ACCESS NUMBER: 30821 

STUDY TITLE: Socioeconomic Baseline and Projections for Selected Panhandle 

Communities 

REPORT TITLE: Socioeconomic Baseline and Projections of the Impact of an OCS 

Onshore Base for Selected Florida Panhandle Communities, Volume I: Final Report, 

Volume II: Technical Description of the MMS Florida Panhandle Model, and Volume III: 

User's Guide for the Model 

CONTRACT NUMBER: 1435-01-96-CT-30821 

SPONSORING OCS REGION: Gulf of Mexico OCS Region 

APPLICABLE PLANNING AREA(S): Eastern Planning Area 

FISCAL YEAR(S) OF PROJECT FUNDING: FY 96 – FY 02 

COMPLETION DATE OF REPORT: April 2002 

COST(S): $141,027 

CUMULATIVE PROJECT COST: $141,027 

PROGRAM MANAGER: E.S. Schubert 

AFFILIATION: Research and Planning Consultants, Inc. (RPC) 

ADDRESS: 7600 Chevy Chase, Building 2, Suite 500, Austin, Texas 78752 

PRINCIPAL INVESTIGATOR(S)*: Ronald T. Luke, Eric S. Schubert, Greg Olsson, F. 

Larry Leistritz 

KEY WORDS: Florida Panhandle, economic model, onshore service base, fishing, 

military, ports, Lease Sale 181, Destin Dome project 

BACKGROUND: The Minerals Management Service, in the Proposed Outer 

Continental Shelf Oil and Gas Leasing Program for 1997-2002, stated its intention to 

lease an area for development in the western edge of the Eastern Planning area of the 

Gulf of Mexico in the year 2001. Because the experience of Texas and Louisiana has 

indicated substantial social and economic impacts onshore from Outer Continental Shelf 

(OCS) activity are possible, the Minerals Management Service wanted to investigate the 

potential impacts on affected communities in the Eastern Gulf of Mexico. 

OBJECTIVES: The purpose of this study was to develop a projection of the effects of 

potential offshore activity on the Florida Panhandle. The Minerals Management Service 

asked the RPC team to develop a baseline socioeconomic description for Panama City, 

Pensacola, and Ft. Walton Beach and to develop projection models to investigate the 
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possible socioeconomic consequences of various onshore support scenarios on these 

communities. The project also includes studies on four local industries that could be 

impacted by the operations of a support base in the Florida Panhandle: fishing, military, 

ports, and tourism. The project also analyzes possible user-conflicts or benefits that 

these industries might encounter with the operations of the support base located in the 

Florida Panhandle. 

The team developed an economic-demographic model to assess the impacts of 

alternative OCS development scenarios on population for the Panama City and 

Pensacola areas. It also assessed the impacts on employment, revenues and 

expenditures of local governments, school enrollments, and demands on selected 

public services. 

DESCRIPTION: If the oil industry were to locate an onshore service base in the Florida 

Panhandle, the projected socioeconomic impacts on the Florida Panhandle would 

depend on: 1) the size of the hydrocarbon potential in the Eastern Gulf of Mexico; 2) the 

intensity with which the industry could exploit it; and 3) the range of goods and services 

that an onshore support base in the Florida Panhandle could provide the offshore oil 

industry. 

SIGNIFICANT CONCLUSIONS: The Minerals Management Service Florida Panhandle 

Model was developed to enable users to prepare plausible quantitative projections of 

the implications of various OCS development scenarios for selected counties and 

communities. The model is structured as a set of three economic-demographic submodels, representing the metropolitan areas of Fort Walton Beach, Panama City, and 

Pensacola, Florida. 

The model assesses three development scenarios within the Florida Panhandle. The 

first two scenarios involve alternative levels of OCS production from Lease Sale 181. 

The third scenario assumes that Chevron’s Destin Dome project will be supported, in 

part, by facilities located in the panhandle. Each scenario is analyzed assuming the 

onshore support base will be located in the Panama City area or in the Pensacola area 

since the Fort Walton Beach area lacks a deep water port and is therefore deemed 

unsuitable for OCS support facilities. 

The peak year is 2020, in terms of the cumulative number of persons added to the 

population due to the sum effect of Lease Sale 181 and the Destin Dome project. In 

that year the reasonable maximum effect would be between 1,018 and 1,561 persons 

because of both projects. 

Findings of this research indicate that the level of proposed OCS activity that might be 

serviced by an onshore base in the Florida Panhandle probably would not affect the 

level of military or tourism activity in the region. However, tourism stakeholders view the 

benefits of an onshore support base as very small compared to their perceived risks of 

environmental degradation. Strong peer pressure exists in the Florida Panhandle to 

oppose anything related to OCS development. Additionally, a support base could cause 
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potential user conflicts with the military. Support boats and helicopters based in the 

Florida Panhandle would cross the aerial operations area of three military installations. 

There are concerns on how additional boat traffic might interfere with operations if the 

support base grew beyond a certain size. 

Long term estimates suggest that even if both Lease Sale 181 and the Destin Dome 

project are supported by a base in the Florida Panhandle, the increase in the population 

due to this support will be less than two percent of the increase due to inmigration from 

2000 to 2035. The projected size of an onshore support base therefore would have 

relatively little impact on employment, public services and infrastructure. Impacts due to 

OCS development would be small relative to increased demands associated with 

projected baseline growth in the region’s economy and population. 

STUDY RESULTS: Few economic incentives are present to drive OCS support 

industries into the Florida Panhandle at the projected levels of OCS development in the 

Eastern Gulf of Mexico because support bases are most efficient when close to offshore 

wells. Concerns among stakeholders in the area’s tourism industry about the risks of 

offshore oil and gas production have lent support to the Governor of Florida’s public 

position that the Federal Government should not sell new oil and gas leases in Florida 

Federal waters within 100 miles of the Florida coast. If made law by Congress, this 

restriction would limit future appeal and opportunities for onshore OCS-related industry 

in the Florida Panhandle. 

STUDY PRODUCT(S): Luke, R.T., E.S. Schubert, G. Olsson, and F.L. Leistritz. 2002. 

Socioeconomic baseline and projections of the impact of an OCS onshore base for 

selected Florida Panhandle communities, Volume I: Final report, OCS Study MMS 

2002-024, Volume II: Technical Description of the MMS Florida Panhandle Model, OCS 

Study MMS 2002-025, and Volume III: User’s Guide for the Model, OCS Study MMS 

2002-026, U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico 

OCS Region, New Orleans, LA. 

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