Meeting 3, Attachments #21-28

8/8/2019 Meeting 3, Attachments #21-28

1/106

National Com mission on theBP DEEPWATER HORIZON OIL SPILLAND OFFSHORE DRILLING

Attachment 21Written Statement of Mary Landrieu

U .S. S enator, Lo uis iana


2/106

Statement by Senator Mary LandrieuCoastal Restoration and Protection -Lon~-Term CrisisFor mo re than a century, the federal governm ent has misman agedcritical water-resource projects, placing delicate ecosystem s like theM ississippi River Delta at extrem e risk of comp lete and utter collapse.In the decades since o ur federal governm ent first pursued thechannelization of the M ississippi River to prom ote trade and com m erce,the wo rlds seven th-largest delta has been largely deprived ofnourishment from sediments carried by the river, which drains roughlytwo-thirds of the co ntinental United States. Instead of rebu ilding thedelta, these sedim ents now a re redirected and carried out to the Gu lf ofM exico, where they are dispersed.The effect on the de lta is a con stant and deb ili tating land loss. Thisstrangulation of this natural process is com pounded by the ravages o fcoastal erosion and further aggravated by regular storms and hu rricanesthat batter barrier islands a nd co astal plains.Sustainability of life in the delta is under dire threat in coastalLouisiana--a rapidly erodin~ landscape that loses 25 to 35 squaremiles of wetlands each year. At the current rate of land loss, an areathe size of Rhode Island will be underwater by 2050. We havealready lost an area the size of Delaware in the last 50 years.An d w ith the loss of this unique area goes ou r nations only true workingenergy coast--an econom ic engine that contributes 90 percent ofA me rica s offshore energy produc tion, 30 percent of the nations overalloil and gas supply, and 30 percent of the seafood produced in the lower48 states. Ou r working energy co ast also caters to one of the mostuniqu e and vibrant hosp itality tourism indu stries in the na tion. It is also


3/106

hom e to more than 2.5 million citizens w ho operate the great portsystem s of the M ississippi.A t the heart , of this special coast is a m assive river system stretchingnearly 2,500 miles from the Great Plains to the G ulf of M exico. TheM ississippi River has the third-largest drainage basin in the w orld,exceeded only by the watersheds of the A m azon River and the CongoRiver.Sitting at the m outh of this vast river system is m y hom e of NewO rleans--a city that was alm ost lost in 2005 and is still strugg ling torecover from Hun icane Katrina--one of the most devastating m an-mad edisasters in history.W hile it bears great strategic and cultural im portance to the nation, NewO rleans is not the on ly vulnerable area that requires protection. A crossthe entire Louisiana coast, from east to we st, cit ies such a s Lak e Ch arles(population 71,757), Houm a (population 32,393), Ne w Iberia(population 32,623), Thibod eaux (pop ulation 14,431) and La fayette(population 110,257) are threatened as w ell .A s we have seen du ring this cunent oil spill , these cit ies form thebackbone of our na tions fisheries, port system, and o ffshore oil and gasindustry.All of these tremendou s assets are at risk of being w iped off the map .W ith. the persistent and rapid loss of land in Lou isiana, com mu nities arem ore vulnerable to the storm su rge of ma ssive storms and the inevitableimpacts of sea-level rise.The Solution: Justice for the GulfThere is a solution; one that is do-able and a ffordable.

2


4/106

To h elp this region un do decad es of coastal loss and respond to theeffects of the curren t oil spill, it is critical to secure a perm anen t, robustand im m ediate source of revenue for coastal restoration.This can be ach ieved in two w ays, both of which are included in theRE SPO ND Ac t that I re-introduced in August:

Accelerate the D om enici-Landrieu Gulf of Mexico En ergySecuri ty A ct of 2006, which final ly dedicated 37.5% ofnew offshore oil and ga s revenues to coa stal protectionand restoration in the four G ulf energy-producing states.Inland states have sha red 50% of the revenues generatedby d rill ing on fed eral lands since 1 920. H istorically theG ulf states ca rried all of the risk asso ciated w ith d rill ingwithout the reward. Under the RES PO ND Act , the f low ofrevenue w ould begin imm ediately instead of 2017.

2. No less than 80 % o f the civil and criminal penaltiescharged to BP under the Clean W ater Ac t should bedirected to the Gulf Coast for long-term e conom ic andenvironme ntal recovery. The m oney should be investedwh ere the injury was suffered - along the Gulf Coast.

In addition to a perm anent source of funding, we m ust energize thesluggish and il l-equipped federal bureaucracy and establish a new m oreeffective gov ernance m odel for implem enting coastal protection andrestoration.The current federal process for addressing coastal protection a ndrestoration is w oefully inadequa te and p ainfully slow, held up by theinterminable process of planning, irregular and unpredictable F ederalauthorizations, mind-num bing regulations and insufficient funding.


5/106

W e need a new approach that wil l expedite coastal protect ion andrestoration in L ouisiana, and the G ulf Coast, by establishing agove rning entity or institute with this singular focus.I applaud the recommendations that Secretary Ray Mabus ismaking to the President today. In large measure, theserecommendations follow the suggestions of the stakeholders inthe region who are adamantly focused on protecting ourcoastal areas.Spec ifically, this report will recom m end:

Con gressional action to dedicate a significant am ount of anyobtained civil Clean W ater Act penalties incurred to the Gu lfCoasts recovery.Dedicat ion of a p ortion of any obtained C lean W ater Actcivil penalties d irectly to the G ulf States.Con gressional action to create a Gulf Coast Recov eryCouncil to m anage the dedicated Clean W ater A ct funds.The C ounc il should coo rdinate closely with the ongoingNatural Resource Dam age A ssessment (NR DA ) proceedingsand sho uld include representatives from the federal and stategovernm ents, and tribal organizations.Imm ediate appointm ent of a single federal lead for ecosystemrestoration.Imm ediate creat ion of an adm inistrat ively established Gu lfCoast Ecosystem R estorat ion Task F orce to manage thetransi tion from response to recovery. The Task F orce wo uldbe an ad visory body that wou ld include representatives fromfederal, state, and tribal organizations and w ould act in directcoordination w ith the N RD A process. I t would also act to

4


6/106

coordinate non-N RD A ecosystem funds an d projects. I f theRecovery Counci l is establ ished by Congress the E cosystemRestoration Task Force cou ld be mo dified or dissolved.Continuation of public hea l th efforts .Continuation of the important economic recovery work.Suppo~ to nonprofit organizations working on the GulfCoast .

Most of these recommendations will require Congressionalaction and I hope my colleagues will join me in fighting forthese vital and necessary measures to put our coastal areas inbetter condition.Conclusion - While a long-term plan is essential~ we cannotrestore the Gulf Coast until we get people back to work.Apri l 19th,America consum ed abou t 20 million barrels of oil eachday. Now , more than five months removed from the D eepwaterHo rizon explosion, our nation sti ll consum es 20 m illion ban els ofoil a dayThank s in large mea sure to a robust oil and gas industry in theGu lf, the U.S. produc es abou t 5 million ban els of oil here. Weproduce another 3 million barrels w orth ofbiofuels.While more needs to be done to reduce our dependence on oil -and to transition to cleaner, renewable forms of energy~ thefact remains that America will need oil well into theforeseeable future.

This point is crit ical and o ne this Com mission should takeleadership over. This coun try need oil and gas to run o ur5


7/106

econom y, but not one person in this Ad ministration seem s focusedon the future of domestic oil and gas de velopm ent.This A dm inistration co ntinues to serve as a road block,threatening the viable future of the indu stry.Here is just one exam ple of the Ad m inistrat ions seem ing lack ofsuppo rt for the quick return of the industry. Acco rding to theFed eral register notice for this mee ting:

"The President directed that the Commission be establishedto examine the relevant facts and circumstances concerningthe root cause of the BP Deepwater Horizon explosion, fire,and oil spill and to develop options to guard against, andmitigate the impact of any spill associated with offshoredrilling in the future."

The re is a key piece m issing to this directive - the fact thatour ec,ono m y is l iterally driven by oil and gas a nd w ill continueas such for the foreseeable future. There is no me ntion of theimp ortance this industry and the v ital jobs i t supplies througho utour country. As such, I hope this Com m ission can help theA dm inistration focus on this vital piece to our secure energy andeconom ic future.

For decades, Louisiana and the 330,000 people who w ork in the oi land g as industry have delivered this fuel to our nation.Th at energy fue ls not just our cars, but a significant portion of ournational economy.Bu t unfortunately, tens of thousan ds of jobs are at risk due to thisAdministrations ill-conceived and borderline reckless six-monthdeepw ater dril ling m oratorium .

6


8/106

O f course, those of us fam iliar with the industry kn ow that there isalso a de facto mo ratorium on shallow w ater dril ling as we ll. Youm ay be surprised to know thatbefore the BP spill, the M ineralM anagem ent Services (MM S) approved an average of three to sixshallow water permits per week, or 12 to 24 permits on average perm onth. In contrast, s ince M ay, the B ureau of O cean En ergyM anagem ent (BO EM ) has only issued seven shal low w ater permitsfor new we lls.This de facto moratorium threatens the v iability of that entireindustry. -These com panies cannot hold on to an em pty promisethat new perm its will be issued. They need action to keepem ployees on their payrolls or be forced to lay-off workers. Andfor each day new perm its are not issued, the econom ic crisiscontinues to grow .

I bring up these m oratoria only to m ake this very critical point: along-term plan to save our co ast can only be effective with a shortterm strategy to save the thousands of jobs w hich are at grave risk.W hat good is saving our environm ent to only let the econom ycrumble around it?The Gulf Coast needs quick and decisive action to lift themoratorium to save our businesses and our economy. Thataction coupled with a secure long-term plan to restore ourcoast is the only way to save our way of life long into thefuture.

7


9/106


Attachment 22Written Statement of Haley Barbour

Governor of Mississippi


10/106

Testimony of Governor H aley Barbour to the National Com mission on theBP Deepwater Horizon Oil Spill and Offshore DrillingSeptember 28, 2010W hile the total impa ct of this summ ers oil spill on the Gu lf of Mexicoecosystem may not be k nown for several years from now , there is much w ealready know about the Gulf and how to make it better, bothenvironme ntally and econom ically, for Mississippi and the region.Hope fully, scientists will find the spill has had a far smaller impact on theGulf ecosystem than m ost feared and a far, far smaller impact than whatsbeen reported by the cable new s channels, as the daily sensational reportsliterally scared tourists away from Gu lf vacation plans this sum me r. But thefact is, while the ecological impact seems sm all for now , we just wont knowthe total imp act until all the data is in.This doesnt mean we need to wait on the studies to conclude before we takeaction. Theres mu ch we know needs doing in the Gulf region, and as wemo ve forward in the aftermath of the o il spill into restoration and im provingthe way w e interface with the Gulf of M exico, there are several areas thatdeserve ou r attention - hurricane protection, env ironmental restoration,fisheries improvem ents, comm erce, and energy production - and all areinterrelated and tied to the long term econom ic well-being of the region.W ith Katrina we hav e learned the hard way ou r comm unities must be betterprepared for hurricanes, and the natural barriers that better protected ourshoreline decades ago need rebuilding, otherwise we will remain morevulnerable to storms than weve ev er been. Seafood, and all of thecom mercial and recreational activity with it, is a huge pa rt of this regionseconom y, and environmen tal restoration and fisheries enhancement are verym uch interconne cted. Finally, this region is critically important to ournations comm erce and international trade through its seaports and to ournations energy supply through production of its vast oil and natural gasresources.Som e of these issues, like oil and gas production, are policy issues that wemu st get right quickly, before m ore investment, infrastructure, and jobs goelsewhere while som e issues, like the Port of G ulfport expansion projectwhich is critically important to future job growth for South Mississippi,require Congressional action and Federal attention to ex pedite permitting


11/106

processes to free up m oney already appropriated while som e efforts willrequire new funding, either through Co ngressional appropriations or m oniesderived from the N atural Resources Dam age Assessm ent currentlyunderway or proceeds from C lean Water Act fines.Seem ingly, the most important role of this Comm ission is to recommen dpolicies to the President and to Congress that could have a long-lasting andenormous im pact on offshore oil and gas production, on our economy, andon energy security.. For decades now, for the obvious reasons of naturalsecurity and jobs creation, Am ericans have demanded m ore Am ericanenergy and, election after election, have elected politicians that rhetoricallyused "energy independence" as a platform. With roughly 60% of oilconsum ed in the U.S. being im ported, statistics show that we h ave done avery poor job of expanding A merican energy production over the years, andin fact, our federal energy po licies, or lack thereof, of have resulted inrestricted access and supply, m ore imported oil, and higher prices. At $75per barrel oil, this is over $8 00 million U.S. dollars spent on im ports per dayand over $3 00 b illion spent per year. A little progress towards reducingimpo rts would have a significant imp act on the trade deficit. Am ericanswant mo re domestic energy and understand that more supply means m orejobs, more security, and affordability.The Presidents moratorium is a backwards step and needs to be reversedbefore more infrastructure, investment, jobs, and production is lost in theGulf. Yes, we do need to understand how to prevent what caused theDeepwater H orizon explosion and spill, but the im pact of stoppingexploration and losing production is far too great. We ne ed the energy.W hile the inter-agency report last week bo asts that only 8000 to 12 ,000 jobsare estimated to be "temporarily" lost due to the deepw ater drillingmoratorium, this is no sm all number of jobs to ou r region, and the reportonly estimates job num ber losses, not individual income losses due to thedrastic drop in drilling activity. And the lost production w ill surely bereplaced by imported oil, so mo re Am erican dollars will leave the countryrather than staying here to create jobs in the Gu lf.Roughly 13% of U.S. natural gas production is derived from the G ulf and30% of U.S. oil production com es from the Gulf with 80% of that com ingfrom deepw ater wells. So the deepw ater drilling m oratorium an d the sharpdecline in shallow water drilling permits will have a significant negativeimpact on U .S. energy production. Policy changes are needed now to


12/106

reverse the direction were headed of making our country m ore dependenton foreign oil producers.Aside from the negative impact on energy security and the econom y, wemu st remem ber that of the 10 largest oil spills in U.S. history, 8 have beenfrom tankers or barges, so by reducing production and necessitating moreimported product, we are creating a higher risk of m ajor spills. TheDeepw ater Horizon spill is now the largest by far, but tanker spills aretypically nearshore, not easily contained, and do not get as m uch benefit ofnatural decomposition as we saw with the Deepw ater Horizon oil thissum mer in the warm waters of the Gulf.You re request today was for m e to discuss the opportunities for fundinglong-term Gulf restoration through C lean W ater Act fines, the NaturalResources Dam age Assessmen t, and other mechanisms. Obviously, thereremains m uch uncertainty over Clean W ater Act fines to be paid by theresponsible party, BP. Rega rdless of how m uch this will be or when it willbe paid, those who live, work, kno w, and depend on the resou rces in theGulf should decide how to restore the region. Much of this is science andmost of the restoration needed is not related to the oil spill but variousprojects that were planned over time before this event even b egan.Of course, the Natural Resources Damage A ssessment (NRDA ) process,prescribed under the O il Pollution Act (OPA ), will run its course and w illtell us over the next several months and years environmen tal and economicdamages as a result of natural resource losses due to the Deepwater Horizonspill. As sessm ents in Mississippi began in late April wh en our agencies -the Department of Environmental Quality and the Department of M arineResources - stepped up water, air, sedim ent, and tissue sampling to collectsufficient background data, and assessm ents will continue as our variousteams m onitor all the different components of the MS Gulf ecosystemthrough next year and after.M any of the environm ental restoration needs near M ississippis shore havebeen identifled as part of the M ississippi Coastal Improvemen t Plan(MSC IP). After Hurricane Katrina, Congress asked the U.S. Army Corps ofEngineers to determine projects that would provide greater protectionagainst storm surge to the Mississippi Gulf Coast. The Corps recommendedboth near term improvem ents, which Congress funded at $107 m illion in2007, and long term improvem ents, which are estimated to cost around $1.3


13/106

billion to com plete. Of this, Congress has already appropriated $439 m illionfor the restoration of the M ississippi barrier islands to their pre-HurricaneCam ille footprint. A series of tropical storms and h urricanes, capitalized byHu rricane Katrina, has resulted in the ba rrier islands being flatter with asmaller impact. This is bad for the M ississippi Gulf Coast because theseislands, along with other natural shoreline barriers like w etlands and coastalforestlands, serve as Mississippis defense against storms and storm surge.These natural structures, which are roughly 12 m iles off our main sho reline,both reduce the intensity of hurricanes and decrease storm surge beforeshoreline impa ct. Without the barrier islands an d other natural protectivelands that absorb energy from hurricanes, the Mississippi Gulf Co ast is leftvulnerable. About $800 million is needed to complete the MS C oastalImprovement Plan and restore the barrier islands and the thousands of acresof habitat and natural protection.Regarding Clean W ater Act fines, I know Senator Landrieu has proposedthat 80% be provided to G ulf States in lieu of b eing deposited into the OilPollution T rust Fund or into the Federal treasury. I concur with thisproposal and have proposed to both BP and Secretary Mabus thatadministration of dollars for the Gulf region be funneled through the Gulf ofM exico Alliance (GO M A) or a States-led council. GO M A has existed since2004 and has planned for and carried out actions for habitat restoration,nutrient m anagement, and water quality improvem ents. Each of the fiveGulf States are equally represented on GOM A, and a host of Federalagencies and Gulf researchers are at the table as plans are made and carriedout. What the G ulf region does not w ant is Federal agencies makingdecisions on how G ulf restoration dollars are spent.In Mississippi, I have appointed a Commission made up of scientists,business leaders, conserva tionists, seafood industry representatives, andelected officials. This Com mission is ma king recomm endations in the areasof econom ic development, research, environmental restoration, and publichealth and safety to develop a long-term, com prehensive roadmap for thingsto be done to im prove quality of life amo ng coastal comm unities as it relatesto the Gulf of M exico. This plan w ill be the guiding document foradm inistration o f environme ntal or econom ic restoration dollars inMississippi.


14/106


15/106

WRITTEN STATEMENT OFSTEVEN A. MURA W SKI, PH.D.

DIRECTOR OF SCIENTIFIC PROGRAMS AND CHIEF SCIENCE ADVISORNATIONAL MARINE FISHERIES SERVICE

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATIONU.S. DEPARTMENT OF COM MERCE

PUBLIC HEARING BEFORE THE

NATIONAL COMMISSION ON THE BP DEEPWATER HORIZONAND OFFSHORE DRILLING

September 28, 2010

Thank you G overnor Graham , Adm inistrator Reilly, and all the mem bers of theCom mission and staff for inviting testimony from the Department of Com mercesNational Oceanic and Atmosph eric Adm inistration (NOAA). My name is StevenMuraw ski; I am the D irector of Scientific Program s and Ch ief Science Advisor forNOA As National Marine Fisheries Service. In addition to m y norm al duties I have beeninvolved with a num ber of interagency groups that have been form ed to coordinate spill-related science. I lead the National Incident Com ma nds Joint Analysis Group (JAG ) thatllPage


16/106

provides information and analysis of findings regarding the sub-surface mo nitoring of oiland ocean ography. Add itionally I am the lead for the interagency E xecutive Leadershipgroup, which is coordinating the deployment of an enhanced sub-surface oil anddispersants mo nitoring program being developed through the Unified Area Com man d.My testimon y today w ill discuss som e scientific findings in the Gu lf of Mexico related tothe BP De epwa ter Horizon oil spill, on-going imp act research, and long-term m onitoringplans, as w ell as the Adm inistrations scientific coordination with industry, academ ia, andother state and Federal agen cies.

TI lE R O LE O F SCI EN CEScience has been a critical com ponent of all three m ajor phases of this oil spill responseand recovery effort: (1) the response to the presence of vast qu antities of Deepw aterHorizon oil with respect to the environment and hum an com munities, (2) the NaturalResource Dam age Assessm ent (NRDA) identifying direct and indirect impacts of thespill on the productivity, abundance, and u se of ecosystem services in the Gulf, and (3)long-term recovery of the GulFs ecosystems and com mun ities dependent on naturalresources. Early in this spill it was reco gnized that the scale and scop e of the eventwou ld be so va st that it wo uld touch virtually every aspect of life in and surrounding theGulf. The challenges w ould be to docum ent the quantity, mo vem ent, and fate of the oil;

21Page


17/106

the impacts of oil on ecosystems and peop le; and the success of any targeted recoveryand mitigation efforts.

As the spill scenario had evolved, so too have the nature and emp hasis areas for sciencesuppo rting spill efforts. For examp le, initial samp ling was aim ed at quantifying surfaceoil and predicting its mo vem ents as an aid to the first responders an d clean-up crew s.W ithin hours of the spill the first surface trajectory m odels were being run to p redictwhere oil m ay be found. Ove r the course of the spill, modeling ofoil trajectories becam emore com plex and robust with the development of six independent surface trackingmod els, and the addition of m odels predicting the fate of oil particles in the sub-surface. -

Similarly, issues of seafood safety testing, imp acts on salt marsh, beach, and d eepocean habitats, living m arine resources, air quality, and socioeconom ic impacts haveeme rged as priority areas for science related to the spill. Below I detail some of N OAA sscience efforts, the im portance of interagency collaborations and the role of independentscientists in the overall effort.

THE BREAD TH OF NOAAS SCIENCE SUPPORTING RE SPONSE TO THE BPD EEP WA TER HOR I ZON OI L SP ILLOver the course of the spill literally thousands of N OAA emp loyees and contractors havebeen involved in various aspects of clean up an d impact analysis. From providing daily3lPage


18/106

weather predictions and hurricane outlook forecasts, to conducting shoreline impactassessments; capturing and cleaning oiled sea turtles, and mon itoring the G ulfs seafoodsupply, the spill has touched every aspect of N OAA s diverse mission set. To date,NOA A has condu cted nearly 120 sampling m issions using a total of seven of its shipsand six aircraft. These m issions have b een as diverse as dropping ocean ographicinstruments into the loop current to study oil transport and conducting air qualitysampling from NOA As P-3s to using the new fisheries survey vessel PISCES and itsstate-of-the-art acoustics monitoring capab ilities to provide surveillance in the areaaround the well head for oil and gas plumes once the w ell was shut in. W hile theseefforts have strained NO AAs ability to respond to such a diverse and intensive use of itsresources, NOAA p ersonnel have done so, knowing the importance of timely andaccurate scientific information suppo rting the response.

NOA As scientific experts have been assisting with the response both on-scene andthrough NOA As headquarters and regional offices. The efforts by NOA A include all ofits line organizations, appropriate Cooperative Institutes and Sea Grant collaborationsinvolving m any academ ic institutions. Coordinating all these various activities within theAgency has b een a challenge, and new structures were created to manage these efforts.

41Page


19/106

The developm ent of interagency collaborations by the National Incident Com mand (NIC)and the U nified Area Com man d (UAC ) has facilitated greatly the ability to collect andinterpret critical information. One c ase in po int is the coordination of sub-surfacesampling to track the location, concentration and mo vemen t of sub-surface oil. Once itwas apparent that oil was in subsurface w aters, a coordination unit w as established at theUAC , first in Hou ma an d then in New Orleans, Louisiana. The Sub-surface monitoringgroup (SSM, com prised of many agencies) was ch arged with overseeing the collection ofrelevant data, com mu nication with all vessels conducting sam pling in the area of concernand developm ent of appropriate data sets. Once data began to flow from ships and otherassets deployed for sampling, the National Incident Comm ander set up the Joint AnalysisGroup (JAG) to conduct analyses and to inform the responders, scientific community andthe public abou t relevant findings. Initially collaboration am ong ag ency sc ientists withinput of data from the contractors for one of the responsible parties, the JAG ultimatelyestablished w orking relationships with m ore than a dozen academ ic researchers to assistin interpreting of data and with com bining informa tion from all available sources. Threesubstantial information reports and num erous online databases have resulted from thiscollaboration, which continues to docu ment the concentration of oil and dispersants in theenvironme nt: http://ecowatch.ncddc.noaa.gov/JAG /reports.html. The first of the JAGreports documented the chem istry information, particle size com position, oxygen levelsand evaluated instruments used to sam ple for likely oil signatures. The second report5~Page


20/106

evaluated instrument findings from sp ecial UV lights that fluoresce in the presence of oil(fluorom eters), and the third such report com piled all available information on o xygenlevels calculated for the sub-surface, concluding that "dead zones" or hypoxia ev ents,once feared po ssible as a result of sub-surface microbial activity had no t occurred andwere u nlikely. These reports relied extensively on data collected and exchanged am onggovernm ent, academic and private researchers.

To ensure that the public and agency partners have the data they need to understand w hatis happening and to contribute their own exp ertise, NOAA has undertaken sub stantialefforts to quality control and post data online as so on as soo n as possible after collection.A w ebsite has been created to serve as a focal point for accessing NO AAs data. NOA Acontinues to improve accessibility to data and is looking at w ays, such asgeoplatform.gov, to make inform ation and visualization products available to everyone.

NOA A leadership continues to be briefed daily on emerging science activities, and closecoordination with other federal agencies continues to occ ur at all levels.

At the onset of this oil spill, NOA A quickly m obilized staff from its Damage A ssessme ntRem ediation and Restoration Program to begin coordinating w ith federal and state co-trustees and the resp onsible parties to collect a variety of data that are critical to help61Page


21/106

inform the NRDA . NOAA is working w ith the Department of the Interior (anotherfederal co-trustee), as w ell as co-trustees in five states and represen tatives for at least oneresponsible party, BP on this effort. NOA A and the co-trustees are in the initial phase ofthis process and are currently gathering data on resou rces such as fish, shellfish, birds,turtles, and mammals; their supporting habitats such as wetlands, beaches, and corals;and hum an uses of affected resources, such as fishing and recreational uses across theGulf of Mexico.

Plans are already under discussion for how ag encies will continue to maintain thenecessary level of coordination through the long-term recovery phase.

COOR D I N A TION ON SEA FOOD SA FETY SA MP LI N G A N D R ESEA R CH.NOA A has been coordinating with Food and Drug Adm inistration (FDA), Environm entalProtection Agency (EPA ), the states, and industry on seafood safety and research.Fisheries closures remain in effect in some areas in the Gulf, and there is ongoingsamp ling to evaluate additional areas for potential re-openings. Seafood sam ples arederived from at-sea sam pling and subjected to sensory and chem ical testing for thepresence of oil. NOAA is confident in the sensory and chem ical testing currently beingconducted to detect possible contamination in seafood. In response to ongoing publicconcerns about seafood safety and dispersants, we have been working together with our7[Page


22/106

scientific partners at FDA to dev elop a chem ical test to detect dispersant in seafood.test, once validated, will provide additional public confidence in the safety o f Gu lfseafood. All chemical sam ples obtained to date have tested below levels of concernidentified by FDA and NO AA an d the states.

This

The interagency science processes set up under the various comm ands have by an d largeworked w ell with a high degree of collaboration to assure the proper science is conductedto inform the response and N RDA phases and that the public is informed. W e continueto look at ideas for more effective com mu nication w ith stakeholders and the public.

COOR D I N A TION W I TH THE B R OA D ER SCI EN TI FI C COM MU N I TYW hile NOAAs efforts have involved collaborations with many acad em ic researchers,there continues to be keen interest among the academ ic and private research com mu nitiesfor further involvem ent in oil spill efforts. There have be en a few instances of appa rentmisund erstanding among acad emic researchers and agency information, leading toconfusion am ong the pub lic and the media abou t what is happening, particularly in thesub-surface. In order to address this issue, NOA A, along with EPA, OSTP, N SF, USGS,BO EMR E, and NIH recently convened a series of public discussion sessions with theexternal scientific com m unity aime d at soliciting input to the goals, strategies, andimplem entation of the Unified Area Com man d (UAC)s draft sub-surface oil and8]Page


23/106

dispersant monitoring plan, and discussing science collaborations more generally. Theevents, hosted by the University of South Florida, Mississippi State University (inpartnership with Mississippi-Alabama Sea Grant and the Northern G ulf Institute), TulaneUniversity, and Dillard University (in partnership with the NA ACP ) brought together atotal over 300 pe ople representing academ ic institutions, state agencies, private researchconsortia, non-governmen tal organizations, and private industry. The discussionscovered a b road diversity of topics, including the need for continuing dialogue andenhancing the comm unication and flow of data and inform ation, the need for acomp rehensive plan that spans in-shore, near-shore, shelf, and deep-sea environm ents,the need for a robust integrated ocean observing system , and questions about thedistinctions between the NRDA p rocess, response efforts, and assessmen ts of long-termecosystem impacts.

NOA A is com mitted to continuing to engage w ith its scientific partners. As oneexamp le, NOAA and the other agencies that comprise the Joint Subcomm ittee on OceanScience and Technology are planning a workshop on October 5-6, 2010, in St.Petersburg, Florida. This w orkshop is b eing designed to bring together scientists activelyconducting research, sampling, and m onitoring in response to the DW H oil spill. Inputfrom the conference w ill be used to help federal agencies identify information need s and


24/106

plan short- and long-term research d irections. Topics for the w orkshop w ill include: 1)oil/dispersant extent and fate; 2) oil/dispersant imp acts and m itigation in coastal andoffshore environmen ts; 3) oil/dispersant impacts and m itigation on hum an health andsocio-econom ic; 4) oil/dispersant imp acts and m itigation of living marine resources; and,5) use of in situ and rem ote sensors, sampling, and systems for assessing the extent, fates,impacts an d m itigation of o il!dispersant.

W e will also re-double efforts to comm unicate with and involve the external sciencecom mu nity in oil spill science, to the extent we can .

ECOSY STEM SER V ICES STU D YNOA A is under discussions with the National Academ y of Sciences (NAS) regarding anNAS study of the long-term ecosystem service impacts of the BP Deepwater Horizon oilspill. Such a study would assess long-term costs to the public of lost water filtration,hunting, and fishing (comm ercial and recreational), and other ecosystem servicesassociated w ith the Gulf of Mexico . Calculation of lost services in the G ulf will helpinform the recovery goals and m onitoring strategies likely to be developed.

L O N G - T E R M M O N I T O R IN G P L A N S

lOIPage


25/106

As NO AA transitions from response through the NRDA process to long-term restorationof the Gulf, it will be critical to monitor our restoration progress and adapt as necessary.NOA A, along w ith its agency and academ ic partners, has initiated a process to identifylonger-term scientific needs so that recovery actions can be informed by the m ostcomprehensive science po ssible.

INTERNATIONAL COOPERATION

There has be en keen interest among the o ther regional international partners, as well asfrom other countries that support deep water drilling programs. NO AA an d otheragencies including the Departmen t of State have eng aged coun tries in the Gulf of Mexicoregion, particularly Mexico, the Baham as, and Cub a. NOAA participated in meetingsorganized by the State Department w ith the Bah amian gov ernment, the Mexicangovernm ent, and the Cuban Interest Section. All meetings have led to ong oingdiscussions and interest in m ore form al collaborations

In July, NOA A deployed the research vessel Nancy Foster on a two-week assessm entmission in the eastern Gu lf of Mexico a nd the Florida Straits to collect data critical tounderstanding the Loop Current system and its effect on the plume of the BP D eepwaterHorizon oil spill. This mission was co ordinated with Cuba and Mexico.

111Page


26/106

In addition, a Bahamian scientist spent four weeks at a N OAA laboratory, supported bythe Department of Defenses NORTHCO M (Northern Comm and). It was a verysuccessful visit, and an exam ple of the benefits of collaboration am ong ag encies withinthe U.S. and internationally.

CONCLUSIONResponding to the oil spill has necessitated an agile, robust and coordinated approachemphasizing inter-line office (within NOAA), inter-agency and broader government-academ ic/private partnerships. Coordinating the m assive use o f ships, satellites,laboratories, aircraft and pe rsonnel has requ ired logistics on a scale rarely seen outside ofwar time. No one agency has had enough capacity to fulfill all the requirementsnecessitated by the response, and ad hoc mechan isms set up to coordinate amongagencies have been extremely successful, resulting in more focused response efforts.

NOA As science efforts are not w inding down with the killing of the well, they are,rather transitioning into other stages of the assessment and recov ery. The NRDA andlong-term impacts assessment and monitoring activities will require substantialallocations of resources and personnel to adequately m eet NOA As trusteeresponsibilities with respect to the affected resources. The academ ic and p rivate researchcomm unities have been and continue to mak e significant contributions. Results of~.:~ I P age


27/106

listening sessions and discussions among governm ent, academic and private researchershave em phasized the importance of ongoing coordination of plans to take advantage ofresources being dep loyed in the G ulf, and the expertise existing in all of these dom ains.W e intend to continue these collaborations and there are ongoing an d active discussionsabout how to best structure such collaborations.

Last, I want to acknowledge the enorm ous contributions that have been m ade byscientists in the various agenc ies, in universities and research institutes. Ourunderstanding of the oil and d ispersant fate and effects has increased greatly from theinitial days of the spill, and the information, papers and studies completed, ongoing andyet to be deploye d w ill significantly propel the science of oil spills forward as we searchfor ways to be be tter prepared for such disasters and in fact to decrease the probability ofsuch events in the future.Thank you.

131Page


28/106


29/106

e~

o c~

e~ e~


30/106

e~

0 0

0

Eo~

0


31/106


32/106

Z z z


33/106

f


34/106

e~e e

0000

0o


35/106


36/106~


37/106


38/106


39/106

E

(1) 0


40/106


41/106


42/106


Attachment 24Written Statement and Presentation of Dr. Bill Walker

Mississippi Department of Marine Resources


43/106

A PARTNERSH IP RESPON SE TO THE

BP DEEP W ATER HORIZON OIL SPILL EVENT

Testimony Presented toThe National Commission on the BP Deepw ater Horizon

Oil Sp ill and O ffshore Drilling

by

William W. Walker, Ph.D.Executive Director

Mississippi Dept. of Marine Resources

September 28, 2010


44/106

Thank you S enator Graham and Dr. Reilly and comm issioners forinviting me to present testimony today. Dr. Reilly, its good to see youagain and thank you for visiting Mississippi in July to visit with ourf ishermen , processors, an d retailers.W hen the BP D eepw ater Horizon oil rib exploded on A pril 20, 2010roughly 100 miles south and east of Mississippis shoreline, GovernorHaley Barbour went to work to create a partnership to develop a planto first respond to the event and to protect Mississippi from theapp roaching oil and then to recover from any ad verse effects andrestore those damages. Partners in this effort included the MS Dept. ofEnvironmental Quality {MDEQ ), the M S Dep t. of Marine Resources{MDM R), MS Department of Health {MDH ), MS EmergencyManagement Agency (MEMA), MS National Guard (MNG),NationalO ceanic and Atmospheric Administration (NO AA), US Food a nd DrugAdm inistration (FDA), US Environmental Protection Agency (EP A), theUS Coast Guard, and B P, the responsible party.Tha t plan called for our team to fight the oil spill as far away fromMississippis shoreline as possible. Heroic efforts at the spill site tocollect, skim, and burn the leaking oil, together w ith using d ispersantsto make the crude oil more available to microbial metabolism,succeeded in keeping as m uch as 75 percent of crude and degraded oilfrom ever reaching Mississippi. As oil materials finally did approach ourbarrier islands some 30 days following the April 20 explosion, additionalefforts to skim, corral, and collect the oil further reduced im pacts to ourshoreline.Toge ther we conducted many aerial inspections and collected andanalyzed m any wa ter, tissue, and sediment samp les. These activitiesdid eventually result in precautionary closing of nea rly all Mississippiwaters to harvesting fish, crabs, shrimp, and oysters. While chemicalanalyses of tissues from these species failed to de tect levels of concern


45/106

of any oil related organics, we voluntarily closed our waters accordingto closing protocols agreed to by all affected states and fed eralagencies.As the threat from oil began to diminish, we beg an reopening ourwaters, again in accordance w ith a com prehensive reopening protocolto which all states and federal agencies agreed . This protocol requiredthat:

1. The a rea to be opened must be free of visible oil.: 2 . There m ust be no threat to the area from ap proaching oil.3. Extensive sam ples must be collected for each species to beharvested.4. These samples must pass sensory evaluation and extensiveanalytical examination for all chemical components of the crude

oil .

Only after passing all requirements of this rigorous reopening protocolcould our waters be reopened . For the reopening process and for ourroutine sampling p rogram, 73 shrimp samples, 49 crab samples, 85finfish samples, and 40 oyster samples were collected and sent toNOAA and ultimately FDA for analysis. Samples were analyzed fornaphthalene, fluorine, anthracene, phenanthrene, pyrene,fluoranthene, chrysene, benzo(k)fluoranthene, benzo(b)anthracene,indeno(1,2,3-cd)pyrene, d ibenz(a,h)anthracene, and benzo(a)pyrene.Of the 252 Mississippi samp les provided , 181 of those sam ples havebeen p rocessed, and Im very proud to say that all tissue samp lesanalyzed as p art of the reopening requirements or collected at anyother t ime tested negative for the above analytes or show ed tracelevels far, far below the levels of concern established by federalregulations. In other words, based on credible scientific data collectedusing federally-approved samp ling and analytical techniques,Mississippi seafood has been safe and healthy to eat throughout the


46/106

entirety of this event. To ensure its continued safety, Mississippi willcontinue to samp le and analyze f ish, shrimp , crab, and oyster tissues atmonthly intervals for the foreseeable future. As has been the case forall sampling activities to date, we will continue to engage NOAA andFD A and util ize protocols and sam pling d esigns acceptable to thoseagencies.Mississippi a!so coordinated with Unified Com ma nd in Mobile, NO AA,and FD A to develop and implement a samp ling regime to look forsubm erged o il within 15 miles of the coastlines of MS and AL. Thissurvey divided the entire area into grids (159 for MS waters). In eachgrid section, white sorbent pads were lowered to near the bottom andretrieved. If any of the retrieved p ads sho wed suspicious discoloredareas or other evidence of oil, water samp les were collectedthroughout the water column and sediment samples were taken.Results of this survey showed one w ater samp le collected due to thepresence of sheen on the water tested positive for Diesel fuel. All otherwater samples tested non-detect on oil related organics. None of thesediments collected were determined to contain oil by FourierTransform Infrared Spectroscopy (FTIR).So, w here are we n ow? No ne w oil is entering the G ulf of Mexico fromthis event. Certainly, there are isolated p atches in hardes t hit LAmarshes, and there are credible reports that submerged oil productmay rem ain in the vicinity of the spill site. Scientists from M ississipp iand e lsewhere are and w ill continue to study this area of the Gulf todeterm ine exactly wha t if anything is there and, if oil material is presentthere, wha t actions to take. Weathered tar balls continue to imp actour barrier islands and our coastline, and we can expec t that tocontinue for many months. Clean-up activit ies on o ur islands andshoreline beaches con tinue and wil l continue unti l the tar balls stop.Short-term effects from this event in Mississippi, while serious, havebeen m inima l. We are moving from respon se to recovery and


47/106

restoration, and BP has pledged 55 00 million for academic research toquantify long-term effects and to m onitor ecosystem recovery and thecondition of populations of marine species. The resulting data will, inpart, inform the Na tural Resource Dam age Asse ssment (NRD A), whichwill determ ine appropriate comp ensation levels for dam ages from thisevent.So , the goo d new s is that, based on cred ible scientific information,seafood from M ississipp i and the Gu lf in gen eral, is safe to eat. InMississippi and likely throughout the Gulf, populations of finfish,shrimp, and crabs are plentiful and h ealthy. O ysters in Mississippi havesuffered above-normal mortalities, we think primarily due to extendedperiods of very hot (>90 d egrees Fah renheit) water and dep resseddissolved oxygen levels. We have no scientific evidence to sup portoyster mo rtalities due to the presen ce of oil m aterials.Unfortunately, with absolutely no credible science to support them, asmall but vocal group of com m ercial f ishermen continue to say that oilrema ins in M ississippi waters, that these w aters are not safe forrecreational purposes, and that seafood harvested from these waters isnot safe to eat. While som e of these p rotesters are actually shrimp ingcomm ercially and catching nice, healthy shrimp and selling them toMississipp i processors or directly to consume rs, they continue todeclare their own prod uct unsafe.Suc h statements are irrespon sible, untrue, and unsu ppo rted by crediblescientific data. Unfortunately and in large part due to the actions ofthese few individuals and the press that continues to broad cast thisinaccurate information, there is a perception in areas of our nationawa y from the Gulf that Gulf seafood m ay not be safe to eat. As aresult of that percep tion, our seafood proce ssors canno t sell to thebuyers in Chicago, New York, Boston, and elsewhere that havehistorically regarded Mississippi and Gulf seafood as a safe, high quality


48/106

product. Clearly, all citizens o f this great nation have the right to speakfreely. I only ask that they base their statements on cred ible scientificinformation, which they certainly have not done to date.The m essage that I would like to leave with you today is that the TEAMeffort following this event has been a huge success, the best successstory youll never see on C NN.Thankyou.


49/106

r-T-]

r~


50/106


51/106


52/106


53/106


54/106

O _0

O _0


55/106


56/106


57/106

00

00

00


58/106

0

E

E

E

0

E00


59/106

00

C

00


60/106

ZZ


61/106

National Comm ission on theBP DEEPWATER HORIZON OIL SPILLAND OFFSHORE DRILLING

Attachm ent 25Written Statement of Timothy Fitzgerald

M arine Scientist, Oceans Pro gram, Environm ental Defense Fund


62/106

September 28, 20:~0,Nat ional Com mission o n the BP D eepwater Hor izon O i l Sp i l l and O f fshore Dr i l l ing, 3rdMeet ingTest imony o f T im Fitzgerald , S enior Pol icy S pecial is t, O ceans P rogram, E nvironmental Defense FundGood afternoon. First, Id like to thank the Com mission for the o pportunity to testify today on thiscritically important topic. Im a Senior Policy Specialist in the Ocea ns P rogram of E nvironmentalDefense Fund (EDF), with a scientific bac kground in marine ecology and physiology. For the last sevenyears Ive worked spec ifically on issues of seafood s ustainability and health for EDF , and I w as asked totestify today about the pub lic perception of Gulf seafood sa fety and the work that w eve beg un w ithf ishermen to address on going consum er concerns. For background, ED F is a leading national nonprofitorganization representing more than 70 0,000 m emb ers that links science, economics and law to createinnovative, equitable and cost-effective solutions to soc ietys m ost urgent environm ental problems.As you m ay already know, the seafood m arket is inherently confusing for consumers. Most peoplehave ve ry little conn ection to, or understanding of, the fish they buy. M ore than 80% of fish thatAmericans eat is imported, coming from nearly every country on Earth and c aught or farmed underdozens o f different regulatory schemes an d environme ntal conditions. Given this com plexity, there arenum erous opinions - often conflicting - over w hat seafood is "good" or "bad". Reg ardless, opinionpolls, focus groups, and other studies have consistently show n that quality and safety are two topconcerns for consumers.This might explain, at least partially, why seafood safety has remained such a prominent issue in thewake of the BP oil disaster. The 87-day event resulted in the release of almost 200 million gallons ofcrude oil into the Gulf ecosystem, and the use of almost 2 million gallons of CorexitTMdispersants tomitigate the damage. Despite the re-opening of state and federal waters to fishing, these are figuresseafood consum ers are not likely to soon forget.Based on federal and s tate testing, the public has been repeatedly reassured that Gulf seafood is safeto eat. However sales remain depressed in the region and around the country, and some fishermen arehesitant to return to work given poor markets and concerns o ver lingering toxins in the wa ter. AnAugust 17th Associated Press poll showed that one m onth after the w ell was capped, more than half ofsurvey respondents still lacked confidence in the safety of seafood from G ulf areas affected by the oildisaster. And as you have likely seen, we continue to see coverage in regional and national media thatconsumer skepticism remains high.For Gulf fishermen and other mem bers of the seafood industry, this lack of consumer co nfidence canbe devastating. They not o nly face the pain of imm ediate financial losses, but must also struggle withthe uncertainty of trying to regain the business they once had. Thats why ED F is w orking closely withan assoc iation of snapper an d grouper fishermen called the Gulf of Mexico Reef Fish S hareholdersAlliance to help them preserve their markets in the face of this disaster.These fishermen have faced m any challenges a lready. Years of ove rfishing and ineffective fisherymana gem ent had broug ht the fishery to the brink of collapse. At its low point, their fishing season hadshrunk to only 54 days, and regulations forced them to throw back d ead muc h of the fish they caught.But by w orking together and w ith federal regulators, these fishermen led the cha rge in transitioningtheir fishery to an innovative managem ent program called "catch shares". Catch shares soon allowed


63/106

the fishermen to fish year round w hile fish populations recovered - bringing b etter prices to fishermenand m ore econom ic stability to fishing ports.Low consumer confidence in Gulf seafood post oil-disaster threatens to undermine the progress todate made b y these fishermen and others like them. Therefore our partnership seeks to do everythingpossible to ensure that the market supports them through the following four-part campaign:

Continuing to strive for a m ore sustainable fishery w ith fewer ecological impacts; Dev elopment of a third-party seafood testing program that supplements that of NOAA andFDA; Implementation of a rigorous c hain-of-custody to track fish throughout the supply chain; An ag gressive pub lic relations and m arketing effort to highlight these efforts.

This approach can serve as a mo del as the Comm ission considers how federal and state agencies canrestore confidence in Gulf of Mexico se afood. In closing, I will highlight a few key ch allenges andcorresponding recomm endations that can help this campaign and similar efforts to achieve success:

Empower fishermen to conduct more targeted testing of their catch. The government alone cantsolve this problem for the fishermen, nor are fishermen looking to them to do so. But w hat thegovernment can do is work in partnership with fishermen to work towards their own solution.Making the financial and technical resources available to do this would go a long way towardscom plimenting existing traceability and marketing efforts;Articulate and make public the details of a long-term testing plan. Seafood consumers and buyersnot only need to be tter understand what has b een done and w hy it is sufficient, but they also needreassurances and specifics about how the g overnment is in this for the long haul. Governm enttesting is currently focused on toxic polycyclic aromatic hydrocarbons (PA Hs), and to a lesserextent, dispersants. But there are other contam inants - such as heavy m etals l ike arsenic,cadm ium, or mercury - along with the potential for re-contamination from unfound sources o il,that may become a health risk further down the road, which we believe warrant formal evaluation;Provide upd ated information to the public about dispersants in seafood. This issue remains high onconsumers lists of concerns, despite continued assurances from FDA that they pose no health risks.How ever NO AA ha s recently developed a chemical test to detect them in seafood, so the agenciesshould provide clear guidance a bout their latest findings, and offer recomm endations for futuregovernment and independent testing;

Ma ke a conce rted effort to reach out to consum ers to understand what is needed to regain theirconfidence in Gulf seafood. Bombarding consumers with marketing and dismissing their concernsonly exacerbates the current situation. NOA As recent series of dockside chats provides a goodexample and could be expanded to educate local stakeholders on the issue of seafood safety;

Thank you very m uch for your time, and I am ha ppy to answer any questions that the Com missionersmight have.


64/106


Attachment 26Written Statement of Richard StewartProfessor of Law, New York University


65/106

The Oil Spill Comm issionStatement of Richard B. StewartNew York U niversity School of LawSeptember 28, 2010

This statement provides an overview of the potential criminal and civil claims that the federalgovernment and state and tribal natural resource trustees may assert against BP and otherpotential responsible parties for the Gulf oil spill. Drawing on my experience as AssistantAttorney General for Environment and Natural Resources with the prosecution and settlement ofsuch claims against Exxon for the Exxon Valdez spill, I discuss some of the strategic issues thatthe government parties and the defendants face in dealing with such claims, the incentives forand potential structure of a global settlement, the legal and institutional challenges that thegovernment parties face in assessing natural resource damages (NRD), and the need for anintegrated approach and management structure for restoring the Gulf resources injured by thespill that is closely linked with other ongoing or future programs to protect and enhance thosesame resources.Other than claims for removal costs and NRD, this statement does not address criminal or civilclaims that states or tribes might assert or other claims for economic losses that governments,tribes or private parties may assert. The assertion of some of these other claims could furthercomplicate the already difficult challenge of achieving a settlement of federal criminal and civilclaims and federal, state, and tribal NRD claims in a way that will accommodate the basicinterests of the various parties and advance restoration efforts without prolonged delay.

Potential Criminal and Civil Claims by the Federal Government and NRD Claimsby Federal, State, and Tribal T rustees.The federal government can assert criminal claims, claims for civil penalties, and NRD claimsfor injury to the natural resources of the Gulf and adjacent lands. The claims and the liabilitiesthat they impose are cumulative. State and tribal natural resource trustee agencies can also assertNRD claims, which in many cases will concern the same natural resources as the federal NRDclaims and overlap with them.

A. Criminal ViolationsDepending on the facts, the Department of Justice could assert a variety of criminal violationsagainst corporate and individual defendants. 1 These include the following:Clean W ater Act. 33 USC 1321(b)(3), prohibits the discharge of oil.., in connection withactivities under the Outer Continental Shelf Lands Act... which may affect natural resourcesbelonging to... the United States... in such quantities as may be harmful.., except.., wherepermitted." Negligent violations can be prosecuted under 33 USC 1319(c)(1); persons convictedare subject to a fine of $25,000 per day or 1 year imprisonment or both. Knowing violations are

Corporate defendants wou ld not be subject to the imprisonment prov isions of the criminal statutes discussed,1


66/106

prosecutable under 33 USC 1319(c)(2); persons convicted are subject to a fine of $50,O00/day orthree years imprisonment or both. Under 33 USC 1319(c)(3), a defendant who "knows at [thetime of a violation] that he thereby places another person in imminent danger of death or seriousbodily injury..." is subject to a fine of $250,000 or 15 years imprisonment or both.2Migratory Bird Treaty Act. 16 USC 703(a) makes it "unlawful at any time, by any means or inany manner, to... take [or]... kill.., any migratory bird, any part, nest, or egg of any suchbird..." This is a strict liability misdemeanor offense. The government need only show that thedefendant committed an act that killed a migratory bird or its eggs. No negligence, knowledge, orpurpose to kill a bird must be shown. Under 16 USC 707(a), persons convicted are subject to afine of not more than $15,000, imprisonment for not more than six months, or both.Rivers & Harbors Act. 33 USC 407 prohibits the discharge without a permit from the Corps ofEngineers "from or out of any ship, barge.., or from the shore, wharf manufacturingestablishment or mill of any kind.., any refuse matter of any kind or description." There may besome question whether an oil drilling rig fails within the statute, but the discharge ofcommercially valuable oil does. A mobile, semi-submersible offshore drilling unit such as theDeepwater Horizon would most likely be regarded as a "ship" for purposes of this provision.This is again a strict liability offense. 33 USC 411 provides that a person convicted is "guilty of amisdemeanor and subject to a fine of up to $ 25,000 per day and imprisonment for not less thanthirty days nor more than one year, or by both such fine and imprisonment..."Endangered Species Act. 16 USC 1538(a)(1) and 50 CFR Part 17 make it unlawful toknowingly "take" any species listed by the federal government as endangered or threatenedwithout a permit; "take" includes killing or otherwise harming a member of such a species. 16USC 1540(b)(2) subjects a person convicted to fines of up to $50,000 and imprisonment for upto one year.Alternative Fines Act. 18 USC 3571 provides for enhancements of fines otherwise provided forby specific statutes such as those described above. Subsection (a) provides for fines, in the caseof a felony, of not more than $250,000; for a misdemeanor resulting in death, of not more than$250,000; and for a Class A misdemeanor that does not result in death, of not more than$100,000. Of greatest significance for the BP spill, subsection (d) provides:

"If any person derives pecuniary gain from the offense, or if the offense results inpecuniary loss to a person other than the defendant, the defendant may be finednot more than the greater of twice the gross gain or twice the gross loss, unlessimposition of a fine under this subsection would unduly complicate or prolong thesentencing process."

z Further, under 33 USC 1319(c)(4), a person knowingly m aking a false statement in conne ction with a v iolation issubject to a fine of $10,000 or two years imprisonment or both. Other provisions of federal law also provide forcriminal penalties for violations of record keep ing, reporting, and other requirements, as well as making falsestatements to federal officials.


67/106

The background of this provisions enactment indicates it was aimed at financial fraud,manipulation, and similar crimes. There is a question, that has not been litigated and squarelyresolved by the courts, whether this provision applies to environmental violations, and whether"pecuniary loss" would, in the context of this statute, include removal and restoration costs andeconomic losses stemming from damage to natural resources. The provision was, however,invoked by the federal government in the Exxon Valdez settlement and was invoked as a basisfor a settlement of environmental violations against BP arising out of the explosion at its TexasCity refinery) ff the provision were held applicable, if removal, restoration, and other economiccosts and losses stemming from injury to natural resources caused by the oil spill represent"pecuniary loss" within the statute, and if a court were to conclude that applying the provisionwould not "unduly complicate or prolong the sentencing process," the amount of fines imposedcould increase dramatically.

B. Civil PenaltiesClean Water Act. Under 33 USC 1321(b)(7)(A), persons who discharge oil in violation of theAct are subject to a civil penalty of $25,000 per day or $1,100 per barrel; this is a strict liabilityprovision. For violations resulting from "gross negligence or willful misconduct" a violator issubject to a civil penalty of not less than $100,000 per day of the violation and not more than$4,300 per barrel of oil. Prior to the 1991 amendment of this provision passed after the ExxonValdez spill, it provided only for fines calculated on a per-day basis. The per-barrel penaltiesreflect adjustments for inflation as provided by later statute. Administrative penalties are alsoavailable under 33 USC 1321(b)(6), however such these are capped at $125,000 and aretherefore unlikely to play a role in this matter. Given the magnitude of the BP spill, the civilpenalties are potentially very large..4EPA authorizes civil judicial and administrative enforcement settlements under the laws that itadministers, including the Clean Water Act, to include Supplemental Environmental Projects(SEPs), which must be approved by EPA with review by the Justice Department. SEPs arerestoration projects conducted by the violator designed to improve resources affected by theenvironmental violation or that otherwise have an appropriate nexus to the violation. Civilpenalties otherwise payable may be remitted in part by EPA in consideration of violatorsfunding of SEPs.

3 In United States v. BP Products North America, Inc. , a case arising from a deadly explosion at a BP refinery inTexas City, Texas BP pied guilty to a felony violation of the Clean A ir Act. 610 F.Supp.2d 655 (S.D. Tex. 2009).The court approved the $50 m illion plea agreement expressly on the basis of the Alternative Fines Act. Thecomp lexity of calculating the aggregate gross loss to the victims of the Texas refinery explosion persuade d the courtto base the fine on BPs gain in savings consequent to the violation. Id. at 707. The N inth Circuit, in evaluating theappropriateness of the jury aw ard from the civil l i t igation of the Exxon Valdez spill, relied upon the defendantspotential liability under the Alternative Fines Act as a reference po int. I n r e Exxon V a l dez , 270 F.3d 1215, 1245 (9thCir. 2001). When the Supreme Court ultimately vacated this jury award, it was silent on this use of the AlternativeFines Act. United Sta tes v . Baker , 128 S. Ct. 2605 (2009).4 In addition to seeking civil penalties for a violation of 33 USC 1321(b)(3), the Federal government could assert aanother Clean W ater Act violation un der 33 USC 1311 (a): "Except in com pliance with this section.. , the dischargeof any pollutant.., shall be unlawful." 33 USC 1319(d) allows the government to claim civil penalties of $25,000per day of the violation. See generally United States v. Colonial Pipeline Co., 242 F. Supp. 2d 1365, 1379-72 (N.D.Ga. 2002) (allowing assessment of penalties resulting from an oil spill to proceed under both 1319 and 1321).


68/106

EPA has developed requirements about when and what kinds of SEPs can be utilized to offsetcivil penalty settlement payments. EPA has determined that the required nexus between SEP andviolation may be established by satisfying one three criteria:

"a) the project is designed to reduce the likelihood that similar violations issatisfied will occur in the future; orb) the project reduces the adverse impact to public health or the environment towhich the violation at issue contributes; orc) the project reduces the overall risk to public health or the environmentpotentially affected by the violation at issue.5

Another requirement is that the proposed SEP not augment or supplement the appropriations ofthe EPA or any other federal agency. SEPs must be independent of activities for which the EPAhas received appropriated funds or is required by law to perform. Examples of past SEPsresulting from oil spill violations under the Clean Water Act include the donation of spillresponse equipment to local emergency response crews and the purchase and permanent6protection of resources in the affected area.Endangered Species Act. 16 USC 1538(a)(1) and 50 CFR Part 17 make it unlawful toknowingly "take" any species listed by the federal government as endangered or threatenedwithout a permit. "Take" includes killing or harming any member of such a species. 16 USC1540(a)(1) authorizes a penalty of up to $25,000 for each violation.

C. Removal Costs and Natural Resource DamagesThe Oil Pollution Act (OPA), 33 USC 2702(a), imposes strict liability on "each responsibleparty" for removal costs and damages, including NRD, resulting from discharges of oil from a"vessel." 33 USC 2701(18) defines "vessel" to include a "mobile offshore drilling unit" such asthe Deepwater Horizon. 33 USC 2701(32) defines a "responsible party" as "any person owning,operating, or demise chartering" such a vessel. BP would be liable, having demise chartered theDeepwater Horizon. Transocean would also be liable since it owned and operated the DeepwaterHorizon with the assistance of personnel from BP, Anadarko, Halliburton, and M-I Swarco, whomight, depending on the facts, thereby be liable as "operators.""Removal costs" are defined under 33 USC 2702(b)(1) as any costs incurred by the UnitedStates, a State, or an Indian tribe consistent with the National Contingency Plan, the Clean WaterAct, or the Intervention on the High Seas Act. "Removal costs" are defined under the CleanW ater Act, 33 US C 1321 (a) (25), as "the costs of removal of oil or a hazardous substance that areincurred after it is discharged..." 33 USC 1321 (a)(8) further defines "removal" as "containmentand removal of the oil or hazardous substances from the water and shorelines or the taking ofsuch other actions as may be necessary to prevent, minimize, or mitigate damage to the public

See W alker B. Smith, Importance of the Nexus Requirement in the Sup plemental Environmental Projects Policy,EPA M emorandum, Oct. 31, 2002, available atht tp: //www .epa.gov/comp l iance/ resources/pol ic ies /c iv i l/ seps/sepnex us-mem.pdf .EPA maintains an online database of past SEPs at http://www.epa-echo.gov/echo/compliance_report_sep.html.4


69/106

health or welfare, including, but not limited to, fish, shellfish, wildlife, and public and privateproperty, shorelines and beaches...""Damages" are defined under 33 USC 2702(b)(2) to include NRD; damages for injury to oreconomic losses resulting from destruction of real or personal property; loss of subsistence use ofnatural resources; loss of government taxes, royalties, rents, fees, or net profit shares due toinjury to real or personal property or natural resources; lost profits and earning capacity resultingfrom the same, by any claimant; and the net costs of providing increased or additional publicservices as a result of a discharge.Damages Liability Cap: Under OPA, the amount of liability for discharges from offshorefacilities is capped at "the total of all removal costs plus $75,000,000." 33 USC 2704(a)(3). Forthe purposes of calculating the amount of liability, mobile offshore drilling units like theDeepwater Horizon are treated as offshore facilities. 33 USC 2704(b)(2). The cap does not applyif the discharge was "proximately caused by gross negligence or willful misconduct, or theviolation of an applicable Federal safety, construction, or operating regulation..." 33 USC2704(c)(1).

D. Natural Resource Damages33 U.S.C. 2706(a) provides that the liability by a responsible party for NRD shall be to thefederal government for natural resources belonging to, controlled by, or appertaining to theUnited States; to states for resources belonging to etc. a state or political subdivision thereof, andto Indian tribes for resources belonging to etc. them. Under 33 USC 2706(b), the federal andstate governments designate trustees to present a claim for and to recover NRD. The President,by Executive Order and through the National Contingency Plan at 40 CFR 300.600, designatedthe following as among the trustees under OPA: the Secretary of Defense, the Secretary of theInterior, the Secretary of Agriculture, the Secretary of Commerce, the Secretary of Energy, and"[f]or natural resources.., not otherwise described.., the head of the federal agency oragencies authorized to manage or control those resources." OPA and the Executive Order leaveentirely open what resources different trustees can claim for. In the context of the far-reachingBP spill, involving multiple states each with different resource management agencies andperhaps also tribes, the various federal, state, and any tribal NRD claims will all overlap to aconsiderable degree. Beyond precluding double recovery under 33 USC 2706(d)(3), OPAprovides no mechanism for coordinating or directing the claims and NRD-related activities ofdifferent trustees.The trustees assess NRD and "develop and implement a plan for the restoration, rehabilitation,replacement, or acquisition of the equivalent, of the natural resources under their trusteeship." 33USC 2706(c). NRD are measured according to the "cost of restoring, rehabilitating, replacing, oracquiring the equivalent of, the damaged natural resources;" the "diminution in value of thosenatural resources pending restoration;" and the "reasonable cost of assessing those damages." 33USC 2706(d).NRD recoveries must be spent exclusively to restore injured natural resources and for relatedactivities. The trustees must retain NRD recoveries in a "revolving trust account, without further

5


70/106

appropriation, for use only to reimburse or pay costs incurred by the trustee.., with respect tothe damaged natural resources." 33 USC 2706(f). This arrangement was designed to ensure thatNRD recoveries go to restore the injured resources. The provision authorizing trusteeexpenditures without further appropriation is a notable exception to the general requirements,under the Miscellaneous Receipts Act and Anti-Deficiency Act, that any recoveries on behalf ofthe United States must be deposited in the Treasury and may not be expended except pursuant toappropriation as well as authorization by Congress. The availability of significant funds outsideof the normal appropriations process could have a major impact on the operations of trusteeagencies, including the Army Corps of Engineers, which is under the authority of the Secretaryof Defense, a designated OPA trustee, and has long played a prominent in the Mississippi Deltaand Gulf region.

II . E xxon Valdez SettlementThe October 1991 settlement between the United States, Alaska, Exxon Corp., and ExxonShipping, a wholly owned subsidiary of Exxon and owner and operator of the Exxon Valdez,settled all civil and criminal claims (including federal claims for civil penalties) and wasapproved by the federal district court in Anchorage in the form of a plea agreement (federalcriminal charges) and a consent decree (civil claims)]

A. Criminal Plea AgreementExxon pled guilty to violations of the Clean Water Act, the Refuse Act, and the Migratory BirdTreaty Act.8 A $150 million fine was assessed against Exxon; $125 million was forgiven inrecognition of Exxons cooperation in cleaning up the spill and paying certain private claims. Ofthe remaining $25 million, $12 million went to the North American Wetlands ConservationFund; the North American Wetlands Conservation Act authorizes criminal penalties under theMigratory Bird Treaty Act to be paid into the Fund. 16 USC 4406(b).The pleas agreement also provided $100 million in criminal restitution to be divided evenlybetween the federal and state governments. The federal governments $50 million went into theNatural Resource Damage Assessment and Restoration Fund. Alaskas $50 million wasappropriated by the state legislature for a variety of conservation projects including a recreationand marine mammal rehabilitation center and habitat acquisitions.

B. Civil SettlementThe consent decree settling the federal and state civil claims provided for a total of $900 millionin annual payments over 10 years. The monies have been disbursed as follows: $216 million inreimbursements for cleanup and damage assessments to the US and Exxon; $178 million forresearch, monitoring, and general restoration; $375 million for habitat acquisition; $45 millionfor program development and implementation; $177 million remained in a joint federal-state7 1 had left the office some mo nths before the final settlement was reached a nd judicially approved, but the basiccontours were determined while I was still there.8 Exxon Shipping pled to all three violations; Exxon Corp. to one.


71/106

N RD trust fund account as of September 2008.9 The civil settlement also included a "reopenerwindow" that could be utilized at a later date to seek up to an additional $100 million to addressunforeseen impacts from the spill. The United States and the State of Alaska exercised thisoption in 2006, filing a claim seeking $92 million to remove subsurface oil residues onshorelines. The claim is still pending and has not been resolved.

IlL Issues and Challenges in Assessing NR DThe purpose of NRD assessment is to determine the character and extent of interim and ongoinginjury pending and after completion of recovery. NRD recoveries are to be spent to achieverestoration of the injured resources to the condition that they would have been absent releases, tocompensate the public for interim resource losses, and also for scientific studies, restorationplanning, legal expenses, and other expenses incurred by trustees and government in connectionwith NRD assessment, recovery, and restoration activities.The conceptual basis for restoration is further elaborated in the NRD assessment regulationsissued by NOAA under OPA. While compliance with these regulations is optional with trustees,under 33 U.S.C 2706 (c)(2), trustees that conduct NRD assessments pursuant to the regulationsenjoy a rebuttable presumption in favor of their assessment in litigation against responsibleparties; accordingly trustees generally follow the regulations. The NOAA regulations, 15 CFR990.30, define "baseline" as "the condition of the natural resources and services that would haveexisted had the incident not occurred." The purpose of NRD assessment is to "evaluate the natureand extent of injuries resulting from an incident, and determine the restoration actions needed tobring injured natural resources and services back to baseline and make the environment andpublic whole for interim losses." Restoration consists of actions to restore, rehabilitate, replace,or acquire the equivalent of injured natural resources and services. It includes "primaryrestoration," which is any action, including natural recovery, that returns injured naturalresources and services to baseline; and "compensatory restoration," which is any action taken tocompensate for interim losses of natural resources and services that occur from the date of theincident until recovery.The theory is that trustees can determine a baseline and correlatively, the character and extent ofinjuries caused by discharges; that restoration measures can be selected and implemented torestore, sooner or later, injured resources to their baseline condition; that interim resource lossesto the public pending full recovery can be determined; and that resource measures can be devisedand implemented to provide additional resource benefits to the public as in kind compensationfor interim losses. Actually applying these concepts and identifying baseline conditions (whichrequire good pre-existing data), discharge effects, resource injuries, measures that willsuccessfully restore resources to baseline, interim losses to the public, and additional resourcemeasures to compensate for them therefore is an immensely challenging and difficult task in thecase of a major spill such as Exxon Valdez, or the much bigger and geographically much moreextensive BP spill. The difficulties include determining baselines; determining the extent ofinjury to dynamic biological populations; accounting for long term low level but potentially quiteimportant effects; accounting for the effects of removal actions, including use of dispersants,9 See Exxon Valdez Oil Spill Trustee Council, 2009 Status Report. Available athttp://www.ev~stc.state.ak.us/Universa~/D~cuments/Pub~icati~ns~Annua~Status~2~~9Annua~Rep~rt.pdf.


72/106

which defendants may claim have enhanced rather than reduced injuries; and the feasibility ofdevising and successfully implementing restoration measures that will restore the wide range ofresources exposed to oil in a vast marine environment. While localized, acute effects can bedetermined and perhaps remedied, more diffuse, complex, and long lasting effects pose fargreater difficulties, as attested by the reports of the Exxon Valdez Spill Trustee Council. 10Determining interim losses to the public from injured resources pending full restoration(assuming that goal can actually be achieved) present additional challenges. The basic approachis to use economic valuation methodologies to put a dollar price tag on such losses and spend theequivalent on enhanced resource services to the affected public (e.g. additional protected wildlifehabitat that will benefit those who fish, hunt, observe, or otherwise value wildlife). Fairly goodvaluation methodologies exist for lost resource services - for example, the losses thatrecreational fishers suffer if favored fishing grounds are closed or degraded. But the NRDconception also includes interim "non-use" losses - the loss in economic welfare suffered bymember who places an economic value on the existence of undamaged nature for its own sake.The basic methodology for measuring such losses in dollars consists of contingent valuationmethodology (CVM) surveys of a sample of individual members of the public to elicit theirwillingness to pay to protect a resource similar to that injured, apart from any use that they mightmake of it. The design of CVM studies (including identification of the relevant public and theflaming of the questions, whether respondents are asked to value a range of other resources at thesame time, etc.) is controversial, and critics have attacked the validity of the entire enterprise,pointing out that survey respondents do not have to back up their stated valuations with actualmoney payments. In the context of the BP spill, it would be very difficult to devise a study thatwas not influenced and probably biased by the immense and highly adverse publicity generated.There is also an unresolved question whether a court would, consistent with the Federal Rules ofEvidence, allow CVM study results to be presented to a jury.ll Potential NRD liabilities for non-use values determined through CVM are thus highly uncertain but potentially immense, animportant factor driving a global settlement in the Exxon Valdez case.

IV . Global Settlement of Governm ental Claims for the BP Spill and IntegratedRestoration and E nhancement of the Gulf E cosystemsIt would be in the long mn interests of the federal, state, and any tribal parties and of thedefendants to achieve a global settlement in order to resolve risk and avoid potentially immenselitigation delay and expense. Most importantly, a global settlement could deliver restorationresources to the Gulf more rapidly.Given all the factual and legal complexities in determining and valuing injury to naturalresources, including interim lost use and non-use values, full litigation of the NRD claims inExxon Valdez or BP to final judgment, including massive discovery, endless motions, andappeals, could well take 20 years or more. Defendants could use litigation delay to wear downthe plaintiffs and postpone the ultimate day of reckoning. A big factor in driving the Exxon~ 0 S e e id.11 See generally Richard B. Stewart, N atural Resource Damages: A Legal, Economic and Policy Analysis.(1995) (Editor and principal author).


73/106

Valdez settlement was the federal criminal case. There is little or no discovery in criminal trials,which proceed on a fast track. Defendants, especially major corporations, want to avoid thepublicity of a criminal trial, uncertainty in the amount of fines that could be levied in light of theAlternative Fines Act, and the potential use by plaintiffs of a conviction following trial in privatecivil claims including claims for punitive damages. Thus, defendants have strong incentives tosettle criminal charges, but in doing so they also want to resolve all government liabilities againstthem, rather than settling one set of claims while remaining open to indefinite and highlyuncertain liability under the others, especially NRD claims. Governments also have incentives topursue a global settlement in the context of a criminal settlement in order to avoid long delays,very high costs, and large uncertainties regarding recoveries in NRD claims.Compared with the criminal case, the civil penalty claims in Exxon Valdez were not big enoughto drive the settlement. But they are certainly large enough in the case of the BP spill to helpdrive settlement if they could be determined without significant factual and legal controversy anddelay. Government assertion of penalties for negligent discharge and possible defenses based onpartial government responsibility for the size of the spill could, however, complicate and delaythe resolution of civil penalties claims and thereby reduce their efficacy as a settlement driver. 12As regards the elements of a global settlement and the allocation of settlement monies: becauseof tax deductibility, insurance, public relations, and other considerations, defendants have strongincentives to maximize the amount paid and spent as NRD and minimize the amounts paid anddisposed of as fines or civil penalties. Trustee agencies also have strong incentives to maximizethe NRD portion of the total, because they can expend them without further appropriation and, inthe case of federal agencies, congressional control. Because of its concerns to ensure punishmentand deterrence, the Justice Department sought to ensure that a substantial portion of anysettlement in Exxon Valdez took the form of criminal fines and civil penalties, which ordinarilymust

Documents

Meeting 3, Attachments #21-28