According to a 2010 Interior study, 97 percent of oil and gas production in federal waters occurs along the U.S. outer continental shelf of the Gulf of Mexico. The outer continental shelf is the submerged lands outside the territorial jurisdiction of all 50 states but within U.S. jurisdiction and control. The outer continental shelf contains an estimated 85 billion barrels of oil, and over half of this oil is located in the Gulf of Mexico.Significant reserves also exist in the outer continental shelf off Alaska. Interior is responsible for the oversight of oil and gas activities on the U.S. outer continental shelf, which includes submerged lands in federal waters off the coast of Alaska, in the Gulf of Mexico, and off the Atlantic and Pacific coasts.in the outer continental shelf for mineral development, including oil and gas exploration and production. The lease holder may operate the well or may hire other companies to perform drilling operations and other related services. Operators submit a series of documents to Interior for approval to drill, including an application for permit to drill and an oil spill response plan. In October 2010, Interior promulgated certain new requirements for the application for permit to drill process designed to prevent a blowout including, among other things, requiring independent third-party verification that the subsea blowout preventer is compatible with the specific well location and well design. The oil spill response plan is to include an operator’s proposed methods for ensuring that oil spill containment and recovery equipment and response personnel are mobilized and deployed in the event of a spill. This plan is to be implemented immediately following a spill. The plan is also to include an inventory of spill response resources such as materials and supplies, services, equipment, and response vessels available locally and regionally, as well as a description of the operator’s procedures for conducting monthly inspections and necessary maintenance of recovery equipment. As part of its oversight responsibilities, Interior is required to conduct scheduled and unscheduled inspections of offshore facilities, such as drilling rigs and production platforms. Equipment scheduled for inspections includes equipment designed to prevent or alleviate blowouts, fires, spillages, or other major accidents. As part of its responsibilities, Interior leases blocks of land Also under its oversight responsibilities, Interior issues guidance called a Notice to Lessees and Operators to clarify, supplement, or provide more detail about certain requirements, including requirements for applications for permit to drill. In response to the Deepwater Horizon incident, Interior issued a number of these notices, which, among other things, notified operators that Interior would be evaluating whether they had submitted adequate information about their well containment capabilities with their oil spill response plans. Specifically, in a November 2010 notice, Interior informed operators that it would evaluate whether operators could demonstrate that they had access to and could deploy well containment resources that would be adequate to promptly respond to a blowout or other loss of well control. This notice applies only to operators conducting operations using subsea blowout preventers, which are devices placed on wells to help maintain control over pressures in the well, or blowout preventers on floating facilities. Operators provide information on their well containment capabilities to Interior in a collection of documents that compose a well containment plan. According to Interior officials, all approved applications for permit to drill subject to the November 2010 notice have included a well containment plan. For additional information on the types of information operators provide in their well containment plans, see appendix I. There are three phases to produce oil or gas from a subsea well: drilling, completion, and production. During the drilling phase, operators drill a hole, called the wellbore, from the seafloor down to the reservoir of oil or gas. Early in this phase, a blowout preventer is placed on top of the wellhead, which, in turn, is installed on top of the wellbore to provide an interface between the wellbore and other equipment. A large-diameter pipe called the riser connects the drilling rig to the blowout preventer, and the drill pipe, drill bit, drilling mud, and casing are routed down to the well Industry officials we spoke with through the riser and blowout preventer.said that during the drilling phase, operators must constantly balance the pressure of the drilling mud inside the wellbore with the pressure from the surrounding formation thousands of feet below the seafloor. Interior officials explained that during this phase, operators may encounter a number of unknown well conditions, which if not controlled or corrected could pose a risk of a blowout. During a blowout, operators close the valves in the blowout preventer in an attempt to seal the wellbore and prevent oil and gas from escaping to the surface. Figure 1 illustrates the drilling phase. In the second phase, known as completion, the operator opens the wellbore to allow the flow of oil and gas from the reservoir, and installs equipment at the top of the wellbore to control and collect the oil and gas. The third phase is production, the extraction of oil or gas from the well. The difficulty of the drilling process can vary depending on the depth of the seafloor as well as the depth of the reservoir. According to a 2010 Interior study, the majority of oil production in the Gulf of Mexico occurs in deep water, which the study defined as 1,000 feet or more below sea level. and gas compared with wells in shallower water, in part because high reservoir pressures contribute to well productivity. These high pressures also make drilling deepwater wells significantly more dangerous than drilling shallow wells because, among other things, the increased pressure can exacerbate the effects of a blowout and make a well containment response more challenging. In the case of the well that the Deepwater Horizon was drilling, the seafloor was nearly 5,000 feet below sea level, and the operator, BP, drilled an additional 13,000 feet below the seafloor to reach the reservoir. According to a 2011 report by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, companies and governmental organizations have adopted definitions for deepwater ranging from 600 to 1,500 feet. that is specifically designed to cap a well after a blowout.blowout preventer is designed to manage drilling operations and prevent a blowout, a capping stack is designed to be deployed after a subsea blowout has already occurred. At the time of the Deepwater Horizon incident, there were few capping stacks in existence, and capabilities to support subsea well containment were limited. Since the Deepwater Horizon incident, the oil and gas industry has improved its capabilities to respond to a subsea well blowout in the Gulf of Mexico. In particular, operators have formed two new organizations that are expected to offer improved well containment capabilities, including more effective equipment and services, and expertise to member operators in the event of a well blowout. The subsea well containment capabilities available for the Gulf of Mexico consist primarily of existing technologies that have been modified to support well containment. Following the Deepwater Horizon incident, two not-for-profit organizations of oil and gas companies—the Marine Well Containment Company (MWCC) and the Helix Well Containment Group (HWCG)—formed to provide subsea well containment capabilities and support to operators in the Gulf of Mexico that enter into contracts with them. Once under contract and in the event of a spill, each of these well containment organizations is to provide certain containment equipment and services— capping stacks, vessels, and other resources necessary to respond to a subsea blowout—that operators can customize to their well containment needs. Equipment and services provided by these well containment organizations were developed in consultation with Interior and have been a key part of the well containment plans that operators submit to Interior, according to Interior officials. All of the operators subject to Interior’s November 2010 notice that have received permission to drill in the Gulf of Mexico since the moratorium was lifted have contracted with one or both of these well containment organizations to provide certain well containment equipment and resources in the event of a subsea blowout, according to these officials. In general, MWCC members include some of the largest operators with oil and gas exploration and production activities in the Gulf of Mexico, such as ExxonMobil, ConocoPhillips, Chevron, and Shell, and HWCG members include operators of various sizes. Some operators are members of both groups. More specifically: MWCC operates as an independent, stand-alone company where each of its 10 members has equal ownership and voting rights, and according to MWCC representatives, its members drilled approximately 70 percent of deepwater wells drilled in the U.S. Gulf of Mexico from 2007 through 2009. HWCG is a consortium of 24 operators, which, according to HWCG representatives, represent approximately 80 percent of the deepwater operators in the Gulf of Mexico. HWCG was created around the well containment capabilities offered by one deepwater services company whose equipment was used in the response to the Deepwater Horizon incident. According to representatives from both well containment organizations, members also commit to mutual aid agreements in which operators agree to provide equipment or other support to consortium members that experience a subsea well blowout. Representatives of the well containment organizations said that both HWCG and MWCC also offer services to nonmembers on a fee basis. Furthermore, representatives of the well containment organizations we spoke with generally agreed that should another incident like Deepwater Horizon occur, industry would mobilize to make available all of the equipment and services necessary to ensure a quick and effective response. In addition to equipment and services, both MWCC and HWCG provide overall plans that identify how the equipment and services are to be deployed and used; a schedule of activities to be followed; various contingencies for high-risk activities, such as straightening a bent wellhead that may have been damaged by a blowout; and names and contact information for technical experts who may be called on as required. According to Interior officials, operators would need to customize the well containment organizations’ overall plans to their specific well design.