 All right. We're winding up our day here. We're going to hear the recorded remarks that Senator Reid so graciously provided us Then we'll do our last panel. Thank you all for helping us sort of kind of stick to our schedule This has been a very challenging ambitious agenda, but I hope you're all getting as much out of it as I am Thank you President Champagne and Dean Logan for the invitation to speak at this conference at Roger Williams University I'd like to acknowledge Senator Whitehouse who you heard from earlier today and to thank Dean Logan and Director Faraday for putting together this conference. The topics you are engaging in today are both important and timely Almost one year has passed since the explosion on the Deepwater Horizon Which tragically took the lives of 11 people Eventually spilling over 4 million barrels of oil into the Gulf of Mexico and causing tens of billions of dollars in economic damages Our community still feel the impacts from that disaster And it is important that we hold accountable those who are responsible for the devastation and also learn from the mistakes So that history itself does not repeat itself In Rhode Island We know firsthand the devastating impacts of an oil spill on our economy and coastal resources in 1996 our state suffered after the North Cape oil spill off Southern Rhode Island the 1996 North Cape oil spill occurred when the 340-foot North Cape oil barge ran aground off Moonstone Beach after its tug caught fire during a severe winter storm Over 828,000 gallons of home heating oil spilled into local waters Killing an estimated 9 million lobsters millions of surf clams fish birds and other organisms Scientists from the Rhode Island Department of Environmental Management and the National Oceanic and Atmospheric Administration Recommended protecting female lobsters to eventually replace the estimated 9 million lobsters killed by the oil spill through the collaborative effort by Rhode Islanders and federal agencies our Coastal environment was cleaned up and our state's lobsters and shellfish populations have been built back up after the North Cape oil spill I hope that the experience gained in Rhode Island can help with the efforts in the Gulf of Mexico And I am pleased to note that scientists and researchers from Rhode Island and the New England region Including the University of Rhode Island's research vessel the endeavor assisted with the assessment of the spill in the Gulf of Mexico The Deepwater Horizon oil spill was a national wake-up call to improve the government's oversight of the drilling industry And I was pleased to see the Maneer Minerals Management Service Broken up to separate the inspection and permitting divisions from the Royalty collection division In order to ensure better oversight and help ensure the safety of their operations I believe that the companies that tap oil and gas reserves on federal taxpayer property Should pay their fair share of drilling royalties and inspection fees These were among the first recommendations in the National Commission's report on the oil spill Our important steps to further the effort to protect taxpayers the economy and the environment These natural resources belong to the American people And we need to ensure that big oil companies are paying fair market value for the right to drill on public lands Modest use of fee increases would help prevent future oil spills and ensure the American people are fairly compensated The administration's proposed budget includes a six-fold increase in the fees oil companies pay for deepwater rig inspections For example fees on facilities with one to ten wells would increase from $3,250 to $17,000 This additional funding will help the agency hire over 100 new inspectors and engineers to help ensure the safe and secure production of offshore resources During a hearing I chaired last month on the Department of Interior's 2012 budget I noted how modest those increases will be for the big oil companies And also I noted my surprise at how strongly the big oil companies oppose these increases Just as a comparison BP which had Gulf of Mexico Mexico revenues last year of ten point nine billion dollars is being asked to pay under this new scheme about 1.5 million dollars That is zero point zero one percent of their revenues Similarly shell oil which made six point one billion dollars in the Gulf last year is being asked to pay 1.8 million or 0.03 percent of their gross revenues These fees accrue benefits to these companies and the American public by providing for more thorough inspections and more confident leasing And I am just surprised that this would be greeted by any opposition I think it's a sensible business-like way of getting the job done On an equally important note although the reorganization of the former minerals management services moving forward I am concerned that much of the attention is being focused on the leasing and enforcement side of the ledger and That not enough attention is being paid to fixing the problems associated with revenue collection That is why I have called for better auditing of the resources that energy companies are taking out of the ground To ensure that taxpayers are fairly compensated In 2008 the government accountability office discovered that the Bush administration's lax oversight of the minerals management service or MMS had created a quote culture of ethical failure and that MMS employees who were supposed to oversee management of oil and gas royalties Were instead breaking rules and accepting gifts from the oil and gas lobby in the past the federal government has not done enough to ensure it is Assessing and collecting the appropriate amount of royalties from oil companies drilling in public waters So while oil companies are reaping record profits and consumers continue to pay sky-high prices at the pump Taxpayers may be getting fleeced and that must stop We need to fix this system and recoup billions of tax dollars from the oil companies We also need to make sure that oil companies pay for the damages they cause That is why I have co-sponsored bills that would eliminate the cap on the amount of damages an oil company is responsible for paying For an oil spill involving its facilities and allow greater access to the oil spill liability trust fund Which is financed by a pure barrel charge on produced or imported oil to the United States and Helps cover it the government's course for its emergency response activities Both of these measures are key recommendations from the National Commission's report and are important ways to hold accountable Those who are responsible for spills and make them pay the full cost of recovery It is also important to note that the moratorium on drilling did not slow down production in fact domestic oil production has increased to nearly the highest level in a decade and Current drilling activity in the Gulf of Mexico continues at near historically high levels There may be some modest temporary decline in the production from the Gulf of Mexico as a result of the deep water Horizons bill as Secretary Salazar testified at the hearing I held last month But this is due to the need to ensure safe exploration and production Last month's Interior Commission's forensic report found that the blowout preventives blind shear arms The equipment's final line of defense against an oil gusher could not seal off BP's well as Designed because the drill pipe had buckled in the initial blast Therefore it is important to develop new rules to improve the performance of subsea blowout preventives to avoid a repeat of last year's spill The discussion over drilling will continue especially as gas prices stay at near wrecked highs for the month of April and in response the oil industry continues to push increased drilling as the solution to reducing gas prices Even though the US Energy Information Administration has repeatedly stated for years that offshore drilling in their words Would not have a significant impact on domestic crude oil and natural gas production or prices According to the EIA even with increased drilling there would be no impact on prices of the pump by 2020 and only a three cent per gallon difference by 2030 We cannot drill our way to cheap a gasoline or to achieving oil independence The United States consumes 25 percent of the world's oil production But with only 1.5 percent to 3 percent of the world's oil reserves We cannot meet our needs by simply producing more This point is further highlighted by the fact that even during times of ample domestic supply Demand in China and India and the unrest in the Middle East continue to raise US oil and gas prices We must continue to pursue viable long-term solutions to reduce the overall cost of driving our cars Heating our homes and powering our businesses One of the most effective ways is improving energy efficiency through weatherization and increased fuel efficiency standards for example Last year's vehicle efficiency and mission standards will save consumers more than $3,000 in fuel costs over the lifetime of new vehicles Increasing the standard to 60 miles per gallon by 2025 could result in $7,000 in savings Our competitors in China and Europe already have higher efficiency standards It is time that we create manufacturing jobs here in America by producing cars that save consumers money at the pump And I've been heartened to see our auto industry begin to do just that, but we need to do more Investing in clean energy efficient technology over the long term will strengthen our security Help families save on their energy bills and create jobs here in Rhode Island It's a question of competitiveness and making smart investments On a bipartisan basis, we need to start recognizing that slogans like drill baby drill Honest substitute for balanced well-thought-out energy policy I look forward to hearing what comes out of today's conference and working with you as we continue to address these very important matters Thank you and good luck While we're getting computers switched over here, I'm just very briefly going to introduce Moderator for this panel professor Dennis Nixon from the University of Rhode Island good colleague friend and member of my Marine Affairs Institute advisory board and he has the the admirable challenging inspiring job of Correlling a very esteemed bunch of panelists. So again, we're going to do very quick introductions So you can actually hear the panelists and we'll sort of get out of here on time But please take a look in the program at the at the bios of the speakers that we have here And don't forget to do your evaluation form for me on your way out Thank you, Susan. Just just a couple of brief words. We do have a really incredibly diverse and important panel for you right now Fred is going to lead off has been called by no less than authority the ABA Journal as John Wayne in a pinstripe suit I love I love that line John He recently finished about a month ago as chief counsel for the National Commission on the BP spill He's also the attorney that I we have to give credit or blame for winning the case for George Bush against Al Gore in that Dispute a little election they had in Florida a few years back You see Al Gore was more popular here Ever see who's been hired by both Bush and Obama so John Waldron is John Waldron is one of the most well-known maritime attorneys in the United States He currently represents the Marshall Islands, which was the flag of the Deepwater horizon It was His firm blank Rome has been involved with the maritime issues for many years Tom Galligan Taking to the academic side now as a college president. I guess a recovering law law school professor Who then not having enough grief as a dean right Dean Logan went on to become a college president And and then finally represented the natural resources defense counsel David Pettis Certainly the NRDC has been if you study environmental law of the group that has its name attached to more cases Involving that issue of keeping the public interest involved in regulatory matters. So it's a diverse panel That's a very exciting panel and I want to give Fred all the time He needs so go ahead go ahead Fred and I'm gonna cram about a two-hour deal into 15 minutes I don't talk this fast in front of a jury or I would have been out of business a long time ago So I'm but I'm gonna move fast. You're all smart and you know a lot of this in 1989 the Piper Alpha rig blew up in the North Sea 160 men died The rig was producing 300,000 barrels a day imagine the lost business. I Went over there lived over there for a year. We had the British government had a year-long trial and We wrote we wrote the judge wrote opinions with all of our help which changed the safety regime in the North Sea When the government contacted me about doing the same thing here, I thought gee I've worked in the oil business for years I've represented all these guys. I think they're basically good guys. Good guys make mistakes I make them you make them and I said maybe we can change the safety regime in the Gulf of Mexico as You'll see BP and the other oil companies were just like most big companies They had safety manuals this thick. They had organization charts piled up this high with Responsibilities they had decision trees. They had training. They had databases. They had all this stuff As you'll see in a minute the men that made some of the fateful decisions that night were about 15 feet from here to here From where the rotary was where the explosions happened. They didn't think they were being careless They did not think they were making money risking their lives for the guys in London. Now. How could this have happened? Okay, my job the president gave my group the job of ascertaining root causes So I we stayed away from liability You can read my report. I'm immensely proud of it. You can draw conclusions from it But my job was not to pin liability on any of the companies root cause what happened? So we know how to stop it and We submitted two reports my chapter four in the Commission's report and then about three or four weeks ago a 325-page chief counsels report that spins out all the engineering This is the most complicated engineering. I've ever personally dealt with in my life and I've done a lot of this kind of thing It was it was really really hard to tease out what happened down there some 18,000 feet This is a deep water horizon. It's a ship It it's it's got its own power the Coast Guard has jurisdiction It's got a captain they can steam it around the Gulf and they can take it over to Bahrain if they want to it's controlled by Satellites running thrusters underneath it. It's not a moored rig. It's a drilling rig not a production rig Okay There's the rotary where the where the oil and gas came up. That is the driller shack right there in that shack where highly experienced trans ocean Tool pushers and drillers. They made a lot of these decisions they knew they've been around a long time and they knew that if they made a mistake it was curtains 11 men died and eight or nine of them were right there and The others were a floor below so everybody that died was right there The BP's chief engineer by sheer chance happened to be on the rig that night. Guess why? The rig was receiving an award for an unparalleled safety record BP had an unparalleled safety record guys with clipboards go around every day And they're looking for is there is there oil on a steel step or something like that? There you can almost argue there were so many guys with clipboards going around giving them a good grades because they didn't have oil on A steel step that maybe they missed some of the big points Okay This is the Mekando well This is the the rig is up here. It's a mile down to the seafloor. It's 18,000 feet down to the pay sands down here at the bottom is You can see that's where the hydrocarbons got in the well. You'll see a little cement job down there This is 18,000. This is 13,000 feet up to here another 5,000 feet up to the surface The pressures down there are 15,000 psi a Barrel of gas down there is a thousand barrels in the riser things happen fast if you get a leak and they knew that This is no surprise So We're going to go through quickly what happened three things happen one the cement job at the bottom failed The how they hydrocarbons could not have gotten in the well at the cement job hadn't failed impossible So we know the cement job failed That is a story that I could talk to you for a week about why the cement job failed, but it failed The second thing that happened is there is a test when they when they put in the cement job It was the only barrier they took out all the drilling mud down to here So the only thing keeping hydrocarbons in was the cement job They had a test they run on the cement job They take they reduce the pressure inside the well so that if the cement jobs weak the pressure inside is lower The pressure and the reservoir is 15,000 you'll get hydrocarbons in the well They admit that they filed up the negative test. They admit it The BP admits it Transocean says we don't train our people in the negative test, but the cement job was critical The cement job failed and the test that's run to be sure the cement jobs. Okay was done wrong number two number three About 40 minutes before the explosion in the evening of April 20th the guys on the surface in that drill shack Remember I told you started getting some strange pressures With the pumps off the drill pipe pressure was going up. Normally when you turn the pumps off You're circulating mud and and and seawater and things through the well when the pumps are off You expect the pressure to go down the pressure went up in Hindsight the pressure being observed in the drill pipe was a pretty good measure of the pressure in the reservoir Now nobody thought of that at the time these these men with families Highly skilled highly trained highly experienced stood there 15 feet away for 30 or 40 minutes trying to figure out what happened they They they there was a red button here. They could push that would have shut the well down shut it in totally They didn't push the button. We don't know why because they're gone It probably costs if you shut in a well like this it probably costs a hundred million dollars But it was a hundred million dollars of BP's money not trans oceans I'm just quickly giving you the dilemma these guys are facing there They didn't shut the well down until it was too late after the explosion when they shut in the well and Went tried to go through the drill pipe It had moved sufficiently so that the blowout preventer which is 500 tons and cost 27 million dollars Couldn't do the job now. Let's talk what I'm mainly going to show you I could talk about the engineering forever I'm an engineer and I love this stuff But there's these emails are amazing when you realize that Everybody writing these emails is a graduate engineer most had master's degrees These are and nobody wanted to die and they're not dumb guys and they wanted to get it right Okay, first the BP had responsibility charts up the yin yang as we used to say in the military pages of charts You can't always see these but they had you know one color is I got a Consult another color is he's part of the decision team and there's about 80 different things going down there So they've been careful and they had the responsibility Lined up, you know, this is perfect. Some guy had worked on it for years and when you look at it, it's wonderful When we asked people What was your responsibility? They would say I need to see the chart when When hydrocarbons are coming up the riser with the speed of an express train It doesn't do any good to have charts You can drill down through something has to come into your head as you realize this is going on So this stuff's all great except it's worthless Okay, worthless. I need to see the chart This was a hard cement job Difficult down 18,000 feet There were all kinds of risks that we could talk for days about that made this a difficult cement job Would it set up would it not set up that kind of thing these risks were all known You know Halliburton does the cement Halliburton's the best cement company in the world These guys did not want to do a bad cement job But they knew there were a series of risks and they knew that they the cement job there could be a problem So look let's look for email Okay, if the The cement has to go all the way around the drill pipe to seal off the reservoir. It's down 18,000 feet You can't see it. There's no video down there Every decision is made by looking at pressures that are registered three miles up on the surface That's hard to do They were worried about this because you have to get the drill pipe Centralized in the open hole if it's over against the side you can't get cement around it Maybe you'll have a leak from the Formation so they're worried about it and he said Even a straight piece of pipe and tension won't seek the perfect center of the hole that means it might not be centralized They had 14 other risk factors. They knew it might not be centralized and this is the BP engineer that says Who cares? It's done End of story will probably be fine and we'll get a good cement job We'd rather have to squeeze and get stuck now squeezing means repair the cement job There's ways that you can shoot shotgun shells through the casing and put cement in if it fails This is a recognition that they might have to fix a cement job This is a recognition made three days before the explosion These guys are master's degree engineers guys and they knew the cement job might be bad And they knew that they were taking all the mud out of the well And they knew that this was the only the cement job was the only thing preventing a blowout They knew this is no surprise the people have read my report. It's clear in there now Why in the world did this guy write this? It's a good man We'll get to that at the end. You'll see more of these you you'll wonder why People whose lives and lives are their friends and everybody turned on these things. Why do they say? It'll probably be fine. I'll give you a little hint. I think it's got to do with today's email culture Okay Transition in the year before just six months earlier had a similar When I say similar that might be unfair if I say something here that's different from what my report says go with my report They had an event which was similar they learned in that event that That during the displacement well controls important tested bearers can fail That's the cement job. It failed you got to maintain well control and when you under balance the well Which they're doing you got to watch out. Okay, so they sent out they had all those reports What do they do with these reports? Did they send them out to the guys on the rig? No, they had a database When we ask people they say well, it's in the database again in today's world People think that if they get something sent to Joe It's all fair to ask it's somebody else's problem or it's in the database So the guys on the rig that night didn't have the warnings of a similar event that had happened in the North Sea You know just five or six months earlier Contractors Contractors we need to get his boss and demand a permanent replacement Jesse's too slow. You'll see again and again There are 15 or 20 different contractors on the rig There's only two or three BP guys on the rig all the rest are trans ocean and contractors There's great issues as to who's in charge you these everybody wants to point the finger at somebody else But there's a tendency to say well the contractors are experts They're they got master's degrees in engineering. So we'll worry, you know this even though this guy is Isn't getting his job done And they say this doesn't give us enough time to test the slurry to meet our needs this is Two days before the explosion the slurry is the cement job They say that we don't have enough time to test the slurry But they pump the slurry down and pump the job and you can see this is not just one event It's one after another after another temporary abandon that this is very tricky I'm gonna go through this fast just to give an idea They were gonna leave this well Shut it in and then come back and produce it this well Which would have cost guess what the well would have cost all in quick guess drill Come on. Yes Two hundred million dollars guess how long it would have taken to pay out six months Okay, I mean this is you can lose a lot of money here quick But you can make a lot of money here quick and that's that's why people go there Okay abandoning it when they started out on this is April 14th We don't think they should have been changing the abandonment rules so fast in the last few days They were gonna have a cement barrier here. It was gonna be put in second The next thing they do is they change it around the neck two days later and they move the barrier way here They're gonna put the barrier in Farther down and finally They don't put the barrier in until after they've displaced the mud drilling mud weighs about 15 pounds per gallon Seawater weighs about six. They took all the drilling mud out. Just it just looks like mud But it's more complicated than that and they replaced it with seawater The mud was if the cement had failed the mud would have held the hydrocarbons in down that long shaft You miles and miles of mud but when they took it out then the only barrier they have was the cement job and Instead of putting an upper plug They were going to put two plugs in an upper plug up the well weighs 3,000 feet down they waited and changed at the last minute until after they'd taken all the seawater out all the Drilling mud out and put seawater in which means the only thing left There's nothing holding the hydrocarbons in except the cement job and you see what they were thinking about the cement job good This is April 17th This is a BP from the the well side leader Over the past four days. There's been so many last-minute changes We're flying by the seat of our pants the well side leaders have come to their wits end. It's chaos. It's insanity What's my authority? BP had done a reorganization They'd shifted around I can spend again an hour on this but they've done a major reorganization The well side leader is the BP guy out on the rig. He said it's chaos. I don't know what my authority is What am I supposed to do? I was a soldier for eight years and the key thing is who in the hell is in charge and There wasn't a clear idea of who had authority to do what you can read it here But the answer the guy sends this in Saturday. What's my authority? I need to know his boss I got to go to dance practice with my wife. We're dancing to the village people now It's it sounds that sounds awful and cruel I've looked at emails for a long time and this is not a bit surprising. These are good men. I've talked to them They cared Sims the guy that was at the dance practice was on the rig that night He would not have been on the rig that night if he thought it was something wrong with it Okay, they didn't think in their heads that something was wrong. That's what's so interesting Okay, this is the trans ocean deal The what happened is the bug the gas came up and went right up to the top of the rig to the mud gas Separator that's a very frail device that exploded and they had the explosion. They could have diverted it oversight Put it overboard They had a manual which this is like on page a hundred and fifteen and if the flow rate increases centered overboard You know they had to have in their head do it now Nobody's going to leaf through the manual for a hundred and fifteen pages to see it when an express train of oil and gas is coming up The riser I'm just pointing to a series of things again. This is about a two-day deal to really understand it What's one of the biggest surprises? Sensors you think in today's world this stuff could be sensed This is what the driller saw and this is a critical time and it goes from top to bottom and as you can see here it It's the drill pipe pressure is going up a tiny amount and then they turn the pumps off and it's still going up now The the trans ocean guy said to me when I cross examined him before the commission the right man Had to be the right place at the right time Looking at the right data, and he had to keep looking at the data till he saw the changes We know that you can have technology with algorithms that can pick that sort of thing up right away Now what BP does with which is fine to explain this they flip it sideways and blow it up And then you can see it, but this is what at the end of a 12-hour shift One of those two pushers in that shed sitting there at 8 feet 20 feet away was supposed to pick up Temporary abandonment they were going to move they were going to set the plug at 8,300 feet instead of 3,000 feet Nobody'd ever set a plug the upper plug that low before Setting it low means you're taking out a lot more drilling money. We answer answer shore side seems okay to me Now again that one guy says the email and gets off this plate and other guy answers it and each think the other guys are graduate engineer And the other guys doing his job There the point I'll get back to is there was not a leader leaders take charge. They take responsibility. They do it themselves Okay It wouldn't hit it the problem was that really smart then who knew this stuff and knew what could happen Didn't make the right decision nobody I've talked to a lot of companies want to talk to me because everybody does everybody does process Processes has any problems and I said it's just two things here People have to be responsible when something bad happens. They have to say I'm going to take charge Nobody did that nobody was they're all we're dealing with other smart people They were colleagues and a leader didn't step forward number two this email culture I do it myself I said see you smile I sent it to an email up from my father's and it's taken care of And he said well friends think about I'm glad to know why but there's there's less incentive For somebody to take charge and fix it because you can use that emails around and then if anything bad happens You suck silencio kind of thing. Well, I've got that part Okay, so you just heard in the condo. Well 10 hours and 15 minutes. I hope you got something Thank you very much. That was that was a very exciting presentation That's exciting you need to get a life. Oh, yeah, let's say this I get excited over this stuff John is going to be addressing the principle point we've got for this panel. That's legislative changes the last summer There were hearings going on every day and virtually every committee of the congress Trying to figure out how to change the law. In fact, the house of representatives actually repealed the limitation of liability active 1851 We heard about didn't get anywhere in the senate, but that was a major change possible that was going to happen to this industry We pointed at the fact that the 75 million dollar limit on offshore structures Seems kind of low in the context of 40 or 50 billion dollars of damages in this case So there's a lot of things that have been spoken about but in light of all of the Investigations that are still underway There has now been a remarkable pulling back by the congress in terms of any legislative changes That are being proposed. Maybe that's maybe that's a good thing that congress has other things on their mind right now But at any rate, uh, john as soon as those graphics come up He's going to hit the issue of what legislation Was proposed and perhaps which ones he think might be appropriate and helpful for the safety of the US offshore industry John Yeah, and what i'm going to try and do is give you What i'm going to try and do is is is do basically two things one is show you what the reaction is We know what we've learned over the years is that good or bad. We react to things We don't look ahead in the future as well as we should and there's a there's an incredible Backlash of Willow reaction immediately and I think you're seeing that moderate a little bit But I want to talk to you about the about the result of investigations and the regulations and with boem You know, we're struggling with what the the acronym means that some would say it's bummer Uh for them, but it's not a good name, but boem is probably what i'm going to use Uh, i'm going to go over these pictures fast. This gives you a better good better perspective There it is out of the water with one of these vessels which can actually carry the the rig. That's a deep water horizon Someone else has already shown this graphic. So it really you know, unfortunate picture of the Gulf of Mexico from satellite So the reaction the immediate reaction is everybody's got to investigate and uh, as you've you've heard from fred The president's national commission kept it scheduled basically report was released recently Uh, what's still going on is the joint investigation Final report is due on july 27th Uh, this was kind of a sleeper people don't even know what it is a coast guard incident specific preparedness review We got the department of justice criminal investigation congressional hearings multitude of legislation And on cost What are we talking about bp's already spent over 19 billion On response 20 billion for gulf coast claims How much a nerda claims unknown I'm gonna i'm not going to read all these to you But the reason i'm putting this up you're going to see i'm going to this is the hr 35 34 called the clear act Was passed by the house in august 2010 Or just before august 2000 which is prior to the recess The senate, uh, then took up the bill. They had their own is introduced by senator reid There was a lot of consternation about what the limits of liability should be and what people need to understand You look at the last last bullet there is That there is only so much insurance to cover this and if you give provide unlimited liabilities, which is what we've talked about You're only going to have the big players left. You're going to have the bp's You're going to have the shells So it's going to limit the playing field and there was a number of senators who were looking at some kind of a mutualization Agreement between the industry to come up with a funding system in order to deal with the future limits of liability This is extremely very still very very controversial Um Most of these provisions i'm going to show you are on the maritime side And i'll explain why in a minute because i'm going to talk to you about what boem has done in the sense of the spill to improve safety Offshore, but a lot of these things are immediate reactions. One of the things that wasn't covered for example is damages to human health under open 90 Um, there there were there's an incredible, uh, what people don't understand is that the united states doesn't have the vessels And the capability of vessels to build them offshore most of these vessels are foreign flag foreign built And the immediate reaction by congress is to say well the foreigners don't know what they're doing Deepwater horizon was foreign built marshal islands fly they all they all ought to be us and they've introduced all kinds of legislation That would require everything to be us owned except there's no capability to do that um They would add cost of federal enforcement actions would be would be added to the definition of removal costs These were all things that were passed by the house last year Increased maximum penalties evaluate response plans Interestingly as you've heard here today and as many of you know The way the open 90 setup is that the coast guard is required to direct response activities But the private industry is supposed to have the capability to respond This provision would make the coast guard give them the capability to act as a first responder I'd like to see congress pass the money for the coast guard to take on that role 730 731 is very interesting Kind of like what are they doing there? Well, if BP had wanted to bail out they could have bailed out that company could declare to bankrupt and then there'd been no money This provision would would make Would allow um you to go all the way up the tiers of ownership of a company like BP to make sure that money is there From the art responsible party Now this is the uh the senate version again, which was not passed You'll see there's a lot of provisions on response planning Repeal of the limitation of liabilities act. These are all things that were both in the bills A very interesting one of the Exxon Valdez One of the final actions was to limit punitive damages basically to one versus one in compensatory This would allow unlimited punitive damages and make it retroactive to before the spill Number of the provisions for penalties that would have made things retroactive to before the spill So Where do we find ourselves today? What about 2011? Well Congress has added again. They've introduced a lot of bills um No action has been taken yet Really on any of these to consolidate them very interestingly Representative marky early in the year His bill is implementing the recommendation of the BP oil commission act Well, what it what people will have not if you haven't focused or read the bill What they don't realize that a lot of these implement a lot of these provisions that we saw in the house bill Who were introduced by congressman oberstar would literally just picked up and put in that bill So a lot of these some of these nasty provisions Some would say are are in play I just want to go back here and what one of the most important things I understand the legislation is that The key person right now on the house Is congressman low beyond who's the chair of the coast guard committee? And I've been in his office. I've heard him talk recently and there's a different attitude In in that I think that the congress today wants to make sure they do whatever they do is right and doesn't have Implications are not aware of so I think we're going to see them Wait around a little bit more to take in all the information from the various investigations And this is why it's important They're going to be looking at what actions that the boem has done and I what I've done is I put a chronology here for you which kind of shows you what boem did as a result of this bill Obviously to try and improve the safety issues out there So in June they came up with new safety policies and ntl means a notice to leases less ease So these are requirements for the operators out there So they required additional requirements for blowout scenarios worst-case discharge calculations and plans One of the one of the problems we have with what people don't probably don't know is that All the response planning requirements for vessels are done by the coast guard in the old mms did these The coast guard requirements have very detailed requirements for how you respond to a spill Basically the boem requirements just said what you you the operator just submit a plan and whatever it says is fine And they sign off on it. No detail at all on it This was very important because Right after the the incident boem did a Did a report to the president on safety measures that would be required and the They implemented that on october 14th Which basically is improved safety measures for drilling regulations blowout preventors well-cased and submitting So these are things that have been in place this one since october 14th They also came out with a final rule on safety and environmental management system Which basically brings into play third party third party auditors One of the things that you heard fred talk about is is a safety case And i'll talk about that a little minute because one of the things that that congress is looking at and boem Is changing the way we do business in the united states and look at what norway And in the uk are doing the way we operate offshore So what do you have the investigations you've heard of the national uh the presidential nation commission reports are out the findings are out We've got the joint investigation Their primary purpose of investigating to determine the causative accident They've publicly gone out and said the report is due no later than july 27th But there's something going on behind the scenes here And it may very well be that we're going to the coast guard wants to put out some kind of report I understand it's fairly substantial And there's their deadline or they're what they're shooting for is to come out on the anivis bursary date april 20th So that's something we want to look for I mentioned this coast guard report the isford report. It's very interesting It's the purpose of these reports is to assess coast guard preparedness process and initiate corrective actions problem is That that that the convening order for that they basically have various private Experts as well as other agencies prepare this report. It's not really a report prepared by the By the coast guard and frankly put the president on report and a lot of other people for what the way this bill was was run Now now you've got what's going on with the department of justice. So you've got civil penalties And people are watching this very closely because there are penalties up to $4,300 per barrel of oils billed and you've heard all you were if you've seen some of the presentations here today It's like well, how much oil really came out nobody knows But if you find gross negligence and using the figure that the government's come out with that's a 21 billion dollar fine criminal investigation You don't see anything on the news about that because they can't talk about it, but the doj guys are Are a part of the that the multi-district litigation They're part of the the joint Investigation by the coast guard. They're reviewing all this information And they're going to be looking at grand juries grand jury presentations and come up with various charges In an unprecedented move that's never happened in an environmental maritime case The the entire task force has turned over from the environmental crime section to the criminal division and These manslaughter charges as I see it's called the seamen's manslaughter act Which is those way back to the days when all the vessels offshore were basically steam plants They blow up and a lot of people got killed This statue was dormant for a 100 years or so But in the last 10 years has been quite common in the maritime world where people will charge will get charged For manslaughter for for for deaths And it's a very pretty simple test. It's a negligence standard and people can go to jail for for 10 years for this So I think you're likely going to see manslaughter manslaughter charges And they're looking at any any of the statements that trans ocean bp and others have made which may have been false statements Like for example, how much oil was really coming out coming out of the well And what did bp really know now? I'm not trying to tell you I have any idea what ultimately doj is going to do But you can rest assured with the elections coming up in the fall coming up here that that that the Department of justice wants to be very secure that whatever whatever charges they make are defensible and that the administration doesn't look bad So today, I mean after after what we've seen the people The people that were killed tragic incident the amount of oil that was built in an unprecedented incident that nobody could forecast What are we going to do to fix things? And how long is it going to take? Well, as I alluded to the republics are now in charge and they're more of a wait and see And they're going to wait and see What comes out of the joint investigation report? They've got the national president's national commission report and they're going to assess it Assess it and then they're going to decide what to do with the legislation It took congress 18 months to pass any legislation after the exxon valdez And I would think that would be as soon as that we'd see anything here probably very possibly move into next year And you've got to take into consideration all the proactive work that boem has done to put in to put in safety requirements So congress is going to look very closely at what the coast guard does and what What boem has done before they enact any legislation What I hear from people in the industry is that if you look at the national contingency plan Look at the way the response went. It wasn't broken. It worked pretty well There's certainly major things that can be improved And major training needs to go on as to how things are supposed to happen in that But that's not like all the things we learned over 25 years were lost But clearly we're going to see Looking at limits of liability I don't know what the number is, but if you get above two billion dollars You get a real issue out there as to how how can how can anyone fund that unless you're self-insured Limitational liability act may have go away Response technologies we need improvements in those areas response containment and planning standards. We need improvements So I think that is where we're going to see things play out Predictions is a is only prediction, but I think where we see the investigation is coming out I think that's what I see is the is the fundamental timeline Thank you very much Tom you've got the floor to talk about some maritime tort liability Good afternoon As you all know, it has been about one year since the explosion of the Deepwater horizon It's also been about one year since the birth of Gordon Jones second son The baby was born about two weeks after the explosion Now Gordon Jones wasn't physically president present at the baby's birth I'm sure he was there in spirit and he was there in the delivery room But in a picture frame, but he wasn't there physically and he never will be Because Gordon Jones was one of the 11 workers who was killed when the rig blew up Gordon Jones was a 29 year old mud engineer on the Deepwater horizon But unlike 115 others, he never got off Now if you ask his father Keith Jones, who's a lawyer in Baton Rouge, Louisiana about it all He'll tell you that one of the hardest things about losing his son One of the hardest things about not having his son present for his grandchildren One of the hardest things about it all for him is not knowing where his son's body is There was no chance for the family to ever tangibly say goodbye So the gulf really is a graveyard in the literal sense of that word So I'd like to talk just a little bit about the rights of Gordon Jones wife, his children and his parents I'd like to talk just a little bit about the rights of the families of the 11 men who lost their lives on April 20th 2010 Now it is fine and right for us to analyze all that went wrong all the failures leading up to the explosion It's fitting and proper for us to consider the human failures the corporate failures the technological failures and the regulatory failures It is most appropriate for us to consider how we might try to prevent something like this from ever happening again It's interesting to speculate how congress might still respond in terms of regulations and new contract terms It's fascinating and it's frustrating to watch and participate in the legal wrangling over claims for property damage For damage to natural resources for lost state revenues and for economic loss And it is instructive to compare the efficacy of alternative dispute resolution methods with the traditional litigation model But in all of that fine right fitting appropriate proper fascinating frustrating and instructive conversation Let's not lose sight of the rights of the families of the 11 workers who were killed So what are their rights? They're basically two relevant laws the jones act which through a 1908 statute called the federal employers liability act Gives a semen a negligence claim against his employer and it grants the semen survivors a wrongful death action When the semen is killed as a result of the employer's negligence Now why does the jones act even apply? Because as my friend and the suspenders said this morning the semi submersible rig is a vessel The deep water horizon was a vessel So folks who have a substantial employment related connection to that vessel are treated like semen They are treated like sailors. So the jones act applies Now the second statute which is relevant is the death on the high seas act Which applies to any other death Occurring on or resulting from an injury incurred on the high seas Now as such dosa death on the high seas act governs the deceased semen's relatives high seas wrongful death claims Resulting from an unsee worthy condition. So back to the question What do the relatives recover? They recover their economic loss for the lawyers in the room. They recover their pecuniary damages What's that? Net loss support. So let's take gordon jones If after he cashed his paycheck and whatever he paid for his car paid his golf club dues Went to see a baseball game. He took the rest of that money and he contributed to his family They can recover that net loss of support What else do they recover? They recover lost service So let's say he did the cooking for the family and now they have to hire a cook They recover what they have to pay for a cook. Let's say he did the cleaning They recover what they have to pay for the cleaning Let's say he coached his children's golf team little league team skiing team, although he did live in louisiana They would recover the cost of the coaching They would recover net loss inheritance But as the president of a small endowment tuition dependent private college I would ask how many run-of-the-mill working people in america today expect their children to have a net inheritance Anyway, that's what the relatives recover What do they not recover? They recover nothing for the loss of the relationship itself They recover nothing for their loved ones loss of care comfort and companionship They recover nothing for their loss of society From the law standpoint from the standpoint of the jones act and the death on the high seas act The relationship itself is worth nothing Now tell that to gordon jones wife who looked him in the eyes one afternoon and said that she loved him for the rest of Her life tell that to his sons who will only know him through stories and through pictures Tell that to his parents Friends that relationship has a value and the law ought to recognize that value All right, so it doesn't seem to me. It's fair just me But is it up to date? Maybe even if it isn't fair if it's up to date. It's okay. It's not up to date When did congress pass the jones act? 1920 When did congress pass the death on the high seas act? 1920 when did congress pass the federal employers liability act 1908? The world was a different place. The world was a tougher place What's the majority rule today on land in the united states of america? Loss of society damages are recoverable in a wrongful death case The jones act and dosa should adhere to that modern majority rule So at least according to galligan your guests the current rules are both unfair and out of date Add to that. They are inconsistent. There was a fellow his name was ralph waldo emerson I don't know if you've ever heard of him a philosopher He said a foolish consistency is the hobgoblin of little minds Now he sometimes gets misquoted people say consistency is the hobgoblin of little minds But we lawyers know it's only a foolish consistency. How is the no recovery rule inconsistent? Let's start with the same worker who was doing the same job that gordon jones was doing except he was doing it on land He was a mud engineer or a tool pusher on land What would his relatives recover against the third party tort feasor? Loss of society damages Let's say fred you talked about the fact that this is a rig and that it isn't a permanent platform Let's say it was a permanent platform Then that means it's not a vessel What would apply then well, I don't want to bore you with a bunch of technical law But what would apply then is simply called the outer continental shelf lands act And the ocsla, yeah, I don't see lawyers. We like these letters the oclsa would borrow the adjacent states law What does that mean? It means it is as if it were on land So if the relevant state followed the majority rule and allowed loss of society damages The ocsla would borrow that rule and loss of society damages would be recoverable Now let's look at perhaps the most foolish inconsistency of long the commercial aviation disaster Some of you are too young to remember but there was an airplane korean airlines flight 007 I think the panelists may remember that flight Flying over the high seas Deviated into soviet airspace back when there was soviet airspace The soviets did or didn't warrant to get out of the the soviet airspace The plane didn't the soviets shot the plane went down. Everyone on board was killed Ms zikerman's daughter was killed She filed suit in an american court seeking her loss of society damages Her other daughter filed suit the daughter didn't support miss zikerman But she did give some limited funds to her sister in order to take care of her. I think it was her niece The mother recovers nothing because of the death on the high seas act But the sister's claim goes on because of that relatively minor Support that the daughter provided a few years later Plane korea twa flight 800 crashed as it took off from kennedy eight miles offshore Congress didn't want to repeat of KAL flight 007. So what did it do? It retroactively amended the death on the high seas act to make loss of society damages recoverable For the survivors of those killed in a commercial aviation disaster Everybody else know Commercial aviation disaster. Yes, you're killed on a cruise ship. I don't want to make you nervous No loss of society. You're killed on a semi submersible rig. No loss of society. You're killed in a helicopter crash No loss of society. You're killed by some yahoo on off a cruise ship when you're taking a scuba diving course in the cayman islands No loss of society. You're on a commercial aviation disaster. Oh, wow loss of society It makes no sense It makes sense certainly for the survivors of those killed in a commercial aviation disaster to recover loss of society It makes no sense to not award those rational damages to others Now by undercompensating i'm a torts teacher after all or at least I was we fail to achieve justice and we increase risk Torts is about what? It's about corrective justice. It's about fairness. It's about consistency. It's about compensation But it's also about deterrence in an economic sense, isn't it? It's about making people pay the costs of their activities And if we don't make them pay the costs or if we don't make them pay the full costs Rational economic actors fred great people who want to do great things Are going to rationally perhaps not do them because they do not face the full costs of their activity Now and I don't mean to rant rave too much But um under compensation under deterrence and increased risk in this setting are exacerbated by a wonderful law That I think you've already heard about the ship owners limitation of liability act of 1851 Which allows a vessel owner to limit their liability to the post accident value of a vessel As long as the accident occurred without their privity or knowledge What happens to the hull insurance? That goes to the owner of the vessel that does not become part of the limitation fund Why did we do that back in 1851 to increase investment in american shipping and maritime commerce? What was true in 1851 where the bankruptcy laws are sophisticated and as developed as they are today? No, was the corporate form as sophisticated and developed as it is today? No, who even ever heard of a limited liability company? Do we still need a law? That limits liability to the extent that the limitation of liability act does When all those legal developments have happened since then and oh by the way Most of the ships and rigs on the high seas are not american ships Finally in congress when you do this they have little lights Yellow lights Right right and then it goes red and you hope somebody doesn't come and pull you off Finally All these problems of under deterrence could be solved perhaps if punitive damages were recoverable And they are recoverable, but as you said Exxon valdez case written by my friend and neighbor justice suitor Limited recovery of punitive damages in most maritime tort cases to a one-to-one ratio between the punitives and the compensatory damages It's not a constitutional decision. It's a maritime tort rule Now what does that mean? It means potentially that a jury and judge are deprived of their traditional flexibility To tailor a punitive award to the appropriate facts of the case Now last summer your senator white house proposed a bill a maritime punitive damages bill that would have Restored the court's traditional ability to tailor a punitive award to the facts of the case It didn't pass in closing. Let me say last summer the house Passed bills that would have repealed the limitation of liability act But more importantly at least to me as I speak today that would have amended the jones act and would have amended the death on the High seas act Those bills got out of the house about two weeks after they held a hearing We still wait for the senate to do anything So I admit that I have an interest in this not a financial interest but an intellectual interest But I hope next time when we look at your slide as to what the predictions are We'd see a prediction that the law would be amended to change the jones act and the death on the high seas act To award fair compensation to the families of the 11 people who died. Thank you very very much very compelling argument and now as the last word On a day full of great presentations We'll hear from the n rdc and what your thoughts might be On the entire subject of whether or not this law needs to change that might Actually protect the environment a little bit better Thank you. Thank you. And may it please the court I'm a litigator within rdc and usually when I'm at a podium I'm addressing people in robes. So if any of you has a bathrobe around, you know, it's going on It'll make me feel at home My boss, uh, frances by nicky was also fresh She was on the president's commission was also fred's boss. So I guess that makes us brother wage slaves at least We uh, my job at n rdc is basically to sue polluters and make them cry And that's that's what we try to do. I got involved in the golf case my normal My day job so to speak is uh air pollution and environmental justice work I got into this case because I had tried while in private practice a number of oil industry and oil spill cases I actually worked on the exxon valdez case From the exxon side of the table. I represented shell for years in private practice and I agreed they're good people who work there They didn't exxon did not want to drive that boat onto the rock And in shell cases often involved groundwater pollution Shell had no interest in polluting the groundwater and their attitude was hey if it's ours we'll clean it up But if it's not ours we won't and I I didn't have a problem with that And so with that experience, um, I you know volunteered to help out at nrdc if there was golf litigation and as you know There's been uh plenty I want to talk here briefly about uh four things One is the environmental community suggested reforms to congress and to uh vomer One is the uh the natural resource damages assessment and how it's going from our standpoint our standpoint in the environmental community You heard it described at some length uh this morning. I think that's more of an idealistic Uh the view of what's happening and I want to talk about what I think is really happening during that and um I want to talk last about the recently issued permits vomer has just issued a number of permits for new exploration And I want to talk about those and lastly how nipa and other environmental laws play into those um I think jonathan outlined for us very well what's happened in congress, but you know It just strikes me as incredible president obama Referred to this oil spill as the worst environmental disaster in us history And what congress has done can be summed up in one very succinct yiddish word, which is bupkus Bupkus means beans and you can get the you know, my daughter says ain't got bupkus Um and that you know that conveys the idea they haven't done a thing um What our main ask has been Uh made easier for us in a way after the commission issued its report Um is implement the suggestions just write them down on a piece of paper. There's an executive summary They've got bullets and stuff write them down on the piece of paper and do that and we'd be very happy I have no confidence that that's going to happen In the current conference, maybe jonathan has more and I hope he's right But I have no confidence that's going to happen In the current congress, um at all we um Specifically you've heard talk about The 75 million dollar cap. We've asked that that be eliminated And yes that probably would drive some of the smaller players out But my view is if you can't afford to clean up your mess, you shouldn't be there in the first place There's a fairly obscure Uh rule in oxlo the outer continental shelf lands act that requires bowmer to act within 30 days On permits for exploration. These permits are extremely complicated And have become more so given the recent regulations that you also heard about that require a lot more work from the oil companies including very Complex calculations about worst case oil spill scenarios and where that oil is going to go You know when you've got a basically underfunded agency anyhow giving them 30 days to do anything is Um is tough and what that does is it puts a lot of pressure on the agency to Approve them because in today's environment if they deny a whole bunch of them that all you know It's gonna all hell is gonna break loose in the media people are gonna go to washington and be upset Not people like me, but oil company type people Um Dave i've talked to michael brahm which about this that had a bowmer and he said you know We'd like at least 60 and maybe longer. I think that's more than reasonable given what they have to do I don't think that's going to happen either. I don't think congress is going to touch oxla at least in in this in this term The last ask we've made and this is also Referred to in the commission report, although i want to put a slight refinement on it There is bowmer is going to hire a chief science officer, which i think is long overdue What we have asked is that that person have veto power I mean you could word it more nicely, but have the ultimate say in whether A lease is offered in a certain area and whether individual exploration and drilling permits should be Granted and that person You know, we'd like to see it somebody you know somebody who knows about um Somebody who knows about what the critters live out in the gulf and where they live and how sensitive they are to spills What's going to happen to the currents and the like noa has expertise In all of those areas and bowmer has in to some degree consulted with noa But they don't have to do now what noa tells them to and I think they ought to um, I don't um Again, I've talked to director brahm which about this he's a very very smart guy and very careful in the way He speaks and he basically said yes We're going to pay very serious attention To what our science officer has to say and I said well, does that mean he has veto power? And he said well, we'll pay very serious attention to what he has to say So I think the answer is no, uh, they'll pay serious attention and then they'll do what they want to do So those are our recommendations sort of in a nutshell I think the other Professional viral groups who were involved in this kind of stuff are basically in line with us In terms of suggestions You heard a very accurate description of the changes that bowmer has seen since the incident in terms of future changes There are two things that we're lobbying for Which i'm not optimistic about Either one is as a result of the recent technical report Having to do with what happened to the blowout preventer in deep water horizon It's clear to me that there is there's a failure mode an unrecognized failure mode in these things which has not been Planned against and every one of those Blowout preventers that works in the same fashion where you have the pipe going up the middle and sheer rams That are supposed to cut the pipe and seal it is vulnerable To this same failure mode where basically the pipe Warps off to one side and it jams the jaws of the sheer of the ram I mean so that it can't close to me That's like driving a car with anti-lock brakes that don't work in a panic stop You know that's sort of the point of having anti-lock brakes But you know if if your failsafe device has a known failure mode where it doesn't failsafe it just fails To me it's irresponsible in the at least irresponsible to allow future drilling until that has been studied and fixed I read a comment recently by professor b At university of california berkeley has very widely been quoted on the whole deep water horizon thing And he said look engineers know how to fix this they can fix this Why don't they just you know they ought to just fix it and I agree let the people who know what they're doing Fix this and but until we do My view and on my organization's view is there should not be new drilling in the gulf The second thing we've asked bowmer about Is what happens if there is another incident? How are you going to ensure that the oil companies clean it up? Well in the recently issued permits bowmer has signed off on the following the oil companies say we have a system Great you're good Go and build well. What is the system? Well the system is a combination of two Systems that are unproven and as far as I know Untested and I'll get back to these far as I know in a second One is run by a company called helix Which was involved actually in the deep water horizon matter And one is run by you've heard referred to earlier a consortium of all the major oil oil companies have gotten together And and cooked up this fairly complicated system where basically the oil can be recovered Whereas the helix system it's just going to put a cap on the Again, I asked secretary brahm, which you know when you guys they did a so-called inspection where brahm Which in salsar went down to texas somewhere as far as I can tell they kicked the tires and stuff And that's about it. They saw the equipment on dry land and so I asked him Have you done any tests on this? Do you know of any tests where these things have had some kind of real world? You know a dynamic test as opposed to a tabletop Test it seems to me the tabletop test is useless unless the table was under 10,000 feet of water And he said no why we we haven't and I said do you know if these companies have and he said no I don't know. Why don't you ask him? So I did and what did I get back? Book us That's that's where we are So I don't know as I stand here before you whether these things have been tested or not and in my view Unless and until we know that that's another reason that we should not be permitting new Drilling in the gulf when you read the worst-case oil spill scenarios that the companies are now required to submit The the shell permit that was granted recently the shell said It would take us 109 days to drill a To drill a well that I'm sorry to drill a well, you know In sideways that will actually a relief well that would kill the the wild well And that's assuming the blowout preventer doesn't work nothing else works and they have to drill a relief well 109 days and They estimate in this particular well that the volume of oil that would that would be spewed out in that 109 days Would be a multiple of the of the amount of oil that we saw in the deep water horizon disaster and Contemplating something like that where the only thing that's standing between you and 109 days of massive oil pollution In the gulf is a blowout preventer with a known failure mode into untested oil containment systems again, I think it's irresponsible in in At minimum to allow new drilling in the gulf at this point We've made the point to bomber. They've issued the permits so you can see how how strong our recommendation has been But let me just skip ahead and say With these new permits We've been talking with a few like-minded groups About litigation because our our informal advocacy has gone nowhere There's a number of potential avenues. There's jurisdictional issues What goes in the fifth circuit? What goes in the 11th circuit? And there's a big honka nipa issue which is sort of front and center I don't know if if people here have much familiarity with nipa. I'm sorry if you do it's The national environmental policy act basically requires an agency to take a hard look is the operative term at the potential environmental Consequences of an action that's subject to nipa And there's really three ways you can go you can't give a categorical exemption Which is just this and you stamp the permit which by the way is how the deep water horizon the mccondo well was permitted No environmental review at all You can do what's called an environmental assessment Which is you take a quick look and you see if maybe there might be some sort of significant effect On the environment and then you issue something on not making this up called a fonzi And that is not the character from happy days It's f o n s i and it means finding of no significant impact And then it's just you know go with god go ahead and drill and you're good And then the the ultimate end the big report if you choose to do one is called an environmental Impact study and no one wants to do that because it takes a long time and it's very expensive And what womer did in all of the new recently issued permits is they went down fonzi street And they said we find that there's not going to be any significant impact Even knowing about the blowout preventer issue knowing about the containment issue and When you dig in and ask how can they do that? And i'm not making this up. They do a probabilistic analysis They look at all the oil spills that have happened in the gulf and their frequency and they conclude You know, this really doesn't happen very often. So there's nothing to worry about I'm not making this up. This is right. You know, this is within a year of the deep water horizon You know that really doesn't happen and that's the exactly the same thinking in my view that got us into this problem In the first place is the regulators ignored a low probability high exposure event and few if you Are doing if you read anything about the wall street meltdown. I've been reading a couple books about this recently You see sort of the same thing that these these fancy models that these phd's and physics and the like the quants made They thought they had everything covered and the risk had been eliminated But they didn't quite carry the line out far enough to where You know, it's called sometimes a black swan event something that happens very rarely But if it does happen, you're in a world of hurt and that's exactly the kind of thinking That happened on wall street and exactly the kind of thinking that happened in mms and we're seeing now You know at bowmer. So the nipa issue to close this circle is how can you guys do that? Are you kidding? I mean, it's basically an are you kidding argument to say there's not going to be a significant impact? You know, remember what just happened, you know Um And you know more Analytically, you've got a a parcel full of environment of endangered species out there in the gulf. You got marine mammals You got sea turtles. You've got as someone mentioned earlier the the bluefin tuna's spawning grounds the Sperm whales which are endangered also protected in the marine mammal protection act They like to hang out in Mississippi canyon, which is where the deep water horizon Well was and maybe if someone from noa had had some say in the matter They wouldn't have drilled there out of deference to or protection of the sperm whale, but that didn't happen And I don't think that's going to happen Okay, thank you Well, uh, let me just wrap up by saying we we at nrdc and I know the other major enviro groups are doing the same thing We are advocating on two levels. We're advocating in dc We've asked noa to make the nrd the natural resource damage assessment Process more open to the public. They keep saying good things, but they haven't done book us to actually make that happen You look at the website and they they have a few things they just put up But if you're an ordinary person on the street, you're not going to figure out what's going on We at nrdc are working with community groups in the gulf to try to increase the opportunity Both for the public to give input and for the public to understand What happens in the nrdc process, especially when it gets to restoration Which is going to have an effect on their communities And a lot of locals are scared that there's going to be a lot of money coming in and it's going to be sucked up By local politicians and given to those folks cronies and it's not going to help in the areas where help is really needed So we're trying to work with that And uh, you know when when gentle advocacy at the legislative and administrative Levels fail, we'll see them in court. Thanks very much Due to the incredible efficiency of this panel, we've gotten back on schedule So that's a tremendous achievement. Um, and I'd like to take the opportunity to ask David and perhaps john to comment David i'm surprised you didn't mention one of the suggestions In terms of the environmental community that the united states adopt What countries like norway and i believe canada have done in terms of their procedures in which Any new Exploration well has to be accompanied by a relief well being drilled at the same time Which would address the issue of a of a you know the potential failure that of the blow-up Remender that we have heard from several speakers care to hear this Yeah, we I mean we thought about that about recommending it and um It's I think the canada example is actually not totally accurate. I mean it was that was You know went around the internet, but like a lot of internet things It was not totally accurate. I think in canada they need to have the Ability to drill a relief well and they have to say it's going to be this shift and this equipment And here's where it is now And here's where how long it's going to take to get out there And that's what helix and the marine containment the marine well containment system folks say that they have So if that system actually works, I think it's the equivalent of what they have in canada the Um Someone who's more into the industry than I am can probably give you numbers But it's also hideously expensive to drill a relief well basically at the same time even that keep the ships on station And at a certain point We this may sound funny coming from me, but we need to be realistic about what congress is going to do and in the face of Oil company powerful oil company opposition Okay, you kind of mentioned well, I actually agreed pretty much with what you said And I don't think that's a real standard anywhere in the world today other than our ice areas And I don't know for sure on that mountain expert on that, but I think what is concerns me as I And this was before the you know, the national commission report We have this report done on the blowout preventer And there's still a lot of questions about that and it and BP Is gone into court and asked for more testing the courts granted it It sounds like it needs more testing and the testimony that came out On that about that seems to indicate that they didn't answer all the questions There's a lot of unknowns But what what what I'm not an expert on blowout preventers But one of the things that I'm hearing from industry is that blowout preventer is not really to stop A uncontrolled well a blowout preventer is an operational device that is used to to the rams are supposed to You know stop the well at certain times for operational purposes But they're really not designed if you have a complete blowout of a well And you've got the oil and gas gushing out. It's a little late You should have figured that out ahead of time. It's really amazing If you imagine a pile of sand and you put a garden hose on it and it would immediately erode it away We've looked at the jaws of the blowout preventer and we've looked at the pipe And the the force of this sand and oil and gas coming up that riser so fast Rogues away this carbon steel just like a garden hose and a pile of sand once once you've got gas in the riser it's over And the fact that you had this pipe that was stuck up in there There's still issues as to whether what really happened. They don't have any physical proof They did it through model calculations. They don't really know But if you really need to be able to stop the the what the flow of this well Then you've got to be able to anticipate that something might get stuck in there and the ram has got to be Made physical enough to break through wherever it is. And so the standard the standard isn't really sufficient today It sounds like the two sides of the ram weigh almost a half ton each I'm not sure you could build a blowout preventer that once you had a blowout it would stop But the whole idea was something bad's going on and you've got five different Deals you've got two annular preventers. You've got two pipe rams and then you've got the shear ram So you have different levels of stuff you can do if bad stuff starts happening And I think one of the and I did not get a finish. I mentioned it ahead of time, but what they do You know what they learned in a piper often these other cases in the uk and norway is in the united states We call a prescriptive regulation We have these standards that we've set the united states and a company can go I mean the standard But in this technology offshore Improvements go this fast. None of our standards keep up with it So what they require in norway in the uk is you do a safety case which is done by third party auditors And your safety case is based on your particular Well with the technology that's available today. So that keeps you up with the modernization I think well, I'm not sure where we're going to end up on this I'm not sure what congress will ever come through the night But you'll never get away from prescriptive regulation in the united states But you supplement that with a safety case type of analysis third third party auditors and stuff Prescriptive regulation means you're always fixing something that happened a month ago. Exactly So so when you talk about what the you know, where how you really improve this These are the things where we have to get over, you know, have to take it to the next level And I don't see that it's unclear where the voem is going to adopt something like this It's unclear if congress will ever get around to it And you know, you heard I mean my slight said there are eight deep water wells. There's 10 now I mean, you've got this, you know, in the average american, let's think about this The average americans go to the pump today and he's paying four dollars over four dollars for gas So he wants to see oil I mean, what's the political pressure on this? What's the answer to all this? I don't know In congress, I mean we got the budget. There's no money You think they're gonna but they're gonna give money to the agencies they do more stuff They mentioned the Getting permits that you mentioned getting permits done. This is really interesting For a well like my condo BP probably had 30 engineers maybe half of phd's working for a year On the well design. I mean these guys they want to get it right Then they submit it to lafayette and the guy sits there One guy he could be this he could be god of engineers But he couldn't he could not possibly do what it took 30 Phds a year to do in 30 days. Maybe he can't do it in 60 days I mean, maybe instead of I do not obviously believe in regulation I believe you have to make something so costly that people don't do it again, but it's ground. It's reasonable debate Question all of that. Yes, sir. Please identify yourself Uh, my name is Mike. I sit on the executive editor of the ocean and post a lot there A lot of the university mates go a lot very happy to plug in for our next issue We're just gonna collect a lot of articles addressing these very topics on oil spill So look for that, but also a kind of question about If I can try to ask a two-parter about the other Jones act One I think it was sort of a little esoteric kerfuffle in the midst of all that kind of cleanup I was worried if you could comment on that And whether we'd have any impact on some of the changes we proposed today And then secondly sort of looking forward whether we might have any impact Uh, with all the references to Graves' observation that we're still going to be focused on oil for decades to come But in terms of alternative energy development offshore, especially in the avocado on the shelf Um, have I spoken about that to you as well? Well, the other Jones act kerfuffle had to really do with the coast-wise trade and what ships could fly in coast-wise waters And the controversy was As I recall it was should the United States allow foreign vessels in to engage in skimming and other rescue efforts I think there's just been a conclusion either today or yesterday that That it would not have done much to have had the foreign ships in and that they weren't being denied because We wanted american ships doing that work, but because there were other problems with the foreign ships That's a totally it's the same statute, but it's a different issue than the Jones act Negligence and raffle death benefits. It happens to be an area. I specialize in I do get a lot of rulings It's custom service which grants the rulings completely bogus everything you've heard in the media People don't know what they're talking about the Jones act does not apply offshore With regard to skimming operation the Jones act applies the skimming operation within three miles There was no need for foreign flag vessels operate within three miles. There's enough us capacity So the Jones act didn't apply offshore and that's been confirmed. All right, that's how it works With regard to alternative energy I just got a no one has asked the question as to whether or not the Jones act applies to a foreign flag vessel installing a wind turbine offshore and the reason is because the Jones act says it has to do with with Oil and gas resources from the outer continental shelf. Well, what you spend a wind turbine you put it in the seabed The resource is the wind Nobody's asked customs that question yet, but I can tell you through informal discussions My own legal analysis is the Jones act probably doesn't apply Then you got the issue if you get a ruling what's congress you think congress is going to allow the foreign flag vessel to operate out there Don't know probably saw the story the brits have got 4 000 turbines. They put out in the north sea and various places Wind didn't blow this year I'm not kidding. The turbines were supposed to produce let's say 11 of their electricity. It's like a half one percent Just interesting may need more lawyers to generate more hot air Yes Well, the the the open 90 Was pretty well locked up in congress until the famous tanker trilogy weekend In the following year when three vessels including the world prodigy hit Brenton reef here in nereganza bay and in one of those remarkable twists of fate Each of those groundings happened in the districts of key members of congress And that Really advanced the cause and yet at the very last second resistance over the double bottom provision Of open 90 once again stopped the law until one more casualty. Can you want to name the vessel? The american trader bringing alaskan crude oil to long beach in the process of raising its anchor There's two ways you raise an anchor if you're on a ship You want those flukes pointed away from the bow? Not in and they pulled their anchor right up through their single bottom hull It polluted a massive amount of long beach harbor That following monday the maritime industry gave up its opposition to double bottoms And at that point the law passed congress, but it took four more major pollution Incidents after the exon veldies to actually get all the people that need to agree for that water pass Can I add something I tried the american trader case for the state of california state court in california And in that case the oil was owned by dp I asked the oil and dp stepped up to the plate and they did everything you could have asked them to do They settled all the natural resources claims The uh to hold out and the reason we went to trial is if the shipping company decided Although they had in fact sat on their anchor twice and they had a pilot on board too Um They did not want to play ball with us So we went to trial we tagged them good So is it accurate for people to keep saying open 90s exon veldies or one-on-one? Well the other the other thing with with open 90 was there was always there was a lot of maritime legislation that was being Was uh being negotiated that nobody is Instead of pointing out never there's enough never enough impetus So it was they quickly rushed to put things together and you kept having these hiccups with it. It's true It's it is ironic that we had these continued incidents which resulted in open 90s finally being enacted And we heard we heard it today, you know congress focus and so congress has lost its focus on this area and you know Yeah Well in maritime in the maritime area congresses the maritime issues are always the lowest priority You get to everything else before you get to maritime anyway. I'll tell you a little story that will make you angry Really So everybody had subpoena power, but me The coast guard Incidentally who's now subpoenaed all my records because they want to put like to write a report someday So coast guard the chemical and safety explosion board the justice department everybody had subpoena. I don't have subpoena power so I go to uh I have a congressional liaison person You don't know what these commissions are like. So we go to meet the house passed the deal. I get subpoena power One to senate with it just in a day. So we go to the senate I won't tell you the names of the senators. I go to meet a couple of senators. I'm sitting in the room with this senator republican guy I'm middle of the road type guy And there are like 10 of his little Weenie 20 year old age He says well, mr. Barnett we couldn't give you subpoena power because This is a very liberal commission And I said, uh, he said, uh, you know, you uh, you just probably go after president obama He said that to me. I said any of you kids ever know how to use google They said what do you mean? I said I got a computer google me. I represented president bush in tallahassee I said i'm a middle of the road guy They didn't they they wouldn't give subpoena power because they assumed I was a i'm not kidding And i'm a middle of road guy but that is and I said to this senator I said you care anything about human life That's why puts his head down. I said don't put your head down. You care about human life They don't give a shit Well, all of the bills that I don't Fred all of the bills that I testified on died in the senate. They got out of the house. They died in the senate Now we did okay without subpoena power. I mean i'm not complaining next next question. Yes Such a viral resource There's a wonderful article in the new york times magazine of the hours just before The incident and the attempt of the crew to recover and so if you want a shorter and more vivid journalistic Report on what happened that the minute and mr. Bartlett gave I would uh, I would commend you To that report What up struck me at the time I read that magazine article And again, uh listening to Fred Was to compare that low probability high risk event To another time in low probability high risk event Which is an airplane going down So the odds of an airplane going down is that the odds of an engine going out are just pretty small So sully sullenberger is flying his airplane out from the maria and both engines are taken out by burks So, you know, what is the odds of that? I mean Constructing yet, um When you listen to an interview Of him, uh, because he had a book so he's been interviewed a lot He explained something that just hit me as an extorter He had not met his uh The other pilot in the plane till my day And they knew each other for about 15 minutes when they took off and yet without talking They go into this mode of reaction Which is programmed into them because he explained they have to practice Uh, and that's a regulation that required to practice for this event So he explains that he took over the handling of the airplane to solve practice beforehand His pilot then reached into a notebook, which is that bit And went to the exact page For landing in the river because that's what sullenberger told him to go to He knew exactly where it was He knew the page and he went down one by one of the procedures The sullenberger was supposed to do he reminded him just in case he didn't remember Is he got to flip that switch and go up to that red button? Is there any reason we can't train these crews do the same thing? You know, they do they have all kinds of training and they have simulators And bill riley who was one of the heads of the commission we talked about this a lot And we talked about the nuclear industry because they've got really good programs overarching and Believe it or not with these deep wells. There is an order of magnitude More things that can happen than in a nuke and a nuke. There's only so many things that are going to go wrong There's a bunch but they follow a pattern same way an airplane. There's a certain number of things that are going to go wrong I'm an engineer. I was stunned by the complexity of it But not only the science but the engineering in these things and I'm not saying it can't be done But it's a whole bunch hard. That's all I think from a torches perspective It's it's you ask yourself Very very low probability of extremely great danger What's the benefit of doing this and we do it? I think in events like this and events like like nuclear disasters You have to ask yourself The the high damage that might occur. Can you stop it once it starts and that that may be a little bit different than a quantifiable Terrible thing that happens and for which there's full compensation And I won't repeat my sad story about whether there's full compensation here But it's a little bit different if you think and we can't stop it once this starts So one leader could have easily stopped this and I wind this up with a little If I can real real quick story and I told a total lot of people this story on the commission I'm 21 years old. I'm a company commander Of a unit in a place called redmond washington I don't have a guy on the unit but me that's going that's graduating my school We have about A 500,000 gallons of red fuming nitric acid Bad stuff. We have about 500,000 gallons of jp4 jet fuel. It's a missile unit. We've got warheads. You wouldn't believe Commanding general comes down to me. I'm 21. He said lieutenant. It's you He said what do you mean generally said nobody else here can save us here if something goes wrong It is you you're the only person out of 160 people that you have to know everything yourself and you have to be ready to Add And I was scared but there was no if there had been somebody like that on the rig that this would have been easily stopped There were seven or eight different times. They could have stopped it, but no leaders stepped forward to do it I don't think you can make making leaders is like teaching people to talk Good luck I'd like to thank the panel for this excellent afternoon and susan's putting this whole day together I want to thank all of you for coming particularly Please do an evaluation form on your way out. Give charlotte a big hug on your way out And keep us posted. Thank you