**REPORT TITLE**: Impacts of Outer Continental Shelf (OCS) Development
on Recreation and Tourism.

Vol. 1, Executive Summary; Vol. 2, Final Report and Case Studies;
Vol. 3, Detailed Methodology; Vol. 4, Users\' Manual; Vol. 5, Program
Logic Manual.

**STUDY TITLE**: Impacts of OCS Development on Recreation and Tourism.

CONTRACT NUMBER(S): MMS: 14-12-0001-30166.

SPONSORING OCS REGION: Pacific.

APPLICABLE PLANNING AREA(S): Southern California; Central California;
Northern California.

FISCAL YEAR(S) OF PROJECT FUNDING: 1984; 1985; 1986.

COMPLETION DATE OF REPORT: 1987.

COST(S): FY 1984: \$221,083; FY 1985: \$9,522; FY 1986: \$40,802;
CUMULATIVE PROJECT COST: \$271,407.

PROJECT MANAGER(S): J. Merchant.

AFFILIATION: David M. Dornbusch & Company.

ADDRESS: 1736 Stockton Street, San Francisco, California 94133.

PRINCIPAL INVESTIGATOR(S)\*: J. Merchant, F. Niehaus, C. Parliment.

KEY WORDS: Southern California; Central California; Northern California;
California; aesthetics and recreation; impacts; development; aesthetics;
recreation; tourism; socioeconomics; mitigation; expenditures; model;
development scenarios; oil spill.

ACCESS NUMBER: 30166

**BACKGROUND**: This project was initiated to investigate potential
impacts of Outer Continental Shelf (OCS) oil and gas development on
coastal recreation and tourism in California. The intent was to provide
the Minerals Management Service (MMS) with an analytical tool to
evaluate possible economic impacts from OCS development. In particular,
the study was designed to provide MMS staff who work on lease sale
documents with an objective technique for estimating impacts to coastal
communities from OCS‑related events.

**OBJECTIVES**: (1) To provide profiles of 1982 socioeconomic conditions
in coastal communities, including an analysis of relative importance of
the tourism industry in each coastal county; (2) To develop a
methodology for determining effects of OCS development on coastal
recreation; and (3) To recommend mitigation measures that may reduce the
negative effects of OCS development on coastal recreation.

**DESCRIPTION**: Construction activities, long-term operations, and
potential oil spills were the specific components of OCS development
that were studied. Coastal recreation was defined to include boating,
fishing, water-dependent activities, and water-enhanced activities. The
methodology estimated not only change in number of participation-days,
but also changes in the economic value of recreating to participants and
in the value of recreation spending to local recreation economies. The
methodology combined a series of models. First, a gravity model
estimated the number of recreation trips to different coastal segments.
This information was necessary in determining what particular coastal
segments the public utilize, thus providing an indication of the
relative \"attractiveness\" of those segments. Second, an economic
effects model determined what differing levels of recreation activity
(as predicted by the gravity model) would have on the local economy of
coastal communities. This step involved converting change in recreation
to change in tourist spending using daily spending figures. The model
subsequently determined impact that the spending change had on the total
economy, accounting for \"ripple\" effect or secondary spending changes.
Third, a consumer surplus model measured the amount that people would be
willing to pay over and above the amount that they actually have to pay.
The model was applied to four case studies to evaluate the impacts of
two actual OCS development scenarios and two hypothetical oil spill
scenarios. The eastern Santa Barbara Channel scenario included
construction and operation of three platforms (i.e., Platforms Grace,
Gina, and Gilda), associated pipelines, and an onshore processing
facility. The northern Santa Barbara County scenario represented the
proposed development off Point Pedernales, where two operators have
proposed placement of two platforms 9 mi from the coast with associated
pipelines and electric cables connecting to shore. The Orange County oil
spill scenario assumed a 12 mi oil spill from the Santa Ana River
through Laguna Beach. The Humboldt County oil spill scenario assumed
that a 10,000 bbl oil spill would contaminate the 12 mi stretch of coast
from North Spit to Table Bluff.

**SIGNIFICANT CONCLUSIONS**: This study provides \"profiles\" of 1982
socioeconomic conditions in California coastal counties, including an
analysis of the relative importance of the tourist industry in each. The
percentage of the total employment attributed to coastal tourism ranged
from a high of 22% in Mendocino County to a low of 1% in Los Angeles
County. The annual economic value of coastal recreation in California
was estimated to be \$1.54 billion.

The study resulted in a computer model which was used to estimate dollar
impacts to the economies of coastal counties from [assumed]{.underline}
changes in beach attendance related to construction and operation of OCS
oil and gas facilities.

**STUDY RESULTS**: A cross sectional regression analysis of 111 beaches
in California established six variables that explained beach attendance:
beach frontage length, urban versus rural beach location, pedestrian
access, beach aesthetic rating, State versus local administration, and a
composite proximity variable. The composite proximity variable included
population of origin counties, and those counties\' recreation
participation rates, distance to the beach in question, and distance to
substitute beaches. The variables were statistically significant at the
90% level of confidence or greater, and together explained 68% of the
variance in beach attendance.

Regression analysis in this study revealed some evidence, although
inconclusive, of a negative association between offshore platforms and
beach attendance. Some regression equations indicated that installing
one platform 3 mi offshore would reduce beach attendance by 5.5 to 12%.
However, because of the low t‑statistics on this result and because
other equations showed inconsistent results, confidence in this
relationship was low. These inconsistencies could have resulted from
missing explanatory variables, unreliability of beach attendance data,
or too small a sample of beaches with visible offshore platforms.

Consumer surplus was largest for those areas adjacent to large
population concentrations. Total consumer surplus for all four activity
categories (water-enhanced, water-dependent, fishing, and boating) in
all coastal areas was \$1.5 billion per year. People traveling to
coastal areas to recreate purchase local goods and services. The
relative importance of such recreation-based tourist spending was
estimated in all coastal counties. Generally, the smaller counties were
relatively more dependent on tourism than were the larger counties. The
proportion of local economic activity attributable to coastal tourism
ranged from less than 1% (Los Angeles County) to nearly 18% (Marin
County).

Construction impacts from the eastern Santa Barbara Channel scenario
affected only Mandalay Beach and resulted in small overall impacts to
Ventura County\'s economy. Operation impacts, on the other hand, showed
results of assumed attractiveness changes to 11 beaches, from Rincon
Beach (northern Ventura County) to Point Mugu (Ventura/Los Angeles
County border). The platform operation assumptions from the northern
Santa Barbara County scenario implied negative impacts on one geopiece
along the northern coastline of Santa Barbara County. Only beach
activities were affected, and economic impacts were confined to Santa
Barbara County. The Orange County oil spill scenario affected nine
beaches and two geopieces in the county, reducing attendance and
associated spending for all four activity categories. The Humboldt
County oil spill scenario affected five beaches and one geopiece in the
county. All four activity categories were affected to some extent, with
boating being the most significant.

**STUDY PRODUCT(S)**: David M. Dornbusch & Company. 1987. Impacts of
Outer Continental Shelf (OCS) Development on Recreation and Tourism.
Vol. 1, Executive Summary; Vol. 2, Final Report and Case Studies;
Vol. 3, Detailed Methodology. A final report for the U.S. Department of
the Interior, Minerals Management Service Pacific OCS Region, Los
Angeles, CA. MMS Reports 87‑0064 (Vol. 1), 87-0065 (Vol 2), and 87-0066
(Vol. 3). Contract No. 14-12-0001-30166.

Niehaus & Associates. 1987. Impacts of Outer Continental Shelf (OCS)
Development on Recreation and Tourism. Vol. 4, Users\' Manual; Vol. 5,
Program Logic Manual. A final report by David M. Dornbusch & Company for
the U.S. Department of the Interior, Minerals Management Service Pacific
OCS Region, Los Angeles, CA. MMS Reports 87‑0067 (Vol. 4) and 87-0068
(Vol. 5). Contract No. 14‑12‑0001‑30166.

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