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The Gulf of Mexico hydrates research consortium has been designing a sea-floor observatory to monitor natural gas hydrates in the gulf of Mexico for almost ten years. The observatory will consist of seismo-acoustic receiving arrays, geochemical arrays in the lower water column and upper sediments as well as systems for observing microbial activity. Mississippi Canyon Lease Block 118 (MC118) in the northern part of the Gulf has been selected as the site of the observatory. A carbonate/hydrate mound approximately one kilometer in diameter occurs in the south-central portion of MC118 at a water depth of about 900 m. The surface morphology of the mound has been imaged by multi-beam bathymetric sonar from an autonomous underwater vehicle (AUV) operating 40 m above the sea floor, by video cameras deployed on and a few meters above the sea floor from surface vessels and by visual observations from manned submarines. Gravity and box cores have been collected for lithologic and bio-geochemical studies of the near-surface sediments on the mound. Microbial sulfate reduction, anaerobic methane oxidation, and methanogenesis are all important processes in the upper four meters of sediment. These microbial processes seem to control the diffusive flux of methane from the sediments into the overlying water column. The activity of microbes is also focused within patches or dasiahot spotspsila at the main, active mounds. This activity is primarily dependent upon an active fluid flux of hydrocarbon-rich fluids. The geochemical evidence suggests that the fluid flux waxes and wanes over time and that the microbial activity is sensitive to such change. The subsurface structure of the mound has been investigated by chirp-sonar profiles acquired by the AUV simultaneously with acquisition of the swath bathymetry data and by a psuedo-3D grid of high-resolution seismic profiles obtained using the surface-source/deep-receiver technique. Also, deep seismic 3D volumes obtained by the petroleum in- - dustry have been viewed. The surface of the mound is pocked by craters apparently formed during episodic fluid expulsion events. Gases venting from the mound, as well as those contained in outcropping hydrates, have been analyzed and found to be thermogenic, perhaps having migrated up faults from a deep, as yet undiscovered, petroleum reservoir. The deep seismic data show that the faults emanate from a salt diapir located some hundreds of meters below the mound. It was observed during a cruise in November, 2007, that craters and outcrops had changed significantly during the 14-month period since the previous cruise in September, 2006. The mound therefore has been shown to be sufficiently dynamic to warrant continuous monitoring over the five-to-ten years that the observatory is expected to be operational.