**REPORT TITLE:** Prudhoe Bay Case Study.

**STUDY TITLE:** Prudhoe Bay Case Study (TR-04).

CONTRACT NUMBER(S): BLM: CT6-61; MMS: 14-12-0001-29002

SPONSORING OCS REGION: Alaska.

APPLICABLE PLANNING AREA(S): Beaufort Sea.

FISCAL YEAR(S) OF PROJECT FUNDING: 1976.

COMPLETION DATE OF REPORT: February 1978.

COST(S): FY 1976: \$34,330; CUMULATIVE PROJECT COST: \$34,330.

PROJECT MANAGER(S): E. Crittenden.

AFFILIATION: Crittenden, Cassetta, Cannon/Hellmuth, Obata & Kassabaum,
Inc.

ADDRESS: 601 West 5th Avenue, Anchorage, Alaska 99501.

PRINCIPAL INVESTIGATOR(S)\*: A. Kriken.

KEY WORDS: Beaufort Sea; Alaska; socioeconomics; literature review;
interviews; historical review; development; impacts; North Slope
Borough; Prudhoe Bay; Alaska Region.

ACCESS NUMBER: 29002

**BACKGROUND:** This report is part of the Alaska Outer Continental
Shelf (OCS) Socioeconomic Studies Program, a multi-year research effort
which attempts to predict and evaluate effects of Alaska OCS petroleum
development on the unique physical, social, and economic environments in
the State. This report is a case study of Prudhoe Bay, an industrial
enclave built to service the largest known oil and gas reserve on the
North American continent.

**OBJECTIVES:** (1) To describe facilities and workers located at
Prudhoe Bay in Fall of 1977 when oil production began; and (2) To
identify factors that might be replicated with enclave development in
other remote areas of the State.

**DESCRIPTION:** Methodology of this study was limited to an
identification, review, and summarization of available secondary data
sources supplemented by the review and corroboration of information by a
field visit to Prudhoe and by discussions with representatives of the
State, the North Slope Borough (NSB), the oil companies, and selected
service companies operating at Prudhoe Bay. A thorough review of
secondary data sources on Prudhoe Bay existed prior to initiation of
this study effort. Of those secondary sources, only a very limited
number contained information pertinent to this study. In addition, data
related to employee characteristics was generally not available; for the
limited employee data, it only was accessible in a disaggregated form
within individual employee or union files. The absence of firm data
resulted, in some cases, on a reliance on informed opinion and
speculation by industry and governmental agency representatives.

**SIGNIFICANT CONCLUSIONS:** Some factors unique to Prudhoe Bay include
field size, location remoteness, extreme climate and fragile terrain,
and lack of a regional transportation network or adequate outside
transportation access for movement of equipment and supplies. The most
significant factor influencing development of an independent enclave
appears to be availability of nearby community infrastructure. At
Prudhoe Bay, a lack of nearby community infrastructure was compounded by
location remoteness.

**STUDY RESULTS:** The Prudhoe Bay industrial enclave is located 13 to
16 km (8 to 10 mi) inland from Prudhoe Bay near the mouth of the
Sagavanirtok River, about 208 km (110 mi) southeast of Barrow. The
enclave encompasses a 995-km^2^ (384-mi^2^) area containing oil
production facilities, operations facilities, support services, and
living quarters for persons who work the North Slope and Prudhoe Bay oil
fields. The enclave is geographically isolated from other communities on
the North Slope and does not depend upon them or the NSB for provision
of services. All essential services, including utilities, medical
services, fire protection, housing and commercial amenities, are
provided within the enclave. With the exception of a State Trooper
located at the Deadhorse Airport, police and security services are also
provided by oil companies. Prudhoe Bay is solely a work camp organized
for onshore oil operations on the North Slope. As such, it does not
contain social and governmental institutions that are associated with
typical communities. Prudhoe Bay is the largest North Slope settlement.
As documented by the NSB Planning Department, the 1976 population of the
enclave was 5,531 persons, contrasting with 2,218 persons at Barrow, the
largest indigenous community on the North Slope. Occupants of Prudhoe
Bay include operating oil companies and contract service companies that
support them. Sixteen oil companies own the leases that comprise the
Prudhoe Bay field. To avoid duplication of effort that would result if
each oil company constructed its own facility, the companies and the
State of Alaska are parties to a Unit Agreement. Under the terms of this
Agreement, the two largest lease holders (i.e., ARCO and BP Alaska)
administer the field a oil operators. Each operating company, as well as
each service company, maintains individual and self-contained facilities
for their workers.

Development of the Prudhoe enclave took place in the context of enormous
logistical difficulties imposed by extreme climate and fragile terrain
of the North Slope, absence of an adequate transportation network for
movement of supplies and equipment, legal challenges to development, and
difficult timing requirements related to start of oil production. Living
quarters provided by Prudhoe Bay oil operators represent a significant
advance in Arctic construction from the standpoint of technological
innovation and amenities provided. Similarly, oil operation techniques
represent technological advances in application of offshore oil drilling
to onshore oil operations to minimize environmental impacts on the
Slope.

The size of the Prudhoe Bay field and its distance from nearby
settlement resulted in development of the extensive settlement at
Prudhoe Bay. In the opinion of oil industry spokesmen, it is highly
unlikely that a field of similar magnitude will be found in Alaska. It
is also unlikely that an enclave the size of Prudhoe Bay will be
developed elsewhere in Alaska. Nonetheless, there are certain conditions
identified in the course of this study that may be replicated with
enclave development in other remote areas of Alaska.

Disruption of services by providers from outside the immediate region
may be realized. Transportation services appear to be especially
susceptible to change during the construction phase of enclave
development. Transport resources committed to oil companies may not be
available for local use. After construction is completed, changes in
service patterns may become permanent.

Property taxes levied on facilities at an enclave may significantly
increase the revenues available at the local unit of jurisdiction. If
what occurred at Prudhoe Bay proves typical of enclave development
elsewhere in Alaska, the local unit of government will likely negotiate
with the oil companies to provide the enclave with as few services as
possible.

Oil operations, as well as enclave development, impose additional
administrative requirements on State and local units of government. With
respect to enclave development, those related to planning, land use, and
regulatory controls are of particular note. Regulatory measures
developed in connection with the Prudhoe Bay enclave should provide
useful information for regulating future enclave development.

Introduction of a major settlement in a remote area that has been
dependent on patterns of local employment will likely have an impact on
local wage rates and local patterns of employment.

**STUDY PRODUCT(S):** Crittenden, Cassetta, Cannon/Hellmuth, Obata &
Kassabaum, Inc. 1978. Prudhoe Bay Case Study. A final report for the
U.S. Department of the Interior, Bureau of Land Management Alaska OCS
Office, Anchorage, AK. NTIS No. PB‑281544/AS. Social and Economic
Studies Program Technical Report No. 4. Contract No. 14-12-0001-29002.
viii + 98 pp.

\*P.I.\'s affiliation may be different than that listed for Project
Manager(s).