CAPTAIN MELISSA BERT: Good evening. I'd like to welcome everyone to tonight's History Makers series with Admiral Thad Allen, former commandant of the U.S. Coast Guard. On behalf of the council, I would like to thank Richard Plepler and Home Box Office for their generous support of this series.
The History Makers series focuses on contributions made by a prominent individual at a critical juncture in U.S. foreign policy or international relations. I think you would struggle to find anyone more worthy to be featured in this series than Admiral Thad Allen. He has led the response and recovery efforts to some of the most difficult crises in our recent history. We've all read the bio, but as a quick recap, Admiral Allen led the Coast Guard's efforts to secure the ports along the Atlantic seaboard after 9/11. He was the principal federal response official for the U.S. government's response and recovery operations in the aftermath of Hurricanes Katrina and Rita throughout the Gulf Coast region. And if that was not enough and he wanted a quiet day at the office, he served as the national incident commander for the unified response to the Deepwater Horizon oil spill in the Gulf of Mexico.
Admiral Allen has been widely praised for his extraordinary leadership skills. He was selected as one of U.S. News & World Report's 20 best leaders in 2005. He has been described as a combination of Mike Ditka and Star Trek's Scotty. (Inaudible) -- MIT degrees --
ADMIRAL THAD ALLEN: I hadn't heard that one. (Laughter.)
CAPT. BERT: -- and dubbed by Time magazine as the master of disaster. (Laughter.)
So, with that, before we start our discussion, I need to dispense with a few housekeeping matters. Please turn off your cellphones, BlackBerrys and all wireless devices, and not just put them to vibrate. I would also like to remind the members that this meeting is on the record, so anything you say will be used against you.
So, with that, Admiral Allen, if we can start at the beginning, you've spent 40 years in the Coast Guard, or you spent 40 years in the Coast Guard. What drew you to the Coast Guard, and what kept you there for most of your life?
ALLEN: Well, in the interest of full disclosure, and since you mentioned Mike Ditka -- (scattered laughter) -- when I was a senior in high school in Tucson, Arizona, I was trying to decide where to go to school, and my dad was a retired chief petty officer in the Coast Guard. And obviously, from our family, you're going to have to find a way to pay for college because the family wasn't going to pay for college. And I had done pretty well. I had some academic scholarships to some very large universities and I had an appointment to the Naval Academy.
I applied to the Coast Guard Academy because my dad had been in the Coast Guard and I knew something about it. I ultimately chose the Coast Guard Academy for a completely irrelevant reason. My high school football coach benched all the seniors halfway through the year because we were losing, and he went to bring all the young guys in to get ready for the next year, and I stopped playing, and it made me mad. So I decided to go someplace where I'd have a chance to play college football. I never even thought about doing it. So I picked the Coast Guard Academy because it was a Division III school. (Laughter.) And I walked on the football team as a freshman, and I was a defensive captain my senior year. And, yes, I was the middle linebacker. (Laughter.) And I hung around and became the commandant. If I write an autobiography, it would be "Accidental Admiral." (Laughter.)
BERT: Now, you've been at the helm during an extraordinary series of crises. Is there something particular in your Coast Guard training that enabled you to quickly, like, jump into the, you know, helm of these crises, I mean, moving from 9/11 to Katrina to the Gulf oil spill? I mean, is there a core sort of set of values and principles, mental models that you used?
ALLEN: Well, I think, in general -- and this applies to the Coast Guard overall, not just me -- I think we give a lot of authority and responsibility to junior officers very, very early. It allows them the chance to make decisions. Sometimes you make mistakes. And you've just got to be careful when you do that so you don't end up killing your young, you know. It happens in a lot of organizations. I think that's one thing.
I think we have over a 200-year history of passing autonomy down to field commanders and telling them they have the responsibility to do the right thing. And this goes back to very isolated cutters and search-and-rescue stations that had no communications with higher authority and were expected to act if there was a reason to act.
I think the best example of that was the action after Hurricane Katrina came ashore and our air crews and our small-boat crews went in without any prompting, were deployed to the area and we saved 33,000 people.
For me individually, I was about 23 years old. I was assigned to a ship in Miami. And it was December of 1972. There I was, excited, because the Dolphins were undefeated. They won yesterday. I'm a Dolphin fan. You may remember, some of you, that an L-1011 on approach to Miami, flying over the Everglades, the cockpit crew got distracted and an L-1011 with a full passenger load basically flew into the Everglades, full speed, just right into the ground.
They had called for volunteers to go out to our air station to help with the ground rescue. And, of course, being young and bulletproof, everybody that was in our apartment that night, probably having too many beers, got in a car, sped out to the air station in Miami, and I ended up being on the second helo that dropped people into the fuselage. It was broken apart in the Everglades. And I spent about 24 hours looking for survivors and removing the remains of the ones that didn't make it.
That was a pretty imprinting experience on my life. And once you have either been involved in a situation like that, with an opportunity to save somebody or be consequential even if you're not successful, that pretty much imprints you for the rest of your life and it's something you want to keep doing. Could I ask you, what was the most difficult moment during the Katrina crisis and during the Gulf oil spill crisis?
ALLEN: Well, I've never said this in my -- anything I say can be held against me; I don't care. As I told them earlier, I'm retired and my pension is assured. (Scattered laughter.)
The most difficult thing, I think, in Katrina was not something that was made that public, and it had to do with mortuary affairs. We thought early on there might be 5 (thousand) to 10,000 casualties associated with this. Now, as it turned out, the order of magnitude was more like 3,000, which is not a small number.
ALLEN: But Louisiana had lost all of their capability to do any work related to that. All of their parish coroners are elected by local popular vote. They did not have a state medical lab or a state medical examiner. One of the first crises I hit when I got there was what to do about that.
And what we did was -- it was difficult -- a small town south of Baton Rouge called St. Gabriel, in about less than a week, we found a vacant schoolhouse, a lot next to it and a warehouse all together. And in less than a week, we put a base camp into the schoolhouse where people could stay, and we brought in the ability to feed and take care of everybody. We filled the field nearby with refrigerated trailers. And we put a tent inside the warehouse with over pressure on it, like it was a double seal. And we set up an area where we could process the remains. We set up a family service center where people could come in and make a claim on a lost one, give us DNA samples, give us family records and dental records and so forth.
Doing that from a standing start when FEMA had never had to do it before, including trying to write a specification on a contract for DNA testing -- go find somebody that knows how to do that -- that was difficult. And I have to tell you, though, I made three trips to that place in the next six weeks. And while it was a very sad place to go, it was one of the most uplifting things that I saw, what we were doing for that state that had lost completely that capability. That was hard.
BERT: And in the Gulf oil spill, what was the most difficult moment?
ALLEN: Probably more than a couple on the oil spill. (Laughs.)
ALLEN: I think -- I detected something in the oil spill that I also saw during the hurricane, and what I saw were people who were trying to get up every day and solve a hard problem. But the people who were working those problems, their leaders and organizational structures were being held accountable in the press. Some of the people were being vilified.
And it's hard to separate out the quality of the people that are working on the ground from the decisions the organizations make or what their leaders do. And frankly, I had a morale problem with the people working on the rigs offshore that were trying to drill the relief wells, trying to capture the oil.
I remember talking to FEMA workers during Katrina when I first got down there. They came and they said, you know, I go home at night and I don't even turn the TV on in my hotel room; I can't stand it. And these are the people who are actually doing good. I heard the exact same comments from the Transocean and BP workers out on the oil rigs.
So while it may sound kind of strange because everybody was very angry at BP and they were the responsible party, and all the other folks who were with them, Transocean and the other companies, we had to keep the people on task that actually had to fix the problem. The people who knew how to fix the problem, that had the means of production, were not the government. That was very difficult. BERT: What were the most important -- this is a lessons learned series, so what were the most important lessons learned from the crises that you've participated in? And do you think we're better prepared now when we face the next big, whether it be environmental crisis, earthquake, hurricane, terrorist attack?
ALLEN: Well, I think after one of these things occurred, we're always more prepared to do the same thing again if we have to.
BERT: OK. But the black swan --
ALLEN: Let me -- (laughs) -- yeah, let me delve into that a little bit.
ALLEN: All of the legislation and the steps we took after the Exxon Valdez were aimed at preventing a tanker accident. And for 20 years, guess what, we did it. But in the meantime, the technology allowed drilling to be disassociated from a physical platform, be moved way deep in offshore, and be controlled with electrical cables that sent signals down to hydraulic units, so you didn't have to be physically connected to the surface to drill a well.
And so you had these mobile drilling units connected to a wellhead at the bottom by what they call a riser pipe; completely defied the regulatory and the statutory schemes that we were trying to address to prevent a tanker accident. And the problem is, if we don't know what's going to happen, we can't prepare for it, would be the conventional wisdom.
My opinion is we don't have to sit there and let that happen. And for the folks in the room here, I talk a lot about black swan events. I don't know if you read the book by Nicholas Taleb. A black swan event is something that can't be predicted by prior information or data, and it's based on the fact that until they started creating colonies and looking around the world, nobody thought there was any such thing as a black swan because they'd only seen white swans. That's the premise of the book.
You have to have organizations that are agile and flexible enough and are engaged in corporate lifelong learning, organizational learning, so that when one of those things happens you can't predict, you can be a rapid learning organization and you can adjust rapidly. And so there are lessons learned, but the lessons learned always can relate to what you just did.
ALLEN: And they may be suitable for what happens in the future. They may not. BERT: OK. Now, we know one last question before we sort of open it up. I was wondering -- you know, you talked about the media and the grilling that people took, you know, by the media. How has the 24-hour cable news cycle altered how you deal with response management?
ALLEN: I'm going to give you a convoluted answer.
ALLEN: I'll just warn you ahead of time.
The 24-hour news cycle is a subset of what I believe to be a fundamental change, the sociological equivalent of climate change. And I talk about the ability for the public to participate in events and complex issues before government. I'm talking about the 24-hour news cycle. I'm talking about the Internet. I'm talking about social media; all the ways that people can exchange information or see information or create perceptions or gather information or create impressions. And the 24-hour news cycle is part of that.
And the reason I say that is, after going through these events, I don't believe we're ever going to have another major crisis or complex event in this country again that won't involve public participation. If you don't believe me, just go down south here and look at the occupy folks on Wall Street. And these people can organize and produce behaviors without being in each other's presence. So the social media -- I mean, the news cycle is one part of that.
So, having said that, I consider all of that the sociological equivalent of weather. It just is. You can't change it. You can try and predict it. You can react to it. You can forecast it. But it's going to happen, because there's no barrier to entry for public participation in an event, including the news. So the question is, what do you do about that?
Now, I think it's very curious -- at the risk of disenfranchising some of my very good friends in the media, I thought it was really curious -- and I had this conversation with Howard Kurtz, who does "Reliable Sources" on CNN. I stay at home a lot now because I'm retired, and I do some consulting, so I'm sitting around and I've got the TV on.
It appears to me -- and this is very unscientific -- that about 80 percent of the content on 24-hour news channels are reporters interviewing reporters -- (laughter) -- or reporters that are disguised as contributors or commentators. They're on the payroll to come in and talk.
I think about 20 percent I'm hearing for the first time in original source information. So what you have -- and it repeats on two- or three-hour cycles. When they change, the same stories recycle, and the new person comes into the chair. And this is all of them. This is not just one.
And so the question is what are you going to do about that when whatever they create for the days get recycled five or six times on a show over a 24-hour news cycle and everybody's watching it? It's out in Times Square. It's everywhere.
It creates a significant challenge when you're managing one of the events to try and be transparent, get the information out there, and it puts a premium on being first, being right and being honest. Otherwise, perceptions are created in this vacuum where there is no barrier to entry. And I would apply that to social media as well.
And John Holdren, the science adviser to the president, gives this great presentation on climate change. Now, I don't know where you stand on climate change or if there is climate change, but my theory always was, on climate change in the Arctic, I'm agnostic to the science; there's water where there didn't used to be, and I'm responsible for it, talking to the effects you're trying to achieve. But John Holdren says, on climate change, we have three strategies. We can suffer, adapt or manage.
In relation to what's going on with the press and social media, since it's a permanent feature of our environment, like the weather, except sociological weather, I think we have three ways to deal with it. We can suffer, adapt or manage. And if you go into one of these events and you aren't prepared to deal with it, you're going to fail and somebody else is going to manage national perceptions. There's going to become a gap between the people -- the American public and what they expected in a whole-of-government response.
I'm sorry that was a little long-winded answer.
BERT: Wow. So I'm sure we're going to have lots of questions. I will now open it up to the members to ask the questions. If you'd like to ask a question, please raise your hand, and someone will come to you with a microphone.
So do we have questions? Of course, we do. So, the gentleman in the red tie.
QUESTIONER: Richard Tolman, Columbia University and the Fletcher School.
You have been part of Department of Homeland Security now since inception. I'm wondering if you could talk about are we a much more secure country because of that or not?
ALLEN: Well, I think we are more secure. I don't think there's any doubt about that. Are we as effective as the promise of the Homeland Security Act and the goals and aspirations and the rhetoric that was passed in the wake of 9/11? Probably not because, in standing up a new department and trying to aggregate the authorities, jurisdictions and appropriations of 22 different entities at different stages in the lifecycle which constitute an acquisition, startup, hostile takeover and merger at the same time, it's difficult to do that.
I'm a huge believer in the Department of Homeland Security and its mission and the homeland security enterprise. Should they be farther along than where they're at now? Yes. Could we be safer if they were farther along? You can make that argument.
But I think we are safer. I think we've taken substantive steps moving forward. Events have been averted. It always hasn't been pretty, but I think there's been incremental progress made.
I think what we have to decide moving forward in the current budgetary environment is how we're going to manage risk and make hard choices. And that's what budget, you know, plateaus always make you do. And I think that's the challenge moving forward.
And I think we have to do a much better job at the next Quadrennial Homeland Security Review than we did on the first one to take a more of a strategic look at they do over in the QDR of defense.
BERT: OK. This gentleman in the front?
QUESTIONER: Hi. I'm Brett Dakin from the Rainforest Alliance.
I just -- I was wondering if you could take us back to the moment when the president appointed you to be in charge of the oil spill effort. How was that decision made? How was it communicated to you? How did you feel? And what were the first things that you did after that decision was made to figure out how to manage the situation?
ALLEN: Well, at the risk of making it sound anticlimactic and not as dramatic as it should be -- (laughter) -- I think I would call it a slow accretion of duties starting on the 20th of April. On the 20th of April, when the rig exploded, the Coast Guard had statutory responsibilities out there that were executed through their local field commander who we call the captain of the port or the federal on-scene coordinator.And our immediate task was to save people's lives, and we did a pretty good job except for 11, which was tragic. But there were some heroic actions taken by our air crews, and some of those offshore boats had actually backed up underneath that rig at the risk of putting their ownership on fire and exploding to try and save, you know, over a hundred people.
Three days later, the rig sunk. During that time, I was working closely with Secretary Napolitano. And it was a regional command at the point; in other words, our folks in the Gulf Coast that were responsible for the area were executing the operations.
After the Exxon Valdez, we created in law and in regulation the authority to create a national incident commander for a spill of national significance. We had never done that since it was authorized. And so as the event became more complex, you started have the discussion is it time to declare us a spill of national significance and establish a national incident commander.
Everything got more complicated on the 22nd of April when the rig sunk. The rig sunk on Earth Day, and the president was told about it while he had all the NGOs from the environmental lobby out in the Rose Garden. You may have been there. (Laughter.)
And two hours later, I was in the Oval Office 'splaining -- (laughter) -- you know, what was going on. And from the -- from the 22nd of April until the 1st of May, we elevated our response from the local commander being involved to the two-star admiral that was in New Orleans.
When we realized that we needed to probably look at declaring this a spill of national significance, we ran into an immediate problem. The presumption after the Exxon Valdez is there are two three-star admirals on each coast in the Coast Guard. And the presumption was that the admiral in that area would become the national incident commander. The commandant would run the Coast Guard and work with the interagency.
Because my retirement was scheduled on the 25th of May and I statutorily had to leave, both of those people were moving. And so if you removed the two three-stars and you say we've already got a two- star running it and we have to elevate it, it left the only one four- star in the Coast Guard. Now, I'm not saying it was a matter of elimination because there was a lot of discussion going on, but I thought -- I think the feeling was, number one, I had experience in the area, knew all the political leaders. I'd been working oil spills -- my first big oil spill was in 1980 when I was a lieutenant.
And I think they thought that, in the transition time period where I was going to go anyway, I could do this and let the transition of leadership take place in the Coast Guard and I could focus just on that.And it was probably -- the discussion probably heated up about four or five days later when we realized it probably was going to be broader in scope. We had to bring resources from outside the Gulf in to adequately address it. And the period from about, I would say, around the 28th or 29th of April to the 1st of May -- and I got the call, I believe it was on the 29th of April from Secretary Napolitano on behalf of the president.
Was that responsive?
QUESTIONER: The final part was what were the first things you did, let's say, in the first couple of days to get a handle on the situation? You had already been there, but --
ALLEN: Yeah. Here's what I decided to do. I had been observing what was going on, and I didn't think I need today create a huge, heavy command in Washington and try and run the thing. We already had a significant amount of people in theater working on this thing. At the height of the spill, we had 47,000 people working this problem between Coast Guard, contractors and everybody else.
So I called my staff together -- this is an IT analogy. I said the National Incident Command is going to be a thin client over the top of this, and what we're going to try and do is do the things that are distracting them from focusing on tactical success and be a buffer in the political process, deal with the media and enable our people to focus on capping the well and cleaning up the oil.
To the extent that I needed to get down into the weeds on something, I would go down into the area, I would talk to them, and I would actually give direction when I needed to. But my goal was not to subsume lower levels of command just like you can't run an operation in Iraq or Afghanistan from Washington. And you can't run it from Tampa if you're Central Command; you have to forward deploy and you have a joint task force there.
We had a joint task force on the ground. So my role was somewhere between a combatant commander trying to manage the entire theater of operations and then deal with the strategy and the policy and the political issues which became substantial.
Is that a little more granulary?
BERT: And behind you?
QUESTIONER: Megan (ph) Riley (ph) King (ph) with Melinda (ph) Capital Partners.
I have a question about Cuba. As you may be aware, they're well on their way to drilling in deep water with some partners who have, one would I think say, less experience than, for example, BP and others who've drilled in deep water largely because of the sanctions.I was actually in Cuba the beginning of September talking about oil spills, and I understand that the Cuban government feels that the Coast Guard communicated with them extremely well during the oil spill and felt that that was their only source of information and were very grateful for that given the potential impact, at one point, people thought the Deepwater Horizon spill might have on Cuba.
As you're aware, because of the sanctions, there's severe limitations in the ability of American companies and the government to participate if there were something like the Deepwater Horizon, God forbid, to occur 50 miles off of Key West.
And I'm curious to the extent you can talk about it what your view is of -- in the event that U.S. policy doesn't change and if such a spill were to happen or a spill of some significance, what do you think should happen from the United States side? And what do you think would happen?
ALLEN: Great question. Let me give it to you in a couple of pieces here.
First of all, what put the conversation on the table for us was the reporting about the Loop Current, which is a current that goes up into the Gulf of Mexico and ultimately empties down in the Straits of Florida. There was some reporting that there was a potential for the oil to become entrained in the Loop Current and it might carry it down to the Straits of Florida, potentially to Cuba and the Bahamas and potentially up into the Gulf Stream.
Now I had hours of conversations with Jane Lubchenco, the administrator of NOAA, on this and we all felt that that was a very, very low probability. But given the credibility of the issues with the flow from the well and all the things that were happening at the time, I didn't feel that we could not do something about this, even in a preventative sense. So I actually went back and the Coast Guard -- I didn't do it as a national incident commander, but the Coast Guard and the State Department actually approached Cuba and the Bahamas about what would happen.
Now, there's a previously negotiated convention in the Caribbean called the Cartagena Convention that lays out a general framework for oil spill response between the countries. What is debilitating if this were ever to occur right now -- and you are absolutely correct -- is our inability to transfer funds to Cuba, buy anything from Cuba, or have an exchange because the entire oil spill response protocol in the United States is premised on the fact that the responsible party hires what we call an oil spill response organization, or an OSRO, the cleanup contractor.
We cannot hire a cleanup contractor in the United States and send them to Cuba under current law, nor can we send money to Cuba to hire a response contractor in Cuba. So you can't get there from here. And I think what has to happen going forward is we need to think about, what would have to happen in terms of congressional notifications. Do you need emergency legislation? Can you have some kind of emergency declaration and use presidential authority?
Short of doing that, you're prohibited by statute, as you probably are well-aware of, from making those financial transactions, and a lot of them that require permits or licensing require three or four (more ?) agencies to do. That's the reason we went early. If we were going to have to do that, we knew that -- and that remains a challenge out there that we need to deal with.
Now on the drilling, I had a conversation earlier today about this. This is my belief, and I have not gone to Cuba and talked to the Cuban officials yet. They frown on active-duty four-stars going down there. (Laughter.) The biggest source of dollar economy in Cuba right now, at least my understanding, is tourists coming from other parts -- obviously not the U.S. -- Canada, you know, Europe and other places. Some of the most beautiful beaches in Cuba and the most valuable resorts are on the north coast. I do not believe -- and this is only Allen's opinion. I do not believe that the Cuban government believes they can risk losing that in a major oil spill. In my mind that should create a higher degree of diligence and duty on their part to ensure that contractors are coming in under whatever international arrangements are made or whatever to ensure the proper safety measures are taken care of.
Now what we don't know we don't know. And I'd like to give you a fuller response, but that's kind of the way I have viewed it, and I think it would be problematic if we had something happen tomorrow, but it would be problematic if we had -- a vessel collision, which could happen any time, would cause the same problem.
BERT: In the front? Hi.
QUESTIONER: Hi. I'm Diana Glassman, head of environmental affairs for Dominion Bank's U.S. subsidiary. The question for you is, coming back to your black swan comment, do you think the industry and also the government have internalized the lessons and actually institutionalized the lessons from this event. And do you think there are any implications on, say, Arctic drilling, or perhaps even coming onshore on hydraulic fracking?
ALLEN: Well, as I said earlier, we spent 20 years trying not to have another Exxon Valdez and we succeeded. I suspect we're going to spend the next 20 years not having another Macondo well. What differentiates that from a black swan is that the black swan, we don't know what's going to happen. We haven't predicted it yet.
Now, having said all that, I get asked all the time, is it safe to drill. And I have a hard time answering that question. If I can parse that phrase for a minute, I think it would be helpful. And I'm glad to talk about the Arctic. The phrase "is it safe to drill" for me has very little meaning because I don't know what safe is. I know nothing is risk-free. So "safe" is a subjective evaluation that somebody places on an event whether or not they think it's safe or not.
Like, you go out of your house not because you can't get run over or have an automobile accident. You made a determination that it's safe enough for you to carry out that activity. So I think the more proper discussion to have is, understanding that nothing is risk-free, what is an acceptable level of risk that we are willing to assume that allows us to believe that we should go ahead and remove these hydrocarbons because we have no other choice related to energy decisions. And if you (look at ?) -- there are probably people in the room who are smarter than I am. I think we're 25, 30 years out from completely replacing hydrocarbons if we move at best speed to other sources of energy. So we have the decision before us right now how to deal with the requirement for fossil fuels, knowing that nothing is risk-free.
But what is safe then? Well, I think safe is what we agree on safe is. And there's a concept they use in mining around the world. It's called, you know, public license to operate. You can do everything right and still get a public veto. Anybody remember the Shoreham nuclear power plant, Long Island? They spent billions of dollars building a nuclear power plant that never operated because the one thing they didn't plan on was public license to operate and they were never granted that. The roadblocks were thrown up and everything else. So I think what has to happen is a reasoned discussion about what constitutes an acceptable level of risk to extract the hydrocarbons.
Now, having said that, in the Arctic we're dealing with shallow water and lower pressures. So the risk profile for a well in the Arctic is much less than the Macondo well. It is completely safe? I would never say that. Is it risk-free? I would never say that. Is it easier to mitigate the risk associated with drilling in the Arctic? It probably is only because of the depth of the water and the pressure, and that is purely a quantitative statement made on the attributes of the reservoirs and the wells, OK?
In regards to shale gas, the Marcellus Shale and the shale reservoirs that are down in Oklahoma and Texas and Louisiana -- again this gets back to the public license to operate. And I've got to tell you, because I travel around and I talk to these folks, they're ambivalent. I was at an event in Pittsburgh a couple of months ago, and I was sitting around the room with some very wealthy people that own land under which there is gas. And some of them had already granted leases and some of them hadn't, and some of them were really -- you know, a lot of concern on whether or not they should move ahead.
The fact of the matter is, do we believe there's enough insulation between the reservoir -- sorry. Let me start over again. Do we believe that there's enough insulation between the ground water, the aquifers and then the reservoir containing the gas that needs to be fracked, and what do we believe as far as the extraction techniques? One thing we can learn from the Macondo well is they should demonstrate what the risks associated with it are and how they're going to manage the risk.
The permits in the Gulf were managed on like a checklist. Once the checklist is done, you get the permit. And we know we can't do that any more. It's called making the safety case and establishing a plan on how you're going to deal with the risks associated with it. And the question is how far do we want to advance that discussion in return for the value of the hydrocarbons we extract. And because I get involved in these things and I try and de- politicize them because otherwise you can't be successful, I have a tendency to say let's de-emotionalize all of this. Let's really talk about -- let's sit down and really talk about what's really acceptable to ourselves, and to do that you have to reach some kind of common ground. And if you (get into an ?) ideological polarization on these things, you're not going to get there.
Was that responsive?
QUESTIONER: Do you think the government and the industry has moved toward your risk assessment?
ALLEN: Oh, in the Gulf they have, yes. Like I said, we are working very, very hard not to have another Macondo.
QUESTIONER: But for other sorts of --
ALLEN: I think the lessons learned from the Macondo well are being applied to fracking. Yes, I do. Yes, I do, especially in regards to well control and risk assessment required as a condition of permitting, and mitigation measures that are required as a condition of permitting.
Now, it's a little more complicated because there is not universal federal control over shale gas. There are places where the federal government has authority because they are federal lands, but in most cases these are state-regulated activities and they're managed under a very -- you've probably never heard of the Interstate Oil and Gas Compact Commission. It was created for the states to be able to manage and regulate their own gas and oil production where they didn't involve federal lands. That is a different regime for managing those resources than we have offshore on the continental shelf, and it involves potentially state autonomy in making some of these decisions.
BERT: Thad, could I just as a follow-on to that -- you travel all over the world. Are you as confident about drilling, you know, deepwater, you know, off the coast of West Africa, when you go to Central Asia? Are you concerned that other countries do not have the proper safety protocols? You talked about Cuba, but what about other sort of geopolitical hot zones where we may not think the governments have the same competence that the U.S. government would have in dealing with a crisis.
ALLEN: Well, I think based on the requests I've had for meetings, consultations and to speak, I think there's certainly been a global wake-up call. Now, how that translates in individual countries, I think varies.
We were talking earlier, I spent -- a week before last I spent some time in the United Kingdom, in Southampton, England, at a place called Oil Spill Response Limited, which is a national -- international consortium, talking with an international conservation organization with the ministers of Kazakhstan about oil spill response in the Caspian Sea, which is a land-locked sea not subject to a lot of the international rules and regulations, but involves Russia, Azerbaijan, Kazakhstan, Turkmenistan and Iran.
And they have maturing response protocols. And they're sitting on top of one of the largest oil and gas reserves in Central Asia. Everybody understands that. I think the oil companies understand there is a higher degree of diligence they're going to have to adhere to even if there's not a regulatory system involved. And if they don't do it, they're going to be subject to the vagaries of civil courts, where there's not a regulatory regime like we have.
And I have been approached by oil companies to talk about this, and I think they're working it hard. But there is such a vast array and portfolio of exploration operations going on out there right now, it's almost how each individual company is adapting to the various countries that they operating in.
You know, one of the reasons BP had such a difficult time on this whole thing is, the BP operation worldwide was really a residual result of the British realm, where BP managers were sent into countries saying: Optimize production, do what you need to do, adapt to the local culture, deal with the government, but your job is to go in and, you know, extract the resources.
Well, the result was a very uneven application of safety procedures across the company. Then they started acquiring U.S. companies. And what there never was, was a standard culture of safety and a set of values, as it applies to oil exploration. It was thought to be autonomous responsibility of the managers in the individual countries, which watered down the overall corporate safety culture, if you will. And I can't tell you how effective it is, and I can't give you any statistics on it, but based on the companies that I'm talking to, that are talking to me, everybody understands this.Now, the question is, how's the best way to move forward. And I believe, to the extent that you -- (inaudible) -- create progress and having stand-by well capping equipment and all that kind of stuff, it ought to be interoperable and subject to international standards. So if you need to move it to the Gulf of Guinea from the Gulf of Mexico, you can do it, or vice versa.
MS. BERT: Thank you.
QUESTIONER: Hi. Thank you. Elizabeth Addonizio, from Morgan Stanley -- I have a question actually about the Coast Guard. I'm wondering if you could talk about the stress that was placed on the force -- the Coast Guard force in forward deployments in support of the wars of the last decade; how that was balanced against domestic responsibilities in and around domestic waterways; and what you think that means for the force structure going forward particularly in an era of defense budget cuts?
ALLEN: Our deployments in support of foreign operations -- or, right now they call it OCO, right, Overseas Contingency Operations -- was not on the level of the other services, although I think it was consequential and important where we did it.
For example, from the start of hostilities in Iraq, we have conducted security around the oil platforms off the port of Umm Qazr, which constitute about 80 -- or 80 (percent) to 85 percent of the GDP of Iraq right now, but getting that oil out and selling it. And we've had six patrol boats over there since the start of hostilities. They operate out of Bahrain. They forward-deployed in the Kuwaiti naval base, and they're there.
When we activated the detention facilities at Guantanamo Bay, they couldn't just go down and use what was there because it was just basically a very scantily staffed forward operating base. Since the start of the detainees in Guantanamo Bay, all the security in Guantanamo Bay on the water side, and some related to (future ?) trials, has been carried out by the Coast Guard.
Now, we've been compensated every year in supplemental funding through the "overseas contingency operations." To the extent that that gets forced into everybody's base budget, which is kind of where they're going, that could create some stress on the Coast Guard. But in general, because we were compensated and could adjust for it, and the fact that we do not -- we do not rotate our people over there on deployments, we permanently assign our folks over there, the cutters for a year, and we rotate them back. So it's like being assigned to a place of duty. You're in some place, removed from your family, for a certain period of time and then brought back. So we didn't have the boots-on-ground, the dwell ratio issues that the other services had.The mobilization for the spill was the largest stressor, in my view, on the Coast Guard since we mobilized for the Mariel Boatlift. We moved everybody that was nailed down in the Coast Guard to the Gulf of Mexico. And we were burning out our senior commanders who were trying to run the tactical operations down there. We rotated them in and out.
But as I said, at the height of that operation we had 47,000 people, and a good number of those people down there were Coast Guard people that we were removing from other places in the United States and taking a risk position because we needed them down there. And there was a public perception that it was better to have a blue-suiter overseeing contractor operations than have somebody with a BP hat on. And frankly, I will tell you, that was political pressure, too.
MS. BERT: OK, the gentleman in the back has had his hand up for awhile.
QUESTIONER: Sam Rascoff, from NYU -- I actually wanted to hear more about the point you were just making, Admiral. Namely, the idea that, as part of your responsibilities as incident commander, you're in effect commanding not just your own troops but members of industry.
It strikes me that this is going to be the sort of thing we're all going to see a lot of in the coming decades, whether it's oil spills or whether it's cyberwarfare. Someone with a lot of stars on his lapel is going to end up being the boss of a lot of people who answer to a private corporation, and I wonder if you could say more about what the feel of that is like.
ALLEN: That was well-said. (Laughter.)
QUESTIONER: Thank you. (Off mic) -- a law professor when I grow up.
ALLEN: Got to watch out -- Allen's definition of legal opinion is something that's correct but not useful. (Laughter.)
You've got -- you've got your finger on something here that's very, very important. And if I could just maybe give you some background on it. -- I don't believe -- given what I said earlier about the social, political and public context of this, I don't think there's a complex problem, whether it's a crisis, the debt, what's going on with financial regulation or anything, that is within the purview of one particular agency -- not-for-profit, NGO, private sector company, or individual -- to fix.
And we'd better wake up and smell the coffee pretty quick that it takes unity of effort. And I differentiate unity-of-effort from unity-of-command, because inside the military there's a monolithic legal structure, because when you go -- when I went to the Coast Guard Academy I had to memorize my chain of command, from my platoon commander to the president. Everybody can do it.Now, I don't think during the oil spill I could pick -- I could take somebody from the Fish and Wildlife Service who's dealing with oiled birds and say, can you recite your chain of command to the president.
And some of them didn't even know who their supervisors were -- not with the Fish and Wildlife -- (inaudible) -- you know, is a really amorphous organization.
The goal is to create unity of effort to achieve the effects, and try and create a whole-of-government response that is in keeping with the expectations of the public. And that social contract in their minds is changing. And what constitutes a whole-of-government response -- because they live in a world where information is immediate, they don't see the government as being that fast. They want ice, food and water delivered immediately after a hurricane. They're not prepared to stay in their own house for 72 hours and have medicine and all that kind of stuff. We have some very, very different levels of expectations.
Over the top of all of that, government cannot do very complex things all by itself anymore, especially when you're talking about critical infrastructure, cybersecurity, offshore oil and gas exploration. We made decisions a long time ago that the means of production -- the sector allocation of those things, going clear back to Pareto, whoever stayed awake through microeconomics -- or macroeconomics -- these are going to be public -- private goods delivered (to ?) the private sector. When they become consequential in addressing a crisis, you have to create unity of effort that transcends government, and I don't think we're training leaders to do that.
Now, I've had the opportunity to get involved in these things, so I've learned -- in the Coast Guard we call it the "school of the ship;" you can call it the "school of hard knocks" or whatever -- but there's only one way you get through one of these things: Have a set of shared values, committed to the response and the effects you're trying to achieve that creates unity of effort, that subordinates some of the roles and responsibilities, authorization, even appropriations of the strict structures around these operating departments in the government.
And any political party -- I'm not talking about this president or anybody else (are loathe to ?) subordinate one cabinet officer to the other, unless it's a defense operation. So it has to happen somewhere, where they have a national incident commander, or a principal federal official, or it's a lead in the national security staff. Somewhere you have to have the capability to create that unity of effort. And you got to bring enough "throw-away" with it. Whether it's legal or illegal, you know, or you're just doing it by force of personality, you've got to do it, because if you don't do it, you're going to fail.And there were some things I did that had no legal justification, but you know, I leaned on the old line, you know: You don't have sovereignty unless you can exert it. And I made some unilateral decisions, and I figured, well, if somebody wants to go to court, we'll have at it, but I got to make some decisions and got to do some things.
That wasn't a Miller Lite answer. It didn't taste great. It wasn't less filling. (Laughter.)
MS. BERT: You, sir.
QUESTIONER: I'm Gerald Pollack (sp).
Just on that same theme, Admiral, could you explain a little bit more fully the breakdown of responsibility between BP, which was shutting down as best they could the spill; the cleanup efforts that you were making? To what extent were you actually directing BP to do any particular thing?
And to what extent was BP for its part responsible for cleanup operations? How did all of that shake down?
ALLEN: That was the most asked question during the response. Let me try to explain and the fact that I have to explain that it's complicated sends a signal about how well we've communicated how we respond to oil spills in advance so people are not surprised.
Following the Exxon Valdez, we passed legislation in this country called the Oil Pollution Act of 1990, that fundamentally changed how we looked at oil spills, because there was a perception the Government didn't have the capability and capacity to act if Exxon wasn't acting fast enough. And under that law, they created the legal notion of what's called a responsible party, that's the spiller, and the legal notion, the legal concept contained in that, the spiller pays. Not only they pay for the cleanup, they pay for the environmental damage, they pay for the cost of claims and are subject to civil and criminal litigation under the Clean Water Act.
So BP was designated the responsible party. Transocean was also designated the responsible party. And under the response structure that was created after that, we have what we call a national contingency plan for oil spill response, and it's predicated on what's called a unified command. In the local area that is managed in the spill response, you have a federal on scene coordinator that is a local Coast Guard captain of the port, senior Coast Guard officer, you have the state representative to represent the equities of the state, the responsible party is part of that because they're responsible to bring contracted resources out to clean up the spill pursuant to the plan that was approved as a condition of operation.
So when you're trying to have this discussion, you have to say their responsibility is to bring contracted resources out and do it because they're required by law and it's their responsibility and that's why we want them to do it. If they don't do it, we have the power to order them, change the order, or take over managing the spill ourselves. So there's a fine line when you have a cause to say they're not doing what they're supposed to be, we're going to step in and do it, especially, especially at the well. The closer you get into shore, you have alternatives on how you clean up oil. At the well itself, private industry had the only means of production to fix that problem. There was no existing capacity, competency, or capability in the federal government to do that.
So, you're me -- (laughs) -- they have the technology, how do you manage that? Well you need a bunch of people that are smart about this, you can have independent second and third party opinions on what's happening because there's a disagreement on what's going to happen. The only person that can direct responsible party to do anything is the federal on scene coordinator. I had the authority as the national incident commander.
Now most of the time the lower level commanders exercise it, but there are about, I'd say 10 or 15 occasions where I signed the letter and I give the direct order to Bob W. or Tony Hayward because it was that consequential.
And there was never a case where I signed one of those letters when they did not comply.
Is that a murky response?
QUESTIONER: (Inaudible) Admiral, how did you know what to state in your letter since BP is the one that (inaudible)?
ALLEN: We had about four or five different command nodes while this was going on. We organized those in response to the spilled oil under the geographical boundaries of Coast Guard commands. What BP did for the actions at the well, they set up an emergency command post at their corporate headquarters in Houston.
And the only thing we knew about that well was what we knew from ROV videotape and remote sensing. All of that was portered back through satellites to a single room in Houston that it was about the size of this room that had multiple screens all the way around it and was called the HIVE, high intensity video environment. There was somebody sitting there that did look like Scotty on Star Wars, and he was sitting in the big chair in the middle and he was the only one that could see everything that was going on at the one time because if you're out on the one offshore supply vessel, you could see what one ROV only was seeing.
At the height of that operation, we had 21 ROVs within one mile of that well operating under water. They all came back to this big screen, there was a guy sitting there and he was seeing everything and he was telling everybody what to do and he had guys helping him. That was something we could not replicate inside the U.S. government, including the fabrication of the capping stack, which was made from scratch and installed in 85 days. So what I did was I took the best engineers, the brightest engineers we had in the Coast Guard, and I put them down in Houston and I said 24 hours a day, we'll find a hotel room, when you tire you come back in and we never left the place. They were around the water coolers, they were looking over their shoulders. And then the president also directed that Secretary Chu from energy put together a science team and sent them down there to basically wander the halls. And every time BP came up with, if BP wanted to take another step, whether it was to we're going to try and put the new capping stack on to recover oil, they had to submit a plan that had to be approved by the federal government before they could proceed.
So while they had autonomy to develop the plans and they were the ones that had the capacity and the capability for the solution, we had to sign off technically and prior to signing off on those plans, we had Coast Guard engineers and other folks that were helping us going through all those things that are involved in inspection of offshore oil rigs. So we did have competency down there.
It was, we almost embedded it in there so when we got these letters up saying we propose to do this, it was not a surprise and we already knew what it was, and if we were going to tell them something different, they knew a letter was coming back saying no, you're going to do this, and I ordered you to do it.
And when I did that, they complied.
BERT: OK. We have, let's see, 10 minutes and three hands up so we will take them rapid fire now. So, on the end.
ALLEN: I think you mean I've got to be shorter.
QUESTIONER: Alfred Youngwood from Paul Wise. What grades do you give BP at various points during this process and why?
ALLEN: That's a good question. I give them an A minus at the well. The cap did in 85 days with technology that had never been invented.
Now, I'm discounting the fact they should have had a plan to do with a well blowout to begin with. If you just take, set that aside, what they had to do from where they were at, I give them an A minus.
As you get closer to shore, they get into the D minus, F range.
BERT: Gosh. ALLEN: And I'll tell you why. And I've had this conversation with Carl-Henric Svanberg, the chairman of the board of BP, we had a very, frank, open conversation about it. I tried to, I tried, when I talked to Tony Hayward Bob Dudley I tried to get them to understand that there are certain things that BP does that they're very good at. That's what I call wholesale oil and gas experts, what they call upstream activities. And at one point I was talking with Carl-Henric Svanberg and he said you know, one of our problems is we don't have customers. And what he meant by that was the same thing that I had told Tony Hayward and Bob Dudley, I said you guys really suck at retail. And, I'm sorry, what I mean by that was --
ALLEN: -- I'm not saying telling retail gas, it's interaction with customers and individuals, where you have to have a transaction that involves empathy, compassion, shared values where you're trying to sell somebody something or provide a service. They don't do that every day.
So they further they got away from the well and their core competency, the less successful they were in dealing with things like claims processing, dealing with local communities on the impact, how to deal with contractors, how to deal with vessels of opportunity. They did not have the capacity and the capability to inside the company to understand that you can't outsource core values, compassion, and empathy to a third party contractor.
ALLEN: Does that make sense?
So the closer you get to the well, the higher the grade. The further away you get from the well, the lower the grade.
BERT: Jonathan Chanis.
QUESTIONER: Jonathan Chanis, New Tide Asset Management. Last week in the Wall Street Journal there was an opt ed by a noted defense analyst which talked about an apparent threat to offshore oil infrastructure and specifically things like submersibles attacking it. Do you think this is remotely credible or is this a solution in search of a problem?
ALLEN: Well, as I said earlier nothing's risk free so anything's possible, OK.
I was doing national journal on CSPAN one morning and a guy called in and he wanted to know, he was absolutely convinced that that whole thing happened due to mischief by an Russian submarine.
(Laughter.) ALLEN: Could you run a submarine to a ithrapipe(ph) and cause a problem? You could. You could actually have a ship to lose steerage and your drilling rig and hit it and have the same effect. So you can't rule out low probability, high consequence outcome type decisions.
There's a difference between having a vulnerability and having a viable threat as it relates to risk, that's the consequences and the likelihood of an event. I can list vulnerabilities that would scare you to death. But as a former commandant of the Coast Guard and somebody that's worked on the water all of his life, a submarine threat to an undersea well doesn't even come close in my view to the threat of unregulated small boats in this country.
Just check Miami on a weekend.
QUESTIONER: Thank you. Michael Kavoukjian, White and Case. During this spill, I heard stories that we had been offered help from other countries, one of which had some massive unique skimmer that had a great capacity and that we turned down these offers.
My questions are: Is that true? If so, would the help have made a difference? And why did we turn it down?
ALLEN: We turned down no reasonable offer of assistance. We did say no. I would get a call from an ambassador from Amsterdam saying, these people have this equipment, and the country wants to offer it to you. So you follow up on it, and it was similar equipment to what we already had or we could get, and they didn't want to donate it. They wanted to sell it. OK? So we had to sort all that out.
Anything that we needed that was available from a foreign country, we accepted. OK?
QUESTIONER: Wasn't there any massive skimmer --
QUESTIONER: Do you remember what it --
ALLEN: It was called the "A Whale." It was a tanker that they made holes in the bow and you go through and it would skim the oil. And they said this will work. And I had a press conference. I said, I don't think so for the following reasons.
But for such a credibility problem you almost had to prove the null hypothesis, you know, to get on with business.
So finally, the guy came in and said, listen, I'm so convinced that this will work that I will pay for the ship myself. Let me bring it down there and skim oil. And I said, all right, there has to be some conditions; we've got to make sure this thing floats and it's not going to be a threat to the environment. (Laughter.)
And they were talking about bringing a supertanker down to scoop up oil, right? Well, let me tell you what the environment was like. At the height of the operation, within a two-nautical-mile radius of the site where the well was at, we had two mobile drilling units drilling the relief well and a second relief well. We had oil containment systems trying to capture oil and either burn it off or produce it. We had the offshore supply vessels that are resupplying all of that, and we had the support vessels that are running the ROVs.
At the height of the operation, within two miles around that well, we had 35 vessels and 21 ROVs operating. And their goal was to go through there with a supertanker and scoop the oil up because oil was coming up right in the middle of all of it. OK?
And I said where you can have the greatest impact, we can't let you in. Can we stop capping the well? By the time it gets further out, it gets disaggregated to the point where you don't have a scale economy to make it worth using one of those things. But we let him come down. They worked for 10 days, and they came back and said, you know, it doesn't work. (Laughter.)
I said, well, let's all be at peace now. Let's -- (inaudible) -- (laughter) --
BERT: So we actually have about, you know, two minutes left, and I thought I would maybe slip in a last question.
Your views on the International Law of the Sea? You've written or you have an op-ed coming out -- about to come out on this. I'm wondering if you could talk about briefly why it's important for the United States to ratify this treaty.
ALLEN: Well, first of all -- I won't go into a lot of detail. It was our idea. (Laughter.) We brought it before the U.N. We pressed very hard for its ratification. There was some pushback on provisions of the Law of the Sea Treaty related to seabed mining and the fact that there would be certain fees charged and income diverted to other countries in the world. Those provisions were addressed in the 1980s.
Nobody that I talk to that works on the ocean or around the ocean -- and I am talking about the chairman of the Joint Chiefs of Staff, the secretary of defense, the secretary of state, the CNO of the Navy -- nobody believed there was anything in that treaty that would not allow us to exercise our sovereignty rights, our control of the continental shelf. And in fact there were things that we cannot do that will allow us to have -- that we'd be more empowered if we were to do it.
Right now, China is extending its reach in the South China Sea and, by presence and by practice, trying to assert control over what we call a transit strait. Now, a transit strait is defined in the Law of the Sea Treaty as a body of water that connects two international bodies of water of which there should be uninhibited right of passage.
The Chinese would assert that the Taiwan Straits are internal waters and are not subject to the Law of the Sea Treaty. So we go and we say there should be freedom of navigation in the Taiwan Straits, and they turn around and say, well, why are you saying that. You haven't even ratified the treaty.
We have countries that are claiming up to 200 miles as a territorial sea. The Law the Sea Treaty says 12 miles. We have done that by policy due to executive order signed by President Reagan.So we have a country in South America that won't allow us to board a drug boat that has 10 tons of cocaine on it because they're asserting they have sovereignty out to 200 miles, and we can't board their territorial sea. And we say, no, we can.
And they're saying, well, you haven't ratified the Law the Sea Treaty.
We have a treaty in Antarctica since 1958 or '54 that governs what happens in Antarctica. We have no treaty -- no treaty in the Arctic except the Law of the Sea Treaty.
It's time to ratify this, and I am very, very frustrated that we get so involved in some of the partisan political politics in this country. There are substantial issues that are just sitting there waiting in the parking lot, and this is one of them, in my view. Senator Kerry should bring it to a vote.
BERT: Well, on that note, Admiral Allen, I'd like to thank you for a lively discussion tonight and for your service to the nation and for all members for their extraordinary questions. Thank you so much. (Applause.)
ALLEN: My pleasure. Thank you.