[Taken from the live closed-caption files]
Good morning, everybody.
Good afternoon, everybody.
Welcome to our session this afternoon on the deepwater blowout containment capabilities.
My name is David Hayes, the deputy secretary of the Department of Interior.
We will be joined shortly by Secretary Chu of the Department of Energy.
Obviously on my right is our host, Secretary Ken Salazar.
While we are waiting for Secretary Chu, I thought we would outline how we are proposing to proceed this afternoon.
We have two panels to address this very important issue, blowout containment capabilities.
The first panel is a government panel.
We will have some opening remarks from Secretary Salazar and from Secretary Chu.
We will then have a presentation from Dr. Tom Hunter, who is former director of the Sandia National Lab, who was intimately involved in the containment effort in Houston with BP through the last several months.
He will frame some of the issues that we are dealing with here at this session, including fundamental questions about how we stand today in terms of our containment capabilities, on April 19 of last year, and how we move forward collectively and effectively to ensure that the nation has good containment capability to address future blowouts.
After that framing exercise by Dr. Hunter, Admiral Allen will be providing commentary from his perspective, obviously a unique perspective as the current national incident commander -- soon-to-be former national incident commander.
And he is happy about that, I think.
And then we will have a roundtable discussion with everyone here, and I will put some questions to Dr. Marcia McNutt, Director of the United States Geological Survey, who was deeply involved as part of the government technical and science team that was participating in all the containment activities.
And Brian Salerno, who has policy responsibility for the U.S. Coast Guard in this arena.
That is our plan, and then the second panel will be a panel that brings the non-governmental view.
We have representation from industry, in particular, Rex Tillerson, CEO of ExxonMobil, who has led the industry effort to put together a major industry initiative on containment strategies.
We will hear from Andrew Inglis from BP, who led the BP effort in Houston on containment.
Their full bios are in the materials that you have in front of you.
We also have Dr. Don Winter from the National Academy of Engineering, who is the former Secretary of Navy and is involved in the oversight of this incident for the National Academy of Engineering, the independent review under way.
He will be talking not from that perspective but his own experience in terms of how to deal with these sorts of major unprecedented, virtually unprecedented issues and how to structure effective approaches for dealing with them.
And then Elgie Holstein with the Environmental Defense Fund, actively involved in the spill arena, also formerly chief of staff.
Mike Bromwich is going to be the director of Bureau of Ocean Energy Management enforcement, and he will have a few comments of his own.
We are going to be -- our goal is to present this introduction to you in a very efficient way because we have a number of speakers with points to make that I think are all going to be interesting and relevant, so we are going to move through it.
But let me suggest, Mr. Secretary, I would like to ask you to welcome everybody and to begin the program as you see fit.
>> Thank you, David, and thank you all for coming here this afternoon and for joining us.
For what I think is a historic event, a historic milestone in our efforts to deal with the oil spill.
Four days ago, on Sunday morning, September 19, in our daily BP call, the coroner, Thad Allen, declared the oil well effectively dead.
It was a historic and important time for all of us who have lived with this effort since the night of April 20 and throughout the last 4.5 months.
With the confirmed death well, we turned a page with the Deepwater Horizon.
To finally get to this important milestone, we are proud of the fact that we're at this milestone.
Also we are very proud of the contributions that were made by the Department of Energy and the laboratories of the Department of Energy, led in large part by our good friend and expert, Tom Hunter.
The United States Geological Survey and the great work of Dr. Marcia McNutt, as well as the people who were working nonstop at the Houston mission control center.
The effort to kill the well challenged the best and the brightest minds of the public and private sectors.
The complex operation tested the limits of the oil and gas industry and the U.S. government's technology and expertise, and it required trial and error, where there was very little room for any kind of error to avoid a mishap that none of us wanted to see in the Gulf of Mexico.
In short, the deepwater Horizon Oil spill may bear the shortcomings and help us outline practices.
In the five months since it exploded, the Obama administration and the Department of Interior and Energy have executed an aggressive offshore program on reform.
Our goal is simple.
Our goal is to raise the bar on safety and environmental protection to prevent these kinds of disasters from ever happening again.
And to be sure that deep water drilling and the oil and gas that comes from deep water as our energy portfolio, can resume in a safe way that will protect the environment.
To achieve that goal, we have already implemented requirements for inspecting and testing the casing and cementing of wells.
We have launched a new environmental analysis of the Gulf that will guide future decisions, and we are requiring agencies to conduct more robust environmental reviews of deepwater drilling projects.
We're advising that the missions of the agency was a service, officials leasing offshore areas for development are separate from those responsible for policing the offshore energy operations.
We are substantially increasing the number of inspectors for offshore oil and gas and the resources available to them.
We are requiring companies that want to drill to prove in their expiration plans that they are prepared to respond to the catastrophic blowouts and oil spills on magnitude we have seen from the deepwater horizon.
Ultimately, to achieve our objective of safer offshore energy production, we must eliminate the gap between the technology and the knowledge that allows oil and gas companies to tap in deep waters.
And the strategies that allow us to deal with emergencies at those depths.
BP's failure to contain at that depth exposed that neither industry nor the government has the preparedness to deal with the disaster that happened in the gulf.
It is one of the reasons why the current deepwater drilling is so important.
So today, Secretary Chu and I have convened this meeting to have a discussion of how we might move forward with the strengthening of the containment capabilities that we need for deepwater production.
We have the benefit of many senior leaders here today.
Including Michael Bromwich, Director of BOEM, who has held forums across the country to discuss containment capabilities in deep water.
He is currently analyzing the information he has collected and how we will adjust the deepwater drilling suspension.
He will deliver a report to me in the next several weeks.
We have several other top U.S. government scientists and key industry and stakeholder leaders with us today.
They will share their insights with us, and I would like to recognize them.
Secretary Chu, who worked nonstop from the very beginning and brought not only the expertise of the Department of Energy, but all the labs and scientists and engineers from the industry to the table.
He was a key partner in the effort over the last five months.
He has become a comrade in arms with me as we move forward on our comprehensive energy programs for the country.
I'm thrilled to have him as a partner.
Dr. Marcia McNutt, one of the first people that we deployed to Houston to work there at the command center with BP and spent several months in Houston, helping on matters ranging from the efforts to kill the well to dealing with the issues relating to flow from the well.
Thad Allen's extraordinary leadership has kept him from retiring, and I am not sure we are letting him go on October 1 even though he is ready to go.
Dr. Tom Hunter is one of the most capable scientists that I know, putting his knowledge to use some ways for practical understanding for people like myself the deputy commandant of the Coast Guard, every day in Houston and around the Gulf, the members of the Coast Guard did an extraordinary effort in dealing with the oil spill response and source control.
David Hayes, Deputy Secretary of the interior, who was with me on just about every phone call, every one of those mornings, and who has taken on so much of the difficult issues that we are dealing with as we move forward into the new chapter.
I want to thank again the second panel that we will hear from.
Andrew Inglis, for his determined purpose in trying to get the well under control.
Rex Tillerson, who provided invaluable expertise from his company as we dealt with the issue.
Don winter, your history with the Department of Navy and the National Academy of Engineering.
And Elgie Holstein, for your guardianship of the nation's environment and your work with the Environmental Defense fund.
We appreciate you being here.
I am looking forward to hearing from all the experts.
It is my hope that today's discussion will help guide the forums that are raising the bar for the oil and gas industry's practice as well as to help inform recommendations on whether and how we will lift the current deepwater drilling moratorium.
In my view, the legacy of the BP Oil spill will be to create the gold standard for safe drilling and production of oil and gas in the outer continental shelf, and to do so in a manner that is safe and protect our environment.
I look forward to hearing from everyone this afternoon.
With that, I would like to turn it over to my colleague on the cabinet, the Nobel Prize winner for physics, Dr. Steven Chu.
>> thank you, Dr. Salazar.
My remarks are going to be somewhat more informal, in part because just in time became almost in time.
I think we want to use this as an opportunity to rethink how we are going to increase and improve oil safety.
I think, although this is strengthening the blowout control capabilities, it is not contained in what we should be focusing on.
But the best way to deal with an accident is to prevent an accident.
So what I'm going to do is spend a lot of my time talking about those things.
Because I have been for a long time and still remain a practicing scientist, I'm not going to sound like a cabinet member.
So you will forgive me.
I want to get into some specific suggestions, as for instances.
Primarily what I would like to encourage the interior in the industry to do is to work, the industry work with the government so that sensible regulations can be put in place both for containment and something that happens after the accident, for environmental restoration.
But also, what do we need to do to prevent an accident.
Let me start with the following.
Department of Energy got involved in this because we made a suggestion about diagnostics.
What had happened is that the B.O.P. Had initially sailed.
A number of reasons I do not want to go into that.
In reading the deepwater accident investigation report that BP put out recently, they themselves noted that there were 17 attempts to close vents between April 25 and May 5.
The accident occurred May 20.
Some of the valves were not closed, and there was a lot of time injecting hydraulics into the system, not knowing what the state of the valves was.
Many of the valves had closed.
This is something where a reengineered and actually very inspective retrofit BOP'S could do a lot so that when the valve is closed and the safety pin is engaged, and the extent to which it is known how far it is closed is a simple engineering job that would have saved 10 days of angst going forward.
There is no instrumentation on the B.O.P. -- and that is the equivalent of commercial aviation, where the signal goes out to lower the landing gear and there is a signal that comes back and says landing gear down and locked.
That is one example of what can be done.
There were -- during the accident, if you look at the report, what scientists said, the overall consensus is that this job had failed, but in the negative pressure test, where you back off the pressure and it withstands the pressure coming from the reservoir, the finds were noted correctly.
The cement was leaking, but the pressure from the drill, you RE UP pressure from the kill line.
They were in direct contradiction, and there are two possible reasons.
There may have been something that plugged the kill line, or a valve had been inadvertently closed that isolated the kill line.
There is no kill on the B.O.P. that indicates it, and one would have been able to discern and read correctly that the cement was inadequate if the fix had been put in.
When our government team got on site, there was no pressure gauge at the bottom.
The joke was, if you want to know the pressure, have a pressure gauge.
If you do not want to know what the pressure is, have two pressure gauges.
Do not have just one or two, but multiple pressure systems that will allow you to measure these things.
The Department of Energy has experience with this.
We are responsible for the weapons, the nuclear-weapons in the United States.
We are responsible for the nuclear propulsion systems of our nuclear Navy.
Through those responsibilities, we have over the last half century developed procedures and things which are different than what I have seen in this industry.
One does not really have to reinvent a lot of things.
In fact, I was visiting a plant that is responsible for the assembly and disassembly of nuclear weapons.
A mistake at that plant could end up as a blinding white flash.
So this low-probability, really dramatic event that could occur is something you do not want to ever be in place.
There has been a lot of study over the decades on how to design systems approaches where not only will a single point failure -- if you look at what was going on in the well, it was actually multiple failures, not one or two or three.
There were a half-dozen or more going on.
How to design multiple redundant systems is something we have experimented with.
I recommend reading high reliability operations so that when you dismantle a nuclear weapon you do it in the right way that does not end up with a nuclear explosion.
This is also true of the nuclear reactors.
There has not been a nuclear reactor accident due to excruciating attention to detail and procedures, something I think we can learn a lot.
I can go on and list a number of other things where I think things could be different.
There could be an automatic self checking of critical components and control systems.
Some companies sell systems where it is a complicated electronic box that manipulates many valves.
Some installations have an automatic check every 15 minutes.
You ping them, is this signal up right now?
Are you on?
Do you still hear me?
I have a young lady saying that time is up, so I will stop.
I'm going to make one more observation.
There could also be technical aid, and during critical times, what I consider critical times, testing of whether a cement job has worked is a critical time.
Reading the accident report, the attention was not completely focused on what was going on.
They were doing other things in anticipation of ending the job.
You can do technology to actually help steer the attention, and there were signs early on that things were going out of control.
When airplanes land, there is a buzzer in the cockpit that says with your altitude you are 5000, 4000, 3,000 feet above ground, those are some things that can be incorporated.
These are examples of things where I hope the government can work with the oil industry in deciding what is sensible, what makes good sense, what is not just a necessary regulation, but will it improve safety?
Finally, a comment about venturing into hostile territory.
We slowly went into deeper waters.
We are now drilling 5,000 feet, going to 10,000, 12,000 feet depths.
We do not have vehicles that can hang around for seven to 10 days during a hurricane.
It is not hard to design an A.U.V. That can anchor itself to a well.
We had about eight days and observational time to say when a hurricane came and we had to pull anchor, it was worth the risk to keep it sealed.
There was nothing that we leave there that could stay you can design something that it will be anchored.
Just to have a satellite uplink, these are the examples of things where I think we should think hard about going forward, and make the industry a lot safer.
>> thank you very much, Mr. secretary.
We are now going to proceed with Dr. Tom Hunter, who will frame the issue with specific eyes towards containment but the broader issues as well in terms of the learning that occurred in connection with the Houston activity, and also some of the issues going forward -- Secretary Salazar's comments, that we are interested in having an open discussion about.
>> thank you, David.
Ladies and gentlemen, I would like to thank secretaries Salazar and Chu for this opportunity to discuss something that has been really important over the past several months.
I will try to start where I end up, which is to say this is a group of people that did not know each other in the beginning, but by coming together, much is accomplished.
The question is how do we move across the same form of cooperation engagement.
Let me start with a couple of slides.
My talk today will have three parts.
It will have some observations that we got from this experience from the well.
We are trying to frame the discussion by talking about what a possible future it could be and how we might go together for a difference tomorrow, and then a couple of key steps moving forward.
I should comment on the scope of my comment.
I will focus on the Bureau of containment and the well itself.
You have the opportunity to talk about service marketing and Bill response, and then as Steven Chu just said, there will need to be a focused effort on prevention as we go forward.
While I will not comment on too many of those, the concepts and methods that we talked about in terms of containment -- we will focus on feedback and focus on how we might go forward.
But to stand back and say what we have learned from personal experience, one that I think would be observed is I think the fact that this was possible and possible to the extent it was not anticipated and realized.
It was not in the mindset, some of this seriousness and the large flow -- It took a while to get people's heads around, to figure out how one deals with that.
As you just heard from Secretary Salazar and Secretary Chu, there really were no solutions waiting, ready, and immediately available.
There have been a lot of developments that occurred, which I think have profoundly made a number of differences going forward, particularly Secretary Chu's comments, we wish that we had a little more understanding of just what was going on.
The government also came together very closely and nicely, a team that was with a lot of expertise that was relevant but did not have a lot of experience with this technology in these environments.
That made a difference.
If I were to ask what characterized the work, there were rapid technological advances made.
In fact, I think that is unprecedented in the pace of economic development.
We needed something where solutions were developed, and in many cases -- in fact, for the primary cases, it became very in-depth and effective containing the well.
If we stress nothing else, a problem that had no solution, ideas were proposed, technology was developed, tried out, put together, implemented with procedures that made it happen.
It is an almost revolutionary event in today's times.
One thing that we all learned is that clarity of responsibilities and how decisions were made are essential.
As we move forward, there ought to be understood as early as possible, in our case, they were resolved and all were very quite nice.
A mechanism of decision making.
Admiral Allen talked about the progress for the well.
There are a lot of things that happened.
I could not make a list of all the things that happened as I observe the BP team putting things together.
There were a large number of collection devices.
Some worked, some did not, some were never used, but they were built.
The Waterloo of this event was the ceiling cap.
A ceiling cap was developed, prototypes put in place, and that is not an unprecedented appointment.
I mention not a lot of data.
But with the data that we had, from the analyses we had to figure out what the well was doing.
Both BP and the government teams put together a fantastic way of understanding the data as it was going on.
Very important to operations as everything was done was done under a procedure written and approved, evaluated, and they were pulled together quickly.
But that represents a wealth of experience.
And then the relief well was in my mind a technological breakthrough and one of no less importance, but who knew that you could drill half a mile away and hit one other well so precisely and so well?
That was an important demonstration.
You might ask, what did the Government scientists do?
Well, I mentioned that they did not have this experience working in the deep water, but they played an important role which in my mind ended up being very collaborative in nature.
We did a lot of independent structural analyses, a lot of diagnoses trying to understand conditions.
An enormous effort was pulled together by the government in monitoring the well during that period after the gap was put in place, and the question was, is it leaking into the Rock?
We had to find if it was leaking and where.
We put together seismic runs and we put together acoustic imaging ships, in the daily runs over the well.
With course to the pivotal flow analyses.
The key word, though, in leaving that experience was one of collaboration.
With limited data, there is only limited differences as to what the different views might mean.
To summarize the observations, I would say that there was not an effective containment facility for the deepwater horizon's blowout in that event.
The other well provided a leap forward in understanding and getting a sense of what could be done by what time frame.
Now the containment capability in this industry is much further along in its ability to understand what can be done, but also there is a lot more which we will talk about that can be done.
There is aan overarching theme that I have heard people from BP make, Andy make, and the secretaries make that capture this operation.
As you understand, you can take action.
As you take action, you can understand more.
We learned an awful lot with them and put things together in a way that made sense so every step was a better step.
First, we can have a different tomorrow.
We can respond to the situation differently.
If I were to cast a vision for that under guiding principles, the government and industry both have a stake, a big stake.
If we can move together forward, it must be an enduring relationship, not one that is strong today and weak tomorrow.
We have to vote mutually for the best and make sure ownership is maintained.
Like all efforts of this, it will stay together as the leaders keep it together.
I really think the leadership of the industry in the federal government to make sure that not only do they stay engaged, but they keep emphasis on moving forward.
There will have to be a strong dose of R&D and innovation moving forward.
That will only be evaluated if you have demonstrated, in fact, and I'm sure there are ways to do that.
What is a model for going forward?
We could put together a structure for industry collaboration.
We have an excellent start.
The R&D company is the foundation, a deployable expertise space on both sides of the government.
We will need to make sure that all the information is available to people in terms of individual expertise, but also in terms of records and procedures.
There needs to be a more ready containment technology that not only do we make better every day but is used frequently, demonstrated frequently, and is available when needed.
Demonstrating authorities' roles and demonstrating how capabilities work.
One thing we can do, we can put together a road map for the technology.
Steven Chu mentioned some of those.
That would include diagnostics, remote-control electronics hardware and software.
Weekend rates and innovation in technology developed based on those road maps.
I would say, though, that marching in place and staying ready -- I think what one needs to have is to have real projects in companies for but also at the full scale.
I really believe that we should keep these teams together and have personnel changes.
We have ways that they are blended together and maintain a state of readiness, and in reviewing and guiding it, we need governance that allows us to do that.
In my mind, the Grand challenge was there was one pivotal event that made this come under control in containment.
That was the ceiling at installation.
It was a bit controversial, and it was two days after installation.
But it was truly a remarkable effort pulled together based on the things that I mentioned, in analysis and procedures and complex decision making.
We got to that point between 70 and 80 days after the event.
I would challenge the future to have us there in one week.
That is to pull things together, being to that point.
So I would leave that on the table as a challenge going forward.
I think by the pace of activity in the letter in a few weeks, it is much more doable.
Let me close with what we have to do to get there.
You can take some real good next steps.
We can lay out a Government Industry collaborative partnership and we can charter objectives that are clear.
We can find a structure for Government Industry partnership that allows companies to work together.
We can lay out a governance model that keeps leaders engaged in guides where we need to go where we can work on secure investments from both parties.
I would argue, again, personnel commitments means we have to commit our best people to this effort.
Are we going to have an action plan?
Are we going to engage in stakeholders on the government side, dealing with Congress and the government and things like that?
Lastly, things have to be improved quickly.
Let's get ourselves together, let's collaborate.
Let's capture that and keep the public and the industry and the government collaboration going.
I will close with one final thing.
This was not on my plan to be on this project, for this length of time.
I had some strong encouragement to do so.
My life would have been completely different had this not occurred.
Also, I do not think it would have been better.
Thank you for giving me the opportunity to talk about it.
>> Thank you, Tom, for those provocative thoughts, which we will be discussing here as a group.
Let me first though ask commandant Thad Allen on these general questions, where we stand on this experience with the well, particularly regarding the containment issue.
Broader observations are welcome as well.
In times of crisis when people are thrown together who do not know each other, creating an effort, at times like that you find what people are like and their capabilities and competencies.
I want to tell everybody in this room, it is no surprise for everybody sitting at this table that the leadership of Tom Hunter down in Houston with the science team that emerged during this event is a striking example of what is best in government.
We thank you, Tom.
If I could baseline everybody's understanding for what the situation was on April 20 in the Gulf of Mexico, and I'm going to do this as a non-practitioner in oil drilling.
I did not stay at a Holiday Inn Express last night.
The way we produce oil in the Gulf of Mexico is much different than the way we produce it anywhere else in the world.
The reason that is important to understand, containment systems have to be -- oil in the Gulf of Mexico is largely produced short of pipeline.
There are no structures that get oil easily to the surface.
That was a major challenge in containment and required extraordinary things that Tom laid out.
What we ultimately had to do to contain this well and finally close it were to bring technologies in existence in other parts of the world related to other models and put them together in an automated fashion in the Gulf.
Putting a containment system in that can be successful, and we know that this one can be based on ours.
I'm talking about the use of vertical riser pipes.
Free the riser pipe from the floating production platform of the vessel above it.
We had one up and operating and we are producing oil to the helix producer.
This is the production capability that is used off the coast of Africa but not usually used around the Gulf of Mexico.
The second part of that are floating production platforms and shuttle tankers.
That is not a commonly used production method in the Gulf of Mexico either.
We brought in a dynamically positioned tanker from the North Sea to be able to take oil that was produced and shuttle it a short period to take a tanker and put the equipment on it.
It is a technology not usually used in the Gulf of Mexico either.
A shorthand description of what happened on containment, I tell everybody that our seamen in the Gulf of Mexico, these systems are not going to be the integrity, they come from different parts of the world.
One of the things we have to think about moving forward is interoperability and standards.
This gets into an issue of global oil production and exploration, and I think there is probably an opportunity to harmonize what we can do and what we think is going to be done through industry operations throughout the rest of the world.
Just for the information of everybody in the room, before we came, I had a brief discussion with the secretary general of the IMO.
Their maritime environment protection committee meets next week.
I think we have an opportunity not only to create a system that works in the Gulf of Mexico, but ultimately it will help us decide how to do this in the industry moving forward.
A couple of things that Secretary Chu and Tom Hunter said.
We have the opportunity to put remote sensing equipment.
One of the things that was very challenging, we were dealing with a problem almost 5,000 feet down where we normally did not have access, and our entire body of knowledge was developed through remote sensing.
If we know that, that will be the conditions for response in the future.
So that we have a better operating picture of what is going on down there.
We also know with the amount of R.O.B.'S required, the operations were at a level no one had seen before in the oil industry.
I'm not an expert, but I have been the captain of a ship.
The fact that we never had a major accident during this entire time is a testament to the skills and competency of the folks working in Houston and the folks operating the R.O.B.'S on the ships out there.
We also have to understand we are going to have to be --
To the extent that you can put more capability into the systems themselves so you get the information, you drive the knowledge you need without having to reduce that at the time to other means.
It's back to Secretary Chu's comment we are going to be working at various depths.
If you look at the spill that occurred off Australia last year, that was in shallower water.
They jacked up rates was brought into it to the relief well.
I believe also -- and this was stated earlier -- we somehow forgot the value in the five years after the Exxon Oil Pollution Act was passed.
I helped implement the Oil Pollution Act in 1990.
I was a coordinator that negotiated the protocols.
We basically got complete amnesia about R&D, to fund it and stay ahead at the same time that the technology for deep water drilling was moving offshore.
It is imperative that we get our arms around R&D in the government and the private sector moving forward.
I would say, just as a closing comment because other people need to talk here -- I am staying away from response planning because I think Brian Salerno is going to talk about that a little bit.
We need to understand that this is always going to be a collaboration.
The hardest thing I had to explain during the response was what is a responsible party.
What is the relationship of the responsible party to the federal government and the federal on-scene coordinator?
At the most sensitive times during this response, the idea of the responsible party was both socially and politically mollified, in my view.
We have to work through that and understand that the industry needs to be there.
They have the technology and the means of production, and we have to get past whatever we think an RP is and not start out with the mental baggage associated with passions related to the event itself that have nothing to do with the response.
>> Thank you, Mr. commandant emeritus Thad Allen.
I want to complete the discussion with the folks at the table by pitching a couple of questions to Dr. Marcia McNutt and to Brian Salerno.
Then I would like to have, for a few minutes, a roundtable discussion on some key questions and points that have been made by the panelists.
Marcia, you were the head of the technical group that, in the midst of this exercise, brought science together to figure out what the flow rate was, and that was an important element of the containment effort.
Obviously there were concerns early on about the flow rate estimates.
What learning do you think we have now that we did not have before in terms of making these estimates?
Are we in a better position to make these subsea estimates so that appropriate containment can be matched to the size of a blowout?
>> Absolutely, David.
Before the deepwater horizon incident, the closest analogue we had to something of this sort was the incident in 1979 in the Gulf.
But that blowout was in only 50 meters of water, and there is actually no peer review literature that says how the flow rate had been calculated.
So we were basically going blind in terms of figuring out how to calculate the flow rate for a mile-deep well under water.
So when Admiral Allen stood up to the flow rate tactical group to calculate the flow rate from this well on May 19 -- we started our work a few days after the first videos came out showing that the flow rate was likely much larger than the initial estimates.
But we did not know by how much, so we took all techniques at our disposal and put them to work trying to figure out how much the flow rate was.
Less than one month after the flow rate technical group was stood up, we had enough of those techniques reporting in that we came up with an estimate that stood the test of time.
We came up with an estimate that it was between 35,000 barrels per day and 60,000 barrels per day, and when the final flow rate was determined, when the capping stack was shut off, we did have the final flow rate that came in at 53,000 barrels per day, right within our estimate.
So we now know exactly what we do if this ever happens again, what technique we would use first, under what circumstances, and we could have the right technology in the field within hours to days of a blowout and have a flow rate that we could put forward to the American people, and we would trust that answer and we would not need multiple methodologies to have a good flow rate.
>> I'm guessing, Marcia, that with the increased instrumentation that Secretary Chu talked about, might also add to it and add to the precision of those flow rates?
>> What we found were the best techniques actually were in the ocean.
It was important to get equipment into the bottom of the ocean.
Oceanographic gear was the best way to do it.
Let me ask Brian Salerno a question that goes to the traditional Coast Guard responsibility here of helping to oversee spill response.
I preface this with a statement that the traditional spill response issues are getting and will continue to get a fresh look also as we look at the technology of the approach and the lessons learned once you have the oil at the surface or nearing the surface.
Give us your commentary on the containment side and what we might think we need to do going forward to help address that piece of it.
Thank you and good afternoon.
First, let me say I agree with Secretary Chu, if we can prevent this in the first place, we are better served by that.
We know that sometimes bad things happen, and when they do, we need the means to respond.
The oil solution Act of 1990 put the planning burden on the federal government and on the industry to prepare for those types of events.
In fact, there have been a number of plans out there that have been tested over the years.
For most of these bills that we see, it works quite well.
This really stressed the system.
We had three plans used during this response -- a regional plan, a more localized plan, and an offshore plan.
We found that they were not aligned all that well.
When we were involved in this response, some assumptions that undergirded those plans did not match up.
The best way to characterize that is most of the focused plans and coastal approach plans really look at finite quantities of spills.
At some point it is a finite quantity, and you can plan for that knowing the normal traffic that comes in and out of a port.
This bill in contrast dealt with an infinite quantity of oil.
That gets to how do you plan for that, what types of equipment should be in place, and what type of organizational structure do you need?
Regarding organizational structure, this response was quite unique.
Admiral Allen was the National incident commander, the first we have ever named in this country since the Exxon Valdez.
This is a very infrequent event.
His first time since the implementation of homeland security presidential directive 13, which talks about -- it gives the Department of homeland security response authorities for national disasters.
The first time we have done a Pollution response under that construct.
So there are a lot of things to study in terms of that organization, a lot to look at in terms of the breadth of 90 and the whole of government approach that was occurring with this response.
All of the things that were there were absolutely necessary.
All the plans that have been put in place really rely on surface recovery and shoreline recovery.
And yet one of the -- what we really needed in this case was some intervention below the surface at the sea floor, containment systems, and also the use of subsea dispersants.
A lot of new technology that we leverage as we go forward.
Despite all the new technology that was developed in this case, there's probably more that can be discovered and put to use in future planning.
I will stop there and I will wait for questions.
>> So let me open this up and welcome our panelists to make comments on some of the points that have been made today.
To start the discussion, let me throw out a tease, but please go with this as you see fit.
My sense is that today we are much better off in terms of containment capabilities due to this experience, and we want your confirmation on that or dissent about that, but we are talking also about going forward.
We will hear on the second panel bold proposals by industry to put out major investments in this arena, and the question maybe for the government panel is, what is the best relationship for the government to work with industry recognizing that there are different roles and responsibilities, and how best for government to essentially keep up with the technological advances that you see in the industry?
>> A couple of comments -- one, I would keep the spirit of collaboration well alive.
Secondly, I would make this commitment to an enduring investment.
Then I would put in place ways in which people who work together, working scientists, are actually engaged in real problems, see real solutions and real new technologies, and based on those technologies, they see an impact on the industry.
That will make the real nature of it so profound, it will endure.
>> One of the basic premises of the Oil Pollution Act of 1990 was that we create response capability in this country, but we keep it in the private sector, requiring both facility and vessel response plans.
We then created a demand to have those resources available to meet the standby requirements of the response plans.
There were questions from time to time throughout the life cycle of this event regarding who should have the capability and what was the proper role of government.
I would suggest as we move forward that needs to be reaffirmed.
We need to be able to tell ourselves and our partners what our position is on that.
There were questions from time to time throughout the life cycle of this event regarding who should have the capability, what was the proper role of government.
I would suggest as we move forward that needs to be reaffirmed.
There needs to be a signal to the industry and we need to tell ourselves and the partners exactly what the public policy position is, and if it remains the same position, it needs to be reaffirmed so there is certainty in the markets.
>> Can I follow up and ask a question in that regard?
>> The traditional skill response capability that came into place in the Oil Pollution Act, an industry-led effort.
We heard others suggested the R&D component -- you suggested the R&D component has lagged.
How do you keep -- Is there a way the government could help ensure that when industry comes forward with significant investment the government can ensure that it remains vital?
I think this is what Tom was getting at with a dedicated Science and R&D.
Love your comments.
And perhaps Secretary Chu would like to comment on that.
>> I think an integrated coordinated approach to R&D is needed.
There needs to be a certain amount of competency in the Federal government to carry out oversight responsibilities and make sure we are meeting our commitment to the American people.
It requires some amount of investment on the government side.
However, moving forward, we created oil spill response organizations has a direct result of the Oil Pollution Act of 1990.
There are some mechanisms I assume will be discussed and proposed by the industry moving forward on how to organize and capitalize the equipment.
I think there needs to be a clear understanding.
The best way to move forward where we stay at the same speed, and quite frankly, technology got ahead of the government, considering exchange of personnel and executives and subject matter experts, not only sending them to industry as we do from time to time, or bring those folks from industry into the government as well.
>> One of the other things we can do, going back to the team, other industries in high risk situations, rare events with high consequences.
The Department of Energy runs facilities where, once you build them, it just has to do with radiation, treatment of fuel and analysis.
Toward hot rooms where once you let this stuff in there, you are not going to get in there for 10 or 20 years.
Building a waste treatment facility.
Not going in there for 20 or 30 years.
Things are designed to be serviced and fixed remotely.
Early on, what was the big event?
What was the real big event?
Being able to unbolt the screws.
And so, going forward, actually there are certain things that, as you go down to these remote areas, build it so you can service them remotely and continue -- where major things can be fixed so you can really limit the damage.
>> David, I think one of the key things that everybody is focused on here is instrumentation.
I think Secretary Chu, in one of the conversations I had with him over the last several weeks spoke about with a very low percentage investment in the blowout preventer, you can have the instrumentation in there that will allow us to have the kind of information -- sometimes days and sometimes weeks.
So I would say there are many things that are going to come into play as we move forward with a program to create safer drilling and production in the outer continental shelf.
Some will come sooner, some later.
So we will move forward with in terms of regulations.
Some we already issued and some of which we will issue.
There are some things that I think can actually be done sooner than later.
Including the enhanced instrumentation that both Tom and Stephen Chu have spoken about.
And the question really becomes how we ultimately get that done.
Some of it should come from the government.
In my view, that is one of the responsibilities that we have working as a government, to come up with a regimen that can basically make sure that those things are being put into place.
But industry is the one that is going to have to be paying.
My visits to -- and other blowout prevention facilities with Tom and Mark shut some time ago, I was struck by at but size of the blowout preventer.
I did not know much about BOP's before April 20.
Looking at the cost.
$50 Million, $90 million.
With a small percentage additional investment in those BOP's you can add the instrumentation, and in my view, the additional redundancies that could in fact make these BOP's much more fail-safe.
But to get that done is going to require the kind of collaboration that the panel has spoken about.
>> Let me ask if others have final comments on the panel before we move to the other panel.
>> One final note on R&D.
There actually is a mechanism within the federal government for coordination of R&D specific to oil spill response.
Like all programs, it has limited capabilities -- resources, however.
They have focused on other areas.
What they have done in this event is redirect their efforts and look at some of the subsea capabilities.
>> I think and other industries, there are proven mechanisms where we had a really strong industry and government cooperation.
For example -- there had been a long period of engagement.
That is true for nuclear power.
Ways that you can work -- mechanisms.
We just have to seek them out and put them into effect as quickly as we can.
Then I will come back to you, Mr. Secretary.
Let's go to Marsha.
>> I wanted to say that in some ways there was some serendipity as well in terms of the response.
Several of my top scientists were involved in a National Science Foundation-funded project to drill into the San Andreas Fault, a very deep hole, and have achieved through that project a lot of experience with drilling that they had a brought to this project and used that knowledge to help understand some of the challenges in the Macondo and intervention.
It was through that project.
I have come from USGS from Monterey Bay Research Institute that had a reputation with exploits with remotely operated vehicles in the very deep sea and I brought that experience as well so, I think there was a lot of serendipity, too.
>> Maybe just a footnote.
As we look at the systems moving forward, I think there are peripheral issues that have been dealt with from a regulatory and inspection stamp.
A lot of different platforms.
A lot of different flags under a lot of inspection regimes.
I would think this would also be the opportunity, as we try to look at long-term system approaches, to resolve some inconsistencies and get a standard inspection regime.
I know the Coast Guard is looking at their certificate of compliance and try to come up with a way to ensure the safety of the platforms that are out there.
>> I think -- first, let me comment.
I implored all the people in the government, the independent scientists in academia, people in the National Laboratories exemplified by Tom Hunter, who have stepped up to the plate.
There is a lot of expertise out there.
A lot of expertise in related areas out there that could be helpful.
I just want to offer the expertise in the Department of Energy as we move forward, how to work with industry, how to work with Interior to form the best set of not only regulations but habits and attitudes.
But we can go a long way toward preventing a lion's share.
And when they do, how do you correct them as quickly as possible.
>> Thank you.
For the final word on the panel, Secretary Salazar.
>> Two concluding comments.
To our own policy.
First, the oil and gas industry is a part of our comprehensive energy portfolio for this nation.
President Obama has long recognized that, I recognize that as Secretary of interior.
With my first meeting with Secretary Chu on this incident, what we talked about was the amount of oil and gas produced from the Gulf of Mexico and how important it is for the energy portfolio of this nation.
We believe that oil and gas will be a part of the nation's energy portfolio.
And that is a policy determination that the President and which I and Secretary Chu and members of the cabinet have made.
The second policy issue that has arisen because of the Macondo blowout is how do we produce the oil and gas in a matter that is safe and protective of the environment.
While the death of the Macondo well is a milestone for us, it is just a beginning chapter of many chapters yet to come in how we put together the kind of collaboration which Thom Hunter and Secretary Chu and others have spoken about.
So, we will be at this for some time.
This is not the kind of issue in which you wave a magic wand and have it done in a month or two.
This is a multiple-year process and it requires a kind of perseverance and dedication of time over a long period of time by both the government as well as by industry.
Another final point I want to make is just a thank you to everyone who had been involved in this first chapter.
It has been a long time to get to where we are today.
April 21, I sent the Deputy Secretary and -- to New Orleans, sensing that somehow this was an event that would further change our world relative to what we did with energy and oil and gas in the Gulf of Mexico.
Later that evening I sent an e-mail in response to information that David Hayes has sent back, to all of my staff at Interior saying we were in for an event that truly requires all of us and the Department of Interior to move forward with grace and purposeful determination.
Almost five months from the time the explosion occurred, I think it has not only been the Interior family that moved forward with that kind of purposeful determination but the whole feeling of the United States government.
We have been joined with that collaboration by industry.
I thank you all for being a part of the meeting which Secretary Chu and I pulled together to start on the way to the second chapter.
Thank you very much.
>> Thank you.
We are going to change panels and begin again very shortly.
>> If everyone could take their seats, please, we would like to get started.
Thank you very much.
I am the director of the Bureau of Oceanic energy regulation and enforcement and it is my pleasure and privilege to be moderating this second panel.
This event is very timely and lots of ways.
It is an opportunity for us to begin formally learning the lessons of the past and try to absorb what the teachings for the future are.
Today the topic is more containment than anything else, but I think that is going to be a general theme for us from now going forward.
I have become familiar with the containment issue actually quite recently.
I joined the department of the latter part of June.
And I have become most familiar in the context of it being one of the three legs that supports the moratorium on deep water drilling that Secretary Salazar imposed on July 12.
As I think all of you know, the three supports for that are drilling and workplace safety, spill containment, and spill response.
In connection with Secretary Salazar's decision on whether and under what circumstances to either lift or modify the moratorium, I have been learning more and more about containment issues than I thought I would ever know from a series of public forums throughout the country, a number of which focuses specifically on spill containment.
They began in early August and they ended last week.
And I think I, and we as an agency and the government, have been learning a tremendous amount about the containment issues in recent weeks and months.
There have been some major developments recently with respect to containment.
Secretary Salazar and others mentioned the formation of a Marine well containment corporations, four of the major oil companies formed six weeks ago in which they pledged to invest upwards of a billion dollars to make sure that we are better prepared on the containment front next time than we were this time.
My understanding is within the last few days there has been an agreement between a Group of the major oil companies and BP to make use of both the learning and equipment acquired in connection with the containment effort.
With the killing of the Macondo well, we have moved to a new stage.
Secretary Salazar, again, referred to the fact that we are in the process of developing new rules and regulations we hope are aimed adequately toward prevention and would prevent anything like the Deepwater Horizon explosion from ever happening again.
Those rules will be out in the very near future.
But we are now into intense lessons learned phase and that is why this is so timely.
I think we will be aided immeasurably by the numerous investigations and reviews currently ongoing.
Presidents Commission, National Academy of Engineering BU headed by Don Winter, as well as many others.
But one of the issues that it already bubbled to the service and we are addressing squarely today is the issue of the necessary collaboration between government and industry.
That the first person talked about from the perspective of government officials who are involved in an intimate way on a day-to-day basis over a period of five months on working through that collaboration.
The second panel is an opportunity for industry representatives and people who have had a relative -- relevant experience is to talk about their perspective on this collaboration issue and to continue the constructive dialogue that was begun during the first Panel on ways to institutionalize that collaboration, to improve the collaboration and making sure collaborative vehicle to not fall into this use over time so they are not available in a robust form at the time they are truly needed.
Let me introduce the most distinguished members of the panel joining me here.
To my immediate left is Andy Inglis, chief executive of exploration and production for BP and also a member of the board of directors and a member of its executive management team.
Sitting to my right is Rex Tillerson, chairman and chief executive officer of ExxonMobil.
He has been with ExxonMobil for the bulk of his career and has held a number of high executive positions.
To his right is Don Winter, former Secretary of Navy and professor of engineering practice at the University of Michigan.
He served as the 74th Secretary of Navy from January of 2006 until March of 2009.
Sitting to Andy's left is strategic director for strategic planning for land, water, and wildlife programs at the Environmental Defense fund.
Prior to that, he was senior adviser to the Obama presidential campaign on energy and environmental policy.
I am a very pleased that we have knowledgeable gentlemen here to join me.
They will each have limited presentation and if time permits there will be a discussion.
Let me start with Andy.
>> Thank you for the opportunity to join this discussion panel.
There is much to learn from the response to the Deepwater Horizon incident.
Today I want to talk specifically about BP's learning's on subsea containment and offered a few thoughts on how industry and government can move forward together.
There are equivalent learnings from the surface response and we are committed to work with boem to build these lessons into future spill response plans.
I want to start by saying how much everyone at BP has been saddened by this terrible accident that tragically cost the lives of 11 people and injured many others.
I deeply regret what happened and it affects on the families of those involved as well as the impact on the communities and the environment of the Gulf Coast states.
Containing the Macondo blow out presented a huge challenge.
BP and industry colleagues had spill response that conformed to regulatory requirements, however, no one could anticipate an event of this particular series of mechanical and human failures.
The Macondo well as at a water depth of 5,067 feet.
This is by no means the deepest water depth he drilled in the Gulf of Mexico but it did pose a unique set of logistical and operational challenges.
Temperatures are less than 40 degrees Fahrenheit.
Seafloor pressure is greater than 2,200 psi.
These pressures and temperatures -- the gas was formed into ice-like crystals known as hydrates which complicated efforts.
In addition, the state of the well of following that incident made access to the well very difficult.
The 5000-foot riser connecting the well to the Deepwater Horizon fell to the seabed and was then been breached in several locations.
The first talents in the early days of the response was to survey the status of the equipment and locate the source of the oil and gas flowing into the sea.
Given the inability to successfully close the blowout preventer and stop the flow, the challenge was to fully and safely contained Buffalo and minimize any leakage into the Gulf of Mexico, while relief wells were being drilled to kill the well.
As I reflect over the response the past 12 months I believe three factors were critical to the conclusion of this incredibly challenging endeavor.
These are innovation, know how, and expertise.
So, let me give you some examples.
First on innovation.
From the beginning, the relief wells were envisioned to be the final step in permanently killing the well.
It was critical that these wells were drilled safely and efficiently to intercept the Macondo well.
To put it into perspective it requires hitting a seven-inch target at a distance of 3 1/2 miles.
Using existing technology, open hole magnetic ranging, 17 ranging -- were performed to add to the position the relief well and I am pleased to say we hit the target of a first time.
Each ranging one required magnetic tools to be deployed wireline from the servers, a process that takes approximately 36 hours.
In total the ranging runs added over three weeks to the time it took to successfully intercept the well.
While the relief well was being drilled we developed a tool that allowed ranging well drilling, eliminating the need for time consuming deployment from the surface.
This technology was proven in the final intersect of the well.
This is just one example.
The challenge going forward is to ensure this type of technology -- subsea containment, continues beyond the immediacy of incident response.
Second, know how.
I am sure many people here today will remember the unsuccessful deployment of the containment dome early in the response of prepared this dome was around 20 feet square, three stories tall, and designed to contain the flow of the well.
Why was it unsuccessful?
The operational procedures, while detailed, did not fully contemplate hydrates inside the dome during the conditions.
We took that learning into account for the installation of the ceiling cap.
Ahead of its deployment we ran over 100 trials on sure to test the installation procedures with any scenario we could envision.
This time and attention lead for a successful installation of the cap and a ceiling of the well on July 15.
The challenge the way forward is to make sure the know how embodied in these and other detailed procedures developed during the response is not lost.
In the early days following the incident, it became apparent that it would be extremely difficult for any one company to address the challenge.
Therefore we welcome the offers of expertise from other deep water operators and service companies worldwide.
Under the direction of the National incident commander, U.S. Coast Guard, boem, and the government's science team played a particular role of reviewing each step of the subsea containment effort.
I would like to add knowledge of the contribution they made in response to this incident.
The challenge going forward is to maintain this collaboration between industry and government.
It is our hope that the subsea expertise developed indent now Laboratories during this response will be expanded and available if needed in the future.
So, given all that we've learned, what exists today for subsea containment and includes key elements that were not in place on April 20.
We now have an inventory of immediately deployable open and closed containment systems, approve and add depth with associated procedures.
Proven systems for processing and transporting contained oil, freestanding risers and flexible subsidy for no lines.
This includes equipment to reduce downtime in the event of a hurricane.
Demonstrated methods to mitigate hydrate formation.
Techniques for System diagnostics an advance surveillance, including, for instance, Digital radiology at death brought by National laboratories.
Plans and organizational models for immediate stand up of dedicated source containments.
And technologies and procedures to drill relief wells in deep water.
Above all else, an enormous amount of experience in using all of the above.
So, what are the next steps?
The nature of the incident, including the scope, schedule, and complexity, has clearly driven significant advances in the responsibility for the industry as a whole.
These advances were made possible by utilizing the talents of the very best people, be they from BP, industry, or government.
From the onset we committed we would make public our lessons learned in subsea containment and service response.
We are also determined to preserve of for the industry the capability we developed.
To this end, as Director browmwich said, we signed an agreement with wecc, containment company, to bring our equipment, no how, and expertise to this venture.
We believe mwcc will build upon the learning as I have identified today.
First, in the area of innovation, it is critical mwcc has a robust R&D program that ensured its equipment and capability are cutting edge.
Conducting this research with the national laboratories, would also help build expertise.
Second, in the area of know how, we must have robust operating procedures and train personnel through real world drills' of subsea containment.
Finally, in the area of expertise, it must -- core capabilities and able to draw upon established lists of the best minds in the industry and government when needed.
Thank you for the opportunity to speak today.
This is an important forum, and as I said, it is a great opportunity for BP to bring the learnings that we have learned over the last five months to bear for the benefit of all.
>> T very much -- Thank you very much.
>> Thank you, director.
I think have others noted, this forum provides a welcome opportunities for meters from the business, industry, and government, to discuss what we have learned from the tragedy in the Gulf of Mexico.
Specifically about the role of the government, the role of the industry, in places where public and private sector might work together to further enhance our distinct capabilities in oil spill prevention and emergency response.
In meeting these goals government and industry each had an important role to play.
By respecting each other's strengths and unique capabilities we can further improve say aye performance, operational integrity, and find new and effective ways to work together in the event of a major incident.
Let me start by making a few comments about the role of government in an edgy sector Emergency preparedness and response.
First and foremost, government plays a critical role in helping prevent accidents by maintaining competent, stable oversight, and consistent approach for all competitors participating in energy development in the United States.
This role, inconsistently for single laws and regulations, send a clear message to the government's expectations are all participants and helps hold the industry accountable.
As the Deepwater Horizon incident unfold we are also reminded of -- another important function that must be played by the federal government in its role as on scene commander of the Joint unified command.
Ensuring the responsible and timely coordination among the various local, state, and federal government entities playing a role in incident response, and assisting the responsible parties in largely required Well Control and clean-up equipment.
U.S. energy industry respect his role of government, as evidenced by the rapid and comprehensive effort to support the government's stewardship of the incident response.
And responds that must be coordinated on multiple fronts to address, in this case, regaining control and integrity at the well, addressing oil released at the source, oil that finally reaches the surface and will that old elite -- the beach.
I believe history will show that one of the most significant learnings of the incident was comprehensive and effective use of dispersants keeping some 4 million barrels of crude oil from reaching the beaches of Louisiana, Mississippi, Alabama, and Florida.
In that regard -- and it has been mentioned the importance of R&D, ExxonMobil has maintained an oil spill research program for four years, and while some may call a modest add a few million dollars, it is our continuity and understanding of the sport since that lead us to recommend direct injection of dispersants at the source and the subsea early in the spill.
The government's approval of service dispersants on large scale, including first-time use of subsea dispersants in my view critical enabling natural processes to biodegrade the oil off shore.
These processes have proven effective for thousands of years in the case of natural oil seeps.
The benefits of lowering the impacts to marches, marine and bird wild life, as well as lowering the risk of work activities on the service weighed against the concern and risks associated with a large scale subsea in Jackson in the area, is an area that I think additional study is warranted and will be useful in considering future such applications.
Just as the U.S. industry respects the role the government plays an oil spill response, so, too, government should encourage and support the strengths of the industry and utilize our unique capabilities and incident prevention and response.
Prevention is, of course, the best response.
By upholding high standards of safety and operation integrity, the oil and gas industry has safely and successfully drilled more than 14,000 feet water wells around the world.
Not a new activity for us.
When you probably design of the wells with a range of risk anticipated, when you follow established procedures, when you build and follow layers are redundancy, properly inspect and maintain equipment, properly trained operators, when you conduct testing drills and focus on safe operations and risk-management, tragic accidents like that what occurred in the Gulf of Mexico simply do not occur.
The industry's dedication to operational integrity has made America's energy industry one of the most important effect of contributors to the economy, job creation, and U.S. competitiveness around the world.
Further collaborative approaches in which the industry can ensure best practices around risk-management are available to all in the industry and that they are put to the effective use by all who participate in the industry is area for further consideration, and that consideration is underway in the industry at this time.
But all the precautions our industry invests and must be backed up by preparedness.
And I believe the Deepwater Horizon incident made clear there was a need to enhance this preparedness the event of a major incident.
Along with the Chevron, ConocoPhillips, and Shell we committed technology expertise and financial strength to unprecedented initiative.
We are designing and developing in the rain will contain a system for the deep water Gulf of Mexico.
ExxonMobil is leading this effort with strong support from our partner companies.
We accomplished a great deal in the weeks we first announced our plans to build this new containment system.
Recent milestones include the formation of a project team of approximately 100 engineers and project management personnel from all four of the companies.
We also completed conceptual engineering and not already procuring additional equipment to improve current capabilities.
We are forming a Marine well contain a company to operate and maintain this equipment, with membership open to all companies operating in the Gulf of Mexico.
We already received several expressions of interest and have information sessions planned for potential members over the next two weeks.
The key focus for the containment system is flexibility and adaptability.
We want to be able to respond to a wide range of potential scenario said to be more adepts up to attend thousand feet, adverse weather conditions, and low range exceeding the size and scope of the Deepwater Horizon spill.
We want to ensure the system can be deployed rapidly.
Our goal is to begin mobilization within 24 hours and be fully operational within days, to weeks.
We will also put a focus on training and accountability for readiness.
We will undergo regular tests to ensure prepared as a personnel and put in place integrity management systems to maintain a continuous state of operational readiness.
In the aftermath of the Deepwater Horizon incident, government and industry have an opportunity to reaffirm the distinct mutually reinforcing roles of the public and private sector in will spill litigation and response.
In fact, I think this is already underway.
To the joint industry tax forces and multiple conversation with the part of Interior, Energy, Presidential Commission and other authorities, our industry has engaged government in a comprehensive and constructive way.
It is in this spirit I would like to offer additional thoughts on other areas of potential further research and study that could be considered between the private sector and doe's system of world class and national laboratories.
The building on what is already a long history of technology collaboration between the industry and the National lab.
Not like we have to go introduce ourselves.
Research into dispersant modeling, both for subsea application as well as serve this spring.
Methods to improve remote sensing satellites to quickly define the extent, a fitness, and movement of service oil to optimize utilization of mechanical Service response resources.
ExxonMobil exports of following up on his thoughts with additional discussions with the government in the near future.
As we consider these and other areas of potential collaboration, several fund of the questions must be addressed to ensure mutual objectives are achieved.
They include the following recognizing distinct roles, capabilities, and experience of government and industry.
How do we ensure collaboration is effected and achieves the affected -- benefits without the unintended consequences?
How is the separation with the role of government regulator and the role of operator best maintained?
Of course, what are the lessons learned from Macondo.
This collaboration enhance timely descended -- decision making or are there alternative approaches that could be more effective?
I believe that if we maintain a spirit of cooperation and dialogue we can successfully address these questions and identify new opportunities to enhance oil spill response capabilities.
The American be but have shown their support for deep water drilling, but they expected to be done in a safe, see here, environmentally responsible way.
Our industry recognizes this and agree with it.
The American people support development because they understand it is important.
The Gulf of Mexico accounts for about one-quarter of the U.S. oil production for its oil and gas activity in the Gulf including deep water, hundreds of both large and small businesses of all the approximately 170,000 direct jobs.
This is an industry is essential to our national economic and energy security.
With continued innovation by industry, sound policies by the government, and a commitment to dialogue and cooperation, we can continue to develop American Deep Water Resources safely and work together to support economic growth and response will stewardship of the environment.
I assure you as an industry, that is our commitment.
>> Thank you very much, Rex, for your thoughtful comments.
>> Don Winter?
>> Secretary Salazar, Secretary Chu, thank you for the opportunity to join you for this important meeting.
I am pleased to provide my perspective on the challenges of the developing contain the capabilities for any future deep water blowout.
Before I do so, however, I would like to clarify -- while I am the chair of the National Academy's committee investigating the Deepwater Horizon Macondo well blowout, I must note the committee is still in the process of collecting data.
Our interim report will not be issued until late October, after it has gone through the academy's peer review process.
Furthermore, that report and the final report due next June will be focused on the causes of the blowout and means to prevent future incidents, and not containment or other response efforts.
Consequently, my comments this afternoon are mine alone and to not be construed as those of the committee or the National Academy.
That said, I must note that in examining the Deepwater Horizon incident add -- After my tenure at the Secretary of Navy -- maybe I am struck by the many parallels of the challenges faced but off shore oral and gas industry and government agencies after the Deepwater Horizon blow out and the challenges faced by the U.S. Navy after the loss of the submarine thresher in April of 1963.
The loss of the Thresher with 129 souls on board was devastating to the Navy.
Even more so, given she was the first of a new class of submarines with the most modern hull and equipment.
The Navy's response to the Thresher was the program that established a very high standards for the design, manufacture, and maintenance of the submarines.
It also established equally high standards for those personnel involved in sub-safe activities.
Those standards were codified in the criteria issued in December of 1963, less than one year after the loss.
Since then, no sub-safe certified submarine has been lost.
A far cry from the previous 50 years when, on average, a submarine was lost every three years.
Notwithstanding the significant improvements in submarine save the attributable to the sub-safe program.
The Navy also made significant investments in submarines arrival, a state, and rescue.
In that regard, some rival of the submarine crew had been enhanced by investments in training and equipment.
Similarly, new equipment and procedures have been developed to enable personnel to escape from submarines disabled in shallow waters.
Perhaps most notable with regard to the day's discussions are large-scale rescue capabilities that have been developed, including equipment, procedures, and logistics, all enabled by extensive training, full-scale exercises, and international cooperation.
I should add a level of international cooperation took on greater emphasis after the loss of the Russian submarine the Kursk in 2000.
Since then within the formation of the international submarine escape and rescue liaison organization, located in Virginia and staffed by NATO personnel.
The value was seen in the successful rescue of the Russian submarine in August of 2005, enabled by a British rov, supported by U.S. and Canadian personnel.
I would like to suggest there multiple aspects of our Navy's response to the loss of pressure that may be relevant to today's challenge in aftermath of the Deepwater Horizon Macondo well blowout.
I would note in particular 5 points.
The first, the sub-safe program was established as a focused effort to ensure a submarine could die in the stately and resurface.
It is based on clear, concise, and not negotiable requirements for both material and personnel.
The expectations of personal responsibility and accountability are underscored at annual training sessions in which sub-safe personnel listen to a recording of the Thresher being crushed and a reminder of the lives being lost at that precise moment in time.
Two, rescue efforts of the result of extensive pre planning to enable response times targeted at less than 72 hours.
The pre-stage equipment is designed to work with standardized interfaces for all submarines and could accommodate the uncertainties that could accompany a submarine in distress such as large roll or pitch angles.
All logistics and operations are preplanned and evaluated through extensive full-scale exercises.
Rescue efforts are supported by multiple navies, coast guards, and industry.
The contractors come principally from the offshore oil and gas industry.
For example, Phoenix International supports the U.S. Navy and in 2005, mobilized personal -- personnel and equipment for a rescue in Louisiana.
Other assets deployed including a surveyor that was under contract to shell at the time.
Four, expensive training efforts and full-scale exercises have proven to be invaluable, not only in holding key skills but also in developing confidence in multinational operations.
Fortuitously, just two months before the incident, NATO conducted a major submarine rescue exercise in the Mediterranean.
Participants in this exercise included Russian, U.S., and U.K. navies as well as U.S. Navy contractor Phoenix International.
No. 5, operational control of rescue event is established using a preplanned Task Team structure under the theater commander.
Technical advice is saw from and provided from major except -- many international sources, facilitate a by the international liaison organization.
Now, I fully expect the development of the containment response capability for deep water well blowouts will have many unique elements, resulting from the nature of such events and the associated technologies.
Nonetheless, I believe the history of submarine rescue affords many lessons learned that should be examined closely by those charged with the development -- Development of blowout response program.
In particular, three basic precepts that I believe have been well established by the submarine community and which warrant particular consideration.
First of all, the value of broad based, operation, including multinationals government and industrial efforts to develop and operate large-scale response is.
Two, timely response that is enabled by extensive advance preparation.
3, the need for continuing training and full-scale exercises.
Again, I am pleased to be here today to engage in this most and pour a topic, and I am looking forward to the panel discussion.
>> Thank you very, very much.
Really appreciate it.
>> Let me start by thanking you, Mr. Secretary, for convening us.
I think this is an enormously helpful opportunity and I might even take advantage of your hospitality by suggesting that a year from now you reconvene us or another group and see how we are doing at making progress toward some of the many recommendations we have heard today.
I want to suggest a framework for thinking about the institutional changes that we need to see in the future.
First, it is a virtual certainty that offshore drilling will become more technically complex and challenging.
The oil industry will be moving back into the Gulf of Mexico at some point, into the deeper waters, and will continue into ever deeper waters with ever more challenging conditions in which to deal.
And more challenging regulatory requirements as well.
It is likely there will be more blowouts in the future.
We could only hope and pray and plan to ensure that the future blowouts in not reach the scale of the tragic BP blowout of this past April.
It is also likely these blowouts' will not be identical to the Macondo Wells situation, so we need exactly the kind of ongoing collaboration that has been described, and we must guard against becoming a complacent -- complacent, that we have learned all there is to learn in looking forward to the possibility of future events of this time -- time.
Two concerns going forward.
The first is Gulf Coast restoration.
That is not the topic of today's discussion so I will touch on a very briefly.
A loss of thousands of square miles of Louisiana coastal wetlands has been a process that has been ongoing since well before the blowout.
We need as a nation to respond to that tragedy with a comprehensive effort, one in which the oil industry joined closely with government and stakeholders in designing a system, much as we're seeking to do in the Everglades to reap from the Mississippi River system so that we can return the river, written at the river to the age of functions of building and sustaining new land.
The second concern I had is, again, we must be realistic about our future in dealing with these kinds of event.
I was impressed by the amount -- as I think all onlookers were, how the government and industry did improvise.
Yes, it took longer than all of us would have liked.
Many of us in this room.
But I think we have to be realistic about the fact that over time, the people who learned those lessons will not necessarily be the people standing guard and on the front lines in the event of another catastrophic blow out, should it occur in the future.
It is critically important that we stay focused in putting in place not only the regulatory mechanisms but the sorts of institutional systems that can ensure that we maximize our readiness for future responses for these kinds of accidents.
I agree we need to formalize this kind of collaboration and I think the good news there are a number of examples where highly technical, high-risk kinds of operations can be -- have been addressed successfully by industry and government in a collaborative fashion.
I want to name three of them, just as examples.
They all actually deal with different aspects of nuclear issues.
The first is the nuclear waste Technical Review Board, created in the 1970 -- 1987 Nuclear Waste Policy Amendments Act.
Members of the TRB are completely independent.
It is a peer review process and a panel of advisers -- advises Secretary of Energy and the Congress simultaneously in respect to the management of the government spent fuel and highly radioactive waste management program.
It includes, in other words, both civilian and nuclear-weapons-related government high-level radioactive waste.
The recommendations are taken very seriously.
Their expertise is highly regarded.
And their ongoing collaboration and interaction with not only the Department of energy experts and program directors but also with the other parts of the technical community, I think is a wonderful example of the kinds of institutional location of this collaboration that will work.
The second example comes from a weapons program itself.
This is an example of the Defense Nuclear Facilities Safety board.
I am sure Secretary Chu has had dealings with dnfsb.
For nearly 50 years the Department of Energy and its predecessor agencies operated the defense nuclear weapons complex about any independent external oversight.
By 1980, the consequences have become painfully obvious what widespread contamination, worker exposures, etc..
It was established in 1988 as an independent oversight organization within the executive branch charged with providing advice and recommendations to the Secretary of Energy to ensure public health and safety protection.
In all the years since 1988, it has been making technical recommendations to ensure a safe in an ongoing close monitoring of the weapons complex.
No Secretary of Energy has ever rejected a single one of their recommendations.
It is a remarkable safety record by a group of people who change overtime, a group of experts, who have gained so much credibility as an organization that rarely or ever second-guess.
The Nuclear Regulatory Commission's use of a classic Advisory committee.
The advisory committee of reactor safety.
I will just read one sentence here about who they are.
Membership currently includes expertise in nuclear engineering, risk assessment, chemistry, facility operations, management, severe accident, phenomenon, material science and alert -- metallurgy, the thermal hydraulic and heat transfer.
It goes on and on.
In short, with all the complexity of our commercial nuclear power industry, we have in place a highly regarded body that works very closely and collaborative live with both industry and the government in ensuring ongoing safety of our nation's fleet of commercial nuclear power plants.
Now, all members of these three bodies that I mentioned are independent credible scientists and leaders in their field -- engineers and people who have gained a reputation as in their own fields, for fair minded and straightforward intelligent thinking about how the government ought to deal with these very risky enterprises.
The collaborative efforts of the industry, in the case of oil well safety, should go forward, and they are welcome, but not so vision.
I agree with Admiral Allen's pulled up, agreeing there must be competency within but U.S. government to achieve count -- accountability, and I believe the way to achieve that at least in part is to have an ongoing institutionalize collaboration, not occasional consultation.
Keeping up with the industry's technological advances will continue to be a key challenge for government.
But again, the good news here is we have done that in these other sectors where worker, public, and environmental health and safety are at stake.
The final point would be touching on something else Admiral mention Allen repeatedly throughout this process.
Often in the midst of crisis we don't give enough thought to the importance they colder communications and engagement.
Admiral Allen mentioned the importance of doing this especially within or among government agencies.
I would second that but add to it of the communication with the broader stakeholder and public population becomes a critical part of managing a crisis like this, as all of our federal representatives here today well understand.
So, the lessons learned from that stakeholder engagements and the involvement of stakeholders and communications with stakeholders I would suggest should be something -- those lessons of to be captured just as well as the response lessons themselves should be captured and preserved as we go forward and planning for the future response capability.
>> Thank you very much for a very thoughtful presentation but I want to thank all four panelists for their comments.
We do have a few minutes left.
Would that time, I would like to ask for the thoughts of the panelists on in this central collaboration issue.
I think all four of you focused on it in various ways.
I think Andy teed it up in a way of presenting the challenge of how to obtain a hard one collaboration that was achieved on the fly in dealing with the Macondo below out.
I want to ask all of the panelists starting with Andy, who has the most inside knowledge.
How do you preserve the collaboration?
It is difficult as an institutional matter to take something Ford's in crisis and continues sufficient elements of it that it remains a vibrant and a force.
Interested in your thoughts on how we go about starting to think about that and doing that.
>> I think we have learned something from the last five months which helps us guide the future.
I sort of come back to the themes I have laid out.
I think it is definitely an area of innovation with the collaboration can live.
I would support it very clear program of R&D between both the industry and government labs.
That would create a much deeper knowledge base.
I think that is a starting place.
And that can be expanded from where we are today.
I think the second thing is, it has to go beyond the actual innovation in the lab to real know how that can be deployed.
I think that is one of the things we could really learn in the incident, is the expertise itself has to go with a deep knowledge in the industry.
I think there is more we can do there.
You have to go beyond Research, beyond deployment.
And I think this -- between key people in industry and government would help create that institutional knowledge and doing that in a systemic way.
And then, I think finally, as we start to think about how the industry would respond in the future, I think being able to draw on the expert knowledge created through this response -- but it has to live beyond today.
As you said, the half life now is quite sure.
Credit a huge amount of knowledge, and particular between my team and Tom's team.
How do we keep it going?
I think that is the real challenge.
It has to be about doing real things.
It sort of brings you back to drills, real life experiences.
>> Rex, what are your thoughts?
How do you institutionalize collaboration that has grown up recently?
How do you drive it forward so it doesn't just hang out there on use the?
>> With respect to what that collaboration brought in the incident response, I am not in a good position to comment because we were not in the room, so to speak, during all that collaboration.
That is why one of the questions I posed was, I know it was there.
To what extent it was helpful in decision making.
I think it is something that has to be examined.
I know there are a number of learnings we want to extract and we have not had the opportunity to extract those yet for the interactive process.
I do think, as I commented, it is very important that we continue to have a full dialogue around what is the decision making process when you are in the midst of an incident like this.
How do you want to manage the risk management elements of it?
Because, as I look on the incidents, I am going to take exception to a couple of comments made -- I do not mean to step on toes.
But from where I said, a few hundred miles away watching the statement that required trial and error response, I don't agree with.
The statement that we had a problem that had no solution, I don't agree with.
Most of all the tools that were brought to bear ultimately to solve this problem with things already had and do how to do, the pieces were there but we had to assemble them in the right way to respond.
The problem was, here are the tools and how we use them.
The sequence with which a response occurred was a risk management sequence.
There were several ways to respond to what was going on.
And from my perspective, it.
That the lowest risk, lowest chances of success options were chosen first and we went in sequence to the higher risk, higher risk -- chances of success in the end.
What was done to contain, it is possible it could have been done in the beginning.
I don't know but that is all we're interested in knowing more about, a lot of the details of what were in people's minds when they decided to take certain steps as opposed to certain accident -- actions in different sequences that could lead to a different outcome.
That is the collaboration peace -- that is why I posed as an open question because I don't know but we are very interested to understand what is the dialogue.
One of this is over I think it will be very helpful for the industry to be able to convene what the science team and others directly engaged and go through a table top exercise of what was the information people were looking at, what were the judgments they were making.
Because I know in the and they were always a risk management decisions.
We did not do something because of it failed and Mike -- might make the situation worse.
If we did do it and it did not fail, we would have a much better outcome.
That is what we as an industry do it all the time.
We deal with the information -- some of which we know, some of which we don't know, but we managed that every time we drill an exploration well.
So, we are quite comfortable dealing with ranges of uncertainties, taking decisions and actions with a contingency plan in the event it does not work.
It was not evident to me that process was working very well.
And it is an important question because there is it going to be in any major incidents, this collaboration.
It is dictated by law, and dictated by the sponsor command restriction and we have to get better at that.
>> Tom, what are your thoughts on the government of spirits and how to institutionalize the collaboration between the private sector and government entities?
>> I would assert that you learn how to collaborate by working at it on a continuing basis.
Referencing the submarine rescue community.
We do have a standing working group that includes representatives from 40 countries and various industry representatives as well.
But I think the most learning comes actually from a full-scale exercises.
That is when you learn where the scenes are, where you learn to confront the problems that occurred and where you decide whether or not or how you are going to expose collaboration issues.
>> Your thoughts on that question?
>> Just very briefly.
I discussed several models.
One where you use an advisory committee and another where you create an entity actually within the executive branch that is totally independent of any particular department but works closely with one or more departments.
A third model is an entity that can report to one or more Cabinet members and to the Congress and simultaneously.
So, there are variations on these themes.
I think the thing we perhaps have not discussed sufficiently that I would like to emphasize is the research and development component of this.
As a secretary Chu, I think, was suggesting in his comments when a talked-about critical points in the equipment that represent real opportunity is for bringing even current technology to bear to solve certain problems of detection and information and real-time data sharing, etcetera.
Emphasizes the point that government can play a very and poor and roll and regulation can do some of it, but not all of it.
Government can play an important role the finding a research and development agenda.
What are the things we really need to -- we will never have the money to go and study every single thing all the time, nor should we.
We need to be able to define those research and development priorities.
I think that is the key process.
Doe has for just a few years now have a cooperative R&D program with the industry.
But much of the focus has been on developing new technologies to actually enhance the efficiency and effectiveness of drilling, particularly in more challenging environment.
I think that program can easily be redirected toward not necessarily abandoning that work, but a new emphasis placed on a research and development agenda that focuses on Emergency response of a blowout prevention equipment needs, and the formulation of a research agenda that more than one agency can hopefully collaborate on in carrying forward and use their budgets to fund.
>> Thanks very much.
I have learned that he is rewarded that brings in a panel discussion on time or close to on time.
I would like to wrap things up right now Bridge I want to express my thanks and appreciation to all the members of the panel.
I think this is the first in what I hope and think will be an ongoing series of discussions to make full use of all of the lessons that have been learned from the event that people have been through over the last five months.
We have heard some very interesting and provocative suggestions about collaboration on R&D, personnel between industry and government and back again, as well as a number of very specific institutional episodes in our history where there has been a successful collaboration.
So, I want to thank all of the panelists for their contributions and I want to thank everyone here and Secretary Salazar, Deputy Secretary Hayes, Secretary Chu, Tom Hunter and Thad Allen for coming together and giving us the benefit of their thoughts.
Things will come out as studies and investigations continue.
To provide some information you are asking for as well as what many of us are interested in making sure we can make maximum use of what we have been through.
Thank you again.
Thank you very much.