 We want to get started because we have the deputy secretary with us and I know the kind of precious time it takes to get on a deputy's office because, you know, he's running the Interior Department and so he's just kind of taking his lunch. As a matter of fact, I took his sandwich away from him. He's not even getting his sandwich. I did promise, though, that we would wrap up a sandwich and send it with him and he said it has to be less than $25. And I can promise you it's worth less than $25. I have no idea what it costs. I mean, that's a different matter. Well, welcome. We're delighted that you're all here. This is, of course, a continuation of our series of conferences that we started after Mccondo and trying to get an understanding of all of the challenges that now come with both deepwater exploration but also exploration when a country cares about energy and also cares about the environment. And a year ago, that was a red-hot, intense issue, still is a latent issue of great concern. And at its core, I think there were three anxieties that Americans had. They had an anxiety about technology. Does this stuff really work? You know, I mean, are we able to manage it? Everyone was an anxiety about the business incentives of industry, and will they really be, you know, attentive and careful about the environment when they are going after these resources? And third, frankly, and honestly, was an anxiety about government. Is government competent to manage complex, sophisticated operations? And so, obviously, this has become an important thing for us to explore. And we've had eight sessions. This is our ninth session. We're actually combining. We've actually had a parallel series on the Arctic that we've been working. And so, we've really brought the two together because in some ways, this is the unarticulated anxiety that so many environmentalists have about drilling in the Arctic. You know, it is a pristine environment and what risk does it face? And because of all of that, we needed to bring this discussion, this debate forward to all of you. And I appreciate your being here. It's been a very good morning. I welcome David Hayes. This is a guy who doesn't seem to learn. He keeps coming back again and again and again to serve his second time, his deputy secretary at Interior. We worked as counterparts at that time in the Clinton administration. And I must say, I always admired his energy and his commitment to service. And of course, he's demonstrated that now in manifold times, and we're really fortunate that he is back serving at this time in Interior. And these are challenging days. No one knows it better than the secretary. So he's given us time. We're grateful to have him here. I want you to have as much opportunity as you can to ask questions. And I'm going to ask David Pumphrey to field that. But at this stage, let me ask you welcome the deputy secretary of Interior, David Hayes. Thank you, David. Thank you very much, John. And I was complimenting, John, before I got up here about the series that CSIS has sponsored in this space. These have been very important meetings that many of you have been involved in. We were challenged last summer like we have never been challenged before as a nation when it comes to dealing with an environmental crisis associated with oil and gas development offshore. And I must say this summer seems a little more leisurely than last, although not all that leisurely as I'll discuss here today. I want to begin with just a couple of framing comments. As you know, the president has been very clear that increasing safe and responsible oil and gas production is a priority for him and for all of us in the administration. And you'll recall in March 30th, the president set out a vision of a broad energy policy to secure our energy future, and he set a goal of lessening our dependence on foreign oil by reducing oil imports by a third by 2025. And that is an extraordinarily significant goal, and we are already well on our way toward that goal. For those of us whose minds are a little bit stuck in the past as we have heard through our careers about the continued creep up of the percentage of oil that we import in the United States, it's somewhat surprising and jarring in some respects. It's in a positive way to know that for the first time we're in many, many years we're importing less than half of the oil that we use in the United States. You'll recall from those of us who are, remember, back to the oil shocks in the 70s and beyond the continued creep up into the 60s with projections into the 70s. Well we've increased domestic production and we've reduced our imports significantly by 7% in the last two years alone, and we want to continue on that path, and the president has challenged us to do that. Now to achieve that goal, we know we're going to need a suite of activities to do that, and part of that is taking advantage of all the resources we have available here in the U.S., which is why the president has put together a plan to responsibly develop oil and gas at home. At the same time, leveraging cleaner alternative fuels and increasing efficiency to build a 21st century clean energy economy over the long haul. And I should say the Interior Department has a big role in this regard, both in terms of conventional energy and in terms of renewable energy. You know, one third of our oil supplies, our domestic oil supplies, come from lands or offshore that we manage at the Interior Department. And on the renewable side, the clean energy side, we are making huge strides toward using our public lands and our offshore resources, offshore renewable resources, like Atlantic Wind, to contribute to this secure energy future. Just last year, we permitted 4,000 megawatts of new wind and solar and geothermal power on our public lands. That's the equivalent of 10 coal-fired power plants. We're going to do, we hope to do the same this year, maybe more. We have a pipeline to keep this going. This is significant new development under this administration on the renewable side. But let's get back to the President's overall vision. The President, when he announced his new energy plan, he made it clear in the blueprint document that was released in March that one size does not fit all, and that different regions require different types of focus and attention. And Alaska is one of those places. It's a unique place. As all of you know, its natural resources offer significant promise for energy development while posing special challenges with the Arctic environment. Its heritage is rich and diverse, and the development must take into account the cultural, economic, and subsistence needs of different communities. It is a very special place. Now we have many agencies across the Federal Government with a stake in Alaska and in working with the State and communities and responsibly developing energy there. Obviously, the Interior Department, through the Bureau of Ocean Energy Management, Regulation and Enforcement, has responsibility for overseeing the development of offshore Alaska resources, specifically in the Beauford and Chukchi seas. And you have heard Mike Bromwich in previous meetings here at CSIS talk generally about how BOEMR is upgrading the safety requirements and environmental response requirements expected for offshore development. Just to say, we are taking that same message to Alaska, and we're currently reviewing Shell's proposed plans to drill exploration wells in both the Beauford and the Chukchi next summer. Also Shell, of course, will need to get approval from NOAA, another Federal agency with jurisdiction here regarding potential impacts on marine mammals. Onshore, the Bureau of Land Management, has vast responsibilities in Alaska, including in the oil and gas sector, BLM manages the 23 million acre national petroleum reserve, and BLM is currently actively involved in looking to facilitate responsible development in the MPRA, the MPRA which is estimated to contain perhaps a billion barrels of conventional undiscovered oil, and 53 trillion cubic feet of conventional undiscovered, non-associated gas. We recently announced within the last two weeks that we will hold a lease sale in the MPRA later this year, and every year annually thereafter to spur domestic energy production. BLM is also in the midst of preparing a new land use plan for the entire 23 million acre planning area that will analyze potential future oil and gas development, protection of special resources, management assistance resources, and opportunities to construct necessary onshore infrastructure, including potentially pipelines to potentially bring oil and gas from the Chukchi to the transatlantic pipeline system. A draft of that plan is being worked on now and should be ready by early next year. And as I understand came up this morning, we're also working to facilitate the permitting of ConocoPhillips's proposed CD5 project in the MPRA, which involves the Corps of Engineers, EPA, NOAA, and our Fish and Wildlife Service. Let me also mention one other aspect of the Arctic that I think pertains to the broader question of how to responsibly develop oil and gas in the Arctic, and that is the initiative that our administration has made to work with the Arctic Council, the group of eight Arctic nations that discusses shared opportunities and responsibilities regarding the Arctic. And until this ministerial meeting, this most recent ministerial meeting in March in New Greenland, no Secretary of State had ever attended and participated in an Arctic Council meeting. We changed that in a big way as Secretary Clinton participated along with Secretary Salazar and myself and Senator Lisa Murkowski was along as well in that trip. And among other things we put on the agenda for the Arctic Council, the importance of working on oil spill prevention preparedness and response, convening experts to help address those issues, and also introducing the concept of ecosystem-based management in the Arctic for all Arctic nations. These are two initiatives the U.S. put on the table and that were adopted by the Council and that will be moving forward. We think that kind of international cooperation is extremely important. The point, though, the general point I want to make here is that there are lots of federal interests involved and lots of agencies involved to developing holistic, safe oil and gas development in the Arctic. And it's also important and perhaps more important than ever that the federal government, rather, speak with one voice as we address these issues. That's been a message we have received from Senator Murkowski, Senator Begich, many others, many of you. They've called for more coordination on Alaska Energy Development and permitting. And in short, we agree. And recognizing this need, the President, in a May 14th radio address, called for the formation of a high-level cross-agency team to support efforts in this area. Well, I'm here to announce today that the President is signing an executive order today that implements this promise. The executive order that was just released within the last hour will form an interagency working group on coordination of domestic energy development and permitting in Alaska. This working group, which will formalize interagency interactions that are already occurring, will be chaired by me as the Deputy Secretary of the Department of the Interior. And it will include deputy-level officials from the Departments of Defense, Commerce, Agriculture, Energy, Homeland Security, EPA, and the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects. These officials will be joined by White House officials, including from the Domestic Policy Council as our primary coordinating body, along with the Council on Environmental Equality, the Office of Science and Technology Policy, the Office of Management of Budget, and the National Security Staff. This new working group will play a number of roles as part of our coordinating mission that the President has charged us to implement. First, we are going to facilitate orderly and efficient decision-making processes by making sure that agencies are working together as we evaluate permits and conduct rigorous environmental reviews for onshore and offshore energy development projects in Alaska. This means communicating on schedules and progress, on different pending decisions, sharing application process, the project information, developing jointly scientific and environmental data that are needed for good decision-making, pulling together cultural and traditional knowledge across our agencies that are relevant. It means making sure that we are working together as a Federal family collectively to have the best information available to make the best decisions possible. The working group also will provide a venue to help agencies think about immediate decisions in a more holistic context by engaging in longer-term planning and coordination efforts related to issues like spill prevention, preparedness and response, and the development of necessary infrastructure to adequately support energy development in Alaska. And finally, the working group will help facilitate a coordinated approach to collaboration with our many partners outside the Federal Government, be it other governments, tribal organizations, industry stakeholders, and the non-profit NGO community as we work through energy development and permitting issues in Alaska. In fact, the Executive Order specifies that the group will designate primary points of contact to facilitate coordination with the State of Alaska and with local communities, governments, tribes, co-management organizations, and similar Alaska Native organizations regarding energy development and permitting issues in Alaska. This means that we will be working closely with other governments permitting authorities, both in the State of Alaska and with the Alaska North Slope Bureau. And we hope it will help to reinforce the importance of collaboration and consultation across different levels of government and with Native Alaskans and other stakeholders. We look forward, under this new Executive Order, to continuing to work with our partners inside and outside the Federal Government to facilitate safe and responsible energy development in Alaska. And we hope and expect that the formation of this new group will, in fact, reinforce the importance of collaboration and consultation across different levels of government. So that's our big news of the day. And I'm going to close there, and we'll appreciate the opportunity to answer questions on this and other related subjects. Let me just say that this area of Alaskan oil and gas development is extremely important to the nation and to us as part of the Obama Administration. And we are committed, as we are, in all of our energy activities, be they conventional, renewable, be they onshore or offshore, that we proceed in a balanced, science-driven way that addresses the needs of industry, of the environment and of local communities. And we look forward to this new mechanism under the President's Executive Order to help achieve those ends. Thank you. Well, thank you, Mr. Secretary. That's, I think, very welcome news to be moving forward on setting up this interagency group and interagency process. So I'm sure it's going to stimulate a number of questions, though. So why don't we go ahead and open the floor remembering the ground rules of identifying yourself and also trying to frame it in terms of a question. So floor is open. Well, I think a lot of folks have asked for, which is sort of a coordinating mechanism. My name is Fran Olmer, and I'm from the state of Alaska, but I'm here as Chair of the U.S. Arctic Research Commission. I assume that this is not a one-stop permitting office. It is really a way of getting issues on the table for agencies to talk through various concerns. It may be too soon to say, because the Executive Order is just coming down today, but could you talk a little bit about how you will actually do business, your vision as Chair of how you will, how issues will come to you, how that will affect decisions by the various agencies as they are reviewing permits and making choices about investments, et cetera. Certainly. Thank you, Fran. Thank you for your service in so many capacities, including on the Deepwater Horizon Commission and now with the science orientation. You're right. We're not looking to this group to be a super permitting agency, one-stop shop in terms of all permit activities is concentrated and comes out of this group. We're really a coordinating group. Each agency continues to have their jurisdictional responsibilities under their statutory frameworks. The primary purpose of this is to ensure coordination and broad sharing of information and timely response to permitting windows and permitting needs. There are special challenges in Alaska in that regard and I will say we're having somewhat of a dry run of this right now as we work with Shell and as they put together their applications for exploratory drilling for next summer, we are working with the other agencies that have clear permitting responsibilities along with us including, for example, in particular EPA and NOAA and we're making sure that timing-wise that we're all synced up and that we are collaborating and sharing information necessary and it's working well, I would have to say. This is really a common sense approach that is being implemented today. Jack Belcher with Energy North America, I'm realizing that this has just come out and this may be premature to ask the question, but do you envision this as a group that is meeting occasionally or is it going to be coordinated sort of on a day-to-day basis and what do you envision in terms of the level of representatives from each agency in terms of this working group? That's a good question. The working group is a high-level group, a deputy secretary-level group and I'm sure we will be meeting as a working group on a periodic basis, but much of the work will be done through folks that are down the line in our agencies and we're the ones who are accountable to ensuring that the work is proceeding and well-coordinated and it's difficult to generalize more than that at this point, but we are being responsive to what has been, the concerns have been expressed that there are a number of federal agencies that have not been coordinated ideally and the President said we're not going to have that, we're going to make sure that we are responsive and work together and we've been doing that and now we're formalizing it. Heather and then Brooks and then... Secretary, thank you very much. Heather Conley with CSIS. How would this working group then interface with the interagency policy coordination group that is charged with overall Arctic policy per the Presidential Directive 66 that came out on larger Arctic policy? Because this is such a vital, particularly oil spill response prevention agreement, so vital to the future work of the Arctic Council as well as the broader needs for the capacity, how does this group obviously focusing on the domestic energy resources, how does that work or integrate with the IPC on the broader Arctic policy and the State Department's role in that? Thank you. Well, that's one advantage of having this working group at a Deputy Secretary level because we have visibility into the Arctic policy groups in general and there are several to be frank and so that's one reason why this is, the President has put this group together at such a high level to ensure that in the focus on permitting, which is what this executive order is focused on, the broader pictures, picture of activities across the administration and in the global context are taken into account. Thanks. Hi, David, very nice to see you here and to see your involvement in these issues, which I'm sure will benefit the nation. This group, you say, is going to be focused largely on permitting, but given the recent USGS report that pointed out a number of areas of deficiency in the science basis for, shall we say, rational development of the Arctic Ocean resources, will this group also have a mandate to pursue the acquisition of scientific data about marine mammals, fisheries, under sea topography, the things that could matter in influence development and will there be a product of some kind that describes how we're going to better and improve our knowledge of the Arctic as we go forward and finally will you be making recommendations about budgetary resources that are necessary for USGS and NOAA and other institutions to be acquiring the knowledge that is so badly needed. Would you like to add some more parts to the question? That's a very good question and I'll answer it in two ways. One is this particular working group is focused on permitting coordination and not the, in response to my Heather's question, is not trying to do more than that. I will say, though, that as part of that permitting process, science issues are implicated. Oil spill response issues are implicated. So this group, I think, will help as a practical matter facilitate the exchange of information on relevant science-based, relevant science information that pertains, that may pertain to the permitting process. And frankly, just the exercise of ensuring that top level folks from the agencies are together working on these issues will facilitate that discussion. In terms of the broader agenda of science for the Arctic, that we would not want that to be, Frank, constrained by an executive order that focuses on permitting issues. And Secretary Salazar obviously has stressed the importance of developing the scientific baseline in the Arctic by commissioning the USGS, United States Geological Survey report that was released a few weeks ago. And that does a terrific job for those of you who haven't accessed it of identifying on the one hand the tremendous volume of science that has been developed in the Arctic. But it also recognizes the need for more coordination and additional science to be developed. And that will be a joint enterprise, clearly. NOAA has a big role, EPA, our department, other departments. And Fran Olmer is going to bring this all together in her new role. But I will say that on the science side, my impression from my visit to Alaska is that there is a very good science community that works together in Alaska on these issues. I think the USGS report has shown that there are some opportunities for more collaboration and more integrated science work in Alaska. And I know it's very important to this administration that we proceed along those lines. A question here in the front and then we'll take the one back. Robert Schrader, International Investor. Again, a simple technical question. Because we're talking in the Arctic a lot of ice and water issues, where does the Department of Interior's role end and NOAA begin? And in the event of international border disputes and the long, you know, the technical long reach of some of this drilling, who will be the lead agency to fight those disputes? A good question. It's one of the reasons we have this coordinating group. The short answer, I guess, is that the Department of the Interior through the Outer Continental Shelf Lands Management Act has responsibility for managing the Outer Continental Shelf and the lands under the sea, if you will. So that we have plenary jurisdiction in terms of permitting drilling activities, any activities involving the seabed directly. NOAA's jurisdiction, which they share to some extent with our Fish and Wildlife Service, focuses largely on marine mammals and their, in terms of oil and gas interaction specifically, and their potential interaction with oil and gas development. They obviously have responsibility over fisheries. One simplistic way to look at it is that they're more involved in the water column as opposed to the seabed activities. In terms of oil spill response, the primary player offshore under the Oil Pollution Act, as you know from the Wakanda Well situation, the United States Coast Guard, has a lead role, but working very closely with both NOAA and EPA. And in terms of international, it's always the Department of State that represents the United States government. We all fall in line behind the Department of State. Good afternoon, Secretary Hayes. Gary Gentil with Plats. Earlier this morning, we had a representative from Shell up on the panel there expressing a certain amount of frustration over the process that that company has been going through to get its permits to do some exploratory drilling. He used terms like lack of credibility and, you know, if there were a second lease sale in the Beaufort in the Chukchi, he's not sure who would even show up given the experiences so far. How will this group address some of these issues that industry, some of this frustration that industry has expressed? And if it's not a one-stop permitting shop, how do you see its role in terms of helping industry? Is that you, Pete? Take the Fifth Amendment. The reality is that a number of companies have made a very significant investment in leasing in the Arctic offshore. And we came into office a couple of years ago. Last year, after the Wakanda well blowout, there was really a mutual decision, I think, made by Shell and the Department of the Interior to not push forward last summer to try to do development work. This summer, there is not activity going on this summer for a variety of reasons. I think there's frustration on all sides, frankly. What you're seeing today with this executive order and with the President's comments is a very firm commitment to ensure that we on the federal side are doing what we need to do to work carefully with industry and with other stakeholders to proceed in the right way. And to do so in a straightforward way. And that's our commitment. And that's what we are doing right now. So I'll stop with that. Oh, okay, Pete. So thank you for that, Deputy Secretary. I think it is, you know, I will make a couple of comments as I've got the undesired amount of attention here. The work that has gone has been important, and I think it's been a key difference in year to year. I don't want to call it an intervention, but the attention that's being played at trying to bring these agencies together is hugely important. I've worked in a number of different areas, and I don't think industry is in a position where, you know, the word I don't want to see used is streamlined, and I'm very, very happy to see nobody is talking about that. We need the standards, but this level of coordination is absolutely important with respect to putting together a work product, I think that's going to address all the needs that various people have. And the discussions that we've had that have worked through these various agencies with the White House overseeing how this thing ties together I think is going to be very, very important in getting together a work product that reflects all the good input from industry. Stakeholders and regulators, and so I'm very happy to hear the announcement today. You know, actually nomenclature can be important, and Pete's comment about streamlining is important. The plan, the intent, the full intent is to have a vigorous implementation of all requirements and a comprehensive look at proposals in the Arctic, because the opportunities are great and the challenges are also great. So that's a very important point. But what also popped through my head is that the question about whether this is a one-stop shop for permitting, I'd like to just say that I think what this is, is a one-stop shop for coordination of permitting, which is extremely important. This is, as I said before, this is not a new super permitting group. Each department will continue to be responsible for implementing its statutory obligations as Congress requires it to do. But we will have a one-stop shop for coordinating permitting of oil and gas in the Arctic, and this group will ensure that there is good coordination in that regard. Additional questions? Well, perhaps we can release you to your sandwich, but I would note after many years toiling in the bureaucracy of the federal government and the administration branch, one can't underestimate the power that comes from setting up this type of process. It may sound like another layer of bureaucracy, but I think you're to be commended for putting this together, because this will draw the attention of all the relevant agencies to the fact that this is an important process to go through. So I think you're to be commended and wish you the best of luck in implementation. That's always the next step, but I think it's a great effort, and we'll allow Fran one more. I'm a little concerned about the current budget cutting, having an impact on not just your agency, EPA, NOAA, the Coast Guard, all of the players that are so essential in being able to develop safely and responsibly. I've heard a lot of presenters this morning talking about their confidence in the ability of the United States to do oil and gas development in the Arctic, but that assumes a whole lot. It assumes that the necessary environmental and infrastructure investments are made by the agencies as well as by the industry and by the state. We need a new Coast Guard icebreaker. We need a whole lot of things to have the kind of search and rescue and other readiness that really will assure the level of confidence that we want to believe in, but it doesn't just happen. It takes money, and I'm very concerned about that, David, and I wonder if you'd just comment a little bit for the people who are in the room today and frankly for those who aren't in the room today, who want to believe that the United States can move forward responsibly. It does take investment at the very same time that Congress seems totally preoccupied with the debt. Not that that's not important, but there are counterbalancing interests. Could you comment, please? Certainly. That's a very appropriate comment, Fran. There is a premise to the Executive Order, which is that the agencies have the wherewithal to proceed through a good permitting process with industry and with other stakeholders. And budgets are needed for that purpose. And to the science budget as well, obviously, that requires resources. And there can be a tendency, I think, by those who are frustrated by the fact that permitting processes must go forward. Some have the reaction of cutting budgets in those agencies when that has the potential to have a direct negative effect on economic activity that would otherwise be facilitated by that permitting activity. We're concerned about that. We're very concerned about that. And the Arctic is a very good example of an area that could be affected in significant ways by budget implications. Needless to say, we are, as you know from previous CSIS events, we're in the process of very significantly reforming the Bureau of Ocean Energy Management, Regulation and Enforcement. And we did get some additional funds for Fiscal Year 11 for that exercise, but the house mark for the department would not come close to what we think we need in order to have sufficient inspectors, technical experts and others to do the work necessary for safe offshore oil and gas drilling. Well, without upbeat assessment, again, congratulations on being able to pull this together. And thank you very much for joining us this afternoon.