**REPORT TITLE:** Beaufort Sea - Petroleum Development Scenarios, Man
Made Environment Impacts.

**STUDY TITLE:** Beaufort Sea Petroleum Development Scenarios: Man Made
Environment Impacts (TR‑19).

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: 1977.

COMPLETION DATE OF REPORT: 1978.

COST(S): FY 1977: \$32,959; CUMULATIVE PROJECT COST: \$32,959.

PROJECT MANAGER(S): G. Smythe.

AFFILIATION: Alaska Consultants, Inc.

ADDRESS: 137 East 7th Avenue, Anchorage, Alaska 99501.

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

KEY WORDS: Beaufort Sea; Alaska; development scenarios; drilling;
development; forecast; Barrow; Kaktovik; Nuiqsut; Wainwright; Alaska
Region.

ACCESS NUMBER: 29002

**BACKGROUND:** The North Slope Borough (Borough) presently is composed
of two distinct population groups. One group is composed of the
permanent regional residents, primarily of Eskimo heritage, who live in
traditional communities. A second group is comprised of the transient
petroleum-related personnel, primarily white, who live in a series of
camps. The two groups have little direct contact. However, the petroleum
industry\'s impact on the lives of people in regional traditional
communities has been a major one. The purpose of this study was to
assess future impacts of outer continental shelf (OCS) petroleum
development in a non-OCS case and in four OCS scenario cases on the
man‑made environment of the Beaufort Sea region, in general, and of four
communities, in particular, including Barrow, Kaktovik, Nuiqsut, and
Wainwright.

**OBJECTIVES:** (1) To assess future impacts of oil and gas development
in a non-OCS case and four varying levels of exploration/development
activity (i.e., OCS scenario cases) on the man‑made environment of the
Beaufort Sea region and four communities in the region (i.e., Barrow,
Kaktovik, Nuiqsut, and Wainwright).

**DESCRIPTION:** The four OCS cases included the Camden-Canning, large
Prudhoe Bay, small Prudhoe Bay, and Cape Halkett scenarios. In each of
the four OCS cases, emphasis was placed on additional impacts that such
scenarios could be expected to have beyond what would be anticipated in
the non-OCS case. To assist in this assessment, a series of projections
were developed for anticipated population and employment changes in the
individual communities, plus projections of Borough revenues and
expenditures. Community infrastructural requirements in the non-OCS
scenario and additional requirements likely to be generated by each of
the four OCS scenarios were also examined.

This study effort utilized information from Technical Reports Nos. 8 and
18 of the Alaska OCS Socioeconomics Studies Program and \"Social
Analysis, Beaufort Sea Lease Sale\" from the Alaska Department of
Community and Regional Affairs.

**SIGNIFICANT CONCLUSIONS:** Field development timing for the various
OCS scenarios was generally not significant in terms of Borough
communities; however, start-up dates were very important. In the non-OCS
case, the Borough was forecast to experience a period of deficits in
revenues through FY 1985/86 which would force it to levy a debt service
tax. A similar, although less serious, deficit was also forecasted for
FY 1988/89 through FY 1989/90 in a non-OCS case. The Large Prudhoe Bay
OCS scenario went furthest towards alleviating the immediate deficit
simply because it represented the first OCS scenario to get underway.
The Small Prudhoe Bay OCS scenario was only slightly less desirable as
it would begin to assist the Borough financially in FY 1980/81 compared
to a year earlier for the Large Prudhoe Bay OCS case. The Cape Halkett
OCS scenario offered the least benefit since it would not assist the
deficit until FY 1984/85. The Camden-Canning OCS scenario was less
desirable than the two Prudhoe Bay scenarios. The second deficit period,
however, was eliminated by all four OCS scenarios.

**STUDY RESULTS:** The non-OCS scenario predicted the following impacts
on Borough traditional communities: (1) slow growth of small villages,
with a significant amount of out-migration of young adults to Barrow and
outside the region; and (2) faster growth for Barrow because of
in-migration from villages and by whites from outside the region. Both
the Borough and the Arctic Slope Regional Corporation (ASRC) have a
major potential for effecting change in regional traditional
communities, the former through taxation and the capital improvements
program (CIP), the latter through investments and mineral exploration
activities. A major share of forecasted community needs (e.g., education
facilities) was already being met by the Borough or was planned for the
near future. Major areas of new impact included housing and utilities
services, particularly in Barrow. Adequate housing was recognized as a
major unmet need in both Barrow and small villages despite Borough
programs. Short-term Borough deficits through FY 1985/86 will force
levying of substantial millage rates against property owners for debt
service payments. A similar position was forecast to occur in FY 1988/89
through FY 1989/90.

No additional impacts on the Beaufort Sea region beyond those identified
in the non-OCS case were anticipated in a Camden-Canning OCS scenario.
The following were significant impacts to Borough traditional
communities. Although Kaktovik was forecast to grow at a faster rate
than Nuiqsut or Wainwright because of its proximity to the
Camden-Canning area, numbers of people added in all three villages were
projected to be small. Out-migration to Barrow and outside the region
was less than the non-OCS case. Barrow\'s population was forecasted to
grow faster than the non-OCS case, mainly from in-migration from outside
the region. Borough revenues were forecast to be higher, allowing
additional community facilities and services without financial hardship
to the Borough. This scenario will assist the Borough\'s long-term
financial position, but not as much or as quickly as the Large or Small
Prudhoe Bay scenarios because of its start‑up date.

No additional impacts on the Beaufort Sea region beyond those identified
in the non-OCS case were anticipated in a Large Prudhoe Bay OCS
scenario. The following were significant impacts anticipated on Borough
traditional communities. Although population of regional smaller
villages was forecast to grow at a faster rate than in the non-OCS case,
numbers of people added were expected to be very small. Barrow\'s
population was forecasted to grow faster than the non-OCS case from
in-migration from outside the region. Borough revenues will be higher,
allowing additional facilities and services without undue financial
hardship to the Borough. This scenario offered the most promise for
assisting the Borough\'s imminent revenue deficit because of its earlier
start‑up date. Borough deficits projected from FY 1979/80 through FY
1985/86 would be reduced, permitting a lower debt service mill levy
against Borough Taxpayers during these years.

The Small Prudhoe Bay OCS scenario created no additional impacts to the
Beaufort Sea region beyond those identified in the non-OCS case.
Although population of smaller regional villages was forecast to grow at
a slightly faster rate than in the non-OCS case, the numerical
difference was marginal. Barrow\'s population was forecasted to grow at
a rate between the non-OCS and Large Prudhoe Bay cases mainly from
in-migration from outside the region. Borough revenues were expected to
increase, allowing additional facilities and services without undue
hardship to the Borough. After Large Prudhoe Bay, the Small Prudhoe Bay
OCS case offered the most immediate financial assistance to the Borough.
The FY 1980/81 through FY 1985/86 deficit would be reduced, although
less than the Large Prudhoe Bay OCS case.

The Cape Halkett OCS case produced no additional impacts on the Beaufort
Sea region beyond those identified in the non-OCS case. The following
were identified as the significant impacts to Borough traditional
communities. The population of smaller regional communities was expected
to grow at a slightly higher rate than in the non-OCS case; however, the
numerical difference was marginal. As in the Small Prudhoe Bay OCS case,
Barrow\'s population was forecasted to grow at a rate between the
non-OCS and Large Prudhoe Bay cases. Like the other OCS cases, a Cape
Halkett OCS scenario would contribute to significantly higher Borough
revenues through property taxation than possible in a non-OCS case.
However, because this scenario was not expected to get underway until
the mid-1980s, its positive contribution to immediate Borough deficits
was projected to be minimal. The Cape Halkett OCS scenario had the least
impact on traditional Borough villages of the four OCS scenarios;
however, it also offered the fewest benefits to the Borough and its
people.

**STUDY PRODUCT(S):** Alaska Consultants, Inc. 1978. Beaufort Sea -
Petroleum Development Scenarios, Man Made Environment Impacts. A final
report for the U.S. Department of the Interior, Bureau of Land
Management Alaska OCS Office, Anchorage, AK. NTIS No. PB-294314. Social
and Economic Studies Program Technical Report No. 19. Contract No.
14-12-0001-29002. ix + 195 pp.

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