Wednesday, July 21, 2010

Deepwater Horizon Oil Spill:

This Congressional Research Service papers explores the issues that the Deepwater Horizon explosion and oil spill have set in motion about oil exploration and recovery in the Gulf of Mexico generally, about the federal offshore oil and gas program, and about the risks of deepwater drilling in particular. The incident
has raised many issues; this report provides a set of selected descriptions to give the reader a baseline and context for pursuing topics of interest.

Several themes trace through the diverse aspects of the incident:
• The explosion and oil spill having occurred, what lessons should be drawn from the incident? Such lessons may involve the appropriateness and capabilities of the technologies used in drilling and in trying to stop the spill; the adequacy of
the regulatory regime and how it was administered and enforced; possible implications of corporate cultures of the companies involved; and the adequacy
of cleanup technologies and of the safety net for impacted businesses and
• As oil and gas exploration and recovery moved into the deepwater frontier, were
technologies and regulatory capacities keeping pace with new and/or heightened risks? Technologies and regulations appropriate to onshore and shallow-water
exploration and recovery may not be adequate to address risks in deep water.
There are economic incentives to develop technologies to find and recover
deepwater oil and gas, but the question arises of whether concomitant incentives
exist to ensure that those technologies are robust enough to provide a reasonable
margin of safety in this more challenging environment. Likewise, it might be
asked if administrative and regulatory requirements appropriate to the lesschallenging onshore and shallow-water environments have been, or need to be,
strengthened to address deepwater risks.
• What interventions may be necessary to ensure recovery of Gulf resources and
amenities? The spilled oil will surely degrade over time; intervention might
accelerate cleanup, but may have its own costs.
• What does the Deepwater Horizon incident imply for national energy policy, and
the tradeoffs between energy needs, risks of deepwater drilling, and protection of
natural resources and amenities?

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