OCS Study

BOEM 2015-053

Forecasting Environmental and 

Social Externalities Associated with 

Outer Continental Shelf (OCS) Oil 

and Gas Development – Volume 2: 

Supplemental Information to the 

2015 Revised Offshore 

Environmental Cost Model (OECM)

US Department of the Interior

Bureau of Ocean Energy Management

Headquarters

December 2015
[This page intentionally left blank.]
OCS Study

BOEM 2015-053

Forecasting Environmental and 

Social Externalities Associated with 

Outer Continental Shelf (OCS) Oil 

and Gas Development – Volume 2: 

Supplemental Information to the 

2015 Revised Offshore 

Environmental Cost Model (OECM)

Prepared by

Industrial Economics, Incorporated

2067 Massachusetts Avenue

Cambridge, MA 02140

and

SC&A, Incorporated

1608 Spring Hill Road, Suite 400

Vienna, VA 22182

US Department of the Interior

Bureau of Ocean Energy Management

Headquarters

December 2015
DISCLAIMER

Study concept, oversight, and funding were provided by the US Department of the Interior, Bureau of 

Ocean Energy Management, Environmental Studies Program, Washington, DC, under Contract Number 

GS-10F-0093K, order number M14PD00057. This report has been technically reviewed by BOEM and it 

has been approved for publication. The views and conclusions contained in this document are those of the 

authors and should not be interpreted as representing the opinions or policies of the US Government, nor 

does mention of trade names or commercial products constitute endorsement or recommendation for use.

REPORT AVAILABILITY

To download a PDF file of this Environmental Studies Program report, go to the US Department of the 

Interior, Bureau of Ocean Energy Management, Environmental Studies Program Information System

website and search on OCS Study BOEM 2015-053.

CITATION

Industrial Economics, Inc. and SC&A, Inc. 2015. Forecasting Environmental and Social Externalities 

Associated with Outer Continental Shelf (OCS) Oil and Gas Development - Volume 2: 

Supplemental Information to the 2015 Revised OECM. U.S. Department of the Interior, Bureau 

of Ocean Energy Management. OCS Study BOEM 2015-053. 
i

Contents

List of Figures................................................................................................................................ iii

List of Tables ................................................................................................................................ iv

Abbreviations and Acronyms ........................................................................................................ vi

1. Introduction..........................................................................................................................1

2. Energy Alternatives and the Environment...........................................................................3

2.1 Overview of Energy Services ..................................................................................3

2.1.1 Oil and Gas Uses and Alternatives: Residential Sector...............................6

2.1.2 Oil and Gas Uses and Alternatives: Commercial Sector .............................8

2.1.3 Oil and Gas Uses and Alternatives: Industrial Sector..................................9

2.1.4 Oil and Gas Uses and Alternatives: Transportation Sector .......................10

2.1.5 Oil and Gas Uses and Alternatives: Electricity..........................................10

2.2 Current and Future Production of Energy Sources................................................11

2.2.1 Current and Future Energy Use .................................................................11

2.2.2 Renewable Energy Current and Future Use...............................................12

2.2.3 Nuclear Energy Current and Future Use....................................................23

2.2.4 Other Natural Gas Current and Future Use................................................24

2.2.5 Location of Solar Energy Facilities/Opportunities in the United States....24

2.2.6 Location of wind Energy Facilities in the United States ...........................26

2.3 Environmental and Social Costs of Energy Sources..............................................27

2.3.1 Overview of Environmental and Social Costs of Energy Sources ............27

2.3.2 Waste Management....................................................................................28

2.3.3 Mining Health and Safety ..........................................................................29

2.3.4 Groundwater Impacts.................................................................................29

2.3.5 Surface Water Impacts...............................................................................29

2.3.6 Air Quality Impacts....................................................................................30

2.3.7 Socioeconomic Impacts.............................................................................31

2.3.8 Ecological and Wildlife Impacts................................................................31

2.3.9 Onshore Spills............................................................................................31

2.3.10 Environmental and Social Impacts by Energy Source...............................32

2.4 References..............................................................................................................58

3. Analysis of Impacts from Catastrophic Oil Spills .............................................................64

3.1 Response Costs......................................................................................................65

3.1.1 Variability and Uncertainty of Response Costs.........................................65

3.1.2 Estimation of Response Costs by Region ..................................................66

3.2 Ecological Damages...............................................................................................68

3.2.1 Gulf of Mexico...........................................................................................69

3.2.2 Atlantic.......................................................................................................70

3.2.3 Cook Inlet...................................................................................................72

3.2.4 Arctic..........................................................................................................72

3.2.5 Summary....................................................................................................73

3.3 Recreational Use ....................................................................................................73
ii

3.3.1 Shoreline Recreation and Boating .............................................................75

3.3.2 Wildlife Viewing .......................................................................................86

3.4 Commercial Fishing...............................................................................................87

3.4.1 Commercial Fishing Approach..................................................................88

3.5 Subsistence.............................................................................................................91

3.5.1 Cook Inlet...................................................................................................92

3.5.2 Arctic..........................................................................................................93

3.6 Fatal and Nonfatal Injuries.....................................................................................95

3.7 Value of Spilled Oil Not Recovered ......................................................................95

3.8 Impacts of Dispersants and In-Situ Burns .............................................................96

3.9 Uncertainties..........................................................................................................96

3.10 References............................................................................................................101

Appendix A: Damage Estimates for Additional CDE Scenarios in the Atlantic Region ..........108

Shoreline Recreation........................................................................................................108

Inland Fishing ..................................................................................................................110

Commercial Fishing.........................................................................................................111

Uncertainty.......................................................................................................................112

Appendix B. Supplemental Recreational Use Values For The Gulf Of Mexico .......................113
iii

List of Figures

Figure 1. Primary energy consumption by fuel in the reference case, 1980–2040 (quadrillion 

Btu) ................................................................................................................................12

Figure 2. Renewable electricity by fuel type in the Reference case, 2000–2040 (billion 

kilowatt hours) ...................................................................................................................13

Figure 3. Electricity generation by type of biomass energy source..............................................14

Table 8. Renewable generation amount and percentage of total energy produced ......................14

Table 9. Comparison of baseline, reference case, and REmap analysis energy supply and 

demand...............................................................................................................................16

Figure 4. Geographic market potential for biodiesel ....................................................................17

Figure 5. Geographic market potential for ethanol.......................................................................19

Figure 6. Geographic market potential for biomass energy..........................................................20

Figure 7. Geographic market potential for geothermal energy.....................................................21

Figure 8. Top non-powered dams with hydroelectric energy potential........................................22

Figure 9. Operational landfill gas projects and candidate landfills for future landfill gas 

projects by state..................................................................................................................23

Figure 10. Geographic market potential for biomass gas.............................................................24

Figure 11. Geographic market potential for concentrating solar resources..................................25

Figure 12. Geographic market potential for PV solar resources...................................................26

Figure 13. Geographic market potential for wind energy.............................................................27

Figure 14. Map of recreation sites sampled in the Deepwater Horizon lost recreational use 

assessment..........................................................................................................................77
iv

List of Tables

Table 1. 2013 residential energy end-use splits, by fuel type (quadrillion Btu).............................7

Table 2. AEO2015 residential energy source projections ..............................................................7

Table 3. 2013 commercial energy end-use splits, by fuel type (quadrillion Btu)...........................8

Table 4. AEO2015 commercial energy source projections............................................................9

Table 5. AEO2015 industrial sector energy source projections .....................................................9

Table 6. AEO2015 transportation sector energy source projections ............................................10

Table 7. AEO2015 electricity fuel projections.............................................................................11

Table 8. Renewable generation amount and percentage of total energy produced ......................14

Table 9. Comparison of baseline, reference case, and REmap analysis energy supply and 

demand...............................................................................................................................16

Table 10. Onshore oil and gas production ....................................................................................33

Table 11. Oil and gas imports.......................................................................................................35

Table 12. Coal production.............................................................................................................36

Table 13. Biofuels.........................................................................................................................39

Table 14. Biomass.........................................................................................................................41

Table 15. Geothermal....................................................................................................................43

Table 16. Hydroelectric ................................................................................................................45

Table 17. Municipal waste............................................................................................................47

Table 18. Nuclear..........................................................................................................................49

Table 19. Other natural gas...........................................................................................................51

Table 20. Other oil ........................................................................................................................52

Table 21. Solar..............................................................................................................................54

Table 22. Wind (onshore and offshore)........................................................................................56

Table 23. Distribution of shoreline habitat ...................................................................................67

Table 24. Estimated response costs per barrel by geographic region ...........................................68

Table 25. NRDA estimates of ecological damages from past spills on the Gulf Coast 

(2017$)...............................................................................................................................70

Table 26. NRDA estimates of ecological damages from past spills on the Atlantic Coast 

(2017$)...............................................................................................................................71

Table 27. Range of NRDA costs by geographic region (2017$) ..................................................73

Table 28. Duration of losses to shoreline recreation, by region and activity, for the 

Deepwater Horizon lost recreational use assessment ........................................................77
v

Table 29. Deepwater Horizon shoreline and inland fishing study lost use estimates – tier 1 ......78

Table 30. Deepwater Horizon boating study lost use estimates - tier 1........................................78

Table 31. Summary of Tier 1 recreation impacts associated with the Deepwater Horizon 

spill 79

Table 32. Tier 2 secondary shoreline study damages....................................................................80

Table 33. Summary of recreational impacts associated with the Deepwater Horizon oil spill ....80

Table 34. Beach use baseline for the Atlantic...............................................................................82

Table 35. Recreational inland angler trips baseline for the Atlantic : May – March impact 

period 83

Table 36. Estimated reduction in recreational activitity in the Atlantic following a CDE ...........84

Table 37. Summary of recreational damages associated with a CDE in the Atlantic...................84

Table 38. Estimated change in Gulf of Mexico landings volume following the Deepwater 

Horizon oil spill .................................................................................................................89

Table 39. Estimated change in Gulf of Mexico landings revenue following the Deepwater 

Horizon oil spill .................................................................................................................89

Table 40. Commercial fishery landings revenue in the mid-Atlantic (2017$) .............................91

Table 41. Average annual Cook Inlet commercial fishery landings (2017$) ...............................91

Table 42. Estimated Cook Inlet subsistence losses.......................................................................93

Table 43. Estimated Arctic subsistence losses..............................................................................94

Table 44. Uncertainties, limitations, and assumptions of analysis...............................................97

Table A-1. Baseline shoreline use for alternative scenarios: may of spill year through 

November of the following year......................................................................................109

Table A-2. Shoreline use damages summary for alternative scenarios......................................110

Table A-3. inland fishing baseline for alternative scenarios: May of spill year through 

March the following year.................................................................................................110

Table A-4. Inland fishing damages for alternative scenarios .....................................................111

Table A-5. Commercial fishing baseline and damages for alternative scenarios (2017$) .........112

Table B-1. Gulf of Mexico valuation studies for beach recreation.............................................113

Table B-2. GOM recreational fisher per trip valuation estimates...............................................113
vi

Abbreviations and Acronyms

AEO2013 Annual Energy Outlook 2013

AEO2015 Annual Energy Outlook 2015

ARC Appalachian Regional Commission

BOEM Bureau of Ocean Energy Management

Btu British thermal unit (equal to about 1055 joules)

CAFE corporate average fuel economy

CDEs catastrophic discharge events

CO carbon monoxide

CSR Concentrating Solar Resources

DOE U.S. Department of Energy

DOI U.S. Department of the Interior 

DOL U.S. Department of Labor

DPP Draft Proposed Program

DWH Deepwater Horizon

E&D exploration and development

EDWPC East Delhi Waste Processing Company Pvt. Ltd.

EGS Enhanced Geothermal System

EIA U.S. Energy Information Administration

EPA US Environmental Protection Agency

FAO Food and Agriculture Organization of the United Nations

FFV flexible-fuel vehicle

FWS U.S. Fish and Wildlife Service

GAO Government Accountability Office

GLC Great Lakes Commission

gW gigawatt

GWh gigawatt hour

IRENA International Renewable Energy Agency

kWh/m2kilowatt hour per square meter

LCF latent cancer fatality

LFG landfill gas

LMOP Landfill Methane Outreach Program

LPG liquefied petroleum gas

m meter(s)

MarketSim Market Simulation Model

mmscfd Million Standard Cubic Feet per Day (gas distribution)

MMTCO2e/yr million metric tons of carbon dioxide equivalent per year

MRIP Marine Recreational Information Program

MSW municipal solid waste

MW megawatt

NMFS National Marine Fisheries Service

NOAA National Oceanic and Atmospheric Administration

NOx nitrogen oxides

NRC U.S. Nuclear Regulatory Commission

NRDA natural resource damage assessment
vii

NRDC Natural Resources Defense Council

NREL National Renewable Energy Laboratory

NSRE 2000 National Survey of Recreation in the Environment

NYT New York Times

OCS Outer Continental Shelf 

OECM Offshore Environmental Cost Model

ORNL Oak Ridge National Laboratory

OSIR Oil Spill Intelligence Report

PBS Public Broadcasting System

PDARP Preliminary Damage Assessment and Restoration Plan

PJ petajoule

PM particulate matter

PV photovoltaic

PVC photovoltaic cell

RDF refuse-derived fuel

RUM Randomized Utility Maximization

SNG synthetic natural gas

SO2 sulfur dioxide

TEEIC Tribal Energy and Environmental Information Clearinghouse

TNC The Nature Conservancy

Trustees Deepwater Horizon Oil Spill Natural Resource Trustees

TVA Tennessee Valley Authority

TWh terawatt hours

USDA U.S. Department of Agriculture

USGS United States Geological Survey

UTTR undiscovered technically recoverable resources

VOC volatile organic compound

VSL value of a statistical life

WTG wind turbine generator

WTP willingness to pay
1

1. Introduction

The Bureau of Ocean Energy Management (BOEM) is charged with assisting the U.S. Secretary 

of the Interior in carrying out the mandates of the Outer Continental Shelf (OCS) Lands Act 

(Act), which calls for expedited exploration and development (E&D) of the OCS to, among other 

goals, “reduce dependence on foreign sources and maintain a favorable balance of payments in 

world trade.” The Act also requires that BOEM prepare forward-looking five year schedules of 

proposed OCS lease sales that define as specifically as possible the size, timing, and location of 

the OCS territory(ies) to be offered for lease. As part of the development of these “Five Year 

Programs,” BOEM completes an analysis of the environmental and social costs attributable to 

the exploration, development, production, and transport of oil and natural gas anticipated to 

result from the Program proposal, net of the environmental and social costs attributable to the No 

Action Alternative (NAA) (i.e., the costs associated with energy production from sources that 

would substitute for OCS production in the absence of the Program) and net of any benefits 

(measured as “negative costs”) attributable to OCS oil- and natural gas-related activities.

To estimate the anticipated environmental and social costs attributable to oil and natural gas 

E&D activities on the OCS, as specified in an E&D scenario,1 BOEM utilizes the Offshore 

Environmental Cost Model (OECM), a revised Microsoft (MS) Access-based model, which has 

been updated in conjunction with development of the 2017-2022 Program. The OECM was 

designed to focus on capturing the most significant environmental and social costs from the 

proposed action and NAA. The report Forecasting Environmental and Social Externalaties 

Associated with the Outer Continental Shelf (OCS) Oil and Gas Development – Volume 1: The 

2015 Revised Offshore Environmental Cost Model (OECM) (BOEM 2015-052) presents the 

model’s cost calculation methodologies as well as descriptions of each calculation driver, 

including the sources of underlying data and any necessary assumptions. The purpose of this 

companion report (Volume 2) is to present supplemental information on environmeantal and 

social costs that BOEM considers in conjunction with the OECM results.

The OECM was designed to focus on the “main” energy market substitutions (i.e. increased 

imports and onshore production of oil and natural gas, fuel switching to coal, and reduced 

demand likely to occur as a direct result of programmatic decisions to make OCS oil and gas 

resources unavailable to the market) but multiple other “minor” energy substitutes (those that 

might occur in small quantities or without regard to programmatic decisions) exist. Chapter 2 of 

this report, Energy Alternatives and the Environment, gives consideration of the full range of 

possible energy sources sources that may potentially replace OCS production (including those 

not directly evaluated in the OECM) and provides a qualitative discussion of their environmental 

and social costs, recognizing that all energy sources have externalities. Specifically, the chapter 

presents oil and gas uses and alternatives by sector (e.g. residential, commercial, industrial, 

transportation, and electricity) and discusses current and future production trends and the 

environmental and social costs of the different energy sources. 

 

1 An E&D scenario defines the incremental level of OCS exploration, development, and production activity 

anticipated to occur within planning areas expected to be made available for leasing in the BOEM Five Year OCS 

Oil and Gas Leasing Program. Elements of an E&D scenario include the number of exploration wells drilled, the 

number of platforms installed, the number of development wells drilled, miles of new pipeline constructed, 

anticipated aggregate oil and gas production, and the number of platforms removed. 
2

While many of the impacts that the OECM estimates are associated with the possibility of oil 

spills from pipelines, tankers, and OCS platforms, it does not include impacts from catastrophic 

discharge events (CDEs) because these are extremely unlikely and their potential impacts 

difficult to estimate due to large variability in the factors that contribute to impacts. To 

supplement the costs considered in the OECM, Chapter 3 of this report, Analysis of Impacts from 

a Catastrophic Spill provides information on the potential environmental and social costs of a 

CDE. This chapter provides an overview of the available data and literature on potential CDE 

impacts, including response costs, ecological impacts, recreational impacts, commercial fishing 

impacts, fatal and nonfatal injuries, and value of oil spilled. 
3

2. Energy Alternatives and the Environment

BOEM uses its internal Offshore Environmental Cost Model (OECM) to generate monetary 

estimates of the environmental and social costs attributable to oil and gas exploration and 

production activities anticipated to result from each Five Year decision option. The OECM 

produces a cost estimate not only for the environmental and social costs attributable to activities 

anticipated to result from the sale(s) in that option, but also for those attributable to the market 

substitutions anticipated to result from the No Action Alternative [i.e., the costs associated with 

energy production from sources that would substitute for OCS production in the absence of 

anticipated production from the sale(s)]. The costs associated with any No Action Alternative

are a function of the type and scale of substitute resources predicted by a companion model, 

BOEM’s Market Simulation Model (MarketSim) (Industrial Economics 2015).

One of the primary purposes of this chapter is to consider the full range of possible energy 

sources available, including those that are not directly affected by shorter-term levels of OCS oil 

and natural gas production and thus are not evaluated in the OECM. The OECM provides 

estimates for several energy sources that energy markets would likely substitute for forgone 

production of OCS oil and natural gas (i.e., increased imports and onshore production of oil and 

natural gas, fuel switching to coal, and reduced demand). These are referred to as “main” energy 

substitutes in the OECM. However, there are other “minor” energy substitutes, some of which 

could be directly affected by programmatic decisions (e.g., biofuels) and others (e.g., wind and 

solar energy) that may also be affected in a minor way but that serve more generally as 

substitutes for oil and gas in the long run. Government, corporate, and consumer decisions to 

increase or decrease generation capacity for the latter will affect demand for oil and gas overall 

and thus for OCS oil and gas as well over time. This chapter will discuss the full range of energy 

sources that may potentially replace OCS production in future decades and provide a qualitative 

discussion of their environmental and social costs, recognizing that all energy sources have 

externalities.

2.1 OVERVIEW OF ENERGY SERVICES

This section presents an overview of energy sources of interest to BOEM in analyzing the 

potential impacts associated with a non-OCS lease scenario (under the No Action Alternative). 

Energy source substitutes for OCS oil and gas production include (1) onshore oil and gas 

production, (2) imports of foreign-produced oil and gas, (3) coal production, (4) biofuels, 

(5) biomass, (6) geothermal, (7) hydroelectric, (8) municipal waste, (9) nuclear, (10) other 

natural gas (synthetic gas, coke oven gas, refinery gas, and biomass gas), (10) other oil (liquids 

from gas and coal), (11) solar (both concentrated resources and photovoltaic), and (12) wind 

(both onshore and offshore). As with OCS oil and gas production, each energy source yields 

environmental and social costs. A qualitative discussion of these costs is provided in Section 2.3 

of this document.

The Annual Energy Outlook 2015 (EIA 2015; referred to hereafter as AEO2015) serves as our 

primary reference for the energy sources that could serve as substitutes for new oil and gas 

production on the OCS through 2040. It should be noted that the AEO2015 projections are 
4

based generally on federal, state, and local laws and regulations in effect as of the end of October 

2014. The potential impacts of pending or proposed legislation, regulations, and standards are 

not reflected in the projections [for example, the U.S. Environmental Protection Agency’s 

(EPA’s) proposed Clean Power Plan]. In certain situations, however, where it is clear that a law 

or a regulation will take effect shortly after the publication of AEO2015, it may be considered in 

the projection.

U.S. energy consumption is expected to grow at a modest rate over the AEO2015 projection 

period, averaging 0.3% per year from 2013 through 2040 in the Reference case. A marginal 

decrease in energy consumption in the transportation sector contrasts with growth in most other 

sectors. Declines in energy consumption tend to result from the adoption of more energyefficient technologies and existing policies that promote increased energy efficiency.

The following briefly defines each energy source.

Onshore Oil and Gas Production is crude oil and natural gas supplied from resources in the 

lower 48 states. Crude oil supply includes lease condensate, and natural gas is differentiated 

between non-associated gas and associated-dissolved gas. Non-associated natural gas is gas in a 

reservoir that is not in contact with significant quantities of crude oil. Associated-dissolved 

natural gas consists of the combined volume of natural gas that occurs in crude oil reservoirs 

either as free gas (associated) or as gas in solution with crude oil (dissolved).

Foreign Oil and Gas Imports represent crude oil and natural gas imported into the United States

from foreign countries.

Fuel Switching to Coal reflects increases in coal production to replace OCS oil and gas 

production. It is important to note that coal is only a viable substitute for oil and gas for some 

end-use sectors (e.g., electricity generation).

Biofuels are liquid fuels and blending components produced from biomass (plant) feedstocks and 

are primarily used as energy for the transportation sector. Biodiesel, which is typically made 

from soybean, canola, or other vegetable oils; animal fats; or recycled grease, is a biofuel that 

can serve as a substitute for petroleum-derived diesel fuel or distillate fuel oil. Ethanol is a 

biofuel that is used principally for blending in low concentrations with motor gasoline as an

oxygenate or octane enhancer. In high concentrations, ethanol is used to fuel alternative-fuel 

vehicles specially designed for its use.

Biomass is an organic non-fossil material of biological origin that constitutes a renewable energy 

source. Two major examples of biomass are wood/wood-derived fuels and biomass waste. 

Wood and products derived from wood that are used as fuel include round wood (cord wood), 

limb wood, wood chips, bark, sawdust, forest residues, charcoal, paper pellets, railroad ties, 

utility poles, black liquor, red liquor, sludge wood, spent sulfite liquor, and other wood-based 

solids and liquids. Biomass waste is organic non-fossil material of biological origin that is a 

byproduct or a discarded product (e.g., agricultural crop byproducts).
5

Geothermal represents energy obtained from hot water or steam extracted from geothermal 

reservoirs in the earth’s crust that is used for geothermal heat pumps, water heating, or electricity 

generation.

Hydroelectric energy uses the kinetic energy of falling water to produce electricity. There are 

two categories of hydroelectric energy—pumped storage is hydroelectric power that is generated 

during peak load periods by using water previously pumped into an elevated storage reservoir 

during off-peak periods, while conventional is hydroelectric power generated from flowing water

that is not created by hydroelectric pumped storage.

Municipal Waste refers to energy produced from any organic matter, including sewage, sewage 

sludge, and industrial or commercial waste, and mixtures of such matter and inorganic refuse 

from any publicly or privately operated municipal waste collection or similar disposal system. 

Municipal waste can be further categorized as either biogenic waste (waste originating from the 

biological processes of living organisms) or non-biogenic waste (consisting of plastic, rubber, or 

other material of non-biological origin).

Nuclear energy consists of the thermal energy released from the fission of nuclear fuel in a 

reactor to generate electricity. A reactor includes fuel (fissile material), moderating material to 

control the rate of fission, a heavy-walled pressure vessel to house reactor components, shielding 

to protect personnel, a system to conduct heat away from the reactor, and instrumentation for 

monitoring and controlling the reactor's systems.

Other Natural Gas includes synthetic gas and supplemental gaseous fuels. Synthetic gas is a 

manufactured product, chemically similar to natural gas, resulting from the conversion or 

reforming of hydrocarbons. Synthetic gas can easily be substituted for or interchanged with 

pipeline-quality natural gas. Supplemental gaseous fuels are gaseous substances introduced into 

or commingled with natural gas that increase the volume of gas available for disposition, and 

include, but are not limited to, refinery gas, coke oven gas, manufactured gas, and biomass gas. 

Refinery gas, which is used as a refinery fuel and a petrochemical feedstock, is produced in 

refineries by distillation, cracking, reforming, and other processes. Coke oven gas is produced 

by the carbonization of coal in a coke oven at temperatures in excess of 1,000° C. Manufactured 

gas is obtained by destructive distillation of coal or by the thermal decomposition of oil, or by 

the reaction of steam passing through a bed of heated coal or coke. Biomass gas is a medium 

Btu gas containing methane and carbon dioxide that results from the action of microorganisms 

on organic materials such as those in a landfill.

Other Oil includes stock withdrawals (e.g., from the Strategic Petroleum Reserve) and liquids 

obtained from coal and gas. Coal liquefaction is a chemical process that converts coal into liquid 

hydrocarbons, including synthetic crude oil. Gas-to-liquids is a process that combines the carbon 

and hydrogen elements in natural gas molecules to make synthetic liquid petroleum products.

Solar converts the radiant energy of the sun into other forms of energy, such as heat or 

electricity. There are two categories of solar energy: thermal energy and PV. Solar thermal 

energy refers to the conversion of the sun’s radiant energy into other forms of energy, such as 

heat. Solar thermal energy generally refers to the optical concentration of solar rays through an 

arrangement of mirrors to generate a high temperature working fluid (often piped to a central 
6

engine). Photovoltaic (PV) solar energy uses a photovoltaic cell (PVC) to convert sunlight into 

electricity (direct current). A PVC is an electronic device consisting of layers of semiconductor 

materials fabricated to form a junction (adjacent layers of materials with different electronic 

characteristics) and electrical contacts.

Wind energy is kinetic energy present in wind motion that can be converted to mechanical 

energy for driving pumps, mills, and electric power generators.

The following sections are organized by sector (residential, commercial, industrial, and 

transportation) and include an evaluation of the data drawn from AEO2015 as they relate to 

energy use in each sector. The primary energy sources included in this discussion are coal, 

electricity, natural gas, petroleum, and renewables. The discussion by sector is followed by a 

section on the energy sources responsible for electricity generation, which include coal, natural 

gas, nuclear, renewables, and petroleum.

2.1.1 Oil and Gas Uses and Alternatives: Residential Sector

Table 1 presents data on the use of energy in the residential sector. Natural gas is predominantly 

used for space and water heating, cooking, and wet cleaning. Fuel oil, which is not used much in 

this sector, is primarily used for space and water heating.

Alternatives to these uses of natural gas and oil include liquefied petroleum gas (LPG), 

renewables (used directly), and electricity. Energy use in this sector is expected to decline in 

part because many homeowners are implementing efficiency upgrades to decrease the demand 

for space heating, which can be viewed as a substitute for the use of oil and gas. These 

efficiency upgrades refer to efficiency improvements in the construction of buildings to retain 

heat, rather than the efficiency of the heating equipment itself. Measures such as adding 

insulation, sealing leaks, and installing more efficient windows reduce the energy required to 

maintain a desired temperature. It is also expected that over the long term consumers will 

replace oil- and gas-fired equipment and appliances with electric-powered units, which are 

readily available, widely used, and have a lower capital cost.
7

Table 1. 2013 residential energy end-use splits, by fuel type (quadrillion Btu)

Natural Gas Fuel Oil LPG Other Fuel (1) Renewable Energy (2) Electric (3)

Space Heating (4) 3.32 0.44 0.30 0.01 0.58 1.63

Water Heating 1.20 0.05 0.06 1.35

Cooking 0.21 0.03 0.3

Wet Cleaning (7) 0.05 0.98

Space Cooling 0.02 2.03

Other (8) 0.25 0.01 0.04 3.66

Lighting 1.81

Refrigeration (5) 1.35

Electronics (6) 1.01

Computers 0.37

Total 5.05 0.50 0.43 0.01 0.58 14.54

Notes: (1) Kerosene assumed attributable to space heating. (2) Comprised of wood space heating. (3) 

Site-to-source electricity conversion (due to generation and transmission losses) = 3.075. (4) Includes 

furnace fans. (5) Includes refrigerators and freezers. (6) Includes television. (7) Includes clothes 

washers, dryers, and dishwashers. (8) Includes small electric devices, heating elements, motors, 

swimming pool heaters, hot tub heaters, outdoor grills, and natural gas outdoor lighting.

Source: EIA 2015

The most likely renewable energy source that will serve as a direct substitute for oil and gas 

(versus as a fuel for power plants) is a solar water heater. Solar water heaters usually have a gas 

or electric backup to provide supplemental heating on cloudy days, in cold seasons, or in highdemand hours. As a result, they do not eliminate the use of gas or electricity entirely. Another 

renewable energy source is a geothermal heat pump, which uses 25% to 50% less energy than 

conventional heating and cooling systems (DOE 2012b). However, high installation costs for 

underground or waterborne heat exchanger piping have limited the use of geothermal heat 

pumps. They are generally installed in new construction homes.

As shown in Table 2, electricity represents the largest energy source for the residential 

sectorfollowed by natural gas. Electricity is the only energy source expected to grow in this 

sector.

Table 2. AEO2015 residential energy source projections

Sector Source

Energy (quadrillion 

Btu/year) %Total 2013 %Total 2040 Annual 

Growth 2013 2040

Residential Electricity 14.54 15.75 68.9% 75.4% 0.5%

Residential Natural Gas 5.05 4.31 23.9% 20.6% -0.6%

Residential Petroleum 0.94 0.49 4.4% 2.3% -2.4%

Residential Renewables 0.58 0.35 2.7% 1.7% -1.8%

Residential-Total 21.11 20.90

Source: EIA 2015, Table A2
8

2.1.2 Oil and Gas Uses and Alternatives: Commercial Sector

Table 3 presents how energy is used in the commercial sector. Natural gas is predominantly 

used for space and water heating, space cooling, and combined heat and power (shown in the 

other category). Fuel oil, which is not used much in this sector is primarily used for space and 

water heating. Alternatives to these uses of natural gas and oil include renewables (used 

directly) and electricity. The main renewable that can substitute for oil and gas in this sector is 

biomass with solar water heating, solar PV, and wind representing much smaller fractions of 

potential substitutes. With regard to potential energy substitutes, this sector is very similar to the 

residential sector. A more detailed discussion of the substitutes is presented in the residential 

sector.

Electricity and natural gas provide more than 95% of the energy used by the commercial sector. 

As shown in Table 4, both of these energy sources are expected to grow, with electricity growing 

more on both a percentage and absolute basis. As more efficiency standards are implemented, 

future energy use for heating and cooling will be reduced.

Table 3. 2013 commercial energy end-use splits, by fuel type (quadrillion Btu)

Natural Gas Fuel Oil (1) Other Fuel (2) Renewable Energy (3) Electric (4)

Space Heating 1.86 0.15 0.26 0.12 0.49

Water Heating 0.54 0.02 0.28

Other (5) 0.74 0.20 5.14

Cooking 0.20 0.06

Space Cooling 0.04 1.50

Lighting 2.79

Ventilation 1.59

Refrigeration 1.13

Electronics 0.67

Computers 0.34

Total 3.37 0.37 0.26 0.12 13.99

Notes: (1) Includes distillate fuel oil. (2) Includes residual oil, propane, coal motor gasoline and 

kerosene. (3) Comprised of biomass. (4) Includes all site electricity and electricity loss due to generation 

and transmission losses. (5) Includes service station equipment, ATMs, telecommunications equipment, 

medical equipment, pumps, emergency electric generators, combined heat and power in commercial 

buildings, and manufacturing performed in commercial buildings.

Source: EIA 2015
9

Table 4. AEO2015 commercial energy source projections

Sector Source

Energy (quadrillion Btu/year)

%Total 

2013

%Total 

2040

Annual 

Growth 2013 2040

Commercial Electricity 13.99 16.46 77.3% 78.7% 0.8%

Commercial Natural Gas 3.37 3.71 18.6% 17.7% 0.4%

Commercial Petroleum/Other Fuel 0.63 0.58 3.5% 3.0% -0.1%

Commercial Renewables 0.12 0.12 0.7% 0.6% 0.0%

Commercial-Total 18.10 20.92

Source: EIA 2015, Table A2

2.1.3 Oil and Gas Uses and Alternatives: Industrial Sector

Energy consumption in the industrial sector is expected to grow faster than in all other sectors, 

according to AEO2015. As shown in Table 5, electricity, natural gas, and petroleum all 

contribute similar amounts of energy to this sector. A large portion of both consumption and 

anticipated growth is in the bulk chemicals industry, which is able to take advantage of increased 

domestic supply of natural gas, hydrocarbon gas liquids, and petrochemical feedstocks. The U.S. 

bulk chemical industry represents approximately 60% of the energy use (EIA 2015). While 

some energy is used in the bulk chemical manufacturing process for heat and power, most energy 

in that industry is used as feedstocks, or raw materials used in the manufacture of chemicals.

Table 5. AEO2015 industrial sector energy source projections

Sector Source Energy (quadrillion Btu/year) %Total 

2013

%Total 

2040

Annual 

2013 2040 Growth

Industrial Electricity 9.98 11.97 32.0% 31.8% 0.9%

Industrial Natural Gas 9.14 11.19 29.3% 29.7% 0.8%

Industrial Petroleum 8.4 10.59 26.9% 28.1% 0.9%

Industrial Coal 1.48 1.44 4.7% 3.8% -0.1%

Industrial Renewables 1.48 1.63 4.7% 4.3% 0.4%

Industrial Biofuels 0.72 0.86 2.3% 2.3% 0.6%

Industrial-Total 31.20 37.68

Source: EIA 2015, Table A2

The mix of industrial energy sources is expected to stay relatively constant from 2013 through 

2040, reflecting the limited ability to switch from other fuels to natural gas in most industries. 

Consumption of renewable fuels increases from 2013 to 2040, although as a percentage of total 

energy consumption, renewable fuels remain a small fraction of total energy consumption in 

2040. The paper industry remains the predominant user of renewable energy, accounting for 

roughly 66% of the energy consumed for heat and power in that industry (EIA 2015).

The main substitutes for oil and gas include biofuels, renewables, and electricity. Many facilities 

may switch from oil to gas, but we do not evaluate this possibility here since our focus is on 
10

shifts from oil and gas to other fuel sources. There is also the possibility of recycled plastic and 

biobased chemicals being used as substitutes for plastic manufacturing.

2.1.4 Oil and Gas Uses and Alternatives: Transportation Sector

As shown in Table 6, petroleum products are predominantly used in the transportation sector and 

make up the majority of the energy used in this sector. The only significant substitutes for 

petroleum products in this sector are natural gas and more efficient vehicles. Greater fuel 

efficiency should be achieved in all of the transportation modes. In the near term, efficiency of 

the U.S. vehicle fleet is likely to be determined more by stricter regulatory requirements than by 

a demand from consumers for more efficient vehicles. The corporate average fuel economy 

(CAFE) standards will continue to require cars and trucks to be more fuel efficient over the next 

several decades. Gasoline-only vehicles, excluding hybridization or flex-fuel capabilities, 

represent about 46% of the total new sales in 2040. However, alternative fuel vehicles and 

vehicles with hybrid technologies show a significant growth in the market: gasoline vehicles 

with micro hybrid systems represent about 33%, E85 flexible-fuel vehicles (FFVs) 10%, full 

hybrid electric vehicles 5%, diesel vehicles 4%, and plug-in hybrid vehicles and electric vehicles 

2% (EIA 2015).

The increased use of compressed natural gas and liquefied natural gas in vehicles represents 

close to 3% of the total energy use in the transportation sector.

Table 6. AEO2015 transportation sector energy source projections

Sector Source

Energy 

(quadrillion 

Btu/year)

%Total 

2013

%Total 

2040

Annual 

Growth

2013 2040

Transportation Petroleum 26 24.76 96.3% 93.0% -0.2%

Transportation Pipeline Fuel Natural Gas 0.88 0.96 3.3% 3.6% 0.3%

Transportation Electricity 0.07 0.18 0.3% 0.7% 3.4%

Transportation Compressed/Liquefied 

Natural Gas 0.05 0.71 0.2% 2.7% 10.3%

Transportation Liquid Hydrogen 0 0 0.0% 0.0% 0.0%

Transportation-Total 27.00 26.61

Source: EIA 2015, Table A2

2.1.5 Oil and Gas Uses and Alternatives: Electricity

Table 7 presents the fuels used to produce electricity and the amount of fuel used in 2013 and 

projected to be used in 2040. Petroleum, the only fuel projected to decrease in usage, is not used 

in a significant amount in fueling power plants. The absolute value of this decrease is 

insignificant compared to the use of petroleum in the transportation and industrial sectors. 

Generation from coal-fired plants and nuclear energy sources remains fairly flat into 2040.

Renewables have the highest projected growth in terms of percentage and have a similar absolute 

growth as natural gas. Renewables will be an important substitute for natural gas, but both 
11

renewables and natural gas will make up most of the capacity decrease resulting from the slower 

growth in the coal and nuclear industries. Climate change and energy policy could have a 

significant effect on shaping the electricity sector; Table 7 assumes that current laws and 

regulations affecting the energy sector remain unchanged through 2040.

Table 7. AEO2015 electricity fuel projections

Fuel

Energy-billion kilowatt-hours % Total 

2013

% Total 

2040 Annual Growth

2013 2040

Coal 1586 1702 39.0% 33.7% 0.30%

Natural Gas 1118 1569 27.5% 31.0% 1.30%

Renewables 530 909 13.0% 18.0% 2.00%

Nuclear 789 833 19.4% 16.5% 0.20%

Other 20 25 0.5% 0.5% 0.80%

Petroleum 27 18 0.7% 0.4% -1.60%

Total 4070 5056

Source: EIA 2015, Table A2

Tables 1–5 do not identify the specific renewables that are expected to contribute to the increase 

in capacity. AEO2015 makes the following comment regarding renewable growth and provides 

additional details on renewables and their growth projections.

Solar photovoltaic (PV) technology is the fastest-growing energy source for 

renewable generation, at an annual average rate of 6.8%. Wind energy accounts 

for the largest absolute increase in renewable generation and for 40.0% of the 

growth in renewable generation from 2013 to 2038, displacing hydropower and 

becoming the largest source of renewable generation by 2040. Geothermal 

generation grows at an average annual rate of about 5.5% over the projection 

period, but because geothermal resources are concentrated geographically, the 

growth is limited to the western United States. Biomass generation increases by 

an average of 3.1%/year, led by cofiring at existing coal plants through about 

2030. After 2030, new dedicated biomass plants account for most of the growth 

in generation from biomass energy sources. 

It should be noted that onshore wind energy accounts for the largest share of the projected wind 

energy increase.

2.2 CURRENT AND FUTURE PRODUCTION OF ENERGY SOURCES

2.2.1 Current and Future Energy Use

Section 2 presents more detailed information on each of the potential energy substitutes, 

including generation amounts and U.S. locations where these energy sources are generated.

Figure 1 presents the percentage of 2013 energy consumption in the United States by energy 

source, as well as projections of energy consumption through 2040 (EIA 2015). This figure 
12

indicates that there is little change in the percentage of total national energy production for liquid 

biofuels, nuclear, and coal from 2013 to 2040. Renewables increase from 8% to 10%, natural 

gas increases from 27% to 29%, and petroleum and other liquids decreases from 36% to 33%.

Source: EIA 2015, p. 24, Figure 31

Figure 1. Primary energy consumption by fuel in the reference case, 

1980–2040 (quadrillion Btu)

2.2.2 Renewable Energy Current and Future Use

Electricity generation from both wind and solar energy has seen significant increases over the 

last several years, while production of other renewable energy sources has remained relatively 

stable. Figure 2 shows electricity generation by renewable fuel in the AEO2015 Reference case, 

2000–2040, indicating that renewables increase to 18% of the total fuel source in 2040 and in 

fact surpass nuclear energy. Figure 2 shows the renewable electricity generation by fuel type per 

the AEO2015 Reference case. This figure shows the continued growth of wind and solar, along 

with an increase in geothermal as an energy source. Hydropower and biomass are projected to 

contribute similar amounts of energy in 2040 as in 2013.
13

Source: EIA 2015, p. 25, Figure 34

Figure 2. Renewable electricity by fuel type in the Reference case, 

2000–2040 (billion kilowatt hours)

Figure 3 displays the historical trend in energy generation from biomass sources, which shows 

relatively steady increases in electricity production from landfill gas/municipal solid waste and 

other biomass energy sources over the last decade, while production from wood and woodderived fuels was fairly constant. (Note that the significant reduction in landfill gas and 

municipal solid waste between 2000 to 2001 is an artifact of a classification change—beginning 

in 2001, non-biogenic municipal solid waste and tire-derived fuels were reclassified from waste 

biopower to non-renewable energy sources.)
14

 Source: NREL 2014a, p. 78

Figure 3. Electricity generation by type of biomass energy source

Table 8 shows the generation amount of each of the renewables along with the percentage of 

total energy produced. By 2040, wind exceeds conventional hydroelectric power and solar and 

wood/other biomass both represent 1% of the total energy produced in the United States.

Table 8. Renewable generation amount and percentage of total energy produced

Energy Source Reference Case 2013 Reference Case 2025 Reference Case 2040

GenerationgW% of Energy 

Produced

GenerationgW% of Energy 

Produced

GenerationgW% of Energy 

Produced

Conventional 

hydroelectric power 275.2 4.4% 294.2 3.7% 297.0 3.3%

Geothermal 15.6 0.2% 38.5 0.5% 69.6 0.8%

Municipal waste 20.6 0.3% 23.9 0.3% 23.8 0.3%

Wood and other 

biomass 37.6 0.6% 65.5 0.8% 89.3 1.0%

Solar 11.2 0.2% 58.7 0.7% 110.1 1.2%

Wind 141.0 2.3% 234.9 3.0% 319.3 3.5%

Total 501.2 715.6 909.1

Source: EIA 2015, Table A16
15

The International Renewable Energy Agency (IRENA) recently produced an alternative forecast 

for renewable energy in the United States (IRENA 2015).2 Unlike the AEO2015 business-asusual projections, IRENA forecasts the effects of potential future new investments and policies 

targeting support for renewable energy. According to IRENA’s “REmap” analysis, the United 

States could reach a 27% renewable energy share by 2030 if the realizable potential of all the 

analyzed renewable energy technologies is implemented.

Table 9 presents a summary comparing the REmap analysis energy production projections with 

the Annual Energy Outlook 2013 (current version at the time of the REmap work) (EIA 2003, or 

AEO2013) Reference case projections. Under REmap, wind and biomass accounts for nearly 

three-quarters of the total renewable energy use in 2030, and wind accounts for over two-thirds 

of total power sector energy. The remainder of REmap’s 2030 energy production is equally 

divided between biomass, solar, and geothermal.

The REmap analysis also projects total biomass use to increase three-fold from 2010, with 

biomass accounting for more than half of total renewable energy use in 2030. The analysis 

concentrates additional biomass use in heating markets (buildings and industry). Although 

biomass may be the largest source of renewable energy in REmap 2030, wind, solar, and 

geothermal energy show the highest growth rates.

 

2

IRENA is an intergovernmental organization that supports countries in their transition to a sustainable 

energy future. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, 

including bioenergy, geothermal, hydropower, ocean, solar, and wind energy, in the pursuit of sustainable 

development, energy access, energy security, and low-carbon economic growth and prosperity.
16

Table 9. Comparison of baseline, reference case, and REmap analysis energy supply and 

demand

Energy Source 2010 Reference 2030 REmap 2030 

Total primary energy supply (PJ/year)

Coal 21,045 20,401 8,469 

Oil 31,365 29,360 26,618 

Gas 22,862 25,575 20,384 

Nuclear 8,905 10,090 7,828 

Hydroelectric 936 1,059 1,550 

Modern bioenergy (incl. biogas, biofuels) 4,183 6,609 12,651 

Solar thermal 100 137 675 

Solar PV 13 155 847 

Wind 344 625 4,153 

Geothermal 551 1,537 2,955 

Total 90,303 95,547 86,124 

Total final energy consumption (PJ/year)

Coal 1,468 1,458 1,458 

Oil 30,956 29,040 26,297 

Gas 14,700 16,301 11,219 

Modern biomass (solid) 2,005 2,535 5,855 

Modern biomass (liquid) 1,127 1,567 3,1 08 

Solar thermal 96 126 996 

Geothermal 11 25 25 

Other renewables 0 0 261 

Electricity 13,510 15,392 16,234 

District Heat 278 234 234 

Total 64,150 66,678 65,688 

Gross electricity generation (TWh/year)

Coal 1,847 1,765 638 

Natural gas 969 1,377 1,361 

Oil 37 18 18 

Nuclear 806 914 707 

Hydroelectric 260 294 430 

Biomass 95 238 490 

Solar PV 4 43 235 

Concentrated Solar Power 1 3 8 

Wind onshore 96 164 994 

Wind offshore 0 9 160 

Geothermal 15 42 183 

Total 4,130 4,868 5,224

It is important to note that there are geographic challenges associated with connecting energy 

demand with renewable energy supplies. To demonstrate the potential challenge of meeting 

future energy demands with non-fossil fuels, the following summarizes information on the 

geographic distribution of minor energy source resources/markets. This information is largely a 

product of geographic energy analyses first performed in 2012 by the National Renewable 

Energy Laboratory (NREL) (NREL 2012a).
17

Biofuels

NREL used six market indicators to evaluate the existing and potential future regional market 

strength for biodiesel (blends of B20 and higher) and E85 ethanol (NREL 2014b). In the NREL 

analysis, each market indicator was mapped, combined with the others, and evaluated and 

adjusted by industry experts. The analysis suggested the weight the market indicators should be 

given, with the proximity of fueling stations being the most important indicator, followed by 

alternative fuel vehicle density, gasoline prices, state incentives, nearby resources, and, finally, 

environmental benefits.

Biodiesel

As indicated by Figure 4, markets for biodiesel appear throughout the Midwest, centered on the 

Chicago area. This is where the majority of biodiesel production occurs, providing both low

shipping costs and a pro-biodiesel population. Urban areas and linking highways from Atlanta to 

Boston also show strong market potential because of high freight traffic and diesel registrations 

throughout the greater region. Memphis, Houston, Dallas, Denver, and Phoenix appear as 

additional areas of promising market potential due to high diesel prices and well-connected 

corridors of high freight tonnage. Wyoming, Utah, and Idaho have the weakest biodiesel 

markets despite the activity in Yellowstone National Park and Salt Lake City, and the existence 

of interstate highways connecting Idaho Falls to Boise.

Source: NREL 2014b, p. 12, Figure 4

Figure 4. Geographic market potential for biodiesel
18

Geographic areas identified by NREL with unexpected biodiesel market strength include North 

Dakota and the Oklahoma panhandle, where biodiesel refineries and a high number of state 

incentives push market ratings into high categories.

North Carolina has many pro-biodiesel incentives and a disproportionate number of B20 

refueling stations (18% of the nation’s total, despite only having 3% of the total U.S. 

population). These refueling stations are well-dispersed throughout the state. Pennsylvania 

shows great promise due to high gasoline prices, freight tonnage, diesel vehicle registrations, and 

a number of biodiesel refineries. Hawaii is strong as well due to very high gasoline prices, many 

state incentives, a high density of diesel registrations, and seven B20 stations. However, the lack 

of biodiesel supply is currently overriding these indicators of high demand. The Appalachian 

region has poor biodiesel market potential even though it is surrounded by relatively strong 

biodiesel markets.

Ethanol

The NREL analysis found that ethanol markets are most robust in the Midwest (see Figure 5). 

Outside the Midwest, the urban areas surrounding the San Francisco Bay (including 

Sacramento), Los Angeles, Denver, New York City, Rochester-Buffalo, Houston, Miami, and 

Dallas have large markets (listed in order of the size of the geographic area that received scores 

in the highest quintile). The weakest ethanol markets are found in the region comprising 

Wyoming, Utah, Idaho, Nevada, and Montana. These states have very few pro-ethanol 

incentives, low FFV density, few fueling stations, and only one ethanol refinery.
19

 Source: NREL 2014b, p. 13, Figure 5

Figure 5. Geographic market potential for ethanol

Following its initial analysis, NREL made several changes to the prioritization of ethanol market 

indicators. Gasoline price was treated as less important for spurring adoption of FFVs than for 

other alternative fuel vehicles. The majority of FFVs on U.S. roads are owned by individual 

consumers, who tend to prioritize performance and design over life-cycle cost much more than 

fleet owners. Furthermore, ethanol retailers appear to peg the price of E85 to that of gasoline, 

which results in high gasoline costs not necessarily translating to substantial fuel savings when 

using E85. Therefore, the current pricing strategy of E85 is not providing as much incentive to 

use E85 as other fuels that have their price based on the feedstock and production cost of the 

fuel. For ethanol, nearby resources were weighted more heavily than all other factors, excepting 

existing E85 fueling infrastructure. More so for ethanol than for other fuels, NREL concluded 

that there are strong social, economic, and cultural ties to the feedstock and fuel production 

plants. Ethanol plants are located near corn-based economies, where farmers feel the positive 

effects that corn-based ethanol production has on corn prices, and where a great deal of farm 

work requires light-duty trucks, which are disproportionately FFVs.
20

Biomass

As indicated in Figure 6, the regions that show with the most biomass potential are in the 

Midwest for crops, and the West/South for forest residues.

 Source: NREL 2014c

Figure 6. Geographic market potential for biomass energy
21

Geothermal

Geothermal resources are primarily centered in the western United States. (see Figure 7). The 

Rocky Mountain States, and the Great Basin particularly, contain the most favorable resources. 

It should be noted that, especially in western states, a considerable portion of geothermal 

resources occur on protected land.

Source: NREL 2009

Figure 7. Geographic market potential for geothermal energy

Hydroelectric

Hydropower is currently the largest source of renewable power generation; however, it is 

expected to be overtaken by wind power due to the limited potential for new large-scale 

hydroelectric power plants. Figure 8 displays the estimated capacity for the top non-powered 

dams in the United States. Additional potential capacity can be assumed to be available from 

retrofitting and upgrading turbines at existing hydroelectric dams.
22

Source: NREL no date

Figure 8. Top non-powered dams with hydroelectric energy potential

Municipal Waste 

Approximately one quarter of the currently operating landfill gas projects are using the energy 

produced to directly offset the use of other fuels such as natural gas, coal, or fuel oil (EPA 

2015a). Energy production from landfill gas can be achieved through the use of various 

technologies, making it an option for large-scale as well as small-scale applications. Currently, 

the ability for landfill gas to be converted into other types of fuels (liquefied natural gas, high- or 

medium-Btu fuel, or methanol) is under investigation. Figure 9 gives the number of operational 

landfill gas projects as well as the number of identified candidate landfills for future projects in 

each state as of March 2015.
23

 Source: EPA 2015b

Figure 9. Operational landfill gas projects and candidate landfills for future 

landfill gas projects by state

2.2.3 Nuclear Energy Current and Future Use

The development of new nuclear power plants has been significantly impacted by “cheaper” 

natural gas a result of unconventional drilling as well as the nuclear incident in Fukushima, 

Japan. There have been 18 combined license applications for new nuclear plants in the United 

States, with seven of the applications having been suspended; six under review, two withdrawn, 

and three issued (NRC 2015). The facilities under review or that have been issued licenses are 

all located in the eastern United States.
24

2.2.4 Other Natural Gas Current and Future Use

NREL has developed a map of the potential county-level generation of methane from biomass 

gas resources. This map, which is presented as Figure 10, generally indicates the greatest 

resources in heavily populated metropolitan areas and areas with substantial livestock 

production.

 Source: NREL 2014d

Figure 10. Geographic market potential for biomass gas

2.2.5 Location of Solar Energy Facilities/Opportunities in the United States

NREL has produced two maps characterizing the geographic distribution of solar resources. 

Figure 11 presents Concentrating Solar Resources (CSR), while Figure 12 displays PV resources. 

Technical potential for CSR exists predominately in the Southwest. This pattern holds for the 

potential for PV solar energy, although the NREL analysis indicates much less of a decline from 

the Southwest region’s potential to the South Central and Southeast regions than indicted by the 

potential for CSR.
25

 Source: NREL 2012b

Figure 11. Geographic market potential for concentrating solar resources
26

 Source: NREL 2012c

Figure 12. Geographic market potential for PV solar resources

2.2.6 Location of wind Energy Facilities in the United States

The potential for onshore wind energy is greatest in the western and central Great Plains and 

lowest in the southeastern United States (see Figure 13). Areas in the Midwest routinely average 

wind speeds of 8.5 meters per second at a height of 80 meters. The ability to deliver electricity 

to consumers from these high resource areas, which are often far from consumption centers, can 

prove a challenge given the existing grid infrastructure. Technical potential for offshore wind 

power is present in significant quantities in all offshore regions of the United States. Wind 

speeds off the Atlantic Coast and in the Gulf of Mexico are lower than they are off the Pacific 

Coast, but the presence of shallower waters there makes these regions more attractive for 

development.
27

 Source: NREL 2011

Figure 13. Geographic market potential for wind energy

2.3 ENVIRONMENTAL AND SOCIAL COSTS OF ENERGY SOURCES

2.3.1 Overview of Environmental and Social Costs of Energy Sources

This section focuses on the potential environmental costs associated with the primary alternatives 

to oil and gas. The OECM considers “main” energy market substitutions (i.e., increased imports 

and onshore production of oil and natural gas, fuel switching to coal, and reduced demand), but 

multiple other “minor” energy substitutes exist (e.g., nuclear, wind, and solar electricity; 

biofuels). This section provides a qualitative discussion of the environmental and social costs of 

both the main energy substitutes not already monetized in the OECM and minor energy 

substitutes. The OECM addresses the following environmental and social costs:

 Recreation

 Air quality

 Property values

 Subsistence use

 Commercial fishing
28

 Ecological effects

The purpose of this section is not to explore this subject in great detail. Rather, we make the 

point that negative as well as positive externalities (i.e., costs borne by society that are not 

reflected in a good’s price) can be attributed to all forms of energy production, and any complete 

consideration of alternatives would seek to take these costs into account. An exception could be 

made when increased energy efficiency, or simple conservation, are the oil or gas substitutes, as 

those actions often will result in decreased use of the energy resources that give rise to 

environmental costs.

The primary alternatives to the direct use of oil and gas across all sectors are biofuels and 

electricity production for heat or for stationary or mobile power, using non-hydrocarbon fuel 

sources (i.e., coal, fissionable materials, or renewable resources). All energy sources have 

externalities.

The following activities are assumed to be the most significant in terms of potential 

environmental and social costs not addressed in the OECM or associated with the minor energy 

sources: (1) waste management issues, in particular with the nuclear and coal industry; 

(2) health and safety issues with the mining of coal and uranium; (3) groundwater impacts 

potentially associated with onshore oil and gas production; (4) surface water impacts from spills 

at onshore energy-producing facilities; (5) the air quality impacts of incremental emissions 

associated with biofuels (air quality impacts from traditional energy sources are covered in 

OECM); (6) socioeconomic issues associated with the loss of land from mining or processing 

activities, as well as the impacts to real estate values near energy production facilities; 

(7) ecological and wildlife impacts associated with all onshore energy production and offshore 

renewable energy production; and (8) the spill impacts from onshore energy production.

2.3.2 Waste Management

Waste management issues are also a concern, with the biggest concern being associated with 

nuclear power and coal-fired power plants. The country has been struggling for decades to 

determine how the spent fuel from the nuclear power plants will be managed on a long-term 

basis. The U.S. Department of Energy (DOE) has spent roughly $12 billion on Yucca Mountain 

without a facility being constructed (NYT 2011). If a decision were made to proceed with 

construction of the facility, the total cost would be about $100 billion.

On December 22, 2008, the walls of a dam holding 1.1 billion gallons of coal ash crumbled, 

spilling the material into the town of Kingston, Tennessee, and creating the largest industrial spill 

in U.S. history. The ash (waste residuals from burning coal mixed with water) wiped out roads, 

crumpled docks, and destroyed homes. In excess of $1 billion has been spent to address this 

incident (USAToday 2013).

On February 2, 2014, a release of coal ash into the Dan River occurred at the Dan River Steam 

Station (Duke Energy) north of Eden, North Carolina. It is estimated that costs to remediate this 

spill will be roughly $15 million (HP 2015).
29

2.3.3 Mining Health and Safety

Both the coal and nuclear industries rely on a fuel source that is mined. Health and safety issues 

associated with these mining activities are discussed below.

The U.S. Department of Labor (DOL) has tracked fatalities associated with coal mining since 

1900 (DOL 2015). From 1900 through 1930, there were typically about 2,000 deaths per year 

associated with mining. From 1931 through 1948, the typical number of deaths had decreased to 

about 1,000 per year. From 1949 through 1984, the number had been reduced to the 

approximate range of 100 to 500 deaths per year. The annual fatalities have continued to 

decrease and have recently been in the range of 20 per year.

Research accumulated against coal has shown that human health impacts from coal emissions on 

miners, workers, and local communities are severe. The release of heavy metal and organic 

compounds pose major health risks. Among health risks are lung cancer, bronchitis, heart 

disease, and other health conditions.

The fuel for nuclear power plants, uranium, is also mined. Uranium mining is believed to be the 

cause of a statistically significant amount of lung cancers as a result of exposure of the miners to 

radon based on some epidemiological studies. While these studies are not conclusive, the 

industry has taken steps to improve ventilation and reduce the radon content in the mines.

2.3.4 Groundwater Impacts

Many onshore energy-producing activities have the potential to contaminate groundwater. 

Unconventional drilling for oil and gas, if not performed properly, has the potential to 

contaminate groundwater. Groundwater contamination can prevent the local community from 

using the groundwater for drinking and can cause other threats to human health and the 

environment if the groundwater is withdrawn and used or upon its discharge to a surface water. 

Groundwater contamination is one of the key items that will cause sites to become Superfund 

sites and require millions of dollars to remediate.

2.3.5 Surface Water Impacts

Surface water impacts are a specific concern for on-shore energy production. According to an 

EPA report released June 4, 2015 (EPA 2015c), groundwater withdrawals used for hydraulic 

fracturing that exceed the land’s natural recharge rates decrease water storage in aquifers and can 

potentially mobilize contaminants or allow the infiltration of lower quality water from the land 

surface. Additionally, a general decrease in groundwater being discharged to streams can also 

affect surface water quality. 

EPA (2015c) also characterized 151 spills due to hydraulic fracturing (fracking). In about 9%, or 

13, of those spills, fluids reached surface water. These spills have the potential to contaminate 

drinking water resources, possibly affecting human health. 
30

On November 2010, an estimated 6,300 to 57,000 gallons of Marcellus Shale produced water 

was illegally discharged at XTO Energy Inc.’s Marquardt pad and flowed into the Susquehanna 

River watershed. Although no impacts to water wells and springs were observed within one mile 

at the last sampling, produced water constituents could eventually reach drinking water sources 

through surface runoff or infiltration to the ground (EPA 2015c). 

Hydroelectric facilities can have major impacts on aquatic ecosystems if proper actions are not 

taken (e.g., fish ladders and intake screens). If these actions are not taken, fish and other 

organisms can be injured and killed by turbine blades. In addition to direct contact with the 

turbine blades, there can also be wildlife impacts both from the damned reservoirs and 

downstream from the facility. Reservoir water is usually more stagnant than normal river water 

and will therefore have higher than normal amounts of sediments and nutrients, which can 

cultivate an excess of algae and other aquatic weeds. These weeds can crowd out other river 

animal and plant life.

2.3.6 Air Quality Impacts

Air emissions can jeopardize a region’s ability to maintain or achieve attainment status, be 

harmful to the health of the local population, increase greenhouse gas emissions, and also present 

a safety hazard (e.g., release of methane into confined spaces). From a life-cycle perspective, all 

of the energy sources will contribute air emissions, with most of the renewables having

negligible to no air emissions during operations and coal having the greatest amount of air 

emissions during its life-cycle. In just one year, 50,000 U.S. deaths can be attributed to air 

pollution from coal-fired power generation, while death counts reach over 200,000 per year 

globally (Flannery and Stanley 2014).

With nuclear power, small amounts of radioactivity are released, including small quantities of 

radioactive gases (krypton-85, xenon-13, and iodine-131). These gases may be detectible but are 

never at harmful levels (WNA 2013).

Contributing significantly more to pollution, fracking emits unhealthy levels of smog and toxic 

air contaminants. Exposure to such pollutants can cause eye, nose, and throat irritation, 

respiratory illnesses, central nervous system damage, birth defects, cancer, or premature death. 

Preliminary results from a study in Pennsylvania, for example, show impacts among newborns 

that could be linked to air pollution such as increases in low birth weight. Additionally, 

researchers who looked at air pollution levels near fracking sites in Colorado found an increase 

in chronic and sub-chronic effects stemming mainly from oil and gas pollutants which have the 

capability to harm the respiratory and neurological system, leading to symptoms like shortness of 

breath, nosebleeds, headaches, dizziness, and chest tightness (NRDC 2014).

One of the renewables that has the potential to impact air quality is biofuels. Most studies have 

found that producing first-generation biofuels from current feedstocks results in emission 

reductions in the range of 20%–60% relative to fossil fuels, provided the most efficient systems 

are used and carbon releases deriving from land-use change are excluded (GF 2015). Brazil, 

which has extensive experience of producing ethanol from sugar cane, shows even greater 

reductions. Second-generation biofuels, although still insignificant at the commercial level, 
31

typically offer emission reductions between 70%–90%, compared with fossil diesel and petrol 

(excluding carbon releases related to land-use change).

2.3.7 Socioeconomic Impacts

A study performed in 2010 indicated that there can be a 3%–7% decrease in housing values for 

neighborhoods located within 2 miles of a power plant compared to neighborhoods with similar 

housing and demographic characteristics (Davis 2010). The report mentions some evidence that 

there are larger decreases from homes located within a mile of a plant.

Eastern Kentucky and its coal industry seem to pose a similar issue. According to the 

Appalachian Regional Commission, there is a relationship between coal-dependent economies 

and undiversified economies, fewer professional service employment position, and lower 

educational attainment. The disadvantages the Appalachian region of the United States have

long been associated with poor public health outcomes within the surrounding population, 

making the costs outweigh the benefits in the region (ARC/USDA 2010).

2.3.8 Ecological and Wildlife Impacts

One of the most mentioned wildlife impacts of power plants is associated with onshore wind 

turbines. A recent study in which researchers used 58 mortality estimates that met their criteria

estimates that between 140,000 and 328,000 birds die each year from collisions with monopole 

turbines, which now comprise the vast majority of U.S. wind turbines (Loss et al. 2013).

Another study concludes that about 368,000 fatalities for all bird species are caused annually by 

collisions with wind turbines (Erikson et al. 2014).

Wildlife impacts associated with onshore oil (pipelines) include fragmentation of land. 

Depending on scale, these constructions and installations may cause displacement of wildlife, 

along with deforestation and general distortion of the terrestrial landscape. Additionally, the 

discharge and disposal of wastes from onshore operation installations may harm the surrounding 

land and its habitats, resulting in death of fauna and flora. Spills associated with pipelines and 

onshore oil have the potential to destroy acres of land along with its inhabitants (Ramirez and 

Mosley 2015).

2.3.9 Onshore Spills

The largest onshore oil spill in U.S. history occurred on July 26, 2010. Enbridge’s pipeline 

ruptured and released nearly 3 million liters of tar sands diluted bitumen into a tributary of the 

Kalamazoo River in Michigan. Final costs of $1.04 billion include cleanup and remediation, 

along with a fine levied by the Pipeline and Hazardous Materials Safety Administration. 

Communities along the creek inlet and the river experienced sickness from the fumes that 

blanketed miles of intersecting wetlands and waterways. The spill contaminated 20 miles of the 

river and local drinking water supply, and more than 50 homes near the site were evacuated

(NWF 2010). 
32

Earlier, on June 12, 2010, 33,600 gallons of oil leaked from the Chevron Oil Co. pipeline on its 

way to the nearby refinery. Although the oil was stopped before it ran into the Great Salt Lake, 

approximately 200 birds were coated with oil (NWF 2010). 

Pipeline spills have also been known to cause casualties. In November of 2007, two people were 

killed, seven injured, and four homes were destroyed after 430,000 gallons of liquid propane 

were released in Carmichael, Mississippi from a ruptured pipeline. Additionally, 70 acres of 

woodland were devastated in the process (NWF 2010).

One of the energy sources that has been associated with spills is the unconventional drilling 

(fracking) of oil and gas. Roughly 865,000 gallons of oil spilled from a Tesoro Logistics 

pipeline in Tioga, North Dakota, in September 2013 (DESMOG 2013). The pipeline was 

carrying oil from a fracking operation to a rail facility. The estimate to clean up this spill was 

$4 million.

More recently, in January 2015, 3 million gallons of a brine from a fracking operation spilled in 

western North Dakota (PBS 2015). The leak reached the Missouri River and contaminated two 

creeks near Williston—Blacktail Creek and the Little Muddy River. The Little Muddy River 

empties into the Missouri River, one of the town’s sources of drinking water. There have been 

conflicting reports on the presence of any threats to human health and the environment from the 

spill, although it was the largest saltwater spill in North Dakota history.

2.3.10 Environmental and Social Impacts by Energy Source

The tables that follow summarize environmental and social costs into the following categories:

 Air impacts

 Geologic impacts

 Health and human safety impacts

 Land use impacts

 Noise impacts

 Socioeconomic impacts

 Transportation impacts

 Vegetation impacts

 Visual resource Impacts

 Waste management impacts

 Water resources impacts

 Wildlife impacts
33

Table 10. Onshore oil and gas production

Impact Type Impact(s)

Air Impacts  Construction would cause a temporary increase in emissions of carbon 

monoxide (CO), nitrogen oxides (NOx), and volatile organic compounds 

(VOCs) from construction equipment exhaust.

 Construction would generate airborne particulates during clearing and 

road construction.

 Operation would generate formaldehyde, a hazardous air pollutant.

 Carbon dioxide is released from oil and natural gas combustion, and 

could contribute to local, regional, or global climate change.

Geologic Impacts  Impacts to soil as a result of construction activities, including grading, 

paving, and establishing impervious surfaces to support the plant and 

associated infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss 

of ground cover and exposure of soils to precipitation and runoff.

Health and Human Safety 

Impacts

 Potential occupational risks during construction include: the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from 

general construction activities; and spills and exposures related to the 

storage and handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

 Hazards associated with possibility of fires, spills/releases of hazardous 

chemicals during operations.

 Exposure to gaseous and particulate emissions.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

 Nearby residents may be subject to additional noise during plant 

operation.

Socioeconomic Impacts  Potential adverse impacts to desirability of real estate and decreased 

property values in the surrounding area.

 Population growth associated with facility construction and operation may 

lead to increased demand on the local public infrastructure.

 Increased employment opportunities to support construction and 

operations.

Transportation Impacts  Traffic flow on local roads will increase during construction and operation.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction 

activities.

 Compacted soils from construction can inhibit germination and root 

growth for native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials into 

un-infested areas, or from transfer of topsoil inoculated with noxious 

weeds.

Visual Resource Impacts  Visual intrusion that would be visible for miles.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.

 Construction would contribute to visual impacts with its associated dust, 

large cranes, pit excavations, and well drilling.

 Cooling tower could produce a vapor plume that could be visible against a 

dark nighttime sky from all viewpoints.

 Transmission lines would contribute to visual impacts.
34

Table 10. Onshore oil and gas production

Impact Type Impact(s)

Waste Management 

Impacts

 Wastewater from oil and gas production activities (e.g., produced 

water/fracking fluids) may produce hazardous air pollutants, be released 

during on-site transfer or management, and require some form of on-site 

or off-site management.

 Petroleum coke, sludges, hazardous and nonhazardous solid waste may 

produce hazardous air pollutants, be released during on-site transfer or 

management, and require some form of on-site or off-site management.

Water Resources Impacts  Construction activities would have the potential to release liquids (oils and 

fuel) to surface and groundwater.

 Construction and operation of the facilities would increase the potential for 

contaminated stormwater runoff to be discharged into surface waters, 

reduce groundwater recharge and increase risk of contamination in 

surface waters.

 Construction activities could cause erosion of sediments into adjacent 

floodplains or bodies of water located offsite and degradation of water 

quality from stormwater runoff.

 Releases of hazardous chemicals and oil used on-site could affect 

surface water and groundwater quality.

 Groundwater may be required to provide water for operation of the facility

and deplinish supply of groundwater.

Wildlife Impacts  Wildlife displacement/avoidance during initial land-clearing and 

construction activities.

 Transmission lines pose some collision risk to avian species.

 Potential habitat contamination from hazardous materials for land and 

aquatic species.

Sources: DOI 1978; TNC 2011.

.
35

Table 11. Oil and gas imports

Impact Type Impact(s)

Air Impacts  Air emissions from compressor stations may include methane, ethane, 

benzene, toluene, xylene, CO, ozone and other pollutants. (Pipeline)

 Air emissions from engines during transport. (Tanker)

Geologic Impacts  Large amount of soil disturbance involved in laying pipeline poses 

erosion and sedimentation risks, particularly in steeper areas, near water 

bodies, and during heavy rain events. (Pipeline)

 Disturbance of the soil could increase the potential for erosion due to 

loss of ground cover and exposure of soils to precipitation and runoff.

(Pipeline)

Health and Human Safety 

Impacts

 Potential casualties during transport. (Tanker)

 Possibility of a fire or explosion during transport, transfer or storage.

 Ruptures emitting toxic chemicals such as benzene, hydrogen sulfide, 

toluene and xylene. (Pipeline)

Land Use Impacts  Use of land for right-of-way and land for ancillary facilities (e.g., access 

roads, pump stations, and construction camps) that will not be available 

for other uses. (Pipeline)

Noise Impacts  Construction noise impacts. (Pipeline)

 Noise pollution at compressor stations. (Pipeline)

Socioeconomic Impacts  The potential for a future embargo under the import option is such that 

American productivity and policy could become subservient to foreign 

influence. (Tanker)

Transportation Impacts  Increased vessel traffic. (Tanker)

Vegetation Impacts  Fragmentation of large patches of forest into smaller ones. (Pipeline)

 Vegetation can be affected by surface disturbance, changes in water 

flows, the arrival of alien species and air contamination. (Pipeline)

Visual Resource Impacts  Temporary effect on quality of scenic resources during construction.

(Pipeline)

 Above ground facilities’ effects on quality of scenic resources via views 

from travel routes and residential and recreational areas. (Pipeline)

Waste Management 

Impacts

 Oily waste from pigging operations and maintenance on valves may 

produce hazardous air pollutants, be released during on-site transfer or 

management, and require some form of on-site or off-site management.

(Pipeline)

Water Resources Impacts  Oil spills affecting surface water and groundwater.

 An incident involving release of a container vessel’s bunker fuel could 

cause a significant environmental impact. (Tanker)

 Risk of stream bed collapse with “bore crossing” techniques if poorly 

designed or executed. (Pipeline)

Wildlife Impacts  Anchor damage in biologically sensitive areas. (Tanker)

 Natural habitat loss and fragmentation, changes in species movement.

(Pipeline)

 Oil spills caused by groundings and collisions tend to occur in shallow 

waters around headlands and straits, which are waters that also tend to 

be favorable for fisheries and mariculture. (Tanker)

Sources: GLC 2014; DOI 1978; Woolgar 2008; TNC 2011.
36

Table 12. Coal production

Impact Type Impact(s)

Air Impacts  Construction would cause a temporary increase in emissions of CO, NOx, 

VOCs, and fugitive dust from construction equipment operation.

 (Fischer-Tropsch Process) The processing of coal into liquid fuel would 

result in a minor impact to air quality due to emissions, primarily nitrogen 

and carbon dioxide.

 The gasification process would result in an increase in annual air emissions 

of NOx, CO, sulfur oxides, particulate matter (PM), VOCs (a precursor of 

ozone), and reactive organic gases.

 (Shell Gasification) Some odors would be emitted during operation of the

facilities. Sources for these odors would include diesel engine exhaust from 

locomotives, trucks, maintenance equipment, and coal yard loaders; the 

coal pile and coal handling; sulfur storage and handling; and ammonia 

storage and handling.

 (Shell Gasification) Heat Recovery Steam Generator stack emissions 

include mercury and beryllium.

 Carbon dioxide emissions could contribute to local, regional, or global 

climate change.

Geologic Impacts  Impacts to soils as a result of construction activities including grading, 

paving, and establishing impervious surfaces to support the plant and 

associated infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss of 

ground cover and exposure of soils to precipitation and runoff.

Health and Human Safety 

Impacts

 Potential occupational risks during construction include the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from general 

construction activities; and spills and exposures related to the storage and 

handling of chemicals and disposal of hazardous waste.

 Potential for injuries and fatalities associated with mining coal.

 Typical work hazards associated with heavy industrial activities.

 Hazards associated with possibility of fires, spills/releases of hazardous 

chemicals.

 (Shell Gasification) Short- and long-term inhalation exposure can lead to 

non-cancerous health impacts, including exposure from manganese, 

hydrogen chloride, hydrogen fluoride, and acrolein.

 Potential impact on quality-of-life issues affecting daily life for asthmatics, 

such as restricted activity days and days with symptoms.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

 Vehicle and rail traffic would create noise during facility operations.

Socioeconomic Impacts  Potential adverse impacts to desirability of real estate and decreased 

property values in the surrounding area.

 Population growth associated with facility construction and operation may 

lead to increased demand on the local public infrastructure.

 Increased employment opportunities to support operations.

Transportation Impacts  Construction-related truck traffic.

 Increased traffic on roads and highways.

 Increased rail traffic.
37

Table 12. Coal production

Impact Type Impact(s)

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction activities.

 Compacted soils from construction can inhibit germination and root growth 

for native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials into uninfested areas, or from transfer of topsoil inoculated with noxious weeds.

Visual Resource Impacts  Flare stack would be noticeably visible and probably look different from 

other developments in the area.

 Water Vapor Plume emission may be visible from surrounding area under 

certain weather conditions.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.

 Transmission lines would contribute to visual impacts.

Waste Management 

Impacts

 Gasification byproducts generated by operation would include gasifier slag, 

fine solids, elemental sulfur, and sludges from water and wastewater 

treatment which may produce hazardous air pollutants, be released during 

on-site transfer or management, and require some form of on-site or off-site 

management.

 Gasification ash may be released during on-site transfer or management 

and require some form of on-site or off-site management.

 During construction, typical construction refuse and debris would be 

generated and would need to be disposed of properly.

 During construction, potentially hazardous waste materials (waste oils, 

solvents, and paints) would be generated and may produce hazardous air 

pollutants, be released during on-site transfer or management, and require 

some form of on-site or off-site management.

 Wastewater generated on site may produce hazardous air pollutants, be 

released during on-site transfer or management, and require some form of 

on-site or off-site management.

Water Resources 

Impacts

 Construction activities would have the potential to release liquids (oils and 

fuel) due to increased presence and use of construction-related hazardous 

substances and waste.

 Construction and operation of the facilities would increase the area of 

impervious surfaces. Water that previously would infiltrate the soil to enter 

the groundwater would instead become stormwater runoff and be 

discharged into streams, thus reducing groundwater recharge.

 Water use increases during facility operations.

 Waste generated during facility operations includes diesel and process 

water containing hydrocarbons which may spill during onsite transfer or 

management and require some form of onsite or offsite management.

 Construction activities could cause erosion of sediments nto adjacent 

surface water features located offsite and degradation of water quality from 

stormwater runoff.

 Gasification, turbine condensers, and fuel gas saturation process would 

require a water source (surface water or groundwater) for facility operations 

and would generate wastewater that could spill during onsite transfer or 

management and also require onsite or offsite management.
38

Table 12. Coal production

Impact Type Impact(s)

Wildlife Impacts  Wildlife displacement/avoidance during initial land-clearing and construction.

 Potential habitat contamination from hazardous materials for land and 

aquatic species.

 Operation of the flare would create an altered visual environment at night 

when the flame would be visible to active wildlife, specifically birds, which 

could be attracted to the flame.

 Transmission lines pose some collision risk to avian species.

Source: DOE 2007a.
39

Table 13. Biofuels

Impact Type Impact(s)

Air Impacts  The processing of biofuel feedstocks can affect local air quality with CO, 

particulates, NOx, sulphates, and VOCs released by industrial processes.

 Carbon dioxide emissions could contribute to local, regional, or global 

climate change.

Geologic Impacts  Impacts to soils as a result of construction activities including grading, 

paving, and establishing impervious surfaces to support the plant and 

associated infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss 

of ground cover and exposure of soils to precipitation and runoff.

Health and Human Safety 

Impacts

 Potential occupational risks during construction include: the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from 

general construction activities; and spills and exposures related to the 

storage and handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

 Operations involving high temperatures and pressures, as well as 

flammable/toxic liquids, and the potential for exposure to PM.

 Risk of potential spills and exposures to released vapors.

 Potential fire hazard due to the storage of large quantities of flammable 

liquids.

Land Use Impacts  Loss of land for industrial use.

 Diversion of farmland use from food supply to biofuel feedstock supply.

Noise Impacts  Construction noise impacts.

 During operation, some equipment (such as chippers) may contribute to 

some additional noise.

Socioeconomic Impacts  Potential for land rights disputes as industrial-scale crops are planted to 

produce biofuel feedstock.

 Diversion of farmland use from food supply to biofuel feedstock supply 

can jeopardize food security and could raise food prices.

 Could impact local industry that supports other land uses such as 

recreation and hunting.

 Can impact the nonmarket values of open space.

Transportation Impacts  Increase in traffic during construction, as well as increased traffic for 

facility employees during operation.

Vegetation Impacts  Loss of agrobiodiversity induced by intensification on croplands, in the 

form of crop genetic uniformity.

 Low levels of genetic diversity increases the susceptibility of these crops

to new pests and diseases.

Visual Resource Impacts  Nighttime lighting may be noticeable to nearby residential neighborhoods.

 Clearing of land for construction and/or land use changes may lead to 

temporary aesthetic impacts.

Waste Management 

Impacts

 Potential for the production of small quantities of hazardous materials 

(waste oils, lubricants, solvents, cleaners, paints) during construction

which may produce hazardous air pollutants, be released during on-site 

transfer or management, and require some form of on-site or off-site 

management.

 Char and ash produced during operations may be released during on-site 

transfer or management and require some form of on-site or off-site 

management.
40

Table 13. Biofuels

Impact Type Impact(s)

Water Resources Impacts  Many of the crops currently used for biofuel production – such as sugar 

cane, oil palm and maize – have relatively high water requirements at 

commercial yield levels--the processing of feedstocks into biofuels can 

use large quantities of water, mainly for washing plants and seeds and for 

evaporative cooling.

 Irrigated production of the key biofuel feedstocks have the greatest impact 

on local water resource balances.

 Converting pastures or woodlands into maize fields (example) may 

exacerbate problems such as soil erosion, sedimentation and excess 

nutrient (nitrogen and phosphorus) runoff into surface waters and 

infiltration into groundwater.

 Excess nitrogen into water pathways causing “dead zones.”

 Pesticides and other chemicals can wash into waterbodies, negatively 

affecting water quality.

Wildlife Impacts  Biodiversity loss following land conversion and habitat loss.

 Agricultural expansion driven by higher prices could endanger areas rich 

in bird species diversity.

Sources: DOE 2007b; FAO 2008; German et al. 2011.
41

Table 14. Biomass

Impact Type Impact(s)

Air Impacts  Construction, harvesting and transportation would generate emissions and dust 

from operation of equipment.

 Biomass project’s power plant/wood boiler/biorefinery uses fuel and generates 

greenhouse gases, primarily carbon dioxide, methane, nitrous oxide and a small 

amount of sulfur dioxide (SO2).

 Carbon dioxide emissions could contribute to local, regional, or global climate 

change.

Geologic Impacts  Impacts to soils as a result of construction activities including grading, paving, 

and establishing impervious surfaces to support the plant and associated 

infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss of 

ground cover and exposure of soils to precipitation and runoff.

 The harvesting of biomass can result in short-term disturbances to and 

modifications of soil structure.

Health and Human 

Safety Impacts

 Potential occupational risks during construction include the movement of heavy 

objects; slips, trips and falls; the risk of fire or explosion from general 

construction activities; and spills and exposures related to the storage and 

handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

Socioeconomic 

Impacts

 Increased employment opportunities to support operations.

 Could impact local industry that supports other land uses such as recreation 

and hunting.

 Can impact the nonmarket values of open space.

Transportation 

Impacts

 Increase in traffic during construction, as well as increased traffic for facility 

employees during operation.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction activities.

 Compacted soils from construction can inhibit germination and root growth for 

native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, vehicles 

transporting noxious weed-inoculated soil or plant materials into un-infested 

areas, or from transfer of topsoil inoculated with noxious weeds.

Visual Resource 

Impacts

 Transmission lines would contribute to visual impacts.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.

Waste Management 

Impacts

 Potential for the production of small quantities of hazardous materials (waste 

oils, lubricants, solvents, cleaners, paints) during construction that may produce 

hazardous air pollutants, be released during on-site transfer or management, 

and require some form of on-site or off-site management.

 Ash produced during operations may be released during on-site transfer or 

management and require some form of on-site or off-site management.

Water Resources 

Impacts

 General construction impacts could affect water resources by increased 

stormwater runoff being generated from the construction locations which could 

carry sediment and contamination loads into vicinity surface waters during times 

of heavy rain, and contamination from construction activities infiltrating area 

soils and percolating down into the groundwater.

 Increased stormwater runoff occurs from developed sites as vegetation is 

removed and as the amount of impervious surface area increases, posing a risk 

of contaminating water and harming aquatic life.

 Reduction of groundwater levels due to the irrigation demand of biomass crops 

prior to harvesting.
42

Table 14. Biomass

Impact Type Impact(s)

Wildlife Impacts  During (woody) biomass harvest, change in successional stage and forest 

structure impact wildlife species differently. Late successional stage species 

such as birds that nest in mature forests would be negatively impacted following 

the first harvest, and early successional stage species such as mammals that 

live and feed on young forest stages would be positively impacted.

 New transmission lines could increase potential hazards to birds such as 

collision or electrocution.

 Noise from biomass harvesting activities could temporarily affect wildlife.

Source: DOE 2011a.
43

Table 15. Geothermal

Impact Type Impact(s)

Air Impacts  Construction would cause a temporary increase in emissions of CO, NOx, 

VOCs, and fugitive dust from construction equipment operation.

 Emissions associated with generating electricity from geothermal 

technologies are negligible because no fuels are combusted.

Geologic Impacts  Impacts to soil as a result of construction activities, including grading, 

paving, and establishing impervious surfaces to support the plant and 

associated infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss 

of ground cover and exposure of soils to precipitation and runoff.

Health and Human 

Safety Impacts

 Potential occupational risks during construction include the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from 

general construction activities; and spills and exposures related to the 

storage and handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

 Exposure of individuals to drilling mud and geothermal fluid or steam

during exploration and development (E&D) drilling activities.

 Exposure of individuals to hydrogen sulfide contained in geothermal fluid 

or steam during exploration, development, and operation phases.

 Exposure of individuals to hazardous materials used and stored at 

facilities, such as petroleum oil, lubricants, paints, solvents and herbicides.

Land Use Impacts  Could remove farmland or forestland from production.

 If water is not re-injected into the ground after use to maintain pressure 

underground, it may cause sinking of land at the surface.

Noise Impacts  Construction noise impacts.

 Areas with minimal noise sources (remote areas) would experience a 

greater change in the noise characteristics.

Socioeconomic Impacts  Potential adverse impacts to desirability of real estate and decreased 

property values in the surrounding area.

 Population growth associated with facility construction and operation may 

lead to increased demand on the local public infrastructure.

 Increased employment opportunities to support operations.

 Could impact local industry that supports other land uses such as 

recreation and hunting.

 Can impact the nonmarket values of open space.

Transportation Impacts  Increased traffic on nearby roads during construction.

 Increased traffic for facility employees during operation.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction 

activities.

 Compacted soils from construction can inhibit germination and root growth 

for native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials into 

un-infested areas, or from transfer of topsoil inoculated with noxious 

weeds.

Visual Resource 

Impacts

 Transmission lines would contribute to visual impacts.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.

Waste Management 

Impacts

 Solid waste and hazardous waste (paints, coatings, solvents) generated 

during construction may produce hazardous air pollutants, be released 

during on-site transfer or management, and require some form of on-site 

or off-site management.
44

Table 15. Geothermal

Impact Type Impact(s)

Water Resources 

Impacts

 Potential for groundwater contamination when drilling wells and extracting 

hot water or steam (can be prevented with proper management 

techniques).

Wildlife Impacts  Loss of wildlife habitat from the surface disturbance required for 

construction of drilling pads and access roads.

 Project generated noise could keep some animals away from areas 

directly affected by surface disturbance during the on-site project 

construction and drilling activities.

Source: TEEIC 2015.
45

Table 16. Hydroelectric

Impact Type Impact(s)

Air Impacts  Construction would cause a temporary increase in emissions of CO, NOx, 

VOCs, and fugitive dust from construction equipment operation. If a large 

amount of vegetation is growing along the riverbed when a dam is built, it 

can decay in the lake that is created, causing the buildup and release of 

methane, a greenhouse gas.

Geologic Impacts  Impacts to soil as a result of construction activities, including grading, 

paving, and establishing impervious surfaces to support the plant and 

associated infrastructure.

 Potential for slope failures, landslides, and rock falls during construction 

where construction involves earth moving.

 Erosion of shoreline and sediment transport.

 Reservoir-triggered seismicity (where the chance exists).

 Changes in channel morphology and bed surface texture in the bypassed 

and peaking reaches from changes in project operations affecting supply 

and transport of sediment.

Health and Human Safety 

Impacts

 Potential occupational risks during construction include: the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from 

general construction activities; and spills and exposures related to the 

storage and handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

Land Use Impacts  The construction of hydropower plants can alter sizable portions of land 

when dams are constructed and lakes are created, flooding land that may 

have once served as wildlife habitat, farmland, and scenic retreat.

Noise Impacts  Construction noise impacts.

Socioeconomic Impacts  Potential for gain or loss of water-based recreation and fisheries.

 Displacement of residents for construction of the dam and creation of 

water body.

Transportation Impacts  Increase in traffic during construction, as well as increased traffic for 

facility employees during operation.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction 

activities.

 Compacted soils from construction can inhibit germination and root 

growth for native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials into 

un-infested areas, or from transfer of topsoil inoculated with noxious 

weeds.

 Colonization of invasive plant species due to the fluctuating water levels in 

the reservoirs.

Visual Resource Impacts  Transmission lines would contribute to visual impacts.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.

 Possible positive or negative visual effects due to lake creation, 

depending on setting.

Waste Management 

Impacts

 Some material may need to be dredged from reservoirs and disposed of 

properly.

 Hazardous and nonhazardous wastes related to maintenance activities

may produce hazardous air pollutants, be released during on-site transfer 

or management, and require some form of on-site or off-site 

management.
46

Table 16. Hydroelectric

Impact Type Impact(s)

Water Resources 

Impacts

 Construction may cause the change of surface water flow patterns and 

increase erosion and sedimentation.

 In cases where cofferdams are being used during construction, future 

erosion may result in the release of lower oxygenated water downstream.

 If wells are emptied in order to fill reservoirs, groundwater levels would be 

affected by construction of reservoir. After the reservoirs are filled, high 

evaporation rates could degrade the water quality in the reservoirs and 

seepage from the reservoirs could affect nearby groundwater quality. 

 Fluctuation of water levels in the reservoirs could have an impact on acid 

production from water interaction with the rocks surrounding the 

reservoirs.

 Discharge of pollutants (e.g., fuels, lubricants, and other hazardous 

materials) and other contaminants (e.g., human waste and petroleum 

products) into adjacent rivers, streams, and reservoirs and groundwater; 

and contamination of water supply systems.

Wildlife Impacts  Filling the reservoirs and creating a new source of drinking water for 

wildlife has the potential to alter migration movement for some species 

and disturb wildlife habitat.

 Hydroelectric power plants affect various fish populations in different 

ways.

 Construction activities will create adverse impacts for wildlife, and will 

create hazardous areas for local wildlife, including open pits, material 

stockpiles, shade created by equipment, and clearing of vegetation.

 Birds are likely to view the ponds as a safe source of drinking water or 

resting area. However, high total dissolved solids concentrations in these 

proposed ponds could be harmful or fatal to birds and other wildlife.

 New transmission lines could increase potential hazards to birds such as 

collision or electrocution.

Source: ORNL et al. 2010.
47

Table 17. Municipal waste

Impact Type Impact(s)

Air Impacts  Emissions of fugitive dust and exhaust from vehicles and equipment during 

construction and increased emissions of criteria pollutants, formaldehyde, and 

acetaldehyde during operations.

 During the operation phase the main sources of pollution should be the boiler 

stack emissions, emissions from refuse-derived fuel (RDF) plant, and fugitive 

dust and odor emissions from waste handling and processing emissions due 

to vehicular movement.

 Possible air pollutants released during operations include PM, VOCs, CO, 

SO2, NOx, formaldehyde and acetaldehyde.

 Carbon dioxide emissions could contribute to local, regional, or global climate 

change.

Geologic Impacts  Impacts to soil as a result of construction activities, including grading, paving, 

and establishing impervious surfaces to support the plant and associated 

infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss of 

ground cover and exposure of soils to precipitation and runoff.

Health and Human 

Safety Impacts

 Potential occupational risks during construction include: the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from general 

construction activities; and spills and exposures related to the storage and 

handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

 Increased truck traffic may cause higher noise levels.

 Noise emissions from equipment such as shredders, boilers, generators, etc.

Socioeconomic 

Impacts

 Potential adverse impacts to desirability of real estate and decreased property 

values in the surrounding area.

 Population growth associated with facility construction and operation may lead 

to increased demand on the local public infrastructure.

 Increased employment opportunities to support operations.

Transportation Impacts  Increase in traffic during construction, as well as increased traffic for facility 

employees during operation.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction activities.

 Compacted soils from construction can inhibit germination and root growth for 

native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials into uninfested areas, or from transfer of topsoil inoculated with noxious weeds.

Visual Resource 

Impacts

 Transmission lines would contribute to visual impacts.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.
48

Table 17. Municipal waste

Impact Type Impact(s)

Waste Management 

Impacts

 Generation of solid waste from materials used during construction may 

produce hazardous air pollutants, be released during on-site transfer or 

management, and require some form of on-site or off-site management.

 Solid and hazardous waste may be generated (explosives, lead acid batteries, 

etc.) which may produce hazardous air pollutants, be released during on-site 

transfer or management, and require some form of on-site or off-site 

management.

 Solid waste byproduct produced after pyrolysis (ash, slag, char) may produce 

hazardous air pollutants, be released during on-site transfer or management, 

and require some form of on-site or off-site management.

 Generation of leachate is possible if some of the waste noted above is stored 

on site.

Water Resources 

Impacts

 Increased water demand, sewage production, and natural gas usage during 

operations.

 Increased storm water run-off during construction and operations at facility 

location.

 Potential for contaminants (fuels and lubricants) to enter water sources during 

construction if not properly contained.

Wildlife Impacts  Wildlife displacement/avoidance during initial land-clearing and construction 

activities.

 Transmission lines pose some collision risk to avian species.

 Potential habitat contamination from hazardous materials for land and aquatic 

species.

Sources: DOE 2011b; EDWPC 2008; DOE 2011c.
49

Table 18. Nuclear

Impact Type Impact(s)

Air Impacts  Construction would cause a temporary increase in emissions of CO, NOx, 

VOCs, and fugitive dust from construction equipment operation.

 During operation, releases to the environment of heat and moisture from the 

primary cooling system, operation of auxiliary equipment (generators and 

boilers), and emissions from workers’ vehicles would be the primary impacts 

to air quality.

 No greenhouse gases emitted related to the direct generation of electricity.

Geologic Impacts  Impacts to soils as a result of construction activities including grading, paving, 

and establishing impervious surfaces to support the plant and associated 

infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss of 

ground cover and exposure of soils to precipitation and runoff.

Health and Human 

Safety Impacts

 Potential occupational risks during construction include the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from general 

construction activities; and spills and exposures related to the storage and 

handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

 Public and workers would be exposed to increased ambient background 

radiation.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

 Some impact to ambient background noise.

Socioeconomic 

Impacts

 Potential adverse impacts to desirability of real estate and decreased property 

values in the surrounding area.

 Population growth associated with facility construction and operation may lead 

to increased demand on the local public infrastructure.

 Increased employment opportunities to support operations.

Transportation 

Impacts

 Increase in traffic during construction, as well as increased traffic for facility 

employees during operation.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction activities.

 Compacted soils from construction can inhibit germination and root growth for 

native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials into uninfested areas, or from transfer of topsoil inoculated with noxious weeds.

 The thermal plume discharged into the water source, along with chemical and 

physical impacts, may have a negative impact on the aquatic ecosystem for 

nuclear plants that use water bodies as a heat sink.

 Biota would be exposed to increased ambient background radiation.

Visual Resource 

Impacts

 Transmission lines would contribute to visual impacts.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.

 Cooling towers and their associated vapor plumes would be clearly visible to 

nearby residents.
50

Table 18. Nuclear

Impact Type Impact(s)

Waste Management 

Impacts

 During construction, typical construction refuse and debris, hazardous and 

nonhazardous wastes, are generated that may produce hazardous air 

pollutants, be released during on-site transfer or management, and require 

some form of on-site or off-site management.

 During operation, waste management would involve the following, which will 

require on-site and off-site management:

o Transuranic waste

o Low-level radioactive waste

o Mixed low-level radioactive waste

o Chemical waste

o Solid waste

o Sanitary wastewater

o Liquid low-level radioactive waste

Water Resources 

Impacts

 Construction activities would have the potential to release liquids (oils and 

fuel) due to increased presence and use of construction-related hazardous 

substances and waste.

 Construction and operation of the facilities would increase the area of 

impervious surfaces. Water that previously would infiltrate the soil to enter 

the groundwater would instead become stormwater runoff and be discharged 

into streams, thus reducing groundwater recharge.

 Construction activities could cause erosion of sediments into adjacent surface 

water features located offsite and degradation of water quality from 

stormwater runoff.

 Groundwater and/or surface water would be withdrawn to provided water 

needed for operation of the facility (if withdrawing from surface water, impact 

would fluctuate with water levels)

o The groundwater withdrawal can have a potential offsite impact of that 

water not being available to other users 

o Also, neighboring groundwater users may experience higher pumping 

costs due to the physical drawdown of the hydraulic head of the confined 

aquifer

Wildlife Impacts  Wildlife displacement/avoidance during initial land-clearing and construction 

activities.

 Noise impacts during operation may lead to habitat loss through avoidance, 

reduced reproductive success, and mortality.

 The thermal plume discharged into the water source may have a negative 

impact on the aquatic ecosystem.

 The chemical and physical impacts from the water discharge into the water 

source may have a negative impact on the aquatic ecosystem.

 Biota would be exposed to increased ambient background radiation from a 

nuclear unit.

 Transmission lines pose some collision risk to avian species.

Source: WNA 2013.
51

Table 19. Other natural gas

Impact Type Impact(s)

Air Impacts  Synthetic natural gas (SNG) plants can be major point sources of emissions 

of sulfur compounds (primarily SO2) and hydrocarbons, and to a lesser 

extent, of CO, NOx and particulates.

 Carbon dioxide emissions could contribute to local, regional, or global 

climate change.

Geologic Impacts  Impacts to soil as a result of construction activities including grading, 

paving, and establishing impervious surfaces to support the plant and 

associated infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss of 

ground cover and exposure of soils to precipitation and runoff.

Health and Human 

Safety Impacts

 Potential occupational risks during construction include: the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from general 

construction activities; and spills and exposures related to the storage and 

handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

 Exposure to gaseous and particulate emissions.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

 Some impact to ambient background noise.

Socioeconomic Impacts  Potential adverse impacts to desirability of real estate and decreased 

property values in the surrounding area.

 Population growth associated with facility construction and operation may 

lead to increased demand on the local public infrastructure.

 Increased employment opportunities to support operations.

Transportation Impacts  Increase in traffic during construction, as well as increased traffic for facility 

employees during operation.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction activities.

 Compacted soils from construction can inhibit germination and root growth 

for native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials into 

un-infested areas, or from transfer of topsoil inoculated with noxious weeds.

Visual Resource Impacts  Transmission lines would contribute to visual impacts.

 Nighttime lighting may be noticeable to nearby residential neighborhoods.

Waste Management 

Impacts

 Hazardous and nonhazardous wastes from construction and operations

may produce hazardous air pollutants, be released during on-site transfer or 

management, and require some form of on-site or off-site management.

Water Resources 

Impacts

 May have indirect impacts on the quality of the surface waters and ground 

waters due to extensive water withdrawals, possible intermedia transfer of 

pollutants or accidents and system failures.

 The intermedia pollution transfer routes may include percolation of 

wastewaters from impoundments and leachates from landfill/mines, 

uncontrolled runoff from plant sites and precipitation of air pollutants from 

the facility.

Wildlife Impacts  Wildlife displacement/avoidance during initial land-clearing and construction 

activities.

 Natural habitat loss and fragmentation, changes in species movement.

 Potential habitat contamination from hazardous materials for land and 

aquatic species.

Source: EPA 1979.
52

Table 20. Other oil

Impact Type Impact(s)

Air Impacts  Atmospheric emissions of NOx, CO, SO2, VOCs, and PM from 

emissions of vehicles, heavy equipment, machinery and tools during 

construction, and during routine operations.

 Airborne dust arising from soil moving operations during construction.

 Synthesis gas contains certain hazardous air pollutants (mercury, 

beryllium, benzene, hydrogen chloride, hydrogen fluoride, etc.) to be 

removed from emissions by scrubbers.

 Smoke and odors due to burning of vegetation for land clearing.

 Carbon dioxide emissions could contribute to local, regional, or global 

climate change.

Geologic Impacts  Grading of soils for construction of facility and feedstock banks could 

lead to increased erosion.

Health and Human Safety 

Impacts

 Potential occupational risks during construction include: the movement 

of heavy objects; slips, trips and falls; the risk of fire or explosion from 

general construction activities; and spills and exposures related to the 

storage and handling of chemicals and disposal of hazardous waste.

 Typical work hazards associated with heavy industrial activities.

 Exposure to SO2, NOx, PM 10 microns in diameter or smaller, CO in 

plant emissions.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

 Sources of noise during routine operations include turbine/generators, 

air inlets, exhaust systems, cooling towers, pumps, and compressors.

Socioeconomic Impacts  Potential adverse impacts to desirability of real estate and decreased 

property values in the surrounding area.

 Population growth associated with facility construction and operation 

may lead to increased demand on the local public infrastructure.

 Increased employment opportunities to support operations.

Transportation Impacts  Increase in traffic during construction, as well as increased traffic for 

facility employees during operation.

 Possible increased railway traffic if fuel materials shipped via railcar.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction 

activities.

 Compacted soils from construction can inhibit germination and root 

growth for native plant species, and new alien species can establish.

 Noxious weeds can be spread from unwashed construction equipment, 

vehicles transporting noxious weed-inoculated soil or plant materials 

into un-infested areas, or from transfer of topsoil inoculated with noxious 

weeds.

Visual Resource Impacts  Transmission lines would contribute to visual impacts.

 Nighttime lighting may be noticeable to nearby residential 

neighborhoods.

 Vapor plume from cooling towers may be visible during some 

conditions.
53

Table 20. Other oil

Impact Type Impact(s)

Waste Management 

Impacts

 Hazardous and nonhazardous wastes from construction and operations

may produce hazardous air pollutants, be released during on-site 

transfer or management, and require some form of on-site or off-site 

management.

 Byproducts generated during operation, including slag, ash, sludges, 

and elemental sulfur, may produce hazardous air pollutants, be 

released during on-site transfer or management, and require some form 

of on-site or off-site management.

 Wastewater may produce hazardous air pollutants, be released during 

on-site transfer or management, and require some form of on-site or offsite management.

Water Resources Impacts  Stormwater runoff during construction could decrease surface water 

quality.

 Chemicals present in facility effluents could negatively impact water 

quality.

Wildlife Impacts  Wildlife displacement/avoidance during initial land-clearing and 

construction activities.

 Transmission lines pose some collision risk to avian species.

 Potential habitat contamination from hazardous materials for land and 

aquatic species.

Source: DOE 2007a.
54

Table 21. Solar

Impact Type Impact(s)

Air Impacts  Construction would cause a temporary increase in emissions of CO, 

NOx, VOCs, and fugitive dust from construction equipment operation.

 No greenhouse gases emitted related to the direct generation of 

electricity.

Geologic Impacts  Impacts to soil as a result of construction activities, including grading, 

paving, and establishing impervious surfaces to support the plant and 

associated infrastructure.

 Disturbance of the soil could increase the potential for erosion due to loss 

of ground cover and exposure of soils to precipitation and runoff.

Health and Human Safety 

Impacts

 Potential occupational risks during construction include the movement of 

heavy objects; slips, trips and falls; the risk of fire or explosion from 

general construction activities; and spills and exposures related to the 

storage and handling of chemicals and disposal of hazardous waste.

 Increased number of traffic accidents or retinal damage due to glare from 

equipment associated with solar developments.

Land Use Impacts  Loss of land for industrial use.

Noise Impacts  Construction noise impacts.

 Equipment, motor vehicles, high pressure steam blow.

Socioeconomic Impacts  Potential adverse impacts to desirability of real estate and decreased 

property values in the surrounding area.

 Population growth associated with facility construction and operation may 

lead to increased demand on the local public infrastructure.

 Increased employment opportunities to support operations.

 Visibility of solar developments from recreational areas could reduce 

visitation and tourism in the area.

Transportation Impacts  Increase in traffic during construction.

 Glare from the solar receivers can impact nearby roadways.

Vegetation Impacts  Solar development will typically require the total removal of vegetation at 

most facilities, increasing the risk of invasive species introduction, 

changes in species composition and distribution, habitat loss (e.g., dune 

or riparian areas), and damage to biological soil crusts.

 Indirect impacts also likely in terms of dust deposition, altered drainage 

patterns, runoff, and sedimentation.

Visual Resource Impacts  Solar development would alter the character of largely rural areas along 

with development of supporting infrastructure.

 Transmission lines would contribute to visual impacts.

Waste Management 

Impacts

 Hazardous wastes similar to those generated during construction of other 

industrial facilities (cleaners, paints, fuels, etc.) and nonhazardous 

wastes during construction of solar energy facility that could be released 

during on-site management and will also require on-site and off-site 

management.

 Hazardous materials required for routine maintenance of solar 

components and equipment:

o May include water treatment needs for washing fluids

o May include dielectric fluids

Water Resources 

Impacts

 Solar thermal projects with wet-cooling systems require large volumes of 

water. Solar thermal projects with dry-cooling systems need less than 

one-tenth of the amount of water required for wet-cooling systems.

 Modification of surface and groundwater flow systems.

 Water contamination resulting from chemical leaks or spills.

 Water quality degradation by runoff or excessive withdrawals.
55

Table 21. Solar

Impact Type Impact(s)

Wildlife Impacts  Loss of habitat, disturbance, loss of food and prey species, loss of 

breeding areas, effects on movement and migration, introduction of new 

species, habitat fragmentation, and changes in water availability.

 Operation of the project may result in bird collisions with the heliostat 

mirrors and incineration at or near focused solar heat at the central tower.

 Construction would have the potential to interrupt wildlife movement 

through the area.

Sources: DOE 2010a; DOE 2012a.
56

Table 22. Wind (onshore and offshore)

Impact Type Impact(s)

Air Impacts  Construction would cause a temporary increase in emissions of CO, NOx, 

VOCs, and fugitive dust from construction equipment operation.

 Offshore air emissions sources include vessel traffic, installation of anchoring 

devices, energy conversion devices, transformer/service platforms, and 

underwater cables.

 No greenhouse gases emitted related to the direct generation of electricity.

Geologic Impacts  Onshore, impacts to soil as a result of construction activities, including grading, 

paving, and establishing impervious surfaces to support the plant and associated 

infrastructure.

 Seabed scarring/scouring/drilling and sedimentation during construction.

 Alteration of seafloor topography, such as through erosion, and changes in 

sediment transport along the coast.

Health and Human 

Safety Impacts

 Potential occupational risks during construction include the movement of heavy 

objects; slips, trips and falls; the risk of fire or explosion from general

construction activities.

 Hazards include working at heights, working on and/or over water, working in 

confined spaces, working with machinery, and the danger of being hit by falling 

objects.

 Hazards associated with ocean vessel operation (e.g., collisions, rough seas, 

underwater hazards).

 Potential for accidental impacts between small aircraft and wind turbines.

 Possible risk of a rotor blade breaking and parts being thrown off the turbine.

 Potential for fires due to electrical shorts, insufficient equipment maintenance, or 

contact with power lines.

Land Use Impacts  Port facilities may need modifications to support the heavier components of 

offshore wind energy construction.

 Long-term, permanent loss of land possible depending on size and location of 

project.

 Existing waterway uses could potentially be affected by offshore wind facility 

development (e.g., transit lanes, recreational boating, undersea cable 

installations, shellfish beds or fishery areas).

Noise Impacts  Onshore, increase in noise due to use of heavy equipment during construction.

 Offshore construction noise can propagate underwater beyond immediate project 

area.

 Vehicle (onshore) and vessel (offshore) traffic would create periodic noise during 

facility operations.

Socioeconomic 

Impacts

 Impacts on property values, tourism, and recreation would be location-specific, 

and could be positive or negative.

Transportation 

Impacts

 Short-term increase in onshore and offshore traffic during construction.

 Periodic onshore (vehicular) and offshore (vessel) trips during operation for 

maintenance activities.

 For offshore wind farms, navigational safety of ocean-going vessels and aircraft 

can be impacted.

Vegetation Impacts  Removal of vegetation during initial land-clearing and construction activities.

 Construction promotes conditions such that new alien species can establish.

 Seafloor vegetation can be disturbed during construction.

Visual Resource 

Impacts

 Changes to scenic quality (e.g., nighttime lighting) depending on location.

 Vessels on par with visible traffic associated with transport of workers and 

equipment for construction, maintenance, and facility decommissioning.
57

Table 22. Wind (onshore and offshore)

Impact Type Impact(s)

Waste Management 

Impacts

 Hazardous and nonhazardous wastes produced during construction could be 

released during on-site management and will require on-site and off-site 

management.

Water Resources 

Impacts

 Onshore, stormwater runoff from construction could carry sediment and 

contamination loads into vicinity surface waters.

 Dredging and other offshore construction activities can lead to sedimentation.

 Wind turbines in areas with little rainfall may require the use of a small amount of 

water.

Wildlife Impacts Avifauna Impacts

 Wildlife displacement/avoidance during initial land-clearing and construction 

activities.

 Risk of birds colliding with equipment during construction and operation of 

wind turbine generators or migratory raptors using them as perches.

Fish/Essential Fish Habitat/Marine Mammal Impacts

 Potential impacts of waste discharge, and/or oil and fuel spills during 

construction and operation.

 Disturbance of the seafloor could result in impacts on seafloor habitat under 

and adjacent to the foundation and cables.

 Increases in water turbidity can displace prey fish.

 During operation, foundations may provide artificial reef habitat.

Sea Turtle Impacts

 Sea turtle nests or aggregates of hatchlings could be destroyed.

 Disorientation by nearby lights could lead hatchlings away from the surf; 

onshore lighting may also draw hatchlings back out of the surf.

Bat Impacts

 Bats could develop barotrauma (condition in which the lungs of bats are fatally 

damaged from the negative pressure created around operating turbines).

 Turbine noise could impede bat echolocation, resulting in decreased foraging 

efficiency.

Sources: DOE 2010b; MMS 2007; MMS 2009.
58

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64

3. Analysis of Impacts from Catastrophic Oil Spills 

In the aftermath of the Deepwater Horizon (DWH) oil spill in April 2010, BOEM is making 

consideration of the potential impacts of low-probability/high-consequence events more explicit 

in its assessments of future exploration, development, and production activities on the OCS.

3

 A 

decision as to whether or not to proceed with proposed lease sales (auctions) necessarily carries 

with it the risk, however slight, of catastrophic discharge events (CDEs). Because these events 

are extremely infrequent and only limited data are available on their impacts, the OECM--the 

model that BOEM uses to assess the net environmental costs associated with its Five Year 

Leasing Programs—was not designed to estimate the costs of a CDE. To supplement results 

generated by the OECM for BOEM’s 2012-2017 Proposed Final Program, the Bureau performed 

an analysis of the potential environmental and social costs of a catastrophic spill in any of the 

BOEM planning areas.4 The purpose of this chapter is to re-visit the data and literature on these 

impacts and, where possible, present updated estimates of the per-barrel impacts associated with 

a catastrophic spill. In reviewing this information, we consider potential impacts associated with 

a well blowout as well as impacts related to a catstrophic tanker spill. The former is likely to 

occur several miles from shore, while the latter is more likely to occur in the nearshore 

environnment.

As a preemptive caveat to the data and methods presented in this chapter, we emphasize that the 

environmental impacts of a CDE are highly uncertain. The magnitude of these impacts depends 

on multiple factors, including the volume of oil spilled, the duration of the spill, the proximity of 

the spill location to sensitive resources, meteorological conditions at the time of the spill (e.g., 

whether the wind is blowing toward shore), the type of oil spilled, and response and containment 

capabilities. Compounding these uncertainties is the limited data available on CDE impacts. 

Only two catastrophic spills have occurred in U.S. waters: the Exxon Valdez spill in 1989 and the 

Deepwater Horizon blowout and spill in 2010. While a wealth of data are available on both 

spills, it is uncertain whether these spills are representative of future catastrophic spills. 

The remainder of this chapter presents a review of the available data and literature on potential 

CDE impacts and, where possible, our estimates of these impacts on a regional basis for the 

following categories of impacts:

 Response costs;

 Ecological impacts;

 Recreation, inclusive of beach recreation, recreational fishing, boating, and wildlife 

viewing;

 Commercial fishing impacts;

 Fatal and nonfatal injuries; and

 Value of spilled oil.

 

3BOEM historically considered the impacts of catastrophic oil spills in developing the Five Year Program, 

but discontinuted the practice in response to declining frequency and severity of oil spills. This practice was 

resumed following the Deepwater Horizon oil spill.

4

See BOEM (2012).
65

After presenting the available information on the impacts above, we discuss the impacts 

associated with response actions such as the use of dispersants and in situ burns. We conclude 

by identifying the most significant uncertainties in our analysis and their implications for our 

estimates of catastrophic impacts.

3.1 RESPONSE COSTS

Spill containment and cleanup refers to all costs related to emergency response following an oil 

spill, and the physical cleanup of any spilled oil. This includes a number of fixed costs such as 

setting up a response center and mobilizing labor and equipment, in addition to a variety of costs 

tied to the length and intensity of the cleanup effort, such as equipment rental costs, and wages 

for cleanup and monitoring crews.

3.1.1 Variability and Uncertainty of Response Costs

Several factors may affect the spill containment and cleanup costs associated with a given CDE. 

Most of these factors are related to the specific circumstances of the spill, creating significant 

uncertainty in efforts to generalize the average cost of oil spill response. Some of the key 

uncertainties include the following:

 Proximity of the spill to infrastructure critical for response, such as ports, airports, and 

population centers;

 Proximity of the spill to response/clean-up equipment resources;

 Proximity to potentially affected resources, particularly shoreline (i.e., distance from 

shore that spill occurs);

 Oil type (different types volatize at different rates);

 Wind, weather, and prevailing currents;

 Season, which is a determinant of temperature and ice cover;

 Differences in technical feasibility of cleanup, as affected by shoreline habitat type; and

 Cleanup strategy (mechanical, dispersants, in-situ burn, etc.).

Despite the uncertainty surrounding the circumstances of any given spill, a body of research 

exists related to response costs based on historical spill data. In particular, this research indicates 

response costs per barrel are significantly correlated with the length of shoreline oiled, the type 

of oil spilled, and the volume of oil spilled.5

The correlation between response costs and the length of shoreline oiled is particularly strong 

because shoreline cleanup requires much more complex, time consuming, and expensive 

techniques than cleanup of oil in open water. Etkin (2000) notes that in almost any spill, 

shoreline cleanup is the most expensive and time-intensive phase of the cleanup. Additionally, 

the type of shoreline oiled can have a considerable impact on the cleanup cost. For instance, a 

rocky shore is much easier to access and clean than a coastal marsh. Etkin (2004) estimates that 

on average, oiled wetland is more than three times as expensive to clean up as oiled rocky shore. 

 

5

See Etkin (1999), Etkin (2000).
66

Additionally, Etkin (2004) estimates that oiled sandy shore is 20 percent more expensive to clean 

up than oiled rocky shore.

The historical spill record also shows a clear relationship between the barrels of oil spilled and 

the response cost per barrel. In general, as the size of an oil spill increases, the response cost per 

barrel decreases.6This is a result of the considerable fixed costs associated with an oil spill 

cleanup operation, such as the need to set up a response center and mobilize equipment and 

labor. However, response costs associated with the two historical catastrophic spills in U.S. 

waters, Exxon Valdez and Deepwater Horizon, do not follow this trend.

The Exxon Valdez incident resulted in the spillage of 257,000 barrels of oil into Prince William 

Sound.7Exxon spent approximately $4.2 billion dollars to contain and clean up the spill, or 

roughly $16,000 per barrel of oil spilled. The Deepwater Horizon incident resulted in the leakage 

of 3.19 million barrels of oil into the Gulf of Mexico.8 BP spent approximately $16.3 billion on 

cleanup and containment, or roughly $5,100 per barrel of oil spilled.9In contrast, historical data 

on non-catastrophic spills from the OSIR International Oil Spill Database indicates that in the 

U.S., the average response cost for a spill greater than 32,000 barrels is only $122 per barrel 

(Etkin, 2000).10

3.1.2 Estimation of Response Costs by Region

Since the response costs associated with non-catastrophic oil spills do not appear to be reliable 

indicators of the response costs associated with catastrophic spills, our estimates of the per-barrel 

response costs associated with a catastrophic spill are based on the response costs for the 

Deepwater Horizon and Exxon Valdez spills. The per barrel response costs observed for the 

Exxon Valdez serve as our point estimate of response costs in Cook Inlet, and the response costs 

observed for the Deepwater Horizon spill serve as our estimate for response costs in the Gulf of 

Mexico. 

We also use response costs observed for the Deepwater Horizon spill as the basis for our 

response cost estimate for the Atlantic. We would expect response costs in the Atlantic to be 

similar to response costs in the Gulf of Mexico for two reasons. First, both regions have heavily 

populated coastal areas, with ready access to ports, airports, equipment, and labor. Additionally, 

the shoreline habitat types observed in the Central Gulf and Mid-Atlantic regions are generally 

similar.11 Since shoreline cleanup commands such a large portion of response resources, the 

 

6

See Etkin (1999), Etkin (2000).

7

See ADFG, Exxon Valdez Oil Spill Trustee Council.

8

See U.S. District Court (2015). Though 4 million barrels of oil were released from the well, roughly 

800,000 were contained, leaving only 3.19 million barrels that were discharged into the Gulf of Mexico. Though 

recovery of the 800,000 barrels was part of the response, we calculate per barrel costs using the 3.19 million barrels 

to provide a conservative estimate of response costs per barrel spilled.

9

See BP (2015).

10 This estimate does not take into account oil spills that occurred within the last 15 years. While it is 

possible that average response costs have changed in the last 15 years, this source remains the most comprehensive 

analysis of oil spill response costs available.

11 We use the Mid-Atlantic for this comparison based on information in the DPP indicating that the MidAtlantic accounts for more than 80 percent of the undiscovered technically recoverable resources in the Atlantic 

Program Area. The Central Gulf Planning Area was chosen for purposes of comparison because historically the 

Central Gulf has seen greater levels of oil and gas activity than the other two Gulf planning areas. 
67

similarities in shoreline habitat type indicate that cleanup costs in both locations are likely to be 

similar, assuming similar levels of shoreline oiling. If anything, shoreline cleanup is likely to be 

less expensive in the Mid-Atlantic than in the Central Gulf, because the Mid-Atlantic has a 

higher proportion of beaches and a lower proportion of wetlands than the Central Gulf. As a 

result, using the response costs observed for the Deepwater Horizon spill as the basis for the 

response cost estimate in the Atlantic is likely to provide a conservative estimate. Table 23

presents the distribution of shoreline types in the Central Gulf and Mid-Atlantic, as calculated 

from the National Oceanic and Atmospheric Administration (NOAA) Environmental Sensitivity 

Index data.12 For additional perspective, Table 23 also shows the distribution of shoreline types 

for the Mid-Atlantic, South Carolina, and Georgia combined (i.e., the states near the Program 

Area) and for the Mid-Atlantic and New Jersey combined.

Table 23. Distribution of shoreline habitat

Shoreline 

Classification

Percent of 

Shoreline 

in Central 

Gulf

Percent of 

Shoreline In 

Mid-Atlantic

Percent of 

Shoreline in

Mid-Atlantic, 

South Carolina, 

and Georgia

Percent of 

Shoreline in 

Mid-Atlantic 

and New 

Jersey

Marshes and 

Swamps 67% 50% 45% 44%

Beaches 17% 33% 39% 38%

Tidal flats 6% 2% 2% 1%

Man-made 

structures 5% 3% 2% 3%

Riprap 3% 10% 10% 11%

Rocky and steep 

shorelines 1% 0% 1% 1%

Vegetated banks 1% 1% 1% 2%

Source: NOAA Office of Response and Restoration. Environmental Sensitivity Index Maps. 

Accessed 7/20/15 at: http://response.restoration.noaa.gov/maps-and-spatial-data/downloadesi-maps-and-gis-data.html

Notes:

(1) The NOAA Environmental Sensitivity Index data include shoreline information for coastal 

rivers and other inland waterways that are unlikely to be impacted by CDEs. As a result, we 

exclude information on these inland waterways when calculating regional proportions of 

shoreline habitat types. For instance, the Environmental Sensitivity Index data include 

information on shoreline habitat along the Potomac River, but we do not include this 

information in our calculation of shoreline types in the Mid-Atlantic.

(2) Additionally, we exclude coastal areas landward of the Outer Banks in North Carolina 

from our calculation of shoreline habitat types in the Mid-Atlantic. We assume that the Outer 

Banks would prevent oil from reaching this area.

(2) Shoreline types which account for less than one percent of total shoreline are not 

included in this table.

 

12 See NOAA Office of Response and Restoration.
68

The Arctic region presents the greatest difficulty in estimating cleanup and containment costs. 

This is a result of both the unique geography of the Arctic region and the lack of historical spill 

response operations to examine. While the Exxon Valdez spill provides the best comparison 

available, there are several reasons why a spill in the Arctic may result in considerably different 

response costs than a spill in southern Alaska. One major difference is that the Arctic is hundreds 

of miles away from major ports, airports, and population centers. In the event of a spill, it would 

likely take longer to move equipment and labor to the spill site than in any other region. A 

delayed initial response to a spill has the potential to result in a greater volume of oil spilled, or a 

greater amount of shoreline oiling. Additionally, the Chukchi and Beaufort Seas are relatively 

open as compared to the relatively enclosed Cook Inlet (and Prince William Sound). As a result, 

a catastrophic oil spill may disperse into open water to a greater extent in the Artic, resulting in 

comparatively less shoreline oiling. The greater preponderance of ice cover along the Arctic 

shoreline as compared to Cook Inlet also has the potential impact spill response costs. Often 

times, ice can act as a natural barrier, containing oil out at sea where it is easiest to clean up. 13

However, if sea ice is spread too thin to contain the oil, it may just hinder response activities. 

Additionally, under certain conditions spilled oil may become encapsulated by ice, potentially 

adding to the length of the response effort when the ice melts and releases the trapped oil.

As a result of the particularly significant uncertainty associated with responding to a spill in the 

Arctic, we present the cleanup and containment costs for this region as a range. At the low end of 

the range, we assume a per barrel response cost equal to that associated with Deepwater Horizon. 

For the high end of the range, we apply the per-barrel response cost associated with Exxon 

Valdez. Table 24 presents cleanup and containment cost estimates for catastrophic spills in the 

Gulf of Mexico, Atlantic, Cook Inlet, and the Arctic.

Table 24. Estimated response costs per barrel by geographic region

Cost 

Category

Gulf Of 

Mexico Atlantic Cook Inlet Arctic

Response 

Cost $5,100/barrel $5,100/barrel $16,000/barrel $5,100/barrel -$16,000 /barrel

Note: All values presented in 2017 dollars.

3.2 ECOLOGICAL DAMAGES

Similar to response costs, the ecological damages associated with a CDE are variable and 

dependent upon a number of uncertain factors. Many of these factors are the same as those that 

contribute to uncertainty in response costs, such as oil type, weather, proximity to shoreline, and 

habitat type. Among these, oil type and weather conditions affect the dispersion, evaporation and 

volatilization rate of oil, which influences the quantity of ecological resources oiled. Oil type, 

proximity to shoreline, and habitat type all influence the magnitude of damages associated with 

oiled ecological resources. For instance, a mile of oiled wetland typically causes greater 

ecological damage than a mile of oiled beach. Similarly, a mile of shoreline oiled with crude 

typically causes greater ecological damage than a shoreline oiled with a lighter petroleum 

product such as gasoline. Ecological damages are also dependent on the season, which affects the 

 

13 See Transportation Research Board and National Research Council (2014).
69

presence or absence of migrating species, and the vulnerability of species to oiling. For instance, 

shoreline oiling may be considerably more damaging during the growing season, when the oil 

could impact plant reproduction and seed development.

Given these significant uncertainties and the lack of historic data on catastrophic spills, we 

estimate a range of ecological cost estimates for each region. The high-end ecological cost 

estimates are derived from settlement data for the two catastrophic oil spills that have occurred in 

the U.S., the Deepwater Horizon and Exxon Valdez spills. Since historic examples of 

catastrophic spills in the Atlantic and Arctic do not exist, we developed the high-end estimates 

for these regions by applying scaling factors to the Deepwater Horizon and Exxon Valdez

damage estimates. 

The low-end estimates of ecological costs are based on the per barrel damages for other (noncatastrophic) spills, using settlement and assessment data published by NOAA and the U.S. Fish 

and Wildlife Service (FWS). While these spills are smaller in size relative to the Deepwater 

Horizon and Valdez spills and may have occurred in circumstances different than what might be 

expected from offshore oil and gas development, they still provide insight into geographic 

differences in ecological costs and the potential per barrel magnitude of these costs. 

3.2.1 Gulf of Mexico

The low-end estimate of the per-barrel ecological damages resulting from a catastrophic spill in 

the Gulf of Mexico is based on the damages for eight previous spills in the region. Table 25

presents the number of barrels spilled and estimated ecological costs associated with each spill, 

as obtained from the associated natural resource damage assessment (NRDA) documents. 

Across these eight spills, the per barrel ecological damage ranges from $8 to $1,400, with an 

average value of $580 per barrel. This value serves as our low end per-barrel value for the Gulf 

of Mexico.

The recently announced settlement for the Deepwater Horizon spill serves as the basis for the 

high-end ecological costs per barrel spilled in the Gulf of Mexico. While the settlement has not 

yet been finalized through a consent decree, BP has reached an agreement in principle with the 

United States and five Gulf states.14 The terms of the agreement include approximately $8 

billion15 to compensate for damages to natural resources.16 This value represents total natural 

resource damages, including any damages to recreational resources. To isolate the ecological 

portion of these damages, we subtract approximately $720 million (adjusted from 2015$ to 

2017$) in recreational use damages, as estimated in the Preliminary Damage Assessment and 

Restoration Plan (PDARP) for the Deepwater Horizon spill. Total ecological damages are thus 

estimated to be approximately $7.2 billion, or $2,200 per barrel of oil spilled (in 2017 dollars).17

 

14 See DOJ (2015)

15 $8 billion reflects $1 billion in early restoration costs, a $7.1 billion settlement paid out over 15 years, 

and an additional $700 million to cover any presently unknown future natural resource damages. All of these costs 

were adjusted to 2017 dollars. In addition, the 15-year stream of payments for $7.1 billion was adjusted for inflation 

to convert from nominal dollars to real year 2017 dollars.

16 See NOAA (2015).

17 Note that the estimate of $720 million in recreational damages from the Deepwater Horizon spill differs 

from the $600 million estimate presented later in this document. This is due to the fact that the $720 million figure 

reflects compounding between the time of the spill and the publication of the PDARP. Because the time between a 
70

Table 25. NRDA estimates of ecological damages from past spills on the Gulf Coast (2017$)

Spill Name Spill 

Year

Barrels 

Spilled

NRDA 

Settlement

NRDA Cost 

Per Barrel

Mosquito Bay12001 3,000 $1,800,000 $610

Westchester2 2000 12,000 $99,000 $8

Devon LA Corp3 2002 300 $65,000 $220

Equinox Oil, Alma Energy41998 1,500 $1,200,000 $770

OCEAN 255/B-155/BALSA 37 

Spill5 1993 8,600 $9,600,000 $1,100

Blake IV and Greenhill 

Petroleum Corp. Well 256 1992 2,900 $4,000,000 $1,400

Chevron BLDSU #5, West Bay 

Field6 1995 260 $110,000 $430

Texaco Pipeline Company Lake 

Barrel oil spill6 1997 6,500 $880,000 $130

Average 4,400 $2,200,000 $580

Notes:

All values rounded to two significant digits. When it was possible to make a distinction, 

NRDA settlement values represent only the ecological portion of natural resource 

damages.

Sources:

1 See Settlement Agreement, Mosquito Bay (2001)

2 See United States of America, the State of Louisiana v. Marine Oil Trader 3, Ltd. and 

Ermis Maritime Corp (2003)

3 See North Pass Settlement Agreement (2006)

4 See In re: Equinox Oil Company, Inc. / Alma Energy Corporation, Debtors. Settlement 

Agreement (2006).

5 See FLDEP, NOAA, and U.S. DOI (1997)

6 See BOEMRE (2010)

3.2.2 Atlantic

We estimate low-end ecological cost values for CDEs occurring in the Atlantic based on the 

estimated damages or settlement values for 18 previous spills in the region. Table 26 lists these 

18 spills, and the associated settlement values for ecological damages. As indicated in the table, 

the ecological damages or settlement values for these spills average approximately $790 per 

barrel.

 

CDE’s occurrence and the publication of a PDARP depends on factors unrelated to damages (e.g., the negotiating 

strategies of the responsible parties and the Trustees, the number of Trusteess involved), we excluded compounded 

interest from our estimates of damages where possible. For impacts other than recreation, we made no adjustments 

for compounding, however, since the Deepwater Horizon PDARP does not describe the monetization of ecological 

damages.
71

Table 26. NRDA estimates of ecological damages from past spills on the Atlantic Coast 

(2017$)

Spill Name Spill Year

Barrels 

Spilled

NRDA 

Settlement

NRDA Cost 

Per Barrel

Anitra11996 1,000 $1,300,000 $1,300

North Cape21996 20,000 $10,000,000 $520

T/V Bow Mariner32004 82,000 $640,000 $8

Kinder Morgan Sodium Hydroxide42004 11,000 $110,000 $10

Cibro Savannah51990 17,000 $470,000 $28

Exxon Bayway61990 14,000 $15,000,000 $1,100

B.T. Nautilus71990 6,200 $4,300,000 $690

Bouchard Barge82003 2,300 $1,500,000 $650

Julie N91996 4,300 $1,200,000 $290

M/S Star Evviva10 1999 570 $2,500,000 $4,300

T/V Posavina11 2000 1,400 $140,000 $100

Barge RTC 38012 1992 640 $330,000 $520

Evergreen International M/V Ever 

Reach Vessel13

2002

300 $1,000,000 $3,500

Chelsea Creek (Global Oil/Irving Oil

Pipeline)13

2006

520 $12,000 $23

Jahre Spray13 1995 1,400 $200,000 $140

M/T Kentucky14 1994 310 $34,000 $110

M/V Presidente Rivera15 1989 6,000 $4,100,000 $680

M/V World Prodigy16 1989 7,000 $1,000,000 $150

Average 9,700 $2,500,000 $790

Notes:

All values rounded to two significant digits. When there was enough information available, NRDA 

settlement values represent only the ecological portion of natural resource damages.

Sources:

1 See NJDEP (2004)

2 See NOAA, U.S. DOI, State of Rhode Island (1999)

3 See U.S. FWS (2010)

4 See NOAA Damage Assessment, Remediation, and Restoration Program.

5 See Montauk Oil Transportation Corp. v. Steamship Mutual Underwriting Association (Bermuda)

6 See United States of America, the State of New York, the State of New Jersey, and the city of 

New York v. Exxon Corporation.

7 See United States of America, the State of New York, the State of New Jersey, and the city of 

New York v. Nautilus Motor Tanker Co., Ltd.

8 See United States of America, Commonwealth of Massachusetts, and the State of Rhode Island 

v. Bouchard Transportation Company, Inc., Tug Evening Tide Corporation, and B. No 120 

Corporation.

9 See United States of America and the State of Maine v. Amity Products Carriers, Inc.

10 See U.S. FWS, S.C. DNR, Office of the Governor (2004)

11 See NOAA, U.S. DOI, MA EEA (2004)

12 See Settlement Agreement, in the matter of Barge RTC 380 (1994)

13 See BOEMRE (2010)

14 See Pennsylvania DEP (1995)

15 See NJDEP (1996)

16 See NOAA (1996)
72

Ideally, the high-end estimate of ecological damages for a catastrophic spill in the Atlantic would 

be estimated based on one or more historic examples of such a spill in the region. Since a 

catastrophic oil spill has never occurred off the Atlantic coast of the United States, we estimate 

the high-end costs of a catastrophic spill in the region by scaling the per barrel damages 

associated with the Deepwater Horizon oil spill in the Gulf of Mexico. The sample of noncatastrophic oil spills used to estimate low-end costs (presented in Tables 25 and 26) indicated 

that the average oil spill in the Atlantic resulted in ecological damages per barrel 35 percent 

higher than the average ecological damages in the Gulf of Mexico ($790 per barrel versus $580 

per barrel). As a result, this analysis assumes that a catastrophic spill in the Atlantic would result 

in ecological damages per barrel that are 35 percent greater than the damages from the 

Deepwater Horizon spill. Scaling the Deepwater Horizon settlement value in this way suggests 

that a catastrophic spill in the Atlantic would result in ecological damages of approximately 

$3,000 per barrel

3.2.3 Cook Inlet

While no catastrophic oil spills have occurred in Cook Inlet, the Exxon Valdez spill occurred in 

the neighboring Prince William Sound. Because of the similarities between the two locations,18

we use the per barrel ecological damages associated with the Exxon Valdez spill as the high-end 

estimate for the ecological damages expected to result from a catastrophic oil spill in Cook Inlet. 

The Exxon Valdez settlement included approximately $1.1 billion to compensate for damages to 

ecological resources, or approximately $4,200 per barrel of oil spilled (in year 2017 dollars). 

A review of NRDAs led by NOAA and FWS did not identify any non-catastrophic spills in Cook 

Inlet that might inform the estimation of a low-end ecological damages value for the area. In the 

absence of such data, we develop a low-end estimate by scaling the low-end value for the Gulf of 

Mexico by the ratio of ecological damages from Exxon Valdez compared to Deepwater Horizon. 

Specifically, as noted above, the eight historic NRDAs in the Gulf of Mexico indicated average 

ecological damages of $580 per barrel. Additionally, the Deepwater Horizon agreement indicates 

ecological damages of $2,200 per barrel, while the Exxon Valdez settlement resulted in 

ecological damages that were 86 percent higher, at $4,200 per barrel. As a result, we assume that 

the low-end ecological damages for Cook Inlet are 86 percent greater than the average settlement 

of $580 per barrel seen in the Gulf of Mexico, or $1,080 per barrel.

3.2.4 Arctic

The uncertainty surrounding ecological damages is particularly high in the Arctic, given that 

there is no historic record of NRDAs associated with oils spills of any size in the region. Since 

the Arctic environment is most similar to that of Cook Inlet, the ecological damage estimates 

produced for Cook Inlet serve as the starting point for the estimation of Arctic-specific values. 

Lacking any historic spills to compare between the two regions, the OECM was used to develop 

scaling factors to apply to the low-end and high-end values for Cook Inlet. 

 

18 The similarities between the two locations were confirmed by outputs from the OECM. The BOEM 

2017-2022 DPP scenario for Cook Inlet was run for both Cook Inlet and the Gulf of Alaska planning area, where 

Prince William Sound is located. The OECM produced very similar estimates of ecological damages in both 

planning areas (differing by only 2 percent), suggesting that oil spills tend to have similar impacts on the ecological 

resources in each planning area.
73

Though the OECM was not designed to model the impacts of a catastrophic spill, the impacts of 

a series of smaller spills can be analyzed to identify the relative difference in ecological impacts 

between Cook Inlet and the Arctic. Specifically, this was achieved by modeling identical E&D

scenarios in both Cook Inlet and the Arctic. The identical E&D scenarios are associated with 

identical spill sizes and frequencies. As a result, any difference in ecological damages produced 

by modeling the same E&D scenario in both Cook Inlet and the Arctic will reflect the influence 

of environmental factors specific to each region. For this analysis, we used the E&D scenario 

associated with the 2017-2022 Draft Proposed Program (DPP) for Cook Inlet to model 

ecological impacts in both Cook Inlet and the two Arctic planning areas (Chukchi Sea and 

Beaufort Sea).

The OECM results suggest that ecological impacts in the Beaufort Sea are 35 percent greater 

than in Cook Inlet, while ecological impacts in the Chukchi Sea are 130 percent greater than in 

Cook Inlet. The difference in results between the two Arctic planning areas may be driven by a 

number of factors, including sensitivity of shoreline habitat, presence of biota populations, and 

the impact of ocean currents on shoreline oiling. To be conservative, we use the 130 percent 

factor estimated for the Chukchi Sea to scale the per-barrel damage values for Cook Inlet. 

Applying this factor to the low-end estimate for ecological damages in Cook Inlet ($1,080 per 

barrel) yields a low-end value for the Arctic of $2,500 per barrel. Using this same approach, we 

estimate a high-end cost value for the Arctic of $9,700 per barrel.

3.2.5 Summary

Table 27 presents the range of ecological costs estimated to result from a catastrophic oil spill in 

the Gulf of Mexico, Atlantic, Cook Inlet, and the Arctic. The lowest ecological impacts 

associated with a catastrophic oil spill are expected in the Gulf of Mexico, while the highest 

impacts are expected in the Arctic.

Table 27. Range of NRDA costs by geographic region (2017$)

Region Low-End Ecological Cost High-End Ecological Cost

Gulf of Mexico $580/barrel $2,200/barrel

Atlantic $790/barrel $3,000/barrel

Cook Inlet $1,080/barrel $4,200/barrel

Arctic $2,500/barrel $9,700/barrel

3.3 RECREATIONAL USE

Coastal and marine resources provide recreational services such as beach use, boating, fishing, 

and wildlife viewing that are valuable to the public and that enhance the welfare of those who 

consume these services. If these resources are oiled as a result of a CDE (or expected to be 

oiled), the recreational value that they provide may be diminished, as oiling may impair the use 

of these resources. The diminished recreational value provided by affected resources may be 

reflected in reduced use of these resources (e.g., reduction in the number of beach trips) or 

reductions in individuals’ willingness to pay (WTP) to use the affected resource. In the case of a 

CDE affecting large portions of the coast, these impacts are likely to be particularly substantial 

because widespread oiling would limit the ability of individuals to engage in coastal recreation at 

other sites located near their preferred site. For a smaller spill affecting a single beach, the 
74

availability of substitutes in the same area may partially mitigate the recreational impact of the 

spill. Given the potential scale and duration, a CDE could limit these substitution options.

Estimating the recreational value lost as a result of CDE requires information on (1) the baseline 

level of activity for the full suite of recreational activities affected, (2) the change in the level of 

recreational activity, and (3) the per unit (e.g., per user day or per beach trip) value that 

individuals place on these activities in the baseline and during the impact period. This 

information would allow one to estimate recreational value in the absence of the CDE and with 

the CDE. Obtaining this information, however, presents a number of challenges, as described 

below for each of the items outlined above.

 Specification of baseline recreational resource use: The specification of the baseline would 

ideally reflect use in the impacted area in the absence of a CDE. However, the timing 

and location of a CDE, both of which are substantial determinants of a CDE’s impact, are 

highly uncertain. With offshore oil production occurring year-round, a CDE could occur 

during periods of high use or during periods when use is relatively low. Similarly, a CDE 

could affect coastal and marine areas frequented by recreators or areas where recreation 

is more limited. 

Aside from uncertainties related to CDE location and timing, gauging baseline use is also 

complicated by the fact that variables besides the occurrence of a CDE affect the use of 

recreational resources. In particular, changes in weather affect the use of coastal 

recreation sites, with higher temperatures and a lack of precipitation typically leading to 

higher use than cooler temperatures and/or rain. Thus, even if use data are available for 

an impacted area in the aftermath of a CDE, the prior year’s data may not be 

representative of the actual baseline for that CDE. For example, if a hurricane had struck 

during the prior year but not during the spill year, use during the prior year would likely 

be an under-representation of baseline use. 

 Estimating the change in coastal recreation activity: Estimating changes in the use of 

coastal resources attributable to a CDE is complicated by the non-spill factors described 

in the baseline discussion above. Changes in the use of coastal recreation sites could 

reflect the impact of a CDE as well as the weather, macroeconomic conditions, gas 

prices, and other variables. Distinguishing between the influence of a CDE and these 

other variables may not be possible in all cases. In addition, the spatial resolution of the

available use data may not allow one to focus exclusively on use in areas affected by a 

CDE. For example, some data sources report use by state rather than for individual sites.

 Valuation: The value of the recreational uses of coastal and marine resources is highly 

variable depending on the attributes of the sites potentially affected by a CDE. Key 

attributes that affect value include the amenities available at the site (e.g., fish pier), how 

crowded a site is, the cleanliness of the site, or the prevalence of fish at the site (for 

recreational fishing sites). Furthermore, because a CDE may affect the attributes of a 

site, the value that individuals place on the site may change as a result of a CDE. Thus, 

even if existing literature provides estimates of recreational value under non-CDE 

conditions, the occurrence of a CDE could affect the value of recreational activity that 

still takes place after the CDE occurs. 
75

In addition to the challenges outlined above related to the measurement of baseline use, changes 

in use associated with a CDE, and recreation value, the available data on each of these variables 

is also fairly limited for most coastal areas. While use data are available from a few sources, 

many of these sources are either outdated or limited in the scope of activities or geographic areas 

that they cover. For example, the National Survey on Recreation and the Environment 

(Leeworthy and Wiley, 2001), includes estimates of the number of user days for beach use, but 

these data are for the year 2000 and are not disaggregated beyond the state level. Data on the 

changes in use associated with a CDE are even more limited, as only two catastrophic spills have 

ever occurred in the U.S. (e.g., the Exxon Valdez spill in 1989 and the Deepwater Horizon spill 

in 2010). While data associated with these spills may inform the assessment of the recreational 

impacts associated with a CDE, these events represent just two data points in a wide distribution 

of recreational impacts that may occur as a result of a CDE. Finally, while the environmental 

economics literature includes several studies related to the value of different coastal recreational 

activities, many of these studies are fairly dated or focus on marginal changes on the value of 

recreation that are not transferrable to assessment of the impacts of a CDE. For example, some 

studies estimate changes in the value of a recreational fishing day per acre of coastal marsh 

developed or preserved.

Despite these and other limitations, the available data nevertheless can be used to approximate 

the potential recreational costs of a CDE for four recreational activities: beach use, recreational 

fishing, boating (Gulf of Mexico only), and wildlife viewing (Cook Inlet only). We present our 

estimates of these damages, on a per barrel basis, and our approach for developing these 

estimates in the sections that follow. While a CDE would likely affect activities other than those 

examined here, such as scuba diving, the available data for these other activities were insufficient 

to support development of impact estimates. 

3.3.1 Shoreline Recreation and Boating

Our assessment of the potential per-barrel damages related to shoreline recreation (beach use and 

inland fishing) and boating focuses on impacts in the Gulf of Mexico, the Atlantic, and Cook 

Inlet.

19 For the Gulf of Mexico region, we present the estimated damages associated with the 

Deepwater Horizon spill as an indicator of potential impacts. We obtained this information from 

the PDARP and the associated administrative record issued by the Deepwater Horizon Oil Spill 

Natural Resource Trustees (the Trustees).

20

 The PDARP provides aggregate results from the 

Trustees’ comprehensive study of the spill’s impacts on recreational activites, including 

swimming, sunbathing, shoreline fishing, inland fishing, and boating. The Trustees’ assessment 

of lost recreational use associated with the Deepwater Horizon spill represents one of the most 

comprehensive and robust economic studies of coastal recreation ever conducted.

Due to the more limited data available for the Atlantic and Cook Inlet, we apply a different 

approach for these regions. For both regions, we assume that a CDE would occur near the 

beginning of the peak season for coastal recreation and would affect recreational activity for 

several months. Based on this information, we develop estimates of baseline use in both areas 

for an extended period of several months. We then estimate the percent reduction in use based 

 

19 Aside from subsistence fishing, which we examine below, we are not aware of any recreational fishing 

that takes place in the Arctic.

20 See NOAA (2015)
76

on the observed changes in use for the Deepwater Horizon and Exxon Valdez spills. Applying 

these percentage reductions to the estimates of baseline use yields estimates of the lost user days 

associated with a CDE. We value the reduction in recreational use based on estimates presented 

in the economic literature. We present the details of this approach below by region.

Note that the recreational activity examined in this section includes beach use (inclusive of 

fishing on sandy beaches), inland fishing, and boating. While much of the environmental 

economics literature examines beach use and fishing separately, we examine them together here 

because the most robust and detailed data that we identified combine the two. 

Gulf of Mexico (GOM)

As noted above, we rely on the results of the lost recreational use assessment included in the 

Deepwater Horizon (DWH) PDARP and the associated administrative record to approximate the 

impacts of a CDE on coastal recreation in the Gulf of Mexio region. The DWH assessment 

examines three categories of recreation: shoreline use, inland fishing, and boating. Shoreline use 

includes any and all saltwater recreation occurring on sandy beaches, including swimming, 

sunbathing, and fishing. Inland fishing, as distinct from shoreline fishing, represents fishing at 

salwater locations not located on sandy beaches. Boating refers to pleasure boating and fishing 

on motorboats or sailboats.

To estimate changes in recreational use associated with the spill, the Trustees mounted a 

significant data collection effort that involved a series of onsite recreator surveys and aerial 

counts of recreators partaking in recreationl activities at coastal sites. The Trustees measured the 

number of recreators at 743 beach segments throughout the Gulf through overflights (conducted 

by low-flying airplanes), and onsite interviews and counts (conducted by survey teams on foot). 

To capture the impacts to recreational anglers at non-beach saltwater access points, the Trustees 

sampled 323 sites from a list of non- beach saltwater sites provided by NOAA’s Marine 

Recreational Information Program (MRIP). For the boating study, the Trustees conducted counts 

and interviews to measure the number of recreational boaters entering the Gulf at 103 sites in the

North Gulf and 90 sites in the Florida Peninsula. Sites were selected from MRIP’s list of 534 

saltwater boating access points open to the public. Using these various data, the study team 

estimated the level of recreational activity during the impact period and after recreational use 

returned to baseline levels. The difference between the two represents the change in use 

associated with the spill.

The Trustees estimated the changes in shoreline recreation associated with the Deepwater 

Horizon spill over a large area spanning the North Gulf and the Florida Pensinsula over a period 

of 19 months. Figure 14 below shows a map of the sites sampled throughout the impact area 

(including non-beach fishing and boating sites). The duration of spill impacts to recreation varied 

within the area shown in Figure 14 and by activity. For example, the impact period for shoreline 

use in the Florida Peninsula was June 2010 through January 2011, while the impact period for 

shoreline use in the North Gulf (i.e., closer to the blowout site) was May 2010 through 

November 2011. In addition, within the North Gulf, impacts for shoreline use were longer in 

duration than impacts for inland fishing. Table 28 outlines the different impact periods by 

activity and region. 
77

Figure 14. Map of recreation sites sampled in the Deepwater Horizon lost recreational use 

assessment21

Table 28. Duration of losses to shoreline recreation, by region and activity, for the 

Deepwater Horizon lost recreational use assessment

2010 2011

Ac tivi ty Region

MayJuneJulyAug.Sept.Oct.Nov.Dec.Jan.Feb.Mar.Apr.MayJuneJulyAug.Sept.Oct.Nov.

Shoreline 

Use

North Gulf

Peninsula

Inland 

Fishing North Gulf

Boating North Gulf

Source: Adapted from NOAA (2015)

Tables 29 and 30 below, taken from the PDARP, present the recreational use estimates from 

what the Trustees refer to as Tier 1 of the damage assessment.22 These Tier 1 damages are based 

on the Trustee’s detailed infield data collection effort and cover the period June 2010 through 

 

21 See NOAA (2015).

22 The Trustees’ Tier 2 estimates of damages, which rely on less detailed information than the Tier 1 

estimates, as summarized below.

Source: NOAA (2015)
78

November 2011. Consistent with the PDARP’s presentation of results, Table 29 presents use 

estimates for shoreline use and inland fishing combined. As shown in the table, the Trustees’ 

Tier 1 assessment estimated that the Deepwater Horizon spill resulted in 12.47 million lost user 

days for shoreline use and inland fishing. This value represents a 23.3 percent reduction relative 

to the baseline of 53.4 million user days over the entire 18-month impact period for Tier 1. Note 

that Table 29 splits the impact period for shoreline use and inland fishing into two separate subperiods. For the first period—June 2010 through January 2011—the estimated reduction in use 

is 32.5 percent, whereas the estimate for the second period—February 2011 through November 

2011—is lower at 10.0 percent.

Table 29. Deepwater Horizon shoreline and inland fishing study lost use estimates – tier 1

Region

Baseline 

Estimate

Spill Estimate 

(User Days 

During Spill)

Loss 

Estimate 

(Lost User 

Days)

Percent 

Decline

June 2010 through January 2011

North Gulf 14,207,507 7,782,270 6,425,237 45.2%

Peninsula 17,471,871 13,601,695 3,870,176 22.2%

Overall 31,679,378 21,383,965 10,295,413 32.5%

February 2011 through November 2011

North Gulf 21,754,732 19,580,582 2,174,149 10.0%

Total (Months 1-18) 53,434,109 40,964,547 12,469,562 23.3%

Source: NOAA (2015)

Table 30. Deepwater Horizon boating study lost use estimates - tier 1 

Region

Baseline 

Boating Days

Boating Days 

During Spil 

Impactperiod

Lost 

Boating 

Days

Percent 

Decline

North Gulf 759,605 544,231 215,374 28.4%

Source: NOAA (2015)

To estimate the economic value of recreational losses associated with the Deepwater Horizon

spill, the Trustees developed two Randomized Utility Maximization (RUM) models for saltwater 

recreation in the Gulf of Mexico region. One model covers both shoreline use and inland 

fishing, while the other is specific to boating. These models capture the value of lost trips, as 

well as the value of substitute trips and diminished-value trips (i.e., trips that still occurred with 

the spill but were of lesser value because of the spill). The Trustees collected the data necessary 

to estimate these models from a local survey targeting adults who live in Louisiaina, Mississippi, 

Alabama, Florida, and selected counteies in Texas and Georgia, and a national survey that 

targeted adults living in the contiguous U.S., excluding the areas targeted in the local survey.
79

Using the survey data, the valuation models provide a quantitative description of people’s 

recreation behavior. For example, the shoreline valuation model estimates the number of 

recreation trips from throughout the contiguous U.S. to different shoreline areas in the Gulf of 

Mexico region. This behavior, combined with the costs associated with different site choice 

options, form the basis of the models’ valuation of recreation. Calibrating the models to the 

reduction in use measured through the overflights and infield surveys (see Tables 29 and 30), the 

Trustees estimated a value per lost user day of $36.25 for shoreline use and inland fishing and 

$16.20 per day for boating, both in year 2015 dollars.23 In year 2017 dollars, these values are 

$37.87 and $16.93, respectively. When applied to the lost user day estimates presented above in 

Tables 29 and 30, this translates to losses of more than $475 million in total, as summarized in 

Table 31.

Table 31. Summary of Tier 1 recreation impacts associated with the Deepwater Horizon 

spill

Lost User Days

Value Of Recreation Impacts 

(2017$)

Shoreline 12,325,512 $466,800,000 

North Gulf 8,455,336 $320,200,000 

Peninsula 3,870,176 $146,600,000 

Inland Fishing 144,050 $5,500,000 

Boating 215,374 $3,600,000 

Total $475,900,000 

Note: The value of recreation impacts presented in this table is lower than the 

estimate of approximately $523 million in the PDARP for the Deepwater Horizon 

spill. The difference reflects the compounding of damages from 2010 to 2015 in 

the PDARP. For the purposes of the present analysis, we do not compound 

impacts.

Source: Values derived from English and McConnell (2015). Values from this 

memorandum were converted to year 2017 dollars.

The Tier 1 losses shown in Table 31 reflect the extensive infield data collection undertaken by 

the Trustees. The coverage of the infield studies, however, does not include all locations, times 

of day, or months impacted by the spill. For example, the study team’s primary infield data 

collection did not capture use of the beach at night. To address these gaps in coverage, the 

Trustees performed a series of supplemental analyses using various other data sources. These 

Tier 2 analyses and the losses estimated by each analysis are summarized in Table 32.

 

23 Please see Appendix B for a summary of additional GOM beach use and fishing valuation estimates. 
80

Table 32. Tier 2 secondary shoreline study damages

Coverage Gap 

Filled Lost User Days

Damages 

($2017)

Early Data 

Collection

Lost user days in 

May 2010 not 

included in Tier 1.

Shoreline use: 1,550,137

$60,100,000 Inland fishing: 22,708

Boating: 72,871

Total: 1,645,716

Supplemental 

Shoreline 

Study

Shoreline activity 

before regular 

sampling hours for 

the Tier 1 sutdy.

1,234,821 $46,800,000 

Backyard 

boating

Boating activity for 

boats launched 

from private 

residences.

22,895 $400,000 

Night fishing 

Fishing occurring 

outside the daily 

sampling hours

152,517 $5,800,000 

For-hire 

fishing

Fishing from forhire fishing boats. 216,089 $8,200,000 

Fixed costs 

of boating

Underestimate of 

value due to fixed 

costs incurred

Not applicable $2,600,000 

National 

parks and 

other Federal 

lands

Federal lands 

outside Tier 1 

sample area 23,276 $900,000 

TOTAL $124,600,000

Source: Adapted from NOAA (2015). Monetized values converted to year 2017 dollars 

without compounded interest. 

Combining the Tier 1 and Tier 2 damages yields 15,669,110 lost user days for shoreline use and 

inland fishing and 311,140 lost user days for boating. Together, these correspond to damages of 

approximately $600 million, as shown below in Table 33. Dividing this estimate by the 

Deepwater Horizon spill size (3.19 million barrels, net of oil recovered by BP), the estimated 

impacts to GOM beach recreation on a per-barrel basis are approximately $188.24

Table 33. Summary of recreational impacts associated with the Deepwater Horizon oil spill

Tier

Value Of Recreational Impacts 

(2017$)

Tier 1 (Primary Analysis) $475,900,000 

Tier 2 (Supplemental 

Analyses)

$124,600,000 

Total $600,500,000 

 

24 See U.S. District Court (2015) for the estimate of the spill volume.
81

Atlantic

As noted above, the impacts of a CDE on coastal recreation will depend on when and where a 

CDE occurs. For the purposes of estimating the recreational impacts of a CDE in the Atlantic 

OCS Region, we assume that a CDE would affect recreation in the states along the Mid-Atlantic 

OCS Planning Area. Based on BOEM’s 2017 – 2022 Draft Program Proposal, more than 80

percent of the undiscovered technically recoverable resources (UTTR) of the Program Area are 

in the Mid-Atlantic.

25

 Thus, the Mid-Atlantic represents the portion of the Atlantic region most 

at risk to a CDE. As a sensitivity analysis, however, Appendix A examines the recreational 

impacts of a scenario in which a CDE in the Atlantic affects coastal recreation in the MidAtlantic and as far north as New Jersey. The sensitivity analysis also considers another scenario 

in which a CDE in the Atlantic affects recreation in Georgia and South Carolina, as well as the 

Mid-Atlantic. 

In addition to a CDE’s location, its timing and the duration of its impact are also highly 

uncertain. As a simplifying assumption, this analysis examines the impacts of a hypothetical 

CDE in the Atlantic with timing and duration of impacts consistent with the Deepwater Horizon 

spill in the Gulf of Mexico. Specifically, we assume that the CDE would occur in the spring and 

would affect shoreline recreation (beach use and fishing on sandy beaches) and inland fishing as 

follows: 

 Shoreline recreation: We assume that the CDE would affect shoreline recreation from 

May of the year that the spill occurs through November of the following year. This time 

horizon is consistent with the duration of shoreline impacts in the North Gulf following 

the Deepwater Horizon spill (see Table 28 above). While it is possible that the duration 

of impacts may be shorter for areas relatively far from the CDE site (i.e., similar to the 

Florida peninsula for the Deepwater Horizon spill), we assume a 19-month impact period 

consistent with that for the North Gulf to avoid potential underestimation of impacts. 

In specifying shoreline recreation in the baseline, we split the 19-month period into two 

sub-periods: May to January and February to November. As described in greater detail 

below, we assume different percent changes in use for these two periods, based on the 

changes observed following the Deepwater Horizon spill.

 Inland fishing: We assume that a CDE in the Mid-Atlantic and would affect inland 

fishing from May of the spill year through March of the following year across the entire 

area. This time horizon is consistent with the assessment of inland fishing impacts for the 

Deepwater Horizon spill.

Note that our quantitative assessment of potential recreational impacts in the Atlantic does not 

include boating impacts. While a CDE is likely to affect boating in the Atlantic, the available 

data on boating in this region are limited. In addition, the results of the Deepwater Horizon lost 

recreational use assessment suggest that boating impacts are small relative to impacts related to 

beach use and fishing.

 

25 See BOEM (2015).
82

To develop an estimate of baseline beach use for the Mid-Atlantic region, we rely on beach 

recreation data from the 2000 National Survey of Recreation in the Environment (NSRE).26 The 

NSRE is a comprehensive survey of outdoor recreation participation in the United States and was 

conducted by the U.S. Forest Service and NOAA. The results of the survey include estimates of 

beach visitor days by state for the year 2000. To estimate the percentage of annual beach visits 

occurring during the May – January period, we examined the National Park Service’s monthly 

visitation data for 2009–2014 for Assateague Island National Seashore (Maryland), Cape 

Hatteras National Seashore (North Carolina), and Cape Lookout National Seashore (North 

Carolina).27 Based on these monthly data, we estimate that 88 percent of annual visitation at 

National Seashores in the Mid-Atlantic occurs between May and January. Under the assumption 

that this value applies to all beaches in Delaware, Maryland, North Carolina, and Virginia, we 

estimate baseline beach visitation during the May through January period of 68.6 million beach 

days. Using visitation data for the same National Seashores, we estimate that 96 percent of 

annual visitation on the Atlantic occurs between February and November. Applying this value to 

the NSRE data, we estimate 74.9 million beach trips to the states included in our study for the 

February-November period. Taken together, we estimate a total baseline beach visitation of 

143.5 million beach days across the two sub-periods. (i.e., May to January and February to 

November). Table 34 presents our baseline estimates for the Mid-Atlantic. To provide 

additional perspective on use in the Mid-Atlantic, the table also includes baseline estiamtes for 

New Jersey, South Carolina, and Georgia.28 The latter two are near the Program Area, but the 

waters offshore from these states contain less than 20 percent of the UTTR in the Program Area, 

as noted above. 

Table 34. Beach use baseline for the Atlantic 

State

Estimated Number of 

Beach Visits

May – January

Estimated Number 

of Beach Visits

February –

November

Total Beach Visits

May of Spill Year –

November of The 

Following Year

Delaware 11,290,000 12,320,000 23,620,000

Maryland 16,400,000 17,890,000 34,290,000

Virginia 16,440,000 17,940,000 34,380,000

North Carolina 24,500,000 26,730,000 51,230,000

Mid Atlantic Total 68,630,000 74,880,000 143,520,000

BEACH USE IN OTHER STATES IN THE ATLANTIC 

New Jersey (North 

Atlantic) 35,850,000 39,120,000 74,970,000

South Carolina 

(South Atlantic) 29,210,000 31,870,000 61,070,000

Georgia (South 

Atlantic) 7,440,000 8,120,000 15,560,000

We estimate baseline use for inland fishing for the Atlantic Program Area based on inland angler

trip data from NOAA’s MRIP.

29 NOAA’s MRIP was initiated in 2007 and generates estimates of 

 

26 See Leeworthy and Wiley (2001). 

27 See NPS (2014).

28 Baseline data are only presented for periods in which impacts are expected. 

29 See NOAA (2014). Note that we use only the inland angler data from MRIP rather than total angling. 

We do not use the data for all angling to avoid potential double counting of anglers that are likely to be reflected in 
83

angler’s catch and effort; the data are collected in six two-month periods (i.e. waves). Angler trip 

data for Wave 1 (January and February), Wave 2 (March and April), Wave 3 (May and June), 

Wave 4 (July and August), Wave 5 (September and October), and Wave 6 (November and

December) were downloaded for the Mid – Atlantic states, as well as for New Jersey, South 

Carolina, and Georgia for the years 2009 – 2014. To limit the angler trip data to the assumed 

impact period of a CDE (May – March), we divide Wave 2 data data for each year and state by 

two, assuming that fishing activity is evenly split between the two months in each wave. For 

every state and wave, we then calculate the average number of angler trips across the six years 

for which we compiled data. For example, we average the number of angler trips taken during 

Wave 3 (May and June) in Delaware across the years 2009, 2010, 2011, 2012, 2013, and 2014. 

We then sum the wave-level averages for each state to determine the average number of trips 

during the assumed impact period (May – March). Summing across states, we estimate slightly 

less than 7.13 million baseline angler trips for the Mid-Atlantic region, as shown in Table 35

below. 

Table 35. Recreational inland angler trips baseline for the Atlantic : May – March impact 

period30

State

Estimated Number of Angler Trips

May – March

Delaware 650,000

Maryland 2,410,000

Virginia 2,230,000

North Carolina 1,830,000

Mid Atlantic Total 7,130,000

INLAND FISHING IN OTHER STATES IN THE ATLANTIC

New Jersey (North Atlantic) 2,570,000

South Carolina (South 

Atlantic) 980,000

Georgia (South Atlantic) 620,000

To estimate the change in recreation associated with a CDE in the Atlantic Program Area, we 

assume that proportional changes in recreational activity estimated in the Gulf of Mexico due to 

the Deepwater Horizon spill would also apply to the Atlantic. Thus, consistent with the data 

presented above in Table 29 for shoreline use and inland fishing, we assume that a CDE 

occurring in the spring would lead to a 32.5 percent reduction in shoreline use and inland fishing 

combined from May through January across the entire mid-Atlantic.31 For February through 

November during the year following the CDE, we assume a 10 percent reduction in use. Based 

on these assumptions and the baseline data presented above in Tables 34 and 35, we estimate that 

 

the NSRE data that we use to estimate beach visitation. Because the beach visitation data in the NSRE includes any 

activities on the beach, the NSRE documentation (Leeworty and Wiley 2001) cautions against adding beach 

visitation data to other activities. Because inland fishing by definition does not occur on sandy beaches, anglers 

involved in inland fishing are unlikely to be reflected in the NSRE data for beach recreation.

30 Please see Appendix A for additional damage estimates associated with a spill that affects NJ, SC, and 

GA. 

31 Ideally, we would derive separate estimates of the percent reduction in use for shoreline use and inland 

fishing. The PDARP and associated administrative record for the Deepwater Horizon spill, however, do not include 

baseline estimates for inland fishing alone. Instead, the baseline data include shoreline use and inland fishing 

together. 
84

a CDE in the Atlantic would result in a total of 29.8 million lost beach days and 2.2 million lost 

inland fishing trips, as summarized in Table 36.

Table 36. Estimated reduction in recreational activitity in the Atlantic following a CDE

State

Estimated Reduction in 

Shoreline Visits

Estimated Reduction in 

Inland Fishing Trips

Delaware 4,900,000 210,000 

Maryland 7,120,000 750,000 

Virginia 7,140,000 700,000 

North Carolina 10,640,000 570,000 

TOTAL 29,790,000 2,230,000 

We estimate the value of lost recreational use in the Atlantic based on the results of studies from 

the empirical environmental economics literature. For beach use, we rely on three specific 

studies from this literature. Parsons (2003) estimates $25 per lost trip (in 2003 dollars) 

associated with closing all Delaware beaches to Delaware residents. Based on the results of 

another study by Parsons (2000), the damage assessment of lost human use for the Buzzards Bay 

oil spill applies a per beach trip value of $28.02 in 1997 dollars.32 Focusing on the value of 

seven different beaches in North Carolina, Bin (2004) estimates user day values ranging from 

$21 to $72 for these beaches.33 Averaging across these studies and converting to year 2017 

dollars, we estimate a value of $47.21 per activity day. Applying this value to the estimated 

reduction in beach visitor days associated with a CDE, we estimate a loss in the value of beach 

recreation of $1.4 billion for the Mid-Atlantic region, as shown in Table 37. 

To estimate the value of the reduction in inland fishing in the Atlantic, we apply value-per-trip 

estimates obtained from two valuation studies that focus specifically on this region. McConnell 

and Strand (1994) estimate a mean WTP for one day fishing trips by wave (e.g., March/April, 

May/June, etc.) for nine east coast states, with an average of $81.82 across all states and waves 

(in 1988 dollars). Whitehead and Haab (2000) estimate a median compensating variation per trip 

for site access in North Carolina of $1.08 in 2000 dollars.34 Averaging across studies and 

converting to year 2017 dollars yields an estimated value of $78.00 per fishing trip.35 Based on 

this value and the 2.2 million lost fishing trips estimated above, we estimate approximately $174

million in inland fishing losses for the Mid-Atlantic region. 

Table 37. Summary of recreational damages associated with a CDE in the Atlantic 

Damage Category

Estimated Damages 

(2017$)

Shoreline Use $1,407,000,000

Inland Fishing $174,000,000

TOTAL $1,580,000,000

 

32 This value was derived using a model that was originally developed by Parsons (2000), The model was 

adapted for use in the Buzzards Bay assessment. 

33 See Parsons (2003), Bin (2004) and Bouchard B-120 Oil Spill Lost Use Technical Working Group 

(2009)

34 See McConnell and Strand (1994) and Whitehead and Haab (2000). 

35 Note, we keep the separate WTP values in McConnell and Strand separate when calculating the average.
85

To estimate recreational damages on a per-barrel basis, we divide the estimated shoreline and 

inland fishing damages by by the spill volume associated with the Deepwater Horizon spill (3.19 

million barrels) 36, which results in an estimate of $441 per barrel for shoreline use and $54 per 

barrel for inland fishing, both in year 2017 dollars. While the spill volume associated with a 

CDE in the Atlantic may differ from the volume associated with the Deepwater Horizon

blowout, we determined that this would be the most appropriate spill volume to use given that 

our analysis for the Atlantic uses the percentage reduction in shoreline use for the Gulf of 

Mexico. 

Cook Inlet

For Cook Inlet, our assessment of the shoreline recreational impacts of a CDE is limited to 

recreational fishing, as beach use is likely to be minimal in the area’s relatively cool climate. 

Similar to our approach for assessing recreational fishing impacts in the Gulf of Mexico and the 

Atlantic, we estimate baseline use, approximate the proportional change in use, and apply 

estimates from the empirical economics literature to value these changes. The data sources that 

we apply for Cook Inlet, however, differ significantly from those applied in the Gulf of Mexico 

and the Atlantic, as detailed below. 

To estimate the baseline number of recreational fishing trips in Cook Inlet, we use data on the 

annual number of saltwater angler days in Cook Inlet from the Alaska Department of Fish and 

Game’s Sport Fishing Survey. 37 The Department’s Sport Fish Division has conducted the survey 

annually by mail since 1977 and uses the data collected to estimate the state’s sport fishing 

harvest by species and the total level of sport fishing activity. Using annual Cook Inlet data from 

the Survey for 2009-2013, we arrive at an average baseline of 172,600 angler trips. 

As an indicator of the potential reduction in recreational fishing in Cook Inlet in response to a 

CDE, we assume that the reduction observed in southcentral Alaska following the Exxon Valdez

spill would also apply to recreational fishing in Cook Inlet. Based on the Alaska Department of 

Fish and Game’s annual survey of Alaska anglers, Mills (1992) estimates that the Exxon Valdez

spill led to a 14.9 percent reduction in fishing trips between 1988 and1989 in the area affected by 

the spill. Applying this percent reduction to the Cook Inlet baseline of 172,600 angler trips 

results in a total of 25,800 angler trips lost due to a CDE. 

To place a value on angler days in Cook Inlet, we draw from the values estimated in two studies: 

Hamel (2000) and Hausman (1995). Hamel (2000) estimates the mean compensating variation 

per fishing day for Central and Lower Cook Inlet for both Alaskans ($81.47 in year 1997 dollars) 

and nonresidents ($119.79 in year 1997 dollars). Together, the average compensating variation in 

year 2017 dollars is $155. In the context of the Exxon Valdez spill, Hausman (1995) estimates a 

1989 consumer surplus per sport fishing trip of $148. Inflated to 2017 dollars, this estimate is 

$296. Averaging across studies, we arrive at $226 per fishing trip in year 2017 dollars. Applying 

this value to the estimated loss of 25,800 angler trips lost from a CDE results in total damages of 

$5.8 million. On a per-barrel basis (using the spill size from Exxon Valdez of 257,000 barrels), 

estimated loses are $22.62 in 2017 dollars. We use the spill volume from the Exxon Valdez spill 

 

36 See U.S. District Court (2015).

37 See ADFG (2013).
86

to calculate damages on a per barrel basis because the percentage reduction in recreational 

fishing reflected in our damages estimate is based on the impact of the Valdez spill.

3.3.2 Wildlife Viewing

In addition to impacting beach use and recreational fishing, a CDE may also affect recreational 

wildlife viewing in coastal areas. Our assessment of the impacts of a CDE on wildlife viewing 

focuses on Cook Inlet, as wildlife viewing represents an appreciable portion of coastal recreation 

in the area. We were unable to identify wildlife viewing data specific to Cook Inlet, but such 

data are available in aggregate for southcentral Alaska. Because Cook Inlet makes up a 

substanstial portion of southcentral Alaska and offers an abundance of wildlife viewing 

opportunities, we apply the data for southcentral Alaska as an indicator of wildlife viewing in 

Cook Inlet. 

To develop an estimate of baseline wildlife viewing, we integrate data from several sources, 

based on the following three-step approach.

1. Estimate visitation to southcentral Alaska: As an initial step in estimating the baseline 

level of wildlife viewing on an annual basis, we estimate the total visitation to 

southcentral Alaska in the typical year. Based on visitation data for the years 2009 

through 2014 from the McDowell Group (2014), we estimate that there are 

approximately 1,605,000 non-resident trips to Alaska each year on average. An earlier 

report published by the McDowell Group (2011) also states that 56 percent of visitors to 

Alaska visit southcentral Alaska.38 Applying this value to the total number of visitors to 

the state, we estimate that approximately 899,000 individuals visit southcentral Alaska 

each year. While much of the wildlife viewing in southcentral Alaska may be in areas 

other than Cook Inlet, we use these data to develop a conservative (i.e., potentially high 

end) estimate of the potential impacts of a CDE in Cook Inlet.

2. Estimate number of visitors to southcentral Alaska engaged in wildlife viewing: The 

McDowell Group (2011) also indicates that 52 percent of visitors to Alaska engage in 

wildlife viewing. Based on this value and the estimated 899,000 visitors to southcentral 

Alaska on an annual basis, we estimate that approximately 467,400 visitors to 

southcentral Alaska engage in wildlife viewing on an annual basis. 

3. Estimate wildlife viewing days: To translate the number of wildlife viewing visitors to 

the number of wildlife viewing days in southcentral Alaska, we derive a multiplier using 

valuation data from the U.S. Fish and Wildlife Service (2009). While the FWS study 

focuses on valuation rather than visitation, the values estimated by FWS for nonresident 

wildlife viewing in Alaska include the mean economic value per year per visitor and the 

value per day per visitor. Assuming that each visitor takes one trip to Alaska per year, 

dividing the former by the latter yields an estimate of the average number of wildlife 

viewing days per trip. Following this approach, we estimate six days per wildlife 

viewing trip. Applying this value to the number of visitors presented above (467,400), we 

estimate an average of 2,764,000 wildlife viewing days in southcentral Alaska. We note 

 

38 See McDowell Group (2011).
87

the possibility that the estimate of six days per trip could be an overestimate if the 

economic value per year from FWS reflects activities other than wildlife viewing. 

Nevertheless, in the interest of developing a conservative (i.e., potentially high end) 

estimate, we applied the FWS data assuming that the data reflect wildlife viewing only.

Consistent with BOEM’s 2012 analysis of catastrophic spill impacts, we assume a high-impact 

spill scenario in which a CDE occurs in the summer and last for 80 days, which represents 53 

percent of the summer season.39 Based on this value and assuming that wildlife viewing is 

uniformly distributed over the summer season, we estimate that 1.5 million wildlife viewing days 

will be affected by a CDE in the Cook Inlet Area. To estimate the economic value of these 

losses, we assume that half of the value of a wildlife viewing day will be lost for affected trips. 

Applying this assumption to the FWS (2009) estimate of the mean per-day value of wildlife 

viewing in Alaska for non-residents ($129 adjusted to year 2017 dollars), we estimate a loss of 

approximately $65 per affected viewing day. Thus, we estimate wildlife viewing losses in Cook 

Inlet of approximately $94.6 million.40 Because the assumptions specified in this section may 

apply to CDEs of varying sizes, we do not express these damages on a per barrel basis.

3.4 COMMERCIAL FISHING

The occurrence of a CDE could have wide-ranging impacts on commercial fisheries in the 

affected region. Most directly related to the supply of commercially harvested species, exposure 

to discharged oil may result in several adverse effects to these species, such as premature 

hatching, reduced growth rates, genetic abnormalities, and mortality, each of which would 

contribute to reduced landings (Sumaila et al., 2012). In addition to these direct effects, indirect 

exposure to discharged oil through the food web may adversely affect the condition and/or 

abundance of harvested species. Even if vessel operators are able to maintain landings at 

historical levels in the face of these direct and indirect effects, the cost of achieving these 

landings may increase, putting upward pressure on seafood prices. With respect to demand, 

consumers may reduce their consumption of seafood in response to a spill to avoid real or 

perceived risks associated with consuming contaminated seafood. In effect, consumers’ WTP 

for seafood (i.e., the value that they derive from seafood) may fall, at least temporarily, as a 

result of a spill.

Accurately estimating the welfare losses associated with the commercial fishery impacts of a 

CDE would require detailed information on affected fisheries, both before the spill and in its 

aftermath. In particular, such an analysis would require information on changes in landings, 

production costs, consumption, and pricing. Gauging the changes in these variables, however, is 

fraught with uncertainty. Depending on the timing and location of a CDE, changes in landings 

could vary. For example, a spill that occurs in close proximity to a fishery immediately before 

the start of the fishing season would likely lead to higher impacts to landings than spills farther 

away from fisheries at the end of the season. The extent to which vessel operators are able to 

make operational changes to minimize the impact of a spill is also likely to vary. Fishermen 

harvesting mobile species that limit their exposure to discharged oil might be able to fish in areas 

not impacted by the spill and achieve the same or similar landings as they would absent the spill, 

whereas such a change may not be possible in fisheries for oysters and other less mobile species. 

 

39 See BOEM (2012). 

40 See BOEM (2012). 
88

Other examples of potential mitigating behaviors, the success of which would vary depending on 

the circumstances, include switching to other species or fishing earlier or later in the season.

The reaction of seafood consumers to a CDE is also highly uncertain. While the literature 

includes demand functions for several harvested species41, the occurrence of a CDE could 

fundamentally change these functions in uncertain ways for an unspecified period of time. 

Factors affecting these changes may include the size of the area oiled, the species potentially 

affected by oiling, and consumer attitudes regarding the potential risks of consuming 

contaminated seafood. Because of the limited number of CDEs to have occurred historically, the 

nature of the changes in demand due to these and other factors is unknown.

3.4.1 Commercial Fishing Approach

Due to the uncertain magnitude of the changes in seafood prices, production costs, and demand 

functions that would result from a CDE, we present estimated changes in revenues—rather than 

changes in producer and consumer surplus—as the metric of impacts for the commercial fishing 

sector. For each region—the Gulf of Mexico, the Atlantic, and Cook Inlet—we compiled recent 

landings data to serve as the baseline.42 We then estimated the reduction in landings for each 

region based on a series of region-specific assumptions, as described in greater detail below.

Gulf of Mexico

To estimate the reduction in commercial fishery revenues associated with a CDE in the Gulf of 

Mexico, we draw from the observed changes in commercial fisheries in response to the 

Deepwater Horizon spill. Based on historical landings data published by NOAA’s National 

Marine Fisheries Service (NMFS)43, we estimate that the total volume of landings in 2010 in the 

Gulf was approximately 22 percent lower than the average of the three previous years (2007 

through 2009). Using a slightly different baseline of 2008-2009 and 2011-2013, the estimated 

reduction in the volume of landings increases to 25 percent, as summarized in Table 38. When 

measured in terms of revenues rather than volume, the landings impacts of the Deepwater 

Horizon spill are lower than the estimated changes in volume. As shown in Table 39, we 

estimate that landings revenues declined by 8 to 16 percent as a result of the spill, depending on 

the years used as the baseline. This lower impact may reflect an increase in prices associated 

with the spill-related reduction in harvests.

 

41 For example, see Blomo et al., 1982 and Houston et al., 1989 for demand of Gulf of Mexico shrimp and 

Park et al., 2004 for demand of snapper/grouper. 

42Commercial fishing is currently banned in the Arctic.

43 See NOAA/NMFS (undated).
89

Table 38. Estimated change in Gulf of Mexico landings volume following the Deepwater 

Horizon oil spill

Species

Change in Volume 

of Landings in 2010 

Relative to 2007-

2009

Change in Volume of 

Landings in 2010 Relative to 

2008-2009 And 2011-2013

Mehhaden

102,100 metric tons

(-23%)

135,900 metric tons

(-28%)

Shrimp

19,300 metric tons

(-19%)

17,200 metric tons

(-17%)

Eastern Oysters

2,800 metric tons

(-28%)

2,100 metric tons

(-23%)

Blue Crab

6,800 metric tons

(-27%)

5,100 metric tons

(-22%)

Other

5,500 metric tons

(-13%)

6,000 metric tons

(-14%)

TOTAL 136,500 metric tons

(-22%)

166,200 metric tons

(-25%)

Note: Values in first line of each cell represent the change in landings measured 

in metric tons. The value in parentheses represents the percent change in 

landings. 

Source: Data based on landings data reported by NOAA/NMFS.

Table 39. Estimated change in Gulf of Mexico landings revenue following the Deepwater 

Horizon oil spill

Species

Change in Landings 

Revenue in 2010 

Relative to 2007-

2009

Change in Landings 

Revenue in 2010 Relative to 

2008-2009 and 2011-2013

Mehhaden

$14,000,000

(-19%)

$25,300,000

(-30%)

Shrimp

$27,600,000

(-7%)

$68,000,000

(-15%)

Eastern Oysters

$16,600,000

(-21%)

$14,900,000

(-19%)

Blue Crab

$4,200,000

(-8%)

$7,100,000

(-13%)

Other

$2,500,000

(-2%)

$16,200,000

(-9%)

TOTAL

$64,900,000

(-8%)

$131,600,000

(-16%)

Note: Values in first line of each cell represent the change in landings revenue 

measured in year 2017 dollars. The value in parentheses represents the percent 

change in landings revenue. 

For the purposes of estimating the impacts associated with a future CDE, we assume a 16 percent 

reduction in landings revenue, consistent with the higher of the two values shown in Table 39. 

We use the estimated percentage change in landings revenue rather than the percent change in 

landings volume because the change in landings revenue is our metric of impacts in the absence 

of information that would allow us to estimate changes in producer and consumer surplus. 

Applying the 16 percent value to the average of landings revenues for 2011 through 2013, the 
90

thee most recent years for which data are available, we estimate commercial fishery damages of 

$131 million (year 2017$). Based on the estimated 3.19 million barrels of oil spilled and not 

recovered as a result of the Deepwater Horizon blowout, this value translates to $40.92 in 

commercial fishing damages per barrel spilled.

Atlantic

To estimate the commercial fishing impacts of a CDE in the Atlantic, we rely on the impacts 

estimated for the Gulf of Mexico following the Deepwater Horizon blowout and spill. More 

specifically, we assume that the proportional change in landings revenues estimated for the Gulf 

of Mexico in the aftermath of the Deepwater Horizon spill (16 percent) also applies to the 

commercial fishing impacts of a CDE occurring in the Atlantic. We apply this proportional 

change in landings revenues to fisheries in the states neighboring the Mid-Atlantic OCS planning 

area, consistent with our approach for recreational impacts. If a CDE were to occur in the 

Atlantic, it is unlikely that it would affect all fisheries in the Atlantic. As noted above, BOEM’s 

2017 – 2022 Draft Program Proposal indicates that approximately 80 percent of the UTTR of the 

Atlantic Program Area are in the Mid-Atlantic.

44

 Based on this information, we focused on 

fisheries in the Mid-Atlantic. 

Table 40 presents the landings revenues reported by NMFS for the four states that neighbor the 

Mid-Atlantic Planning Area (North Carolina, Virginia, Maryland, and Delaware) and our 

estimates of the change in landings associated with a CDE. As indicated in the table, baseline 

landings are approximately $368.4 million per year. Note that many of the species shown in the 

table are typically caught in embayments or other areas close to shore, far removed from 

potential well sites on the OCS. However, because a catastrophic spill could occur from a tanker 

transporting oil to shore, including these nearshore fisheries in the assessment is appropriate. As 

indicated in the table, based on the available data, we estimate that a CDE would lead to a $57.6 

million reduction in landings. Based on this value and the 3.19 million barrels of unrecovered oil 

discharged during the Deepwater Horizon spill, we estimate that a CDE in the Atlantic would 

lead to commercial fisheries damages of $18.06 per barrel.

As additional perspective on the baseline landings data shown in Table 40 for the Mid-Atlantic, 

we note that NMFS estimates annual landings of approximately $237 million for New Jersey, 

South Carolina, and Georgia combined—three states that could potentially be affected by a CDE 

in the Atlatnic Program Area. Approximately 83 percent of these landings represent commercial 

fishing activity in New Jersey.

 

44 See BOEM (2015).
91

Table 40. Commercial fishery landings revenue in the mid-Atlantic (2017$)

Species

Average Annual 

Landings Revenue: 

2011-20131

Estimated Change in 

Landings Revenue Due 

to a Catastrophic Spill

Blue Crab $121,100,000 $18,900,000 

Scallops $61,200,000 $9,600,000 

Menhaden $33,700,000 $5,300,000 

Eastern Oyster $26,000,000 $4,100,000 

Striped Bass $15,000,000 $2,300,000 

Flounder $17,000,000 $2,700,000 

Other $94,500,000 $14,800,000 

TOTAL $368,400,000 $57,600,000 

Notes:

1. 2011-2013 landings revenue from the NMFS. 

Cook Inlet

Our approach for estimating the commercial fishing impacts of a CDE in Cook Inlet reflects the 

unique geographic features of Cook Inlet relative to the Gulf of Mexico and the Atlantic. More 

specifically, because Cook Inlet is small relative to the Gulf of Mexico and Atlantic and has 

limited access to open water, we assume that a catastrophic spill in Cook Inlet would affect all 

fisheries in the area and that a full year’s landings would be lost. Table 41 presents the average 

annual ex-vessel revenues over the 2012-2014 period (the three most recent years for which data 

are available). Based on the data in the table, we estimate that a catastrophic spill in Cook Inlet 

would result in $43.5 million in commercial fisheries damage. Because these impacts could be 

realized across a wide range of spill volumes, we do not generate a per barrel estimate of 

damages.

Table 41. Average annual Cook Inlet commercial fishery landings (2017$)

Species

Average Annual Ex Vessel 

Value: 2012-20141

Chinook $338,000

Sockeye $40,271,000

Coho $752,000

Pink $1,264,000

Chum $904,000

TOTAL $43,528,000

Source: ADFG (2014).

3.5 SUBSISTENCE

Many coastal communities throughout the United States rely on coastal and marine natural 

resources for subsistence. In particular, Native Alaskan communities in Cook Inlet and the Arctic 

depend on resources such as Bowhead whales and other marine species to meet their basic needs. 

Oil released during a CDE may contaminate large portions of the Alaskan coastal and marine 

environment, making it impossible for communities to subsist on the resources that are normally 

available. These communities would be particularly impacted if a CDE were to occur during the 

peak season for subsistence harvest.
92

To estimate the impacts of a CDE on subsistence, we would ideally use data on baseline 

subsistence harvests, estimates of the change in subsistence associated with a CDE, and the 

economic value of lost subsistence. Information on all three of these variables, however, is quite 

limited. With respect to baseline subsistence activity, the Alaska Department of Fish and 

Game’s Division of Subsistence maintains subsistence data in The Community Subsistence 

Harvest Information System (CSIS).

45 However, these data vary considerably between 

communities in terms of the years and species covered. Information on the change in subsistence 

associated with a CDE is even more limited, with a sample of only two catastrophic spills to 

draw from. Even if better data on changes in subsistence were available, estimating the value of 

these changes is complicated by the cultural value of subsistence harvests to many communities. 

Based on the limited data available, we estimate the potential subsistence impacts of a CDE for 

Cook Inlet and the Arctic, as presented below. While a CDE in the Gulf of Mexico or the 

Atlantic may affect subsistence in these areas as well, insufficient data are readily available to 

support analysis of these impacts.

3.5.1 Cook Inlet

A CDE in the Cook Inlet area, like the Exxon Valdez spill, could have major impacts on local 

residents who engage in subsistence fishing and hunting. According to a 2012 report on 

subsistence in Alaska, the annual wild food harvest for rural areas in Alaska is 295 pounds per 

capita.46 We use this as our baseline for the annual subsistence harvest for communities along 

Cook Inlet that would be affected by a CDE in the area. 

To estimate the reduction in subsistence associated with a CDE in Cook Inlet, we draw from the 

estimated subsistence impacts of the Exxon Valdez spill on communities in Southcentral Alaska. 

A study published by the Minerals Management Service and the Alaska Department of Fish and 

Game on the long-term consequences of the Valdez spill estimates that the spill led to 

approximately a 50 percent reduction in per capita subsistence in the year of the spill and a 25 

percent reduction the following year.47 Applying these values to our baseline estimate of 295 

pounds per capita yields a loss of 148 pounds per capita in the year of a spill and a loss of 74 

pounds per capita the following year. 

To determine the total Native Alaskan population potentially affected by a CDE in Cook Inlet, 

we use 2010 Census Demographic Profiles of Alaskan communities and calculate that 4,100 

Native Alaskans live in the communities that were affected by Exxon Valdez as of 2010.48,49

Based on this value and the estimated subsistence losses per capita outlined above, we estimate a 

907,000-pound reduction in subsistence as a result of a CDE in Cook Inlet.

As described above, placing a value on subsistence harvests is made difficult by the important 

cultural value of subsistence among many Native Alaskan communities. As an indicator of 

value, we rely on the value applied in the OECM, which represents a per kilogram replacement 

 

45 See ADFG, Division of Subsistence (2015). 

46 See ADFG, Division of Subsistence (2014).

47 See Tables VII-1 and VII-2 in MMS (2001). 

48 See Tables V-5 in MMS (2001) for a list of the affected communities.

49 See ADLWD (2010),
93

cost of subsistence harvest.50 Originally developed by Sharpe (2001), this value was developed 

in the context of valuing the total replacement costs of subsistence harvests, including the 

cultural dimension of subsistence, to local communities if a spill were to occur. Adjusted for 

inflation, this value is $120 per kilogram (or approximately $55 per pound) in year 2017 dollars. 

Applying this value to the 907,000-pound reduction in subsistence, we estimate that a CDE in 

Cook Inlet would result in subsistence losses of approximately $49.5 million. Table 42 presents

the derivation of this estimate based on the steps outlined above.

To estimate subsistence damages per barrel of oil spilled, we divide total damages by the spill 

volume associated with the Exxon Valdez spill (257,000 barrels). This yields an estimate of 

approximately $192.53 per barrel. Because the change in subsistence per capita applied in this 

analysis is based on the impacts of Valdez, the Valdez spill volume is the most appropriate for 

deriving a per barrel estimate. 

Table 42. Estimated Cook Inlet subsistence losses

Year of Spill Year After Spill Total

Baseline Subsistence Harvest 

Per Capita (lbs) 295 295 n/a

Subsistence Loss (%) -50% -25% n/a

Per capita subsistence loss (lbs) -148 -74 221

Estimated Pounds lost, (Based 

on 4,100 Native Alaskans in 

Southeast Alaska)

-604,750 -302,375 -907,125

Value at $120/kg or $55/lb 

($2017) $32,986,364 $16,493,182 $49,479,545

Per-Barrel Losses, based on spill volume of 257,000 barrels 

($2017) $192.53

3.5.2 Arctic

Given their remote location, communities near the Chukchi Sea and Beaufort Sea in the Arctic 

rely greatly on subsistence use to meet their basic needs. To calculate the baseline subsistence 

harvests in the Arctic, we use data found in the Final Environmental Impact Statement for 

Issuing Annual Quotas to the Alaska Eskimo Whaling Commission for a Subsistence Hunt on 

Bowhead Whales for the Years 2013 through 2018 from NOAA’s NMFS.

51 To determine the 

reduced subsistence harvest, we assume that the fall bowhead whale hunt and marine mammal 

harvest are lost in the year of a catastrophic spill and that both the spring and fall harvests are 

lost the following year. These assumptions are consistent with those in BOEM (2012). 

Table 43 summarizes our calculations for the estimated value of Native Alaskan lost subsistence 

harvests for a CDE in the Arctic. At $120/kg, the total value of Arctic lost subsistence harvest 

due to a CDE is estimated at approximately $209 million (year 2017$). Because these damages 

may occur for a range of potential catastrophic spill sizes, we do not present these damages on a 

per barrel basis.

 

50 See Industrial Economics (2012).

51 See NOAA NMFS (2013). Beaufort communities are Kaktoviki and Nuiqsut; Chukchi communities are 

Barrow, Kivalina, Point Hope, and Wainwright.
94

Table 43. Estimated Arctic subsistence losses

Average

Whales52

[A]

Estimated

KG 

Harvested53

[B=A × 

11,472]

Value of 

Annual 

Bowhead 

Harvest 

[C=B × $120]

Ratio 

Marine 

Mammals 

Harvest 

(kilos)54

[D]

Estimated 

Marine 

Mammals 

Harvest 

(kilos)

[E=B×D]

Estimated 

Value of Other 

Marine 

Mammals

[F=E × $120]

Estimated

Value of Fall

BW & Annual Marine 

Mammal Harvest for

Year of Spill

[G]

Estimated Value of

All Bowhead Whale

& Marine Mammal

Harvest for Year

Following Spill

($120/KG)

[H]

Fall Beaufort 

Harvest 4.1

 

47,399 $5,687,912 $5,687,912 $5,687,912

Spring Beaufort 

Harvest 0

 

0 $0 $0

Beaufort Marine 

Mammals 0.080

 

3,788 $454,533 $454,533 $454,533

Total Beaufort 4.1

 

47,399 $5,687,912

 

3,788 $454,533 $6,142,445 $6,142,445

Total Estimated Beaufort Subsistence Losses $12,284,890

Fall Chukchi 

Harvest 7.5

 

85,741 $10,288,962 $10,288,962 $10,288,962

Spring Chukchi 

Harvest 14.2

 

162,727 $19,527,290 $19,527,290

Chukchi Marine 

Mammals 2.63

 

652,975 $78,357,022 $78,357,022 $78,357,022 

Total Chukchi 21.7

 

248,469 $29,816,252

 

652,975 $78,357,022 $108,173,274 $108,173,274

Total Estimated Chukchi Subsistence Losses $196,819,258

 

52 Calculated based on 38 years of historical harvest data in Figure 3.5.2-3 in NOAA/NMFS (2013). We sum the cumulative totals by spring and fall for 

Chukchi communities and Beaufort communities and divide the sums by 38 to obtain the seasonal average number of bowhead whales harvested. 

53 The average whale weighs 25,339 pounds, or 11,472 kilograms. See Table 3.5-2 in NOAA/NMFS (2013).

54 Calculated from comparing whale and marine mammal harvests in the Beaufort and Chukchi communities, see Table 3.5-3 in NOAA/NMFS (2013).
95

3.6 FATAL AND NONFATAL INJURIES

CDEs may unfortunately cause serious injuries or fatalities to individuals located near the well. 

To estimate the costs associated with the loss of life and nonfatal injuries associated with a CDE, 

we draw upon the historical experience of the two well blowout events in the U.S. that led to 

fatalities. The first, which occurred in 1984, caused four fatalities and three non-fatal injuries. 

The second, the Deepwater Horizon blowout in 2010, resulted in 11 fatalities and 17 non-fatal 

injuries.55 For the purposes of estimating the impacts of a potential CDE in the future, we 

average the fatalities and non-fatal injuries across these two events. This results in an average of 

eight fatalities and ten non-fatal injuries per incident. 

We estimate the economic value of fatalities based on the value of a statistical life (VSL). 

Drawing from the U.S. EPA’s meta-analysis of the VSL literature, we estimate that the VSL in 

year 2017 dollars and at year 2017 income levels is approximately $9.5 million.56 The 

adjustment for income reflects a VSL elasticity with respect to income (i.e., the percent change 

in VSL due to one percent change in income) of 0.4, consistent with the value from Kleckner and 

Neumann (1999) used in EPA regulatory impact analyses. Based on the estimated value of eight 

deaths per incident and the VSL of $9.5 million, the total cost of fatalities due to a CDE is 

estimated to be $75.8 million (in year 2017$).

Viscusi (2005) estimates that workers place a value on non-fatal injuries that ranges from 

$20,000 to $70,000 per expected job injury.57 Using the midpoint of this range ($45,000), and 

inflating it to year 2017 dollars, we estimate a value of $57,100 per injury. Applying this value 

to the assumed ten injuries per incident, we estimate costs of approximately $571,000 associated 

with non-fatal injuries resulting from a CDE. Summing this with the $75.8 million associated 

with CDE-related fatalities, we estimate $76.4 million in damages associated with fatalities and 

non-fatal injuries. Because a blowout resulting in these impacts would result in spills ranging 

substantially with respect to the volume of oil spilled, we do not estimate the value of fatal and 

non-fatal injuries on a per-barrel basis.

3.7 VALUE OF SPILLED OIL NOT RECOVERED

Another cost associated with a CDE is the value of spilled oil not recovered. Recognizing that 

the dollar per barrel value of oil is highly unpredictable and will vary over time and that the 

timing of a CDE is highly uncertain, we estimate the value of spilled oil using the oil prices 

associated with BOEM’s Low, Mid-, and High Oil Price E&D scenarios. These values are $40, 

$100, and $160 per barrel, respectively. 

 

55 See BOEMRE (2010).

56 See U.S. EPA (2014). 

57 See Viscusi (2005).
96

3.8 IMPACTS OF DISPERSANTS AND IN-SITU BURNS

While dispersants and in-situ burns can be effective oil spill response strategies, they also have 

potential environmental costs. In-situ burns produce large amounts of smoke, which contains 

particulate matter and air pollutants such as sulfur dioxide, nitrogen dioxide, and carbon 

monoxide. These pollutants have the potential to negatively impact the health of response 

workers and residents of nearby coastal areas. PM—from direct PM emissions or from precursor 

emissions that transform into PM—presents the greatest concern, as studies have demonstrated 

that concentrations of particulate matter within the smoke plume can remain above background 

levels several miles downwind of the burn site. In-situ burns also have the potential to damage 

vegetation in coastal areas, and leave behind an oil residue that can sink and smother benthic 

resources under certain conditions (Barnea, 1995).

Dispersants can reduce oil exposure for surface dwelling organisms, and prevent oil from 

reaching the shoreline habitat. However, these benefits come with the tradeoff of distributing oil 

throughout the water column and into the benthic environment. Even in a diluted form, exposure 

to dispersed oil can cause injury to fish, oysters, coral reefs, and other subsurface ecological 

resources. As a result, the net ecological impact of dispersant usage is necessarily dependent on 

the relative vulnerability of surface and subsurface habitats in a given location (NRC, 2005). The 

ecological impacts of the chemical dispersants themselves are not as large of a concern, as the 

dispersants in use today are generally less toxic than the dispersed oil. Research on dispersant 

use during the Deepwater Horizon spill confirmed this lower toxicity, finding that dispersant-oil 

mixtures were generally no more harmful to aquatic species than oil alone (EPA, 2010).

3.9 UNCERTAINTIES

Due to the various assumptions and limitations of the available data described in the previous 

sections, the CDE damage estimates presented throughout this chapter exhibit substantial 

uncertainty. Table 44 documents the most significant of these uncertainties and describes their 

potential impact on our estimates of CDE-related damages.
97

Table 44. Uncertainties, limitations, and assumptions of analysis

Impact Category Uncertainties, Limitations, and Assumptions Implications for Impact Estimates

Response Costs

 We assume that the response costs for the 

Deepwater Horizon spill are representative of 

response costs for CDEs occurring in the Gulf of 

Mexico.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on the timing 

and location of a CDE and conditions when the CDE 

occurs (e.g., currents and wind direction).

 We assume that response costs in the Atlantic are 

the same as those in the Gulf of Mexico.

 Because wetlands are less prevalent on the Atlantic 

shoreline, we may overestimate response costs for the 

Atlantic.

 We assume that the response costs for the Exxon 

Valdez spill are representative of response costs for 

CDEs occurring in Cook Inlet.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on how the 

timing, size, and duration of a CDE in Cook Inlet differ 

from the experience of the Exxon Valdez spill in Prince 

William Sound.

 We assume that a CDE in the Atlantic Program Area 

would affect shoreline in the states whose waters are 

adjacent to the Mid-Atlantic OCS Planning Area.

 Assumption could lead to overestimation of impacts, 

depending on the location of a CDE and conditions 

when the CDE occurs. If oil from a CDE flows to the 

North Atlantic or South Atlantic, response costs may be 

lower due to the higher proportion of beaches and 

lower proportion of wetlands in these regions.

 We assume that response costs for a CDE in the 

Arctic will be greater than or equal to the response 

costs for the Deepwater Horizon spill ($5,100/barrel) 

and less than or equal to the response costs for the 

Exxon Valdez spill ($16,000/barrel).

 Assumption could lead to overestimation or 

underestimation of impacts, depending on the location 

of a CDE and conditions when the CDE occurs

Ecological Damages

 We assume that the ecological damages for the 

Deepwater Horizon spill are representative of 

ecological damages for CDEs occurring in the Gulf of 

Mexico.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on the timing 

and location of a CDE and conditions when the CDE 

occurs (e.g., currents and wind direction).
98

Impact Category Uncertainties, Limitations, and Assumptions Implications for Impact Estimates

 We assume that average NRDA values for noncatastrophic oil spills will be representative of lowend ecological damages for a CDE. Assumption could lead to overestimation of impacts if a 

CDE matches the trend seen in the historical spill 

record suggesting that ecological damages per barrel 

generally decrease as spill size increases.

 Assumption could lead to underestimation of impacts if 

a CDE results in ecological damages similar in 

magnitude to the two previous catastrophic spills in 

U.S. waters (Exxon Valdez and Deepwater Horizon), 

which produced significantly higher ecological 

damages per barrel than historical non-catastrophic 

spills.

 We assume that high-end ecological damages from a 

CDE in the Mid-Atlantic will be 35 percent higher 

than the ecological damages for the Deepwater 

Horizon oil spill, based on higher average NRDA 

values for non-catastrophic oil spills in the Atlantic 

versus the Gulf.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on whether the 

factors determining ecological damages from noncatastrophic spills are the same factors that would 

determine ecological damages from a CDE.

 We assume that the ecological damages for the 

Exxon Valdez spill are representative of ecological 

damages for a CDE occurring in Cook Inlet.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on how the 

timing, size, and duration of impacts for a CDE in Cook 

Inlet differ from the experience of the Exxon Valdez 

spill in Prince William Sound.

 We assume that ecological damages resulting from a 

CDE in the Arctic will be 130 percent higher than the 

ecological damages resulting from the Exxon Valdez 

oil spill, based on results generated by the OECM for 

Cook Inlet and the Chukchi Sea planning area.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on how the 

timing, size, and duration of impacts for a CDE in the 

Arctic differ from the experience of the Exxon Valdez 

spill in Prince William Sound.

Recreation

 We assume the Deepwater Horizon spill is 

representative of a CDE in the Gulf of Mexico region.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on the timing 

and location of a CDE.

 We assume that the timing, size, and duration of 

impacts for a CDE in the Atlantic is consistent with 

the observed experience for the Gulf of Mexico 

following the Deepwater Horizon spill. 

 Assumption could lead to overestimation or 

underestimation of impacts, depending on how the 

timing, size, and duration of impacts for a CDE in the 

Atlantic differ from the experience of the Deepwater 

Horizon spill.
99

Impact Category Uncertainties, Limitations, and Assumptions Implications for Impact Estimates

 We assume that a CDE in the Atlantic would affect 

recreation in the states near the Mid-Atlantic OCS 

Planning Area. 

 Assumption could lead to overestimation or 

underestimation of impacts, depending on the location 

of a CDE and conditions when the CDE occurs. For 

example, oil from a CDE could spread up the coast to 

the North Atlantic, impacting New Jersey. Alternatively, 

the oil from a CDE on the Atlantic could drift into the 

open ocean away from the coast.

 Our quantitative assessment of potential recreational 

impacts in the Atlantic does not include boating 

impacts.

 Likely leads to slight underestimation of impacts. 

Based on the experience of the Deepwater Horizon

spill, however, boating impacts are small relative to 

beach use and coastal fishing.

 The 2000 NSRE data used to derive baseline beach 

use in the Atlantic are fairly outdated. 

 Use of these data could lead to overestimation or 

underestimation of use, depending on the trajectory of 

use since 2000.

 We assume that the reduction in recreational fishing 

observed in south-central Alaska following the Exxon 

Valdez spill would also apply to recreational fishing in 

Cook Inlet.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on amount of 

oiling relative to the Valdez spill and the timing of a 

CDE relative to the timing of Valdez.

 For recreational fishing in Cook Inlet, we assume a 

CDE volume equal to that of the Exxon Valdez spill 

to calculate damages on a per barrel basis.

 Assumption could lead to overestimation or 

underestimation of impacts depending on damages per 

barrel for future CDEs relative to damages per barrel 

for the Valdez spill. 

 In the absence of wildlife viewing data specific to 

Cook Inlet, we used data for southcentral Alaska as a 

whole. 

 Likely leads to overestimation of wildlife viewing 

impacts since not all wildlife viewing in southcentral 

Alaska is in Cook Inlet.

 Consistent with BOEM’s 2012 analysis of 

catastrophic spill impacts, we assume a high-impact 

spill scenario for wildlife viewing in Cook Inlet in 

which a CDE occurs in the summer and last for 80 

days, which represents 53 percent of the summer 

season.

 Assumption could lead to overestimation of impacts if a 

CDE occurs during another time of the year.

 To estimate the economic value of Cook Inlet wildlife 

viewing losses, we assume that half of the value of a 

wildlife viewing day will be lost for affected trips.

 Assumption could lead to overestimation or 

underestimation of impacts, depending on the extent to 

which recreators change their wildlife viewing behavior 

in response to a CDE.
100

Impact Category Uncertainties, Limitations, and Assumptions Implications for Impact Estimates

Subsistence

 Information on baseline subsistence harvests, 

estimates of the change in subsistence associated 

with a CDE, and an economic value of lost 

subsistence is limited. 

 Because these data are so limited, our estimates of 

subsistence impacts are highly uncertain and may be 

overestimates or underestimates.

 Economic valuation methods are ill-suited to 

quantifying the cultural value of subsistence for 

Native Alaskan communities. 

 Value of subsistence to Native Alaska communities 

may be underestimated.

 We assume that the reduction in subsistence 

observed in south-central Alaska following the Exxon 

Valdez spill would also apply to subsistence in the 

Artic. 

 Assumption could lead to overestimation or 

underestimation of subsistence impacts depending on 

the extent to which future CDEs affect the level of 

subsistence relative to the impacts of the Valdez spill.

 For subsistence in Cook Inlet, we use the spill 

volume from the Exxon Valdez spill to calculate 

damages on a per barrel basis.

 Assumption could lead to overestimation or 

underestimation of impacts depending on damages per 

barrel for future CDE relative to damages per barrel for 

the Valdez spill.

 In the Artic, consistent with BOEM (2012), we 

assume that the fall bowhead whale hunt and marine 

mammal harvest are lost in the year of a catastrophic 

spill and that both the spring and fall harvests are lost 

the following year.

 Assumption could lead to overestimation or 

underestimation of subsistence impacts depending on 

the extent to which future CDEs affect subsistence 

harvests.

Fatal and Nonfatal 

Injuries

 Our estimate of the number of fatalities associated 

with a CDE is based only on two data points: a 

blowout in 1984 spill and the Deepwater Horizon

blowout in 2010. 

 Assumption could lead to overestimation or 

underestimation of the number of fatalities associated 

with a CDE. The actual number is likely to vary 

depending on the cause of the spill and the number of 

people aboard a platform during a CDE.

Value of Oil Spilled

 We assume a range of oil price values based on the 

low and high price assumptions that inform BOEM’s 

low and high E&D scenarios. 

 Given the wide range of oil prices used, impacts are 

most likely within the range estimated.
101

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108

Appendix A: 

Damage Estimates For Additional CDE Scenarios 

In The Atlantic Region

As described in Chapter 3 of this document, our analyses of the recreational and commercial 

fishing impacts associated with a catastrophic spill in the Atlantic focus on the Mid-Atlantic due 

to the fact that approximately 80 percent of the undiscovered technically recoverable resources 

of the Program Area are in the Mid-Atlantic.

58

 To assess the possibility that a CDE in the 

Atlantic Program Area may affect a larger geographic area than the Mid-Atlantic, this appendix 

presents estimates of recreational and commercial fishing impacts for two alternative CDE 

scenarios in the Atlantic region. Alternative Scenario 1 represents a CDE that affects shoreline 

use and commercial fishing from New Jersey through the Mid-Atlantic. Alternative Scenario 2 is 

a CDE that affects the Mid-Atlantic through South Carolina and Georgia. The overall methods 

for estimating the recreational and commercial fishing impacts associated with these alternative 

scenarios are similar to those used in the main body of this document for the assessment of 

impacts in the Atlantic. Due to the more expansive geographic scope of the alternative 

scenarios, however, the data inputs that we use for these scenarios differ slightly from the data 

applied in our primary analysis for the Atlantic. 

Specific to recreation, our assumptions regarding the timing of potential recreational impacts in 

New Jersey, South Carolina, and Georgia are also similar to what we assume for the MidAtlantic. More specifically, we assume that impacts to shoreline use would be realized from 

May of the spill year through November of the following year and that infland fishing impacts

would last from May through March. Below we present our analyses for Alternative Scenarios 1 

and 2 for shoreline recreation, inland fishing, and commercial fishing, respectively.

SHORELINE RECREATION

Drawing from the same data sources described in Chapter 3 of this document, Table A-1 presents 

baseline shoreline use for the areas represented under Alternative Scenario 1 and Alternative 

Scenario 2. As indicated in the table, baseline use between the two scenarios is quite similar but 

slightly higher under Alternative Scenario 2. To estimate the reduction in shoreline use 

associated with a CDE under these alternative scenarios, we apply the same proportional 

reductions in use as assumed in Chapter 3: a 32.5 percent reduction for May of the spill year 

through January the following year and a 10 precent reduction for February through November 

of the following year. Based on these assumptions, we estimate a reduction in use of 45.4 

million user days under Alternative Scenario 1 and a 45.7 million user day reduction under 

Alternative Scenario 2.

 

58 See BOEM (2015).
109

Table A-1. Baseline shoreline use for alternative scenarios: may of spill year through 

November of the following year

State Alternative Scenario 1 Alternative Scenario 2

New Jersey 74,970,000 -

Delaware 23,620,000 23,620,000

Maryland 34,290,000 34,290,000

Virginia 34,380,000 34,380,000

North Carolina 51,230,000 51,230,000

South Carolina - 61,070,000

Georgia - 15,560,000

TOTAL 218,500,000 220,100,000

As described above, we estimate the value of lost beach days in the Mid-Atlantic based on the 

results of three studies from the empirical environmental economics literature. Parsons (2003) 

estimates $25 per lost trip (in 2003 dollars) associated with closing all Delaware beaches to 

Delaware residents; Parsons (2000) applies a per beach trip value of $28.02 in 1997 dollars 

based on the Buzzards Bay spill assessment; and Bin (2004) estimates user day values ranging 

from $21 to $72 for seven North Carolina beaches.59, 60 In addition, specific to the addition of 

New Jersey for Alternative Scenario 1, Leeworthy and Wiley (1991) estimate $31.45 in 

consumer surplus per activity day at beaches in New Jersey. Combining this with the three other 

studies used for the Mid-Atlantic, we estimate a value of $49.72 per user day for Alternative 

Scenario 1. For Alternative Scenario 2, we apply the same user day value as presented in the 

main body of this document for the Mid-Atlantic ($47.21 per user day). 

Applying the user day valuation estimates for the two Alternative Scenario areas to the 

reductions in use described above, we estimate recreational damges of $2.3 billion for 

Alternative Scenario 1 and $2.2 billion for Alternative Scenario 2. Table A-2 summarizes these 

damages and also presents the associated estimates of damages per barrel spilled. The latter are 

based upon the spill volume associated with the Deepwater Horizon spill.

 

59 See Parsons (2003), Bin (2004) and Bouchard B-120 Oil Spill Lost Use Technical Working Group 

(2009)

60 The Parsons (200) value was derived using a model that was originally developed by Parsons (2000), The 

model was adapted for use in the Buzzards Bay assessment. 
110

Table A-2. Shoreline use damages summary for alternative scenarios 

Scenario

Number of 

Lost Visits

Value Per 

Trip 

($2017)

Total

Damages

Per-Barrel 

Impact

($2017)

Alternative Scenario 1: MidAtlantic and New Jersey 45,360,000 $49.72 $2.3 billion $707

Alternative Scenario 2: MidAtlantic, South Carolina, and 

Georgia 45,700,000 $47.21 $2.2 billion $676

INLAND FISHING

To determine the baseline number of recreational inland fishing trips in New Jersey, South 

Carolina, and Georgia, we rely on inland angler trip data from NOAA’s MRIP.

61 Using the same 

procedures as outlined in Chapter 3 of this document for the Mid-Atlantic states, we estimate the 

baseline values shown in Table A-3. To estimate the reduction in inland fishing activity for each 

of the Alternative Scenarios, we assume a 32.5 percent reduction in use for May of the spill year 

through January of the following year and a 10 percent reduction in February and March of the 

following year, consistent with reductions applied in the main body of this document for the 

Mid-Atlantic. Applying these values to the baseline angler trips for each Alternative Scenario, 

we estimate approximately 3.0 million lost angler trips under Alternative Scenario 1 and 2.7 

million lost angler trips under Alternative Scenario 2. 

Table A-3. inland fishing baseline for alternative scenarios: May of spill year through 

March the following year 

State Alternative Scenario 1 Alternative Scenario 2

New Jersey 2,570,000 -

Delaware 650,000 650,000

Maryland 2,410,000 2,410,000

Virginia 2,230,000 2,230,000

North Carolina 1,830,000 1,830,000

South Carolina - 980,000

Georgia - 620,000

TOTAL 9,690,000 8,730,000

To estimate the value of lost fishing trips, we rely upon per-trip estimates from the empirical 

literature summarized in Chapter 3 plus additional estimates from McConnell and Strand (1994)

for New Jersey, South Carolina, and Georgia. Combining the New Jersey value ($74.78) with 

the other estimates we identified for the Mid-Atlantic, we estimate a value of $77.38 per fishing 

trip for Alternative Scenario 1. Similarly, integrating the South Carolina and Georgia values 

($144.25 and $87.60, respectively) with the estimates for the Mid-Atlantic yields an estimate of 

$90.23 per fishing trip for Alternative Scenario 2.

Based on the per trip fishing values for Alternative Scenarios 1 and 2 and the estimated 

reductions in inland fishing for each scenario, we estimate inland fishing losses of $234.7 million 

 

61 See NOAA (2014)
111

for Alternative Scenario 1 and $245.4 million for Alternative Scenario 2. Table A-4 summarizes 

these damages and also presents damages on a per barrel basis.

Table A-4. Inland fishing damages for alternative scenarios 

Scenario

Number of 

Lost Trips

Value Per 

Trip 

($2017)

Total 

Damages

Per-Barrel 

Impact

($2017)

Alternative Scenario 1: 

Inland fishing impacted 

in the Mid-Atlantic and 

New Jersey 3,000,000 $77.38 $234,700,000 $74

Alternative Scenario 2: 

Inland fishing impacted 

in the Mid-Atlantic, 

South Carolina, and 

Georgia 2,700,000 $90.23 $245,400,000 $77

COMMERCIAL FISHING

The assessment of commercial fishing impacts for Alternative Scenarios 1 and 2 follows the 

same apppoach as described in the main body of this document for the Mid-Atlantic. We rely on 

landings revenue from the NMFS for the years 2011 through 2013 to define the baseline. To 

estimate the change in landings associated with a CDE, we assume that such an event would 

reduce landings by the same percentage as observed in the Gulf of Mexico following the 

Deepwater Horizon blowout and spill in 2010 (16 percent). Based on this approach, Table A-5 

presents our estimates of baseline landings and commercial fishing damages for Alternative 

Scenarios 1 and 2. As indicated in the table, both landings and damages are highest under 

Alternative Scenario 1 than Alternative Scenario 2, due in large part to the relatively high 

landings and impacts in New Jersey. Relative to the estimate presented in Chapter 3 of this 

document for the mid-Atlantic, Alternative Scenario 1 represents a 53 percent increase in 

estimated damages and Alternative Scenario 2 represents an 11 percent increase.
112

Table A-5. Commercial fishing baseline and damages for alternative scenarios (2017$)

State

Alternative Scenario 1 Alternative Scenario 2

Baseline 

Landings

Estimated 

Change in 

Landings

Baseline 

Landings

Estimated 

Change in 

Landings

New Jersey $195,700,000 $30,600,000 - -

Delaware $8,300,000 $1,300,000 $8,300,000 $1,300,000

Maryland $87,800,000 $13,700,000 $87,800,000 $13,700,000

Virginia $192,000,000 $30,000,000 $192,000,000 $30,000,000

North Carolina $80,300,000 $12,600,000 $80,300,000 $12,600,000

South Carolina - - $24,900,000 $3,900,000

Georgia - - $16,100,000 $2,500,000

Total $564,100,000 $88,200,000 $409,400,000 $64,000,000

Note: Baseline landings estimates reflect average landings from 2011 through 2013 from the 

NMFS.

UNCERTAINTY

An important uncertainty of this assessment of the Alternative Scenarios is that the same 

reductions in use and landings, in proportional terms, are assumed for New Jersey, South 

Carolina, and Georgia as off the coast of the Mid-Atlantic states. Thus, Alternative Scenario 1 

assumes that the percentage reductions in use and landings are the same along the stretch of coast 

extending from North Carolina through New Jersey, and Alternative Scenario 2 assumes the 

same proportionate reduction from South Carolina to Delaware. To the extent that oiling or the 

threat of oiling declines with distance from the site of a CDE, however, the change in 

recreational activity and commercial fishing may not be as great for areas far from the CDE site. 
113

APPENDIX B. 

SUPPLEMENTAL RECREATIONAL USE VALUES FOR 

THE GULF OF MEXICO

Tables B-1 and B-2 below provide additional beach use and recreational fishing use valuation 

estimates for the GOM region. 

Table B-1. Gulf of Mexico valuation studies for beach recreation

Study Location

Estimated 

Value Dollar Year

Estimated 

Value (2017$)

Bell and Leeworthy 

(1986) Florida $13.19 1986 $29.83

Bell and Leeworthy 

(1990) Florida $34.00 1990 $64.48

Leeworthy and 

Bowker (1997)

Florida Keys/Key 

West $97.00 1997 $149.80

Leeworthy and 

Wiley (2004)

Clearwater Beach, 

FL $55.96 1990 $106.13

Honeymoon Island 

State Park, FL $14.91 1990 $28.28

Parsons et al. 

(2009)

Padre Island National 

Seashore, Texas $20.00 2008 $23.02

Table B-2. GOM recreational fisher per trip valuation estimates

Study Location

Estimated 

Value

Dollar 

Year

Estimated Value 

(2017$)

Downing and Ozuna 

(1996)

Texas (multiple 

locations) $108.30 1989 $216.48

Leeworthy and 

Bowker (1997)

Florida Keys/Key 

West $97.00 1997 $149.80

Whitehead and 

Haab (2000)

West coast of 

Florida $7.72 2000 $11.11

Bergstrom et al 

(2004)

Lower 

Atchafalaya River 

Basin estuary, 

Louisiana

$30.73 2004 $40.32