ACCESS NUMBER: 30829 

STUDY TITLE: The Social and Economic Consequences of Onshore – OCS-Related 

Activities in Coastal Alabama 

REPORT TITLE: Coastal Alabama Offshore Natural Gas Economic Projection Model 

CONTRACT NUMBER: 1435-01-CT-96-30829 

SPONSORING OCS REGION: Gulf of Mexico OCS Region 

APPLICABLE PLANNING AREAS: Western, Central and Eastern Gulf of Mexico 

FISCAL YEARS OF PROJECT FUNDING: FY 1995-1996, FY 1997-1998, FY 1998-

1999 

COMPLETION DATE OF REPORT: May 2002 

COSTS: FY 95-96: $125,000; FY 97-98: $23,639; FY 97-98: $59,954; FY 98-99: 

$18,426 

CUMULATIVE PROJECT COST: $227,019 

PROGRAM MANAGER: William W. Wade 

AFFILIATION: Foster Associates, Inc. 

ADDRESS: 120 Montgomery Street, Suite 1776, San Francisco, CA, 94104 

PRINCIPAL INVESTIGATOR: Jason R. Plater 

KEY WORDS: natural gas, Mobile, Alabama, Destin Dome OCS, Louisiana, Texas, 

IMPLAN multipliers, calculation of economic effects, economic output, exploratory and 

development drilling, offshore structure costs

BACKGROUND: Following the 1979 discovery of Norphlet gas in Mobile Bay during 

the early 1980s, the Coastal Alabama region experienced the emergence of a large 

offshore gas industry. This study is the second in a series of investigations analyzing 

the social and economic impact of the Coastal Alabama offshore gas industry on Gulf 

Coast states. 

OBJECTIVES: This document summarizes a Microsoft® Excel-based economic 

projection model developed as part of a series of investigations analyzing the social and 

economic impact of the Coastal Alabama offshore gas industry on Gulf Coast states. 

DESCRIPTION: The model forecasts economic effects of the offshore gas industry on 

Mobile County, the rest of Alabama, and the combined economies of Louisiana and 

Texas. The model is driven by economic impact multipliers from a specially-developed 
ACCESS NUMBER: 30829 

IMPLAN model, combined with estimates of industry expenditures for offshore 

exploration, development, and production. The model estimates past economic effects 

and forecasts them through 2020. Future industry activity in the Destin Dome area of 

the Eastern Gulf of Mexico results is also included. The model described in this 

document calculates the economic effects found in the study Economic Effects of 

Coastal Alabama and Destin Dome Offshore Natural Gas Exploration, Development, 

and Production. The above mentioned study is the third in a series of investigations 

analyzing the social and economic impact of the Coastal Alabama offshore gas industry 

on Gulf Coast states. 

SIGNIFICANT CONCLUSIONS: This is an instructional manual and therefore contains 

no conclusions or study results. Conclusions of the model are detailed in Economic 

Effects of Coastal Alabama and Destin Dome Offshore Natural Gas Exploration, 

Development, and Production and reflect the following: 

The study found that total industry spending on exploration, development, and 

infrastructure to fully develop existing Coastal Alabama fields will total close to $4 

billion. Expenditures for ongoing operations and maintenance will add over $3 billion 

more through 2020. The State of Alabama received close to a billion dollars in lease 

bonus payments from offshore operators in State waters during the 1980’s. Coupled 

with ongoing production taxes and royalties, and a share of federal 8(g) royalties for 

fields in the Mobile OCS, the State of Alabama and coastal counties are expected to 

spend close to $6 billion through 2020 from trust fund earnings. Because the principal 

of the trust fund is never drawn down, spending of trust fund earnings will provide a 

significant economic stimulus to Alabama long after gas reserves have been exhausted. 

Coastal Alabama and Destin Dome OCS gas development are expected to support at 

least 7,000 jobs in the Gulf region over a 35 year period and could peak to 10,000 jobs 

in some years. Most of the employment in Louisiana and Texas occurred in the early 

years of development. Mobile County and Alabama employment grew as local gasrelated businesses grew. Employment is not expected to peak beyond 2001 unless 

significant new fields are discovered and produced. 

STUDY RESULTS: This is an instructional manual and therefore contains no 

conclusions or study results. Study results of the model are detailed in Economic 

Effects of Coastal Alabama and Destin Dome Offshore Natural Gas Exploration, 

Development, and Production and reflect the following: 

The research found that the majority of expenditures, and thus jobs and income, from 

exploration and infrastructure (platforms and pipelines) phases of development accrue 

to Louisiana and Texas. Mobile County received a large share of spending from 

construction of onshore treatment plants and receives the majority of economic effects 

from ongoing operations and maintenance. Employment due to Alabama state 

production—dominated in later years by government spending of interest from trust 

funds, which grows to over $200 million annually—becomes most significant in later 

years. 
ACCESS NUMBER: 30829 

STUDY PRODUCTS: Kelley, J.Q. and WW. Wade. 1999. Social and Economic 

Consequences of Onshore OCS-Related Activities in Coastal Alabama: Final Baseline 

Report. OCS Study Minerals Management Service 98-0046. A final report by Foster 

and Associates, Inc., for the U.S. Department of the Interior, Minerals Management 

Service Gulf of Mexico Region, New Orleans, LA. Contract No. 1435-01-97-CT-30829. 

102pp. 

Plater, J.R. 2000. Coastal Alabama Offshore Natural Gas Economic Projection Model. 

OCS Study Minerals Management Service 2000-065. U.S. Dept. of the Interior, 

Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, La. 46 pp. 

Plater, J.R., J.Q. Kelley, W.W. Wade, and R.T. Mott. 1999. Economic Effects of Coastal 

Alabama and Destin Dome Offshore Natural Gas Exploration, Development, and 

Production. OCS Study Minerals Management Service 2000-044. U.S. Department of 

the Interior, Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, 

LA. 219 pp. 

Wade, W.W., J.R. Plater, and J.Q. Kelley. 1999. History of Coastal Alabama Natural 

Gas Exploration and Development, Final Report. OCS Study Minerals Management 

Service 99-0031. A final report by Foster Associates, Inc., for the U.S. Department of 

the Interior, Minerals Management Service Gulf of Mexico OCS Region, New Orleans, 

LA. Contract No. 1435-01-CT-96-30829. 189 pp.