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Oil Leak at Gulf of Mexico Oil Well

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Guest Crimson Tide

Mobile, Alabama Mayor Sam Jones told the City Council today that his administration may be getting more involved in efforts to protect the city's coastline and estuaries.


Jones said the city is looking at hiring its own skimmer boats through its disaster response contractor, DRC Group, a local concern.


Skimming and booming efforts in Mobile Bay have thus far been handled by the Unified Command, which has been doing a "great job," Jones said. Nonetheless, Jones said, he's concerned that there are not enough skimmer boats to keep oil from the BP Deepwater Horizon disaster out of the bay.

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Remarks by the President to the Nation on the BP Oil Spill

Oval Office


8:01 P.M. EDT


THE PRESIDENT: Good evening. As we speak, our nation faces a multitude of challenges. At home, our top priority is to recover and rebuild from a recession that has touched the lives of nearly every American. Abroad, our brave men and women in uniform are taking the fight to al Qaeda wherever it exists. And tonight, I've returned from a trip to the Gulf Coast to speak with you about the battle we're waging against an oil spill that is assaulting our shores and our citizens.


On April 20th, an explosion ripped through BP Deepwater Horizon drilling rig, about 40 miles off the coast of Louisiana. Eleven workers lost their lives. Seventeen others were injured. And soon, nearly a mile beneath the surface of the ocean, oil began spewing into the water.

Because there has never been a leak this size at this depth, stopping it has tested the limits of human technology. That's why just after the rig sank, I assembled a team of our nation's best scientists and engineers to tackle this challenge -- a team led by Dr. Steven Chu, a Nobel Prize-winning physicist and our nation's Secretary of Energy. Scientists at our national labs and experts from academia and other oil companies have also provided ideas and advice.

As a result of these efforts, we've directed BP to mobilize additional equipment and technology. And in the coming weeks and days, these efforts should capture up to 90 percent of the oil leaking out of the well. This is until the company finishes drilling a relief well later in the summer that's expected to stop the leak completely.


Already, this oil spill is the worst environmental disaster America has ever faced. And unlike an earthquake or a hurricane, it's not a single event that does its damage in a matter of minutes or days. The millions of gallons of oil that have spilled into the Gulf of Mexico are more like an epidemic, one that we will be fighting for months and even years.


But make no mistake: We will fight this spill with everything we've got for as long as it takes. We will make BP pay for the damage their company has caused. And we will do whatever's necessary to help the Gulf Coast and its people recover from this tragedy.


Tonight I'd like to lay out for you what our battle plan is going forward: what we're doing to clean up the oil, what we're doing to help our neighbors in the Gulf, and what we're doing to make sure that a catastrophe like this never happens again.


First, the cleanup. From the very beginning of this crisis, the federal government has been in charge of the largest environmental cleanup effort in our nation's history -- an effort led by Admiral Thad Allen, who has almost 40 years of experience responding to disasters. We now have nearly 30,000 personnel who are working across four states to contain and clean up the oil. Thousands of ships and other vessels are responding in the Gulf. And I've authorized the deployment of over 17,000 National Guard members along the coast. These servicemen and women are ready to help stop the oil from coming ashore, they're ready to help clean the beaches, train response workers, or even help with processing claims -- and I urge the governors in the affected states to activate these troops as soon as possible.


Because of our efforts, millions of gallons of oil have already been removed from the water through burning, skimming and other collection methods. Over five and a half million feet of boom has been laid across the water to block and absorb the approaching oil. We've approved the construction of new barrier islands in Louisiana to try to stop the oil before it reaches the shore, and we're working with Alabama, Mississippi and Florida to implement creative approaches to their unique coastlines.


As the cleanup continues, we will offer whatever additional resources and assistance our coastal states may need. Now, a mobilization of this speed and magnitude will never be perfect, and new challenges will always arise. I saw and heard evidence of that during this trip. So if something isn't working, we want to hear about it. If there are problems in the operation, we will fix them.


But we have to recognize that despite our best efforts, oil has already caused damage to our coastline and its wildlife. And sadly, no matter how effective our response is, there will be more oil and more damage before this siege is done. That's why the second thing we're focused on is the recovery and restoration of the Gulf Coast.


You know, for generations, men and women who call this region home have made their living from the water. That living is now in jeopardy. I've talked to shrimpers and fishermen who don't know how they're going to support their families this year. I've seen empty docks and restaurants with fewer customers -– even in areas where the beaches are not yet affected. I've talked to owners of shops and hotels who wonder when the tourists might start coming back. The sadness and the anger they feel is not just about the money they've lost. It's about a wrenching anxiety that their way of life may be lost.


I refuse to let that happen. Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company's recklessness. And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent third party.

Beyond compensating the people of the Gulf in the short term, it's also clear we need a long-term plan to restore the unique beauty and bounty of this region. The oil spill represents just the latest blow to a place that's already suffered multiple economic disasters and decades of environmental degradation that has led to disappearing wetlands and habitats. And the region still hasn't recovered from Hurricanes Katrina and Rita. That's why we must make a commitment to the Gulf Coast that goes beyond responding to the crisis of the moment.


I make that commitment tonight. Earlier, I asked Ray Mabus, the Secretary of the Navy, who is also a former governor of Mississippi and a son of the Gulf Coast, to develop a long-term Gulf Coast Restoration Plan as soon as possible. The plan will be designed by states, local communities, tribes, fishermen, businesses, conservationists and other Gulf residents. And BP will pay for the impact this spill has had on the region.


The third part of our response plan is the steps we're taking to ensure that a disaster like this does not happen again. A few months ago, I approved a proposal to consider new, limited offshore drilling under the assurance that it would be absolutely safe –- that the proper technology would be in place and the necessary precautions would be taken.

That obviously was not the case in the Deepwater Horizon rig, and I want to know why. The American people deserve to know why. The families I met with last week who lost their loved ones in the explosion -- these families deserve to know why. And so I've established a National Commission to understand the causes of this disaster and offer recommendations on what additional safety and environmental standards we need to put in place. Already, I've issued a six-month moratorium on deepwater drilling. I know this creates difficulty for the people who work on these rigs, but for the sake of their safety, and for the sake of the entire region, we need to know the facts before we allow deepwater drilling to continue. And while I urge the Commission to complete its work as quickly as possible, I expect them to do that work thoroughly and impartially.


One place we've already begun to take action is at the agency in charge of regulating drilling and issuing permits, known as the Minerals Management Service. Over the last decade, this agency has become emblematic of a failed philosophy that views all regulation with hostility -- a philosophy that says corporations should be allowed to play by their own rules and police themselves. At this agency, industry insiders were put in charge of industry oversight. Oil companies showered regulators with gifts and favors, and were essentially allowed to conduct their own safety inspections and write their own regulations.


When Ken Salazar became my Secretary of the Interior, one of his very first acts was to clean up the worst of the corruption at this agency. But it's now clear that the problem there ran much deeper, and the pace of reform was just too slow. And so Secretary Salazar and I are bringing in new leadership at the agency -- Michael Bromwich, who was a tough federal prosecutor and Inspector General. And his charge over the next few months is to build an organization that acts as the oil industry's watchdog -- not its partner.


So one of the lessons we've learned from this spill is that we need better regulations, better safety standards, and better enforcement when it comes to offshore drilling. But a larger lesson is that no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk. After all, oil is a finite resource. We consume more than 20 percent of the world's oil, but have less than 2 percent of the world's oil reserves. And that's part of the reason oil companies are drilling a mile beneath the surface of the ocean -- because we're running out of places to drill on land and in shallow water.


For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we've talked and talked about the need to end America's century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked -- not only by oil industry lobbyists, but also by a lack of political courage and candor.


The consequences of our inaction are now in plain sight. Countries like China are investing in clean energy jobs and industries that should be right here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil. And today, as we look to the Gulf, we see an entire way of life being threatened by a menacing cloud of black crude.

We cannot consign our children to this future. The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America's innovation and seize control of our own destiny.


This is not some distant vision for America. The transition away from fossil fuels is going to take some time, but over the last year and a half, we've already taken unprecedented action to jumpstart the clean energy industry. As we speak, old factories are reopening to produce wind turbines, people are going back to work installing energy-efficient windows, and small businesses are making solar panels. Consumers are buying more efficient cars and trucks, and families are making their homes more energy-efficient. Scientists and researchers are discovering clean energy technologies that someday will lead to entire new industries.


Each of us has a part to play in a new future that will benefit all of us. As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs -– but only if we accelerate that transition. Only if we seize the moment. And only if we rally together and act as one nation –- workers and entrepreneurs; scientists and citizens; the public and private sectors.


When I was a candidate for this office, I laid out a set of principles that would move our country towards energy independence. Last year, the House of Representatives acted on these principles by passing a strong and comprehensive energy and climate bill –- a bill that finally makes clean energy the profitable kind of energy for America's businesses.


Now, there are costs associated with this transition. And there are some who believe that we can't afford those costs right now. I say we can't afford not to change how we produce and use energy -– because the long-term costs to our economy, our national security, and our environment are far greater.


So I'm happy to look at other ideas and approaches from either party -– as long they seriously tackle our addiction to fossil fuels. Some have suggested raising efficiency standards in our buildings like we did in our cars and trucks. Some believe we should set standards to ensure that more of our electricity comes from wind and solar power. Others wonder why the energy industry only spends a fraction of what the high-tech industry does on research and development -– and want to rapidly boost our investments in such research and development.


All of these approaches have merit, and deserve a fair hearing in the months ahead. But the one approach I will not accept is inaction. The one answer I will not settle for is the idea that this challenge is somehow too big and too difficult to meet. You know, the same thing was said about our ability to produce enough planes and tanks in World War II. The same thing was said about our ability to harness the science and technology to land a man safely on the surface of the moon. And yet, time and again, we have refused to settle for the paltry limits of conventional wisdom. Instead, what has defined us as a nation since our founding is the capacity to shape our destiny -– our determination to fight for the America we want for our children. Even if we're unsure exactly what that looks like. Even if we don't yet know precisely how we're going to get there. We know we'll get there.


It's a faith in the future that sustains us as a people. It is that same faith that sustains our neighbors in the Gulf right now.


Each year, at the beginning of shrimping season, the region's fishermen take part in a tradition that was brought to America long ago by fishing immigrants from Europe. It's called "The Blessing of the Fleet," and today it's a celebration where clergy from different religions gather to say a prayer for the safety and success of the men and women who will soon head out to sea -– some for weeks at a time.


The ceremony goes on in good times and in bad. It took place after Katrina, and it took place a few weeks ago –- at the beginning of the most difficult season these fishermen have ever faced.


And still, they came and they prayed. For as a priest and former fisherman once said of the tradition, "The blessing is not that God has promised to remove all obstacles and dangers. The blessing is that He is with us always," a blessing that's granted "even in the midst of the storm."


The oil spill is not the last crisis America will face. This nation has known hard times before and we will surely know them again. What sees us through -– what has always seen us through –- is our strength, our resilience, and our unyielding faith that something better awaits us if we summon the courage to reach for it.


Tonight, we pray for that courage. We pray for the people of the Gulf. And we pray that a hand may guide us through the storm towards a brighter day. Thank you, God bless you, and may God bless the United States of America.



8:18 P.M. EDT

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Guest Cynthia

I stand with my President.


He is engaged.

He understands.

He is working on the problem and developing solutions.


I am proud of him and how hard he is working to help the American people.

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Guest J. Cooper

I liked the President talking about the power of prayer. I believe God has helped our country many times. I just pray that God holds back the hurricanes.

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Guest Tea Party Patriot

I believe that God wants us to help ourselves. The President definitely can communicate a good speech. But, what I did not hear is why people are walking around without respirators cleaning the oil? Maybe it is because BP is afraid that if people are wearing respirators, then the air is toxic and they will be liable for it.


The President did not also explain why BP is able to continue the production of the Atlantis rig

150 miles from New Orleans. Atlantis is one of the largest platform on our planet. It is capable of drawing 200,000 barrels per day. It is also 2000 feet deeper than the Deepwater Horizon. Internal BP documents reveal could lead to "catastrophic" errors.


In a May 19th letter to Salazar, 26 congressmen called for the rig to be shut down immediately. "We are very concerned," they wrote, "that the tragedy at Deepwater Horizon could foreshadow an accident at BP Atlantis."


The reason is that BP controls Obama.


Barack Obama needs to step out of the shadows and be the President. I am still hoping for Change.

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BP announced today that oil and gas is flowing through a second containment system attached to the Deepwater Horizon rig’s failed blow out preventer (BOP).


This second system supplements the lower marine riser package (LMRP) cap containment system, which remains in operation. The new system is connected directly to the BOP and carries oil and gas through a manifold and hoses to the Q4000 vessel on the surface. The Q4000 uses a specialised clean-burning system to flare oil and gas captured by this second system.


Oil and gas collected from the BOP reached the Q4000 at approximately 1:00 am CDT (7.00 am BST) on June 16. Operations continue to stabilise and optimise the performance of the second containment system.

Information on the volume of oil collected and gas flared by the LMRP cap containment system is being updated twice daily on BP’s website, www.bp.com. When measurements are available for volumes of oil and gas being flared by the Q4000, this information will be added to the updates on BP’s website.


Neither the new capture system nor the LMRP containment cap system has ever before been deployed at these depths and conditions, and their efficiency and ability to contain the oil and gas cannot be assured.

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Following a meeting with the President of the United States, the BP Board announces an agreed package of measures to meet its obligations as a responsible party arising from the Deepwater Horizon spill.


Agreement was reached to create a $20bn claims fund over the next three and a half years on the following basis:


* BP will initially make payments of $3bn in Q3 of 2010 and $2bn in Q4 of 2010. These will be followed by a payment of $1.25bn per quarter until a total of $20bn has been paid in.

* While the fund is building, BP's commitments will be assured by the setting aside of U.S. assets with a value of $20bn. The intention is that this level of assets will decline as cash contributions are made to the fund.

* The fund will be available to satisfy legitimate claims including natural resource damages and state and local response costs. Fines and penalties will be excluded from the fund and paid separately. Payments from the fund will be made as they are adjudicated, whether by the Independent Claims Facility (ICF) referred to below, or by a court, or as agreed by BP.

* The ICF will be administered by Ken Feinberg. The ICF will adjudicate on all Oil Pollution Act and tort claims excluding all federal and state claims.

* Any money left in the fund once all legitimate claims have been resolved and paid will revert to BP.


The fund does not represent a cap on BP liabilities, but will be available to satisfy legitimate claims. Further and more detailed terms regarding the establishment and operation of the claims fund and the ICF will be finalized and announced as soon as possible.


As a consequence of this agreement, the BP Board has reviewed its dividend policy. Notwithstanding BP's strong financial and asset position, the current circumstances require the Board to be prudent and it has therefore decided to cancel the previously declared first quarter dividend scheduled for payment on 21st June, and that no interim dividends will be declared in respect of the second and third quarters of 2010.


The Board remains strongly committed to the payment of future dividends and delivering long term value to shareholders. The Board will consider resumption of dividend payments in 2011 at the time of issuance of the fourth quarter 2010 results, by which time it expects to have a clearer picture of the longer term impact of the Deepwater Horizon incident.


The Board believes that it is right and prudent to take a conservative financial position given the current uncertainty over the extent and timing of costs and liabilities relating to the spill. BP's businesses continue to perform well, with cash flows from operations expected to exceed $30bn in 2010 at current prices and margins before taking into consideration costs related to the Deepwater Horizon spill. BP's gearing level remains at the bottom of its targeted band of 20-30 per cent. In addition, the Company has over $10bn of committed banking facilities. To further increase the Company's available cash resources, the Board intends to implement a significant reduction in organic capital spending and to increase planned divestments to approximately $10bn over the next twelve months.


Chairman Carl-Henric Svanberg said: "We appreciated the constructive meeting conducted by the President and his senior advisers and are confident that the agreement announced today will provide greater comfort to the citizens of the Gulf coast and greater clarity to BP and its shareholders. We welcome the administration's statements acknowledging that BP is a strong company and that the administration has no interest in undermining the financial stability of BP. This agreement is a very significant step in clarifying and confirming our commitment to meet our obligations. We regret the cancellation and suspension of the dividends, but we concluded it was in the best interests of the Company and its shareholders."


Chief Executive Tony Hayward said: "From the outset we have said that we fully accepted our obligations as a responsible party. This agreement reaffirms our commitment to do the right thing. The President made it clear and we agree that our top priority is to contain the spill, clean up the oil and mitigate the damage to the Gulf coast community. We will not rest until the job is done."

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Statement by the President After Meeting with BP Executives

State Dining Room


2:25 P.M. EDT


THE PRESIDENT: Good afternoon, everybody. I just concluded a constructive meeting with BP’s chairman, Carl-Henric Svanberg, and I raised two issues at the meeting. First was the containment of the oil that is still spewing into the Gulf. As I mentioned last night, my administration has directed BP to mobilize additional equipment and technology, and in the coming days and weeks, these efforts should capture up to 90 percent of the oil that is leaking out of the well.


Now, that’s not good enough. So we will continue to press BP and draw on our best minds and resources to capture the rest of the oil until the company finishes drilling a relief well later in the summer that is expected to stop the leak completely.


The second topic revolved around the issue of claims. As I traveled across the Gulf I heard growing frustration over the pace at which claims had been paid. And I also heard concerns about whether BP will make resources available to cover legitimate claims resulting from this disaster. So this discussion today was essential.


Currently, under federal law, there is a $75 million cap on how much oil companies could under certain circumstances be required to pay for economic damages resulting from a spill such as this. That amount obviously would be insufficient. That’s why I'm pleased to announce that BP has agreed to set aside $20 billion to pay claims for damages resulting from this spill.


This $20 billion will provide substantial assurance that the claims people and businesses have will be honored. It’s also important to emphasize this is not a cap. The people of the Gulf have my commitment that BP will meet its obligations to them. BP has publicly pledged to make good on the claims that it owes to the people in the Gulf, and so the agreement we reached sets up a financial and legal framework to do it.


Another important element is that this $20 billion fund will not be controlled by either BP or by the government. It will be put in a escrow account, administered by an impartial, independent third party. So if you or your business has suffered an economic loss as a result of this spill, you’ll be eligible to file a claim for part of this $20 billion. This fund does not supersede either individuals’ rights or states’ rights to present claims in court. BP will also continue to be liable for the environmental disaster it has caused, and we’re going to continue to work to make sure that they address it.


Additionally, BP voluntarily agreed to establish a $100 million fund to compensate unemployed oil rig workers affected by the closure of the deepwater rigs.


We’ve mutually agreed that Ken Feinberg will run the independent claims process we’re putting in place. And there will be a three-person panel to adjudicate claims that are turned down. Every effort will be made to expedite these claims. Ken has long experience in such matters, including running the fund that compensated the victims of 9/11. And I’m confident he will ensure that claims are administered as quickly, as fairly, and as transparently as possible.


BP’s liabilities for this spill are significant -- and they acknowledge that fact. We will continue to hold BP and all other responsible parties accountable. And I’m absolutely confident BP will be able to meet its obligations to the Gulf Coast and to the American people. BP is a strong and viable company and it is in all of our interests that it remain so. So what this is about is accountability. At the end of the day, that’s what every American wants and expects.


The structure we’re establishing today is an important step towards making the people of the Gulf Coast whole again, but it’s not going to turn things around overnight. And I want all Americans to know that I will continue to fight each and every day until the oil is contained, until businesses recover, and until the Gulf Coast bounces back from this tragedy, as I know it will.


One last point. During a private conversation with Chairman Svanberg I emphasized to him that for the families that I met with down in the Gulf, for the small business owners, for the fishermen, for the shrimpers, this is not just a matter of dollars and cents; that a lot of these folks don’t have a cushion. They were coming off Rita and Katrina; coming off the worst economy that this country has seen since the Great Depression, and this season was going to be the season where they were going to be bouncing back. Not only that, but this happened, from their perspective, at the worst possible time, because they’re making their entire income for the year in the three or four months during which folks can take their boats out, people are coming down for tourism.


And so I emphasized to the chairman that when he’s talking to shareholders, when he is in meetings in his boardroom, to keep in mind those individuals; that they are desperate; that some of them, if they don’t get relief quickly, may lose businesses that have been in their families for two or three generations. And the chairman assured me that he would keep them in mind.


That’s going to be the standard by which I measure BP’s responsiveness. I think today was a good start, and it should provide some assurance to some of the small business owners and individuals down in the Gulf who I was visiting with that BP is going to meet its responsibilities. But I indicated to the chairman that, throughout this process, as we work to make sure that the Gulf is made whole once again, that the standard I’m going to be applying is whether or not those individuals I met with, their family members, those communities that are vulnerable, whether they are uppermost in the minds of all concerned. That’s who we’re doing this work for.


All right. Thank you very much, everybody.



2:33 P.M. EDT

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Briefing by Press Secretary Robert Gibbs, Treasury Secretary Tim Geithner, Under Secretary for Terrorism and Financial Intelligence Stuart Levey, Admiral Thad Allen, and Assistant to the President for Energy and Climate Change Carol Browner; 6/16/2010


James S. Brady Press Briefing Room


MR. GIBBS: All right, now we've got more participants today. I'm bringing Admiral Allen and Carol Browner in -- come on up, guys, you're the next contestant -- to help us go through -- obviously Admiral Allen -- if you have operational questions about what's going on in the Gulf. Carol was involved in the meetings that were had today, so she and I can answer questions about that.


So, Mr. Feller, take us away.


Q Okay, thanks. Some questions about the fund, oil spill fund. Was BP ordered to do this? Did they do this on its own? How exactly did that come together?


MS. BROWNER: We reached an agreement with BP that they will establish an independent claims facility and an escrow account. And it was in the course of discussions that they've agreed to do all of this.


Q So is it your feeling that the company would have done this on its own?




Q So, okay, this is essentially a White House-ordered agreement?


MS. BROWNER: It was a White House-driven agreement. They're now -- they will agree to set up this facility where claims can be expeditiously reviewed and decisions made about how to proceed. They'll set up an escrow account of $20 billion. They will also provide assets, U.S. assets of $20 billion to back that up.


MR. GIBBS: I'll say this, Ben. Obviously the White House and other agencies of the government have been working over the past several days, and you heard the President speak last night, about -- and others in the administration speak yesterday -- about directing them to set up, as Carol said, an escrow account that would be independently administered for speedy claims.


Q Is BP the only company paying in? And if so, what about the other companies that were involved in some way that may have an interest in the well or the rig -- are they liable at all?


MS. BROWNER: Well, BP is the responsible party. There may be other responsible parties. Obviously BP will be working to -- with those companies in whatever way is appropriate to secure funds. But what we have is an agreement for $20 billion in this fund. It is not a floor, it is not a ceiling, but what this gives us is the assurances so that we can make sure that the people, the small businesses that have been impacted can get their claims paid in a timely manner.


It sets up a process. There will be Mr. Feinberg and then a three-person review panel. All of that can be done in an expedited manner. At which point the individuals' claims have been met, if the individual is not happy at that point, they retain all of their legal rights. BP, however, can only seek an appeal of Mr. Feinberg's determination if the claim is in excess of $500,000 that's been granted, or if Feinberg certifies a appeal is allowable.


Q Why $20 billion? Is that the figure that the White House thinks is enough to cover all the damage?


MS. BROWNER: Again, it's not a floor or a ceiling, right?


Q But why the figure?


MS. BROWNER: Because what we wanted to make sure that there were adequate resources there for people to know that they could have their claims met. There were also claims -- the states, local governments may have claims, and so we wanted to start this with a fund that would be adequate to meet all of those expectations.


MR. GIBBS: And just to reiterate, this does not in any way limit or cap the economic damages that BP may be responsible for.


MS. BROWNER: Or natural resource damages.


MR. GIBBS: Or natural resource damages. So it is not a floor, not a cap. It does not limit in any way their responsibility.


Q Just one last question. We didn't hear from Mr. Hayward outside. Did the President have anything specifically to say to him?


MR. GIBBS: The President spent 20 or so minutes at the very beginning of these meetings -- for several hours our group was in discussing the details of the framework agreement, and the President spent 25 minutes with the chair alone in the Oval Office. And I think you heard the President speak directly about that.


The comments that he made at the opening of the meeting and to the chair were not directed at any one person but directed at the entire company, and underscore the responsibilities that they have as the responsible party for this disaster.


Do you have anything you want to -- yes, ma'am.


Q Can you bring us behind the scenes a little bit for the meeting? It was supposed to last a short time; it lasted several hours longer than it was on the schedule. And I'm wondering if you can tell me a little bit about how it played out and whether the apology that was made was something that you suggested that they do.


MS. BROWNER: They actually began the meeting with the President in the Roosevelt Room with an apology from the chairman. It was not something we asked for. The meeting then turned to the President laying out the concerns we had, the things that we thought were very, very important to be addressed. We talked about the containment that's ongoing. He talked about the fact that every time he goes down to the Gulf he visits with these individuals, he visits with small businesses who are feeling the impacts, the need to get that addressed. And the best way to move forward would be through a independent process, not run by the government, not run by BP, and an escrow account to ensure adequate funds to meet the needs.


And again, if they're not adequate, it's not a floor, it's not a ceiling. There will be -- BP remains liable. They remain liable for everything they were liable from the beginning -- which is they remain liable for the cleanup costs, and now what we have is this fund to honor the economic costs.


Q And was the dividend something that you pressed them on?


MS. BROWNER: Well, I mean, the President has said publicly, going back almost two weeks ago now, that he understood they might have legal obligations, but he didn't want to be in a situation where the people of the Gulf of Mexico weren't getting their needs and their claims honored and dividends were moving forward. And so they agreed today not to proceed with the final dividends of this year.


Q So what was the atmosphere of the meeting? What did it go on longer? What were the things -- there must have been sticking points that --


MS. BROWNER: There were sticking points. We did have to take breaks at times. And we had a number of people. They had -- there were six people I think representing BP, and we had in the room maybe six or seven. And there were -- at times, we needed to -- each side wanted to just talk among themselves.


We did take a break at one point to inform the President of the state of discussions and to seek his counsel. And I guess from the outside it seems like it was a long time. It was a pretty busy time, but there were breaks -- not for lunch or anything like that, but for conversation among each of the parties alone.


Q Quick follow-up -- did the President accept the apology?


MR. GIBBS: I assume so, yes.


Q Can you tell us more about the sticking points? What exactly were those sticking points?


MR. GIBBS: To be honest with you, I think we'll be happy to get into what was agreed to.


Q So you can't tell us what it is that you sort of bumped heads over?


MS. BROWNER: We've reached an agreement. It's a really important agreement for the people of the Gulf of Mexico. It gives the individuals and it gives the small businesses some certainty that their claims are going to be handled in an expedited manner. And I think this is a very positive step forward in what has been a very difficult situation.


Q The $100 million fund for unemployed -- $100 million, right? Was that suggested by the White House, or something that they volunteered?


MS. BROWNER: No, that was suggested by the White House. We are concerned, and we welcome the fact that they are making a voluntary contribution, $100 million, to a foundation for unemployed rig workers as a result of the changes in the situation in the Gulf of Mexico.


And you should also know, we are continuing to pursue some legislative fixes that would allow individuals to apply for unemployment insurance.

Q Can I follow on that?


MR. GIBBS: We're going to make our way our rounds.


Q Can you -- just one more thing on sort of the tone of this meeting. As these various things were being brought up -- the $100 million, the $20 billion -- what was the sense? I mean, what were they doing? Were they pushing back? Did they -- can you give us some color as to how they were reacting?


MS. BROWNER: Negotiations are negotiations. People have ideas; they put them forward; they discuss them; they decide how to proceed. But we were very clear from the beginning -- the President was clear from the beginning that what we needed was some sort of independent claims process; we needed an escrow account. And we stayed focused on achieving the President's goals for the meeting.


Q And one final thing. The $20 billion fund, when was that agreed to? Was that yesterday and then just finalized today?


MS. BROWNER: It was agreed to today.


Q Two questions. The first is, it took a long time for this meeting to come to fruition. I mean, the President obviously almost waited two months before he saw Mr. Hayward face to face. Going forward, do you expect to have continued meetings at this level? Or is this it?

MR. GIBBS: The President will meet at -- meet with whomever he needs to meet with, whenever. Admiral Allen is in touch with BP, others are in touch with BP, and we have been throughout this process and we will continue to be.


Q But at this level, I mean do you expect this to happen again, or is it not --


MR. GIBBS: Again, if more meetings are needed, more meetings will be had.


Q Going back to what the President said yesterday -- this is probably more for Admiral Allen -- the President said yesterday that if something isn't working, we want to hear about it; if there are problems on the ground, we will fix them. Are you confident that local authorities have the ability to communicate to the federal government when there are problems? Because we have been reporting for a good deal on the Gulf and it seems like a lot of local officials feel like they are having to take steps on their own and kind of deal with the problems as they come up, as opposed to waiting for the federal government.


ADMIRAL ALLEN: No, there's a conduit into our incident commanders. But what we did do after the visit down there -- and I talked to the President about this yesterday -- we established specific deputies for the incident command post in Mobile for Mississippi, Alabama and Florida. We also guaranteed Governor Crist we'd put an incident management team -- this is a group of Coast Guard folks -- into their emergency operations center in Tallahassee. We're going to do the same thing in Mississippi, in Biloxi. So to the extent that they think there is a problem or there is a problem, it doesn't matter to us, we got to reduce the cycle time, our ability to respond. We're going to do that by putting leadership closer to the states, and the ability to make decisions out there and put assets on target as soon as we can, and quicker.


Q Following up on I think it was Dan's question, on the $100 million, you had been saying before that the oil rig workers that are put out of work would basically be treated equally to other people. It now sounds like they're being put into a different category with a limited amount of money. Are they now not going to be treated as well as they would have if they could have applied just like everybody else for the $20 billion?


MS. BROWNER: I think there were some concerns about, under the law, their ability to participate in the other fund, and we wanted to make sure that there were mechanisms to address their needs. And so the $100 million voluntary contribution by BP and the work that we're doing in Congress we think is a significant step towards meeting their needs.


MR. GIBBS: And I would say this. You heard the President -- he said this in the Gulf probably more than a week ago and reiterated in his speech last night that he understands the economic impact of the deepwater drilling moratorium, understanding that we do not yet know what caused the accident. And because of that, the President believed it was important to pause additional deepwater drilling, but has asked the national commission that will look into the regulatory framework that we must have going forward to ensure drilling is safe, that they can and should look at the framework around deepwater drilling first and report back to him as soon as they can. They do not have to wait for any set period of time.


Q But it sounds like they're now kind of in a second-class here, having to rely on this separate fund. And you say going to Congress -- well, that's taxpayer money. So instead of -- so it sounds like taxpayers are going to be paying for some portion of this.


MS. BROWNER: It's for the unemployment insurance portion of it. That's what we're asking Congress. Some of the workers apparently would qualify under existing law; some might not. So we're seeking to make sure that all of them clarify -- and now there is this additional fund that has been created.


Q And one other area, Feinberg. I mean, knowing him, he'll get up and move in quickly. But he's got to set standards. I mean, there's a lot of bureaucracy and setting up an operation here. How quickly will he actually start handing money out to people?


MS. BROWNER: It's important to understand people can continue to file claims. This will be a seamless transition. As Feinberg's operation comes up, they will be shifted over. But there is a claims process today. We all realize it's not working the way we want it to work. That's part of why we reached this agreement.


Q People down there are saying that what they're getting is a drop in the bucket compared to what they --


MR. GIBBS: Chip, that's why --


MS. BROWNER: That's why we set this up. That's why we did this.


Q But when will they be getting the bucket rather than the drop in the bucket?


MR. GIBBS: Well, we've asked Ken to set this up as quickly as he can and humanly possible. I think picking him, in somebody who has done this before, understands, as you said, the bureaucracy and the standards that have to take place. I do think it is important to reiterate what Carol said, which is that if you were to file a claim yesterday or today, you still fall within a 90-day window to have that claim adjudicated. That will continue to be the case. We believe that this will be handed off in a seamless way and that we now have additional backstops to ensure that claims are not just heard independently, but the appeals process beyond Ken Feinberg to a three-judge panel and ultimately retaining their right under federal law if they're unsatisfied with even what the three-judge panel rules, that they can visit federal court.


Q The President has said that these are people with mortgage payments, boat payments, families to feed. If they don't get this money in a week or two, they could be looking at food stamps.


MR. GIBBS: Well, again, we are moving as expeditiously and as quickly as we humanly can.


MS. BROWNER: And there are claims being honored. I mean, there are claims, and we can get you the numbers; they're reported on a regular basis.

MR. GIBBS: Should get them from -- I think BP did a claims call yesterday. I don't know if you guys were on that.


MS. BROWNER: And we have the numbers, Nick has the numbers. So we can get you the numbers -- the number of claims that have been responded to.


But it's important, people should go into that process, if they have a claim to date. They will be moved over as this system is stood up. It's also important to understand that under -- if the federal government adjudicates the claims, that we make a one-time payment. Under this, people will be able to apply over and over again as is necessary. So it won't be just a one-time payment.

MR. GIBBS: So in other words, if you're a fisherman in Grand Isle, you don't have to estimate -- because, quite frankly, I'm not sure anybody knows how long the Gulf is going to be closed. You don't have to extrapolate 12 or 24 months in advance and come up with the paperwork and what have you. You can file a claim now. If you're still not able to fish sufficiently --


MS. BROWNER: Two months from now.


MR. GIBBS: -- right, two months from now. Because there's still restrictions on fishing in certain parts of the Gulf, you can refile until you're made whole. That's a different process than if the -- as Carol said, if the federal government ran it, it's a one-time deal.


Q But if I'm a fisherman and my boat payment is due in two or three weeks, am I going to get it, or is that just out of the question that it would move that quickly?


MR. GIBBS: You will have your claim heard under the current process and seamlessly moved over to a new independent process that we think gives the certainty of the funding, as well as the independence of a third party.

ADMIRAL ALLEN: This is the overall summary. We can give you a more detailed breakdown if you wish. But as of this morning, there were over 66,000 claims filed. Disbursed was over $81 million; they've already passed the $75 million threshold --


MR. BROWNER: That's paid.


ADMIRAL ALLEN: -- claims. And checks cut, 26,000. So those are the overall order of magnitude numbers.


MR. GIBBS: Chuck.


Q Can you define a "dissatisfied claimant"? Is that people that received money and then in hindsight feel like, you know what, that wasn't a fair thing? Could you just define "dissatisfied claimants"?


MS. BROWNER: Let's do how the current system works and how it will work. Right now, if you file a claim under the current system and you are dissatisfied with that claim, you have the right to go to the federal trust fund, the oil spill liability trust fund, or to go to court. What this sets up is you can file a claim; Mr. Feinberg will determine whether or not your claim should be paid, how much should be paid. If you -- at that moment, you can take it. And if two months later, you're still not working, you can come back and file another claim.


MR. GIBBS: And BP is legally bound to pay that.


MS. BROWNER: They're legally bound to pay it. If you don't like what Mr. Feinberg decides, you can go to a three-person panel and have that reviewed. At the end of that panel, you could take that. If you still don't like that --


Q Can you take -- if you're dissatisfied and take the money?


MS. BROWNER: No. Well, if you're dissatisfied, what you do -- if you don't like what Feinberg does, you go to the three-person panel. If you don't like what the three-person panel does, you then have a choice. You can go to the federal trust fund, the oil spill liability trust fund, or you can go into court.


Q But you can't take the money and be dissatisfied?


MS. BROWNER: You can't take the money and be dissatisfied.

But the big thing here is that you will get a much more -- you will get a quicker answer, and you can file over and over again, because that was a real short --


Q You can file a lawsuit if you choose to --


MS. BROWNER: If you choose --


Q -- not to take the money?


MS. BROWNER: Correct.


Q Okay.


MR. GIBBS: I think it's also important to understand, the 90-day process, the three-person review panel is within the 90-day process.


Q They have to within --


MS. BROWNER: They all have to be done.


Q -- the 90 days?




Q What did you guys agree -- can you share with us the details of -- what is the procedure to go back to BP and say, you know what, $20 billion isn't enough? Is there a specific procedure you guys agreed upon when you go back and say -- if you need -- you say it's not a floor, not a ceiling -- that you go back and say, we need more money, is there a specific procedure you guys agreed upon?


MS. BROWNER: BP retains all of its liability. Nothing in that has changed. So if there wasn't money available, let's say, you can go right back -- okay, you could go straight to BP and say, I have this claim. So all of the rights of the claimants have been preserved, right? Right now, this new escrow account, this new claims facility, will stand in its place. But if for some reason there wasn't money in that, you have all of your rights to go right back at BP and ask for the payment.


Q And that's the -- okay. And then, last night's speech --


MS. BROWNER: The only people who have limited their rights here is BP. I think that's really, really important to understand.


Q And if you accept the money you have limited some of your rights.


MS. BROWNER: Right, but that was true under the existing situation. We've given you a better scenario now.


Q Last night's speech when the President talked about energy legislation, he did not specifically talk about pricing carbon, cap and trade, et cetera. Is it -- what is the President's -- does he -- will he accept a bill out of the U.S. Senate that doesn't have this if he likes -- I mean, can you just walk us through that?


MR. GIBBS: Well, let me just say this. You've heard the President for three and half years now talk about his approach to comprehensive energy reform. I don't think he's -- I don't think that's been unclear. He reiterated a call last night and said that the greatest price we pay is the price of inaction.


This morning the President spoke with Senator Kerry and with Senator Lugar, each of whom have energy legislation that the Senate is likely to take up in the next several weeks. We announced that next Wednesday we'll have a bipartisan group of senators to the White House to discuss the process that the Senate will use moving forward. I think it is safe to say that the President's direction on energy is very similar to the direction that is in the Kerry-Lieberman bill, and that the President feels strongly that including a component to deal with climate is important in comprehensive energy reform.


Now, let me just say this. There are a number of proposals. That's why Senator Lugar and Senator Kerry both got calls. There have been ideas about increasing energy-efficiency standards in buildings much as Carol has worked tirelessly to do with cars, light trucks and heavy duty trucks for the very first time.


We met with -- the President met with business executives at the White House last week, which -- one of their questions was why more money isn't spent on R&D when they're spending a ton of money on R&D. There are a lot of ways to get to this. The President is going to have a meeting next week here to work through that process going forward.


Q Are comparisons to the public option fair, where this was something -- the President supported the public option, but he got 90 percent of what he wanted and he'd rather sign 90 percent --


MR. GIBBS: You know, I don't know why at this point it would be pertinent to get into hypotheticals. Again, I think the President -- go back to what he said at Pittsburgh a week and a half ago. Go back to what he said in 2006 as a U.S. senator. I think his position on how to approach our energy policy comprehensively is fairly well known.


Yes, sir.


Q Two questions. One is, what is BP getting as a result of this agreement? Are they getting any agreement that they won't be found negligent at all?


MR. GIBBS: Not that I'm aware of, no.




Q And then, Ms. Browner, you had said that I guess BP would I guess fund the fund with U.S. assets, so is it not cash? Or is it --


MS. BROWNER: No, they will make payments over a four-year period of $5 billion a year. But they will provide assurance for those commitments by setting aside $20 billion in U.S. assets. It's like an insurance policy. It's not 20 and 20. It's they've committed to $20 [billion], but we will have -- I want to use the right legal word here -- that they will provide assurance by setting aside assets. So as the fund grows up, as the fund grows in size, the assets could be reduced. It's just -- it's an insurance policy.




Q And what did -- what is BP getting out of this agreement? I mean what --


MR. GIBBS: I would ask BP. They may have -- I think they'd have a better way of reading out what they did and why they did this. I think the President's objectives in this was -- objectives were clear. This provides certainty and peace of mind for those in the Gulf if there was any wonder or concern that they would not be made whole for the disaster they didn't cause. That assurance we have today.


And I think -- Carol mentioned this briefly -- the story that the President spoke of with the chair at the end of their meeting in the Oval Office was that when -- the President asked the chair when when they're talking about what's happening in the Gulf, when they're talking and discussing these parameters with the board and with other executives, it's the people that he's met in his four trips -- the people in Grand Isle, the people in Pensacola, the people in --


MS. BROWNER: On Dauphin Island.


MR. GIBBS: Dauphin Island -- who for four generations have fished on these waters to make a living, who have invested their hard-earned money and their sweat in building their business -- those are the people that the President has been focused on throughout this process and believes -- he believes that that's what BP should be focused on as they're discussing these.




Q Robert, on that point, is there a danger President Obama is over-promising when he says, we'll make you whole and make the Gulf Coast even better than it was before? I mean, people's lives have been changed and it looks like it's going to get worse a long time before it gets better.


MR. GIBBS: Well, and the responsible party has committed today through an escrow account that starts at $20 billion to make them whole. Mark, if you're a fisherman or you're a shrimper and your livelihood has been changed because you're in what would traditionally be the heart of the season where you made almost all of your income, you'll be compensated for that.


We've set out a process that is -- that provides independence from the company that caused that disaster with the assurance that the funding will be there. That's important.


In terms of Gulf Coast restoration, the President was concerned about the region environmentally long before this disaster. And you've -- whether it was manmade or a natural disaster -- Katrina coming to mind -- that has seen the wetlands and the marsh erode and become degraded for many, many years, this President believes that we have an obligation to return that valuable ecosystem and environment to a place better than it was before this accident happened.


BP, as Carol said, is liable for the environmental degradation through natural resource damage assessments. Those will be assessed and that bill will be provided to BP. And I believe the basis of that will help restore the environmental vitality of that region.


Q And are we right in assuming, based on what President Obama said today, that no ass-kicking was required at today's sessions?


MR. GIBBS: Again, I think the President was clear about what he thought BP was responsible for and obligated to do. We came with that in mind and left, importantly, with an agreement that is substantive, providing the assurance, providing the independence, providing the funding that I'm sure people in the Gulf went to bed last night wondering whether that was going to be possible. They'll go to sleep tonight knowing that there's a process in place to do this quickly, efficiently, transparently, and independently. And I think they will -- they'll sleep better because of it.


Q If there wasn't an ass-kicking, was there a tense tone? Were there raised voices? Was it confrontational?


MS. BROWNER: It was a business meeting. It was a focused business meeting. We came to get something done. We were successful in doing what we thought was important for the people of the Gulf.


Q -- BP said that the President was frustrated. He clearly said at the stakeout that the President was frustrated. Could you explain why, give us some color about that?


MR. GIBBS: Why he was frustrated?


Q I mean, what perpetuated the frustration --


MR. GIBBS: The last 58 days.


Q How did he express it?


Q Yes, how did he express it? What about tensions?


MR. GIBBS: Look, again, the parts of the meeting that I were in were as Carol described them. I think when the President sat down in the beginning of the meeting, it is fair to say he outlined his viewpoint and the stories that he'd heard and that we've all seen over the past eight-plus weeks -- the livelihoods of generations interrupted.


As you heard the President say, and you've heard this story a couple of times -- we were talking about Dauphin Island in Alabama, a place that was just beginning to recover after Katrina. This was to be the first season, post-Katrina, where they thought the economy was getting better. They had rebuilt after watching a hurricane -- one of the reasons you take that ferry is because that island doesn't -- that's two islands now.


So this was to be the season for tourism or for fishing that this region was going to get back up on its feet. And I think the President opened the meeting by discussing those stories. And he ended his time with the chair discussing those stories again.


I don't think anybody from BP would walk away from the last 58 days or the meeting here not knowing that the President, all of those involved in the response and the recovery, have been frustrated.


Q What I'm asking is, again, I'm going to try to go back and get something out to make you understand what I'm saying. Were there clenched-teeth moments? Were there moments when he struck the table with his fist to show his frustration, anger --


MR. GIBBS: I think his frustration was exhibited in the stories that he told, the stories that he's heard from the Gulf and the stories that he took back to speak with the executives in the company that are going to make the decisions that resulted today in the knowledge that the people of the Gulf will indeed be made whole.


I'm sorry, Roger.


Q Yes, I want to go to BP's financial condition, if you could shed a little light on that. Its bonds were trading at distressed levels today, indicating a mounting concern whether it can pay debts. And some people were saying that there's about a 40 percent chance of default in the next five years, based on its credit -- can you take us behind -- and what was said by the company or the White House's own financial analysis that says the company will not default?

MS. BROWNER: Well, we did not discuss with BP today their financial -- what's happening in the market. We obviously have had analysts look at this situation. We believe that the company has strong assets. They have a lot of assets that they can -- they will continue to operate, continue to be a viable company, and that they will be able to honor the claims associated with this dreadful disaster.


Q Did they have any -- make any suggestions about debts at all?




MR. GIBBS: Wendell.


Q Have you removed the possibility of punitive damages from this equation?


MS. BROWNER: Nothing was taken off the table with respect to enforcement of the laws, whether it be the Oil Pollution Act, the Clean Water Act, and that was made clear. Nothing has been taken --


Q But in terms of government --


MS. BROWNER: In terms of punitive --


Q -- seeking punitive damages.


MS. BROWNER: Nothing has been taken off the table in terms of the Justice Department's work.


Q Admiral Allen, as I understand it, even if everything works optimally, 10 percent of the oil will still be leaking into the water at the end of July. Is the President satisfied with that pace?

ADMIRAL ALLEN: Well, we hope by the end of July we will have a new capping system and a new production system that will give us up to 80,000 production capability a day, and at that point, we're pretty well assured there should be a minimal leakage around that wellhead.


Obviously the ultimate solution is to drill the relief well, which we're looking for the first two weeks of August. But based on the proposal we got from BP last week and our second letter to them, they have come in with counterproposals that have increased the production capacity there that should have us, by the end of next week, up to about 28,000 barrels a day, and then by the end of June, 53,000 barrels. We're going to have to shift from the containment cap we have now and put a harder cap on with a device that will allow us to produce more oil that will get up to 80,000. But the plan is to get us to 80,000 by end July.


Q And that's 90 percent containment -- we're talking about the same thing?


ADMIRAL ALLEN: We're going to be shifting from a containment device to an actual cap that will require us at some point to literally unbolt the flange on which that lower marine riser pipe was on that was cut and replace it with a new flange or -- there's three different options they have to do that. That will -- we'll have to do that to be able to jump from 53,000 to 80,000 barrels a day.


Q There will still be substantial oil offshore.




Q At this time, are any foreign-flagged skimmers headed to this country -- not just the skimming equipment we put on our own boats?


ADMIRAL ALLEN: We have foreign-flagged vessels that are operating out there, they're on the way. We will not turn down any offer that's viable that we can use the equipment for.


Q It's my understanding offers of these things were made early on and were turned down.


ADMIRAL ALLEN: We have an exhaustive list of when it was received and how we acted upon with that. We're glad to make that public.


Q So there are foreign-flagged skimmers on the way?


ADMIRAL ALLEN: Foreign-flagged vessels are operating out there. There's a difference between skimmers and skimming equipment.


MR. GIBBS: There are foreign-flagged --


Q I'm trying to be specific.


MR. GIBBS: No, no, I understand, but I want -- you guys have been focused on this now for several days and I just want you to hear what Admiral Allen said. There are foreign vessels operating as we all speak in the Gulf right now.


ADMIRAL ALLEN: We haven't got to a condition yet where they would need a Jones Act waiver to operate because they're operating outside of state waters. BP has also gone out and purchased from Canada, Mexico, the Netherlands, and Norway -- wherever they can find a source of supply, they are seeking it.


MR. GIBBS: David, did you have a follow?


Q Yes, to follow on the containment issue. Was there any reason that the President or anyone else in the meeting today had to pressure BP to do anything else on the containment front? Or are you completely satisfied with the course of action that they laid out in the letter as they're proceeding? I mean, was that not part of the --


ADMIRAL ALLEN: Well, as we briefed over the last couple of weeks, there's been a very significant iterative process. We said, give us a plan; we said, not enough capacity, not enough redundancy, not soon enough -- and they came back, they gave us another plan. They've gone to some pretty extraordinary lengths to bring in these shuttle tankers that are not normally used in the Gulf of Mexico. These are vessels that are dynamically positioned so they don't move, hooked to a flexible hose to the production platform that would allow us to ramp up between 53,000 and 80,000 barrels a day. We've given them the stretch goals. They've come in and told us how they're going to do it. We need to monitor that now.

MS. BROWNER: And what we did -- we should point out -- we did at the beginning of the meeting, after the President left the room, we did spend some time going through these containment plans, making sure that every single thing was being done to expedite. They walked through the different production schedules, where different parts are coming from, where vessels are coming from. And as the Admiral say -- said, we have to obviously Plans making sure that every single thing was being done to expedite. They walked through the different production schedules where different parts are coming from, where vessels are coming from. And as the Admiral said, we have to obviously remain vigilant to ensure that all those -- they're actually -- in the case of getting t something on the order of 50,000 barrels per day by the end of this month, they're actually manufacturing a riser. There's not one in the world that would work for this particular application because it's never been done before. So it's actually in a foundry being made.


Q On the $100 million fund, does that effectively limit BP's responsibility for any worker moratorium layoffs?


MS. BROWNER: Well, as we said, there were significant questions about whether or not those individuals would be eligible for -- what's the word I want to use -- under the Oil Pollution Act. And so what we wanted to do -- that's why we had already asked Congress to look at changing the unemployment compensation for a disaster situation. And now BP has made a commitment of $100 million to a foundation to address the needs of these workers.


Q And as far as the government is concerned, that settles the issue of BP's liability for workers who were laid off?


MS. BROWNER: The point I'm trying to make is there's a very significant legal question about their liability. And so this was a way for us to address the needs of these workers.


Q Who is going to administer that, and how? And will it include people who are not just rig workers explicitly but also people who are part of that deepwater who are going to be just as affected but aren't literally rig workers?


MS. BROWNER: So it's important to understand that today we reached a very extensive framework. We covered an awful lot of issues. Obviously there were some details to be further fleshed out with lawyers, et cetera. So, for example, you've asked a question about foundation; that's a detail to be fleshed out.


Q Is it just rig workers explicitly, or is it people who are part of that larger economy that are affected by the moratorium?


MS. BROWNER: It's focused on oil rig workers.


Q Thanks, Robert. During the campaign, the President made a big point of saying he would let science guide his decisions. But a majority of the scientists consulted by Interior said they never signed off on a blanket deepwater drilling moratorium and actually say that's a bad way to go. So why isn't the President following their recommendations on that?


MS. BROWNER: At the time of the accident, the President asked Ken Salazar at the Department of Interior to undertake a 30-day review. They reached out, they talked to a lot of experts, they got a lot of input. Some of the people who provided input did not -- let me say it this way -- then policy decisions were made based on those recommendations. Mr. Salazar made a decision to recommend a moratorium; that was a policy decision. But the experts were providing their expert advice, but not the policy decisions that were obviously under the purview of the Secretary of Interior.


MR. GIBBS: And I will say this again -- I know the President said this last night -- we do not know what happened. Thirty-three additional wells were being drilled at deepwater depths. As we now know, the largest environmental disaster in our country was taking place. The President did not think it made sense to continue those drilling activities as we were dealing with this without knowing what was going on.


And I've said this before and I'll say it again, the President has told Governor Jindal and others, you can't sit here and tell me we can't trust BP to do anything, but we're going to take their word for it on the four permits that they had drilling in deep water, even as we were dealing with BP's disaster in the Gulf. The President just wasn't willing to take that chance.


We had a long discussion about it because we understood and he understood that this was not a decision that didn't come without some displacement. But that was superseded by not knowing what had happened and what could potentially happen if this happened again.


I daresay the resources that would be necessary to deal with this happening a second time in that region would be hard to describe in words, and the President believed it just wasn't a chance that he wanted to take.


Q Robert, there's a criminal investigation going on; Justice is looking at the actions of some of the parties here. BP executives were in a meeting at the White House today talking to the President. Might the administration look at any claims they made, representations they made, things they said, with a view towards whether these might -- with respect to their own liability in this? I mean, there's an ongoing investigation.


MS. BROWNER: There was no discussion about any -- at any time in the meeting there was no discussion of any activities related to the Department of




… it's an ongoing investigation.


MS. BROWNER: There was no discussion about any -- at any time in the meeting, there was no discussion of any activities related to the Department of Justice investigation.


Q So they didn't ask for immunity?




Q Was there a transcript of the conversation?


MS. BROWNER: No, there was no request for immunity.


Q Okay, a quick follow-up.


MS. BROWNER: Nor would one have been granted.


Q Okay, a quick follow-up, if we could get a flavor of the meeting and how it went in the sense of -- the amount of money, for example, the $20 billion that was set aside, did BP want to put less into that fund? Did they want the payments stretched out over more than four years? Did they want to put nothing -- did they not want to create a fund at all? Did the President threaten to use his legal authority in the 1990 act to go to court if necessary? I mean can you give us some sense of this?


MS. BROWNER: As we said, it was a very focused, businesslike discussion. The President had said what he wanted to accomplish. We then worked -- a group of us worked with a group from BP, including the chairman, Mr. Hayward and others to make that happen. And like any time there's a negotiation or discussion, there are sticking points and they get worked through.


And what we have now is the product of that discussion. And it is an incredibly important and historic agreement that we have achieved for the people of the Gulf of Mexico.


MR. GIBBS: And I'd say this, Peter, the reason the President had this meeting was to come out with an agreement like this. That -- his goal has been to do what we have to do to take care of the people of the Gulf that have been hurt environmentally and economically.


Today, we come out with the assurance through funding and through an independent process that that will take place. That's what's driven his actions this entire time. This is a tangible and substantive achievement that goes a long way to a big part of the speech that he talked about last night.


Q I believe Carol said at the beginning of the meeting, though, this is something BP was not going to do on its own. I mean the President had to push --


MR. GIBBS: Well, I think that's -- I think that is a push that's been happening over the past many days.


MS. BROWNER: Right, right.


MR. GIBBS: And you'd have to ask them when they came to some conclusion in their mind, we have had -- we've had folks looking at this for many days beyond yesterday and today.


Q I apologize, Robert, I have to ask a question for a colleague too on General Petreus today played down the idea of a December review of progress in Afghanistan, saying too much should not be made of that review, can you give us a sense of the December review? Do you still believe it's a key point for evaluating progress in Afghanistan?


MR. GIBBS: Well, there's no question that the December review is important, but without having seen either the question or General Petreus' exact answer, it's not as if -- it's not as if that review isn't ongoing on a daily, weekly and monthly basis. Again, I'm happy to look through the exact transcript, but I think for some reason to believe that that review process would not exist until December might be what he was pushing back on.


Obviously, those theater commanders provide the President with written weekly updates that are quite thick. This is both Afghanistan and Iraq. As you know there are monthly Situation Room meetings with the Cabinet -- relevant Cabinet members, the President and the Vice President. And this review is ongoing in nature.




Q Robert, two things. Van Jones* says of disperse-ments -- disperse-ments, not disappearance, what happens to the disperse-ments now? You're talking about the capturing of the oil -- the President talked --


MR. GIBBS: Just -- I'm sorry, let's make sure -- dispersants, which is the liquid?


Q* Disperants


MR. GIBBS: Or a disbursement which is the payment?


Q Not -- I'm sorry dispersants --


MR. GIBBS: Okay.


Q Okay. On top of the oil -- he says, the dispersants push the oil -- it's all about optics -- they push the oil from the surface down to the bottom of the ocean where it kills shrimp -- the marine life and things of that nature, so you're talking a capturing 90 percent of the oil, but what happens to the dispersant -- the oil that has been pushed down with the dispersants?


MR. GIBBS: Yes, do you want to do this?


ADMIRAL ALLEN: The purpose of dispersants is to separate the oil into smaller particles so they biodegrade quicker. Oil will ultimately biodegrade at some weight -- there's a metabolic rate for absorbing oil into the Earth's oceans. The dispersants accelerate that somewhat. And we are applying -- have applied dispersants on the surface and are applying them subsea at the source of the leak.


We have because the extensive amount of dispersants that have been applied have limited --




And are applying them subsea at the source of the leak. We have, because of the extensive amounts of dispersants that have been applied, have limited to very particular situations the dispersants that are used on the surface, just because of the unknown factors associated with how much we've had to use so far. The most effective application of dispersants is at the leak site down at the bottom where they could be most effective in dispersing the oil. *.


Q So but -- okay, with that, that is a poison that pushes the oil down. What happens to that that? You are pushing it down -- what happens?


ADMIRAL ALLEN: The oil ultimately biodegrades. It is suspended for a while and then it biodegrades. All oil will ultimately weather and biodegrade. Dispersants accelerate that. And we know there is some toxicity with dispersants, but it is far less than the toxicity of the oil.


Q How long is it going to take the biodegrading to happen?


ADMIRAL ALLEN: I would -- we can check with NOAA and give the exact --


MS. BROWNER: * I'm going to give you a way to think about this maybe. If you have a oily pan and you go to wash it, you squirt some Dawn in, right? And what --


Q *


MS. BROWNER: Dawn. And what happens? It starts to -- Dawn, right. Okay, Joy, but actually Dawn is the preferred. And it starts -- that's how they wash the animals, in Dawn. They actually use Dawn for the animals. And it starts -- you know, so in your kitchen sink, you have the oil starting to break up and you're seeing that biodegrading process right in front of you. That's what happens.


Q Okay and also --


MR. GIBBS: I don't do dishes so I can't *


Q Ooh! (Laughter.)


MS. BROWNER: I bet he's doing some dishes tonight. (Laughter.)


Q Oh, I reached* your home, didn't I?


MR. GIBBS: Yes -- or my sink, yes.


Q Right. On another subject, and not to make light of this, but there is a preconception already about big oil versus average America. And when the chairman of the board was at stakeout, and I'm quite sure you heard it -- did you all hear the stakeout?


MR. GIBBS: We were in my office getting ready. I think we -- I heard parts of it, yes.


Q Did you hear at the end when he said -- talked about the President's frustration, and then he said, you know, the President is concerned about the small people, we're concerned about the small people


You hear at the end when he said talked about the President's frustration, and then he said the President is concerned about the small people, we're concerned about the small people. Those words kind of rang very strong on television. Talk to me, do you think it's just the wrong terminology? Do you think that there was an arrogance? I mean, because I'm listening -- you guys said, we're the ones who had to push this forward, we had to push the $20 million, we had to push this, and it was all on the White House side. And what did they offer? Were they worried about the average American who are --


MR. GIBBS: Well, look, I'll let Carol talk about what's in the meeting. Obviously, as I said before, in meeting with both the chair and meeting with the group of executives, as the President came in, it's the people of the Gulf that the President has had in mind throughout this process as those that he's fighting for.


Again, whether it's a mom-and-pop restaurant that he visited on this trip, whether it's a shrimper, whether it's a mayor who represents constituents that earn their living on the water or through tourism or something like that, that's -- those are the people that the President has had in mind throughout this entire time.


Q Wrong terminology, maybe --


MS. BROWNER: And let me say -- I mean, again, we began in the Roosevelt Room, we began with the President, the Cabinet, and the BP representatives. And when the chairman of the company spoke, he did begin with an apology. So I think Robert's point is exactly right. When the President spoke, he spoke about the people he's met. He spoke about his trips to Louisiana and across Alabama and Mississippi and Florida.


Q Wrong terminology on behalf of BP?


MR. GIBBS: I would assume so, yes.


Q Thanks, Robert.


Q Robert, you said before that -- and I just want you to clarify -- with regard to Kerry-Lieberman, you seem to indicate that that would be sort of the basis from which the President would move forward. Is he committed to having that be the starting point?


MR. GIBBS: Well, again, what I said was I think that the principles enlisted in Kerry-Lieberman are consistent with the principles that the President has outlined on countless occasions dating back -- I would say dating back to the campaign but likely dating back to his service in the U.S. Senate.


Q Well, one of those occasions was last night, and he didn't mention it explicitly. And a lot of folks on the Hill interpreted the ambiguity that he left in terms of the legislation --


MR. GIBBS: You know, I'd focus on what the President said and has said on any number of occasions --


Q But Robert, with all due respect, they have to pass this thing on the Hill, and there is a sense that --


MR. GIBBS: With all due respect, I understand the legislative process. (Laughter.)


Q There is a --


MR. GIBBS: Thanks, I've seen how a bill becomes a law.


Q I know. I could play it for you. No, but there is a sense that the President's omission of Kerry-Lieberman has given --


MR. GIBBS: Yes, again, I don't know how I can be more clear, I don't know how the President can be more clear than to look at what he said in Pittsburgh.


Q Well, is he committed to having Kerry-Lieberman be the basis for this deal?


MR. GIBBS: He is committed to exactly what he said in Pittsburgh and what he's said on countless occasions and what I said here today, that climate should be -- that climate has to be a component of a comprehensive energy plan.


Q Why didn't* he mention carbon caps in the speech if he's committed --


MR. GIBBS: You know, I'd love to play "seek a word" with you. I think the President -- I understand you've got to write a story. Go back and look at -- and I could email it to you, it would crash your computer -- all the times the President has talked about a comprehensive strategy.


Q Thanks, Robert. I have two quick questions. First, last week there were reports that BP was considering suspending one of their dividend payments and that they wanted to get * a cooling of the rhetoric from the White House. And it looks like now today you got three dividend payments suspended. Was there any giveback* -- was there any talk at all about cooling the anti-BP rhetoric in the meeting?


MR. GIBBS: None that I know of, no.




Q And my second question, both -- Jon Stewart last week and this week has been very critical of the President. Keith Olbermann last night really badly trashed the President's speech. Is the President or the White House concerned at all about losing two such influential allies in the media?


MR. GIBBS: No. No. Ken*.


Q Robert, this is non-BP --


MR. GIBBS: I will say this -- can I say this? I've said this before; I'll reiterate it -- if the President had decided to run for President based on what the pundits were saying in December of 2006 and January of 2007, he'd be in the Senate. No, no, hold on. I appreciate the pulse -- the hand on the pulse of America by those that live on cable TV. I don't actually think that's where all of real America lives.


Q Okay. Non-BP-related. Right before this, Dan Pfeiffer put out a statement urging the passage of the DISCLOSE Act. One of the things that some of the good-government groups have complained about is this deal that was cut for the NRA in terms of moving around disclosure requirements. Can you talk specifically whether/why* the President objects to that deal and why that --


MR. GIBBS: Tim*, I have been -- I've been out here while that must have gone up. I'll be happy to go look at what was put out and give a sense of what's in that agreement.

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I believe that God wants us to help ourselves. The President definitely can communicate a good speech. But, what I did not hear is why people are walking around without respirators cleaning the oil? Maybe it is because BP is afraid that if people are wearing respirators, then the air is toxic and they will be liable for it.


The President did not also explain why BP is able to continue the production of the Atlantis rig

150 miles from New Orleans. Atlantis is one of the largest platform on our planet. It is capable of drawing 200,000 barrels per day. It is also 2000 feet deeper than the Deepwater Horizon. Internal BP documents reveal could lead to "catastrophic" errors.


In a May 19th letter to Salazar, 26 congressmen called for the rig to be shut down immediately. "We are very concerned," they wrote, "that the tragedy at Deepwater Horizon could foreshadow an accident at BP Atlantis."


The reason is that BP controls Obama.


Barack Obama needs to step out of the shadows and be the President. I am still hoping for Change.


I am quite sure BP could not stop production of oil on the Atlantis if they wanted to. The pressure is too strong to cap the well. Once the oil is gushing it is nearly impossible to stop. I have a couple of natural gas wells and they can last a week at most if I need to temporarily cap the wells. That is on land.

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Guest Nadeam

Speaker Nancy Pelosi released the following statement stating the need to hold BP and Big Oil accountable, the effort to support those affected in the Gulf region, and the need to create a clean energy future:


“In the House, we are uncovering the truth about the oil industry’s disregard for safety and appalling lack of response plans. We have passed legislation to ensure the federal government can continue its swift and sustained response, while BP foots the bill. And we will pass whatever additional legislation is needed to prevent a repetition of this catastrophe and protect the interests of every American.


“The disastrous BP oil spill is a harsh reminder of the price we are now paying for the Bush Administration and Republican Congress placing the employees of Big Oil in charge of regulating their own industry. We lost 11 lives in the tragic oil rig explosion, and our thoughts and prayers remain with the loved ones of those that perished. We have lost billions of dollars that belong to small businesses and residents in the region, and we have lost irreplaceable resources. In response, our energy policy must move in a New Direction.


“Last June, the House passed a bill to create clean energy jobs here in America, protect consumers, reduce pollution and help free us from our dangerous dependence on dirty foreign fuels while ensuring our national security. Moving forward, we must complete this legislation and invest in a clean energy future founded on American innovation and the skill of our workers. And we must harness the power of the sun, wind, soil, and our natural resources to fuel our future.”

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Before President Obama's speech Energy and Commerce Committee Ranking Member Joe Barton, R-Ennis/Arlington, made the following statement Tuesday at a hearing entitled, "Drilling Down on America’s Energy Future: Safety, Security and Clean Energy":[/b]


I've listened with interest to the opening statements of Chairman Markey and Chairman Waxman. I want to say that in terms of doing the investigation, [b][color="#FF0000"]I commend the majority's staff, especially on the Oversight and Investigations Subcommittee that Mr. Stupak chairs.[/color][/b] We are getting the facts assembled and putting them out in an open and transparent fashion so the American people understand, to the extent that it's possible to understand exactly what happened.

[b]It's no question that British Petroleum oil company, which is the owner and chief operator of the rig that had the accident, is responsible for the accident. It's also, as Mr. Waxman has pointed out, the responsibility of our major oil companies to have adequate contingency plans when things go wrong.[/b] So I’m not trying to whitewash the private sector in terms of their responsibility for causing this problem. But I want to point out something that hasn’t yet been pointed out. [b][color="#FF0000"]The five people most concerned about solving the problem are probably sitting before us today. ExxonMobil, Chevron, ConocoPhillips, Shell Oil and BP America have huge interests in getting it right and preventing it from ever being wrong again.[/color][/b]

[b][color="#FF0000"]If you add up the market capitalization of those five companies, it still would not equal the market cap of some of the oil companies that are owned by sovereign nations, such as Saudi Arabia, Venezuela, Republic of Mexico.[/color][/b]

I would stipulate, Mr. Chairman, that BP has caused this particular problem. I will also stipulate that the gentlemen before us are a big part of the solution. But if the president of the United States has got a better idea about how to solve this problem right now, he can pick up the phone and tell BP exactly what to do. It is a federal issue, in terms of the mitigation plan, in terms of the cleanup plan. [b][color="#FF0000"]If there's anybody from President Obama on down who really knows the solution, and you can stop that oil from spilling right now, by golly, all you have to do is pick up the phone and tell them what to do. You've got to know exactly what to do and you’ve got to have the engineering and the technology available to do it.[/color][/b]

[b][color="#FF0000"]America needs the energy that is below the Gulf of Mexico and in the Outer Continental Shelf. Thirty percent of our oil and gas is coming from the OCS right now and 80 percent is coming from what are called deep rigs. We have a depletion rate of existing production in this country, Mr. Chairman, of 30 to 40 percent. That means that the 8 million barrels of oil and gas that we’re producing per day, next year we’re only going to be able to produce about five and a half or 6 million.[/color][/b] You’ve got to replace that energy and since we have drilled millions of wells onshore since 1896, or the 1870s in Pennsylvania, the fact of the matter is, if you’re going to find significant oil reserves in the continental United States, they’re going to be in the Outer Continental Shelf. We need that energy.

[b][color="#FF0000"]Now, I agree with Chairman Waxman that having a 500-page document that's a cookie cutter approach on what to do when you have a problem is not an answer. You can't have a contingency plan that says, 'cross your fingers' and hope the blowout preventer works. And that was the contingency plan.[/color][/b]

[b][color="#FF0000"]We haven’t had a major accident in the OCS in 50 years, so everybody had decided these blowout preventers are so good and so effective that all you had to do was push that magic button on the BP rig, but it didn’t work. So Chairman Waxman is right: We need more than a cookie cutter contingency plan. Where I disagree with Chairman Waxman and Chairman Markey is that the gentlemen before us have the wherewithal, the expertise, and they certainly have the incentive, to put that plan together.[/color][/b]

[b][color="#FF0000"]Now, I don’t know what the answers are. Maybe we need a full-time safety inspector on these rigs. Maybe we need a real-time data center somewhere, where all the drilling information goes to a central data point where there's somebody in charge of safety that looks at it. It does appear that if people had been looking for the problem that we now know happened – the data was there to tell them what to do. But they weren’t looking for that. This rig was 40 days behind schedule and millions of dollars over budget. There was pressure to finish the job. There was nobody on that rig whose job was to make sure that they made the safe decision. When you start making decision after decision after decision that are not in and of themselves a bad decision but cumulatively minimize safety, eventually you reach a critical mass and you have an accident.[/color][/b]

[b]Our job, Mr. Chairman, as the watchdogs for the American people, is one, to get the facts on the table. Two, listen to people who have possible solutions. Three, if there’s a federal issue and a federal role, let’s do it. But when you take a patient to the emergency room, the solution is not normally to kill the patient[/b]. The solution is to stabilize the patient, determine what needs to be done to save the patient, and then implement that strategy. I will stipulate, Mr. Chairman, [b][color="#FF0000"]America needs the energy beneath the Outer Continental Shelf off the coast of the United States of America and the five men before us who represent five of the largest privately owned companies in the world, while they are part of the problem, they are a big part of the solution.[/color][/b]”

Thank you, Mr. Chairman.

[b]Barton also submitted his written statement for the record:[/b]

Mr. Chairman, [b]today we are 56 days into one of the worst environmental disasters ever faced by this country. For 56 days crude oil has gushed out of the destroyed wellhead once beneath the Deepwater Horizon drilling rig. Several lives were lost in the initial explosion, and, as the crisis has worsened, every day we’re seeing the effects on people and wildlife.[/b]

The initial cause or causes of this tragedy are under investigation and it is critical that we get the real facts about the causes. [b][color="#FF0000"]I think folks may know that I am a strong supporter of energy production, both onshore and offshore. But I know that the only way we can continue with drilling is if we are all sure that this production can be done safely, without harm to people or the environment. I believe firm oversight and safety are critical, and strongly support the investigation.[/color][/b] When I was chairman of the Energy and Commerce Committee, we conducted investigation and held hearings on the BP pipeline spill in Alaska’s North Slope and the Texas City refinery explosion which killed 15 workers in 2005. [b][color="#FF0000"]We need to take all the steps necessary to find out the causes of this incident and ensure that this never happens again. Once we establish what went wrong, we will take whatever legislative or regulatory measures are necessary to protect people and the environment.[/color] [/b]

Since April 20, a gargantuan effort has taken shape to stop the leak at the drilling site and protect the shoreline from experiencing catastrophic damage. In attempting to accomplish these objectives, the federal government has supervised and directed BP’s efforts, with consistently disappointing results. The leak has not been plugged, oil is destroying marshes, fishing fleets are tied up in port, plumes of oil swell under the surface. [b]We need answers not only about what went wrong, but about how we can do a better job at stopping the leak and cleaning up the spill.[/b]

[b][color="#FF0000"]Unfortunately, the administration response to the spill has been disappointing. Instead of marshalling all the resources available, the administration used the occasion to justify a new push for its economy-destroying global warming bill.[/color][/b] Instead of calling for tougher safety requirements and inspections on offshore facilities, [b][color="#FF0000"]the administration issued an arbitrary and ham-handed moratorium on all deepwater exploration, threatening to add thousands more lost jobs to our nation’s 9.4 percent unemployment. Instead of looking for ways to support energy independence, the Administration is increasing our dependence on foreign oil.[/color][/b]

Mr. Chairman, this was a human tragedy. Eleven lives were lost, and we’re continuing to see an ecological disaster unfold that could last years. But anger and frustration do not solve problems. Likewise, the leak at the ocean floor will not be plugged by the words spoken in this room today. [b]I support producing American energy from all sources, including the Gulf of Mexico, but also include solar, wind and anything else that makes sense. I look forward to the day when a broader variety of made-in-America energy is affordable and available.[/b] I want to see that day. But we must focus on the real problems: how to mitigate the spill, assist Gulf residents, and ensure a disaster like this never happens again.
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Rep. Barton has been regarded as a global warming skeptic and his opposition to addressing global warming has been consistent and long-term. Barton is considered an oil industry apologist, most notably by rebuffing the White House for asking for a cleanup fund from BP in response to the Gulf Oil Spill disaster.


As a chairman with primary responsibility over the energy sector, Barton has consistently acted over the years to prevent congressional action on global warming. In 2001, Barton declared, "as long as I am chairman, regulating global warming pollution is off the table indefinitely. I don't want there to be any uncertainty about that."


Barton led opposition to amendments that would have recognized global warming during consideration of the Energy Advancement and Conservation Act in 2001, opposing an amendment to require the President to develop and implement a plan to reduce greenhouse gas emissions to 1990 levels as called for by the non-binding United Nations Framework Convention on Climate Change, to which the U.S. is a party.


In 2003, Barton again opposed amendments that would have recognized global warming during consideration of the National Energy Policy Act of 2003, opposing a nonbinding amendment that would have put Congress on record as saying that the U.S. should "demonstrate international leadership and responsibility in reducing the health, environmental, and economic risks posed by climate change."


In July 2003, Barton offered an amendment to the Foreign Relations Authorization Act to remove language that both recognized global warming and called on President Bush to reengage with the international community to find solutions. In addition, Barton has consistently opposed proposals to reduce the nation's dependence on oil.


In 2005, prompted by a February 2005 Wall Street Journal article, Rep. Barton has launched an investigation into two climate change studies from 1998 and 1999. In his letters to the authors of the studies, he requested not just details on the studies themselves but significant information about their entire lives and previous studies. This has been widely regarded as an attempted attack on the scientists rather than a serious attempt to understand the science, although some view it as a normal exercise of the committee's responsibility and an effort to make possible scientific debate on a subject within its jurisdiction. The Washington Post condemned Barton's investigation as a "witch-hunt". Environmental Science & Technology, an obscure policy journal often cited by politicians, including Barton, reported what it said was scientific proof that global warming science is wrong.The dispute expanded with Sherwood Boehlert's House Science Committee taking a strong interest.


In 2006, Barton earned two "environmental harm demerits" from the conservative watchdog group Republicans for Environmental Protection, the first "for derailing floor passage of a sense of the House resolution ... acknowledging climate change and the need to reduce greenhouse gas emissions"; the second, "for holding hearings, in his role as chairman of the Energy and Commerce Committee, designed to intimidate climate scientists and raise doubt about the impacts and causes of climate change." The hearings were held by Barton's committee on July 19, 2006, chaired by Rep. Ed Whitfield (R-KY), Chair of the Subcommittee on Oversight and Investigations; there, several skeptics testified regarding the hockey stick graph.


During Former Vice President Al Gore's testimony to the Energy and Commerce Committee in March, 2007, Barton asserted to Gore that "You're not just off a little, you're totally wrong."

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On June 17, 2010, Barton accused the White House of a "$20 billion shakedown" of oil giant BP by requiring the company to establish a huge escrow account to pay the claims of people harmed by the Gulf Coast oil spill. He made the assertion at the outset of a House hearing where BP's chief executive officer, Tony Hayward, appeared for the first time before Congress. Facing Hayward at the witness table, the Texas Republican congressman said, "I'm ashamed of what happened in the White House" on Wednesday. Barton was referring to the agreement that President Barack Obama announced with BP for establishment of a $20 billion relief fund.


In response, White House spokesman Robert Gibbs criticized Barton’s remarks and asked other members of Congress to do likewise. "What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners and communities whose lives have been devastated by the destruction," said Gibbs.

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Press Briefing by the Vice President and Press Secretary Robert Gibbs, 6/17/2010

James S. Brady Press Briefing Room


Q Vice President Biden, What are your thoughts about Mr. Barton’s comments this morning?


THE VICE PRESIDENT: Well, since you know I never say what’s on my mind -- (laughter) -- I probably shouldn’t comment on Mr. Barton’s comment.


Q Oh, come on.


Q Please --


Q Is it that bad?


THE VICE PRESIDENT: They’re encouraging me, what can I say? (Laughter.)


MR. GIBBS: Well, okay, you should --


THE VICE PRESIDENT: Look, look -- (laughter.)


Q How big of a deal was it? (Laughter.)


THE VICE PRESIDENT: Thank God my mother wasn’t around. (Laughter.) Look, guys, I find it incredibly insensitive, incredibly out of touch. The reason why I got involved in politics, the reason why the President and I ran, the President got involved, is the one primary role for government is to protect people who are being taken advantage of; protect people who are in an extreme straits and not able to take care of the circumstances themselves.


I’ve been down in the bayou area off and on for the last 36 years. My daughter went down to Tulane -- I was worried she was not going to come home. I think I know the area relatively well as an outsider. There’s an entire way of life in jeopardy. This is just not about jobs. This is just not about whether or not the waterfowl is polluted and you can’t -- this is an entire way of life that’s in jeopardy. And to sit there and say that we’re being -- in effect, as I understood the statement -- that he was ashamed we’re being tough on an oil company who caused the problem -- I mean, I -- look, I just think that it’s pretty important to the people of Louisiana all the way through Florida and even in his home state of Texas that people disassociate themselves from that.


That’s not the role -- there’s no shakedown. It’s insisting on responsible conduct and a responsible response to something they caused. And I find it outrageous to suggest that if, in fact, we insisted that BP demonstrate their preparedness, to put aside billions of dollars -- in this case, $20 billion -- to take care of the immediate needs of people who are drowning -- these guys don’t have deep pockets. The guy who runs the local marina, the guy who has one shrimping boat, the guy who has one small business -- he can’t afford to lose $10,000, $12,000, $15,000, $30,000 a month.


And so the thing the President did -- and I was so proud of him -- is when we had the meeting with BP -- and they were cooperative in the meeting. They were cooperative. He said, look, what I want you to do is take care of those people now who, if they don’t get help now, are going to be under, gone. Gone.


And I might add, this fund is not a ceiling, and people can go back to it as many times as they can prove they have been damaged and they need help. And the cleanup costs are all BP’s costs, separate, apart and above that $20 billion.


What is wrong with that? How is that a shakedown? I mean, I just -- I don’t know, I find it pretty astounding, the comment.


Q One thing about yesterday. In the meetings, did BP ask for the President to make the comments that he did about the importance of a strong and viable BP? Was that a request from the company?


MR. GIBBS: I was not in there the whole time. Not that I’m aware of. Obviously I think everybody -- as the President said, everybody in the country, everybody in the Gulf, has as interest in a company that's able to uphold its responsibilities, particularly the ones that they outlined yesterday.


Q So you don't know if the company is saying, this would be important for us?


MR. GIBBS: Not that I’m aware of. Not that I’m aware of.


Q And then the -- going back to the speech Tuesday night when the President talked about a Gulf Coast restoration plan, he didn’t really explain what that would mean. Is this a government program? How much money are we talking about? What kinds of -- what sort of scope does this have?


MR. GIBBS: As you know, Governor Mabus, the Secretary of the Navy -- former Governor Mabus, the Secretary of the Navy, is here and will see the President -- may have already seen him, I think. The President has tasked the Secretary to develop and devise a process for a long-term Gulf restoration plan that includes all of the stakeholders -- states, local communities, Gulf Coast residents, a whole host of -- those that have significant equities in the environment and the ecosystem.


One of the things that is not covered in the economic claims are the natural resource damage assessments that will be done on the Gulf environment. And BP is liable for those damage assessments. And I believe that will be the basis for a lot of the restoration that we’ve seen --


Q So BP funded –- basically the government --


MR. GIBBS: Well, again, those are -- I wouldn’t close off anything. Obviously it’s the beginning of a process that will take some time. And I think it’s safe to assume and safe to say that recovery for the Gulf will take years. But the basis for -- the basis for that will be those NRDAs.


Q But I think when people in the region heard him talk about that, they took it to mean something bigger than just let’s think about what this oil --


MR. GIBBS: Well, I don’t -- and I don’t --


Q It’s a topic that people talk about down there for a long time.


MR. GIBBS: And I don’t foreclose that that will be part of it. I wouldn’t get into what we would fund based on the fact that there’s a process right now going forward to create that --


Q So he hasn’t established parameters, in other words?


MR. GIBBS: Well, I think the parameters that he roughly laid out in the speech was to leave the Gulf in a place that was better than it was prior to this accident.


Q Okay, and then just really quickly, you just mentioned about the natural resources degradation being a separate liability for BP.




Q There was some confusion about this yesterday because both in the fact sheets from here and the statements that BP was putting out --


MR. GIBBS: I think I know where you’re going --


Q -- it looked like the fund was supposed to be paying for that stuff as well.


MR. GIBBS: The fund can -- let me -- I’ll try to -- because I think I knew where you were going. There's $20 billion that’s set aside as a minimum for economic claims. As we said yesterday, and as you heard the Vice President reiterate, that’s not a cap. So if the economic damages are more, then BP is liable for that amount. Let’s say, for instance, those economic damages were $15 billion -- that $5 billion left over could go to --


Q The environmental work --


MR. GIBBS: -- could go for the natural resources assessments if all the economic claims are covered. But it is not two pots of money that compete against each other. The prioritization in the escrow fund are for the economic losses -- loss of income, loss of jobs for individuals and small businesses.


Q Thank you.


MR. GIBBS: Yes, sir.


Q I'd like to come back to the remarks on the Hill, the shakedown. I mean, do you think -- or does the White House think there’s any risk of alienating businesses by dragging BP up here for hauling over the coals? And also, the Congressman’s remarks sort of raised the question of the legality. I mean, could you have stepped over a constitutional boundary?


MR. GIBBS: No, they’re responsible for -- let me be clear, they’re responsible for the economic loss that happened in the Gulf. That’s what they agreed to pay into. There’s no constitutional problem. And I don’t have a lot to add to what the Vice President said. I think he was very clear on this. I think Republicans are going to have to ask themselves whether Congressman Barton should be the ranking member of a committee that's doing what it's doing today, given the fact that he believes we owe an apology to BP, rather than BP owing an apology to the Gulf.


Q (Inaudible) for him to resign? Step down?


MR. GIBBS: I will let Republicans make that decision.


Q You usually don’t comment on things like that, though, Robert. Why take this particular opportunity?


MR. GIBBS: Because there’s a fairly pointed comment about the notion of whether or not BP is going to be responsible for the damage that they’ve caused. The President and the Vice President believe so. I think the people in the Gulf believe so. Congressman Barton, who, let's understand, is the ranking member of the Energy and Commerce Committee, apparently believes -- and did so by apologizing to BP. I don’t --


Q That’s a disqualifier, in your mind, in the White House’s mind --


MR. GIBBS: As somebody who's going to oversee -- as we look into what the company is doing, to begin by apologizing to the company, I think is an interesting way to start.

Q Can I follow on -- Congressman Barton seemed to raise a question about the propriety of having the Attorney General in the room yesterday. Just on that narrow point, are you concerned --


MR. GIBBS: Not at all, not at all. But let’s understand that there were -- the President, the Vice President and the relevant Cabinet agencies -- the Department of Energy, the Department of the Interior -- I’m trying to go around the room -- the Department of Labor, the Department of Justice -- I’m going to miss some -- Commerce was there -- they’re the relevant agencies that have purview over what’s going on in the Gulf.


And as I think we said pretty clearly yesterday, this wasn’t a -- this was not a discussion about what happened that night on the rig, whether or not they cut corners, took shortcuts, tried to take the cheap way out -- none of that was discussed. And those Cabinet members were in there only for the first 20 minutes with what the President --


Q But the Secretary of Commerce does not have an open criminal investigation of this company --


MR. GIBBS: No, the Secretary --


Q The question was, they had that hanging over their head and had the Attorney General --


MR. GIBBS: No, the Secretary of Commerce has within it NOAA, which closes the Gulf to fishing and affects those that earn their living --


Q But the Attorney General has an open criminal investigation, he’s sitting across the table from them -- doesn’t that make them more likely to be willing to write a $20 billion check?




Q On containment, on Tuesday morning, I think you said on "Good Morning America" that more than 90 percent of the oil would be contained by the end of June.


MR. GIBBS: I think I said in the coming weeks, or end of June, right.


Q I think it was in response to a question that said end of June. Do you still stand behind that? Because how do we really know how much oil is in the Gulf when the numbers keep changing about how much is spewing into the Gulf? It’s 90 percent of what?


MR. GIBBS: Well, 90 percent of what’s coming out right now. That’s what we -- our containment strategy is based on what’s coming out of the leaking well as you and I speak, Ed. Let’s understand that the --


Q So it's just 90 percent of, say, 60,000 barrels if that’s what’s coming out per day?


MR. GIBBS: Up to 60,000 barrels. The flow rate group, using new information and pressure readings -- Secretary Chu asked and directed BP to take pressure monitor readings from inside their two top vents inside the top cap itself. He knows what the pressure is outside of that; by measuring the pressure inside of that, you get a far better scientific conclusion as to the amount that's coming out.


We know what’s coming to the top from the top cap. And that allows you to make as best a scientific assessment as you can, understanding, as we’ve always said, that we are estimating a flow rate for something we cannot see or touch.


In terms of containment right now, the top cap is drawing oil and gas to the surface to -- from the LMR -- the lower marine riser cap to the Enterprise. The Q4000 came online yesterday, and I should have an estimate -- we’ll have an estimate later in the day about the rate at which going through the choke and kill line and off of a device that was set up for the top kill procedure, using those lines to direct oil to the surface, that adds an additional approximately 5,000 to 10,000 barrels to our containment strategy.


By the end of June -- and, again, I think you guys have seen all of our correspondence with BP directing them to move forward more quickly with a containment strategy -- there is a riser that’s being fabricated now that will be hooked to another vessel that will increase by the end of June 40,000 t0 53,000 barrels per day. And there are additional containment strategies by the middle of July that would take that figure to the capacity of 60,000 to 80,000 barrels a day.


Q Last thing, Secretary Mabus, is he planning to step down as Secretary of the Navy?




Q Wouldn’t this be a full-time job, the Gulf recovery?


MR. GIBBS: The President talked to the governor about this and they both agreed that he had the ability to do both.


Yes, ma’am.


Q Robert, I know there was some review early on with the EPA regarding the dispersant. I just wonder, at this point, is the administration comfortable with the amount of dispersant that is being released into the Gulf? And are you comfortable with the substance itself? Because a lot of marine biologists that we’ve talked to say that this is a very toxic chemical, that this could actually be more harmful to wildlife in the Gulf than the oil itself.


MR. GIBBS: Well, that -- I don’t know what the -- I wouldn’t know what the scientific basis for that is. I think far and away the most harmful substance that is being emitted into the environment in the Gulf is the oil. That’s why to clean the beaches, you’ve got to wear a hazardous materials suit.


The EPA early on -- and I think you probably have a copy of the directive -- I think the number was to reduce by 75 percent the amount of both surface and subsea dispersants that were being used. NOAA continues -- as does EPA -- continues to do water sampling of -- in and around the areas of the Gulf to ensure that we’re accurately monitoring the health and safety of the Gulf and anybody involved in working.


We were concerned about and remain concerned about the sheer amount of dispersants that have had to be used. And that’s why the EPA came through with a directive to significantly reduce the amount that we emit into the environment.


Q So do you think at the current quantity it’s safe to release that dispersant into the water?


MR. GIBBS: Well, again, that -- yes, we believe that the dispersant that’s being used at the amount that it’s being used at now is safe, yes.


Q This particular chemical, this Corexit, as it’s called -- because it’s patented, scientists are not able to see the actual formula of what this is, so it’s difficult to know what’s in it. Is there any move to try and --


MR. GIBBS: Well, how does the marine biologist say that it’s more toxic?


Q Well, given the studies that they’ve done based on what’s happened on Alaska, they say -- they call it Corexit in Alaska, but they also call it "Hidesit," because it essentially hides it from the surface of the water and pushes all the chemicals underneath.


MR. GIBBS: Well, but, again, that’s the purpose of the --


Q It is the purpose, but it keeps it in the water.


MR. GIBBS: -- right, the dispersant -- well, if you’ve got something we can put in the water that takes the oil out, I’m -- come see me and Bill right after this because we should sign you up. You add this -- you add -- we’re doing this for the first time at a subsea level. And April asked a question of Admiral Allen about this yesterday. The point is not to have it accumulate on the surface and allow it to spread either onto beaches or into marshes. At that depth, it can biodegrade more quickly, which is exactly what you want the oil to do.




Q On the $20 billion not being a cap, what’s to stop BP four years from now, after they’ve contributed the full $20 billion, from saying, that’s it, that’s all we’re giving; if you want more, take us to court?


MR. GIBBS: Well, we certainly would retain the right to do something like that. We --


Q But it's up to them whether it's a cap, right? And they could declare at any point it's a cap.

MR. GIBBS: No. Well, I will say this, Chip. One of the things that we need Congress to do -- and Senator Menendez from New Jersey tried today again to get consent for the Senate to move forward on lifting the liability cap that’s in the Oil Pollution Act. Right now we know it’s $75 million; obviously what BP has pledged greatly exceeds the $75 million. But we need that -- for our own purposes, we need that cap to be lifted.


We will continue to monitor the claims process and direct BP with whatever they need to do. Obviously we have -- as part of the deal, we have some collateral.


Q On the oil rig workers, you’ve stated very clearly, and I think other administration officials have, too, that the administration believed that BP was legally responsible for compensating oil rig workers who are out of work because of the moratorium. Yesterday, Carol Browner said, well, there are legal issues here. Where does that stand now? Are you backing off your position? And is that because BP said you’re wrong --


MR. GIBBS: Well, we’re looking into the legal issues. I think one of the things that is tremendously important out of yesterday was a $100 million commitment for those rig workers --


Q Right, but that was not a legal obligation. That was a goodwill gesture.


MR. GIBBS: Yes, it was. And it’s a -- it was one that was part of what we worked out yesterday.


Q Are the comments you’ve made in this room before saying that BP is legally responsible, is that null and void at this point?


MR. GIBBS: As I said a minute ago, Chip, we’re looking into any of the any of the legal issues.


Q So you’re backing off the affirmative statement that you made?

MR. GIBBS: I would just say we’re looking into the legal --


Q Have you been in the President’s presence when he either heard about or responded to the Joe Barton comments? And what did he say?


MR. GIBBS: I briefed him on them earlier and he shook his head and couldn’t understand why anybody would say something like that.


Q Did he say anything?


MR. GIBBS: Well, he said, I can’t understand why anybody would say that.




Q Shakedowns aside, isn’t it true that BP essentially didn’t fight the $20 billion fund?


MR. GIBBS: I don’t -- let me -- I want to disassociate the premise of your question from the beginning. Yes, look, I don’t want to characterize how they came to the meeting yesterday. They have said and we have put into place an assurance that the economic damages that have been caused will be compensated.


Q BP essentially has laid down many of its legal rights voluntarily.


MR. GIBBS: Yes. I mean, they -- there’s no doubt that they -- yes, again, the cap that I spoke about with Chip a minute ago, I think would be exceeded -- well, they’ve given states money to advertise for tourism in the four affected states that exceeds the $75 million cap in and of itself.


Q Just bottom line, they’re not really fighting?


MR. GIBBS: Again, I don’t want to be a BP spokesperson. I think it is -- there’s no doubt that -- I will characterize -- let me characterize it this way, we did not give up the ability to do the natural resource damage assessments and give them the bill. Nobody gave up anything in terms of them paying for the cleanup costs that they’re liable for. There was no discussion about anything involving -- and they’ll get a bill for this -- the penalty for the pollution that’s been emitted into the Gulf. And all we did for claimants was add to their ability to appeal.


Q You’ve said that it’s in certainly BP’s interest but also the government’s interest for BP to stay solvent and not go into bankruptcy, as that would imperil the ability of victims to get their recovery. So --


MR. GIBBS: It would, but I would say this. The important -- one of the important parts of the -- what was worked out yesterday was -- I mean, obviously BP is a company that possesses tremendous assets. If I’m not mistaken, I think they have the largest producing oil well in the world -- obviously a number of assets in order to take something like that and make it the largest producing well in the world. We have that collateral as they pay into the fund to ensure and to make sure that nothing risks the amount that they’ve put in there.


Q Right, I mean, they’re giving it over four years. But setting that aside, given the federal government’s interest in BP staying solvent, didn’t the government, the administration, exacerbate BP’s financial position last week by taking such an aggressive view of liability -- Salazar, you at this podium --about the oil rig workers -- a position it now disavows, as Chip says, Carol Browner saying --


MR. GIBBS: No --


Q -- let me just finish the thought -- Carol Browner said there are very significant legal questions about their liability; every lawyer will tell you that’s true. BP’s stock dove 16 percent on the day that Ken Salazar made those comments. So doesn’t the government have a role to act responsibly and not exacerbate that situation for BP?


MR. GIBBS: Well, let’s understand -- understand that the amount that, even if you fully compensated rig workers, right, you’re not even close to a billion, let alone $20 billion, right? So let’s understand that what might imperil the company financially is not paying for the sidelined rig workers at 33 drilling points in the Gulf of Mexico. What it -- hold on, let me finish my thought. What they’re responsible for, and what I think has caused -- I don’t want to get into commenting about their stock, but I think what has caused -- let me not get into commenting on the stock -- I think that they are responsible for the nation’s greatest environmental disaster and they are going to have to pay to compensate those that were impacted economically, they’ll pay the government the damages for what it’s done to the environment, they’ll pay the cleanup costs, and they’ll be fined. And that’s their price for doing business in a way that caused this damage.


Q I guess the bottom line, just to put a bow on it, does the administration recognize that it has a special responsibility to not take a very aggressive and legally flawed position that could exacerbate an already precarious financial position?


MR. GIBBS: I don’t think we’ve done that. I don’t think we’ve done that in any way.


Q Yesterday, did the President spend any time alone with Mr. Hayward, or was it only with the chairman?


MR. GIBBS: No, he spoke for -- the first 20 minutes was with all of the six -- I think it was six -- BP representatives and their outside counsel, and then 25 minutes with the chair.


Q Good? Okay. A couple things. (Laughter.) The fund doesn’t --


MR. GIBBS: Didn’t think Major was going to pass. (Laughter.) Go ahead.


Q The fund doesn’t exist. The negotiations, according to people I’ve to talked to at Justice today, are going on about the contours of it -- is that your understanding?




Q The fund, the escrow fund.


MR. GIBBS: Yes, yes. Well, understanding the framework agreement that was laid out, the appeals process that has been laid out, the payments in the collateral --


Q Those things have been locked down.


MR. GIBBS: Yes. Obviously we are working through the setup of the independent claims process that will be overseen by Ken Feinberg.


Q And the three-member panel.


MR. GIBBS: And the three-member panel that allows a claimant to --


Q Do you have a timeline for that, agreed upon with BP, that the American public can evaluate as far as how’s it going and when they should be ready to see this -- and the folks in the Gulf?


MR. GIBBS: Well, we’ve told -- I believe in the negotiations we told them and expect that Mr. Feinberg will set this up as quickly as possible, he obviously -- one of the reasons that he’s selected as somebody who has expertise and experience in this type of work. The claims process that we have now continues as we transition to an independent body, and that anybody that’s involved in the claims process now -- so you filed -- so you filed a claim two days ago, you still have the 90 days to get your claim processed. And if -- as I understand it, if you don’t like the outcome of what BP says, you can enter the appeals process in the new system.

Q And I heard this commented by folks in the Gulf now, they’re sort of wondering there are these places, there are these numbers, there’s a process that we’ve somewhat grown accustomed to. Will all of those portals, if you will, to this claims process remain, or will they be replaced?


MR. GIBBS: I don’t -- my guess is that they will remain, Major. What we envision is a fairly seamless process because -- and I forget the number that Admiral Allen read yesterday about the --


Q Sixty-six thousand --


MR. GIBBS: Yes, the number of claims that are in the process, the number of claims that are being adjudicated. I think we believe it’s important -- and certainly did yesterday in the agreement -- believe it’s important to get an independent process to evaluate those claims.


Q One other thing, technically, on the agreement, will that be released in written form for the public to view at any point?


MR. GIBBS: I can check on that. I wouldn’t see why not.


Q For the deepwater rigs that are under inspection now, how is that going? Have you -- have they had a chance to look -- will any of those open up again?


MR. GIBBS: Well, the commission that is in the process -- the commission -- that will be part of the commission’s work, to discuss the regulatory framework around their operation. And I will say this, as I’ve said and as the President said in his speech, that’s something that doesn’t have to wait for a six-month deadline. It can be something that he would encourage that they do quickly.


Q Is there any indication that any of the companies are either pulling out, stopping -- taking wells that were due to be built or planned at least for the Gulf and moving them to other countries?


MR. GIBBS: You mean the MODUs -- the mobile drilling units?


Q No, that exploration that was going to be American-produced oil now going to other oil-producing countries because of --


MR. GIBBS: Again -- and I think we’re probably saying the same thing, largely -- because I don’t know the answer if anybody has -- you’ve obviously got -- you remember what the Deepwater Horizon looked like. I do not know if those drilling units, if any of those drilling units have left for other places.


Q Let me just phrase it this way, then. Does the President fear that the government response to this will drive away what would have been American-produced oil and then now make the country more dependent on foreign oil?


MR. GIBBS: Well, what would make us completely dependent on foreign oil is if this happened again, right? So the President believed that, in weighing all of the economic and environmental concerns, and all the safety concerns, especially given that we did not have and still don’t know exactly what happened, that continuing drilling on those 33 sites was not what should be done.


Q Thanks, Robert. I want to quickly clarify the answer to Major. In terms of the framework that was agreed to yesterday, is anything at this point actually signed, and will it ever actually be signed between BP and the administration? Or is it more of just an agreement?

MR. GIBBS: I can find out if there’s a piece of paper. I mean, I don’t know -- beyond the fact sheet, let me check and see.


Q And prior to their voluntary agreement yesterday, it’s been the administration’s position that you had the legal authority to compel them to do this if they didn’t do it on their own. Can you provide us -- it doesn’t have to be at this exact moment, but what the actual code, the actual statutory --


MR. GIBBS: Yes, it’s within the -- let me see if --


Q It’s all in the Oil Pollution Act --


MR. GIBBS: Yes. Yes.


Q -- it’s not in any other place?


MR. GIBBS: It's in the Oil Pollution Act.


Q Okay, I want to make sure I get that language.


MR. GIBBS: Okay.


Q Thanks.


Q Robert, again, referring to the Oil Pollution Act, the threshold for the liability cap being lifted in that law, as I understand, is a threshold of gross negligence. You guys have said -- used various terms to describe BP’s behavior in the Gulf; recklessness is one of them. Do you think at this point in time that that gross negligence bar has been reached?


MR. GIBBS: Well, let me be careful not to get into the Department of Justice’s investigation, and they’ll come to that determination. As you mentioned, Glenn, gross negligence is one of the automatic ways that that cap is lifted. I don’t think -- it’s our view that we should not wait for that investigation as hundreds of thousands have been impacted and are -- continue to be surprised that people object to lifting a 20-year-old number for a disaster in a far different place that we all know is greatly going to exceed that amount of money.


Q Robert, just one quick follow on that. The bill that’s proceeding -- the energy bill that will emerge from the Senate will almost certainly include a liability cap -- the liability cap being lifted. Would you accept that alone without comprehensive energy reform? Would that --


MR. GIBBS: I don’t think this is part of comprehensive energy reform. I think this is -- lifting the liability cap shouldn’t have -- should not be impacted -- should not impact the debate about our energy policy for the future. This should be --


Q So it would be a separate piece of legislation --


MR. GIBBS: Yes. And I think what Senator Menendez was trying to do was get them to act on that separate piece of legislation.


Q Other than what Representative Barton said this morning, other Republicans and conservatives have said similar things. (Laughter.) They’re not interested.


Q No, I am -- (laughter.)


MR. GIBBS: You hung around, Savannah. Go ahead.


Q Michele Bachmann called the fund a redistribution of wealth fund. On FOX they’re calling it "Chavez-like" as in Venezuela Chavez. Can you speak --


MR. GIBBS: Not the boxer?


Q Not the boxer. (Laughter.) Can you speak to the larger theme here of Republican and conservative opposition to this as yet another Obama socialistic, big-government initiative?


MR. GIBBS: I mean, I don't -- it's hard to tell what planet these people live on. It's hard to understand -- it's hard to understand their viewpoint, but it may explain their votes on financial regulation; it explains how they view whether or not the banks ought to be able to write their own rules and play the game the way they played it in -- several years ago that caused our economy to crash. It’s understanding how we got an MMS that was handing out drugs in favor of drilling permits.


I don’t think that’s the type of regulatory structure we ought to have, and it certainly sends an awful message to any company around the world, particularly one as large as BP, that they can come here, do what they’ve done to our economy, the environment, and as the Vice President so eloquently said, a way of life for so many -- and if you listen to Congressman Barton, Congressman [sic] Bachmann, Congressman Price, you’d think somehow BP was owed a handkerchief and a crying shoulder. And --


Q That VP was what?


MR. GIBBS: The VP was so eloquent in talking about how much it threatened a way of life. It’s a delusional thing. And, again, I think the Republican Party is going to have to, on Capitol Hill, look at whether or not somebody that has the viewpoint that Joe Barton has, if he should sit on -- not just sit on the Energy and Commerce Committee, but be the ranking member, as we look into and as that committee looks into actively what happened on the Deepwater Horizon if his opening bid is an “I’m sorry” to BP. Maybe Congressman Barton should drive to the Gulf Coast of Texas or to the Gulf Coast in Louisiana, Mississippi, Alabama and Florida and ask the people down there whether his opening bid should have been an apology to BP.


Sam, and then I’ll go to Lester.


Q All right. Two questions. One is, what have your impressions been of Tony Hayward’s testimony so far? He’s been criticized by some on the Hill.


MR. GIBBS: The truth is I have not watched -- I watched a very little bit of the opening statements in which I saw Congressman Barton, but I have not seen much of what’s happened.

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"Republicans know that defending oil companies and their profits is about as popular as BP itself," said Senator Menendez. "They know that they can't win an argument against ensuring full accountability for oil companies that spill. They have attempted to give the illusion of being tough on oil companies, but their proposals have loopholes big enough to navigate an oil tanker through. In contrast, the actions we are pursuing - like our unlimited liability legislation - would unequivocally protect taxpayers, coastal families and coastal businesses, not oil companies."

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An Analysis of the Finances and Investments of the Major Oil Companies


During the last ten years, the five largest oil companies (ExxonMobil, Shell, BP, ChevronTexaco, and ConocoPhillips) earned over $750 billion in profits. These earnings included $24.5 billion in profits during the first quarter of 2010, an increase of 85 percent from their first quarter profits in 2009. As oil pollution in the Gulf of Mexico continues, questions have arisen about how the nation's largest oil companies have been using their record-breaking profits. Specifically, are they investing significant amounts in clean energy sources that can reduce the nation's dependence on oil which protects our environment, and strengthens our economy and national security?


Oil Industry Finances


Profits. Over the last ten years, the five largest oil companies earned over $750 billion in profits. The profitability of these five companies has been so robust that in the first quarter of 2009, when the U.S. GDP shrank by 6.4 percent and corporate profits decreased by 5.25 percent, they still earned more than $13 billion in profits.


According to their most recent annual reports, the five largest oil companies have $38 billion cash on hand. This represents a 175 percent increase over the $13.8 billion in cash on hand they held in 2002. To put those figures in context, their 2009 combined cash on hand levels exceed the 2009 combined cash on hand levels of Coca-Cola, PepsiCo, Amazon, eBay, FedEx, UPS, McDonalds, Walt Disney, Kraft, and Halliburton.


The American Petroleum Institute (API), the nation's leading oil and gas association, touts industry investments in new and clean sources of energy in order to make it appear as if the nation's oil and gas industries are building a bridge to much greater use of clean energy. For instance, API stated in a recent document that "U.S. oil and gas companies are pioneers in developing alternatives and expanding America's use of virtually every form of energy – from geothermal to wind, from solar to biofuels, from hydrogen power to lithium ion battery for next-generation cars."


With the industry boasting about their investments in new and clean energy sources, and given its profits and cash on hand levels, one might expect that these types of claims would easily hold up to scrutiny. However, a closer look into the annual reports and Securities and Exchange Commission (SEC) filings of the nation's five largest oil companies reveal a more accurate story. The following information summarizes their investments in capital expenditures in oil and gas, clean energy, and then compares them against the amount of money they spent repurchasing their own stock.


Capital and Exploration Investments.


Since 2002, the five largest oil companies have made investments of approximately $193 billion in U.S. capital and exploration activities. Globally, the five largest oil companies have made investments of $690 billion in capital and exploration activities. Typically, these investments have been used to increase or sustain their ongoing oil and gas drilling and exploration activities as well as in refining heaving sources of petroleum like oil shale.


Since 2002, ExxonMobil has made investments of approximately of $32.4 billion in U.S. capital and exploration activities. Globally, ExxonMobil have made $156 billion in capital and exploration activities.


Since 2002, BP has made investments of approximately $64 billion in U.S. capital and exploration activities. Globally, BP has made approximately $158 billion in capital and exploration activities. The following charts compare BP's levels of investment in domestic capital and exploration activities against their overall amount invested globally since 2002.


Since 2002, Shell has made investments of approximately $22.3 billion in U.S. capital and exploration activities. Globally, Shell has made approximately $174 billion in capital and exploration activities.


Since 2002, ChevronTexaco has made approximately $40 billion in U.S. capital and exploration activities. Globally, ChevronTexaco have made approximately $118 billion in capital and exploration activities. The following charts compare ChevronTexaco's levels of investment in domestic capital and exploration activities against their overall amount invested globally since 2002.


ConocoPhillips. Since 2002, ConocoPhillips has made approximately $34 billion in U.S. capital and exploration activities. Globally, ConocoPhillips have made $86 billion in capital and exploration activities. The following charts compare ConocoPhillips' levels of investment in domestic capital and exploration activities against their overall amount invested globally since 2002.


Clean Energy Investments. As noted previously, API aggressively promotes its industry's investments in clean energy as a response to their record-breaking profits. However, API's rhetoric about being "a pioneer in developing alternatives" does not the match the reality of the data found in the API's own materials.


The API's "Facts on Fuel" document shows that, between 2000 and 2007, the entire oil and gas industry invested only $1.5 billion in North American"nonhydrocarbon investments " aimed at reducing the nation's dependence on oil. In order to put that level of investment into context, the five largest oil companies earned $619 billion in profits during the same time period and that level of investment represents just 0.25 percent of their combined profits, 0.7 percent of their combined U.S. capital and exploration investments, and 4 percent of their 2009 cash on hand totals.


While the oil industry has begun recently to very slowly increase their investments in clean energy, the vast majority of them have not been investing in clean energy technologies that reduce our dependence on oil. Instead, the vast of majority of them have focused on the production of electricity from wind, solar, geothermal, and landfill gas. The division of their clean energy investments plainly reveals their business strategy: maintain and extend the nation's unhealthy addiction to oil.


The financial reports of the five largest oil companies provide some recent anecdotal evidence of the choices and scale of their clean energy investments, which provide a helpful comparison against their profits, capital and exploration investments, and stock buybacks.


ExxonMobil. In its most recent annual report, ExxonMobil notes that it has entered into a research and development alliance to help develop advanced biofuels from photosynthetic algae. Their financial report notes that if "research and development milestones are met, ExxonMobil expects to spend more than $600 million" over the course of the multi-year project. The $600 million pledged by ExxonMobil represents only 3 percent of its 2009 profits and 2 percent of its 2009 capital and exploration expenditures.


BP. In 2009, BP divided its $2.1 billion investment in clean energy between wind, solar, carbon capture and sequestration, hydrogen, and advanced biofuels technologies. These types of clean energy investments have increased BP's wind energy generation from 172 megawatts in 2007 to 711 megawatts in 2009. However, it is important to note that while all clean energy investments are important, their profits in just the first quarter of 2010 were 190 percent larger ($2.1 billion versus $6.079 billion) than their total 2009 clean energy investments.


Shell. In 2009, Shell invested $1.1 billion in its research and development program, which it uses to reduce costs and the environmental impacts of its operations as well as to create new energy technologies like alternative fuels or carbon capture and sequestration. These investment levels have remained flat in 2008 ($1.23 billion) and 2007 ($1.16 billion) at the same time Shell was repurchasing $3.6 and $4.4 billion in its own stock.


ChevronTexaco. ChevronTexaco's clean energy investments in 2009 were highlighted by the deployment of a 16.5 megawatts wind farm and solar and energy efficiency projects for a transit authority and school district. ChevronTexaco also made investments in clean energy through its wholly owned subsidiary, Chevron Energy Solutions, and through its own research and technology investments ($603 million in 2009). Despite the importance of those investments, they do not come close to matching the $5.8 billion in investments that it made in 2009 in its traditional oil and gas industries.


ConocoPhillips. In 2009, ConocoPhillips made a $97 million investment in its "emerging businesses," which are focused on "power generation and new technologies related to conventional and nonconventional hydrocarbon recovery (including heavy oil), refining, alternative energy, biofuels, and the environment." The investments that ConocoPhillips is making in emerging businesses is 50 times less than the investments it made in U.S. oil and gas capital expenditures in 2009 ($4.921 billion).


Stock Buybacks. Since 2002, the five largest oil companies have combined to repurchase close to $270 billion of their own stock. The size of their combined stock repurchases is so large that it exceeds the amount invested by the five largest oil companies in U.S. capital and exploration projects by over $100 billion. The following charts compare their combined and individual levels of stock repurchases against their combined and individual levels of U.S. capital and exploration investments.


ExxonMobil. Since 2002, ExxonMobil has repurchased approximately $156 billion of its own stock while investing $32.4 billion in U.S. capital and exploration projects. More strikingly, between 2004 and 2008 when the average national price of gasoline increased by 74 percent ($1.85 per gallon to $3.24 per gallon), ExxonMobil increased its percentage of stock repurchases by 260 percent ($9.951 billion to $35.734 billion). The following chart illustrates its levels of stock buybacks against its levels of U.S. investment in capital projects since 2002.


Since 2002, BP has repurchased approximately $46 billion of its own stock while investing $64 billion in U.S. capital and exploration projects. The following chart illustrates its levels of stock buybacks against its levels of U.S. investment in capital projects since 2002.


ChevronTexaco. Since 2004, ChevronTexaco has repurchased approximately $25.1 billion of its own stock while investing $34 billion in U.S. capital and exploration projects.


ConocoPhillips. Since 2005, ConocoPhillips has repurchased approximately $18.1 billion of its own stock while investing $26.6 billion in U.S. capital and exploration projects.



Given their enormous profits and cash on hand levels, the oil industry certainly has the capital to invest much more heavily in domestic clean energy technologies and alternative fuels.


Unfortunately, and despite the rhetoric from the five largest companies and the API about a commitment to developing cleaner and safer energy sources, the companies and industry appear much more interested in repurchasing their own stock than investing in new U.S. capital equipment and exploration activities or in rapidly bringing new clean and renewable domestically-produced alternative fuels to market.


As the oil pollution in the Gulf of Mexico continues, these companies should strongly consider adopting an aggressive corporate investment strategy that quickly phases down the nation's unhealthy addiction to oil by emphasizing clean energy transportation fuel alternatives. With less than three percent of the world's oil reserves in North America, any other decision will only continue to weaken the nation's national security, increase pollution and continue our economy's vulnerability to price and supply manipulation by OPEC.




1Based on the annual financial reports of ExxonMobil ($260.6 Billion), BP ($152.6 Billion), Shell ($181 Billion), ChevronTexaco ($113.9 Billion), and ConocoPhillips ($46.7 Billion) from 2001-2010.


Bureau of Economic Analysis, Corporate Profits by Industry and Percentage Change in Gross Domestic Product, Table 6.16D and 1.1.1, http://www.bea.gov/n....asp?Selected=Y Based on the annual financial reports of ExxonMobil ($10.693 billion 2009; $7.229 billion 2002), BP ($8.339 billion 2009; $1.735 billion 2002), Shell ($9.719 billion 2009; $1.556 billion 2002), ChevronTexaco ($8.716 billion 2009; $2.957 billion 2002), and ConocoPhillips ($542 million 2009; $307 Million 2002) from 2001-2010.


Calculated from YRankings.com on May 6, 2010. http://ycharts.com/c...gs/cash_on_hand


American Petroleum Institute, Facts on Fuel, Last Updated August 26, 2009, http://www.api.org/i...ST_POPUP_03.gif Calculated by times multiplying 97 by 50 which results in a total of 4.85 billion.


Based on the annual financial reports and SEC filings of ExxonMobil, BP, Shell, ChevronTexaco, and ConocoPhillips 2002-2009. Stock repurchases total $267.33 billion and investment in U.S. capital and exploration activities total $158.23 billion.


Energy Information Administration, Annual U.S. Regular Gasoline Prices, http://www.eia.doe.g...&s=MG_RT_US&f=A

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Guest Truthseeker

Today U.S. Senator Robert Menendez (D-NJ) asked his colleagues for unanimous consent to pass his legislation that would remove all limits on oil liability, the Big Oil Bailout Prevention Act. Republicans blocked the bill for the fourth time.


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Guest Truthseeker

With the amount of oil spilling into the Gulf of Mexico now estimated at as much as 60,000 barrels per day, seven senators, led by Senator Robert Menendez (D-NJ), today urged U.S. Attorney General Eric Holder to ensure that his criminal investigation into the spill includes a focus on BP's incorrect estimates of the spill rate and its alleged withholding of information necessary to determine the spill rate. Estimates have been consistently revised upward, from BP's original estimate of 1,000 barrels per day. Recent news reports indicate that BP had internally estimated a month ago that the spill rate was as much as 40,000 barrels per day, though it publicly claimed the rate was only 5,000 per day. BP has a financial stake in underestimating the amount of oil spilled - it could be fined up to $4,300 per barrel.


The letter was sent by Menendez and Senators Charles Schumer (D-NY), Patty Murray (D-WA), Frank Lautenberg (D-NJ), Kirsten Gillibrand (D-NY), Bill Nelson (D-FL) and Sheldon Whitehouse (D-RI).


"We cannot overstate the importance of knowing how much oil has been and is being spilled," wrote the senators. "In addition to holding BP accountable for Clean Water Act fines, for lost royalty payments, and for all damages, knowing the amount of oil spilled is important for NOAA to understand the volume of oil that could hit the nation's coasts, including Atlantic Coast locations, and to ensure that all states are properly equipped for the worst-case scenario. And if BP is shown to have misled the government in estimating the size of the spill, it may have compromised response efforts.


"BP's potentially criminal withholding and distortion of information has hampered the government's ability to ensure that all costs are paid by the polluters, not taxpayers. An investigation by your office of BP's withholding of information and misinformation should be an important focus alongside other aspects of your investigation. Thank you for your hard work to investigate this ongoing disaster."


PDF of letter to Holder: http://menendez.sena...r_SpillRate.pdf


Text of letter:



June 17, 2010



Attorney General Eric Holder


U.S. Department of Justice


950 Pennsylvania Avenue, NW


Washington, DC 20530-0001



Dear Attorney General Holder:


We applaud you for opening an investigation into the Deepwater Horizon disaster, but as United States Senators we are deeply concerned about reports that BP has withheld and distorted information regarding the amount of oil flowing into the Gulf of Mexico. We are writing to ensure that your criminal inquiry thoroughly investigates these allegations.


BP has an obvious incentive to downplay the size of this spill, as their liability could change by billions of dollars depending on the final official tally. As President Obama said on May 27: "Their interest may be to minimize the damage and, to the extent that they have better information than anybody else, to not be fully forthcoming." Under the Clean Water Act, depending on BP's culpability, the company could be fined up to $4,300 per barrel of oil spilled. BP's original, obviously understated estimate of 1,000 barrels per day would mean a fine of less than $300 million. But if the flow rate turns out to have been up to 60,000 barrels per day, as experts now estimate, then BP's fines could approach $15 billion. Even for a company as large as BP, $15 billion is powerful incentive to withhold or distort information.


If BP is shown to have misrepresented or suppressed critical information, these acts would be punishable under federal law. Under the Federal Fraud and False Statements statute, it is a crime to make any "materially false, fictitious, or fraudulent statement or representation" in connection with "any matter within the jurisdiction of the federal government." In addition, BP may be liable for false statement penalties under the Clean Water Act and other appropriate laws. You have the statutory authority to fully investigate these allegations and punish BP if they hold true.


And there is much to investigate. The record is quite clear that BP withheld information. Within a matter of days BP had robot-operated cameras at the source of the spill but it took a month for the company to release a live feed from those cameras to the public. It took almost three weeks more, until June 8, an astounding 50 days after the explosion, for BP to provide the appropriate high resolution video needed for accurate scientific assessment of the flow rate. In the meantime, BP senior officials claimed that "there's just no way to measure it." In addition, the substantial video archives of these recordings have not been released in their entirety so that they can be analyzed by experts. To date BP has also failed to provide the video archives in a readily accessible form, which has made it difficult for the government-convened panel of scientific experts charged with evaluating the flow rate of the spill to fulfill their responsibilities.


BP also allegedly withheld critical data from scientists, including government scientists, who are best equipped to estimate the spill flow rate. A BP spokesman claimed the company was sharing data with "legitimate interested parties," while in reality, some scientists said that they were left in the dark. Woods Hole Oceanographic Institute experts were poised to fly to the Gulf soon after the spill to conduct volume measurements, but BP told them not to come. And when the National Institute for Undersea Science and Technology team, funded by NOAA and with the government's support, first discovered the oil plume and began gathering data on its extent, BP denied that a plume existed and disrupted data collection.


In addition to withholding information and blocking data collection, BP has seemingly misrepresented the magnitude of the spill. Astoundingly, at first, after the Deepwater Horizon burst into flames and then sunk to the ocean floor, BP claimed that there was no spill. The next day they estimated an absurdly low flow rate of 1,000 barrels per day. On May 20, BP said they were siphoning off 5,000 barrels of oil a day from what they then claimed was a 5,000 barrel a day spill. Video feed released under pressure from Congress on May 21 showed a very different story, with a heavy flow of oil still spewing from the well. In response, the company adjusted their siphon estimate down to 2,200 barrels a day to explain why oil was still flowing. We now know that what the video actually showed was a much, much heavier flow rate.


Only recently have experts begun to have access to some of the data they need to make more credible estimates. On June 15, Secretary of Energy Steven Chu, Secretary of the Interior Ken Salazar, and Marcia McNutt, Director of the USGS and the government convened Flow Rate Technical Group, estimated that the flow may be as high as 60,000 barrels a day, which means that an estimated 3 million barrels may have spilled so far. That would amount to more than 13 Exxon Valdez spills.


We cannot overstate the importance of knowing how much oil has been and is being spilled. In addition to holding BP accountable for Clean Water Act fines, for lost royalty payments, and for all damages, knowing the amount of oil spilled is important for NOAA to understand the volume of oil that could hit the nation's coasts, including Atlantic Coast locations, and to ensure that all states are properly equipped for the worst-case scenario. And if BP is shown to have misled the government in estimating the size of the spill, it may have compromised response efforts.


BP's potentially criminal withholding and distortion of information has hampered the government's ability to ensure that all costs are paid by the polluters, not taxpayers. An investigation by your office of BP's withholding of information and misinformation should be an important focus alongside other aspects of your investigation. Thank you for your hard work to investigate this ongoing disaster.



















United States Senators

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Guest Cassie Smedile

U.S. Congresswoman Ginny Brown-Waite (FL-05) released the following statement denouncing comments made by Rep. Joe Barton of Texas during a hearing by the House Energy & Commerce Committee:


"People’s livelihoods are being threatened by this oil spill. The economic and cleanup costs are immeasurable at this point. BP is responsible for those costs and this Member of Congress will make sure they pay up.


"While the administration has bungled the response, the facts still remain that this is BP’s mess and they will be held accountable.”

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Guest David Plouffe

When BP CEO Tony Hayward testified before Congress this morning, many expected to hear him apologize for the disaster his company has caused. Instead, GOP Congressman Joe Barton was the one saying he was sorry -- to BP.


In his opening statement, Barton, the top Republican on the committee overseeing the oil spill and its aftermath, delivered a personal apology to the oil giant. He said the $20 billion fund that President Obama directed BP to establish to provide relief to the victims of the oil disaster was a "tragedy in the first proportion."


Other Republicans are echoing his call. Sen. John Cornyn said he "shares" Barton's concern. Rep. Michele Bachmann said that BP shouldn't agree to be "fleeced." Rush Limbaugh called it a "bailout." The Republican Study Committee, with its 114 members in the House, called it a "shakedown."


Let's be clear. This fund is a major victory for the people of the Gulf. It's a key step toward making them whole again. BP has a responsibility to those whose lives and livelihoods have been devastated by the disaster. And BP oil executives don't deserve an apology -- the people of the Gulf do.


Rep. Barton and Republicans like him don't understand that the real tragedy is what's happening to the people in the Gulf Coast. They're the ones who deserve his apology -- not BP.


But big oil knows exactly who its allies are. And if Republicans win control of the House, Rep. Barton could be chairman of the House Energy and Commerce Committee -- overseeing regulation of the oil and gas industry.


Notably, companies like Halliburton -- the folks responsible for cementing the Deepwater Horizon rig -- are directing their political committees to deliver thousands of dollars to GOP candidates this cycle. Barton himself has received more than $100,000 from the oil and gas industry this election cycle.


Barton should apologize to the people of the Gulf and he should step down as the highest-ranking Republican on the House Energy and Commerce Committee.

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Guest Louisiana Legislature



EMERGENCY/ENVIRONMENTAL: Memorializes congress to direct EPA to investigate the governor of La.'s refusal to timely declare a state of emergency in response to the Deepwater Horizon oil rig



2 To memorialize congress to direct the Environmental Protection Agency to investigate the

3 governor of Louisiana's refusal to timely declare a state of emergency in response to

4 the deadly and tragic destruction of the Deepwater Horizon.

5 WHEREAS, on April 20, 2010, an explosion occurred on the rig Deepwater Horizon

6 which resulted in the fire that eventually sank the rig, killed at least eleven crewmen, and

7 threatens Louisiana's delicate coast and industries that rely on the coast with thousands of

8 barrels of oil spewing from five thousand feet on the ocean bottom; and

9 WHEREAS, the Louisiana Homeland Security and Emergency Assistance and

10 Disaster Act,R.S. 29:721, et seq., confers upon the governor of Louisiana emergency powers

11 to deal with emergencies and disasters, including those caused by fire, flood, earthquake, or

12 other natural or man-made causes, in order to ensure that preparations of this state will be

13 adequate to deal with such emergencies or disasters, and to preserve the natural resources

14 of the state, lives, and property of the people of the state of Louisiana; and

15 WHEREAS, when the governor determines that a disaster or emergency has

16 occurred, or the threat thereof is imminent, R.S. 29:724( b )(1) empowers him to declare a

17 state of emergency by executive order or proclamation; and

18 WHEREAS, a declaration of emergency is necessary to allow state agencies to

19 thoroughly prepare for and respond to any eventuality and to allow federal agencies and

20 federal resources to be deployed if necessary; and


End Page 1


Begin Page 2


1 WHEREAS, a declaration that a state of emergency exists is necessary due to the

2 predicted impact of oil along the Louisiana coast leaking from the Deepwater Horizon which

3 threatens the state's natural resources, including land, water, fish, wildlife, fowl, and other

4 biota and likewise threatens the livelihoods of Louisiana's citizens living along the coast

5 which increases the economic impact of this incident; and

6 WHEREAS,National Oceanic and Atmospheric Administration models show the oil

7 spill could reach parts of the Louisiana coastline by Thursday, April 29, 2010, and proceed

8 into the Breton Sound and Chandeleur Sound by Saturday, May 1, 2010; at this time, the

9 Pass a L'Outre Wildlife Management Area is expected to see the first impact of the oil spill;

10 and

11 WHEREAS, a minimum of ten additional state and national wildlife management

12 areas and wildlife refuges in Louisiana and Mississippi are in the direct path of the oil plume

13 and can be expected to be impacted; the Barataria-Terrebonne Estuary, Biloxi Wildlife

14 Management Area, the Breton National Wildlife Refuge, Buccaneer State Park (MS), the

15 Sandhill Crane National WildlifeRefuge (MS), theGulf Islands National Seashore National

16 Park (MS), Grand Bay National Wildlife Refuge (MS), and Bon Secour National Wildlife

17 Refuge (MS) are all in the direct path of the plume; and

18 WHEREAS, Louisiana's coastline is comprised of 3.5 million acres of coastal

19 wetlands, which represent approximately forty percent of all the coastal wetlands in the

20 continental United States; furthermore, billions of dollars in ongoing coastal restoration

21 projects may be at risk because of this emergency; and

22 WHEREAS, the governor waited to declare a state of emergency until the afternoon

23 of April 29, 2010, four days after the disaster.

24 THEREFORE, BE IT RESOLVED that the Legislature of Louisiana does hereby

25 memorialize congress to direct the Environmental Protection Agency to investigate the

26 governor of Louisiana's refusal to timely declare a state of emergency in response to the

27 deadly and tragic destruction of the Deepwater Horizon.

28 BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the

29 presiding officers of the Senate and the House of Representatives of the Congress of the

30 United States of America and to each member of the Louisiana congressional delegation.


End Page 2



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United States House of Representatives

Committee on Energy and Commerce

Subcommittee on Oversight and Investigations

Tony Hayward

Chief Executive, BP plc

June 17, 2010

Chairman Stupak, Ranking Member Burgess, members of the Subcommittee. I am Tony Hayward, Chief Executive of BP plc.


The explosion and fire aboard the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico never should have happened ─ and I am deeply sorry that they did. None of us yet knows why it happened. But whatever the cause, we at BP will do what we can to make certain that an incident like this does not happen again.


Since April 20, I have spent a great deal of my time in the Gulf Coast region and in the incident command center in Houston, and let there be no mistake – I understand how serious this situation is. This is a tragedy: people lost their lives; others were injured; and the Gulf Coast environment and communities are suffering. This is unacceptable, I understand that, and let me be very clear: I fully grasp the terrible reality of the situation.


When I learned that eleven men had lost their lives in the explosion and fire on the Deepwater Horizon, I was personally devastated. Three weeks ago, I attended a memorial service for those men, and it was a shattering moment. I want to offer my sincere condolences to their friends and families – I can only imagine their sorrow.


My sadness has only grown as the disaster continues. I want to speak directly to the people who live and work in the Gulf region: I know that this incident has profoundly impacted lives and caused turmoil, and I deeply regret that. Indeed, this is personal for us at BP. Many of our 23,000 U.S. employees live and work in the Gulf Coast region. For decades, the people of the Gulf Coast states have extended their hospitality to us and to the companies like Arco and Amoco that are now part of BP. We have always strived to be a good neighbor. We have worked to hire employees and contractors, and to buy many of our supplies, locally.


I want to acknowledge the questions that you and the public are rightly asking. How could this happen? How damaging is the spill to the environment? Why is it taking so long to stop the flow of oil and gas into the Gulf?


And questions are being asked about energy policy more broadly: Can we as a society explore for oil and gas in safer and more reliable ways? What is the appropriate regulatory framework for the industry?


We don't yet have answers to all these important questions. But I hear the concerns, fears, frustrations – and anger – being voiced across the country. I understand it, and I know that these sentiments will continue until the leak is stopped, and until we prove through our actions that we will do the right thing. Our actions will mean more than words, and we know that, in the end, we will be judged by the quality of our response. Until this happens, no words will be satisfying.


Nonetheless, I am here today because I have a responsibility to the American people to do my best to explain what BP has done, is doing, and will do in the future to respond to this terrible incident. And while we can't undo these tragic events, I give you my word that we will do the right thing. We will not rest until the well is under control, and we will meet all our obligations to clean up the spill and address its environmental and economic impacts.


From the moment I learned of the explosion and fire, I committed the global resources of BP to the response efforts. To be sure, neither I nor the company is perfect. But we are unwavering in our commitment to fulfill all our responsibilities. We are a strong company, and nothing is being spared. We are going to do everything in our power to address fully the economic and environmental consequences of this spill and to ensure that we use the lessons learned from this incident to make energy exploration and production safer and more reliable for everyone.


A Coordinated Effort


We have been committed to responding to these tragic events and coordinating with the federal government from the beginning. On April 21, the Administration began holding meetings and regular calls with me and other members of BP's leadership to discuss BP's response effort, as well as federal oversight and support.


Even before the Deepwater Horizon sank on the morning of April 22, a Unified Command structure was established, as provided by federal regulations. Currently led by the National Incident Commander, Admiral Thad Allen, the Unified Command provides a structure for BP's work with the Coast Guard, the Minerals Management Service and Transocean, among others. We are grateful for the leadership of President Obama, members of his cabinet, the state governors and local officials.


As the scope of the unfolding disaster became more apparent, we reached out to additional scientists and engineers from our partners and competitors in the energy industry, as well as engineering firms, academia, government and the military.


Among the resources that have been made available:


• Drilling and technical experts who are helping determine solutions to stopping the spill and mitigating its impact, including specialists in the areas of subsea wells, environmental science and emergency response;


• Technical advice on blowout preventers, dispersant application, well construction and containment options;


• Additional facilities to serve as staging areas for equipment and responders, more remotely operated vehicles (ROVs) for deep underwater work, barges, support vessels and additional aircraft, as well as training and working space for the Unified Command.


Working under the umbrella of the Unified Command, BP's team of operational and technical experts is coordinating with many federal, state, and local governmental entities and private sector organizations. These include the Departments of Interior, Homeland Security, Energy, and Defense, the National Oceanic and Atmospheric Administration (NOAA), US Fish & Wildlife Service (USFW), National Marine Fisheries Service (NMFS), EPA, OSHA, Gulf Coast state environmental and wildlife agencies, the Marine Spill Response Corporation (MSRC) (an oil spill response organization), as well as numerous state, city, parish and county agencies.


Some of the best minds and the deepest expertise are being brought to bear. With the possible exception of the space program in the 1960s, it is difficult to imagine the gathering of a larger, more technically proficient team in one place in peacetime. And including BP, industry and government resources, more than 27,000 personnel are now engaged in the response in various activities such as booming, skimming, surveying, clean-up operations, wildlife protection and rehabilitation and claims support. In addition, we are helping to train and organize the more than 19,000 citizen volunteers who have come forward to offer their services. The outpouring of support from government, industry, businesses and private citizens has truly been both humbling and inspiring.


What We Are Doing


Our efforts in response to this incident are focused on two critical goals:


• Successfully stopping the flow of oil; and


• Minimizing the environmental and economic impacts from the oil spill.


These are without a doubt complex and challenging tasks. While we have had to overcome hurdles, we are doing everything we can to respond as quickly and effectively as we can.

From the beginning, we have been committed to a transparent response. We know the public wants as much information as possible about this unprecedented event, and we continue to do our best to provide it so the public can understand the incident and its impacts.


Subsea efforts to secure the well


Our first priority is to stop the flow of oil and secure the well.


We are currently drilling two relief wells, which we believe represents the ultimate solution to stopping the flow of oil and gas from the well. The first relief well is currently at a depth of 15,226 feet, and the second relief well is currently at 9,778 feet.

Separately, the goal has been to minimize or stop the flow of oil and gas before the relief wells are completed. From the beginning, we have implemented a multifaceted strategy, featuring a range of technological approaches. Our efforts to stop the well from the seabed included a number of interventions to the failed BOP, and the 'top kill' procedure. We understand the public's frustration that these approaches did not stop the flow of oil. We, too, were disappointed.


Although we were not able to stop the well at the seabed, our efforts to contain the oil and gas have been more successful. While our first attempt with a Containment Dome was not successful due to gas hydrate formation, we learned lessons that have underpinned subsequent successes. Specifically, we first deployed a Riser Insertion Tube Tool that overcame these gas hydrate problems and captured more than 2,000 barrels per day for ten days. On June 3, we replaced this with the Lower Marine Riser Package Cap, which had increased our collection to about 15,000 barrels per day.


On Wednesday morning, we were in the early stages of increasing oil and gas collection through our next containment step, the Q4000 Direct Connect. It utilizes much of the subsea 'top kill' equipment and takes oil directly from the failed BOP to the Q4000 on the surface. We expect to optimize collection over the next few days to levels well above what was previously accomplished.

It is important to keep in mind that these techniques have never before been attempted 5,000 feet under water. On the seabed, we have made unprecedented use of ROVs for a variety of tasks, including working on the BOP, positioning riser cutting devices and slings, connecting hoses, positioning containment devices and providing extensive surveying and monitoring. We cannot guarantee the outcome of these operations, but we are working around the clock with the best experts from government and industry.


We continue to do more to increase our operational flexibility and collection capability. This includes securing vessels with greater processing and storage capacity, adding shuttle tankers for transporting oil, procuring spares of critical equipment, installing permanent riser systems, and replacing the containment cap with a more secure system. We will not rest with our containment efforts until the well is permanently killed. I know it feels like this all takes a long time but we are compressing operations that normally take months into days.

In addition to these containment operations, and with the approval of the Unified Command and in conjunction with the EPA, we continue injecting dispersant subsea using ROVs. Dispersant acts by separating the oil into small droplets that can break down more easily through natural processes before they reach the surface. Use of dispersant subsea reduces the amount of oil traveling to the surface, which, in turn, reduces the amount of spray dispersant required at the surface. In addition, dispersant use at the source requires approximately one quarter of the amount of dispersant that would be necessary for use on the surface. Sonar testing and aerial photographs show encouraging results.


There has been a lot of discussion about the use of dispersants. On June 4, a federal panel of experts studying this issue recommended continued use of dispersants after analyzing potential risks and benefits for the environment. The dispersant we are using – Corexit – is on the National Contingency Plan Product Schedule, which is maintained by the EPA. We will continue to work closely with the EPA to try to identify alternative dispersants and to monitor the situation closely. We will only use dispersants in ways approved by the Unified Command, supported by the EPA and other relevant agencies.


Clean up Efforts


BP is a "responsible party" under the Oil Pollution Act. This means that federal law requires BP, as one of the working interest owners of Mississippi Canyon 252, to pay to clean up the spill and to compensate for the economic and environmental impacts of the spill. Let me be clear: BP has accepted this responsibility and will fulfill this obligation. We have spent nearly $1.5 billion so far, and we will not stop until the job is done.


It is important to understand that this "responsible party" designation is distinct from an assessment of legal liability for the actions that led to the spill. Investigations into the causes of the incident are ongoing, and issues of liability will be sorted out separately when the facts are clear and all the evidence is available. The focus now is on ensuring that cleanup, and compensation for those harmed by the spill, are carried out as quickly as possible.


Our cleanup efforts are focused on two fronts: in the open water and at the shoreline.


• On the water


On the open water, more than 4,200 response vessels are in use, including skimmers, storage barges, tugs, and other vessels. The Hoss barge, the world's largest skimming vessel, has been onsite since April 25. In addition, there are 49 deepwater skimming vessels, which includes ten 210-foot MSRC Oil Responder Class Vessels, which each have the capacity to collect, separate, and store 4,000 barrels of oily water mix. To date, over 400,000 barrels of oily water mix have been recovered.


As part of our response efforts, over 2,000 "Vessels of Opportunity", independent vessel owners throughout the Gulf Coast are using their boats in a variety of oil recovery activities, including towing and deploying booms, supporting skimming and burn operations, finding and recovering tar balls and transporting general supplies and personnel.


Also on the open water, with the Coast Guard's approval, we are attacking the spill area with EPA-approved biodegradable dispersants, which are being applied from both planes and boats.


• Actions to protect the shoreline


Near the shoreline, we are implementing oil spill response contingency plans to protect sensitive areas. According to the Coast Guard, the result is the most massive shoreline protection effort ever mounted.


To support rapid response, we have made available a total of $175 million to Louisiana, Mississippi, Alabama, and Florida, as well as $70 million to assist these states in tourism promotion efforts.


To date, we have deployed over 2.5 million feet of containment boom and over 3.0 million feet of sorbent boom in an effort to contain the spill and protect the coastal shoreline. The Department of Defense is helping to airlift boom to wherever it is currently needed across the Gulf coast.

Highly mobile, shallow draft skimmers are also staged along the coast ready to attack the oil where it approaches the shoreline.


Wildlife clean-up stations have been mobilized, and pre-impact baseline assessment and beach clean-up has been completed in many locations, Shoreline cleanup assessment teams (SCAT) are being deployed to affected areas to assess the type and quantity of oiling, so the most effective cleaning strategies can be rapidly applied.


Our largest single project commitment to date is to fund the $360 million cost of six berms in the Louisiana barrier islands project. On June 7, we announced that we will make an immediate payment of $60 million to the state of Louisiana to allow the state to begin work on the project immediately. BP will make five additional $60 million payments when the Coastal Protection and Restoration Authority of Louisiana certifies that the project has satisfied 20%, 40%, 60%, 80% and then 100% completion milestones. The entire $360 million will be funded by the completion of the project.


In addition, BP is committing up to $500 million to an open research program studying the impact of the Deepwater Horizon incident, and the associated response, on the marine and shoreline environment of the Gulf of Mexico. The program will investigate the impacts of the oil, dispersed oil, and dispersant on the ecosystems of the Gulf of Mexico and coastal States.

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United States House of Representatives

Committee on Energy and Commerce

Subcommittee on Oversight and Investigations

Tony Hayward

Chief Executive, BP plc

June 17, 2010




Communication, community outreach, & engaging volunteers


We are also working hard to keep the public and government officials around the country informed of what is happening. We are regularly briefing federal, state, and local officials, and we are holding town hall sessions to keep affected communities informed.


BP is also supporting volunteer efforts related to shoreline clean-up. We have partnered with existing volunteer organizations in each of the states to ensure efficient registration and deployment of volunteers to the areas where they can help most.

Untrained volunteers are not being used for any work involving contact or handling of oil, tar balls, or other hydrocarbon materials. This work is being carried out by trained personnel. In some cases, volunteers who receive more intensive training on the safe handling of hazardous materials and vessel operation for laying boom can become contract employees (Qualified Community Responders).


There are twenty-five BP community-outreach sites engaging, training, and preparing volunteers in Alabama, Florida, Louisiana and Mississippi. A phone line has also been established for potential volunteers to register their interest in assisting the response effort.

Coping with economic impacts


We recognize that beyond the environmental impacts there are also economic impacts on many of the people who rely on the Gulf for their livelihood. BP will pay all necessary cleanup costs and all legitimate claims for other losses and damages caused by the spill.


The BP claims process is integral to our commitment to do the right thing. To date, BP has already paid out over $90 million on the more than 56,000 claims that have been submitted. While the initial focus has been on individuals, we are now moving funds on an expedited basis to business owners with nearly $16 million to be paid out this week to businesses alone.


To ensure the process is as fair and transparent as possible, an independent mediator will be appointed to provide an independent judgment in cases in which BP and a claimant are in disagreement. The mediator will be fully independent of BP, and claimants who disagree with the mediator's judgment will retain all rights under the Oil Pollution Act of 1990 either to seek reimbursement from the Oil Spill Liability Trust Fund or to file a claim in court.


Thirty-two walk-in claims offices are open in Alabama, Florida, Louisiana and Mississippi. Our call center is operating 24 hours a day, seven days a week. We also have in place an on-line claims filing system. Nearly 700 people are assigned to handle the claims, including almost 600 experienced claims adjusters working in the impacted communities. Claim forms can be filled out in English, Spanish or Vietnamese, and Spanish and Vietnamese translators are available in many offices.

We are striving to be efficient and fair and we look for guidance to the established laws, regulations and other information provided by the US Coast Guard, which oversees the process.

We will continue adding people, offices and resources as necessary.


Investigating what happened


The question we all want answered is "What caused this tragic accident"?


A full answer to this and other questions must await the outcome of multiple investigations now underway, including a joint investigation by the Departments of Homeland Security and Interior (Marine Board) and an internal investigation by BP itself.


Our internal investigation was launched on April 21, 2010 and is being conducted by BP's Head of Group Safety and Operations.


The investigation team's work thus far suggests that this accident was brought about by the apparent failure of a number of processes, systems and equipment. While the team's work is not done, it appears that there were multiple control mechanisms — procedures and equipment — in place that should have prevented this accident or reduced the impact of the spill. The investigation is focused on the following seven mechanisms:


1. The cement that seals the reservoir from the well;

2. The casing system, which seals the well bore;

3. The pressure tests to confirm the well is sealed;

4. The execution of procedures to detect and control hydrocarbons in the well, including the use of the blowout preventer (BOP) and the maintenance of that BOP;

5. The BOP Emergency Disconnect System, which can be activated by pushing a button at multiple locations on the rig;

6. The automatic closure of the BOP after its connection is lost with the rig; and;

7. Features in the BOP to allow ROVs to close the BOP and thereby seal the well at the seabed after a blowout.


I understand people want a simple answer about why this happened and who is to blame. The truth, however, is that this is a complex accident, caused by an unprecedented combination of failures. A number of companies are involved, including BP, and it is simply too early to understand the cause. There is still extensive work to do.


Lessons learned


There are events that occurred on April 20 that were not foreseen by me or BP, but which we need to address in the future as lessons learned from this terrible tragedy. With ongoing investigations into the incident and continuing efforts to secure the well, we are in the early stages of trying to learn from this incident. But, as I see it, there are already lessons to be learned, and I wanted to share two of them with you today.


Lesson 1: Based on the events of April 20 and thereafter, we need to be better prepared for a subsea disaster. It is clear that our industry needs to significantly improve our ability to quickly address deep-sea accidents of this type and magnitude.


The industry has made significant strides in preparedness measures before, and we will do so again. Following the Exxon Valdez oil spill, the industry recognized the need to enhance its capacity to address oil spills. The result was the MSRC, an independent, nonprofit company which maintains a significant inventory of vessels, equipment and trained personnel, complemented by a large contractor work force. The work of MSRC and other contractors has been central to the surface spill response efforts in the Gulf.


But based on the events of April 20 and thereafter, it is clear that this is not enough. We now need to develop a similar capability for dealing with large undersea spills. We have no doubt that others in the industry will join us in efforts to develop this capability.


Lesson 2: Based on what happened on April 20, we now know we need better safety technology. We in the industry have long relied on the blowout preventer as the principal piece of safety equipment. Yet, on this occasion it apparently failed, with disastrous consequences. We must use this incident as a case study to avoid a similar failure in the future.

Since the April 20 explosion and fire, BP has been carefully evaluating the subsea blow-out preventers used in all our drilling operations worldwide, including the testing and maintenance procedures of the drilling contractors using the devices. We will participate in industry-wide efforts to improve the safety and reliability of subsea blowout preventers and deep water drilling practices. And we will work closely with other interested parties as we do so.



We understand the seriousness of the situation. We know the world is watching us. No one will forget the 11 men who lost their lives in the explosion on the Deepwater Horizon. We hear and understand the concerns, frustrations, and fears that have been and will continue to be voiced. I understand that only actions and results, and not mere words, ultimately can give you the confidence you seek. We will be, and deserve to be, judged by our response.


I give my pledge as leader of BP that we will not rest until we stop this well, mitigate the environmental impact of the spill and address economic claims in a responsible manner. No resource available to this company will be spared. We and the entire industry will learn from this terrible event and emerge from it stronger, smarter and safer.

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