**STUDY TITLE**: Analysis of Indicators for Socioeconomic Impacts Due to
Oil and Gas Activities in the Gulf of Mexico.

**REPORT TITLE**: Indicators of the Direct Economic Impacts Due to Oil
and Gas Development in the Gulf of Mexico. Results of Year I. Executive
Summary; Vol. I, Narrative; Vol. II, Exhibits.

**CONTRACT NUMBER(S)**: MMS: 14-12-0001-30178.

**SPONSORING OCS REGION**: Gulf of Mexico.

**APPLICABLE PLANNING AREA(S)**: Straits of Florida; Eastern Gulf of
Mexico; Central Gulf of Mexico; Western Gulf of Mexico.

**FISCAL YEAR(S) OF PROJECT FUNDING**: 1984.

**COMPLETION DATE OF REPORT**: January 1986.

**COST(S)**: FY 1984: \$270,465.

**CUMULATIVE PROJECT COST**: \$270,465.

**PROJECT MANAGER(S)**: G. Brown, M. Frankel.

**AFFILIATION**: Centaur Associates, Inc.

**ADDRESS**: 1400 I Street, N.W., Suite 700, Washington, D.C. 20005.

**PRINCIPAL INVESTIGATOR(S)\***: G. Brown.

**KEY WORDS**: Straits of Florida; Eastern Gulf; Central Gulf; Western
Gulf; Louisiana;

Texas; Alabama; Florida; cultural impacts; exploratory drilling;
development; impacts; employment; expenditures; labor.

**BACKGROUND**: Primary economic impacts from outer continental shelf
(OCS) leasing include the employment, wages, and salaries accounted for
by the companies that are directly involved in the exploration for and
development of OCS hydrocarbon resources. Secondary impacts include the
expenditures by these companies for contracts, services, and other
purchases, and the associated employment and salary impacts. Primary and
secondary economic impacts affect socioeconomic conditions such as
population, demographic and commute‑to‑work patterns. The collection of
economic data is necessary to evaluate the socioeconomic impacts related
to oil and gas development in offshore areas.

**OBJECTIVES**: (1) To measure the primary direct economic impact of
offshore oil and gas exploration, development, and production in 1984;
(2) to determine the geographic distribution of primary direct impacts
of offshore oil and gas activity; (3) to document the relationship
between place of work and place of residence for personnel employed by
offshore producers; (4) to measure the direct secondary economic impact
of contracts, services, and other purchases made by offshore oil and gas
exploration and production companies; and (5) to develop a framework and
set of reference data for estimating the combined direct primary and
direct secondary economic impacts per unit of activity.

**DESCRIPTION**: Data for this project were supplied by nine offshore
operators in the Gulf of Mexico acting as a Socioeconomic Subcommittee
to the Offshore Operators Committee. Information was provided on
producer employment records for 1984, producer expenditure records for
1984, and budget documents for specific projects or activities
undertaken in 1984. The data were then used to generate numbers on
direct producer employment and wages at the county/parish level.
County/parish allocations of employment and income were based on the
residence zip code of each employee. Application of key business ratios
for each service industry to total expenditures by offshore producers
was used to derive employment resulting from the purchases of goods and
services. Physical descriptions of activities were converted to
expenditures based on actual detailed project records supplied by the
participating companies. All data supplied by the offshore producers was
exclusively for expenditures and employment associated with activities
in the Gulf of Mexico region.

**SIGNIFICANT CONCLUSIONS**: The direct primary effect of oil and gas
operations in the Gulf of Mexico measured in employment, wages, and
salaries. These totaled \$853 million in wages, \$8.75 billion in
expenditures for purchased goods and services, and 23,935 person-years
of employment with oil companies. Secondary effects were associated with
the handling, refining, and processing of offshore oil and gas. These
economic impacts included \$637 million in wages and salaries and 21,572
person-years of employment. In all states, an estimated 142,860
person-years of employment were associated with Gulf operations.

**STUDY RESULTS**: Louisiana accounted for 21,857 of the 23,935 employee
positions associated with Gulf offshore oil and gas producers. This
generated a payroll of \$776,696,436 in the State in 1984. More than 80%
of the offshore and 90% of the onshore Gulf of Mexico workers reported
to work sites in Louisiana. An estimated 14,054 onshore producer
employees reported to work sites throughout the region with 13,500 in
Louisiana and 500 in Texas. In Louisiana, approximately 10,000 came from
the New Orleans area. Offshore producer employees came from 26 states
with 20 states having very slight employment impacts of two to eight
persons. Georgia, Oklahoma, and Tennessee supplied approximately 20
persons each. Louisiana provided 20,000, Mississippi had 1,960, Texas
had 1,413, Alabama had 475, and Florida had 205.

The 1984 producer purchases, expenditures, and contracts resulted in an
estimated \$2.59 billion in wages and salaries to employees of
contractors and other general businesses. These businesses had an
employment impact of 97,500 full-time positions. Of these, 28,955 were
located offshore, 20,085 had an offshore component, and 48,347 were
located exclusively on land. Expenditures by producers resulted in
purchases by the contract and support firms of \$3.9 billion. These
purchases included raw materials, operating expenses, capital purchases,
and subcontracts with other offshore support industries. The purchases
were significant because many were made locally and resulted in
subsequent indirect and induced economic impacts.

Approximately 10,566 person-years of employment were generated at oil
refineries as a result of offshore oil and gas activities. Of this,
9,054 were in Louisiana and 1,512 were in Texas. This resulted in \$306
million in wages in Louisiana and \$51 million in Texas. Gas processing
plants supported an estimated 11,006 person-years of employment which
was almost equally split between Texas and Louisiana. This resulted in
\$137 million in wages in Louisiana and \$142 million in Texas.

**STUDY PRODUCT(S)**: Centaur Associates, Inc. 1986. Indicators of the
Direct Economic Impacts Due to Oil and Gas Development in the Gulf of
Mexico. Results of Year I. Executive Summary. A final report for the
U.S. Department of the Interior, Minerals Management Service Gulf of
Mexico OCS Region, Metairie, LA. NTIS No. PB86-246188/AS. MMS Report
86‑0014. Contract No. 14‑12‑0001‑30178. 33 pp.

Centaur Associates, Inc. 1986. Indicators of the Direct Economic Impacts
Due to Oil and Gas Development in the Gulf of Mexico. Results of Year I.
Vol. I, Narrative. A final report for the U.S. Department of the
Interior, Minerals Management Service Gulf of Mexico OCS Region,
Metairie, LA. NTIS No. PB86‑246196/AS. MMS Report 86‑0015. Contract No.
14-12-0001-30178. 100 pp.

Centaur Associates, Inc. 1986. Indicators of the Direct Economic Impacts
Due to Oil and Gas Development in the Gulf of Mexico. Results of Year I.
Vol. II, Exhibits. A final report for the U.S. Department of the
Interior, Minerals Management Service Gulf of Mexico OCS Region,
Metairie, LA. NTIS No. PB86‑246204/AS. MMS Report 86‑0016. Contract
No. 14‑12‑0001-30178. 700+ pp.

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