**REPORT TITLE:** Monitoring Petroleum Activities in the Gulf of Alaska
and Lower Cook Inlet Between April 1975 and March 1978. Final Report.

**STUDY TITLE:** Monitoring Petroleum Activity in the Gulf of Alaska and
Lower Cook Inlet Between April 1975 and June 1978 (TR-17).

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

SPONSORING OCS REGION: Alaska.

APPLICABLE PLANNING AREA(S): Gulf of Alaska; Cook Inlet.

FISCAL YEAR(S) OF PROJECT FUNDING: 1978.

COMPLETION DATE OF REPORT: August 1978.

COST(S): FY 1978: \$76,149; CUMULATIVE PROJECT COST: \$76,149.

PROJECT MANAGER(S): W. Pyle.

AFFILIATION: Dames & Moore.

ADDRESS: 510 L Street, Suite 310, Anchorage, Alaska 99501.

PRINCIPAL INVESTIGATOR(S)\*: P. Hanley, W. Pyle.

KEY WORDS: Gulf of Alaska; Cook Inlet; Alaska; socioeconomics;
historical review; exploratory drilling; Anchorage; Homer; Yakutat;
Seward; Nikiski; impacts; interviews; employment; monitoring; Alaska
Region.

ACCESS NUMBER: 29002

**BACKGROUND:** The report is a part of the Alaska Outer Continental
Shelf (OCS) Studies Program, a multi-year research effort which attempts
to predict and evaluate effects of Alaska OCS petroleum development upon
the unique physical, social, and economic environments within the State.
This study presents a detailed historical account of drilling activity
on the OCS in the northeast Gulf of Alaska and lower Cook Inlet that
occurred between April 1975 and June 1978. The information was developed
to serve immediate planning and decision making objectives of the U.S.
Department of the Interior, Bureau of Land Management (BLM) and research
objectives of the BLM\'s Environmental Studies Program.

**OBJECTIVES:** (1) To present a detailed historical account of drilling
activity on the OCS in the northeast Gulf of Alaska and lower Cook Inlet
that occurred between April 1975 and June 1978.

**DESCRIPTION:** The account includes information about the number,
timing, location, depth, and results of wells drilled; equipment used;
employment created; wages paid; transportation routes used; and
communities affected. The research effort was initially designed to rely
primarily on information available in secondary sources (i.e., trade
journals, published reports by government and industry). However, it was
discovered that the range and detail of data required for this type of
analysis was not available from secondary sources. An effort was made to
obtain information from individuals with firsthand knowledge of various
aspects of oil and gas operations in the northeast Gulf of Alaska and
lower Cook Inlet. However, a significant amount of data was not
available from either primary or secondary sources within the budgetary
constraints of the project.

**SIGNIFICANT CONCLUSIONS:** To date, eleven exploratory wells have been
drilled on the OCS in northeast Gulf of Alaska lease sale areas. Also,
Continental Offshore Stratigraphic Test wells (COST) were drilled in
lower Cook Inlet, the northeast Gulf of Alaska, and the proposed Kodiak
(i.e., western Gulf of Alaska) lease sale area. OCS petroleum
exploration in the Gulf of Alaska and lower Cook Inlet between April
1975 and June 1978 did not cause \"boom\" conditions in Anchorage or any
of the rural communities affected most directly by the activity (i.e.,
Yakutat, Seward, and Homer). OCS activity did stimulate local economies,
however, there was no general inflation or local shortages of labor,
goods, or services.

**STUDY RESULTS:** Between April 1975 and June 1978, eleven exploratory
wells were drilled on the OCS in northeast Gulf of Alaska lease sale
areas. In addition, single COST wells were drilled in lower Cook Inlet
and the northeast Gulf of Alaska; three more COST wells were also
drilling in the proposed Kodiak (i.e., western Gulf of Alaska) lease
sale area. For each well drilled, the drilling vessel or rig, well owner
company, and well specifics (i.e., location, water depth, total well
depth, well spud and completion dates, testing results, and approximate
cost) were provided, when available. Specific data on drilling vessels
or rigs, supply vessels, helicopters, and shore bases were also
outlined, when available. All necessary permits issued by the U.S.
Geological Survey ( i.e., permit to drill, notice of change of plans,
notice to plugback and sidetrack, notice to pull or alter casing, permit
to abandon, and notice to plug and abandon) and the letter of
authorization from the U.S. Army Corps of Engineers were provided.

Because of the large number of contractors involved in the many tasks
associated with the exploration program, the establishment of an actual
head count of personnel directly involved in petroleum-related OCS
activity in the Gulf of Alaska over the study period could not be
determined. Total direct employment was estimated from industry
interviews and published reports. Operating under the assumption that
the drilling of each well averaged 4 months (including time to position
and anchor the drilling vessel or rig), each well would account for
approximately 548 man-months of employment. Using a total of 13 wells
drilled in the northeast Gulf of Alaska and lower Cook Inlet,
approximately 8,645 man-months of employment were created for oil field
contractors. In addition, approximately 1,500 man-months were estimated
for the administrative staffs of the five operator companies and 1,960
man-months for geophysical work. This was a direct employment estimate
of approximately 14,105 man-months, or 1,175 man-years.

Several supply routes were used during drilling operations. Tubular
goods (e.g., casing and drill pipe), wellhead equipment, bulk mud and
concrete, and similar goods were shipped to Yakutat and Seward by barge,
then transshipped to the drilling vessel or rig by work boat. Supplies
also arrived at Seward from Anchorage and Nikiski via overland routes,
including the Alaska Railroad and highway. Freight arrived at Anchorage
and Nikiski by oceangoing barges, container ships, and truck and rail
ships. Water utilized in offshore operations was obtained from Seward.
Crews were ferried from Yakutat, occasionally by helicopter.

OCS petroleum exploration in the northeast Gulf of Alaska and lower Cook
Inlet during the study period did not cause \"boom\" conditions in
Anchorage or any of the rural communities affected by the activity,
including Yakutat, Seward, and Homer. OCS activity did stimulate local
economies with (1) small increases in local wage employment in a few
industries such as construction, transportation, and communication; (2)
significant, but short-term, spurts of activity for a few local
businesses; and (3) significant and rapid appreciation of real estate
(primarily land) values. No general inflation or local shortages of
labor, goods, or services existed. Small community impacts were
explained by the absence of major construction activity, employment of
many nonresidents, and the fact that offshore drilling vessels or rigs
and supply boats provided worker housing. Yakutat was the most affected
community identified. Impacts associated with construction activities
were evident (i.e., construction required prior to operation of a
support base by an ARCO/Shell Oil Company consortium in Monti Bay).

**STUDY PRODUCT(S):** Dames & Moore. 1978. Monitoring Petroleum
Activities in the Gulf of Alaska and Lower Cook Inlet Between April 1975
and March 1978. Final Report. A final report for the U.S. Department of
the Interior, Bureau of Land Management Alaska OCS Office, Anchorage,
AK. NTIS No. PB-285408/AS. Social and Economic Studies Program Technical
Report No. 17. Contract No. 14‑12‑0001‑29002. x + 72 pp.

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