. Bromwich. They have oversight power. We don't.
Senator Manchin. OK. We have no hammer.
Mr. Bromwich. Correct.
Senator Manchin. Any you're telling me you don't know if
anyone's talking about using a bargaining of some sanctions or
lifting sanctions that might make it better for us
environmentally to have input?
Mr. Bromwich. I don't know whether those conversations are
taking place.
Senator Manchin. Do you believe that they should? As an
official of the government and as the Admiral of the most
powerful Department of Defense in the world, what do you
believe?
Admiral Salerno. Sir, we're actually Homeland Security. But
sir, I have no----
Senator Manchin. You're very powerful.
[Laughter.]
Admiral Salerno. I have no knowledge of discussions of that
nature.
Senator Manchin. It's never got to your level. Did you even
talked about how you would have more input to protect,
environmentally, the American shoreline, the American waters?
Admiral Salerno. Actually, sir, I think that would--that
discussion would take place way above my level.
Mr. Bromwich. I think there is--we talked, I talked in my
prepared testimony in my oral statement about work that we're
doing with other countries in the Caribbean including Mexico.
So we certainly think and hope that the continuing multi-
lateral engagement would have the kind of impact and effect
that you're----
Senator Manchin. I think the most important thing I've got
out of this whole discussion is that basically the only
leverage we have is companies that are doing business in
American waters. That's the only leverage we have.
Mr. Bromwich. That's the direct leverage that we have.
Senator Manchin. That's it. But other than that there is--
--
Mr. Bromwich. There may also be leverage that we can
exercise through our multi-lateral partners like----
Senator Manchin. You're going to use economic sanctions, I
would assume against other companies that might go on behest of
the Cuban government. You're thinking well maybe I can leverage
that and go back and make them do it right. But you really have
no ties.
If they're not in our waters, we have no oversight or
leverage whatsoever. I think that's fair.
Mr. Bromwich. I think that's fair.
Senator Manchin. We've got that. OK.
So we know that we are at a tremendous danger for the
environment of the United States coastline and waters unless
there's other reasons for someone. If a Communist country, such
as Cuba, to have a more vested interest other than just trying
to please the American government which they haven't done in
the last 50 years.
Mr. Bromwich. I don't think either of us is denying that
there's a risk.
Senator Manchin. OK. Thank you, sir.
The Chairman. Senator Murkowski, do you have anything more?
Senator Murkowski. I do not, Mr. Chairman.
The Chairman. OK. Why don't we dismiss this panel? Thank
you both very much for your excellent testimony. We will go to
the second panel.
The second panel is Mr. Jorge Pinon, R. Pinon, who is the
Visiting Research Fellow with the Latin American and Caribbean
Center at the Cuban Research Institute at Florida International
University in Miami.
Mr. Paul A. Schuler, who is President and CEO of the Clean
Caribbean and Americas in Fort Lauderdale.
Dr. Mark D. Myers, who is Vice Chancellor for Research at
the University of Alaska in Fairbanks.
We thank you all very much for being here. Why don't we use
the same general rules with you. We will include any written
statement that you have prepared as in full and in the record.
But if you could take 5 or 6 minutes each and give us the main
points you think we ought to try to understand, that would be
very much appreciated.
Mr. Pinon, why don't you start, please?
STATEMENT OF JORGE R. PINON, VISITING RESEARCH FELLOW, FLORIDA
INTERNATIONAL UNIVERSITY, LATIN AMERICAN AND CARIBBEAN CENTER,
CUBAN RESEARCH INSTITUTE, MIAMI, FL
Mr. Pinon. Thank you, Mr. Chairman and members of the
Committee for the privilege and honor to be here today
testifying and sharing with you what I consider to be an issue
of national security. I'm not only with the University, Florida
International University, but I'm also the former President of
Amoco Oil Mexico and the President of Amoco Oil Latin America.
It's important that for the United States, Mexico and Cuba,
the Gulf of Mexico represents the greatest potential source of
significant, new discoveries of oil and natural gas in the
years ahead. Underscoring how critical and strategic the region
is for the respective energy security interest. These resources
will come from increasingly challenging geologic and
environmental settings in deep and ultra deep waters, at depths
below the sea floor not thought possible a few decades ago.
Development of technology to find and to produce oil and
natural gas in these challenging settings has made these
resources available. However, as the risks associated with
pursuing the development have raised concerns for the
environment that challenge industry and regulatory agencies to
ensure that they're prepared to manage their development
effectively and safely.
There are 4 key elements of success for the development of
hydrocarbon resources.
Capital.
Technology.
Operational Knowhow
Last and most important and what I believe is the subject
matter of this hearing, Stewardship. Stewardship is the
principle by which we operate not only for the economic benefit
of the enterprise, but also the commitment to meet human needs
while preserving the environment. These are the regulations,
standards and behaviors, whose objective is the safe and
environmentally responsible development of the resources.
Mexico, Cuba and the Bahamas are in the process of
implementing the most advanced and probably up to date drilling
regulations and standards. But do they have the resources,
capabilities, assets, personnel and experience to enforce them?
Can these countries regulatory agencies appropriate police the
operators? These are issues for debate.
What are the roles and responsibilities of the oil
companies operating in the region relative to safety and oil
spill prevention and clean up? Do the operating oil companies
who are going to undertake the drilling and physical
development of the resources have the values, culture, and
economic interests to follow the set rules, standards,
regulations of the host country?
Said here is only one, publicly traded, non-state oil
company operating in the Gulf of Mexico region outside of the
United States. That is Spain's Repsol. All others are State
owned National oil companies over whom our sphere of influence
is limited or non-existent. I have not heard one single comment
about Petronas and Russia's Gazprom, who are going to drill the
second well after Repsol. What about them?
Then there is the issue of trans-boundary compensation for
oil pollution damages, the role of international oil company
liability conventions, the cost of recovery issues when one
country is providing most of the incident's spill response and
clean-up assets and resources in another country. Just the
issue of identifying ``responsible party and/or parties'' could
result in complex legal disputes in international law.
Are the channels of communication in place to share lessons
learned and best practices for the benefit and protection of
our common economic and environmental interests? Let's think
about prevention. Not only with other regulatory agencies, but
most importantly with the private and State oil companies which
are going to execute the projects. These are questions that
need to be answered.
While respecting each country's sovereignty we must put
aside cultural, political and nationalistic differences, not an
easy task, and work together toward a set of common standards
and regulations, as well as, regional emergency planning and
response cooperation agreements.
As a result of the 1979 Pemex Ixtoc well blow-out, which
impacted the South Texas coastline, the United States and
Mexico signed in 1980 MEXUS Plan, as it was discussed here
previously.
A similar environmental agreement exists between the United
States and Canada. The 1986 Canada-United States Joint Marine
Pollution Contingency Plan covering the shared maritime borders
of the Great Lakes, Atlantic/Pacific coast and the Beaufort
Sea.
Today the Deepwater Horizon incident and the resulting
catastrophic oil spill demonstrates the urgency in developing a
similar policy of environmental cooperation between the United
States, Mexico, Cuba and the Bahamas, as these countries embark
in developing their respective deep water, hydrocarbon
resources.
The consequences from an accidental oil spill demands
proactive joint planning by all 3 countries and the United
States in order to minimize or avoid such a disaster. This
planning should be done in the spirit of cooperation and not
confrontation.
These risks and challenges are what give purpose to what
Dr. Lee Hunt, President of the International Association of
Drilling Contractors, calls a ``One Gulf'' policy of working
together for the development of collective standards,
regulations and solutions to the risks associated with deep
water drilling.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Pinon follows:]
Prepared Statement of Jorge R. Pinon, Visiting Research Fellow, Florida
International University, Latin American and Caribbean Center, Cuban
Research Institute, Miami, FL
Thank you Mr. Chairman and members of the committee, for the
privilege and honor to be here today testifying and sharing with you
what I consider to be an issue of national security.
My name is Jorge Pinon, I am a Visiting Research Fellow with
Florida International University, Latin American and Caribbean Center's
Cuban Research Institute. I am also the former president of Amoco Oil
de Mexico and president of Amoco Oil Latin America.
For the United States, Mexico, and Cuba, the Gulf of Mexico
represents the greatest potential source of significant new discoveries
of oil and natural gas in the years ahead; underscoring how critical
and strategic the region is for their respective energy security
interests.
These resources will come from increasingly challenging geologic
and environmental settings in deep and ultra-deep water and at depths
below the sea floor not thought possible a few decades ago.
The development of technology to find and to produce oil and
natural gas in these challenging settings has made these resources
available, however as the risks associated with pursuing their
development have raised concerns for the environment that challenge
industry and regulatory agencies to ensure they are prepared to manage
their development effectively and safely. (Groat 2011)
There are four key elements of success for the development of
hydrocarbon resources; capital, technology, operational know-how, and
last and most important, and what I believe is the subject matter of
this hearing, stewardship.
Stewardship is the principle by which we operate not only for the
economic benefit of the enterprise, but also the commitment to meet
human needs while preserving the environment. These are the
regulations, standards, and behaviors whose objective is the safe and
environmentally responsible development of the resources.
Mexico, Cuba and The Bahamas are in the process of implementing the
most advanced and up to date drilling regulations and standards; but do
they have the resources, capabilities, assets, personnel, and
experience to enforce them? Can these countries' regulatory agencies
appropriately police the operators? These are issues for debate.
What are the roles and responsibilities of the oil companies
operating in the region relatively to safety and oil spill prevention
and clean up? Do the operating oil companies who are going to undertake
the drilling and physical development of the resources have the values,
culture, and economic interests to follow the set rules, standards and
regulations of the host country?
There is only one, publicly traded, non-state oil company operating
in the Gulf of Mexico region outside of the United States and that is
Spain's Repsol; all others are state owned national oil companies over
whom our sphere of influence is limited or non-existent, and over which
the question of sovereign immunity is to be considered.
And then there is the issue of transboundary compensation for oil
pollution damages, the role of international oil pollution liability
conventions, cost recovery issues when one country is providing most of
the incident's spill response and clean-up assets and resources. Just
the issue of identifying ``responsible party or parties'' could result
in complex legal disputes in international law.
Are the channels of communication in place to share lessons learned
and best practices for the benefit and protection of our common
economic and environmental interests? Not only with other regulatory
agencies, but most importantly with the private and state oil companies
which are going to execute the projects. These are questions that need
to be answered.
While respecting each country's sovereignty we must put aside
cultural, political, and nationalistic differences--not an easy task--
and work together toward a set of common standards and regulations, as
well as regional emergency planning and response cooperation
agreements.
As a result of the 1979 Pemex Ixtoc well blow-out, which impacted
the South Texas coast line, the United States and Mexico signed in 1980
the MEXUS Plan. This agreement of cooperation set protocols to follow
in case of an oil spill which would pose a threat to the waters of both
countries.
A similar environmental agreement exists between the United States
and Canada; the 1986 Canada-United States Joint Marine Pollution
Contingency Plan, covering the shared maritime borders along the Great
Lakes, Atlantic and Pacific coasts, and the Beaufort Sea.
Today, the Deepwater Horizon incident and the resulting
catastrophic oil spill, demonstrates the urgency in developing a
similar policy of environmental cooperation between the United States,
Mexico, Cuba and The Bahamas; as these countries embark in developing
their respective deepwater hydrocarbon resources.
The consequences from an accidental oil spill demands proactive
joint planning by all three countries and the United States in order to
minimize or avoid such a disaster. This planning should be done in a
spirit of cooperation, and not confrontation.
These risks and challenges are what give purpose to what Dr. Lee
Hunt, president of the International Association of Drilling
Contractors calls a ``One Gulf'' policy of working together for the
development of collective standards, regulations, and solutions to the
risks associated with deepwater drilling.
Thank you Mr. Chairman.
[This testimony reflects strictly the personal views of the author and
in no way an expression of his views in his official capacity with
Florida International University Latin American and Caribbean Center's
Cuban Research Institute.]
The Chairman. Thank you very much.
Mr. Schuler.
STATEMENT OF PAUL SCHULER, PRESIDENT & CEO, CLEAN CARIBBEAN &
AMERICAS, FORT LAUDERDALE, FL
Mr. Schuler. Yes. Good morning, Mr. Chairman and Committee
members. My name is Paul Schuler. I am President and CEO of
Clean Caribbean and Americas.
CCA is an international oil spill response cooperative with
geographic responsibility for the Caribbean basin and the
Americas. I've been President of CCA for 20 years following a
14 year U.S. Navy career. I'm here today to discuss how we are
planning for oil spill response drilling in Cuba.
CCA covers 37 countries and territories in the hemisphere.
We're a non-profit organization that is funded by our 40 oil
company members. Our mission is oil spill preparedness and
response and over the years membership dues have capitalized a
multi-million dollar stockpile of air mobile response
equipment. Repsol has been a member of CCA for many years.
Petronas, who will be the next company to drill in Cuba, is in
the process of completing membership.
CCA operates under an internationally accepted system of
response developed decades ago by the U.N. Environment Program
and International Maritime Organization. The system is called
Tiered Response. Is recognized in the U.S. and is the
foundation for preparedness and response around the world.
Accordingly companies involved the petroleum industry are
required to have a capability to respond to oil spills that
might occur from the entire range of their operations with
escalating capability and resources depending on the severity
of the incident.
At Tier 1 capability with immediately available response
resources for small operational spills should be available
onsite.
Tier 2 capability escalates with additional equipment
nearby or in cooperation with other companies or government
resources.
CCA is a Tier 3 response organization. We have air mobile
equipment that can be rapidly mobilized to provide assistance
in incidents that exceed local or National capability. We work
very closely with other Tier 3 response organizations including
Oil Spill Response Limited in the UK and with the Marine Spill
Response Corporation in the U.S. MSRC is the world's largest
and most capable response cooperative and led the response in
the Gulf of Mexico last year for BP.
In the past 20 years CCA has responded to a number of
spills in the Caribbean, Latin America and North America. We
have been involved in Cuba since 2001 when we first applied and
received licenses from the Department of Treasury and
Department of Commerce to travel and to export our equipment to
Cuba. This was in response to drilling that took place by
Repsol and Petronas.
CCA staff, including myself, have traveled to Cuba for
contingency planning, training, drills and exercises with these
companies. With the new round of drilling coming up we have
recently been back to Cuba to work with Repsol and Petronas.
CCA is jointly developing Repsol's oil spill contingency plan
with our sister cooperative Oil Spill Response Limited in the
UK. OSRL also has a large stockpile of air mobile equipment and
they have no limitations on sending equipment and personnel to
Cuba.
Repsol's contingency plan is being developed and resources
are being committed consistent with the international model of
tiered response. The drilling rig has Tier 1 equipment onboard
to provide initial, rapid response onsite. Seven containers of
equipment are en route to Cuba from OSRL to be placed in the
shore base at the Port of Mariel for Tier 2 reinforcement. The
contingency plan calls for rapid mobilization of CCA and OSRL
for Tier 3 support, if needed.
I'll just divert from the text and say we do not have plans
right now for bringing in the U.S. capability. We can discuss
that in Q and A.
I do not believe the concern about Cuba is really about
small Tier 1 and Tier 2 incidents. It's about the blowout
scenario that we experienced last year in the Gulf of Mexico.
CCA was intensely involved in that response. Although we
provided conventional equipment such as skimmers and
containment boom, our primary focus was on aerial application
of dispersants flying our spray system in a chartered C-130
Hercules aircraft.
Under the authority of the U.S. Coast Guard as Federal on
scene commander, CCA equipment and contractors sprayed almost
400,000 gallons or more than one-third of the dispersant
applied by aircraft. We are intensely proud of the role we
played. We believe that science supports the judicious use of
dispersants to minimize the impact of oil spills.
I have personally been involved in research and published
papers on the topic of net environmental benefit analysis of
dispersed verses non-dispersed oil in tropical ecosystems. I
bring this up because one of the many advantages of the
dispersant option is the speed of mobilization and the quantity
of spilled oil that can be treated with dispersants. Due to the
currents in the Florida straits and the difficulty of
conventional recovery operations dispersants will likely play a
major role at least in the initial phases of a spill response
until other resources can be mobilized.
Spilled oil knows no political boundaries. So what we do in
Cuba can very well determine the impact of spilled oil in
Florida and the Bahamas. In a deep water blowout scenario in
Cuba, CCA will provide the initial Tier 3 response resources
from our organic assets.
We can very rapidly mobilize our equipment to integrate
with the ongoing Tier 1 and Tier 2 response effort in Cuba.
OSRL will simultaneously activate bringing in additional
resources. We will provide and sustain the initial response and
take measures to combat the spill near its source. However, for
an incident on the scale of the Gulf of Mexico spill we would
expect the mobilization or cascading of significant other
resources as the response further escalates and transitions to
the project phase.
I regularly meet with government officials in the Caribbean
and Latin America to advise on national contingency planning
and especially on establishing mechanisms for rapid and smooth
movement of response resources through customs and immigration.
Cuba presents a unique challenge. On this coming Thursday, CCA
will participate in a table top exercise of the U.S. Coast
Guard's International Oil Drilling Response Plan. We will
simulate the initial responses I described.
What remains to be seen is how the response escalates
beyond our involvement. Nearby in the Gulf of Mexico is perhaps
the largest concentration of oil spill capability in the world.
Hopefully we'll never need to execute our plan. But if we do we
need this capability. I therefore encourage some form of
loosening up of the process so more U.S. companies, contractors
and resources can be made available, if needed.
Thank you for your attention and the honor and privilege of
addressing you.
[The prepared statement of Mr. Schuler follows:]
Prepared Statement of Paul Schuler, President & CEO, Clean Caribbean &
Americas, Fort Lauderdale, FL
Good morning, Mr. Chairman and Committee members. My name is Paul
Schuler and I am President and CEO of Clean Caribbean & Americas (CCA).
CCA is an international oil spill response cooperative with a
geographic responsibility for the Caribbean basin and the Americas. I
have been President of CCA for 20 years, following a 14 year career in
the US Navy. I am here today to discuss how we are planning for oil
spill response for drilling in Cuba. CCA covers 37 countries and
territories in this hemisphere. We are a non-profit organization that
that is funded by our 40 oil company members. Our mission is Oil Spill
Preparedness and Response, and over the years, membership dues have
capitalized a multi-million dollar stockpile of air mobile response
equipment. Repsol has been a member of CCA for many years, and
Petronas, who will be the next company to drill in Cuba, is in the
process of completing its membership in CCA.
CCA operates under an internationally accepted system of response
developed decades ago by the UN Environment Program and the
International Maritime Organization. The system, called ``Tiered
Response'' is recognized in the US and is the foundation of
preparedness and response around the world. Accordingly, companies
involved in the petroleum industry are required to have the capability
to respond to oil spills that might occur from the entire range of
their operations, with escalating capability and resources depending on
severity of the incident. A Tier 1 capability with immediately
available response resources for small, operational spills should be
available on site. Tier 2 capability escalates with additional
equipment nearby or in cooperation with other companies or government
resources. CCA is a Tier 3 response organization, and we have air
mobile equipment that can be rapidly mobilized to provide assistance in
incidents that exceed local or national capability. We work very
closely with other Tier 3 response organizations, including Oil Spill
Response Ltd (OSRL), in the UK, and with the Marine Spill Response
Corporation (MSRC) in the US. MSRC is the world's largest amd most
capable response cooperative and lead the response in the Gulf of
Mexico last year for BP.
In the past 20 years CCA has responded to a number of spills in the
Caribbean, Latin America and North America. We have been involved with
Cuba since 2001, when we first applied for and received licenses from
the Department of Treasury and Department of Commerce to travel to and
export our equipment to Cuba. This was in response to drilling that
took place by Repsol and Petrobras. CCA staff, including myself, have
traveled to Cuba for Contingency Planning, training, and drills and
exercises with these companies. With the new round of drilling coming
up, we have recently been back to Cuba to work with Repsol and
Petronas. CCA is jointly developing Repsol's Oil Spill Contingency Plan
with our sister cooperative, Oil Spill Response Ltd, in the UK. OSRL
also has a large stockpile of air mobile equipment, and they have no
limitations on sending equipment and personnel to Cuba.
Repsol's contingency plan is being developed and resources are
being committed consistent with the international model of Tiered
Response. The drilling rig has Tier 1 equipment on board to provide
initial rapid response on site. Seven containers of equipment are en
route to Cuba from OSRL to be placed in the shore base at the Port of
Mariel for Tier 2 reinforcement. The Contingency Response Plan calls
for rapid mobilization of both CCA and OSRL for Tier 3 support if
needed.
I do not believe the concern about Cuba is really about small Tier
1 or Tier 2 incidents. It is about the blowout scenario that we
experienced last year in the Gulf of Mexico. CCA was intensely involved
in that response. Although we provided conventional equipment, such as
skimmers and containment boom, our primary focus was on aerial
application of dispersants flying our spray system in a chartered C-130
Hercules aircraft. Under the authority of the US Coast Guard as Federal
On-Scene Commander, CCA equipment and contractors sprayed almost
400,000 gallons, or more than one third of the dispersant applied by
aircraft. We are intensely proud of the role we played and believe that
science supports the judicious use of dispersants to minimize the
impact of oil spills. I have personally been involved in research and
published papers on the topic of the Net Environmental Benefit Analysis
of Dispersed versus Non-dispersed oil in Tropical Ecosystems. I bring
this up because one of many advantages of the dispersant option is the
speed of mobilization and quantity of spilled oil that can be treated.
Due to the currents in the Florida Straits and difficulty of
conventional recovery operations, dispersants will likely play a major
role, at least in the intial phases of a spill response until other
resources can be mobilized to the Straits. Spilled oil knows no
political boundary, so what we do in Cuba can very well determine the
impact of spilled oil in Florida and the Bahamas.
In a deep water blowout scenario in Cuba, CCA will provide the
initial Tier 3 response resources from our organic assets. We can very
rapidly mobilize our equipment to integrate into the ongoing Tier 1 and
Tier 2 response effort in Cuba. OSRL will simultaneously activate
bringing in additional resources. We will provide and sustain this
initial response and take measures to combat the spill near its source.
However, for an incident on the scale of the Gulf of Mexico spill, we
would expect the mobilization or ``cascading'' of significant other
response resouces as the response further escalates and transitions to
the ``project phase.''
I regularly meet with government officials in the Caribbean and
Latin America to advise on National Contingency Planning and especially
establishing mechanisms for the rapid and smooth movement of response
resources through customs and immigration. Cuba presents a unique
challenge. On Thursday, CCA will participate in a tabletop exercise of
the US Coast Guard's International Oil Drilling Response Plan. We will
simulate our initial response as I described. What remains to be seen
is how the response escalates beyond our involvement. Nearby in the
Gulf of Mexico is perhaps the largest concentration of oil spill
response capability in the world. Hopefully we will never need to
execute our plan, but if we do, that capability will be needed.
I therefore encourage some form of loosening up ``the process'' so
more US companies and resources can be made available if needed. Thank
you for your attention and the honor and privelage of addressing you.
The Chairman. Thank you very much.
Dr. Myers, go right ahead.
STATEMENT OF MARK MYERS, VICE CHANCELLOR FOR RESEARCH,
UNIVERSITY OF ALASKA, FAIRBANKS, AK
Mr. Myers. Thank you.
Good morning, Chairman Bingaman, Ranking Member Murkowski
and Senator Corker. Today I will limit my comments to the
Arctic areas.
Alaska's Outer Continental Shelf adjoins the Canadian
Beaufort Sea on the East and on the West the Russian Bering and
Chukchi Seas. Response capacity and readiness for oil spills on
waters adjoining Alaska's Outer Continental Shelf should be
seen in light of the type, probability and potential
consequences of spill.
Oil spills in the Arctic could occur from marine shipping
accidents such as vessels including fishing boats, cruise
ships, bulk carriers, cargo ships or oil tankers.
Oil spills can occur from oil exploration wells, production
platforms, loading platforms and oil pipelines.
These different sources all carry different risk profiles
and response requirements. Spill risk and ability to respond is
also controlled by the geology, geography and ecology of the
region.
So talk about marine shipping. It is expected that Arctic
shipping will dramatically increase as sea ice decreases. Based
on recent historical change and coupled oceanographic and
atmospheric models it is predicted the Arctic Ocean will be
seasonally ice free by mid century.
This will open up seasonally opportunities for shorter
international shipping routes and also create the opportunity
to develop increased Arctic tourism, fishing, mining and oil
and gas development. With these shipping opportunities will
come increased risk of vessel accidents and associated spills.
The largest risk to vessels is likely to come from ships that
encounter ice conditions beyond the ship's capacity to handle.
In order to escort or respond to vessels in distress both
Canada and Russia have significant Arctic capable, ice breaking
fleets. The Canadian Coast Guard has a fleet of 7 ice breakers
that were built between 1969 and 1987.
Russia has a fleet of 28 ice breakers that were built
between 1957 and 2007 including ten that are nuclear powered.
In addition Russia intends on constructing 3 new nuclear
carriers or nuclear ice breakers by 2020.
In contrast the United States currently has a fleet of one
operational ice breaker with a second under repair and a third
planned for decommissioning.
In order to prevent shipping accidents, Canada continues to
work on its improved Arctic Regulatory Shipping Systems
including efforts to better monitor and forecast ice conditions
including multi-year ice and pressured ice zones.
Russia has been investing in container ships, oil tankers
and commercial ships with ice strengthened hulls that are
designed to be used without ice breaker escort.
So I'm looking at oil and gas exploration development in
offshore areas adjoining Alaska. I will first look at the
Mackenzie Delta region of Canada. To date, 89 exploration wells
have drilled in the Canadian Beaufort Sea. No production has
occurred.
Although oil was found these wells found significant
quantities of natural gas which most likely will not be
commercialized without a construction of a natural gas pipeline
south of the Mackenzie Valley. These earlier wells were drilled
in the shallow waters of the Beaufort Sea inner shelf.
Currently there's renewed interest in drilling for oil on the
Outer Continental Shelf and the Continental Slope where
multiple companies have acquired parcels. Exploration wells
drilled in the outer shelf and slope will face some additional
challenges to those drilled in shallower water. They are likely
to encounter a shorter drilling season due to more severe ice
conditions and the use of drill ships rather than bottom
founded structures for drilling.
Currently no exploration drilling has occurred on the
Russian offshore areas adjoining the U.S. portion of the
Chukchi Sea, however offshore production does occur in areas
further south near Sakhalin Island and through a large offshore
terminal off western Siberia. This terminal is an area where
ice cover may exceed or may be at a maximum at about 247 days a
year. The terminal is supported by both ice breaker and
auxiliary ice breaking tugs.
So if you look at prevention response to exploration
spills. The risk from a spill offshore can be dramatically
reduced through active preparation. Prevention starts with an
in-depth understanding of the geologic conditions to be
encountered while drilling. Data collection on shallow hazards
such as subsea permafrost, gas hydrates, shallow gas pockets,
shallow faults and slope instability, ice scour, and sediment
type will help assure the well is properly designed. Proper
design should include the use of redundant levels of protection
including the best practices in well operations and procedures,
logging, casing, cementing and the use of enhanced blow out
preventers.
Rapid response should greatly reduce the effects of an oil
spill and includes potential to including direct injection of
subsea dispersants and well capping. It also includes the rapid
deployment of containment and mechanical cleaning systems, and
the ability to use in-situ burning chemical dispersants when
appropriate. Finally, equipment should be available to drill a
relief well if necessary. In order to improve response, the
Canadian Coast Guard has prepositioned supplies in Arctic
communities and does some local training. For the Eastern
Beaufort Sea, the Canadian producers have formed a nonprofit
industry consortium, the Mackenzie Delta Response Corporation.
Some of the challenges associated with responding to Arctic
oil spills include the very cold temperatures, sea ice, limited
daylight hours, lack of infrastructure, remoteness of the
resources and a unique ecosystem. In order to monitor and track
the oil spill a suite of sensors from satellites, aircraft,
vessels and buoys are necessary. Emerging use of unmanned
aerial vehicles and autonomous underwater vehicles will
dramatically improve monitoring and tracking of arctic spills
because they can stay deployed for longer periods of time and
operate under conditions when it is unsafe to use manned
systems.
Space and airborne radar systems can locate spills in low
light conditions, provided ice cover is not too great. Lidar
and electro-optical sensors provide additional capacity. High
frequency, portable, coastal radar can be used to measure ocean
currents and ice movement.
One of the greatest challenges is locating oil under ice.
Both airborne and ground--excuse me, both airborne ground
penetrating radar and the use of oil smelling dogs show
promise. Poorly understood and in greater need for research is
the behavior of oil that is actually under ice. Techniques for
removing oil include containment, mechanical cleaning, in-situ
burning, bioremediation, chemical dispersants and natural
recovery. The effectiveness of these techniques is
significantly affected by the percentage of ice cover.
Throughout the Arctic more research is needed in order to
develop better predictive models for the movement of sea ice
and ocean currents, improve spill trajectory models, increased
understanding of behavior and tracking of oil under ice and a
better understanding of impacts to the ecosystem. Stronger
integration of data streams and system--excuse me, data streams
and data sharing will be necessary in order to develop a best
operational picture. Finally more large scale field training
exercise will be necessary in order to achieve the most
efficient operational capacity.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Myers follows:]
Prepared Statement of Mark Myers, Vice Chancellor for Research,
University of Alaska, Fairbanks, AK
Alaska's outer continental shelf adjoins the Canadian Beaufort Sea
on the east, and on the west the Russian Bering and Chukchi Seas.
Response capacity and readiness for oil spills in the waters adjoining
Alaska's outer continental shelf should be seen in light of the type,
probability and potential consequences of a spill. Oil spills in the
Arctic could occur from marine shipping accidents from vessels
including fishing boats, cruise ships, bulk carriers, cargo ships, or
oil tankers. Oil spills could occur from oil exploration wells,
production platforms, loading platforms, and oil pipelines. These
different sources all carry different risk profiles and response
requirements. Spill risk and ability to respond is also controlled by
the geology, geography and the ecology of the location.
MARINE SHIPPING
It is expected that Arctic shipping will dramatically increase as
sea ice decreases. Based upon recent historical change and coupled
oceanographic and atmospheric models it is predicted that the Arctic
Ocean will be seasonally ice free by mid-century. This will open up
seasonal opportunities for shorter international shipping routes and
also create the opportunity to develop increased Arctic tourism,
fishing, mining and oil and gas development. With these shipping
opportunities will come increased risk of vessel accidents and
associated spills. The largest risk to vessels is likely to come from
ships that encounter ice conditions that are beyond the ship's capacity
to handle. In order to escort or respond to vessels in distress both
Canada and Russia have significant Arctic capable ice breaker fleets.
The Canadian Coast Guard has a fleet of 7 icebreakers that were built
between 1969 and 1987. Russia has a fleet of 28 icebreakers that were
built between 1957 and 2007, including 10 that are nuclear powered. In
addition Russia intends on constructing 3 new nuclear icebreakers by
2020. In contrast, the United States currently has a fleet of one
operational ice breaker with a second under repair and a third planned
for decommissioning. In order to prevent shipping accidents Canada
continues to work on improving its Arctic Regulatory Shipping Systems
including efforts to better monitor and forecast ice conditions
including multi-year ice and pressured ice zones. Russia has been
investing in container carriers, oil tankers and commercial ships with
ice strengthen hulls that are designed to be used without ice breaker
escort.
OIL AND GAS EXPLORATION AND DEVELOPMENT IN OFFSHORE AREAS ADJOINING
ALASKA
To date 89 exploration wells have been drilled in the Canadian
Beaufort Sea. No production has occurred. Although oil was found, these
wells primarily found significant quantities of natural gas which most
likely will not be commercialized without the construction of a natural
gas pipeline south through the Mackenzie Valley. These earlier wells
were drilled in shallow water on the Beaufort inner shelf. Currently
there is renewed interest in drilling for oil on the outer shelf and
continental slope where multiple companies have acquired parcels.
Exploration wells drilled on the outer shelf and slope will face some
additional challenges from those drilled in shallower water. They are
likely to encounter a shorter drilling season due to more severe ice
conditions and the use of drill ships rather than bottom founded
structures.
Currently no exploration drilling has occurred in the Russian
offshore area adjoining the US portion of the Chukchi Sea, however
offshore production does occur further south near Sakhalin Island and
through a large offshore terminal off Western Siberia. This terminal is
in an area that may be ice covered up to 247 days a year. The terminal
is supported by auxiliary an ice breaker and an icebreaker tug.
PREVENTION AND RAPID RESPONSE TO EXPLORATION SPILLS
Risk of a spill from an offshore exploration well can be
dramatically reduced through active prevention. Prevention starts with
an in-depth understanding of the geologic conditions to be encountered
while drilling. Detailed data collection on shallow hazards such as
subsea permafrost, gas hydrates, shallow gas pockets, shallow faults,
slope instability, ice scour, and sediment type will help assure that
the well is properly designed. Proper design should include the use of
redundant levels of protection including best practices in well
operations and procedures, logging, casing, cementing and use of
enhanced blow out preventers.
Rapid response should greatly reduce the effects of a spill and
includes potential for direct injection of subsea dispersants and well
capping. It also includes the rapid deployment of containment and
mechanical cleaning, and the ability to use in-situ burning, and
chemical dispersants when appropriate. Finally, equipment should be
available to drill a relief well if necessary.
In order to improve response the Canadian Coast Guard has
prepositioned supplies in the Arctic at local communities and does some
local training. For the Eastern Beaufort Sea the Canadian producers
have formed a nonprofit industry consortium, the Mackenzie Delta
Response Corporation.
ARCTIC SPECIFIC OIL SPILL ADVANCES IN TECHNOLOGY
Some of the challenges associated with responding to Arctic oil
spills include very cold temperatures, sea ice, limited daylight hours,
lack of infrastructure, remoteness from resources and the unique
ecosystem. In order to monitor and track an oil spill a suite of
sensors from satellite, aircraft, vessel and buoys are necessary.
Emerging use of unmanned aerial vehicles and autonomous underwater
vehicles will dramatically improve monitoring and tracking of arctic
spills because they can stay deployed for long periods of time and
operate under conditions when it is unsafe to used manned systems.
Space and airborne radar systems can locate spills in low light
conditions provided the ice cover is not too great. Lidar and electro-
optical sensors provide additional capacity. Portable high frequency
coastal radar can be used to measure ocean currents and ice movement.
One of the greatest challenges is locating oil under ice. Both
airborne ground penetrating radar and the use of oil smelling dogs show
promise. Poorly understood and in need of greater research is in the
behavior of oil under and within ice.
Techniques for removing oil include containment and mechanical
cleaning, in-situ burning, bioremediation, chemical dispersants, and
natural recovery. The effectiveness of these various techniques is
significantly affected by the percentage of ice cover.
RESEARCH NEEDS
Throughout the Arctic more research is needed in order to develop
better predictive models for the movement of sea ice and ocean
currents, improved oil spill trajectory models, increased understanding
of the behavior and tracking of oil under ice, and better understanding
of the impacts to the ecosystem. Stronger integration of data streams
and data sharing will be necessary in order to develop the best
operational picture. Finally, more large scale field training exercises
will be necessary in order to achieve the most efficient operational
capacity.
The Chairman. Alright. Thank you very much. Let me just
start with a few questions and then defer to Senator Murkowski.
It seems to me just listening to Mr. Pinon and Mr. Schuler
that we sort of have 2 different expectations of possible
actions on our part. Mr. Pinon, you talk about, in your view,
the urgency, let me quote you exactly. Here you say, ``Urgency
in developing a similar policy that is similar to the policy we
have with Mexico, the MEXUS plan and similar to the policy we
have with Canada in 1986.'' So you're talking about the urgency
of developing a similar policy of environmental cooperation
between the United States, Mexico, Cuba and the Bahamas as
these countries embark on developing their respective deep
water, hydrocarbon resources.
So you feel that some kind of formalized effort to come to
an agreement among those countries around the Caribbean is
important to pursue at this time. Is that accurate?
Mr. Pinon. No question, Mr. Chairman. I mean, sometimes I'm
surprised how naive we are in transnational issues, particular
when it comes to oil and gas issues. We need to be sure that we
focus on prevention.
So far this conversation has been about assuming that there
is going to be a spill. But I haven't seen any focus on
prevention. I mean, the technology in which a lot of these
companies operate is what's important. Most of that technology
is in the U.S.
Mr. Chairman, we continue to focus on Repsol. I am amazed
and pardon the expression, how we're bullying that company. I
haven't heard any comments, whatsoever, Mr. Chairman, about
Bicentenario Uno. Bicentenario Uno, if you can put the Mexican
map up please, is a rig that was built in Korea, in South
Korea, that is now, has been delivered to Mexico. It's going to
be operated by Pemex just 22 miles south of our EEZ on the
Mexican side.
Is the U.S. Coast Guard going to respect Bicentenario? We
have to cooperate. We have to work together. We cannot continue
in this element of confrontation with countries that I just
mentioned and that is my sense of urgency.
My sense of urgency is we're all in business together. The
environment is all of our concern. So we need to sit down and
work, not in a spirit of confrontation, but cooperation.
The Chairman. Alright.
Mr. Schuler, you talk in your comments at the end of your
written testimony about encouraging a loosening up of the
process so more companies and more resources can be brought
into the response from the U.S. in the event they are needed.
Now then, I understand Mr. Pinon is talking about prevention.
You're here, your organization is focused more on response and
that's a very important distinction. But could you describe a
little more, elaborate, on what you mean by how you would like
to see a loosening up of the process so that more companies and
more resources could be brought into a response from the U.S.
if they are needed?
Mr. Schuler. First of all I'd say there's a lot of
emotional issues in South Florida about Cuba as there are here,
I'm sure. But at present we write the contingency plan with
only the resources we know we can get, not with resources that
we would like to have. It's pretty black and white. If you
can't assuredly have it, don't put it in the plan.
There are only 3 U.S. companies that have licenses to go to
Cuba right now. We are the only company that has a license to
export to Cuba. The other 2 can provide management and training
services.
So if we're talking about being able to cascade equipment
into Cuba, I'm a little bit less sanguine about the process
with licensing than we heard before from the Director. We have
to renew our licenses either every year or every 2 years. It's
a long process and my view is that if we're looking to have
U.S. resources go in there, it needs to be handled in advance
and put into the plan, not as an ad hoc type of arrangement
that we're going to try to do once there is oil spilt----
The Chairman. Let me just ask you one other question, Mr.
Schuler. Would you agree with Mr. Pinon, that we should be
initiating an effort to work with Mexico and Cuba and the
Bahamas to get a plan for establishing standards and ensuring
safe operations in the Gulf?
Mr. Schuler. Again there is the distinction that I work on
the side when prevention fails. Preparedness and response is
our area. But yes, I agree 100 percent.
Years ago when we first applied for the license back in
2001, the first time we did it, it was denied. We went back and
wrote a little paper and said this is a little bit like cutting
off your nose to spite your face. If there's a significant
problem in Cuba and we're unable to deal with it in Cuban
waters. The obvious follow on is that we'll deal with it in
U.S. waters and perhaps in the coast of Florida.
So I think it's in our interest and the interest of
preserving our natural resources in Florida, the beaches, the
mangroves to coral reefs and further up the coast that we do
something to engage with the Cubans so that we can operate
there.
The Chairman. Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
Mr. Pinon, I hear the frustration in your voice when you
ask why is everybody just focusing on Repsol? The purpose of
the hearing was to kind of look at what is happening off Cuba.
But it is a reminder to us that we are a global petroleum
economy. We need to wake up to the fact that it's happening
around us and it's happening in waters that we share that
maritime border. If we don't receive that--if we just kind of
close our eyes to it here and say it's not going to happen
anywhere else, we're fooling ourselves.
So I think that conversation that we're having here today
is important. About what is going on in Mexico, what is
happening up North, and as Dr. Myers has pointed out, while the
Russians in the high Arctic are not exploring right now they
have been down in the South. The Canadians are looking. There
is a level of activity that I think is unprecedented.
Again, how we have a level of preparedness that makes
sense, I like the idea whether it's the Arctic Council
spearheading the oil spill prevention and response or whether
it's one Gulf policy as you have mentioned. We've got to
recognize that the water touches all of us here. If there is a
spill the impact doesn't necessarily stop there at our borders.
You brought up the issue of enforcement of regulations.
This is something that I think we saw play out here. You've got
folks that are earning a pretty good income out working on the
rigs. They're making a heck of a lot more than they were as
potentially workers within MMS or within the agencies.
So we didn't have the trained, skilled work force that we
needed to enforce on the rigs because people are getting paid
well. I understand that the tool pushers on the rig offshore,
off Cuba, are going to be paid. They're going to be paid very
well.
So the question is whether the Cuban government has the
ability to pay competitive wages to those who are issuing the
permits, doing the inspection. Is this going to be an issue for
us? We're relying on a level of oversight. We heard Director
Bromwich speak to that, but how much can we count on from the
Cuban government when it comes to enforcement?
Mr. Pinon. That is a very good point. It's not the issue of
whether the Cuban government can pay the wages that other
countries are paying. The issue, Senator, I have worked in
countries around the world in which both you and I would be
impressed by their environmental regulations that are on the
shelf.
But that form of enforcement is a huge gap. A lot of
countries and nothing against Cuba or Mexico even for example.
They just don't have the experience. They just don't have the
years of experience that we have in the United States to
enforce those regulations.
So even in Mexico, Comision Nacional de Hidrocarburos was
just formed in 2009. They're doing a fantastic job. Most of
their personnel are former Pemex employees. So the experience
is only for one oil company.
So the issue is, I am sure, that the Bahamas, Cuba, Mexico
will eventually have on their regulations the best policies and
standards available. But that is not the point. Do they have
the resources of the manpower and the experience, like you
said, to enforce those regulations? I doubt it.
That's why it's so important then to have operators that
are of the caliber of Repsol. Instead of trying to run them off
the scene, we need those types of strong companies which are
the ones that somehow we're they're going to get the guarantee
that those regulations are going to be enforced. Having said
that again, not that Cuba, Mexico and the Bahamas are not going
to enforce it, but regrettably they just don't have the
experience at it.
Senator Murkowski. How do you see things playing out in
Mexico now that their supreme court has opened up the doors, if
you will, for foreign companies coming in to produce off their
waters? In terms of stepped up activity you had a map there
that you reminded us. I think you said 22 miles.
Mr. Pinon. Right.
Senator Murkowski. From where that rig is and U.S. shores,
what do you see happening? Are we seeing a stepped up level of
interest?
Mr. Pinon. Yes. Yes.
Senator Murkowski. From whom?
Mr. Pinon. Mexico, Pemex. There's only one oil company in
Mexico and that is Pemex. They are scheduled to drill 3
prospects next year at about a billion dollar total cost, south
of the Perdido Fault or on the Mexican Perdido Fault just south
of where Chevron, for example, has tried and where Exxon and
Shell are also active.
So they're going to aggressively announce their production
is really declining. They're now below 3 million barrels a day.
They expect that there's as much as 20 billion barrels of
reserves on the Mexican side of the Perdido Fault. So they are
aggressively going to move forward in that direction.
I expect that changes will come into the Mexican
constitution in the next election period which will be sometime
in 2013. But right now hands are tied in Mexico for
international oil companies such as Repsol, for example, to
take an active participation in their deep water exploration.
That's why I think now is the time to engage Pemex, now, which
we're doing, by the way. We're doing a very good job at it
working with the Mexican authorities.
So Mexico certainly is an area of concern from that point
of view because again they're going to be just 22 miles south
of our EEZ. We do have the experience of the Ixtoc well
explosion and blow out back in 1979.
Senator Murkowski. Thank you, Mr. Chairman.
The Chairman. Senator Corker.
Senator Corker. Thank you, Mr. Chairman. Thank you all for
your testimony.
Mr. Pinon, I got in listening to the, our first witness and
then talking about Repsol the way that you have. I had no idea
that there was a mentality of potentially bullying them. I
didn't know that's what we were talking about.
But apparently the State on enterprises then, we have there
is no transparency whatsoever. We have no idea what they're
doing. It seems to me that that's your concern that the Bureau
that we have that is able to deal with Repsol because they are
public and they want to do business with us and other entities,
we have the ability to talk with them, if you will.
But with the State on enterprise we have none of that. Do
they have the same types of industry practices that Repsol has
or are they far less sophisticated?
Mr. Pinon. The international oil companies that are
operating in Cuba, Senator, are experienced oil companies that
have experience in deep water. Petronas from Malaysia, ONGC
from India, even Sonangol from Mongolia, they have deep water
experience. But the issue is that we have not established any--
we haven't made any effort even to approach them. We have
solely focused on Repsol because it just happens to be the only
company that is willing to share as much information as they
have shared with us.
By the way, they also have a contractual issue. We're
asking of Repsol things like the pressure of the reservoir.
That's proprietary information, confidential information that
they have with the Cuban government. We have put them in a bind
because they have a contractual relationship.
It is just like Pemex will come to us and ask Shell what is
the reservoir pressure in your Perdido Fault. That's just like
if the Bahamas will come and ask us in the United States from
Exxon and Shell and Chevron and others information on their
offshore activities. So we have to be very careful with that.
But Petronas from Malaysia is a partner with Russia's
Gazprom. ONGC from India, they're an experienced company. But
the Scarabeo 9, as soon as Scarabeo 9 finishes with Repsol,
she's moving over to another prospect right there by April
she'll be drilling a Petronas prospect. We're totally blind
when that Scarabeo 9 gets to the Petronas prospect.
Senator Corker. Is there a reasonable chance if we tried to
engage with them and understand what their practices were and
what they were doing that they would share those or?
Mr. Pinon. I will be sure that those companies will be more
than happy, even though they don't have assets in the West. May
I remind the Senator that the U.S. does have assets in those
countries? Chevron, Exxon and Hess have huge assets in
Malaysia. Chevron controls one-third of the production of
Angola. Their company is going to drill in Cuba.
So there's no question to me, Senator and members of the
Committee, that if we establish that relationship with all
companies working in these areas, even if they're national oil
companies, we can certainly get a positive response from them.
But we haven't done it.
Senator Corker. Why do you think we haven't?
Mr. Pinon. Because of Cuba. I mean, it's--you said the
Miami crowd. I happen to be Cuban American. It's regrettable
how the issue of politics gets in the way of safeguarding the
economy and the livelihood of the whole State of Florida.
I think that's not acceptable. I am a Cuban American. I am
very proud to be a Cuban American. But I'm also an American. I
pledge allegiance to the flag of this country. So I have the
same feelings that everybody else has, probably, toward Cuba.
But I recognize that my primary concern is the livelihood, the
economic livelihood, of the State of Florida and its 11 million
citizens.
Senator Corker. Mostly Presidential politics, I might add,
not here.
But Mr. Schuler, the--you seem like you were speaking in
code about the loosening up. Maybe you're alluding to the same
thing that Mr. Pinon is leading--alluding to here. But when you
say loosening up is that loosening up by us?
I mean, is it our own limitations that we place on our own
entities that put us in a position of not being able to respond
appropriately if there is a blow out of some kind or is it, or
are they policies that Cuba is putting in place?
Mr. Schuler. No, sir. These are U.S. policies. Again, in
order to send equipment and personnel to Cuba you have to have
either a Department of Commerce or a Department of Treasury
license. There are very few companies who have them.
So right now as we speak today, the U.S., the overwhelming
part of the U.S. response industry is not going there. It's not
because the Cubans won't accept them it's because it takes
licenses to go there. Then you have to go through the entire
licensing process which my experience has not been quick.
Senator Corker. Mr. Chairman, it's interesting. I don't
want to wade into the bigger issues that--in this hearing
regarding Cuba. But it seems like there are some policies that
we have that are sort of cutting your nose off to spite your
face that maybe it would be worth looking at.
I thank you for having this hearing. Certainly appreciate
the testimony of our witnesses.
The Chairman. Senator Murkowski, I believe had a few other
questions.
Senator Murkowski. Just very quickly. I'll follow up with
you, Mr. Schuler, because you kind of dangled this out there.
We have incredible resources and assets standing by just
100 miles away. To recognize that in the event of an incident,
a tragedy, a disaster, that could impact our shores that we're
kind of in standby mode. You say, you know, from your
experience, it takes a while--the licensing and just that whole
process.
That doesn't give folks the assurance that I think we would
all like. There's nothing more frustrating than knowing that
you have the ability to address something, but you've got your
policies that are hanging you up from accomplishing that.
Dr. Myers, I wanted to first of all acknowledge the fact
that you came a long way on some pretty short notice and
appreciate that. You mentioned in your testimony that while
Canada and Russia are neighbors in the Arctic, they have not
yet really begun to move out in terms of exploration and
production activity. But clearly the resource is there.
In your former capacity as head of USGS, you had certainly
a hand in assessing what it is that is available in the Arctic
offshore. From a geological perspective, from an academic
perspective, do you have any doubt that these other Arctic
Nations will begin to aggressively bring these offshore
resources to market?
Mr. Myers. Thank you for the question, Senator Murkowski.
Let me start by saying in my testimony I talked about the
waters immediately adjoining Alaska in our Arctic waters. There
is development and exploration occurring on the Canadian Arctic
side in the East side of Hibernia. There is also drilling off
Greenland and a significant amount of activity off in the
Bering Sea and off the West Siberian shelf. So there are
drilling activities currently ongoing in the Arctic,
substantial activities and substantial development that has
occurred in the Arctic region.
So I was just referring again to that----
Senator Murkowski. Right.
Mr. Myers [continuing]. Blanket in Canada and then the area
adjoining the Alaska Chukchi and Bering Seas.
Again the production operations in the Sakhalin Islands to
the South are significant. So those countries are developing
the resources.
Again, I want to thank you for the compliments, but on the
2008 CARA study the survey did, that was the work of really
good quality science.
Senator Murkowski. Yes.
Mr. Myers. Really good scientists and I want to commend
them for the work they did. That was a ground breaking study.
It clearly was the first time we integrated the data and did a
strong peer reviewed approach on what the resource potential
was in the Circum-Arctic, the entire Circum-Arctic. It did show
areas of tremendous high potential, as you know about 22
percent of the world's remaining undiscovered resource base up
there.
It highlighted several basins. Those are the basins we're
seeing drilling. Greenland, again, West Siberian, Bering Sea
area, off shore of Alaska was quickly highlighted because of
its high oil potential. The other areas have significant oil
resources but a lot of natural gas as well.
So in those areas that were highlighted we've seen the
activity increasing. We see strong intent. You see high levels
of investment in Arctic technology and capacity that's
occurring in major companies like Shell, ConocoPhillips, Stat
Oil. We're just starting to see. We're seeing huge investments
in Russia for Arctic oil and gas exploration by some of the
biggest international partnerships.
It's coming. Clearly the companies have a long term view of
the Arctic. The leases in the Mackenzie were very aggressive.
We have seen that area was quiet. It was developed in the
1970s and the late 1970s primarily when they did a bunch of
drilling. We're seeing a huge renewal of leasing activity and
plans to drill, again in areas where traditionally they found
more gas, but they believe there's more oil out there in the
Mackenzie as well. I mean, in the further offshore
environments, as well as areas almost immediately adjoining the
Coast of Alaska.
So we're clearly seeing that interest follow the assessment
of the CARA study or the CARA study is mimicking the company's
own interpretation of the high perspective areas.
Senator Murkowski. Let me ask you about the technologies.
You mentioned the various things that we're utilizing up North,
everything from the satellite and radar to the unmanned aerial
vehicles and, really, just the changing landscape. With the
technologies that are available for us to track, to just be on
top of whatever the issue may be whether it is a spill or how
we deal with the prevention side which as Mr. Pinon has
mentioned, this is where we want to be.
Do we have the expertise to build-out a sufficient amount
of response, assets and capacity, the infrastructure that we
have there? We're Alaskans. We know. Big State.
There's a lot of space in between our communities and what
we heard from the Admiral there is absolutely true. We need a
forward operating base. We need a deep water port. We
appreciate that as Alaskans in terms of the infrastructure. But
do we have the expertise that we will need to build out some of
these technologies that will really help us?
Mr. Schuler. Lots of questions there. But let me start with
the concept of the emerging technology. There are huge
advancements in technologies in terms of seismic technology,
remote sensing technology, satellite technology, the use of
unmanned systems that offer huge potential. That potential is
not fully realized yet.
So we're going through the research and development stage.
We learned a lot in the Gulf. Of course in the Arctic you have
the ice and very different environmental conditions. You have
very different geological conditions. So they'd need to be
appropriately used where they're available.
In order to combat issues of lack of infrastructure the use
of these remote aerial vehicles and remote submarines, very
sophisticated radars, fusion of sensors together give you a
much better operational picture. Again we're dealing with
darkness in the winter so the primary use of optical systems
isn't going to work. So we're going to rely more on radar, more
on a broad range of other sensors. That is all doable. But we
have to operationalize it.
The other thing I would say is incremental steps of
development are going to require different solutions. So again
the solutions you have to deal with shipping issues, better
navigation, better charts, ice breakers, is different than you
would to do a Sub C developed pipeline.
So we're in that phase now, the exploration phase in the
further offshore and we need to bring these technologies
together. But as the Admiral said, the Coast Guard has some
capacity, but the primary capacity is with the companies. I'll
go with that again, prevention is the No. 1 cure of risks of
oil spills. The ability to make sure that you understand the
underlying risks whether they be ecological or geological. To
make sure that you have a strong culture of safety and you have
redundant safety on the rig.
Good regulation to prevent the spill is the first thing.
The second thing is to get to it quickly so the well
capping and the containment, the ability for them to move
equipment up there quickly helps us immensely in this
exploration phase. So that's an assessment of risk.
In the development stage I would expect a different
infrastructure to develop. Just like Alaska Clean Seas is over
$50 million of equipment, 160 skimmers sitting there around
Prudhoe Bay. There is significant capacity to deal with the
existing infrastructure. If you go off far in the offshore, 100
miles offshore, you would expect in a production scenario for
additional capacity be added to deal with that. So capacity
kind of follows the expected path of development.
We also have to understand that this is where international
relationships work well. We have good relations with the
Canadians. We can share capacity and remote sensing and
satellite and integration of information with them and to a
certain extent with the Russians, so international cooperation
is an important piece of this in the Arctic.
As you had pointed out before there is significant
development in the Arctic. If we don't do it on the U.S. side,
it certainly is happening elsewhere. An oil spill in one part
of the Arctic affects the rest of the Arctic.
So again, integration, international efforts, adaptation of
this new, developing technology investment in not only in the
new sensors, making them small enough to fit on UAVs. The use
of remote submarines again, throughout the water column give
you a huge advantage that we hadn't previously had. So I'm
excited about the technology.
I'm concerned that we're not fast, integrating it fast
enough into our operational potential.
Senator Murkowski. I appreciate that answer. Thank you, all
of you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Shaheen.
I'm going to have to go back to my office for an
appointment. But why don't you go ahead with your questions and
then dismiss the hearing at the end of those questions unless
Senator Murkowski has additional questions.
Senator Murkowski. I don't think so, but I will listen to
Senator Shaheen's.
The Chairman. OK. Either one of you that still has
questions can dismiss the hearing when we're through.
Thank you all very much. I think it's been useful.
Senator Shaheen [presiding]. Thank you very much, Mr.
Chairman. I appreciate your keeping this panel until I could
get here and apologize for being late.
I think I probably want to follow up on what I understand
has been a line of questioning from a number of members of the
Committee. Because I'm very interested in what you had to say,
Dr. Myers about the developing technology and agree with you
that that provides the opportunity that we have for, not only
further exploration, but for trying to make sure that that
exploration is as safe both for humans and for the environment
as possible. But recognizing that despite everything we do to
try and make sure that exploration is as safe and without
problems as possible, I still am concerned about human failure
and about how we address oil spills once they happen.
I know that Director Bromwich probably addressed earlier
what the Department of the Interior and Secretary Salazar would
like to see with respect to the Ocean Energy Safety Institute
and how that could help with researching responses to oil
spills. But how can we incentivize the private sector to also
look at that issue? I know they have an incentive in developing
new technologies to help them advance exploration. But how do
we also think about encouraging them to look at what happens in
case of a disaster?
I would throw it out to any of you to respond.
Mr. Myers. I'll take the first shot at that, Senator.
You know, I think in some ways we need to really understand
that companies have a shorter term profit cycle. They work
through an issue. They invest appropriately at a certain level
of technology appropriate to their activities.
Again, the company exploring doesn't know if it's going to
find a susceptible development. So they're not going to invest
fully in the infrastructure necessary to deal with development
until they're in the appropriate development stage.
The government, on the other hand, has a long term
interest. If you look at the fiscal interest in oil and gas
development and the money that goes to the Federal Treasury, I
think there's an opportunity for the government to invest in
the research R and D. Some of the mapping and remote sensing
pieces provide fundamental underpinning of information,
investing in translational technology, for example.
There's a risk with that technology. So again coming from a
university environment, I see huge opportunities to exploit the
technology and to get it to the point where it can become
operational.
The other piece, I think, is you see in the Gulf spill, as
a classic example. You've seen it after every large natural
disaster in the United States, local community involvement.
Getting the folks engaged in the process and making those
connections is partly governmental. It's partly industry. It's
a connection back to local and State government as well.
So I think one aspect is the linkages of the decisionmaking
process together can be much stronger if there is a more
integrated process of providing base information publicly.
Companies, as was pointed out, work on a confidential
basis. That information or that underlying geology is extremely
sensitive and valuable to them.
On the other hand, the regulators need to have that
information and be able to share a level of information. We
need to know what those Sub C pressures are. So there has to be
a vehicle for private/public partnerships of that kind of base
information that involves safety, even if it compromises a bit
of the confidentiality.
It's a crucial element. It builds public trust. It gets
everyone aware. It allows the best technology and approaches to
be brought forward. So that information flow, in my opinion, is
a big thing that needs to be worked on.
Can we release data, seismic data, after 10 or 15 years of
confidentiality for, particularly a shallow section of seismic
data, can tell you a lot about the geo-hazards? There's just
one example.
Can well data--in the State of Alaska, we released well
data after a certain period of time after really it's primarily
commercial sensitivity is gone. Providing that data out there
to other agencies to the public provides a huge sense of
confidence and actually can help develop the kinds of things
you're talking about. So I think data freedom, policy
integrated information, some baseline government investment
help the companies and help their ultimate engagement.
Senator Shaheen. Do you think the industry appreciates that
that's helpful to them and important to their future?
Mr. Myers. I think they do on the broad sense. But when
it's your project and your specific area, that particular
company may resist it. They might love it when it's someone
else's project.
So I'll defer that question to you, if I could.
Mr. Pinon. Yes. I think the Deepwater Horizon certainly
taught a lesson that up front efforts both in the form of
technology investment is worth long term. It's very difficult
for the private sector sometimes, Senator, to balance
profitability and growth.
Senator Shaheen. Right.
Mr. Pinon. But I think that, again, the Deepwater Horizon
incident has taught the industry as a whole. Not that the
industry wasn't doing it before, but certainly to go back and
focus on the upfront side of prevention and technology because
if it doesn't work the costs, not only the monetary costs, but
the social costs are huge.
The issue of confidentiality, I think that is an issue that
can be resolved as long as it's done in the spirit of
cooperation and not confrontation. I think the oil companies
would be more than happy to sit down and have this
conversation, again, but it has to be done--it has to take
place in the spirit of cooperation and not confrontation.
Senator Shaheen. Thank you.
Mr. Schuler, would you like to add anything?
Mr. Schuler. Not very much actually, but just last week in
New York the X Prize Foundation announced the winners of a
million dollar prize for the company that could develop the
best skimmer for offshore operations. There was several months
of testing that took place at the research tank up in New
Jersey. One company won the million dollars. The second won
$300,000.
But that's kind of a one shot deal. There's always efforts
to improve containment boom, improve skimmers and prove
dispersants because it's in the marketplace that the best ones
are going to be sold. But it's purely a commercial incentive.
There isn't, outside of the manufacturers and a few oil
companies, there's not a tremendous amount of R and D in this
field.
Senator Shaheen. Thank you all very much. At this time I
will close the hearing.
[Whereupon, at 12:04 p.m. the hearing was adjourned.]
[The following statement was received for the record.]
State of Alaska,
Department of Environmental Conservation,
Juneau, AK, October 18, 2011.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, U.S. Senate, 304
Dirksen Senate Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy & Natural Resources Committee, U.S. Senate, 304
Dirksen Senate Building, Washington, DC.
Re: Full Committee Hearing to Examine the Status of Response Capability
and Readiness for Oil Spills in Foreign Outer Continental Shelf Waters
Adjacent to U.S. Waters
Dear Chairman Bingaman and Ranking Member Murkowski: I am writing
to you on behalf of the State of Alaska to provide our comments to the
Senate Committee on Energy and Natural Resources for its hearing on
response capability and readiness for oil spills in foreign Outer
Continental Shelf (OCS) waters adjacent to United States waters. I
serve as the state's commissioner of the Alaska Department of
Environmental Conservation, the state agency with primary
responsibility for spill prevention, preparedness and response. This
testimony was prepared by me in consultation with Mead Treadwell,
lieutenant governor of Alaska, liaison to the Arctic Council, and
former chair of the U.S. Arctic Research Commission.
My comments are in four parts: a short overview of the State of
Alaska's experience in oil spill prevention, preparedness and response;
the risks we see from spills related to foreign OCS activities; what
actions the state is currently taking to help mitigate those risks, and
lastly, specific actions Alaska believes should be taken at a federal
level to make OCS oil and gas development and transportation safer for
everyone.
ALASKA'S EXPERIENCE
Oil spill prevention, preparedness, and response are not new to the
State of Alaska. The state has been among the three leading states in
oil production in the U.S. for decades. Although most of this
production has occurred from wells on Alaska's North Slope (over 15
billion barrels), there have also been 78 wells drilled in the Arctic
Ocean, 33 wells in the Bering Sea and 695 wells in Cook Inlet. If it is
successful in getting its remaining federal permits and authorizations,
Shell has plans next summer to drill two exploratory wells on the OCS
in the Beaufort Sea. It also holds leases on the OCS in the Chukchi Sea
and plans for exploratory drilling there too. Other companies with
plans to explore the OCS off Alaska's northern shore include Conoco
Phillips, ENI and Statoil. These companies are moving back into areas
in the U.S. Arctic OCS where drilling has already occurred. The State
of Alaska, federal agencies, local governments and industry continue to
work hard to make sure oil and gas exploration and development in
Alaska are safe.
Oil spill prevention, preparedness and response related to foreign
OCS exploration and development is also very important to Alaska. We
are bordered on the east by Canada and immediately across the Bering
Strait is Russia. Both of these nations currently have OCS exploration
and development plans or activities that could lead to an oil spill
impacting the waters and shoreline of Alaska. According to a U.S.
Geological Survey report, ``The extensive Arctic continental shelves
may constitute the geographically largest unexplored prospective area
for petroleum remaining on Earth'' (USGS Fact Sheet 20083049: Circum-
Arctic Resource Appraisal: Estimates of Undiscovered Oil and Gas north
of the Arctic Circle). According to the report, an estimated 90 billion
barrels of oil, nearly 1,669 trillion cubic feet of natural gas and 44
billion barrels of natural gas liquids may remain to be found in the
Arctic, 84 percent of it in offshore areas. The report puts one-third
of the oil resource in the Circum-Arctic region in Alaska and the
Alaska OCS. Given the world demand for energy, and increased
accessibility due to less seasonal sea ice, it appears likely
exploration and development of these important resources will continue.
Thus, it is imperative that federal, state and local governments in
Alaska, as well as the international indigenous groups that are
permanent participants in the Arctic Council, engage, not only at a
state and national, but also at an international level, to minimize the
risks of spills and to prepare for responses that may cross national
borders.
RISKS FROM SPILLS
There are two primary sources of spills that need to be considered:
spills from drilling platforms and other fixed infrastructure, and
spills from vessels carrying crude oil, fuel and other hazardous
materials.
The worst spills in Alaska over the last 25 years have been from
marine accidents. These include accidents in the Aleutian Islands
involving non-tank ships on the Great Circle Route between Asia and
North America and Alaska's very worst spill, the 1989 Exxon Valdez
tanker spill in Prince William Sound. Drilling platforms and other
infrastructure, although fixed in location, have the potential in some
locations and circumstances for even larger spills, as demonstrated by
the Macondo well blowout in the Gulf of Mexico.
Various reports indicate this year's traffic may total 18 Northern
Sea Route voyages (which go across the top of Russia and through the
Bering Strait). We understand from shippers that traffic carries
hazardous cargoes in both directions, i.e., oil or oil products
originating in the Russian Arctic find markets in Asia, and aviation
fuel in Asia may be returned on the back haul. Ships plying this route
are subject to Russian regulation, but there is no contingency planning
requirement today that involves U.S. regulatory bodies. (Such a
requirement might kick in if a cargo were headed to or from a U.S.
port.) At its most narrow point, the Bering Strait is only about 53
miles wide between Russia and Alaska. The wells in Russia that are
providing some of these cargoes are much further away and aren't
believed to pose a risk to the state.
In. Canada, there is potential for oil development in the Eastern
Beaufort. A large spill in that area could travel west and impact the
northeasterly shores of Alaska. Such a spill could also impact fishes,
whales and other marine mammals that are important to Alaska Natives in
the region.
Regardless of the source of the spill, oil spill response
challenges in the Arctic include:
Extreme weather--wind, temperature, and fog
Seasonal darkness
Seasonal and broken sea ice
Distances from ports, harbors, air fields, lodging and other
infrastructure and services
Distances to response assets, including vessels and aircraft
Communications network less developed in far north latitudes
The tactics, equipment, vessels and other resources the United
States and Alaska rely on to address the risk of spills must take into
account these challenges.
ACTIONS TO MITIGATE OIL SPILL RISKS
Again, the actions the State of Alaska is taking build on many
years of experience with spill prevention, preparedness and response.
The state is very willing to be a partner at the table with federal
agencies and other jurisdictions, learning from their experiences and
sharing ours. I will describe how the state is participating with the
federal government at an international, regional and national level,
then describe some of our efforts at the state and local level, to
better address the risk of oil spills.
The State of Alaska was pleased to be invited by the federal
agencies to participate in new Arctic Council initiatives related to
oil spills. The Arctic Council, a unique organization that includes
indigenous groups whose membership straddles our borders with Canada
and Russia and includes all of the eight Arctic nations, approved an
agreement last May on how the nations will cooperate on search and
rescue in the Arctic. At that meeting, the Council also agreed to a 2-
year effort to develop an instrument on how the nations can jointly
address oil spill preparedness and response. In addition, the Council
approved a review of spill prevention measures by its Emergency
Prevention, Preparedness, and Response working group. Larry Dietrick,
the State of Alaska's Director of Spill Prevention and Response, is
currently representing the state in the first set of meetings on these
matters in Oslo, Norway.
It is Alaska's hope that through the Arctic Council work, nations
will find ways to better share information and resources to address the
risk of spills. Ideally, vessels plying this route would have a
contingency plan and provide financial support for an oil spill
response organization in our region. This could be a method of sharing
the cost of ocean-going tugs and other spill response assets in key
locations such as the Bering Strait and the Aleutian Islands. It may be
appropriate to seek International Maritime Organization (IMO) approval
for local precautionary measures. Those precautionary measures may also
be authorized under Article 234 of the United Nations Convention on the
Law of the Sea. (The U.S. has not yet ratified the Law of the Sea, nor
has it determined how it might use the authorities to extend
environmental law in traditionally ice-covered areas authorized by
Article 234.)
The importance of having an ocean-going tug in the Aleutians was
dramatically demonstrated in December 2010 when the M/V Golden Seas, a
738-foot long foreign freighter lost a turbocharger on its only
propulsion engine and began drifting north of Adak in heavy seas. The
ship was carrying a cargo of rapeseed from Canada to the United Arab
Emirates. There was a combined volume of more than 473,000 gallons of
fuel oil, diesel fuel and lube oil on board. A break in the weather
allowed it to turn away from shore. An ocean-going tug stationed in
Dutch Harbor for work with Shell Exploration was able to reach the
vessel with an emergency tow line provided by the state, and which had
been stored in Dutch Harbor for such an emergency. The vessel was towed
nearly 500 miles to Dutch Harbor for repairs. This incident had a good
outcome, unlike the grounding of the Selendang Ayu which lost power and
eventually broke up on a reef in the Aleutians in December 2004,
spilling an estimated 350,000 gallons of bunker oil and diesel fuel.
The state has also been following and commenting on the U.S. Coast
Guard led Bering Strait Port Access Route Study. This study looks at
navigational hazards, vessel traffic patterns, environmental concerns,
aids to navigation and other factors affecting the safety of ship
traffic in the area. The state supports this effort and plans to stay
engaged as it progresses through discussions among the U.S. federal
agencies, joint U.S.-Russia negotiations and then the IMO process.
At a more regional level, the state has participated in tabletop
and field spill drills with the U.S. and Canadian Coast Guard and
neighboring provinces and states. These drills have looked at spill
scenarios in both the Eastern Beaufort and Dixon Entrance area at the
Southeast border of Alaska.
The state also actively participates in the Pacific States /
British Columbia Oil Spill Task Force. The members of this task force
include California, Oregon, Washington, British Columbia, Hawaii and
Alaska. The members share information and collaborate on oil spill
research. The task force recently completed a review of existing U.S./
Canada transboundary oil spill response plans and capabilities for the
British Columbia/Alaska and British Columbia/ Washington borders,
including recommendations for improvements. (The report can be found at
the task force's website at http: / /www.oilspilltaskforce.org/docs/
notes_reports/Final_US_Canada_Transb oundary_Project_Report.pdf.)
Although this report focuses on Alaska's southern boundary with Canada,
many of the findings and recommendations are also pertinent to looking
at spill response along the shared boundary at the northeast corner of
Alaska.
The Pacific States / British Columbia task force members have also
all signed mutual aid agreements that describe how they will assist
each other in responding to a major spill in the region, or back up a
state/province that sends resources to another region, such as happened
last year in response to the Macondo well incident.
More recently, the State of Alaska has begun working with the Yukon
and Northwest Territories in a sub-group of the Arctic Caucus of the
Pacific Northwest Economic Region (``PNWER'') focusing on identifying
and sharing information and resources at the provincial/ state level in
the event of a spill. PNWER is a bi-national, public partnership of
states, provinces and territories in the Pacific. Northwest.
Although Alaska has several venues for collaborating with our
Canadian counterparts on spill preparedness and response, there hasn't
been the same opportunity to engage with our Russian counterparts.
There, we are much more dependent on the U.S. federal government to
provide forums for the exchange of information, joint planning and
sharing of resources. The state will continue to track with great
interest, and participate where we can with the federal agencies, in
the work of the Arctic Council and on the Bering Strait Port Access
Study. We hope the level of cooperation will grow where we can do more
joint planning and even drills with the Russians.
The state has commented on U.S. Coast Guard regulations for non-
tank vessels and tracked its use of ``Alternative Planning Criteria''
where the Coast Guard finds vessels may have initial difficulty in
meeting the response planning requirements. Alaska remains concerned
that the Alternative Planning Criteria framework applied in remote
areas off Alaska does not include sufficient detail and structure to
ensure practical, achievable improvement in spill response resources in
those remote areas.
Alaska has also partnered with the U.S. Coast Guard on a marine
traffic risk assessment for the Aleutians. This study was designed with
the help of the Transportation Research Board in the National Academy
of Sciences. The study involved a variety of experts and stakeholders.
Their Phase I report (http://www.aleutiansriskassessment.cona/)
containing initial recommendations for the Coast Guard and the state
was issued this year.
With the increase in OCS activity and marine transportation, the
State of Alaska has also expanded its own planning and spill response
preparedness. The federal Oil Pollution Act of 1990 (OPA) requires the
U.S. Coast Guard and Environmental Protection Agency (EPA) to create a
National Contingency Plan for spill response. There are also
requirements for Regional and Area Plans. Working cooperatively, the
U.S. Coast Guard, EPA and the state have created a ``Unified Plan'' for
the state that satisfies both OPA and state spill planning requirements
for government involvement in spill response. We have also developed
ten sub-area regional plans, including for Arctic areas.
The state has been engaged over the last year updating and
enhancing the subarea regional plans for Northern and Northwest Alaska,
including a more focused look at: identification of environmentally
sensitive areas, geographic response strategies, near shore response
plans and tactics, potential places of refuge for stricken vessels,
local response agreements and training, spill drills, prepositioning
initial response equipment and emergency tow packages.
The state has also put an emphasis on making sure there is
alignment and a common understanding of the provisions of these
government spill response plans and the spill contingency plans private
entities are required to have in place under federal and state law.
A critical need for both search and rescue and spill response is
being able to identify and track marine vessels. The 2009 Arctic Marine
Shipping Assessment Workshop report noted a Highest Priority Arctic
Policy Issue was ``Full tracking and monitoring of Arctic commercial
ships and mandatory AIS (Automatic Identification System).'' Since 2004
most major commercial vessels. have been required by international
treaty to be equipped with AIS that broadcasts several times a minute
the vessel name, type of vessel, flag, dimensions, cargo, course,
speed, location and destination. Having this information allows
agencies with responsibilities to spot when a vessel may be getting
into trouble and what other vessels of opportunity might be in the area
and able to respond. The state has been investing in AIS receiving
stations along its coastline. It is a challenge to cover all of
Alaska's approximately 33,904 miles of coastline (longer than the rest
of the entire ``lower 48'' coastline combined), particularly when some
of the stations are in very remote locations without any local source
of power.
As Alaska expands its network of AIS receivers, we have also been
talking with our neighbors in Canada about the eventual build-out of
their systems in the Canadian Arctic and how we might share information
to better track commercial marine traffic in the Arctic.
The state of Alaska has also been tracking and partnering on
scientific research by industry and other jurisdictions designed to
reduce the risk of spills from OCS drilling. Among many other
activities, the state is watching with interest the Joint Industry
Program on Arctic Oil Spill Response Technology. The state is looking
to partner with industry and others through establishment of an Oil
Spill Research Center at the University of Alaska in Fairbanks.
WHAT'S MISSING?
The United States needs polar class ice breakers to help maintain
our safety, security and competiveness in the Arctic. As stated by
Governor Sean Parnell in his testimony to the U.S. Senate Subcommittee
on Homeland Security Appropriations, August 20, 2009:
Melting sea ice and increased military and commercial
activity require a greater Coast Guard presence. The Coast
Guard needs to move north and improve its capability--our heavy
ice-class icebreakers are on their last legs. To provide
homeland security the Coast Guard must have new Arctic-class
icebreakers equipped for search and rescue missions, border
protection, law enforcement, fisheries enforcement,
infrastructure and environmental protection.
Prime Minister Vladimir Putin announced on September 23, 2011 that
Russia will be building nine new icebreakers to work toward their goal
of making the Northern Sea Route as important to commerce as the Suez
Canal. No action has been taken by the U.S. Executive Branch for new
icebreaker capacity. Alaska's Congressman Don Young introduced
legislation that would authorize the Coast Guard to lease and operate
two new icebreakers. Senator Mark Begich is a sponsor of the Coast
Guard reauthorization legislation that requires the continued operation
of at least two polar class icebreakers. It is vital that the U.S.
Congress support these efforts.
The federal government needs to support the U.S. Coast Guard in
establishing forward bases to respond more quickly to maritime
accidents and spills in the Arctic, including the Aleutians.
The U.S. government, if it is going to be a viable player in the
Arctic, also needs to ratify the United Nations Convention on the Law
of the Sea.
The U.S. government needs to continue to work through the IMO,
Arctic Council and other international venues to make sure that the
U.S. is a player--not a bystander--in the future of the Arctic.
Alaska looks forward to both the challenges and opportunities in
the Arctic, which are not only vitally important to our state, but to
our entire nation.
Sincerely,
Larry Hartig,
Commissioner.
APPENDIX
Responses to Additional Questions
----------
Responses of Michael R. Bromwich to Questions From Senator Bingaman
Question 1. I would like to open this round of questions by asking
the both of you--How confident are you that the U.S. is ready to
respond to a spill following the tragic events of the Deepwater
Horizon?
Answer. BSEE is very confident that our overall preparedness and
capability to respond to an undersea drilling well blowout has
significantly improved when compared to the capability before the
Deepwater Horizon incident. The Deepwater Horizon was a human and
environmental tragedy that highlighted a number of weaknesses in our
offshore drilling and oil spill response regulatory regimes in place at
that time. We have learned from those weaknesses, however, and taken
strong steps to reform our regulations and processes. Shortly after the
spill, the Bureau of Ocean Energy Management, Regulation, and
Enforcement (now split into the Bureau of Ocean Energy Management
(BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE))
began requiring implementation of new safety measures for offshore
drilling activities, including the availability of undersea containment
equipment for any well being drilled with a subsea blowout preventer or
floating drilling rig. This requirement alone, which clarifies existing
regulation-based requirements on operators, will help ensure that we
will be far more ready to respond in the event that another subsea
blowout occurs. We have also instituted a requirement that all offshore
lessees and operators have safety and environmental management systems,
and have recently proposed expanding that requirement to provide for an
even greater level of safety. In addition, we have improved planning
and communication regarding oil spill response with other agencies,
including U.S. Coast Guard the Environmental Protection Agency (EPA),
and the National Oceanic and Atmospheric Administration (NOAA). We
continue to work to improve safety oversight in other areas, such as
strengthening our inspections and enforcement program to ensure that we
are assessing and focusing adequate resources on the highest-risk
operations.
Question 2. In particular, how confident are you that we're ready
in the advent that an oil spill occurs in the near future in Cuban
waters--that would impact US waters, such as the Florida straights?
Answer. In conjunction with other federal agencies such as the U.S.
Coast Guard (USCG) EPA, and NOAA, and to the extent authorized by law,
BSEE is seeking to ensure that U.S. national interests, particularly
environmental interests in Florida and along the U.S. coastline, are
protected from the potential impacts of oil and gas drilling operations
in Cuban waters. Repsol YPF Cuba, S.A., (Repsol), a Spanish energy
company, is preparing to undertake petroleum exploration activities in
Cuban waters. Repsol offered the United States government (USG) access
to review certain operations and equipment on the Scarabeo 9, the
drilling rig that will be used to conduct these activities. The USG
accepted Repsol's offer to allow U.S. government officials, including
BSEE and USCG inspectors, to review certain equipment and documentation
onboard the rig while it was offshore Trinidad and Tobago. These
observations and reviews have provided information for USG officials
concerning Repsol's adherence to its voluntary commitment to conform to
all U.S. offshore drilling safety standards, including those
implemented after the Deepwater Horizon incident. However, we do not
have enforcement authority over the rig or Repsol's activities in Cuban
waters, nor were we able to do a number of inspection activities that
BSEE or the USCG would typically perform in U.S waters once a rig is at
the drilling site. BSEE is aware that the USCG is updating its
contingency plans to ensure its readiness to respond to oil spills in
Cuban waters that may affect U.S waters and coastline. Questions about
USCG activities in that regard should be directed to the USCG.
CUBA LICENSING
Question 3. You mention that Treasury has been issuing licenses in
the last decade for spill response and is considering new licenses for
spill response. Should equipment, such as capping stacks and other well
containment that is manufactured in the US, be needed--in the advent of
an oil spill--do you think Treasury will grant licenses for this
equipment and its supporting personnel knowing that U.S. natural
resources, environmental and human health and safety could be adversely
affected?
Answer. All U.S. efforts are designed to protect U.S. interests.
BSEE works closely with other government agencies including the
Department of Commerce and the Department of the Treasury in the
context of fulfilling the Bureau's missions.
The Department of Commerce advises BSEE that, consistent with U.S.
foreign policy and national security concerns, the Department of
Commerce's Bureau of Industry and Security (BIS) has licensed temporary
exports of post-incident oil spill containment and cleanup items for
use by U.S. companies while in Cuban waters since 2001.
The Department of the Treasury advises BSEE that Treasury's Office
of Foreign Assets Control ((VAC) has licensed U.S. entities to prepare
for and to operate in the event of an oil spill.
We defer to the Department of Commerce and the Department of the
Treasury to provide any additional details.
BAHAMAS
Question 4. You seem to have had some great success in working with
Mexico and Repsol, in terms of getting them to comply with accepted
U.S. regulatory standards. Have you begun to work with the Bahamian
government at all to assist them in developing regulations for any
offshore exploration that may occur going forward?
Answer. We participated in a multilateral regional technical
meeting titled ``Regional OPRC [Oil Pollution Preparedness, Response,
and Cooperation] Seminar to Focus on Developing National Plans for
Marine Pollution Preparedness and Response Related to Offshore Units
and Regional Cooperation,'' on December 7-9, 2011, in the Bahamas.
Participating countries were the Bahamas, Cuba, Jamaica, Mexico, and
the United States. The meeting was a planning seminar focused on
improving spill prevention and well control, preparedness and response
to a major oil spill from an offshore drilling operation that may
impact the waters and coastlines of multiple nations in the northern
Caribbean. It was a useful starting point for coordination among
Caribbean nations, and we plan to have follow-up meetings to further
examine issues and carry out strategies.
ARCTIC
Question 5. It seems that BSEE is quite active in the area of spill
prevention and intervention for arctic areas and that a great deal of
efforts are being expended to gain a better understanding of how best
to approach this issue. Do you feel that we are currently ready to
response to an oil spill of any magnitude that could happen in arctic
waters, on ice or under ice--in or around Alaska? How do you think we
compare, in terms of our experience and readiness, with our arctic
neighbors--Canada and Russia?
Answer. BSEE's regulatory responsibility for spill prevention
includes oil spill response plan review and approval, drilling permit
review and approval, and a safety and environmental inspection program.
Facilities engaged in the development, exploration and production of
offshore energy resources are required to submit detailed spill-
response and prevention plans for BSEE approval prior to commencing
operations. Spill response plans must specifically designate a spill
management team available on a 24-hour basis as well as an oil spill
response organization (OSROs) capable of responding to prospective
spills from that specific facility in accordance with the Oil Pollution
and Clean Water Acts. BSEE engages in a rigorous review and approval
process to ensure that adequate spill response and prevention measures
are in place and that the operator has the capability to respond to a
worst-case scenario oil spill. Facilities operating in the Arctic must
demonstrate the capability to respond to spills in these scenarios
without the assistance of the USCG or the State of Alaska.
The Administration is proposing a priority action through the
National Ocean Policy Implementation Plan to address development and
implementation of response coordination, procedures, and decision
support systems. BSEE, in collaboration with federal partners in NOAA
and USCG are also studying the effects of oil in, on and under the ice
with international partners. BSEE is committed to developing and
assessing new technology and techniques for oil spill prevention and
response in ice-covered waters through our Technology Assessment &
Research (TAR) Program, which has provided funds and resources for
research concerning Arctic spill prevention, preparedness and response
for decades.
Many nations, including Norway and Canada, have collaborated with
the TAR Program and use our OHMSETT spill tank facilities in New Jersey
for testing response measures in ice conditions with real oil. Canada
and Norway are members of the International Regulators Forum in which
safety, operational practices, and investigations of offshore incidents
are shared among national regulators to foster a coordinated approach
to prevention and preparedness.
BSEE is also a leader in the work of the Arctic Council on spill
prevention, preparedness and response, including development of the
Arctic Offshore Oil and Gas Guidelines and Guidelines for In-Situ
Burning, an Arctic-wide instrument for emergency preparedness and
response, and other projects. The U.S. and Canada have been sharing
research in spill response in the U.S.-Canada Northern Oil and Gas
Research Forum. Results of these studies, assessments, programs, as
well as our experience in offshore Arctic operations, are valuable to
Arctic nations. Based on our participation in the Arctic Council and
communications with other northern nations, we believe that our
readiness for oil spills is equal to or greater than Canada's and
Russia's.
Responses of Michael R. Bromwich to Questions From Senator Murkowski
Question 1. Prior versions of the Chukchi exploration plan had won
your agency's approval and the only changes to it have been,
indisputably, improvements such as including additional spill
prevention, containment, and response measures. Specifically, what
legal and administrative obstacles may remain before the approval of
this EP?
Answer. The approval of exploration plans (EPs), in the Chukchi or
anywhere else on the U.S. Outer Continental Shelf (OCS), is not under
BSEE's purview. All EP reviews and decisions are performed by the
Bureau of Ocean Energy Management (BOEM). We coordinate closely with
BOEM during its EP review to ensure that required information is
submitted and understood by both bureaus. Subsequent to BOEM approval
of an EP,BSEE would consider any applications for permits to drill in
accordance with any BOEM-approved EP.
BOEM granted conditional approval of Shell Gulf of Mexico, Inc.'s
Exploration Plan under leases in the Chukchi Sea Planning Area on
December 16, 2011. BOEM is best able to provide additional information
concerning review and approval of exploration plans in the Chukchi Sea.
Question 2. You have stated before that the failure to provide
final answers on administrative decisions is the worst possible result
from an agency. Is your current process consistent with delivering an
answer in time for the decisions which the Chukchi applicant must make
with regard to contracting for the 2012 exploratory season?
Answer. The mission of the Bureau of Safety and Environmental
Enforcement (BSEE) is to ensure that exploration, development and
production of offshore energy resources take place in a manner that is
protective of human health and the environment. Although BSEE is
committed to conducting the most efficient reviews possible, reviews of
oil spill response plans or applications for permit to drill must take
place in a manner such that agency decision-making is fully informed by
all relevant materials regardless of any particular applicant's
internal timelines. We are on schedule to complete a thorough review of
Shell's Oil Discharge Prevention and Contingency Plan (ODPCP) for the
Chukchi Sea, with comments informed by the participation of other
federal agencies through the Interagency Working Group on Coordination
of Domestic Energy Development and Permitting in Alaska, well before
the start of the 2012 exploratory season in Alaska. The timelines for
agency review are dependent on Shell providing information and
correcting any potential shortcomings in its plans or applications.
BOEM conditionally approved Shell's Chukchi Sea Exploration Plan on
December 16, 2011, and we are confident that BSEE's internal processes
will not be the source of any undue delays in the review of the ODPCP
or future Applications for Permits to Drill.
Question 3. It is my understanding that the Administration will be
reviewing the Alaska spill response plan separately from the
exploration plan; specifically that Deputy Secretary Hayes is
evaluating this element of the plan with the Interagency Working Group
on Coordination of Domestic Energy Development and Permitting in
Alaska. Although your testimony indicated your absence from the
Interagency Working Group, both BOEM and BSEE have or will have
responsibilities associated with the plan. What is the timeline on
evaluating the spill response plan?
Answer. The review of the ODPCP is proceeding separately from the
review of the exploration plan (EP) because the two reviews are
conducted, under our regulations, by two separate bureaus. The
separation of these functions is part of our reorganization intended to
put safety regulation in different hands from planning and leasing for
oil and gas development offshore. BOEM is responsible for review of the
EP, and BSEE is responsible for the review of the ODPCP. As part of our
review of Shell's Arctic ODPCPs, BSEE has been closely engaged with the
Interagency Working Group on Coordination of Domestic Energy
Development and Permitting in Alaska, established by the President in
E.O. 13580, and BSEE staff has participated in comprehensive dialogue
with technical experts from Shell, the USCG, the Environmental
Protection Agency, and the National Oceanic and Atmospheric
Administration. The interagency process has been extremely helpful for
highlighting concerns from other agencies long before they would
normally be addressed. Working through those concerns is helping to
inform our review and should allow Shell to more fully address our
comments on their ODPCPs in a more timely manner. Shell was provided a
detailed notification of certain modifications that we believe are
necessary to incorporate into their Chukchi ODPCP. Shell's response to
that notification was received and will be incorporated into our review
of their Chukchi ODPCP.
Question 4. In light of the Interagency Working Group's apparent
control over part of the decision on the Arctic, as well as action and
inaction of other agencies with the power to slow or halt OCS
exploration, are you comfortable that DOT's ultimate statutory
authority over the OCS is preserved?
Answer. The Interagency Working Group on Coordination of Domestic
Energy Development and Permitting in Alaska has no control over any
decisions to be made in the Arctic by BSEE. The purpose of the
Interagency Working Group is to ensure effective coordination among all
relevant agencies with respect to decisions about Arctic resource
development. With respect to the ODPCP, this involves soliciting
information and feedback from other agencies to help inform BSEE's
review. It has performed this role admirably. With respect to other
agencies that also have legal authority over activities on the OCS, we
continue to work with those agencies exercising their respective
statutory authorities, which do not negatively affect the Department of
the Interior's ability to successfully fulfill its missions in any way.
Question 5. Your agency has asserted that contractors in the OCS
will be subject to the same direct regulation by DOI as the operators--
notwithstanding the previous practice of regulating the operator as the
lead entity in charge of an operation. Because this authority is newly
found or, at a minimum, newly exercised, the Committee has an immediate
interest in understanding specifically how the OCSLA, a statute under
our jurisdiction, is being interpreted and implemented at the agency
level. In the interests of oversight, better understanding, and
transparency, will you include those specific memoranda on legal
rationale for this authority with your responses to these questions?
Answer. BSEE's legal authority over contractors who violate the
provisions of the Outer Continental Shelf Lands Act (OCSLA), is based
in part on subsection 24(b)(1), which states in part: ``[I]f any person
fails to comply with any provision of the Act, or any term of a lease,
or permit issued pursuant this Act, or any regulation or order under
this Act, after notice of such failure and expiration of any
reasonable? period allowed for corrective action, such person shall be
liable for a civil penalty .. ..'' Consistent with the Act, BSEE's
implementing regulations also extend responsibility for OCSLA
compliance to co-lessees, operators, and those persons actually
performing OCS covered activities. (See, 30 C.F.R. Sec. 250.146.)
BSEE's civil penalty regulation also defines a ``violator'' as a person
responsible for a violation of the Act. (See; 30 C.F.R. Sec. 250.1402.)
In addition, in subsection 24(c) Congress authorized assessment of
criminal penalties against ``any person'' who ``knowingly and
willfully'' violates OCSLA, regulations issued under the authority of
the OCSLA, and leases, licenses, or permits issued pursuant to the
OCSLA. Congress's utilization of the tenn ``any person'' in OCSLA
provides BSEE with clear statutory authority over non-leaseholders and
non-operators.
______
Responses of Jorge R. Pinon to Questions From Senator Bingaman
Question 1. Do you feel that the channels of communication that you
referenced in your testimony are in place to share best oilfield
exploration practices, as well as spill prevention, preparedness and
response practices, between ourselves and our neighbors in the Gulf--
Mexico, Cuba, and the Bahamas?
Answer. Not with Cuba and The Bahamas. The only ``communication''
with Cuba is through Repsol, one of the six international oil companies
holding oil and gas exploratory concessions in that country and with
the Houston based International Association of Drilling Contractors. To
my knowledge no formal conversations have been held by either the USCG,
Department of State and or Department of Interior's BSEE with
Malaysia's PETRONAS, Russia's Gazprom, India's ONGC, Angola's Sonangol,
Vietnam's Petrovietnam and or Venezuela's PDVSA. I am also not aware of
formal conversations with The Bahamas Petroleum Company Plc., the only
licensed operator in The Bahamas.
Most importantly no conversations have been held with Cuba's oil
and gas regulatory agency Oficina de Regulacion Ambiental y Seguridad
Nuclear and The Bahamas Ministry of the Environment. The United States
does have channels of communication with Mexico's national oil company
Pemex and Mexico's regulatory agency Comision Nacional de
Hidrocarburos.
Question 2. How do you think that we, the U.S. government, can work
to best help our Gulf neighbors in spill prevention and response
planning?
Answer. Create a public or private (non-political academic center
of excellence or professional trade organization such as the
International Association of Drilling Contractors) umbrella
organization under which deepwater hydrocarbon development lessons and
best practices can be shared.
For Cuba's national oil company CUPET to become a member of the
Houston based International Association of Drilling Contractors. . .
they would have to apply for an OFAC license! And face a number of;
1917 Trading with the Enemy Act, State Sponsors of Terrorism, The Cuban
Democracy Act, and The Cuban Liberty and Democratic Solidarity Act
filters. In my opinion this is not the way to share best practices.
Question 3. Perhaps more importantly, is there anything that we can
or should do to help less experienced offshore oil regulators in other
countries to develop the experience that is needed to be an effective
regulator?
Answer. See below.
Question 4. Do the Mexican, Cuban and Bahamian governments have the
resources, capabilities and experienced personnel required to create
and enforce the most advanced and timely frilling regulations and
standards?
Answer. Certainly not Cuba and or The Bahamas. I am sure they have
qualified professionals in their field of academic study but
understandably lack experience in enforcing regulations in the
technically complex environment of deepwater drilling for oil and gas.
That is why it is so important to have experienced operators and sub-
contractors, along with equipment and service providers that have
hands-on international experience of operating under a multitude of
geological and environmental complex scenarios.
But it is not only an issue of physical resources but most
important. . . behaviors.
The challenge for Mexico's regulatory agency CNH is independence.
Mexico's oil and gas sector has been a monopoly for over seventy (70)
years! Most of the experience of CNH's staff comes from working with
Pemex. Would the Senator support a situation under which most of BSEE's
staff were former Exxon employees?
Emerging countries regulatory agencies also face the challenge of
ethical conduct and or dishonest and illegal practices which undermines
the independency of the agency in enforcing regulations and standards.
Question 5. Can each of these countries' regulatory agencies
effectively regulate the operators working in our shared waters?
Answer. Regrettably, not today. Maybe in the future as they gain
industry and sector experience.
Responses of Jorge R. Pinon to Questions From Senator Murkowski
Question 1. Your testimony indicates that the Gulf of Mexico
represents a great opportunity for Cuba to develop resources and
bolster its economy. Let's presume for the sake of discussion that
Cuba's drilling program this year results in a safe, commercial
discovery. What kind of pace or timeline would you envision for
additional leasing, exploration, and development? When might we see
first oil?
Answer. Limited production within three (3) years and a maximum net
working interest of approximately 131,000 barrels per day within seven
to ten (7-10) years assuming that 5 billion barrels of crude oil
reserves are determined to be proven in the ``North Cuba Basin''. Note;
Cuba's current oil demand, under its centralized economic model, is
147,000 barrels per day.
In Cuba's Production Sharing Agreement, Cupet awards the rights to
a third party contractor to explore and produce hydrocarbons within a
specific geographical area at its own risk. The contractor is
responsible for supplying all capital, equipment, installations,
technology and personnel needed to carry out the operations as outlined
in the contract.
PSAs are generally divided into exploration and production periods,
each with its own set of performance requirements. If no exploratory
work is conducted within the specified exploration period, typically 3-
7 years, or insufficient quantities of crude oil and/or natural gas are
found and the reservoir is declared un-commercial the concession can be
surrendered with the contractor unable to recover any of its capital
investments.
If the reservoir is considered commercially viable, then the first
oil extracted from the concession is allocated to the contractor to
recover its capital investment and other exploration costs--cost oil--,
with a limit on what percentage of production can be allocated as cost
oil.
Once costs have been recovered the remaining oil--profit oil--is
divided between Cupet and the contractor in agreed proportions (60% /
40%) as outlined in the PSA. Exploration and production terms are
typically 25-30 years in duration.
Taxes generally paid by the contractor are 25% on personnel
salaries and 30% on net profits. The contractor is also allowed to
dispose of its share of production by exporting it--in kind--or selling
it to Cupet at an agreed to price formula.
Question 2. Can you provide any estimate as to the level of oil
production Mexico might achieve in out years, now that some foreign
participation will be allowed in its development?
Answer. Mexico's oil and gas future has not received the attention
and concern that it deserves as to the socio-economic impact that it
could have in the United States-Mexico relations.
Mexico's crude oil production has fallen below the 3 million
barrels per day threshold for the first time since 1990 from a high
production level of 3.8 million barrels per day in 2004. Oil production
and Pemex represent 14% of total export revenues and 32% of total
government revenues.
Pemex does not have any deepwater experience. Its current
production area of Campeche is not considered deepwater. . .Pemex is
about to drill next year Maximo its first Gulf of Mexico ultra
deepwater prospect at over 9,500 feet of water depth. . .yes, 9,500
feet of water depth, just 22 miles south of the US-Mexico EEZ. . . .And
we are worry about Cuba and Repsol??
That is why we recently witnessed an unfriendly attempt by Pemex to
take shareholder's control of a well experienced Gulf of Mexico
deepwater operator. . .hold and behold. . .REPSOL!!
DOE's EIA assessment.
Mexico, liquids production sinks to approximately 1.4
million barrels per day in 2025 before rebounding
slowly to 1.7 million barrels per day in 2035, still
1.5 million barrels per day below the 2008 production
volume of 3.2 million barrels per day. The rebound
after 2025 depends entirely on the development of
potential resources in the deepwater Gulf of Mexico,
which must begin some years in advance of any increase
in production levels. The outlook for Mexico's liquids
production is markedly different from the IEO
projection just 5 years ago, in which production did
not fall below 2.9 million barrels per day, and a long-
term recovery began in 2013. The difference between the
projections is the result of production declines at
Cantarell, which have been more severe than expected,
as well as diminished expectations for Chicontepec
production and more pessimistic assumptions about the
level of future investment, both foreign and domestic,
in Mexico's deepwater production.
Although the shortage of investment in Mexico is
expected to lead to a mid-term decline, Mexico has
potential resources to support a long-term recovery in
total production, primarily in the Gulf of Mexico. The
extent and timing of a recovery will depend in part on
the level of economic access granted to foreign
investors and operators. Mexico's national oil company,
Petroleos Mexicanos (PEMEX), currently does not have
the technical capability or financial means to develop
potential deepwater projects in the Gulf of Mexico.
______
Responses of Mark Myers to Questions From Senator Bingaman
ICEBREAKERS AND COOPERATION
Question 1. You mentioned the issue of icebreakers in your
testimony. Icebreakers seem to be very important in spill response and
prevention--while the US has only two icebreakers (with a third to be
decommissioned); the fleet of the Canadian icebreakers seems more than
adequate to assist us should we need assistance. Do you know if there
are any agreements in place whereby the Canadians will assist us should
we need to borrow an icebreaker under emergency conditions?
Answer. I know of no pre-arranged agreements between the United
States Coast Guard (USCG) and the Canadian Coast Guard (CCG) for
icebreaker support for the purpose of emergency oil spill response.
Even if there were such a formal agreement for ice-breaker assistance,
the Canadian fleet of icebreakers, consisting of two medium and five
lighter class icebreakers, is spread over a wide area of Canadian
Arctic waters so their ability to effectively respond to a spill in US
arctic waters would be rather limited and probably not very timely.
First response would likely come from an industry-owned or chartered
commercial icebreaker or the USCG Healy.
There has been good cooperation between the CCG and the USCG for
the joint use of icebreakers for scientific research in the Arctic
Ocean. For example 2008-2011 there has been coordinated use of the USCG
Icebreaker Healy and the CCG Icebreaker Louis S. St-Laurent for mapping
of the extended continental shelf off the US and Canadian portions of
the Arctic Ocean.
ARCTIC EXPERIENCE
Question 2. In areas where ice cover remains throughout the
majority of the year, how is it possible to complete a well in a
drilling season? Are our Canadian and Russian neighbors better prepared
to prevent and respond to oil spills? Or do we all have the same level
of experience and knowledge of the Arctic and the complexities that are
involved with arctic offshore oil drilling and development?
Answer. The ability to drill in areas where ice cover remains
throughout the majority of the year is dependent upon the water depth
and drilling technology employed. Where water depth is shallow
(generally less than 100 feet), bottom-founded structures or man-made
islands can potentially be used for year-round drilling. In very near
shore areas, wells can be directionally drilled continuously off shore
from causeways or onshore drill pads. However, in offshore areas where
ice cover remains throughout most of the year and where water depths
are deeper than 100 feet, completion of wells normally requires
multiple drilling seasons. Drill ships or offshore drill rigs are
brought in during the ice free season and the well is partially
drilled, cased, temporarily plugged and abandoned. The rig is then
transported off site. The following summer the rig returns, reenters
and completes the well.
In the United States significant investment has been made through
industry partnerships for oil spill response for currently producing
facilities in the near shore waters of the Beaufort Sea. Because no
production is occurring in the Canadian Beaufort Sea, the Canadian
companies have more limited spill response capacity which is directed
toward exploration drilling and shipping rather than near-shore
production as in offshore Alaska. Because the Canadian and Russian
governments have larger icebreaker fleets these governments are
potentially better capable at responding to a ship-based spill along
the northern sea routes when ice cover is an issue. It should be noted
that independent of the US government capacity, Shell Oil has developed
its own icebreaker to be used in support of its proposed exploration
drilling operations in the Beaufort and Chukchi Seas.
Similar drilling technology is generally available in all arctic
nations where oil and gas exploration development is occurring which
could indicate similar oil spill prevention capacity. However, safety
practices and the capacity and practices of individual companies along
with regulatory requirements and enforcement practices vary from
country to country. With respect to overall scientific knowledge of the
complex nature of the arctic ecosystem, I believe that the United
States has marginally greater knowledge.
ARCTIC ENERGY COUNCIL
Question 3. Can you elaborate a little bit on the role of the
Arctic Energy Council in offshore oil development in arctic areas?
Answer. Established in 1996, the Arctic Council is an
intergovernmental forum to promote cooperation, coordination and
interaction among arctic states. Member states include Canada, Denmark
(including Greenland and the Faroe Islands), Finland, Iceland, Norway,
Russian Federation, Sweden, and the United States. The Arctic Council
focuses on issues of sustainable development (including oil and gas)
and the environmental protection of the Arctic.
Since 2008, the Arctic Council through its Emergency Prevention,
Preparedness and Response Working Group has been synthesising knowledge
and developing expertise on the behavior of oil in arctic waters and
promoting the development and use of technologies and methods that
improve oil spill response. On May 12, 2011, the Arctic Council began
negotiations toward an international instrument on arctic marine oil
spill preparedness and response.
DISPERSANTS
Question 4. How do dispersants behave in arctic areas? Do we know
if it is the same as warmer areas, like the Gulf of Mexico? What is the
state of the science for dispersants in cold water areas?
Answer. In two series of tests funded by the Minerals Management
Service, commercially available chemical dispersants were tested in
cold water conditions on North Slope crude oil samples. These tests
were conducted in the wave tank at the National Oil Spill Response Test
Facility and found that the dispersants were effective in dispersing
both fresh and weathered samples in energetic wave conditions. The
results of these tests were published in the Marine Pollution Bulletin
58 (2009) p. 118-128. Less is understood about the effectiveness of
chemical dispersants in less energetic arctic environments such as oil
that is trapped under ice.
Funded by the Joint Industry Research Program, toxicology tests
have been performed on sample arctic marine species. Petroleum and
chemical dispersant exposures on copepods, fish and krill indicate that
they react with similar or higher resilience than temperate species.
Additionally, chemical dispersants in oiled arctic seawater appear to
enhance the completeness of degradation of measured components in oil
over petroleum not exposed to dispersants.
Recent testing and research has significantly enhanced the state of
knowledge of the effectiveness of commercially available dispersants in
arctic environments and species, particularly with respect to open
water and higher energy environments. However, much less is understood
about how dispersants will function in environments where significant
sea ice is present. Additionally, more research is needed in order to
understand issues such as how dispersed oil and associated microbial
activity will affect oxygen levels in under ice environments.
Information gathered from the recent large scale use of dispersants in
the Gulf of Mexico should be used to better focus comparative research
in arctic waters.
CHALLENGES
Question 5. What do you think the real challenges are for oil
drilling and development in the Arctic? Do you feel that our neighbors
are adequately prepared to prevent and respond to an oil spill on or
under arctic ice or in open waters in arctic areas?
Answer. I believe that the greatest challenge for oil drilling and
development anywhere is the prevention of a spill by fully assessing
risk, employing the best and most appropriate technology, practicing a
culture of safety first in all operations, and preventing situations
where a single point of failure will cause a spill. If prevention
fails, the more rapid the spill is contained, the more effective the
response. Prepositioning effective well capping equipment is an example
of a newly tested technology that could dramatically improve the oil
industry's ability to respond to a spill in offshore wells.
Some of the additional challenges associated with responding to an
arctic oil spill include very cold temperatures, sea ice, limited
daylight hours, lack of infrastructure, remoteness from resources and
the unique ecosystem. There is a strong need for the development and
deployment of an all season and all weather operational sensor network
in the Arctic that integrates subsurface, sea floor, water column,
surface, and atmospheric monitoring. Such an operational network will
require significant investment in emerging technological advancements.
Some examples are next generation autonomous underwater vehicles and
sensors, small to medium unmanned aerial vehicles, portable high
frequency coastal radar, and enhanced integration of data from manned
aircraft and space systems, all coupled with more effective integration
of community-based monitoring systems.
One of the greatest challenges is locating oil under ice.
Furthermore, the behavior of oil under and within ice is poorly
understood and in need of greater research.
Techniques for removing oil include containment and mechanical
cleaning, in-situ burning, bioremediation, chemical dispersants, and
natural recovery. The effectiveness of these various techniques is
significantly affected by the percentage of ice cover and the ability
to timely mobilize adequate equipment and personnel to the spill site.
Throughout the Arctic more research is needed in order to develop
better predictive models for the movement of sea ice and ocean
currents, improved oil spill trajectory models, increased understanding
of the behavior and tracking of oil under ice, and better understanding
of the impacts to the ecosystem. Stronger agreements between
governments, agencies, communities and companies and protocols for the
integration of data streams and data sharing will be necessary in order
to develop the best operational picture. More realistic and larger-
scale field training exercises will be necessary in order to achieve
the most efficient operational capacity.
Under minimal ice and ice free conditions our neighbors in Russia
and Canada have some capacity to prevent and respond to spills in and
around existing infrastructure. However, neither neighbor (nor the
United States) has the capacity to effectively clean up oil under ice.
Responses of Mark Myers to Questions From Senator Murkowski
Question 1. Would you say that strong understanding of the offshore
oil and gas resources, including characterizing the reservoirs, is
important to determine what kind of build out will be necessary, should
production advance?
Answer. Yes, understanding the fundamental geology of the resource
is critically important for all aspects of the exploration and
development of oil and gas fields and their associated production and
transportation infrastructure. For example, the reservoir properties
including the seals, depth, pressure, fluid types and contacts,
reservoir thickness and volume will significantly affect the well and
completion design, the number and spacing of drilling and production
platforms, methods of enhanced oil production, and many aspects of the
design for the production facilities, pipelines and associated
compressors. Other key factors that affect facility and well design
include the water depth and ice conditions that the facilities must be
built to withstand.
Question 2. Critics of arctic development talk much about how
dealing with issues in that environment is so much more difficult
because of the harsh weather and the darkness--but they tend to forget
that those are essentially normal conditions in our region. Is there a
population, both domestically and globally, of both skilled and
unskilled personnel who are accustomed to working in arctic
environments?
Answer. In Alaska, Norway, Russia and Canada there is a highly
successful, professional, skilled, and unskilled labor force that has
worked year-round for decades in oil and gas development and other
professions in the extreme weather conditions of the Arctic.
______
Responses of Paul Schuler to Questions From Senator Bingaman
Question 1. Do you feel that the channels of communication that Mr.
Pinon referenced in his testimony are in place to share best oilfield
exploration practices, as well as spill prevention, preparedness and
response practices, between ourselves and our neighbors in the Gulf--
Mexico, Cuba and the Bahamas?
Answer. I feel channels of communication are expanding; reference
the upcoming IMO Workshop in the Bahamas scheduled for December 7-9,
2011, which will have representatives from the Bahamas, Cuba, Jamaica,
Mexico, and the United States, as well as several subject matter
experts.
Question 2. How do you think that we, the U.S. government, can work
to best help our Gulf neighbors in spill prevention and response
planning?
Answer. Prevention is beyond the scope of my company's activities,
but I believe response planning could be enhanced by the U.S.
Government hosting both workshops and training courses on the subject,
with subject matter experts assisting.
Question 3. Perhaps more importantly, is there anything that we can
or should do to help less experienced offshore oil regulators in other
countries to develop the experience that is needed to be an effective
regulator?
Answer. Like #2, dedicated education and training opportunities
through IMO and other international organizations may be helpful.
Question 4. In your testimony, you have indicated that you have a
license to go and work directly with representatives of Repsol and
Petrobras who have been operating previously in Cuba. In your recent
work, have you felt that the competencies of the companies have
increased with experience?
Answer. I am not qualified to comment on the competencies of these
companies with regard to drilling operations. However, with regard to
oil spill preparedness and response since the Macondo incident, Repsol
and Petrobras, like all the other companies we work with, have
continued to improve on their preparedness and planning, as well as
enhancing response capacities.
Question 5. You also mentioned your sister cooperative, Oil Spill
Response Ltd. Do they have the same capabilities as your company Clean
Caribbean & Americas? Or do they have expanded capabilities such as
wellhead containment equipment?
Answer. Oil Spill Response Ltd. has broadly similar preparedness &
response capabilities as Clean Caribbean & Americas. They have recently
acquired a single wellhead containment system that is dedicated to the
North Sea operations only.
Question 6. You finished your testimony by stating that the process
could be loosened up so that more companies and resources can be
brought into the response from the US. Are you referring to the
licensing process itself or to the embargo?
Answer. I thought it presumptuous to comment on specifics regarding
how to ``loosen up'' the process, which I felt was the purview of
Congress. My point was strictly to bring to light the need to have more
resources available to protect U.S./Florida natural resources. This
could be accomplished by making the licensing process quicker and
broader.
Responses of Paul Schuler to Questions From Senator Murkowski
Question 1. Your member companies represent both major integrated
and independent oil companies. To what extent do you draw on their
expertise--or recruit from such companies--in maintaining Clean
Caribbean's readiness to respond to incidents?
Answer. Preparedness and response is a collaborative process
involving both the operating companies, and the response cooperatives.
Typically the preparedness functions such as planning reside in the
companies, while Tier 3 response resources (supplemental to OSR
resources that the oil companies possess) the physical response
resources reside in the response cooperatives. They are integrated
through training, drills and exercises.
Question 2. Your testimony discusses the appropriateness of
dispersants when used responsibly. One of the issues we've struggled
with is a responsible means of getting pre-authorization for certain
tested dispersants in certain situations. Are there parameters, in your
view, that would make such a regime workable and responsible?
Answer. The primary goal of any oil spill response operation should
be to minimize environmental harm. Although one expectation may be the
complete physical containment and removal of oil from the environment,
this is often not possible (especially with large offshore spills) due
to physical limitations of mechanical recovery systems. In fact,
recovery operations during previous offshore spills only collected a
small fraction of the spilled oil even under ideal conditions [ITOPF
Handbook, 2010]. The Deepwater Horizon incident is no exception, with
preliminary estimates indicating that only 3% of the oil was
mechanically recovered [NOAA Oil Budget, 2010]. Relying solely on
mechanical response measures to large offshore spills may therefore
result in less effective protection of the environment. Responders,
response advisors, and regulators must consider the advantages and
limitations of each response option and the conditions of the spill to
develop a response strategy that minimizes environmental harm.
The oil and gas industry recognizes the significant limitations of
mechanical recovery for large offshore oil spills and has developed
alternative response tools--one of which is oil spill dispersants. Oil
spill dispersants facilitate removal of oil from the environment by
enhancing the natural biodegradation process. Dispersants do this by
rapidly breaking a surface slick into micron-sized droplets that move
into the water column. This provides naturally occurring oil degrading
bacteria greater access to the oil by creating a dilute mixture of oil
in water rather than a thick surface accumulation. Fortunately, oil
degrading bacteria are present in all marine environments, having
evolved to degrade oil released by natural seeps [Margesin and
Schinner, 2001; Prince and Clark, 2004].
Dispersed oil rapidly dilutes [French McCay and Payne, 2001; French
McCay et al., 2006, McAuliffe et al., 1980, Cormack and Nichols, 1977,
Daling and Indrebo, 1996], and concentrations above known toxicity
thresholds do not persist for more than a few hours after effective
dispersant application. Thus the potential for cute impacts to the
environment from dispersed oil is limited in duration and space. In
contrast, a surface slick has the potential to impact marine mammals
and birds for many days and strand on sensitive shorelines. The most
sensitive areas in many marine environments are marine marshes and
swamps. These areas can take years to decades to recover [Sell et al.,
1993] once impacted by surface slicks.
Fortunately, during the Deepwater Horizon incident, the amount of
damage to these resources was far less than scientists initially
expected. In many locations where oil did enter, marsh grass recovery
was apparent soon after the spill [Kaufman and Dewan, 2010]. Although
additional investigations are still needed, this and other preliminary
evidence suggests that a key reason for the limited shoreline impacts
during the Deepwater Horizon incident was the use of dispersants and,
in particular, the subsea injection of dispersants at the wellhead.
Considering the limitations of mechanical recovery in removing oil
from the environment, the decision to use dispersants often assists in
reducing the potential for environmental impacts. The preliminary
evidence from the Deepwater Horizon incident shows that the decision to
use dispersants minimized potential impacts to marine mammals and birds
and oiling of sensitive shoreline environments.
Question 3. Another priority I think we recognized last year was
the need to conduct controlled test spills in the ocean--something we
can't currently practice in the U.S. but which has been conducted in
other nations. Would your organization find use in such an exercise to
both obtain real world experience with the behavior of oil in water and
to test equipment and assets?
Answer. I think that controlled test spills would be useful for
expanding the science and knowledge base on dispersants, in-situ
burning, and other methods, but I don't believe oil in water is
necessary to test the capabilities of responders to mobilize and deploy
equipment in the open water as we perform such exercises on a regular
basis.
Question 4. If the federal government authorized small, controlled
spills in the ocean for purposes of training, would this enhance the
readiness of organizations such as Clean Caribbean to respond to oil
spills in areas adjacent to U.S. waters?
Answer. I believe, as above, that controlled spills would be
valuable for the purposes of enhancing science and knowledge on various
response methods and strategies, but are not critical or additive for
the purposes of training.
______
Responses of Vice Admiral Brian M. Salerno to Questions From
Senator Bingaman
Question 1. I would like to open this round of questions by asking
the both of you--How confident are you that the U.S. is ready to
respond to a spill following the tragic events of the Deepwater
Horizon?
Question 2. In particular, how confident are you that we're ready
in the advent that an oil spill occurs in the near future in Cuban
waters--that would impact US waters, such as the Florida straits?
Answer. The U.S. Coast Guard investigates and responds to oil
spills every day. As the designated Federal On-Scene Coordinator under
the National Oil and Hazardous Substance Contingency Plan (NCP), each
local Coast Guard Captain of the Port (COTP) is responsible for
coordinating local preparedness and response activities for their
respective coastal zone. These responsibilities include overseeing the
development of Area Contingency Plans (ACP) and organizing the Area
Committee whose membership is comprised of stakeholders from other
federal agencies as well as state, local, tribal and industry
representatives.
While the National Contingency Plan (NCP) is sound and performed
well during the DWH spill response, the Coast Guard is working with
DHS, the National Response Team, and other agency partners to update
guidance documents and protocols to reflect DWH Lessons Learned. The
Coast Guard, in partnership with EPA and FEMA, has jointly chartered
work groups to develop recommendations that support improvements for
government responses. The Coast Guard is also working closely with the
National Response Team, including EPA and NOAA, to review and update
response equipment options available to operational commanders in
combating catastrophic spill events.
In addition, the Coast Guard is aggressively and methodically
pursuing a number of enhancements across three major lanes, including
(1) improving internal competency and capacity; (2) improving response
system policy; and (3) improving quantity, quality and efficiency of
the national inventory of response equipment.
In improving internal competency and capacity the Coast Guard is
addressing the ability to manage and sustain an incident response by
developing training courses and implementing personnel enhancements in
the pollution response field. The Coast Guard requested billets in the
FY12 President's Budget for a National Incident Management Assistance
Team (IMAT) Additionally, the Coast Guard has encouraged more
participation from state and local officials in oil spill planning and
preparedness efforts.
The Coast Guard is partnering with other agencies to improve the
quantity, quality and efficiency of the national inventory of response
equipment. The Coast Guard and Bureau of Safety, Energy and Environment
(BSEE) and other agencies are reviewing OPA 90's technical planning
standards for assessing oil spill response equipment efficiency and
effectiveness. In addition the Coast Guard is currently working with
industry on updates to its 1997 Oil Pollution Research and Development
Technology Plan.
Protecting the marine environment from accidental oil and chemical
spills is a key mission of the U.S. Coast Guard. Although a response to
an oil spill in Cuban waters that affects the U.S. would certainly be
more challenging than a similar domestic event, the Coast Guard is
working with other stakeholders to maximize preparedness should a spill
occur. To ensure readiness and awareness, specific to Cuban proposed
offshore oil exploration, the U.S. Coast Guard Seventh District
Commander began outreach and planning efforts over a year ago. These
efforts are ongoing and the U.S. Coast Guard will continue to maximize
information sharing, preparation, and training with all partners, to
make sure sound strategies and liaisons are built to prepare for and
respond to any potential environmental threat to U.S. waters. The Coast
Guard has engaged the State of Florida, our fifteen National and
Regional Response Team partners to include: the Environmental
Protection Agency, Departments of State, Commerce, Treasury, and
Interior, the Government of the Commonwealth of the Bahamas, Oil Spill
Removal Organizations with licenses to work in Cuban waters, as well as
elected officials at all levels of government.
The Coast Guard maintains contingency plans that are ready to be
activated in the event incidents occur. The Coast Guard is updating
plans to address a potential discharge from a drilling rig off the
coast of Cuba or other Caribbean Nations that could potentially impact
U.S. waters. This preparedness effort is far-reaching and includes a
host of federal, state, and private entities to ensure awareness and
mutual cooperation. Additionally, plans are already underway to begin
regional coordination as the Coast Guard focuses on the near-term
drilling that is to occur off Cuba, the Coast Guard is also mindful of
the potential for future offshore oil exploration in Bahamian waters.
In the event of an emergency, the U.S. Coast Guard would mount an
immediate response using existing authorities in partnership with other
Federal, State and local agencies under the National Oil and Hazardous
Substances Pollution Contingency Plan and the Oil Pollution Act of
1990. The National Contingency Plan (NCP) is the Federal government's
blueprint for responding to both oil spills and hazardous substance
releases. In accordance with the NCP, U.S. response agencies are
authorized to undertake immediate actions for the removal of a
discharge that may affect its natural resources. A ``Unified Command''
approach would be employed, focusing on combating the spill offshore
using all viable response tactics.
CUBA
Question 3a. Has the Coast Guard been in the same discussions with
Repsol as the BSEE officials have? If so, do you feel confident that
Repsol is adequately prepared on both the prevention (in terms of the
vessel itself) and spill response should another oil spill occur?
Answer. In March 2011, Repsol independently reached out to the
Coast Guard regarding their future operations for the Straits of
Florida. On April 6, 2011, Repsol officials attended a meeting at Coast
Guard Headquarters and provided general information on their efforts
and plans. This meeting, hosted by the Coast Guard, was attended by
interagency partners including Department of State (DOS), the National
Oceanographic and Atmospheric Administration, the Department of the
Interior (DOI), and the Environmental Protective Agency. Additionally
in July 2011, the U.S. Coast Guard representatives, along with DOS and
DOI (BOEMRE) representatives, received an updated briefing by Repsol in
Trinidad.
Based on information available to the Coast Guard at this time, the
Coast Guard believes the vessel will be fit for intended service. A
joint inspection with BSEE onboard the vessel will help validate the
Coast Guard's expectations that it meets international standards.
The Administration is committed to protecting U.S. national
interests, particularly environmental interests in the Florida Keys and
along the U.S. coastline, as they relate to deepwater drilling in Cuban
waters. Should U.S. waters or land be threatened by an oil spill from
any drilling site, the United States government can use existing
authorities to conduct response operations. Additionally the U.S.
government has engaged relevant state, local, and private stakeholders
to ensure awareness and mutual cooperation and to examine existing oil
spill response plans and will continue to do so.
We have made clear to Repsol that we expect it to adhere to the
highest environmental, health, and safety standards and have adequate
prevention, mitigation, and remediation systems in place in the event
of an incident. Repsol has informed the U.S. government of its plans
and invited U.S. government officials to observe an emergency drill
conducted in Trinidad related to contingency planning for the drilling.
The Administration is committed to supporting best practices to prevent
and contain oil spills, and is pursuing immediate and long term
initiatives that seek to minimize risks to U.S. waters and shores.
The United States government views a multilateral approach as
essential to contingency planning for oil spill prevention and
response, especially in light of planned deepwater activity by a number
of countries in the region. Multilateral engagement with the Bahamas,
Cuba, Jamaica, and Mexico could occur in multiple forums. It is our
intent to vigorously pursue such engagement. Our multilateral
engagement is intended to ensure common understanding and effective
implementation of international obligations and standards for oil spill
prevention and response. Outside U.S. jurisdiction, it would generally
fall to the flag state of the mobile offshore drilling rig and coastal
state where it is operating to ensure compliance with safety and
maintenance rules. Such rules would need to conform to applicable
international requirements, which are often established under the
auspices of the International Maritime Organization.
Question 3b. Will you be conducting an inspection of the Repsol rig
in conjunction with the BSEE inspectors?
Answer. A joint inspection is tentatively scheduled to occur in
December 2011 when the SCARABEO 9 makes a port call in Trinidad. The
Coast Guard intends to send two Coast Guard marine inspectors to
accompany the BSEE surveyors.
GENERAL SPILL RESPONSE
Question 4. Can you describe how you've worked previously with
other governments when spills have occurred?
Answer. In accordance with the Clean Water Act and the National
Contingency Plan (40CFR300), the Coast Guard serves as US lead for bi-
lateral oil and hazardous substance preparedness, planning and response
across our international boundaries with Canada, Mexico, Russia,
Panama, and nations in the Northern Caribbean. Semi-annual plenary
meetings are held at the national level and daily contact occurs in
each of the regions for planning, exercise and actual response
operations.
In general, when a pollution incident occurs, the responsible On-
Scene Coordinator provides notification of the type of incident to
include: situation; action taken; future plans; recommendations; and
the status of the case. Response objectives are coordinated between the
US and the other governments involved.
ARCTIC
Question 5. Can you discuss a little more about how you are working
with local stakeholders in arctic areas to coordinate a spill
prevention and response plan? How does a spill response differ in the
arctic areas, compared to non-arctic areas?
Answer. As the designated Federal On-Scene Coordinator for the
Coastal Zone under the National Oil and Hazardous Substance Contingency
Plan (NCP), the local Coast Guard Captain of the Port (COTP) is
responsible for coordinating local preparedness and response activities
for their respective coastal zone. These responsibilities include
overseeing the development of the Area Contingency Plan (ACP) and
organizing the Area Committee whose membership is comprised of
stakeholders from other federal agencies as well as state, local,
tribal and industry representatives.
As a result of the proposed offshore drilling activities in the
Arctic, the Coast Guard is collaboratively working with the state,
local, and tribal representatives at the local level to update the
worst-case discharge (WCD) scenarios in the industry plans and other
information in the appropriate Regional and Area Contingency Plans.
These plans include the Northwest Arctic and North Slope Geographic
Response Plans (local) and the Alaska Unified Plan (regional). The
revised plans include updated information about offshore facility WCD
scenarios, response equipment surge strategy, environmental protection
strategies, source control, and waste disposal operations. These
revised plans are scheduled for completion and final approval by the
Coast Guard and the Alaska interagency regional and local planning
bodies in advance of the 2012 drilling season. The Coast Guard in
Alaska will continue to encourage more participation from state, local
and tribal officials in oil spill planning and preparedness efforts in
the form of participation in drills and exercises as well as Area
Committee discussions to improve oil spill contingency plans.
A spill response in the Arctic would primarily differ compared to a
spill in non-Arctic regions because of the distance to remote spill
locations, lack of pre-staged equipment, and lack of supporting shore-
based infrastructure. Adverse weather conditions such as ice, low
visibility, and prolonged darkness also reduce the effectiveness of a
response effort.
Responses of Vice Admiral Brian M. Salerno to Questions From
Senator Murkowski
Question 1. Your testimony indicated that the Coast Guard was
examining the option of leasing icebreakers. What stage of this
examination have you reached
Question 2. Given the total absence of Congressional support for
leasing icebreakers from foreign entities, what steps are you taking to
secure availability of U.S. built icebreakers to meet pressing needs in
the Arctic?
Answer. Leasing options continue to be one possible alternative as
the Coast Guard continues to work with the Administration to assess
future icebreaker requirements. The most recent analysis, which
included leasing of currently available platforms and build-to-lease
alternatives, was thoroughly examined in the Polar Icebreaker
Replacement Business Case Analysis. This analysis was delivered to
Congress on 02 November 2011.
The Coast Guard anticipates Coast Guard Cutter HEALY and Coast
Guard Cutter POLAR STAR (when returned to service in 2013) are
sufficient to address the Coast Guard's most pressing, current
icebreaking requirements in the Arctic for the near-term. The Coast
Guard continues to work with the Administration on long-term icebreaker
recapitalization needs. There are currently no U.S.-built icebreakers
available for leases that are capable of operating in the Arctic.
Question 3. Along these same lines, you have been called upon to
address the issue of authorizing larger oil spill response vessels
(OSRVs) over the past year and a half. The vessels that we're seeing
constructed for Alaska's offshore development obviously have to be very
large, with the ability to store huge volumes of recovered oil, and
they have to be able to operate in heavy seas and in the dark. My
understanding, however, is that current policy is based on the post-
Valdez idea that OSRVs would be smaller and tasked with responding to
contained spills in near shore areas. Is this accurate?
Why is there not yet the authorization for these vessels to be
classified as what they are?
Answer.
Yes, this is accurate; however, that policy is grounded in
the governing statute 46 U.S.C.Sec. 3702(f)(2)(A), which
requires that an oil spill response vessel (OSRV) must be
either under 500 gross tons (GT) or an alternate tonnage
created by regulation, or be certified to comply with the tank
vessels standards of Chapter 37 of Title 46, U.S. Code.
OSRVs less than 500 GT are exempt from tank vessel
regulations by statute. However, most Offshore Supply Vessels
(OSV) built after 1996 exceed 500 GT. In recognition of this
trend, the Coast Guard is working on a solution to allow OSVs
greater than 500 GT to also serve as OSRVs without restriction
on the amount of recovered oil they can be certified to carry.
That solution involves a rulemaking project.
As an interim solution, the Coast Guard has approved requests
permitting these larger OSVs to be placed into service as non-dedicated
OSRVs, provided certain conditions are met. As they relate to this
question, these conditions include that the OSVs have been adapted to
serve as OSRVs, and they carry no more than 20% of their deadweight in
recovered oil. In order to carry more than 20% recovered oil, there
must be a demonstrated need articulated by the response authority
during an oil spill emergency, and the Coast Guard Officer in Charge of
Marine Inspection must certify that the vessel can safely operate under
the circumstances. The Coast Guard is confident this approval can be
obtained in a timely manner, and that the interim solution meets the
needs of industry while the Coast Guard pursues a longer-term solution.
Question 4. Why does a vessel like the Nanuq have to obtain
authorization as a vessel of opportunity before it can conduct spill
response operations?
Question 5. Why can't the Coast Guard simply develop an advance
classification for vessels like the Nanuq?
Answer. The Coast Guard's policy and regulations regarding Offshore
Supply Vessels (OSVs), like the NANUQ, and their designation as Oil
Spill Recovery Vessels (OSRVs) are under revision.
Until the Coast Guard's policy and regulations are finalized, as an
interim solution, vessels like the NANUQ can be designated as a non-
dedicated OSRV while retaining their primary designation as an OSV.
With this designation, the vessel does not have to obtain authorization
as a vessel of opportunity to recover oil during response operations,
as long as the vessel does not exceed 20 percent of its deadweight
tonnage in recovered oil.
If there is a need for the vessel to recover quantities exceeding
20 percent, authorization may be granted when response authorities
determine such carriage is necessary during an oil spill emergency, and
it is approved by the Coast Guard.
The Coast Guard has existing standards under which vessels such as
the NANUQ can receive advance authorization to serve as an OSRV. In
addition, in recognition of the multi-service nature of these vessels,
the Coast Guard is developing design and operating standards for
vessels (like the NANUQ) which normally support offshore oil and gas
exploration and production, and may only operate occasionally as an
OSRV.
Question 6. Is it true that these large, ultra-capable vessels
can't work in the Gulf of Mexico, meaning they wouldn't be on hand for
an issue in Cuba or Mexico, without getting specific, case by case
authority from the Coast Guard?
Answer. These vessels can work in the Gulf of Mexico. As the Coast
Guard's Oil Spill Response Vessel (OSRV) policy is under revision, as
an interim solution, the Coast Guard has approved requests permitting
Offshore Supply Vessels (OSVs) to be placed into service as non-
dedicated OSRVs, provided certain conditions are met. Specifically,
Coast Guard approval would be needed if the vessel exceeds 20 percent
of its deadweight tonnage in recovered oil. However, the Coast Guard is
confident such approval would be forthcoming if the response authority
required it and the cognizant OCMI determined it was safe under the
circumstances.