Federal regulators haven't kept up with oil drilling expansion

To drill in federal waters, companies must clear a series of MMS reviews, including several meant to gauge environmental risk. Companies must detail the equipment and procedures involved in their operations and develop contingency plans to respond to accidents.

But even though MMS approved a BP spill-prevention plan last year that said the "worst case" blowout could spew 250,000 barrels of oil a day — the equivalent of an Exxon-Valdez-size catastrophe once a day — no one appears to have developed a response plan for that scenario.

MMS calculates the risk of a major spill based on historical precedent, even as gulf drilling moves into unprecedented depths. Because of that, the assessments don't accurately reflect new challenges of drilling for oil far from equipment and support, to depths inhospitable to divers, where extremes of pressures and temperatures can tax materials such as cements used to fix casings, or synthetic materials used for seals and valves.

In addition, unfamiliar formations in the deep sea can contain hidden surprises, such as contaminants or layers of unforeseen high pressure. A gas leak at the seafloor may result in gas expanding very quickly as it travels the long distance to the water's surface — in the worst case, producing blowouts. Such a scenario is being investigated in the Deepwater Horizon disaster.

Even though the BP drilling project faced all those challenges, MMS officials last year concluded after a month of study that it did not pose a large enough spill risk to warrant a detailed review under the National Environmental Policy Act. Decisions to grant those so-called categorical exclusions from the act have become common practice at MMS, which granted two dozen of them even after the Deepwater Horizon sank.

Officials say that MMS' frequent spill-preparedness drills, sprung upon unsuspecting oil companies in the dead of night, have never approximated anything close to a blowout the size of the Horizon disaster. Instead, the drills often model one of the most common types of spills to occur in the gulf: a discharge of 50 to 100 gallons of fuel in a botched interchange between rig and tanker. Officials and outside supporters say the practice means the management service is focusing on the most likely scenarios.

Lynn Scarlett, a former deputy secretary of Interior, said budget constraints have hamstrung MMS' ability to meet more demanding responsibilities as energy prospecting has moved farther offshore.

"In the deep water — that's precisely when these agencies need more resources to deploy the most extensive analysis that is available to us," she said. "Unfortunately, they don't have those resources available to them. That may ring hollow to the American public. But I have sympathy for agencies that are asked to do so much."