406 Dirksen EPW Hearing Room

Barbara Boxer


Full Committee Hearing:
"Economic and Environmental Impacts of the
Recent Oil Spill in the Gulf of Mexico.”
May 11, 2010
(Remarks as prepared for delivery)

Today, we will hear about an oil spill that could be one of the greatest environmental disasters our nation has ever seen. My heart goes out to the families of those who lost their lives.

Our ocean environment is not only a God-given treasure and our legacy -- it is also a great economic asset. In California, ocean-related tourism, recreation and fishing generate $23 billion in economic activity each year and support 390,000 jobs. California’s 19 coastal counties account for 86 percent of the state’s annual economic activity, or more than $1 trillion. Nationwide, ocean tourism, recreation, and fishing provide nearly $130 billion in economic activity and 2.4 million jobs annually.

Louisiana is the largest seafood producer in the lower 48 states, with a total economic impact of about $2.4 billion. Recreational fishing in Louisiana generates an additional $1 billion in retail sales a year.

The Gulf Coast is also home to remarkable National Wildlife Refuges. One of the first refuges impacted by the spill – Breton National Wildlife Refuge – was established by Teddy Roosevelt to protect the numerous species of birds that use the islands for nesting and wintering.

We are all united in our top priority: stopping the spill, cleaning up the oil, and protecting the threatened economic and natural resources of the region.

As I analyze what has happened here and the policies and practices surrounding offshore oil drilling, a number of issues come to the forefront.

First, it is imperative that the impacts to businesses, jobs, and environment are taken care of as quickly as possible. Those responsible should provide the resources. That means we need to change the law regarding limits on liability. A $75 million cap does not come close to addressing the potential damages from a spill of this magnitude. This idea has strong support, and I will work with my colleagues to move forward with legislation as soon as possible.

Second, I am pleased that Interior Secretary Salazar is already discussing separating minerals extraction responsibility from safety and environmental oversight at the Minerals Management Service (MMS). I have already discussed this idea with Energy Committee Chairman Bingaman, and I believe we will work together on legislation.

A strong argument for supporting this separation is the MMS finding in its comprehensive review of the Gulf area that the likelihood of a spill was remote and impacts limited, and therefore MMS supported categorical exclusions on a site-by-site basis. BP also said in its oil exploration plan that there would be no significant impact on any natural resources.

In addition, I am concerned that reports of corruption at MMS -- including illicit activities – might have played a role in these decisions and this approach. Clearly, stronger, more independent oversight of oil company activities is needed. With so much of the region’s economy at risk, why were exploration plans and environmental documents prepared with little to no analysis of the threat of a serious spill?

Third, has the push to drill in ultra-deep water and expand exploration outpaced the oil companies’ ability to respond to oil spill disasters in waters so deep they have been described as “inner space”?
A fourth area of great concern to me is the lack of sufficient back-up safety systems. How do you go ahead and hold a party on the rig to celebrate safety when you don’t even have an effective plan in case the blowout preventer fails?

Finally, I am concerned about the cement application, since I learned it may have been the cause of a serious blowout in Australia last year. I am interested to find out more about the condition of the cement, and the companies’ experience and practice in carrying out this sensitive part of the operation.

The Environment and Public Works Committee has an important role to play as this unfolds. This Committee is responsible for a number of areas directly related to the oil spill and its aftermath, including the Oil Pollution Act, environmental aspects of Outer Continental Shelf lands, air and water pollution, fisheries and wildlife, and regional economic development through the EDA.

Today’s hearing is just the first step in this Committee’s ongoing oversight of the oil spill in the Gulf of Mexico. Next week, we will hold a hearing with Administration officials to get even more answers.
Moving forward, we must all work together to stop this spill and repair the damage, and we must find out why this happened and how we can ensure nothing like it ever occurs again.

I look forward to the testimony from all our witnesses today.

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