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._An EXflnQnation of SeleGted Recent -

MMS Socioeconomic Studies and Assessments i . i

in the Gulf of Mexico :

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, , I u.s. Department of the Interior

... Mi~erals Management Service ,n".g Environmental Division

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OCS Study

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MMS 2002-057

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An Examination of Selected Recent MMS Socioeconomic Studies

and As~essmentsin the Gulf of Mexico . ,

Herndon, Virginia

September, 2002

Publisheo by I ;I

U.S. Department of the Interior

Mineral~ Management Service

Enviro~enial Studies Program , I

, Steve H.lMurdock

• F. Larry Leistritz

I • Stan Albrecht

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, DISCLAIMER I

T~iS report was prepared under contract between the Minerals M;nlgement Service (MMS) and

th(~ authors. This report has been technicalIy reviewed by the MMS :and it has been approved for

publication. Approval does not signify that the contents peces~arily reflect the views and

policies of the MMS. It is, 'however, exempt from review and 'compliance 'I with the MMS

editorial standards. , '

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REPORT AVAILABILITY I

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Extra Copies of this report may be obtained from the Information Ce~ter (Mail Stop 4063) at the

following address: . . i . ~I: !

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CITATION

(703) 787-1080

FAX (703) 787-1050

Headquarters (HDQRS)

Information Center, MS 4063

Information Technology Division

Minerals Management Service

381 Elden Street

Herndon, VA 20170-4817

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Murdock, S.H., F.L. Leistritz and S. Albrecht. 2002. An Examination , of Selected Recent MMS

Socioeconomic Studies and Assessments in the Gulf of Mexico. 0CS Study MMS 2002-057.

U.S. Dept. of the Interior, Minerals Managemen't Servic(~' Environmental Studies Program,

H~mdon, VA. 63 pp. I

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Suggested citation:
TABLE OF CONTENTS

SECTION'3.0 A BRIEF OVERVIEW OF STUDIES EVALUATED IN

TillS ANALYSIS

2.3, CHARACTERISTICS AND DIMENSIONS AFFECTING

SOCIOECONOMIC IMPACTS AND THE

< ASSESSMENT CONTEXT

2.3.1 Aspects Related to the Nature of the Petroleum Industry

2.3.2 Aspects Related to the Gulf of Mexico Development Context

2.3.3 Aspects Related to Differences in Institutional, Demographic,

, Social, and Economic Contexts

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III

Determination of the Impacted Area

. Description of Baseline Conditions

Projection of Baseline Conditions

Projections of Project-Related Impacts

III

EVALUATION OF MMS STUDIES

ECONOMIC AND FISCAL IMPACTS ASSESSMENT

4.1.1 Impact Dimensions

4.1.2 Methods

,4.1.3 Quality vs. State-of-the-Art

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! 4.1.4 Utility for Decision Makers

: 4.1.5 Areas/Issues Meriting Further Examination

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PETROLEUM INDUSTRY STUDIES

STUDY AREA CONTEXT-illSTORY, SOCIOECONOMIC

TRENDS, AND CURRENTISSUES

OCS EMPLOYMENT AND EXPENDITURE STUDIES

ANALYSES OF SELECTED TYPES OF IMPACTS

IAREA-SPECIFIC STUDIES OF SOCIOECONOMIC

IMPACTS

2.1

2.2

3.1

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3.4

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SECTION 4.0

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TABLE OF CONTENTS

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• SECTION 1.0 INTRODUCTION

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SECTION:2.0 ,CRITERIA FOR STUDY EVALUATIONS

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'SOCIOECONOMIC IMPACTS

THE IMPACT ASSESSMENT PROCESS

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'2.2.1

i2.2.2

2.2.3

2.2.4

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PROGRESS TO DATE

CONTINUING LIMITATIONS

RECOMMENDATIONS.

4.3.1 Impact Dimensions

4.3.2 Methods

4.3.3 Quality vs. State-of-the-Art

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4.3.4 Utility for Decision Makers ,';.

4.3.5 AreaslIssues Meriting Further Examination'

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SUMMARY, IMPLICATIONS AND RECOMMENDA'fIONS

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Impact Dimensions

Methods

Quality vs. S~ate-of-the-Art

,Utility for Decision Makers!

AreasfIssues Meriting Further EXarnluatton , ' -I .,

SOCIAL AND CULTURAL IMPACTS ASSESSMENT

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DEMOGRAPHIC AND PUBLIC SERVICE IMPACTS'

ASSESSMENT'I

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APPENDIXA MMS srtIDIES SELECTED BY MMS FOR RE!VIEW - t[

APPENDIXB LIST OF ONGOING GULF OF MEXICO REGION MMS

SOCIOECONOMIC STUDIES BY TOPIC':

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RJEFERENCES

SECTION 5.0

Table of Contents, Continued
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INTRODUCTION

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The Minerals Management Service (MMS) is the major mineral leasing agency of the

Federal Gdvernment. Its Outer Continental Shelf (OCS) Gas and Oil leasing program has

generated tnore than $100 billion in revenue since 1954. Its OCS program is of major

importancJ to the MMS and the nation. I "

In attemJting to manage the nation's gas and oil resources, MMS has made extensive

efforts to rheet the needs of a wide variety of constituencies and to address the concerns of a .

similarly ~road spectrum of local. state and national groups including those interested in the

developm~nt of oil and gas resources, the preservation ofsuch resources, and the environmental

factors that may~be impacted by their use. The Environmental Studies Program (ESP) was

developed!in "1973 as one means of obtaining additional research on key biological, physical and

socioecon~mic issues impacting energy resource development. It was to assist the agency in

obtaining Aecessary information about the ecological, physical, oceanographic, and

socioecon6mic implications of energy development through the contracting of studies in a

variety of physical, biological and socioeconomic areas. The ESP was mandated to address such

human en~ironrnent concerns as those noted in both the National Environmental Policy Act

(NEPA) aAd the'Outer Continental Shelf Lands Act (OCSLA).

Thlj National , Environmental Policy Act of 1970 clearly mandated soc~~economic analysis. For example, the act notes (National Environmental Policy Act, PL 91-190, 1970, p.

853) "The)Cong'ress, recognizing the profound impact of man's activity on the interrelations of

all components of the natural environment, particularly the profound influences of population

growth, high-density urbanization, industrial expansion, resource exploitation; and new and

expandingl technological advances and recognizing further the critical importance of restoring

and maintaining' environmental quality to the overall welfare and development of man, declares

that it is tHe continuing policy of the Federal Government, in cooperation with State and local

governmehts, and other concerned public and private organizations, to 'use all'practicable means

and measJres, including financial and technical assistance, in a manner calculated to foster and

promote the general welfare, to create and maintain conditions under which man and nature can

exist in prbductlveharmon'y, and fulfill the social, economic and other requirements of present

and futurelgene;ations of Amencans." It goes on to note that to do this, procedures and

perspectives rim'st be employed that (p854) "utilize a systematic, interdisciplinary approach

which wiIl ensure the integrated use of the natural and social sciences and the environmental

deSlgn · arts'''1... . 1 , . Similarly, the Outer Continental Shelf Lands Act requires that attention be given to the

human entironment which is defined by the act as consisting of "the physical, social and

economic ~omponents, conditions, and factors which interactively determine the state, condition,

and quality of liVing conditions, employment, and health of those affected, directly or indirectly,

by activities occurring on the Outer Continental Shelf' (43 U.S.C. &1331 (i)).

. FJallY i ~ is clear that additional dimensions have become of increased importance due to

public coricem imd administrative decisions. Thus, the need for assessing environmental justice

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':1 .' II ', diinensions as established by Executive Order 12898 has further higHlighted the importance of

socioeconomic dimensions in governmental decision m~king,: !

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:: Clearly then, socioeconomic analyses have become a central part of the mission of the

, I 0tf of Mexico MMS Region. ; , 'II " Despite these mandates, it was not until the early 1990s that the Gulf of Mexico OCS

Ri:gion began to contract a significant number of studies in the area 6f socioeconomic impacts.

This set of studies has now come to comprise a substantial bqdy of, i4formation. It has examined

numerous socioeconomic issues and impacts affecting the Gulf of Mexico OCS region.

i: What has not been suffiCiently evaiuated, and is the f~dus offhiS report, is:

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1. The extent to which recently' completed studies haVe addressed the key

socioeconomic dimensions related to OCS development ih the Gulf of Mexico;

2. The quality of studies completed relative to conceptual,' clethodological and state-ofthe-art criteria; ,,: ; I

3. What additional studies should be completed to adequately address the

socioeconomic impacts of offshore development under b9th existing and likely future

market, technological, industry, and developmental con'ditions.

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In thiS paper, we report on our exammatlOn of a selected set of SOCIOeconomic studIes m an

attempt to address the three issues noted above. The studies examin&d were ones selected by the

MMS Contracting Officers Technical Representatives (COTR) wh9 ~are s(}cial scientists '

thoroughly familiar with socioeconomic analysis completed for the <!Julf of Mexico and whose

selection represented their expert view of which studies were appropriate for review as

socioeconomic analyses. The studies selected for review are,listed ih Appendix A,

It!\s important to not~ that the;e are numerous ongoing studies,tha:C~Uld not be reviewed here

because final drafts of their reports were not available to the review team. The list of such

studies is substantial and Appendix B provides a list of some' of the ~ost important of these. For , 'A' 'I . example, it·was not possible to review the OCS-Related Infr~structure study for the Gulf of

Mexico that is collecting information on such facilities as terminals, Iwaste facilities, ports,

hdiports, supply bases, shipyards, platform fabrication yards,repair/maintenance yards, pipe

coating facilities, refineries, petrochemical plants, and gas pro~essink plants in coastal areas in

Texas, Louisiana, Mississippi, Alabama and Florida. It was also not possible to examine the

Benefits and Burdens of OCS Deepwater Activities that is daminink the effects of deepwater

ac:tivities on selected community and local public institutions and diinensions including factors

affecting population growth'in frontier areas. The study (Assessing ~nd Monitoring Labor Force

Needs) which is assessing and monitoring labor needs in industry arid is developing a

methodology to gather reliable measures and information on.activitibs, hiring and scheduling,

purchasing, and contracting through longitudinal survey data tould ~Iso ,not be reviewed. The , ,'

extensive case study (Sustainable Socioeconomic Development inOil and Gas Country) of

Abbeville, Louisiana to examine factors that have been associ~ted:~ith reducing the volatility of

the effects of oil 'and gas development was also not available, for examination but promises both

important substantive and methodological developments. CI¢arly, if such studies had been

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c~mplet~d and JViewed by us the conclusions of this examination may have been somewhat

different,' I"\'"''. '". ;

The analysis, evlluations and recommendations presented represent the views lof the authors and

, should be ;ecognized as such. In addition, since this is a review of a designated set of studies, it

must be reJognized that it is neither comprehensive nor exhaustive but rather represents an

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; attempt to evaluate the general nature of MMS socioeconomic analyses to date both in terms of • I,

-'content and quality. It is also important to note that the MMS studies program is only one of

many inputs impacting EIS and other Gulf planning efforts, This examination is intended to be , , useful to MMS in future study planning efforts, in its design and completion of EIS analyses, and

in determirting the information likely to be of greatest utility to communities and individuals in

areas impabted by OCS development.

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SECTION 2.0

CRITERIA FOR STUDYEVALUATIONS

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The evaluation of these studies was done in terms of how well they addressed the key

dimensionk of socioeconomic impacts, if they did so using methods and empirical processes

generally accepted as reflecting the most accurate and useful methods available (referred to as

state-of4h~-art or SOA methods) and if they produced information likely to be useful to MMS < • •

and local decision-makers. Specifically then, we use the criteria noted below to examine:

1. The lxten~ to which the materials/studies are inclusive/exclusive of key impact

dimensions;

2. The appropriateness, application, and documentation of the methodologies used in the

area of analysis under consideration in the study;

3. The quality of the work relative to the state-of-the-art in the area of impact

assessment both conceptually and methodologically;

4. The likely utility of the work for communities' (residents and leaders) and MMS'

managers and decision-makers;

5. AreaS/issues meriting further examination.

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2.1 . SOCIOECONOMIC IMPACTS

wI evallate socioeconomic impact studies related to economic, demographic, public

service, fiJcal, and social impacts as delineated by Leistritz and Murdock (1981). This is

admittedl~ only'one such categorization scheme (see for example Gramling and Freudenburg

1992; Van'clay ~nd Bronstein 1995; Porter and Fittipaldi 1998), but it provides a means of

examining detaiied aspects of the socioeconomic studies reviewed in this report. The description

of the cate'gorization scheme of Leistritz and Murdock (1981) is useful for examining both

studies and environmental assessments. The categories it delineates and the items it notes as

needing arlalyses in an assessment indicate areas in which socioeconomic studies should be

completed and the methodologies it describes indicate methods that should be used in

assessments. I . . j I

Leistritz and Murdock (1981) delineate the five major types of impacts which they assert

must be damin~d for different project phases and different levels of geographic aggregation.

The projeJt phases for which assessments are to be made generally include baseline,

constructi6n, operation, and post-operation phases. These are roughly equivalent to baseline,

leasing,dJvelopment, operation, and post-operation or decommissioning phases of OCS projects.

The reasoA for examining these project phases lies in the fact that impacts can only be assessed

relative to)baseline change and that the levels of investment, types of employment, forms of

impacts, and the extent of impacts vary by project phase.

Thl geO~raPhic levels for which Leistritz and Murdock recommend that assessments be , completed include .the state, development regions, counties, places (towns and cities), school

districts, a'nd other taxing jurisdictions. These levels are dictated by the fact that economic

market arias tend to operate within broad regions while other impacts are also manifested in

smaller gdographical areas. Similarly, the areas for which impacts are to be assessed are

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Social and cultural impacts include effects on socialinstitutibns (including families, the

e,;onomy, religion, education, and government), impacts on social structures (social stratification

and inequality) and specific social groups (e.g., youth, the elderly, lbng-time residents, new

residents), and impacts on the attitudes, values and perceptions of m\w and long-time residents of . I

vanous types. !

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but, if a specific area (such as the Gulf of Mexico) is of interest, impacts across projects are often

cumulated to determine cumulative and long-tenn impacts. lihis process is discussed further

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d~!tennined by the types ofjurisdictions whose leaders must react to,l and attempt to manage,

socioeconomic impacts and whose actions can affect the distribution~ and extent of local-area

impacts. These are clearly such governmental jurisdictions asthe st~te, counties, places, school

districts, and taxing jurisdictions. ;

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.. The five types of impacts delineated by Leistritz and Murdock are economic,

demographic, public service, fiscal, and social and cultural impacts. IIncluded among the

economic impacts are impacts on employment, income and b~sinessi activity. Demographic

impacts include those on the size, distribution, and composition of the population including

workforce participation patterns, worker and population settlement ~nd migration patterns, and

demographic characteristics of new and long-time residents including household size, presence

of other workers (other than the person directly linked to the project), age, gender, race/ethnic

composition, and education and other socioeconomic characteristicsi

'! Public service impacts include effects' on the demand'for s~rfice personnel, facilities and

equipment relative to the supply of these factors for such services as'education (primary,

secondary and higher education); police, fire and emergency service~; water, sewer and

sanitation services; health services including personnel (e.g., docton! and nurses both general and

specialized), specialized equipment (e.g., CAT scans, dialysis units)!and facilities (e.g., hospitals

and clinics); transportation services (highways, road and streets, rivers, canals, and other fonns . , I

as appropriate); social services including impacts on the number of persons receiving TANF,

Medicare, and Medicaid and the characteristics of service providers; criminal justice services

including impacts on youth and adult facilities, probation and other personnel; recreational

impacts including impacts on parks, playgrounds, and selected recre'ational activities; library

services including new facilities, services and holdings required; nousing including both public

and private-sector housing demands and supplies; and other serviee~ specific to the impact area.

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'i Fiscal impacts include effects on public costs by type of sen;ice (as noted above) and

revenues by source (e.g., property tax, sales tax, special assessments, user fees), and the timing

of such costs and revenues relative to other project impacts for key j'urisdictions. These

jurisdictions generally include the state (if state costs and revenues are impacted), county, place,

school district, and special taxing jurisdictions in the impact area. I

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2.2 THE IMPACT ASSESSMENT PROCESS

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The process of impact assessment, and the analyses of socioeconomic impacts in general,

usually involve several major steps. Below we briefly review the assessment process describing , ' key elements of the process and the standard (i.e., state-of-the-art methods) used at each stage.

Although differences exist depending on the specific guidelines of the organization and/or , , agency doing the assessment, most National Environmental Policy Act guided assessments have

evolved tolhave:similar steps/stages (in addition to Leistritz and Murdock 1981, see Vanclay and

, Bronstein :1995 imd Porter and Fittipaldi 1998). These stages commonly include: (1)

determination of the impact area; (2) description of baseline characteristics (often including an

assessment or "scoping" of impact area residents' expectations and preferences related to

developmJnt); (3) projections of baseline conditions; and (4) projections of project-related

impacts. fu general, baseline projections are projected for a time period from the most recent

period for \vhich historical data are available through the last year for which project-related

impacts projected. Project-related projections are usually made by individual year within key

phases of the project (e.g., leasing, development, operation, and post-operation or

decomrriisbonirig phases).

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2.2.1 Determination of the Impacted Area

~ht soci~econOmiC impact assessment area is often quite different than that used for

assessing ~iological, physical or other similar forms of impacts. Whereas areas for other analysis I

are often clearly discernible by using the boundaries of ecosystem areas, clearly defined I •

topographical areas, or other delineated geographical boundaries, socioeconomic impact areas , .

are difficult to determine. As noted below, this may be especially difficult in regard to OCS

developm6nts. in general, socioeconomic impact areas are determined by two criteria, the areas , . where project-related expenditures are made and areas which serve as the residence areas for

project-reJ'ated workers. Information on the likely location of workers and expenditures is

usually obtained from the companies developing the expected projects or from analysis of the

patterns fdr similar projects previously developed in the area. Because both project-related

workers artd expenditures may be dispersed widely across geographic areas, analyses are usually

required t6 identify areas where clusters of employment and expenditures are likely to be

located. Irt all c'ases, because employment and expenditures seldom display discrete patterns, I .

some judgment is usually involved. Despite a certain arbitrary aspect to the determination of

, .impact areas, the identification of the impact area is critical to the assessment process. Ifsuch , .

areas are under-bounded, one is likely to find that key impacts are missed while if such areas are

over-boun'ded, one runs the risk of diluting the impacts and thereby suggesting that the impacts , of a project are less consequential than they may prove to be. A critical part of any assessment ., , related report is thus a description of the impact area and the rationale for its determination.

oAce an! overall impact area has been determined, it is critical to disce~ what subareas

will be used for' assessments. Counties and places are widely used as are taxing jurisdictions (for

fiscal anal1ysis).1 What is critical in most assessments is that the subareas for which analysis is to

be completed be ones that are useful to decision-makers both in the agency making the

developm~nt decision and local decision-makers who must manage the impacts.

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2.2.4 Projections of Project-Related Impacts

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After determining the impact area (and subareas within it fol- analysis), collecting

baseline (i.e., pre-leasing) data on the dimensions noted abov~, and 'projecting them under

baseline conditions for the projection period for each of the five types of impacts noted above, a

projection of project-related impacts is completed. Socioeconomic impact projections generally

begin with data on project characteristics particularly project locati6n, project expenditures by , type, sector and location of the expenditures, and direct projett-rela~ed employment (Leistritz ,

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2.2.3 'Projection ofBaseline Conditions

This part of the assessment process consists of projecting major changes in the impact

dimensions noted above that will occur even if the proposed I1rojeddoes not occur. This is

cllitical, because even without the proposed project the impact area ~ill change. In assessing

impacts the key comparison is not how the area when impact<,;d by t~e project will differ from

the area prior to the project but how it will differ from the characteristics it will have during the , I .

time period in which the project would exist without the project's in:itiation. For example, many

rural areas have had years of population decline such that baseline conditions are likely to

c,ontinue such decline. The impacts of a project on the demographiq characteristics of such an

area may be simply to partially stem the decline rather than to lead to extensive growth relative

to baseline levels. In general, the projection methods described bel6w for impact projections are , I

also used for the baseline projections. The state-of-the-art m~thods igenerally used include inputoutput models (such as IMPLAN) for economic assessments, ,cohort-component methods for

demographic assessments, population-based ratios for service asses~ments, service and

economic-based methods for fiscal assessments, and historicaJ and 6bservation-based and

survey-based extrapolations for the social and cultural baseline proj¢ctions. Although the

baseline projections are often seen as easier to complete than projec~-related projections, their

difficulty depends upon the nature ,of baseline socioeconomic1change in the impact area. In areas

that have been relatively stable or which have changed in a relativeJ'y constant manner over time

such assessments may be relatively straightforward, although;general societal changes may alter , conditions in them in unforeseeable ways. In areas with a variety of socioeconomic changes

taking place, such as many rapidly growing areas in rapidly d~velo~ing regions, anticipating how

they will change taking into account all factors, except the proposeq project, may be very

demanding and make baseline projections as subject to error (if not ;more so) than project-related , projections. I '

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2.2.2 Description of Baseline Conditions !

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, Having determined the impact area, the next stage in the ass~ssment process is the

description of baseline conditions. This involves collecting d~ta including historical as well as

quantitative and qualitative data on the characteristics ofthe impact area prior to development.

This assessment process can be quite extensive and is often the longbst part of a socioeconomic

impact assessment document. The standard factors included in the 4escription are those

ddineated above for each ofthe impact dimensions. In general, hist:orical data for at least a

d~cade preceding the current time period are provided and crucial trends are noted. The intent is

to provide a comprehensive description of the nature of the impact area and of those parts of it

that are likely to be most impacted by the positive and negative impacts of the proposed project. , ,
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1995; 1998). If possible, such data are obtained for each year during the project's expected life.

Using sucH base data and some forn{ofeconomic model topr6ject indirect and induced

employmeht (m~ltiplier) effects and expenditures, impacts on income, employment and business

activity an~ projected. Project-related change in per capita and household income, employment

demand by sector and project phase, and impacts on businesses by sector and project phase are

then projetted for each year for each geographical subarea and the impact area as a whole.

D I ! h' . all I db" . b I' . I' emograp IC Ifnpacts are gener y comp ete y proJectmg ase me popu atIons

forward o~er the projection period using some form of cohort-component model which projects

change in bopulation cohorts (cohorts being groups of people with similar characteristics such as

age) usingjassumptions about the basic demographic processes of deaths and migration for

existing cohorts; and about birth rates to determine beginning age cohorts (see also Becker

1995). Tolthese' projections of the population by age, sex, and racelethnicity, labor force

participatibn (or'availability) rates are applied to produce projections of labor supply (usually for

different types of employment or jobs such as construction, operational, etc.) and these are

matched t6 the projections of labor demand from the economic model. The difference between

labor supply and demand (again usually by type of employment) is then assumed to indicate

whether n~w labor will migrate into or out of the impact area and household characteristics are

applied to:the in'- or out-migrating workers to produce projections of population migration. The

projections of in- or out-migration are then added to, or subtracted from, baseline migration

levels (or if baseline is used as a type of employment, replace baseline migration to produce total

migration ~stimates including baseline and project-related) and the model iterated for each year

. during the~projeCtion period. Additional spinoff projections may be made of households using " I

household headship rates and school enrollment using enrollment rates.

Inken~rk service-level impacts are projected by using population or ~ousehold-related ratios of service's per population-unit (such as 1,000 or 100,000 persons) or number of

householdh ,and 'multiplying the ratios by the projected population and households. The

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differences in baseline (service-supply factors) and project-related projections (demands for .

services) dan then be used to determine whether the project will accentuate already overburdened

services o} provide additional volume that may help underutilized services to be maintained.

FiLaI ilpacts involve projections of costs and revenues (Leistritz 1995; 1998). Cost

projection~ are usually obtained by multiplying per capita (or unit) costs for the delivery of a

service tirtJes the number of persons (or households or service units) to be served. Revenue

projection1s usually utilize projections of taxes per unit of income and/or assessed value of , , property. jThe specific services for which costs will be assessed will be largely determined by

those for which cost data can be determined and revenue types will be determined by the tax

.laws and ~tructures of the impacted jurisdictions. Yearly projections of both revenues and costs

are essential because of the potential problem of the timing of costs relative to revenues, that is

costs,ofteh rise before revenues resulting from new populations or households. lurisdictionspecific ptojections are important because of what is termed jurisdictional mismatch; that is, the

fact that r~veilUe increases may be concentrated in one jurisdiction (or jurisdictional level) while

costs'~ doncentrated in 'another. As for service projections, comparisons of baseline and

project-related projections are useful in determining whether the project is likely to cost more (in

public t~rlns) than it creates in revenues (and where this may occur) and accentuate already . I .

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Volatility based on a volatile world oil market. The substanhal price swings over the

past 30 years have led to major ups and downs in industry a~tivity, and these have , ,I

occurred in both offshore and onshore producing area~. The' oil industry has adjusted to

the reality of price volatility through restructuring, joint venturing, and other risk

reducing strategies (see WalIace et al. [2001b], among othe~). Areas affected by

industry operations have little choice but to cope with the ne\.v reality because they have

little ability to influence a course of events that is determined by global considerations.

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Many Actors. In contrast to other types of development wnere the action is often

con~rolled by one firm, or at most a handful of businesses, the oil patch involves literally

"a cast of hundreds," including majors, independents, ,and a host of subcontractors. For

example, the industry includes fabricators and shipyards, marine shipping compan'ies,

aviation companies, diving companies, pipecoating compani,~s, dnd a multitude of others.

This makes it much harder to obtain accurate information' ab,out industry operations , ' I , I

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existing deficits or whether it may generate revenues that not only pay for project-related costs I

bUtt lead to surpluses that may be used to improve government and s~rvice infrastructure.

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-Social and cultural impacts are generally projected by variou~ forms of extrapolation

from historical events or comparative areas (Taylor et al. 1998; Wilkiinson 1998; Burdge and

Vanclay 1995). For example, if the area has been shown histo,ricallx to be socially very cohesive

and to generally exclude newcomers from social groups, then potential conflicts may be

projected to occur between new and long~time residents. If tht: area ,has successfully

accommodated similar types of projects in the past, then its population may possess the

ex:perience base necessary to successfully accommodate the propose~ project. If the impact area

is similar to other areas that have been substantially disrupted by projects of the type and

magnitude of the proposed project, similar difficulties may occur in the impact area. Projections

in these areas are often qualitative rather than quantitative in nature.: Social and cultural

piojections are often extremely challenging. :

, I .

CHARACTERISTICS AND DIMENSIONS AFFECTING SOCIOECONOMIC

IMPACTS AND THE ASSESSMENT CONTlEXT ' i

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The characteristics and dimensions of OCS development in tre Gulf of Mexico provide

unique challenges to the socioeconomic study assessment andanalyses processes noted above.

These factors both limit the types of analyses that can be completed 'and increase the difficulty

entailed in completing such analyses. We believe it is essential to nbte these factors before

presenting our evaluations of recent studies. These factors ca~ be c6nveniently grouped into , , I

three categories: (I) aspects related to the nature of the petroleum in()ustry; (2) aspects related to

the Gulf of Mexico development context; and (3) aspects related to differences in institutional, , , demographic, social, and economic contexts. I

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2.3.1 Aspects Related ,to the Nature ofthe Petroleum Industry!I , , Several attributes of the oil industry affect socioeconomic analyses and assessments,

whether these projects are offshore or onshore. Included amo~g the~e are:
(employment, expenditures, etc.), let alone intentions. It also makes it more difficult to

est~blish' effective monitoring and mitigation programs; I

GlgraJhic Base. Where the typical socioeconomic impact analysis ~an be conducted

in clearly delineated geographic area, this is not the case for oes activity in the Gulf of

M~xico.1The area is vast extending from Texas to Florida and reflects extreme social,

cultural, economIC, and InstItutIOnal vanatlOn. i _

Llse-sJecific Sales vs. Cumulative Impacts. Both offshore and onshore, it appears

that individual leasing decisions seldom trigger socioeconomic effects of a magnitude to

watrant it comprehensive socioeconomic assessment. Yet the sum of n'umerous decisions

ca~ lead:to truly substantial cumulative effects. Further, sometimes a lease sale's primary

sodioecollOmic effect may be to stabilize the status quo. •

1 I

2.3.2 Aspects Related to the Gulf of Mexico Development Context .

Thlre alio are some attributes ofthe situation in the Gulf of Mexico th~t affect the

context fot impact assessment, and some attributes of offshore development that are somewhat

unique. :These include: .

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Established Industry. The "classic" impact assessment situation has been one where a

ne~ actiVity (industry, project) is being imposed into im environment where this type of ,I .. .

activity has not previously existed. However, the offshore petroleum industry has a long

Iii~tory in the Gulf of Mexico. A certain level of new leasing and development is

fe(~uired;jUst to maintain current levels of industry production, employment, and

POIJUhltion. The whole concept of what is "baseline" and what constitutes "impact" is

difficu!t:to establish and may need to be reconsidered. .

TJanslaling Offshore Activity into Onshore Impacts: Establishing the Impact Area.

AS: the reviews of several of the MMS studies noted below suggest, offshore development

activitid can be serviced from a variety of onshore locations. Also, various phases of an

odshore'development may be serviced from different locations onshore (see, for

exbple', Plater et al. 2000). Finally, the nature of offshore work schedules (7 on, 7 off,

etl) means that some offshore workers can live at substantial distances from their

im~hore :staging areas. This often makes the process of delineating the impact area quite

difficult'and, as a result, many studies tend to examine impacts for areas-that are

~~a~sume'd" to be impacted. . _

2.3.3 ~JpectslRelated to Differences in Institutional, Demographic, Social, and Economic - I •

Contexts

'1 1 Differences in Regulatory Environments. Most impact assessments are made within a

sirlgle' area and nearly always within areas within a single state. Because Gulf of Mexico

as~essments often require multi-state analysis efforts, the impacts are obviously affected

byl vastly different state and other regulatory environments. The forms and types of state

anti agencies charged with regulating energy development, environmental regulations,

setvice provision, and the types and forms of state and local tax structures, zoning

regulations, etc. are likely to be much more varied than in other types of assessments and

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are likely to confound the process of attributing impact~ to O~S and other forms of

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development. . i

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Social, Demographic and Economic Contextual Differenc~s. The different states,

coastal, non-coastal and other development contexts are als'o ~substantially different in

demographic, social, econoinic, and other ways as well. Although numerous studies

specifically attempt to describe such differences (see Wallacd et aI. 2001a; Austin et al.

2002; Seydlitz and Laska 1994), any attempt to assess impacts accurately cannot do so

unless one knows not only that such differences may affect' t~e impacts occurring in an I

area but also the nature, magnitude and duration of their effeets on the magnitude and

location of impacts. This latter type of knowledge has ,not b~en established and is likely

to require basic research that has yet to be completed. The 'p6int , is that as one attempts to

assess impacts in multiple states, counties, and development areas across different

industries involved in OCS activity, the difficulty entailed in laccurate assessments is

increased and the likelihood of misallocation of impacts is also increased. Attempts to

obtain gulf-wide generalizations may therefore be extremely!diffic:ult.

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It is clear, then, that such factors provide additional challengbs to studying socioeconomic

impacts in the Gulf of Mexico, especially when the effects oflong-tJrm multiple projects'

cumulative impacts are being examined. Most assessment methods ks described above utilize . ,I

procedures that are project-specific and implicitly assume thatproje¢t impacts are summative;

that is, that the impacts of multiple projects can be largely determim!d by summing their impacts.

Unfortunately, no clearly agreed upon standards have been develop~d for projecting the impacts

of ,imwioowo" comol'"" off,," io ili, fi'ld '" 'ociowmomi' iffiPOC' ~oc~m,"'.

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A BRIEF OVERVIEW OF STUDIES EVALUATED IN THIS ANALYSIS

, Before blginning the evaluation of the studies ex~ned relative to the;different impact

dimension~, we wish to provide a brief overview of the major studies reviewed. MMS sponsored

studies edmined in this assessment include those discussing the general substantive topics of: ,-' ' i ' ,' :

I. The nature of the petroleum industry in general and the OCS industry in the Gulf of

Mexico in particular;

2. The Gulf Coast study area - including its history, economic trends;

, 'dem6gTaphic patterns, labor force, etc.; :

3. Employment and expenditure studies; ., " •

4. AnalYses of selected types of impacts (e.g., oil spills and recreatio~al fishing);

5. Area~specific studies of socioeconomic impacts.

) I '

3.1 PETROLEUM INDUSTRY STUDIES

StJdies 1f the offshore petroleum industry which reveal important asp6cts of its evolution

include'th6se by Gramling (1995), Pulsipher et al. (1995), Wallace et al. (200ib),Pulsipher et al.

(2001), W~de et al. (1999), and Austin et al. (2002). .

il'l worl by Gramling (1995) traces the development of the offshore 6il industry in the

U.S., and partic~larly in the Gulf Region. The author begins with the first over-water drilling for

oil (in 189p at S'ummerland, CAl and discusses key milestones in technological development that

allowed offshore development to proceed. The advent of the submersible drilling barge iii 1933 . ,

was one of the breakthroughs that allowed exploration and development to proceed in the

shallow cqastal waters and marshes of Louisiana, and others followed -: including increasingly

larger drilling rigs, the tungsten carbide bit, and the ability to lay underwater pipelines. Early in

the development of coastal petroleum resources, it was necessary to solve problems associated

with op~nition ih remote locations where daily commuting was infeasible. The use of crew

living qualters near the job site and division of work into concentrated work periods (1 week on, I I , ,

1 week pfo emerged early in the history of offshore development. '

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FolloWing World War II, the oil industry rapidly moved farther offshore, with the first

producinglwell?n the OCS completed in 1947. The period from 1946 to 1953 was clouded by

Federal'state disputes over ownership of the OCS resources. The author summarizes the key

points it i~sue and the key provisions of the Outer Continental Shelf Lands Act of 1953 that

effectively resolved them. Subsequently, development in the Gulf was rapid. 'By 1957, 100

offshore dlilling rigs were operating in the Gulf, 96 of which were off Louisiana.

1 I ' This report offers a very readable work on the history of OCS development in the Gulf

Region,' p!uticuiarly Louisiana, up to 1995. It provides a very good historical background on the

developmbnt o{OCS activity (including state-federal legal conflicts over ownership) and

discusses the G~lf OCS in the context ofthe global offshore industry. The discussion of offshore

drilling:tethnolbgy (in terms understandable to non-engineers) is also very useful. The report

includes shmnuiry statistics on the number of production platforms in the Gulf, number of tracts

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leased, and population changes in coastal parishes. The author also provides some background

on the development of OPEC and its role in the world oil economy. !The report is a valuable

reference for understanding the history of the industry and whylhow :it developed as it did.

I

Pulsipher et oIl. (1995) address the performance of major, intdgrated oil companies

(rrlajors) versus smaller companies (independents) in exploration and production (E & P) of

hydrocarbons (oil and gas) from the Gulf OCS. The authors explorelthe hypothesis that a shift

from the majors to independents will cause domestic oil and gas resdurces to be developed less

aggressively and less efficiently. Key definitions incorporated in thd analysis include: . . ,

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1. Majors - integrated companies with more than 1 billion barrels of oil equivalent

(BOE) in reserves, worldwide; . I . 2. Large independents - firms listed in the Oil and Gas Jo,urnal (OGJ) list of the

largest 100 firms, but not majors, with assets> $500 million;.

3. Smaller independents - OGJ list of top 300 firms, assets < $500 million. This I .

category also includes all privately held companies. I

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The authors examine drilling records in the Gulf OCS for th~ period 1983-1992, as well

as the total exploration anddevelopment (E&D) expenditures by the; differentgroups of

companies. They find that both majors and larger independents hav¢ been increasing their

foreign E&D activity. From 1987 to 1992, the majors' E&D spending on foreign prospects

increased by 113 percent, while that of the independents grew by 73Ipercent. However, over the

S2me period, domestic E&D expenditures by the majors declined by] 34 percent while those of

the independents grew by 12 percent. Thus, the majors' share of d0lnestic E&D spending fell

from 77 percent in 1987 to 66 percent in 1992. This shift is part of the reason for the concern

about the relative performance of the two groups. I

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To assess their performance, the authors examine drilling reciords for the Gulf OCS for

1983-1992. Over this period, independent operators accounted for nearly 70 percent of . ' , eJ;ploratory wells drilled on the Gulf OCS, while the majors drilled 58 percent of the total

development wells and 60 percent of successful development wells. iHowever, if success is

measured by barrels of oil equivalent added to reserves per foot of spccessful wells drilled, on

average the independents were more successful than the majors, adding 265 BOE per successful

well drilled (1983-92) compared to 227 BOE for the majors. Using !total footage drilled as the

measure, independents as a group still did slightly better with '111 BbE compared to 106 BOE

f . I or~~. i

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To summarize, in the Gulf OCS, independents have been mdre aggressive and successful

than majors in exploration while the majors have been only moderat~ly rriore successful in

development drilling. In aggregate, the independents have done better. Thus, the authors I

conclude that there is little evidence to support the speculation that the Gulf OCS hydrocarbon

resources would be less effectively developed should independents tontinue to playa larger role.

;

,i!' Wallace et oIl. (2001b) examine changes that have occurred ih the U.S. oil and gas

industry over the past 20 years, the major forces leading to those changes, and the principal

effects of industry changes. The authors conducted an extensive re~iew of publications from

industry, government, and academic sources, supplemented by pe;s~nal communication with I " I I .

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· industry'repre~entatives. The discussion is organized around two major issues (oil and gas price

changes'an'd corPorate organization arid strategy) and four eros'sculling topics (economics, .

technolod, labor, and the regulatory environment). Major drivers of industry change identified

· in the stud~ include increasing volatility of prices, rising costs of oil and gas projects,

· globalization of the industry, emphasis on shareholder value, the increasing roie of technology,

and concein for management of risk. ; ,

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, The i~du~try is now a high tech, new economy, industry. With such changes it would be

difficulltoJovers;tate the significance of finances and access to capital in the o~erall strategy that

the industry now follows. This transition is not without important costs. For example, one

, consequence of the restructuring that has occurred over the past 20 years is a shortage ofskilled

· personnel in virtually all aspects of the industry. The image of the industry has been impacted

because ofimass'layoffs and losS ofjob security. .As a result, current employees express far less

loyalty to the companies than did the previous generation: '

Thi stUd~ addresses the U.S. oil and gas industry overall, but with emphasis on oes

activity in the Gulf of Mexico (GOM). Volatility of product prices was found to be a major

force affedting the industry; from 1980 to 2000, oil prices moved from a high of $54.46 (in 2000

dollars) inl198t'to a low of $11.26 in 1998. Prices of natural gas had similar fluctuations. The

collapse' of oil plices in the mid-1980s was a major factor leading to industry restructuring. . . l f 1 •

Producers have consolidated, restructured, adopted cost-saving technologies, and implemented

cost cuttin~ efforts (such as downsizing and outsourcing). .

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These authors have produced a very thorough review of recent changes in the oil and gas

industry, the forces leading to these changes, and their consequences. The study provides a

helpful ba~kground and perspective on the industry that should be useful to anyone undertaking

work on s6cioedonomic impacts of oes development.

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Pulsipher et al. (2001) undertook a rather specialized study to forecast the number of

productiorl platforms that will be operating on the Gulf of Mexico oes to theyear 2023.

Econordethc imalysis using historical data (1947-1996) on structures and other factors is

employedito estimate key relationships. Least squares regression is the specific estimation

techniqtie,laltho~gh other alternatives were explored. Forecasting platform numbers also

required forecasting the average wellhead price of oil, the number of wildcat (exploration) wells

drilled, thJ number of new fields discovered, etc. U.S. Department of Energy'(DOE) projections

of future dil prices drive the projection model. .

'1 I ' the model was found to explain nearly 80 percent of the variation of the historical values

of the pridcipal dependent variable (new offshore structures) and to track very closely with the

historic~l trend of platform installations. The most likely (reference) scenario shows the number

of opedtirig offshore structures on the Gulf of Mexico oes declining by about 29 percent over

the period)fro!J1!1999 to ?023. The decline occurs because the number of platrorms being

Installed IS predIcted to Increase only slIghtly over current levels whJie the number of platforms

being rembved is predicted to increase substantially. ;

" TJe autJors appear to have used appropriate data and estimation techniques, and the

economic logic 'behind their model seems sound. However, econometric analysis using historical

IS
data assumes that past relationships extend into the futljre. AlthougJ the authors did use

accepted methods oftesting for major changes in structure dUring th~ historical period, major

future changes in technology, world markets, or other key forces could invalidate the results.

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Aus,tin and her colleagues (2002) discuss changes in the offshore 011 industry from the

perspective of employees and their families. Their report summarizJs findings from a three-year

etlhnographic study focused on two communities (Morgan City and ¥ew Iberia) in southern

Louisiana The research team explored changes in the OCS oil and gas industry and how they

are affecting workers, families, and communities. The research apptoach included placing two , researchers in residence in the study communities. The interviews aj1d observations by these

individuals were supplemented by site visits conducted by eight additional researchers and also

bv interviews/discussions conducted by a number of local teachers ~ho were recruited and

t:'lined by the project team. Throughout the effort, the team endeav6red to triangulate by

seeking information from persons with different points of view, diffbrent positions in social and

economic hierarchies, different genders, ethnicities, etc. i

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, The report is organized into two major chapters - one discussing impacts by sectors of

OCS activity and a second addressing key issues affecting OCS workers, their families, and the

communities affected by OCS activity. The six sub-sectors of OCS activity examined in the

report represent the diversity of employment opportunities offered by the OCS industry in terms

of stability/vulnerability of employment, patterns of work scheduling, and safety, among other

factors. The researchers found that the sectors differ substantially along several dimensions; for

e)~ample, drilling is very volatile in response to industry cycles, whe~eas production is more

stable. However, some industry trends are affecting all sectors. On~ of these is the series of

mergers and acquisitions that swept across the industry beginning in' the 1980s. The effects of , . , this restructuring of the industry have been many arid varied, including (I) company , headquarters and onshore supervisory personnel have been relocated from Morgan City and New

Iberia to Houston and New Orleans, (2) more formalized hiring pra~tices have enhanced

opportunities for ethnic minorities and women and led to greater emphasis on formal

qualifications, rather than on-the-job experience, (3) an indUStry shift toward contract labor has

reduced workers' job security, (4) shifts from predictable work schetlules'(7-7, 14-14, etc) to oncall status and/or longer shifts place greater strain on workers :and dmilies, and (5) as a result,

tbe OCS industry no longer can rely on a stable and loyal work forcb, at least not to the extent it

could in the past. " ' '!,

Other changes occuning in the industry include (I) th~ pay hifferentials between oil

industry work and jobs in other industries/occupations are much lesJ now than in the 1970s, (2)

work shifts are becoming longer and/or more uncertain in some OCS sectors (and today's worker , and families may be less willing to accept these constraints), (3) the:OCS industry has made

major improvements in both environmental and worker safety, (4) iAcreased diversity in the

workplace has meant that workers may find themselves working with persons with different

cultural backgrounds, and (5) industry cycles, together with company cost-cutting efforts, leave

workers feeling much less secure in their jobs, with layoffs and den\otions (bumpbacks) a real

possibility. I

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Again, the primary focus of this work is on the effects of OGS activity on families.

Particular attention is given to some of the challenges of raising farr/Hies when one of the parents , I I

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(usually the father) spends so much time away. Depending on an individuals' work schedule, a

parentlspo~se may be away from the family anywhere from seven days to nearly a month at a

time. Varibus coping strategies must be learned to more effectively accommodate this work

schedule. One strategy reviewed by the authors is the development of social networks. Families

most affeeted by' OCS work schedules often turn to other family members who have already

experiencdd life in the oil and gas industry to learn effective coping skills. However, informal

social netJorks are also developed.

Thl diff~rent generations within the communities most impacted by oes activity

expressed quite different opinions about working in the oil industry. Older generations generally

see it as a deceni way to make a living. Younger generations, however, are starting to look

beyond thd oil industry. These researchers found that many high school students are increasingly

looking to :higher education as a way to escape life in the oil field. Most students interviewed by

the researchers indicated that they could see themselves working in oil for a short period of time

in order toImake'some quick money, but after that, they hoped to move on to another career

. choice. Inlerestingly, although parents saw oil as a good career for themselves, they too hoped

that their c'hildren would choose other career paths. Clearly, loyalty to OCS work has decreased

in recent y~ars, and this is driven in significant part by changes in the oil industry.

;hi final section of this report deals with the effects of OCS oil and gas activity on other

social insdtutio~s. During boom periods, the population increases rapidly, increasing number of

transients tome into town; and housing shortages are experienced. During bust periods,

unemployfuent i~creases and welfare services become over-taxed. The study also shows that

institutions such' as hospitals and schools have trouble attracting and retaining high-quality

employees!. Students have historically been trained for a life in the oil industry and often lack the

training fo~ other jobs. As stated earlier however, this is beginning to change as an increasing

percentag~ of young people seek life outside the oil industry.

, Thl secdnd volume of the Austin et al. study basically constitutes a coiIection of case

studies. The res'earchers tracked and studied various families, couples, and individuals to assess

how their lives are affected by the oil industry. The first part of the report is basically historical.

For exam~le, it is noted that Iberia Parish was originally known for its production of sugar.

Today thete stili exists a division between the "sugar elite" and the oil workers. Community

residents l6ss directly involved in the oil industry continue to reflect negative stereotypes about

oil workerl; that;include drunkenness, rowdy roughnecks; "loose wives," and divorce. Several

respondents expressed concern about a perceived correlation between oil work and domestic

violence. ~lthough no empirical evidence was presented, the sheriff's department claims that

there is a dorrelation. Law enforcement officials argue that lay-offs and down-times bring more

drinking, fightirlg, and family dysfunction. In addition, when residents are working and the j j, ,

down-time is over, women are often forced to become both father and mother. The stress of the

job schedJle and the stress of uncertainty and instability contribute to excess leve,ls of familyrelated prciblems. Despite this dysfunction, residents quickly point out the importance of family

ties and cdmmuhity support in addressing the problems they face.

Thl I d . f h ' .. d"d I' . R'd d' e secon sectIOn 0 t e report summanzes m tVI ua mtervlews. eSI ents ISCUSS

their struggles c6ping with difficult work schedules and an unstable work environment. Informal

networks Imd support systems are once again brought up as an important coping strategy.

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:1 The authors provide a detailed account of the progress,of exploration and development

aCtiVity and the numerous Issues that arose during the process:of obt~ining permits for the initial

exploratory wells. The report also provides background on Alabama petroleum geology and

summarizes reserve information for federal and state waters. The u~s and downs of the oil and

gas market during the 1970s, 1980s, and 1990s and the effects ofm¥ket volatility on exploration

and development activity are examined. Detailed data are compiledion state and federal leasing

actIVIty, and on the state trust funds established from royalty payments receIved by the state. Ii I

. , I' , The purpose of this report was to provide background for a sflbsequent analysis of the

inlpacts of developing the Destin Dome OCS gas reserves (Plater et [aL 2000). It serves this

purpose very well and should prove valuable to anyone studying the: effects of OCS development . . '

in this area.

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The third section discusses the differences in views bet~een older and younger

generations. The younger generation often sees town life as boring, ~nd expresses the desire to

move on. They admit that the money that can be earned working for; the oil industry is attractive,

yet not worth it. They feel that their work must also be interesting and challenging, and want

more time with their families than their parents had. While the oil irldustry is not seen in these

community case studies as solely negative, local sentiment toward th'e industry is clearly

changing. '

The fourth section deals with truck and boat transportation.' Both of these sectors have , undergone major changes in recent years. De'regulation of intrastateitrucking in Louisiana has

driven rates down substantially, so that oilfield trucking is no longer:an attractive occupation.

Further, this sector,long dominated by independent owner-operator truckers, has recently seen

the rise of large trucking companies which have formed single sourc~ alliances with the major oil

producer-customers. While the emerging structure appears to promote logistical efficiency

(through consolidation of loads, better coordination of back hauls, a~d improved scheduling), it

has greatly reduced the economic well-being of most truckers.' Som~ feel that this is already

being reflected in a lower quality labor pool for this sector. The offshore service vessel (OSV)

sector has also been going through major changes, many stemming from increased emphasis on , formal qualifications for licenses for captains and other personnel. Traditionally, training in this

sector was conducted on the job through informal mentoring. As a r~sult, mariners now face

pressures to undertake extensive classroom instruction to qualify for: licenses, and some

observers believe the sector may face heavy losses ofits mostcompbtent personnel. " I , , " Wade et aL (1999) provide a good overview of the recent his~ory of coastal Alabama and

the history of natural gas production in coastal Alabama, beginning j¥ithMobil Oil Company's

initial Mobile Bay state lease in 1969. The initial well was spudded!in 1978 (after substantial

regulatory delay), and gas was discovered in 1979 (at a depth of 21,000+ feet) in the Norphlet

formation. This formation has become one of the most important U~S. natural gas producing

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3.2 ST,UDYIAREA CONTEXT;HISTORY, SOCIOECONOMIC TRENDS, AND

CURRENT ISSUES

. ~Jdies Jhat provide particularly useful background on the Gulf Coast region or portions , .

thereof include Wallace et al. (200la), Gramling et al. (1995), Blanchard (1999), and Kelley

(1999)., j 1

Wallace ,and her colleagues (2001a) undertook an extensive overview of historical, social,

and econolnic impacts of OCS development on Gulf Coast communities. These authors focus on

three coastal areas (South Louisiana, Coastal Bend of Texas, and Mobile Bay, Alabama) but also

provide c6nsidehble information about the Gulf Coast region generally. The study areas were

selected ~rough a two-stage process involving cluster analysis to identify groups of similar

counties/p~shes based on 1990 data for 611 variables. Then, expert opinion was used to select

I'd' areas lor case stu les. .

Tht stuly was based on ethnographic field work conducted in each st~dY area during

1997 and f998.1 The field work involved interviews with a cross-~ection of key inf?rmants,

together ~Ith documents and data gathered from agency offices, hbranes, and archives. The

study focJ.sed oh three key issues: (1) demographic and economic change in e'ach area, (2) the

historicalfabric'or landscapes of the communities, and (3) work and education. This report is the

second pakof a'two-phase project to provide a baseline of social and economic change in Gulf

Coast coIrlmunities and the role of OCS development in those changes. Phase I produced an

extensive tlatab~se for the period 1930-1990 for 500 counties in the five Gulf Coast states. I I . . The first major section of their report provides an historical overview of the Gulf Coast

region singe 1865. This review provides a very useful description on the development of the

region and the role of the oil industry in that developmeTit. The next section discusses the

developm~nt ofIthe OCS oil and gas industry in the Gulf of Mexico. The authors summarize oil

and gas ptoduction and price changes since the 1950s, with emphasis on the "boom" of the

1970s and early' 1980s, the ensuing "bust" that lasted until about 1990, and the recovery of the j , .,

industry since that time. This overview of the industry is very helpful in understanding the

comrrlUnity socioeconomic effects that are examined subsequently.

TJe rep!rt next provides an overview of economic and demographic trends in the three

study are~s, as well as socioeconomic changes occurring in the Gulf Coast region generally since

1930. Thb influence of federal policies in transforming the region's agriculture, stimulating its

industry, Jnd developing its infrastructure is emphasized, as is the region's history of

racial/ethrlic diversity and disparity. Data on key socioeconomic indicators are summarized for

each study area'for the period since 1930 with more detailed data available since 1970. These

data are u~eful in understanding the nature ofthe five parishes/counties and the changes that

have occu'rred during the OCS development period. Changes in the study areas are compared

with changes occurring iii the respective states, and in some cases nationally.

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• All analyses were bivariate. i

• Social and economic variables were measured at the county or ~arish level, which could

mask community-level changes. !i

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In addressing landscapes of the Gulf of Mexico, the authors focus on five aspects:

agriculture, maritime, industrial, military, and leisure activity. The agricultural discussion

focuses on the Louisiana sugar industry, which has been an important force in Lafourche and

Terrebonne parishes. The mechanization of the industry over the y~ars has had major

implications for local workers, while tl)e key role of federal farm p~licyleads to uncertainty for

the future. In the Texas study area, agriculture once was based on v;egetables and cotton, both of

which were heavily dependent on Hispanic labor. Wages and working/living conditions for

these workers became an issue, which in tum may have speeded thelmechanization of the area's

agriculture. ;

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,!,. The maritime landscape discussion deals with the long-time 'dependence of South

L:ouisiana residents on the sea, first for fishing and later in OCS suplport activities. Over time,

sport fishing has grown, and some study area individuals have becoine fishing guides.

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Discussion of the industrial landscape begins with a recap of economic development

efforts in the Gulf Coast states dating back to the 1930s. Industrial recruitment became an . I

organized state activity, with recruiters citing low cost (but unskilletl) labor, low taxes, and few

regulations as inducements. World War nprovided a major stimul~s to ship building, refineries,

and petrochemicals. The growth of the manufacturing sector,proviqed opportunities for labor

being released from the agricultural sector by mechanizatiOll. Over:time, the three study areas

have developed substantial industrial bases, some of which is'relaiedto OCS activity.

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'i The military landscape has long been important in the Gulf Coast region and currently is'

important to both the Coastal Bend, Texas and Mobile Bay, Alabarrta study areas. The authors

discuss the development of a Navy Homeport in the CorpusChristi [area over the past two

decades. . , .

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ii The report"s fifth section summarizes a statistical analysis oflselected social and

e(:onomic indicators for the study areas and their relationship io indi¢ators of OCS oil and gas

activity. The major findings include: .: .

'f . i . • , The influence of OCS activity has been greater for the South Lo(iisiana and Texas (San

Patricio Co.) study areas than for the Mobile Bay area. :

• Statistical trends in the study areas' social and economiciildicators closely followed changes

in the values of the same variables at the national level. . I

• There was widespread instability in the relationships between sobal and economic indicators

and OCS oil and gas activities, with the most significant instability occurring between 1969

and 1995. .

• There was no single indicator (e.g., OCS oil or gas sales volume', real price, or sales value)

!i that adequately captures/represents the OCS oil and gas activitie~.

In concluding this section, the authors discuss limitations ofthe statistical analysis. Some

ofthese include: I
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The leisure landscape also has been a key factor in development of some parts of the Gulf

Coast area\ The' authors discuss the Grand Isle area of Louisiana and Gulf Shores, Alabama in

this conte~t. Gr~nd Isle was an early resort area, while Gulf Shores has developed as a resort and

retirement1area {n recent years. The relationship between leisure interests and OCS is discussed,

with conc~rns about pollution or visual impairment sometimes leading to OCS opposition from

leisure intJrests ~while recreational fishermen flock to the offshore rigs.

Thl effe1ts of OCS activity on occupation and education are the focus of the last major l •

chapter.. llhe authors examine these effects in the context of six study area communities. They

also discu{s the racial and ethnic aspects of education in the region. The legacy of past

educatiomlI decisions has been a population that lags other parts of the nation in educational

attainment. Cuftently, schools and students face choices as regards college prep curricula vs.

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educa.tion to prepare stUdents. for jobs in the region's major industries (such as the oil

industry). Chan:ges in industry expectations also affect the educational system. Until recently,

the OCS industry provided job .opportunities for young men even though they had not completed

high school. However, today's industry is placing more emphasis on education and

certificati6n. In' addition, lack offormal education has hampered oil workers' ability to find

alternativd employment during downturns in OCS activity.

Thl recJnt resurgence of the OCS industry has led to renewed interest i~ finding qualified

workers. foreign workers (including Hispanics and Asians) have been recruited to fill some.

jobs. Study area schools are attempting to address these needs through school to work programs. ., , Both scho~l sys~ems and employers also express concerns about the quality of students/workers,

in terms of motivation, and work ethic.

TJiS replrt is a truly massive work (489 pages, single spaced, plus appendix), and it

incorporatb a Jariety of issues and approaches. The discussions of the history of the region and

the study !reas provide a background that should be useful to anyone undertaking socioeconomic

impact as~essment work in the region. The comparison of the three study areas also should alert .

readers tolthe. diversity of the Gulf Coast, not only in terms of the local demographics and

economy but al~o in the nature of each community's involvement with the oil industry. The

statistical ~naly;is of relationships between social and economic indicators and indicators of

OCS actiVity was perhaps the least useful section of the report. The major conclusion appeared

to be that ~imple bivariate regressions did not perform well in explaining changes in local social

and econ~mic irtdicators. However, this study can be very useful as background on the Gulf

Coast region, tIle changes that have occurred, and the role of OCS in these changes. The

discussiorl of the development of the region and the industry are particularly useful in helping

understand the background for the current situation.

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McKenzie et al. (1993) assessed socioeconomic impacts of declining OCS activity on the

Gulf Coa¥ The study area included 49 counties and parishes along the Gulf Coast from

Brownsville to Mobile. Data are presented for 1960, 1970, 1980 (reflecting baseline conditions)

and anriually for 1981-86 (to show the period of decline or bust). The authors describe baseline

changes f6r the'period 1960-1980 at the level of 6 coastal (multi-county) areas. The whole

coastal region experienced growth during the 1970s, and all six coastal areas registered net inmigrationldurin'g this period. Although mining industry jobs accounted for only 4.9 percent of

regional employment (189,000 jobs) in 1980, mining industry jobs had increased 126% from

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1970 to 1980. Highest percentage growth was in area C4 (Alabama1Mississippi) while the

Houston area registered 180% growth (from 35,124 to 98,5291jobs) ~nd had the largest absolute

increase. ' . i

The authors describe the decline of the industry from 1981't6 1986 (as prices fell from I

$31.77 per barrel to $12.45 per barrel). The major price drop was frpm 1985 ($24.08) to 1986

($12.45). Exploratory drilling on the OCS increased to 1984, then dropped sharply from 1985 to

1986. Net migration for the coastal region overall (i.e., 49 counties); turned negative between

1983 and 1984, while total employment fell 3.1 percent from 1982 tf> 1986. Also between 1982

and 1986, the mining sector lost 28.6 percent of itsjobs, manufacturing 25.2%, and construction

20.1%. " ! i . " One objective of the study was to examine the industry declihe of the 1980s as a guide to

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the effects likely to be associated with a longer term decline lll'sociated with resource depletion.

However, this section of the report is dominated by a cursory revieJ of the "boomtown"

li,erature associated with western energy development. :

I, " The final section of the report uses stepwise regression to denve models relating

indicators of oil and gas activity to various socioeconomic variablesl The database apparently is

county/parish data for 1960, 1970, 1980, and 1981-86. Initial estimation efforts were not very

fruitful, and so the study area was redefined to eliminate 13 countid/parishes that had relatively

little involvement with OCS activity. Ultimately, the authors conclJde that "no theoretically

meaningful models relating OCS oil and gas activities to socioecon6mic conditions are

possible." :

ii Overall, this study was rather disappointing. First, although!PUblished in 1993, it used

data only through 1986. It would seem that several more years of data should have been

a'vailable, which might have strengthened the study. Second, ,the re~ressionanalysis was a major

concern as the various statistical problems often encountered When rising time-series (or pooled

time-series, cross-section) data were not even mentioned (except foJ. some discussion of

multicollinearity). These problems include heteroscedasticity and ahtocorrelation, each of which

c;in be tested for and potentially corrected for. The authors seem udaware of these issues. Nor

did they seem to consider the possibility of lag effects (i.e., increase:d exploratory drilling activity

in year t may have its greatest effects on area income or population in subsequent years [t +1, t +

2, etc.]). Finally, in discussing the effects of the bust, the authors' cbmment that the 1980s bust

period was also a period of recession in the national economy. HoJever, although the . I .

regression-econometric model framework provides a vehicle for explicitly considering such

effects, the authors apparently never attempted to do so. ' j

,n Gramling et al. (1995), Kelley (1999) and Blanchard (1999)lconducted issue analy~es for

the Central, Western and Eastern Gulf,'respectIvely. In the Central pulf of MeXICO (LoUiSIana,

Mississippi, and Alabama), the study team selected study communities in the three states

(Cameron, Morgan City, Grand Isle, and Lafayette, Louisiana; Gulfport, Biloxi, and Pascagoula,

Mississippi; and Mobile, Dauphin Island, Gulf Shores, and Fairhope, Alabama). Snowball

sampling was used to select informants for the interviews. A;total ~f 13J interviews were

conducted. The main issues identified were (1) posi~ive economic impacts, (2) negative

economic impacts (especially potential damage to tourism by'an oil!spill), (3) positive

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environmental impacts (rigs to reefs);(4) negative environmental impacts (damage to wetlands,

trash on bdttom,letc.), (5) aesthetics, (6) social impacts (over adaptation, boom-bust), and (7)

policy issu6s (too much regulation vs. the need for careful regulation). The various study areas

had major1:Iifferences in the salience attached to various issues. The approach used seems very

reasonable! Communities were selected to reflect different types and levels of involvement with

OCS develbpmeilt. The research methods used and results obtained are described clearly.

, In Jhe E1stern Gulf of Mexico (Florida plus Baldwin Co., Alabama), Blanchard (1999)

focused orr organizatiOIis (environmental groups, Chambers of Commerce, oil and gas

development companies, etc.) rather than individuals. Focus groups of interested parties

(stakeholdbrs) were convened at five locations. Subsequent telephone interviews (with snowball

sampling) Were utilized to complete the study in other areas. The stakeholders seemed most

interested in expressing opposition (or support) to OCS development per se, rather than

discussing!specific concerns. Nevertheless, the author was able to identify differences among

areas in 'th~ intensity of opposition.

Thi focJs of Kelley's (1999) anal;sis is on the social, economic, and environmental

issues relaling to the oil and gas industry in five counties located on or near the Gulf of Mexico

in southea;t Tex'as. The primary goal ofthe project is to identify major issues and concerns of

stakeholde~'grOlips in the region. The study was conducted at a time when recovery from the

mid-80's downturn of the industry was well underway in most of the coastal communities of

Texas that1had been most heavily impacted by the widespread unemployment and collapse of

social and lecondmic infrastructure that had resulted from the "bust" in the oil and gas industry in

the Gulf..j I I . In response to the downturn, many communities in the study counties had made major \ .L • •

efforts to diversify economically (Houston and Corpus Christi), while others had mostly

abandoned prior direct investment in the oil and gas industry. Yet other communities, however,

remain he!vily dependent on the industry and were attempting to "ride out the hard times."

Tht met~odOlogyof the study is qualitative. Subjective perceptions ofcommunity .

leaders in business, government, and environmental organizitions were assessed in face-to-face

interviewsi

. A total of 39 semi-structured discussions were conducted with individuals from

these thre~ general categories over the course of the study. Five general topical areas were

covered inl the discussions: degree of dependence on the oil and gas industry; perceived benefits

to the coItimufiiiy from the industry; local concerns about the strong presence of this industry;

general pe~ceptions about the industry; and the role of the federal government.

Th~ pri4ary perceived benefit from the industry is employment-the availability of jobs

that are relatively high-paying. The primary concern expressed by the stakeholder groups is , , potential threat to the environment-spills, leaks, disposal of toxic materials, pipeline accidents,

and so on.! Another important concern was the perceived vulnerability of local communities

because o{ their~ high level of dependence on a very volatile industry. Many respondents felt that

the federal gove'mment should playa central role in policing the industry and assuring

environm~ntal safety. Yet, interestingly, very few of those interviewed had ever heard of MMS,

or were falnilia~ with what MMS does in the region.

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In 1984, the

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Estimates of payrolls and expenditures for various indhstry 20mponents are also

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provided, as is information on residence of offshore workers.. Louisiana was the place of

n::sidence of 19,680 of the total 23,902 workers, or 82 percent Resibences of workers are listed

by parish and county. . i

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:r The study results provide an excellent snapshot of the offsh9re industry.

industry accounted for 142,860 person years of employment, consisting of:

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Producer headquarters'personnel 9,433

Producer staging area personnel 4,540

Producer personnel on platforms 9,224

Pmducer personnel on vessels 705

Gas processing plant personnel 11,006

Oil refinery personnel 10,556

Contractors and suppliers 97,396

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,Overall, this report provides a readable summary of iSsues id~ntified by key stakeholder

groups. It is extremely limited in focus, however. The study area includes semi-structured

"interviews" with only 39 respondents from just five Texas counties~ The issues identified are

those one would expect-area residents recognize, and are cOJiceme~ about, their dependence on

the Gulf oil and gas industry. They fear the potential of envirqnmental damage, and they would

like to see their local economies continue to diversity. I . J

I . , .. While we note that historical analysis is certainly an on-going effort, we also would like

to acknowledge th'at these first two categories of studies - thl/se de*ling with the oil industry in

th<~ Gulf of Mexico, and those dealing with the area context-.represent a relatively high level of

maturity. We will have more to say about context. However, here it is iinportant to .

acknowledge that while there will need to be on-going refinements dnd updates, the "history" of . . , oil development in the Gulf, at least at a level of sophistication that meets the needs of EIS and

related work, is now quite fully developed. The work of Wallace (2901b) and Gramling (1995),

in particular, provide important historical context for the offshore development of the oil and gas . I

industry. i

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3.3 OCS EMPLOYMENT AND EXPENDITURE STUDIES:

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Ii The first effort to estimate the direct economic effects of Gulf of Mexico OCS'activities

was conducted by Centaur Associates, Inc. (1986). Data were gathered for the year 1984 to I

measure the direct primary effect of OCS production (measured by employment, payroll, and

expenditures for goods and services by offshore producers), the sec~ndai-y direct effect that

results from purchase of inputs by the primary producers, and the secondary direct effect

associated with handling, processing, and refining offshore oil and gas. Nine offshore producers

provided detailed employee and expenditure data for the study. Infqrmation on employment and

expenditures was obtained for 1984 and employee residence'data (hbme zip code) as of Dec. 31,

1984. The data from the nine cooperating companies were later scaled to represent the total .. . I

industry (scale based on oil/gas production data was 1.9937, which indicates the sample

companies accounted for slightly over 50% of industry production).!
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Inf0~ation from about 50 offsh6recontractors ailo\\ied the researchers to compute key

impact ratibs, suth as payrolls as a percent of revenues, revenues per employee, payroll per

employee, land percent of employees working offshore. These ratios were corriputed for the key

, industry se'gments (e.g., air transportation; boat, barge, and marine equipment;'contract

exploratory drilling). Multiplying the offshore producers' expenditures by each service

component gave' estimates oftheir payroll, employees, and other expenditures (based on the

. d' d' I' ) ratIOs lscusse ear ler . .

~JmukJs and his colleagues (2001) attempted to develop a better basi~ for assessing j . ,

i economic impacts of OCS development. Input-output analysis (IMPLAN) is the major modeling

method utilized.! The input-output (I-O) model is incorporated into a Social Accounting Matrix

(SAM) fralnewdrk. A major project activity was defining offshore expenditure profiles, by

- activity ph~se arid water depth, which could then feed into the 1-0 framework. Allocation

formats wJre developed to allocate the offshore expenditures to coastal areas around the Gulf of , , Mexico; The model is demonstrated by estimating economic impacts of anticipated OCS activity

for three chastafregions of Louisiana.

~ala cOllection was constrained ~y an OMB prohibition on surveys. The authors had to

rely on publishe\i sources plus very limited contacts with firms/industry experts. In addition,

engineerin1g cost estimation software (FieldplanPro) was used extensively. The authors were

creative'in using the information available to them, but the data collection constraints were

extensi~e. 1 . ,

Expenditure profiles were developed for all phases of OCS activity, from exploratory

drilling ioplatfdrm removal and abandonment, including work over and oil spills. For each of

the phases\ expenditure profiles were developed for four water depths: 0-60 meters, 60-200

meters, 200-906 meters, and >900 meters, The data bases developed will support analysis of - j ,

economic impacts anhe level of the multi-county coastal areas (10 areas surrounding the Gulf). i ; I . Allocation of offshore expenditures to the 10 coastal areas was based on a recent survey

of offshorb support businesses by the Louisiana Mid-Continent Oil & Gas Association. The

,survey resblts identified the companies and their types of activity. Activity type was used to

categorizelfirm~ into IMPLAN sectors. This became the basis for allocating t~e expenditures for

each phase of OCS activity and each water depth. (It is not clear whether they used the number

of firms, the nutnber of employees, or some other attribute to make the allocations. However,

the same ~ercenrtages were used to allocate expenditures from a given sector regardless of

activity p~ase o~ water depth. The discussion of the regional allocations was not sufficiently

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Plater et al. (2000) estimate the economic impacts of coastal Alabamaland Destin Dome

natural ga~ dev~lopment. Impacts are estimated for three regions (Mobile County, the rest of

Alabama,iandTexaslLouisiana). The impacts are estimated from the beginning of development

activities In the early 1980s and projected through 2020. The three different impact areas

(Mobile 00., re~t of Alabama, and Texas/Louisiana) are affected differently by the coastal

Alabama development. Mobile Co. receives a large share of expenditures from on-going

prodlictioA, a srhall share of exploration and development, and is the site of several gas

processin~ plants. The rest of Alabama is affected primarily by the lease bonuses, royalties, and

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3.4 ANALYSES OF SELECTED TYPES OF IMPACTS

Considering this area overall, the Centaur Associates, Inc. (1986) study was a landmark

effort. The ongoing challenge appears to be how to keep this type of information current.

R,elative to methods used in such assessments, all recent MMS Gulf'of Mexico economic impact

studies that we reviewed used the IMPLAN model. This model. has ,become the standard in

economic impact assessment because it is generally viewed as provi~ing acceptable

accuracylreliability at a reasonable cost. I

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Ii Socioeconomic studies of OCS development in the Gulf of Mexico have also examined I' '

se:veral key areas of concern. Works by Pulsipher et al. (1999) on oil spill impacts and by Hiett

and Milon (2001) on recreational fishery impacts exemplify such st~dies. .

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" The possibility of oil spills and the potential for a spill to de~rade marine resources and

inhibit recreation and tourism have long been a concern associated With offshore petroleum

development. Pulsipher et al. (i999) examined the social and economicimpacts of a 5,000

barrel oil spill that occurred just offshore in the Lake Barre region of the Louisiana coast in May

1997. Based on interviews and information obtained from Texaco (responsible for cleanup), the

cleanup contractors, and local area officials, business owners, and rdsidents, the short-term social

and economic effects were quitesmall. Ofthe $9.8 million spent by Texaco to clean up the spill

(which came from a ruptured pipeline), 60 to 70 percent wenUo entities outside the three-parish

lcical impact area. Few workers were hired locally because clean-uri workers must be trained and

certified. Local expenditures thus were largely for food and lodging fortemporary workers.

Interviews with 27 local informants (officials, business owners, etc.) revealed that 20 percent

were not even aware that a spill had occurred. Positive impacts wete seen to include spending by

the clean-up crews, particularly in motels and cafes. The major neg~tive effect was a concern

about long-term impacts on marine resources (shrimp, oysters, and fish), but there was no local

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One of the positive externalities of OCS development is its Jffects on recreational fishing

-. sport fishermen flock to the offshore structures. Hiett and Milon (2001) estimated demand,

expenditures, and economic impact associated with recreational fisHing and diving near offshore

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otlher revenues it receives, which through a trust fund, support state ~xpenditures of $150+

million annually. Texas and Louisiana receive a major share (85%) pf expenditures for

exploration and development drilling and for platform construction ~nd of pipeline contracting

oUltlays (90%).

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The IMPLAN model is used to estimate economic impacts, But the authors recalibrated

the model to reflect production conditions in Alabama. Data from previous studies by Centaur

A:;sociates, Inc. (1986) and DRI served as a starting point to define expenditure patterns for

various project phases. Information from local industry officials wa~ used to modify the basic

data to reflect major differences between Coastal Alabama operations compared to typical Gulf

of Mexico operations. These officials also helped estimate wHat pertentage of expenditures went I

to Mobile Co. (vs. TexaslLouisiana). The resulting projections sh0'-Y economic impacts to 2020

and the portions attributable to production from (1) Alabama state w'aters, (2) Mobile OCS, and

(3) Destin Dome OCS. :
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Gulfof Mexico oil and gas structure~'-and artificial reefs created from such structures. Data

came fron! surveys of fishermen and divers from Gulf Coast areas of Alabama, Mississippi,

Louisiana! and Texas conducted in 1999. Samples of fishermen using private; charter, and party

boats, as weI! as divers, were interviewed in the field. A subsample from each group received

follow-upjtelephone interviews to obtain expenditure data. The survey data were combined with

information froIh regional surveys of fishermen to generate state and regional estimates of

aggregate bxpertditures. The expenditure data were applied to the IMPLAN model to estimate

regional etoriOltuc impacts. , :

,~J ex~atd the results from the sample to an estimate of impacts for th~ region, the

authors relied oh information from an annual survey conducted by the National Marine Fisheries

Service~ Their resulting estimates were that $324.6 million in economic activity and 5,560 fulltime eqiJiJalei1t:(FTE) jobs in coastal counties of the Gulf Region resulted annually from fishing

and divin~ acti~ities near oil and gas structures. '

l I , This study addresses an important issue. The approach and methods seem to be state-of-'

the-art, an1d the results are presented in a very clear, readable manner. The importance of the

results to polic~ makers is made clear in the report. ' •

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3.5 AREA·SPECIFIC STUDIES OF SOCIOECONOMIC IMPACTS

Mlst of1the socioeconomic impact analyses in recent EIS documents appear to be , I

performed at the level of multicounty subareas representing Labor Market Areas (LMAs). This

appears' approptiate given the challenges of relating offshore activity to specific onshore

localities but li~ts their utility forlocal-area decision makers., However, some strategically

sited com1nunities have received substantial impacts as a result of the recent resurgence of OCS <' • activity. <Dneof these is Port Fourchon in Lafourche Parish, Louisiana which has a strategic

location cit is thle only major Louisiana port located directly on the Gulf and only LA-l provides

surface'ac~ess tb Port Fourchon) and has become an important supply base for OCS activity.

OCS-relafed enlployment grew rapidly in the mid-1990s, and MMS funded ali assessment of , " I ' local socioeconomic impacts (Hughes et al. 2001). l

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" H~ghesft al. (2001) used a Community Impact Model (CIM) to addr~ss economic,-

demographic, and fiscal impacts. The CIM consists of an input-output module (based on , . .

IMPLAN), a labor force module, and a fiscal module. The input-output module produces

estimates 'of ch~nges in output and employment resulting from increased activity in OCS-related

sectors (e!g., petroleum extraction, ship building and repair, water transportation, air

transportdtion).l The labor force module estimates the effect of changes in employment on parish

populatiob, considering likely effects of changes in commuting and unemployment. Estimates of

labor forcb, in-dommuters, out-commuters, in-commuter earnings, and out-commuter earnings

also are g~nerated. Some of the estimates from the labor force module are,fed back into the

input-output m~dule in a recursive fashion, which continues until changes resulting from

feedback etfect~ approach zero. Changes in population, in-commuter earnings, and outcomrtlUtet earnings feed into the fiscal module, where they are independent variables in

equations estirrlating revenues amI expenditures of local governmental units.

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" The fiscal module consists of 16 equations - two estimating revenue capacity (assessed

property value and retail sales), four direct revenue equations (sever~nce tax revenue, state

transfer revenue, federal transfer revenue, and other tax revenue), and 10 expenditure equations

(e..g., spending for schools, roads, law enforcement). The revenues ~nd expenditures represent

thi~ sum of expenditures/revenues for the parish and all municipalitie~ within the parish. The

equations were estimated using cross-sectional regression based on data for a single year from all · I

parishes in Louisiana. . I

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The model is applied to project economic, demographic, and ifiscal changes associated

with OCS activity from 1995 to 2002 for Lafourche Parish. The OCS development scenario I

results in moderate increases in employment (up to 732 direct and l,pO total jobs in the peak

year 1998), population (growth of about 4,000 or 4.7 percentfrom J995 to 2002), and local I

government revenues and expenditures. OCS development is projec,ted to cause local revenues

to increase more rapidly than expenditures (11.2% vs. 6.4% or $20.0 million vs. $9.6 million).

However, the authors point out that the model estimates do not include some public service costs · , that result from unique needs of the offshore oil industry. Specific examples are (1) city watera major bond issue ($10 million) was needed to provide waterlto corhpanies at the port (for use in · , drilling muds, etc.), (2) roads - increased truck and commutertraffi¢ on the only highway

accessing Port Fourchon has created a major concern, and (3) schools - costs to local school

systems resulting from in-migration of foreign national workers (netid for English as a second

language [ESLj classes).

Luke et al. (1999) evaluate potential effects of an onshbre su~portbase located in the

Florida Panhandle. The base would potentially support development resulting from Lease Sale

181 plus some or all of the Destin Dome development. (It is also pdssible that all of this activity

might be supported from the Mobile, Alabama area or from elsewhe~e along the coast). The· . · I ..

study team developed baseline projections for five Panhandle i;ounties (encompassing Panama

City, Fort Walton Beach, and Pensacola). In addition, studies'offOl\r key local industries

(tourism, military, fishing, and ports) were conducted. The impact assessment uses IMPLAN

and an Excel-based spreadsheet model. After examining the offsho~e support industry in ihe

Gulf region, the authors concluded that an onshore base in the Panhandle would only service the

operation and maintenance portion of an offshore project's life cyclt (i.e., the exploration and

development phases, and pipeline installation, would be serviCed by: bases elsewhere on the Gulf

Coast). I

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:! Results show that the study area has experienced substantial lin-migration and population

growth over the past decade and is projected to have the same: pattetn over the project period.

The local socioeconomic effects of the support base would beminiriJal, but would add to the

pattern of baseline inmigration. t

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Two studies that span several of the categories are described' here because they are

l2lfgely oriented at assessing impacts in either Louisiana as a ~hole hr specific parishes within

Louisiana. They are also studies that were initiated at the time oil prices were experiencing · , dramatic declines in the 1980s and thus the concepts and processes described in the western

boomtown literature seemed particularly applicable to the Gulf. One is by Laska et al. (1993) . . I

and the other is by Seydlitz and Laska (1994). I

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The Laska et al. (1993) volulne'preseJits papers thai appear to mark the initial

involvemeht of ~everal of the researchers in OCS related research. It is an edited set of chapters

by differertt authors on different dimensions of OCS activity. The two chapters by Vern Baxter

represent ~ttempts to apply the organizational literature from sociology and the sociological

analyses of corporations to the examination of the oil industry and its development in the Gulf of

Mexico. He uses various aspects of the political economy model of organizational change to

examine tI1e effects of trends such as those in corporate restructuring on OCS development.

Although iargely theoretical, the chapters provide a useful placement of OCS activity in the

setting of 60rporate organizational change in the United States. The chapter on suicide rates , - '

(Chapter 4) and homicide rates by Seydlitz et al. and their Chapter 5 on economic health and

human capital afe largely precursors to the work reported below (in the Seydlitz and Laska 1994

volume). The n'iajor difference is that this analysis is largely limited to the use of t-tests and

related tests of significance between the two sets of parishes identified in the manner noted

below. '1 i '

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Chapter 6, by Thayer and Hadley, provides an interesting overview of the fiscal structure

of Louisiaha as it relates to gas and oil and describes how Louisiana reacted to boom and bust

cycles relJtive to fiscal changes. It suggests that Louisiana may not have prepared for the

downturn in the ocs as successfully as other states. Chapters 7 and 8 are both by Sarah Brabant

and are ba'sed on interviews with 50 respondents from Lafayette Parish (although comparisons to

other pariJhes afe made). Chapter 7 examines effects of OCS development on those in poverty,

and chapth 8 p'rovides an examination of Louisiana communities' responses to boom and bust

cycles. pJrticular emphasis is placed in Chapter 8 on the role of voluntary and other

organizatibns to boom and bust cycles. The final chapter (Chapter 9) is again based on '

observational analysis and examines the impact of the absence of fathers (due to OCS

employmJnt) on families. It provides a useful review of the literature on the dimensions of such , . . impacts. Overall, this effort represents preliminary work by the authors of the chapters and

displays sbme of the methodological limitations that are likely to result from an attempt to gain

widespread invOlvement in a relatively new area (to sociologists and economists) with a limited

1 I - budget ana time frame.

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Seydlitz and Laska (1994) examine the effects of OCS development on social problems

(i.e., suicide rates, homicide rates, juvenile commitments, and criminal cases), educational

attainment and strain, and community economic health. Using secondary data from a variety of \ :. '

state and federal sources, they examine change in such factors over time in 24 Louisiana parishes

grouped irtto two sets of 12 parishes each, with one set of 12 parishes being parishes highly

involved i1n OCS activity and the second set consisting of parishes minimally involved in OCS

activity a~ defined.by the percentage of workers employed in, and income from, OCS related

sectors. They examine trends across these factors for four time periods seen as indicative of

periods in~which OCS activity was displaying specific trends. These included a period of low

activity (i956-73), a period of increasing activity (1974-81), a period of decreasing activity

(1982-85J, and 'another period of low activity (1986-1990). The authors use analysi's of variance,

time serie~, and t-tests to assess whether relationships exist between change in OCS activity and

change inltheafeas of social problems, education, and health.

TJe resllts were relatively mixed in regard to all three factors. Although the authors

suggest t~at there were effects of OCS development on social problems, the statistical analysis

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I . , , 'indicated signs on relationships that were often in the wrong direction and not consistently

statistically significant in the direction indicated. Rates for social pr9blems tended to increase

but then decrease and "the relations are not clear, consistent, nor strQng" particularly when levels

of involvement are considered (Seydlitz and Laska 1994). CO,nclu,si!ms that boom-bust cycles

ale related to rates of criminal cases, homicides, and suicides seem only marginally supported by

the analysis, and should be viewed with some caution. Using data on educational attainment and

per pupil expenditures, they assessed impacts on education. Again, inany relationships were not

significant or showed unexpected relationships to OCS activity. Th~ analysis of community

health used the variables of per capita transfer payments, average per capita income, net

migration, and per capita sales tax. Relationships were found; butthey were not lasting for most , , of these variables. The study represents an attempt to bring quantitative data to bear on trends in

a relatively small set of parishes and reveals many of the prob~ems ~ssociated with such

statistical analyses.

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:: Unlike much of the other work done on the social irnp~cts o~ OCS oil and gas activity,

these authors do attempt to impose a theoretical frame work ort thei~ anaJysis. Two theoretical

oJientations ate used: social disorganization and economic inequality. These approaches are

u:;ed to try and explain impacts of oil development activity such as adecrease in civic . . ' I

participation, an erosion ofsocial integration, and an increase'in crime--impacts that are most

frequently noted in those parishes most heavily impacted byoil dev~lopinent. However, while , , the authors argue that there is an increase in social problems with an increase in resource

e:<traction activities that might be explained by these theories,'meth6dological problems make • • L •

their findings and resultant conclusions tentative, at best. t, ,I ' " The analysis by Kelly and Wade (1999) documents ex~isting~economic conditions in the

clJastal Alabama region and highlights industry sectors important to; the region's economy. This

report discusses the interplay among the different users of the region's natural resources, notably

tourism, fishing, and the offshore natural gas industry. Data are pre~ented that show how

tourism and the natural gas industry contribute to the economic gro~th of coastal Alabama. The

recent conflict between the offshore gas industry and the tourism sector over the use of coastal

A:labama resources isdiscussed.!

I;, The report focuses in four primary industries that contrtbuteito the economic vitality of

the Alabama coastal region: tourism, marine recreation, cominercial fishing, and offshore

natural gas. Tourism has been a rapidly growing sector in coastal ~labama, recording a 60

percent inCrease in tourist spending from 1989 to 1995. Taxes collected on retail sales and

lodging are very important to local govemments of the coastal areai, particularly Baldwin

County. There is no evidence to indicate that the offshore ga~ induJtry has adversely affected the

tourism sector in coastal Alabama. Nevertheless, Baldwin County and the communities of Gulf

Shores and Orange Beach raised concerns when leasing was propos~d near their communities.

As a result, drilling has been limited to at least 15 miles offshore. '

The marine recreation industry focuses on recreational fishi~g. Both private and charter

boats target red snapper, among other species. The Sp0l1 fishing interests are generally very

'accepting of the offshore gas industry as platforms enhance fish ha~itat. Conflicts more

commonly arise between sport fishing and commercial fishing inter~sts. ,

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Alabama's commercial fishiR~' industry is largelyba~td at Bayou LaBatre and targets

shrimp, aslwell ~s oysters and crab. Commercial fish landings have declined since the mid1980's. Commercial fishermen generally perceive little conflict with the offshore gas industry.

Thl autJors also discuss the onshore facilities that service the offShOre~gas industry.

These inciLde t~e Mobile port facilities, support bases located along the Theodore Ship Channel,

at Bayou llaBatre, and on Dauphin Island, transportation and supply services, and ship building.

Thl autJors also discuss the severance taxes that Alabama imposes on gas produced in

state wateJs. T~ese taxes provide an important source of state revenue. In addition, interest from

two state trust

I , funds (holding funds collected from".bonus payments for offshore leases, state

royalty paYmenis, and federal 8(g) royalty revenues) constitute a very substantial revenue source

($100 miliion pius annually, or about 12 percent of the state General Fund in i999).

Thb ana}YSiS provides ~n important overview of the potential effects of OCS

Developmbnt oIl resources deemed as central to local economies. It is one of the analyses that

examine the cOIhpetition and tradeoffs between oil and gas and other tisers of the OCS. As such

it is useful! in id~ntifying potential areas of concern in this important development area.

.hl work by Tolbert (1994) addresses the effect of oil and gas industry expansion and

contraciioh oTl personal and household income inequality in Louisiana and Florida. As such it

represents!a work that could also be placed in the economic impact section but is placed here

because of the duthor's emphasis on the social implications of inequality for specific areas.

~Jlbert Lamines changes in income measures for 1970, 1980, and 1990 for Louisiana

coastal palishes\and Florida Panhandle coastal counties. While the Louisiana parishes all had

been subs(antiaily affected by the oil and gas industry, the Florida counties had few effects from

this industry, The resear~h tests a hypothesis advanced by Kuznets that industrial growth leads,

to a redudion irl income inequality. '

S' lf III h' h f" f ( ) ,,1 d d' pecl lca y, t e aut or Irst examInes measures 0 mean per capIta Income an me Ian

family incpme.IIn 1970, per capita income and median fami.lY income in Louisiana coastal

panshes were lower than In coastal Flonda Panhandle countles. By 1980, the LoUIsiana

parishes' i1ncom'es were higher for both income measures. However, by 1990, both income

measures,ladjusted for inflation, had decreased in the Louisiana parishes, and Louisiana values

were again belo'w corresponding values for the Florida counties. In fact, median family income

in the LoJisian~ parishes had fallen below its 1970 level, after adjusting for inflation.

TJe effJcts of oil industry expansion (1970-80) and contraction (198l0~1990) on income

inequalitylaree~amined through three measures: (1) the Gini coefficient, (2) Theil's inequality/

measure, and (3) Atkinson's SOCIal-welfare functIOn. Data were obtaIned from the decennIal

censuses.IThe findings were that income inequality in the'Florida counties generally trended

_ downw~rd throbgh the period from 1970 to 1990. In Louisiana, the pattern was one of decreased

inequality duri~g the 1970-80 period, followed by increasing inequality from 1980 to 1990.

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THe author attempted to control for the influence of various socioeconomic attributes of

• the local dconofuY (e.g., the percent employed in manufacturing), ofthe local population (e.g.,

educationl race), and of the natio.nal economy (e.g., change in GDP) on income inequality. The

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re;;ults of regression analysis indicated that these factors accoJnted fbr o~e-half or less of the

observed variation in income inequality. There remained a substari.ti~l unexplained component,

bUlt Louisiana inequ'ality patterns clearly followed the expans~?n andlcontraction of the oil and

gas industry more than they followed other variables. : I'

iii Overall, th~ findings of decreased' income inequality d~ring JeriOdS of petroleum ind~stry ex:pansion and increasing inequality during periods of contra6tion supported the Kuznet's

hypothesis. Tolbert also indicated that the major effect of the pil and gas industry on income

inequality occurs in the middle to upper middle portions of the incOIrte distribution. He • ";" j. I

hypothesizes that this represents the effect of better paying joqs and appreciating personal assets

d~lring growth periods, and conversely during declines. The fack of ~ffects in the lowest strata of

the income distribution was attributed to the limited ability of low-income households to

p~Uticipate in oil sector job opportunities. . , I i~ , .

il Overall, the data and methods used by Tolbert appear ().ppropriate. The author used

appropriate methods to control for other factors that might impact" thb dependent variable over

time, the data sources and methods are well documented, and the finaings' and implications are

discussed appropriately. This report represents a work that is genenUly both theoretically and

~~thOdoI9gicallY more developed t,han a majority of work reViewediin this area.

I, • . . . : "_ 'il' What should be apparent from this review is that the range of socioeconomic studies

slipported by the studies program in the Gulf has increased s~~stanti!ally ,in the last few years.

The criticisms raised previously that socioeconomic studies were not being completed in the , , . highly developed and developing Gulf has clearly been addre~sed. In the,next section we

e~~amine issues rel.ated to the scope and quality of the studies revietwbd in this volume.

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SECTION 4.0

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I EVALUAnON OF MMS STUDIES

In this s6ction, the MMS-sponsored studies reviewed in this analysis will be evaluated in

regard to Jconoinic and fiscal, demographic and public service, and social and cultural impact

analyses slandards. Specifically works in each of these areas are examined relative to the impact

dimensiorls, meihods, and assessment processes and practices described above under the

discussiorl of the criteria for evaluation. The evaluation thus examines:

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1. The extent to which key impact dimensions are addressed;

2. The appropriateness, application, and documentation of the methods used;

3. The quality of the work relative to the state-of-the-art in the area; ,

4. The likely utility of the work fOfcommunities (residents and leaders) and MMS

managers and decision-makers; ,

5. Areas/issues meriting further examination.

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4.1 ECONOMIC AND FISCAL IMPACTS ASSESSMENT

4 11 'I I t1D' • .. mpac Imenslons

TJe ma}erialS evaluated here include those in the topical sections on p~troleum industry

studies, sdme of those on the history of the Gulf Coast, those on employment and expenditure

studies, tHose on selected types of impacts, and some of those on area-specific impacts. The

materials teviewed covered the key dimensions of economic and fiscal impact analysis.

However,1the extent/effectiveness of that coverage varied. The studies dealing with the Gulf of

Mexico dcs p~troleum industry and recent changes in the industry were quite good. Those

dealing with historical, economic and social changes in the study area and impacts of past OCS

activities klso were useful. Perhaps the greatest concern is in the definition of the direct

economicleffecis (employment, payroll, expenditures) associated with offshore operations and

the distribution'of those direct effects to onshore locations. The study by Centaur Associates

(1986) pr6vided a strong base, but this information must be updated. The study by Dismukes et

al. (2001)1addresses this topic, and the current MMS plans to obtain a comprehensive base of

informati6n and update on a five-year basis are promising. '

TJe geJeral are~ of regional economic effects (secondary and total) is adequately , , addressed!. The specific issues of adverse economic impacts from oil spills and the effects on

recreational fishing are also addressed. Finally, local economic and fiscal effects are addressed,

albeit thrJugh only three case studies (Kelly and Wade 1999; Luke et al. 1999; Hughes et al.

2001). 1 ,

4.1.2 Methods

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The methods employed in these studies are generally appropriate, but the quality of

documentation;varied. As regards direct effects of OCS activities, Plater et aI.'s (2000) report on

their effohs to update and refine the earlier work of Centaur Associates (1986) and others to

reflect thJ uniqhe conditions in Alabama. Their approach seems very appropriate and well

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documented. The Dismukes et al. (2001) study also addresses direct effects. Their work

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alJpeared to be limited significantly by restrictions on data collectioA, a~d their documentation

could have been more complete. . i

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': In assessing regional economic impacts, the IMPLAN model is used almost exclusively.

Input-output models generally have become the standard approach ~o regional economic impact

a:;sessment, and the IMPLAN model is the most widely used I-a mbdeL Specific studies of

impacts of oil spills (Pulsipher et aL 1999) and recreational fishing (Hiett and Milon 2001) use

appropriate methods and are well documented., ;

, Analyses of local economic and fiscal impacts are representfd by two case studies (Luke

et aL 1999; Hughes et aL 2001). The Hughes et aL (2001) study usf(s a Commumty Impact

Model, consisting of an I-a module, a labor force module, and a fiscal module. The latter two

modules are based on equations derived from cross-sectional regres~ionswith data from all

parishes in Louisiana for one year. Thus, the equations reflect aver~ge relationships across all

parishes, which mayor may not be representative of relationships i~ the coastal parishes. The

documentation of these modules is cursory. For example, the reader is left to wonder how the

values of explanatory (independent) variables for some oftlle equations are being forecast (for

future projection periods). It should also be noted that the CIM estimates revenues and

expenditures for all local jurisdictions within a parish, «ombined. Thus, there is no basis to

discern if, for instance, the parish government is generating a surplus while cities or school

districts may have serious deficits, or vice versa. !

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, Similar to the Alabama studies, the work by Luke et aL (19Q9) reflects a state-of-the-art

approach. It is based on an extensive review of socioeconomic impact efforts throughout the

world including the Gulf of Mexico and uses standard I-a modeling procedures. It reflects the

commonly accepted standards for this type of work.

4.1.3 Quality vs. State-of-the-Art

Generally, the methods used appear to represent the current1state-of-the-art. As

mentioned previously, IMPLAN has become the standard approach: for regional economic

impact assessment. The CIM used for assessing local fiscal impacts is part of a "family" of such

models that are generally regarded as being the SOA for this type of analysis. However, the .

documentation of the Louisiana CIM should be expanded to provid~ a more comprehensive

description of the underlying assumptions and algorithms associatefl with each model

component. !

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4.1.4 Utility for DecisionMakers

, Ii The utility for decision makers can best be evaluated for the regional economic and the.

local fiscal impact analyses. The regional economic analyses are e:kemplified by MMS (1997;

2:002) [EIS for Lease Sales 171, 174, 177, and 180 and 187, 194 etd.]. The regional economic

impacts are discussed at the level of multicounty subareas (labor mlrrket areas) along the Texas . , and Louisiana coasts. Employment and population effects are estimated to be less than 1 percent

6f baseline values in all subareas. These levels of employment chahge would not be expected to . !

trigger in-migration, but the authors point out that requirements forispecific skills, coupled with a

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"shadow effect'/rom the previous bust, could result in some in-migration to fill specific labor

needs. '1 1

The EIS also addresses cumulative effects of OCS oil and gas activities. TotaIOCSi' . related employment, projected by subarea, reflects moderate growth to about 2007, then a

gradual decline for the next 30 years (MMS 1997). The largest relative effects are in LA-l (Lake

Charles) apd LA-2 (Lafayette-Port Fourchon), where OCS-related employment sometimes

exceeds 10 percent of total regional employment. This presentation of regional economic effects

is one thatlshouid have a high level of usefulness for decision makers at allle~els.

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The most recent EIS (MMS 2002-CPA Sales 185,190, etc. and WPA 187, 192, etc.) uses

slightly dif'fereni procedures in allocating expenditures to onshore areas and calculating impacts,

but the fortnat used in presenting results is very similar to that used in the 1997 EIS.

"I i The local fiscal analysis of Lafourche Parish (Hughes et al. 2001) has been useful for

MMS decision making and for local planning. The level of aggregation particularly may be an

issue, however.! From the viewpoint of MMS, it is likely sufficient to have estimates oftotal

populatiod at the parish level, local government expenditures and revenues at the parish level,

etc. Fromlthe viewpoint of a local official, however, it is then important to know more about the

characterihics of the in-migrants, revenues and expenditures by jurisdiction:

4.1.5 AJeaslIlsues Meriting Further Examination

sole 'arLs that should receive added attention include:

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Direct effects of OCS activity (employment, payroll, expenditures) and how

these are distributed onshore. Some sort of system to monitor/periodically update

these could pay substantial dividends; • I

Oil spills. It may be useful to followup a study like Lake Barre (Pulsipher et al.

1999) to see if any longer term effects have been manifested;

1 , Local'fiscal effects could be analyzed for more cases. Also the distribution

among local jurisdictions (county, cities, school districts) should be examined.

. I '

In ,gener,al, then, we found the economic and fiscal analysis to be generally SOA in regard

to the dimensions examined and the methods used. It is most lacking in its provision of data for

local-areajjurisdictions that must manage the impacts of leasing, development, operation, and

decommissioning activities. I '

DEMOGRAPHIC AND PUBLIC SERVICE IMPACTS ASSESSMENT I I

4.2.1 Impact Dimensions

"D 1

emograp I h'IC Impacts . generaII' y mvoIve assessments 0 f popuI'attOn Size, .' d'Istn'b' uttOn and

characterihics and changes in size, distribution and characteristics of the population under

baseline ahd impact conditions while assessments of public service impacts involve

examinatibns of service demand and supply factors relative to personnel, facilities and

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eC[uipment. As noted above, services commonly examined include s,chools, hospital and other

health services, law enforcement, fire protection and EMS services, water, sewer, electric,

transportation, recreation, housing, and social services. Many of the, analyses provide

demographic information (see for example Austin et al. 2002; Wa'lla'ce et al. 2001a; Hughes et al. , 2001) and some examine public service impacts (see Hughes et al. 2901; Laska et al. 1993), and

virtually all specific-area assessments (Seydlitz and Laska 1994; Lu\ce et al. 1999; Hughes et al.

2001; Austin et al. 2002; Wallace et al. 2001a)examine impacts on populations and some -

services. Much of the work completed to date, however, has failed fo examine a sufficient , number of dimensions for a sufficient number of geographic areas. f\s a result, generalizable

knowledge bases have not been established on several key demographic and service dimensions

fC:r a sufficient number of OCS subareas. : . i

ii Analyses completed to date extensively describe existing co~ditions (Wallace et al.

2001a) and/or project the numbers (e.g., Hughes et al. 2001) of newipersons and their general

characteristics. They have less often examined key research issues related to population change , as affected by OCS development in the Gulf of Mexico. For example, the work by Wallace et al. , (2001a) provides a wealth of quantitative historical information on demographic and some

service demands in three distinct parts of the Gulf for an extended time period. But, as noted

above, its statistical analysis of the relationships of these factors to <DCS development is limited

in several regards. As a result, although providing useful descriptive information, it does not

pltovide a sufficiently detailed statistical analysis of the demographic effects of OCS

d,~velopment. Similarly, although the Hughes et al. (2001) analysis;uses assumptions about

inmigrating and outmigrating worker characteristics, these assumpt(ons are not adequately based

on empirical information. In addition, although the Austin et al. (2q02) analysis provides a

wealth of information on families in the Gulf and their responses to ivarious aspects of OCS

development and operational conditions, its conclusions are limited'by the qualitative nature of

the data that do provide information that can be assumed to be reprdsentative. Finally, virtually

ail of the analyses of demographic and publiccservice impacts are quite area-specific providing

little information that can be generalized to new areas of developm~ntin the Gulf and although

the Centaur Associates, Inc. (1986) analysis (and recent and planned MMS analysis of OCS

workforces) provides a useful analysis of demographic factors through its examination of labor

forces, it is not representative of existing studies nor is it of sufficieht recency. As a result,

relatively little is known about the distribution and variation in fami'ly size and composition for

OCS-related workers in various industries, about population settlenient and resettlement patterns

resulting from OCS activities or about the characteristics of OCS related migrants, their families

or numerous other factors for a sufficient number of different subareas in the Gulf of Mexico

Region. The analyses completed to date represent important first st~ps but substantial additional

"iork remains to be completed. : " i " Similarly, public service analyses have tended to be incomplete relative to the range of I, I

services examined for different parts of the Gulf of Mexico. For exilmple, assessments of

s'~rvices are provided in Seydlitz et al. (1994), and in Hughes et al. (2001) and service usage

factors are found in work on poverty and crime in Seydlitz and Las~a (1994) but they are quite

s,~rvice specific. Hughes et al. (2001) note for example that their as~essment does not examine

water, roads (e.g., transportation) and schools. These are key servises that simply cannot be

omitted if an assessment is to be generally useful. Similarly, assessments evident in MMS .• I

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impact as~essint?nts (see MMS 1997,<2002) generally do not.provide assessments of existing

supplies of services. ,

siLlarlL the coverage of these dimensions in EISs (see for example t~e EIS for Lease

Sales 185,1190, etc.) is often cursory and not sufficiently jurisdictional-specific. In the case of

EISs the range Or demographic characteristics (other than total population) is often limited as are

the basiC domponents of population growth (i.e. there may be no mention of ttie number of I <

migrants likely to come to an area or of the aspects of growth due to workers compared to their

dependenth Equally problematic is the fact that the data are often provided at geographic levels

that are ndt equivalent to decision-making, legal jurisdictions. Projections for broad regions are

likely to bh of li'mited utility to parish, county or city decision makers who must decide how and

where to dllocate resources to address future growth or decline. The MMS information in this

area requites substantially more jurisdictional detail.

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4.2.2, Methods

TJe met~ods used in MMS related analyses of demographic and public service impacts,

although ~ithiri" the range of widely used methods, tend to be at the least developed end of the

methods sbectrum. The need for broad-based multi-county assessments has been widely . '. t

recommended to MMS (see Carney 1998) but it is disappointing that critical statistical analyses

that couldjprov{de information that could be more widely generalized are often inadequate. For

example, the very useful work by Wallace et al. (2001a), that by McKenzie et al. (1993) and that

by Seydlifz and'Laska (1994) examine a relatively large number of variables for a large number.

of areas bht lack statistical sophistication. Similarly, several of the EISs examined used

populatio~projections based on the use of simple ratios from state to county/parish values to

obtain tot~l pop'ulations, and many contained no projections with age or race/ethnicity specificity

(see the EIS fo!Lease areas 185, 190, etc.). Hughes et al. (2001) provide a noticeable exception

in that th~y examine expenditures and other characteristics for different types of migrants but this

is for oite!area, !--ouisiana. Although Hughes et al. (2001) and Luke et al. (1999) provide

exampleslof th~ use of more sophisticated techniques in demographic projections, simple

population to employment ratios (see MMS, EISs, 1997; 2002) are too often used and, in service

projehiorls, supply dimensions are seldom considered. Given that more sophisticated cohort

based andlserviCe supply moderated models have been in existence for more than two decades

j .. -

(Leistritzimd Murdock 1981), more sophisticated methods could be used in the assessments and

assessmerlt models. When historical and other analyses of demographic and public service

change aJ corrtpleted, as in the historical analysis noted above, they also tend to examine simply

the total rlumbers of persons or service users rather than any dimensions related to population or

service .cHaracteristics. There is a clear need to employ more sophisticated methods in impact

projectiorls and to examine additional areas with additional statistical sophistication in the

analyses Or dedlOgraphic and public service impacts. .

1 I I ' . 4.2.3 Quality vs. State-of-the-Art

, Ai sugJested by the above discussion of methods used in demographic and public ser~ice analysis, «,e believe that the demographic and public service projections have often not reflected • I '

, the best of SOA methods. Both in terms of the methods employed and the dimensions of

populaiioh and~public services provided additional development and refinement is essential. The

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more extensive use of cohort-component based population projections audof service projections

incorporating quantitative estimates of service supply shortfalls or s~rplJses are examples of the

types of enhancements required in these areas. I '

4.2.4 Utility for Decision Makers

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" The information provided by assessments and studies is likely to be of substantial utility

to decision-makers due to the very nature of the areas thems~lves; tHat is, information on

population and service demand are basic inputs to local planning,Ais sU~h, despite the

limitations noted above, the demographic and public service inform~tiori being provided is

c(,rtainly of substantial utility to decision makers. At the same time,! it clust be noted that data

pl'oviding additional detail on population characteristics and on likely sel-vice shortfalls resulting

from differences between supplies of, and demands for, services would be of additional utility.

For example, knowing the age, sex, and race/ethnicity characteristick of brojected populations for

specific jurisdictions can be important in planning such services as thosd for children, women

and the elderly, and for discerning the need for bilingual educatiml ih schools. Knowing where

s(lrvice shortfalls are likely to be most extensive can guide local goJemrlJents in budgetary and

service planning. The utility of demographic and public service dat~ will be increased to the

extent that additionai characteristics and jurisdictional detail are pro~ideh.

4:2.5 AreaslIssues Meriting Further Examination '!'

II j :

'; The issues meriting additional attention in this area both from the standpoint of the ESP

a~:d EISs include examinations of: , I, , ,

'[ 1. The sources by population characteristics and geographic area of origin of

:Ii ' workers relative to local and nonlocal (migrant) resident ~ources; ,

:li 2. The characteristics of direct, indirect and induced wdrker~ and their families, both

I: those coming from local populations and those migdtingl'nto, (or out of) the area

,. due to OCS activity; , '1

.ii 3. The effects of inmigrating populations, and of outmigrati, .g populations, on

:i services of all types in different parts of the Gulf under different forms, types and

levels of development; . I I . 4. The existing service capacity by type of service for numerous jurisdictions in the

,it Gulf;" I I .

S. Comprehensive assessments of types and levels or'service requirements that have

if actually occurred in impacted jurisdictions for differ~nt fbrms, types and levels of

II OCS development in a variety of Gulf areas; . I I·· "

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6. The development of appropriate methods for the projection of population and

public service impacts with sufficient detail and geographic specificity and the

iiI' inclusion ofjUrisdiction~specificpopulation and pubiic s~rvice data in MMS OCS

i! . impact assessments andstatements. .! I .

Ii In sum, as for economic and fiscal analysis, MMS h~ comp!ete4 numerous (and has

s,~veral additional soon to be completed) studies that include demogfapliic and service

dimensions. These studies provide a substantial increase in the amdunt bf information available

relative to that which existed in the early 1990s. These represent si!gniftcant efforts but we

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believe that the detailed research on, and analyses of, demographic and public service

dimension~, not'simply the projectioh ofregion-wide numbers of services needed, requires , . '

, substantial additional attention. Current plans to develop an ongoing inventory effort for OCS

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workers will help to address these areas of need but additional attention is essential. Since the

key to the lassessment of many socioeconomic impacts is the determination o(new populations

and their s~ttlement patterns, the need to address such information needs in an expeditious

fashion is bvident.

In the arlas of demographic and public service analyses it is thus eVid~nt that whether

examined from the standpoint of the range of demographic and public service dimensions

examined,1 the tyPes of methods employed, and the provision of such information at appropriate

geographical levels MMS ESP and EIS analyses require supplementation. Progress has certainly

been madd relative to the pre-1992 periods but additional studies and incorporation of SOA I .

methods and procedures is required.

, I I

4.3 SOCIAL AND CULTURAL IMPACTS ASSESSMENT

, j I I

4.3.1 Impact Dimensions ,

Th1e atlatsis of social and cultural impacts is largely limited to the ana\yses by Austin et

at (2002) 'on individual and family impacts, Wallace et al.'s (2001a) attempt to comprehensively

examine sbcioeconomic impacts in the Gulf, Tolbert's (1994) examination of the effects of OCS

developmbnt on inequality and Blanchard's (1999), Gramling et al.'s (1995) and Kelley's (1999)

delineatiohs of stakeholders' and other residents' issues related to OCS development, Gramling's , - -

(1995) historical examination of the development of oil in the Gulf, and Laska et al. (1993) and

Seydlitz'sland ~aska's (1994) analyses. However, other studies such as those by Hughes et al.

(2001) dooinclude some limited social analyses. Relative to the historical base of information in

these areak, these studies represent an extensive expansion in social and cultural information.

They exarhine residents' perceptions (Gramling et al. 1995; Blanchard 1999; Kelley 1999),

impacts oh individuals and families (Austin et al. 2002), effects on poverty, social problems,

community health and viability, community organizations, effects of social inequality, and other

key socialjand cultural factors (Laska et al. 1993; Tolbert 1994). It is evident then, that MMS

has taken a quantum leap fOIWard in this area relative to its historical base. .

, T~iCallly, efforts to address the social and cultural impacts of energy ~evelopment projects hhve focused primarily on effects on major social institutions and/or social

psychological attitudes and values in specific areas within the Gulf. While few of the studies

reviewed &0 any systematic analysis of impacts of OCS oil and gas development across the

various inktitutions, the following generalizations can be gleaned from the various individual

studies:' -I . .

L 'Family: Most of the earlier studies focused on the negative effects of

, employment in the oil and gas industry on families. Much of this work addressed

the effects on family structure and roles of work schedules that require a parent

(usually the father) to be away for extended periods of time (Austin et al. 2002;

Gramling 1995; Gramling et al. 1995; Shrimpton and Storey 2001). Among the

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families do experiencea period of adjustment to the lorki schedules and must

negotiate (and renegotiate) the roles of mother and father,! ~s well as the

relationship of each parent to children; families do tend td adapt over time;

informal mechanisms as well as more formal mechim'ismJ (such as professional

counseling) have evolved to help families adjust; neJ de~elopments,such as

improved telecommunications, have helped families aeal bore effectively with

extended periods of separation; ,i

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Religion: While relatively few of the studies have addressed the role played by

churches, it has been noted that churches have been ilnpoHant in providing things

like food, clothing, and shelter during down times in ~he ihdustry (Austin et a!.

2002). At the same time, donations to church,es dec~ase ~Uring "bust" cycles,

and it becomes even more difficult for churches to fill their accustomed "social

support" role;,

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Education: Major impacts on the institution of education are noted in several of i

the studies (Austin et a!. 2002; Gramling 1995; Seydlitz and Laska 1994; Laska et

aI. 1993). For example, the eamings gap based on e~ucation level is increasing

with an increased emphasis on technology and specialization. There is increased

evidence of

a glass-ceiling for the uneducated, again 'becduse of an increased

emphasis on education (Austin et a!. 2002). On the Hirinkfront, degrees are

becoming more important and families and social networks are becoming less

important. In the 1950's, local students were tqtinedifor life in the oilfield.

, Now, increasingly, local technology schools are emphasihnga much broader

curriculum 'and are trying,in some ways, to distanc'e \hen\.selves somewhat from

the oil and gas industry. While parents may continue to {alue their own careers in

the oil industry, more of them are encouraging their children to go to college and

to not plan on careers in the oil industry. Increasingl~, th1ere is the attitude that

young people will "try" college and if that doesn't wbrk, I~hey can fall back on

employment in the oil industry. Finally, the "boom"land "bust" cycles have

major effects on education. During boom periods, 'schools become overcrowded.

During bust periods, they face major funding challen~es;1

Government/Community:A significant change in re~ent years has beena

substantial growth in government regulation of the'oil in~ustry (Blanchard 1999; , I I I

Seydlitz and Laska 1994; Laska et a!. 1993; Kelley 1999; Austin et a!. 2002). For

example, some of the studies note that 20-30 years'a~o, dfforts to regulate the

industry were more limited. Money was good and h?urslwere long. In recent

years, numerous new labor laws have been instituted,. Some of the ,smaller

communities have tried to avoid or diminish an "oil towri" image by increasing

tourism or trying in other ways to diversify the local1ecmlomies. In communities

like New Iberia, there is an ongoing conflict betwee~ thelsugar and land elite and

the oil industry. Outsiders and newcomers often feel unwelcome;

Formal/Informal Organizations: As is the case in mdny 6ther areas, work

relationships have become more fmmalized (Austin ~t all 2002; Seydlitz and

Laska 1994). As noted above, hiring decisions are irtcredsingly made based on

educational achievement rather than on family andsbcial network ties. The

workforce has become increasingly unionized. Coiltbct [labor has replaced

traditional patterns of company loyalty to their local1workforce (and, in tum, , I

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, affected worker loyalty to the company). However, even in this context, informal

social networks still play important roles in helping workers lmd their families

cope with the stresses of the work environment; I

Health care services are impacted by the ups-and-downs of tl1e industry (Austin et

a!. 2002). For example, some major hospitals in the area are [struggling because

"bust" cycles result in the loss of a portion of the patient population. A more

recent change is that because of work schedules many workers commute and thus

receive their healthcare elsewhere. Local hospitals report high volumes of bad

debt and high emergency room costs. They also report low qtilization of

preventative and screening services. Finding and keeping a 'skilled professional , staff is a major problem (Austin et al. 2002). On the mental pealth side, mental

health and substance abuse needs remain high in these comrriunities. There is a

need for more focus on early detection, screening, and cost c~ntainment.

Social services are also impacted by the industry (Austin et dl. 2002; Seydlitz and

Laska 1994; Gramling et aI. 1995; Carney 1998). While loc~l churches, the

United Way, and other groups provide emergency food, clothing, and shelter

during "bust" periods, there are also major pressures on othel- social service

agencies. During down times, when the need is greatest, dorlations decrease. The

heaviest pressure on social service agencies is reported to come from transient

populations (Austin et at. 2002); , I . , Sociocultural Patterns: It is noted in one of the studies that 90% of the variance in

e'mployment patterns can be explained by national and inteniational indicators of

, the world oil market (Wallace et at. 2001b). The increase in[the number of

! women and minorities who are being employed is an import~nt shift, and affects

workforce and community diversity issues. What is happening in the Gulf of

Mexico is obviously an indicator of an important globalization of the oil and gas

industry workforce, Additionally, the restructuring of the industry is contributing

to a decrease in worker loyalty and higher turnover rates, I . )

Turning'to the issue of social psychological attitudes, values, and p~rceptions, even less

informati6n is included in the studies reviewed. Among the generalization~ that can be drawn

are the following: there are important age and generational changes occurri~g: Younger workers

have quitd different expectations of parenthood and are less committed to tne industry. First

generatioJ workers entered the business because wages were high. Older adults who have been

employediin the industry do not regret the life they have had, but frequently prefer something

different for their children (Austin et at. 2002). The older generation focuses on the benefits of

employmJnt inthe industry; the younger generation does not. These financ'ial incentives are

now less ~ecure. And, across the industry, there are increasing concerns about safety issues. The

attitude stLdies'also reflect changing expectations of parenthood. Both fathhs and mothers are

increasingly likely to desire increased involvement of fathers in parenting, something made

difficult by deepwater development employment schedules. ; ,

FiLIlY';SeVeral of the studies suggest that there have been negative~ffects on various

forms of ~ocial behavior as a result of the industry (Seydlitz and Laska 199~; Laska et at. 1993;

GramlingII995). These include higher divorce rates and domestic violence, increased crime,

alcohol abuse, and depression, and increased drug trafficking associated with the growth in the

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4.3.2 Methods

number of transients attracted to the area. However, these observatIOns are largely without

st~ong empirical support - 1 I -

:j Additional needs not yet addressed remain, however. Establ/shi1g differences in social

and culturaltmpacts by area, development phase, and type of developmem (e.g., deepwater

vt~rsus traditional OCS development) have yet to be adequately complettd. Although

stakeholder assessments are important, comprehensive assessments of residents' attitudes and

I •

perceptions have not been completed. Additional studies of instituti,ona\ change to include

informal organizations which are often essential to resident adaptation s~ould be completed and

the implementation of a comprehensive system for the periodic monitoring of social impacts in

key areas of the Gulf should be considered. Nevertheless, MMS is io bd commended for its

attempts to expand its knowledge in these impact areas. : [-

il Unfortunately, despite progress in ESP analyses related to tHese jlreas, social and cultural

considerations are absent from many MMS EISs. Perhaps the recen'cy dfthese analyses has , I

prevented their full use in EISs, but the coverage of such issues in I\ISs is simply insufficient.

]\I[MS must consider means for moving this work into its EIS process.

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~, The social and cultural studies include a variety of qualitati~e anti quantitative methods

fc;r the assessment analyses. For example, among the range of methods iused are residential

ethnographies, informal obserVation, site visits, employment of local research collaborators,

informal discussions with workers, their families, and other local re~idebts, more formal

interviews, focus groups, and attitude surveys. The historical discu~sio~s and descriptions in this • < I ! .

study area such as that by Gramling (1995) and the work by Baxter (Laska et al. 1993) are - , . generally quite informative and appear to be soundly grouncled in factmll accounts of past events.

The qualitative observational analyses provided in Austin et al. (2002) <ind Wallace et al. (2001a)

are extensively described and are the most comprehensive and thorough: use of such methods

e~,ident in the work reviewed for this analysis. Qualitative observational analyses related to the

efforts by Laska et al. (1993) (and the component studies of this eilifed ~ork) and in the Seydlitz

and Laska (1994) efforts, as well as the stakeholders' assessments by Blanchard (1999) and

Kelley (1999) are less well documented. In fact, throughout the wot-k rclviewed in this

a,;sessment, particularly that outside of the work by Austin et al. (2002),1 Wallace et al. (2001a), ,- . and Kelley (1999) discussions of procedures used to validate patterns idfmtified from preliminary

observations are seldom provided and basic discussions ofissues related to the likely

representativeness of informants and similar issues are not discussea with sufficient

thoroughness to allow one to assess the validity of the results. As 4resplt, one cannot be

confident in either the generalizability or the accuracy of the conclu'sions drawn from some of

~~~.' I II i

, The quantitative analyses provided in these works are much [mo)e problematic, both in

terms of the appropriate application of methods and in terms of intefpretation. In several works I ,

including that by Wallace et al. (2001a) and Seydlitz and Laska (19?4), 'there is questionable use

or methods such as time series analysis techniques with very small numbers of cases and time

observations. Perhaps more problematic is the fact that authors (seJ Seydlitz and Laska 1994)

orten find statistical results that are not consistent, clear or strong (rheariing relationships are " I I

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often in the wr1g direction, not statistically sIgnificant and show little persistence across time),

and yet cohclude that they found support for the existence ofspecific forms of impacts. Such

interpretations are clearly problematic.

. . oJerall,;'then, although standard methods have been utilized, it appe~ that

methodoldgicalrigor has been more closely approximated in the areaof qualitative analyses and

much lessIso in the quantitative analyses provided in these studies. The quantitative analyses

presented in the'various studies are relatively unsophisticated, and many of the interpretations are

not particJlarlyinsightful. Greater attention to methodological documentation and care in I

interpretation is·essential.

I J 4.3.3 Quality:vs. State-of-the-Art '

Gilen t~e above evaluations, it is appropri~te to conclude that the MMS literature

reviewed ~e1ative to social and cultural impacts is increasingly approaching SOA levels relative

to the con/ent issues examined in studies but not in EISs. Relative to methodology, it is not yet

SOA plirtibular(y as it relates to quantitative methods of analysis. Attention should be given to

ensuring !!reater adherence to SOA method applications and interpretations.

" I : . O~erall:,we must conclude that both the quantity and quality of work on what are

typically defined as "social" impacts leaves much to be desired. In fact, it is difficult to really

address th~ policy implications of much of this work because of its methodological limitations.

For exam~le,'several of the studies reIy on interview methods, but the surveys were conducted

under lessjthan hate-of-the-art conditions. Sampling methods are particularly weak. Therefore,

it is difficlllt to judge the extent to which social institutions have been seriously impacted or to . I

which social problems in the impacted communities have (as is alleged) increased. .

Mire ~Jention has been given to the institution of the family than an/other. It is evident

that there hre important stresses and strains on families as a consequence of insecurity of

employmdnt associated with traditional boom and bust cycles and as a result of work schedules

that requite that' oil workers spend extended periods, often a week or more, at 'their workplace.

However,las rioted by Shrimpton and Storey (2001) in their recent cross-national review of

offshore ebployment, this system should not be seen as inherently problematic. As is true for

other.syst~ms, it has both advantages and disadvantages for the workers and their families.

~Jere Je other limitations of the work reviewed. For example, again ~s noted by

Shrimptorl and Storey (2001), studies conducted to date have focused on large operations, fixed

work schetlules? and married male workers. Clearly, additional work is needed on women,

minoritie~, older, and single workers. The data are often anecdotal and do not allow one to . ." address Issues of cause and effect. I J

Finally, much of the work on social impacts has assumed primarily negative effects,

based,.welbelie~e, on the reliance on older social impact studies that have been conducted in a

very dIfferent ·context. WhIle there are negative consequences for familIes and communities,

there are Jome obvious positive effects, as well. These deserve additional attention in future

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4.3.4 Utility for Decision Makers , I I

" Several of the products reviewed are likely to have substantial utility for decision makers.

The assessments of stakeholders' views of key issues are clearly of i;mpdrtance to MMS decision

makers in their planning efforts. Attempts to address key areas of c6nceb in leasing and

development can be guided by such information. Similarly, the information on family and

individual impacts in different types of industries should be useful t6'bolh communities planning

social services and to employers in setting work schedules and providing family-related and

counseling services to employees. All of the studies should serve to' sen~itize decision makers to

k? social issues likely to be impacting their areas and residents. I I' ". Additional attempts to move beyond description to suggestidns that can be implemented

by local jurisdictions and individual firms are necessary. Several ofit,he WI'orks. do make policy

suggestions (see Seydlitz and Laska 1994, Laska et al. 1993, and AJstin et al. 2002), but they

tend to be broad-based. Social researchers need to develop their abilities to provide

recommendations at jurisdiction-specific levels.

4.3.5 AreaslIssues Meriting Further Examination

., As noted above, substantial progress has been made in the inclusion of social and cult~ral

research in ESP studies'in the Gulf when viewed relative to historidl pe~iods. Much remains to

be done, however. Analyses are needed: . I

1. To determine the actual level of social impacts across the: OCS Gulf of Mexico

Region for different types of social subgroups and develdpments across the

development cycle; ii'

2. A Gulf wide assessment of a representative sample of Gulf of Mexico residents'

attitudes, values and perceptions of OCS developments nllght be completed as a

base against which to assess change; [ !

3. The very useful family and individual impact analyses noted above should be

extended to other social institutions and to other area~ wilhin the Gulf of Mexico;

4. More sophisticated and thorough quantitative analys6s should be completed of

social disruption, social conflict, and social service i~paJts in different parts of

the Gulf during different development cycles. I

\

, Progress in the assessment ofsocial and cultural impacts has been exten~ive. The extension of

such work to additional sites and substantive areas and the use of irrlpro~ed methodological , I

standards are necessary to move it to the next level of development.! i : I

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SUMMARY, IMPLICATIONS AND RECOMME~ATIONS

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the literature reviewed and the evaluation of the studies above provide substantial

infonnatio'n about the MMS ESP pr~gram in the area of socioeconomic impacts. In this final i ~L -

section, it is appropriate to provide an overall assessment of progress, continuing limitations, and

recommentiations relative to future studies. Each of these factors is discussed below.

"f , 5.1 PROGRESS TO DATE

Thl ~S Gulf of Mexico socioecono"mic studies program has shown ~ubstantial progress i* th~ last decade. In our view the agencyhas listened and responded to its critics and

constituents and is aware of the critical socioeconomic dimensions in DCS development (Cluck

and Luton!2002). If one examines the criticisms of the National Research C0':lncil (i991; 1993),

the recornrenditions from its 1993 socioeconomic wor¥shop (Gramling andLaska 1993), or

from its workshop on deepwater issues (Carney 1998), MMS has responded. These forums

suggested ;1 arg<scale multi-dimensional studies of socioeconomic impacts in the Gulf, and"MMS

has responded as is evident in the efforts by Austin et al. (2002) and Wallace et al. (200 la). "" i "". " - These forums recommended additional industry studies, and these have been addressed in the

effort by Wallace et al. (2001b), by Baxter (in Laska et al. 1993), in the work by Pulsipher et al.

(1995) 6n ~diffetences in independents and major oil producer operations, and Pulsipher et al.'s

. j ,I

(2001) for~ca~t ,~f the number of offshore platfonns. They recommended stakeholder studies,

and these have been addressed in the work of Blanchard (1999), Gramling et aL (1995) and j , "

Kelley (19,99). '.rThese critiques reco~¥l}~ed asse:l~;~ts in distinct parts of the Gulf, and these

have beenladd~~s~ed in the work by AttStr8tf ~l.. ( for areas in Texa~, Louisiana and

Alabama; ispecl,~hzed analyses for coastal LoUISiana 10 the work of Seydhtz and Laska (1994);

Wade et al. (1999) for Alabama as a distinct area, and in Luke et al. (1999) for the Panhandle of

l, "

Florida.' 'TIhey recommended specific analysis of individuals and families, and these have been

addressedlin th~ work of Austin et al. (2002). They recommended analysis ot events that might

provide in~ightinto wider phenomena, such as the analysis of the impacts of an oil spill by

Pulsipher (1999). They recommended studies of key social institutions including the family,

community disruption, organizational and community response to DCS development and these

• have beenladdressed (see Seydlitz and Laska [1994]). Although questions may be raised about

how well some"of these" factors have been addressed, the Gulf of Mexico office of MMS has

attempted]to be'responsive.· :

progreJ in socioeconomic analyses has not been uniform, however. Substantial progress

has been rhade in economic impact modeling and this work largely reflects the SOA. "

Demographic a~d public service impacts were described in basic terms in MMS research before

the recentjjinCre~se in socioeconomic research and thus started at a more developed level than

social and cultural assessment research but, as noted above, progress in this area has been limited

in recent ~esearch. In the sociocultural arena, too many of the conclusions are based on

insufficieAtly verified information and are only partially supported by the more quantitative

analyses.IWe ~ust conclude, based on the information in the studies, that comparatively less is

known (in' an empirical sense) about the impacts of offshore oil development on onshore social

• issues.. Ptogress has thus been extensive but also uneven.

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SECTION 5.0 "
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I!. Although, as was noted above and will be noted further beiow, we believe there is

substantial additional work that is necessary both in terms of baseli~e ddta collection and longterm ongoing analysis, it is appropriate to commend MMS for its supstahtial progress in

addressing socioeconomic research issues of concern in the Gulf of Mex\ico. ~- i

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5,,2 CONTINUING LI:MITATIONS I

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Despite substantial efforts and progress in fielding socioeconomic studies, several

limitations continue. Some of these limitations are a result of the urliquJ contexts and other

factors noted above as limiting socioeconomic assessments in the Gtilf, ~hile others are less

generic and have resulted from a variety of factors that may be cap~ble br alteration. .

~: Two generic limitations require attention. One such limitatibn J~vident in that none of

the retrospective or historical studies examined in this review has ix?en ~ble to adequately

separate baseline from oes related change. Although the Gulf has ,often been seen as a nearly

ideal laboratory for the examination of oesimpacts, the lack of a true tlaseline and the

concurrence in time ofoes and other social and economic events has ~ade the task of

identifying Des specific impacts very difficult. Added to these difficulties has been the fact that

the many operating platforms and service providers in the Gulf tend to iliask, confound, and

diffuse project-specific impacts. It may be necessary to reconsider ~helher retrospective

analyses will provide the wealth of information that they were once[expected to produce.

Greater emphasis on current and future project impacts may be wo~hy ?f consideration because

of the potential ability to trace their impacts through workforce, exp,enditure, and other forms of

surveys and data collection with existing oes levels of development cdnsidered as simply part

of the baseline for DeS development areas. . 1 I . :~ . The second limitation, closely related to the first, is the fact ~hat lthe identification of a

specific impact area has been nearly impossible. In fact, in the wor~ bYIWallace et aL (2001a)

and that by Seydlitz and Laska (1994) the search for more adequate imp'act versus non-impacted

areas presented major methodological challenges. Because of the natur~ of DeS employment, .

the standard delineation of impacted areas as being those areas where the direct and indirect

workers resulting from the development reside is not a suffitlent cnteri~ for delineating the

impact area. Similarly, because of the multiple number of projects ~aki~g place in the Gulf,

many of the service employees (e.g., in helicopters, supply servicesl etcl) serve multiple projects

making attribution of impacts additionally difficult. We believe that MMS intentions to initiate a

fiecurrent survey of industry workers and expenditures will help address: this dilemma, but

additional conceptual and methodological work may be necessary. ! '

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A third limitation is more directly addressable. This is that,:despite the substantial

increase in socioeconomic studies, there is virtually no indication that this knowledge base has

been incorporated into EISs. With the exception of some increase i:n the use of input/output

models, EISs appear little changed from those from a decade ago. The Use ofEIS alternatives

that might vary workforce schedules for workers, that might utilizelalte~lative levels of local

workforces or alter other key factors shown by socioeconomic analysis to be important to

establishing the magnitude and distribution of impacts are not evid~nt, ~nd even the broad-scale

impact projections provided for areas associated with social impacts, such as demographic

change, have seldom been interjected from these studies into EISs.IEIS's by MMS for the Gulf of , r

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"We strongly recommend that the M:MS continue its developing efforts in

e~onomic impact modeling. After years of not being'SOA in this area, it is nearly

SOA in all regards, and efforts in this area should be strengthened. In this regard,

we believe the developmentof more sophisticated demographic ~nd public

service components of such models that employ cohort-component based

d.emographic models and service supply considerations should be a priority.

.Similarly we recommend increased local-are~specificity in such models. Such

recommendations are clearly based on SOA practices as delineated above and in

.l~eistritz and Murdock (1981); t

.We also highly recommend that MMS place high priority on its effort to obtain

, tecurrent industry employment and expenditure data. 'Such data offer substantial

, ~ope for identifying both OCS unique impacts and the likely location of such

, i.inpacts~ The widespread use of the information in the analysi~ by Centaur (1986)

qemonstrates the utility of such efforts.' Given the volatility of the industry we , ,

believe that the collection of such data on a less than five year ~ycle should be

given further consideration; .

, The studies examined sh~ed similar ch~llenges in differentiating the impacts of

'r .

historical OCS development from other sources of change. In many cases, such

is in the analysis by Wallace et al. (200la), the efforts made were extensive.

However, it is also apparent .that many economists, demographers, sociologists,

~nthropologists, and other social scientists simply are not sufficiently trained in

I a.dvanced statistical procedures for use in such analyses. We thus recommend that

MMs consider funding one or more statistical studies aimed at developing ~t .

appropriate procedures for identifying unique OCS development effects,

:including in the deliverables for these studies the provision of advanced statistical

training of Gulf of Mexico social scientists. Procedures such as those used in

",~uch areas of statistics as Linear Structural Relati~ns Analyses,af?d others might

be considered, but a contract seeking assistance from statisticians to address this

underlying problem could provide extremely useful and widely applicable

,. information' l '.. ' .

( ~ased on generally accepted standards for socioeconomic analyses (Leistritz and

Murdock 1981; Vanclay and Bronstein 1995; Porter and Fittipaldi 1998) we also

'~ ~trongly recommend the development of studies aimed specifically at examin,ing

important dimensions of oes related population change and community public

, Service infrastructure development. Studies of worker settlement patterns,

population characteristics, and migrant characteristics are only some of the areas

;, that require current attention. Similarly, although MMS has given considerable

, ~ttention to the analysis of the infrastructure necessary to directly support oes , <;levelopment and its area-specific studies often discuss problems in service f /

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I . t .".",...... . Mexico 'should be informed by the best information available, and we believe that that is not

consistentLy occurring in relation to socioeconomic factors. '

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RECOMMENDATIONS

In lVi~Wing the materials for this analysis and current plans of M:MS,~we believe the

following ~eneraI recommendations are merited:

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provision, the data are not uniformly collected or comparable. Given the

importance to local officials of knowing what the eff6cts bf OCS development

will be on public services, this should be a high priority Jea. Although the

proposed recurrent industry studies will provide sUbstanti~1 data that may

contribute to the level of demographic knowledge availatile, we also recommend

, that consideration be given to a program for monitorihg dbmographic change

through labor force changes; that is, that recurrent iniormbtion be obtained on the

demographic characteristics and settlement patterns of no~ only direct workers but

also indirect workers and their dependents; i I'

Based on the evaluation of social and cultural studies' described above, we also I I

recommend that the social and cultural analyses initiated be expanded and refined

in the following ways. Given the diversity of areas Withih the Gulf we believe

that analyses in this area must be subarea in nature, aitho~gh attempts should be

made to make studies as comparable as possible acro~s ateas. We believe that

,major sociocultural analyses, involving such things as reJident attitudes,

perceptions, and values, community organizational change, and diverse forms of

social disruption might be conducted in areas/commJniti6s that are being most

impacted by OCS development. One approach might be to conduct a series of

case studies of the major ports where OCS activity is: mo~t clearly evident. This

would allow a more detailed identification of major socidcultural impacts on these

areas, and would allow important comparisons to be ina& from one case study to

another. While there would be several advantages to! this! type of an approach, one

of the most important is that it would form a type of 1'basb" against which future

impacts of development could be assessed. Partial ~nal~ses have, of course, been

completed but comprehensive analyses of multiple social: and cultural areas

k ' I I should be completed. Care should be ta en In such analyses to ensure that

research teams completing the analysis include those' with expertise in

quantitative as well as qualitative analyses; ': I

We also recommend that M:MS consider funding a study Ito determine which of

the socioeconomic knowledge components should b~ included in EISs completed

by M:MS and to assess the most effective processes and procedures for ensuring

their inclusion in future EIS efforts. As indicated abbve,!our review of M:MS EIS

efforts finds that the use of socioeconomic knowled~e in iEISs is lagging behind

that provided by the studies program. Although the inclusion of additional I

socioeconomic information might only require an administrative mandate, we

believe that the limited usage of socioeconomic base' kn~wledge in EISs may

involve more complicated dimensions that require m:ore ligorous analyses.

. i i

We began by describing in some detail the Leistritz and Mufdock (1981) model for social

and economic impact assessment. Throughout this review, it 'has b6en obvious that attempts to

address the effects of oil and gas development in the Gulf of Mexic? pr~sent a broad range of

important problems and complications. Perhaps the most important of these, as we have noted

several times, is the virtual absence of a set of well-defined baselin~ corlditions against which

impacts can be assessed. Since it is virtually impossible in the GU1~ of ¥exico OCS Region to

describe a set of baseline conditions, it is also difficult to project iit~er baseline or program

development changes on that baseline. : I

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A s,econd, and related, complication comes from the difficulties of defining the impact

area. Unlike th~ typical rural community in the westernUnited States that was impacted, and

sometimesldramatically, by some form of energy development, it is extremely difficult to

delineate an impact area in the Gulf. The development of a new project in deepwater might be

, served by ~ny of a dozen different communities from any of several of different states. Even

identifying the area where project employees reside is complicated by things such as extended

work schedules,and the tendency of som~ workers to ,live significant distances from coast

. communiti!es. Given such circumstances, the challenges of attributing changes in the

comrriuniti!es to OeS-related activities are compounded. . .

: FiJallY, Le hoped to be able to say somewhat more about cumulative iinpacts from oes

, oil and gaJ development in the Gulf. What we find from reviewing the studies, however, is

somethinglmor~- akin to cumulative findings, rather than cumulative impacts. For example,

enough work has now been completed that we have substantial information on some of the

important ~conomic and related changes in the Gulf that are associated with ofl development.

On the s'odiocultural front, we have also gained knowledge of the effects of un'usual work

conditionsland Schedules on families and their successes and failures. However, we have been

unable to t~ase out what might ordinarily be referred to as cumulative project impacts. Without

baseline', abd without clearly differentiated impact areas, this task is extremely challenging. And I

yet, the communities in the Gulf that service the exploration for and development of oil and gas

are signifi6antly:changed. .

.wl conllude by emphasizing, again, that much of this change i~ clearly attributable to

changes irl the industry itself that we noted at the beginning of this report. Volatility of world oil

markets, ~struc1uring of the industry, joint venturing and other risk reducing strategies, and j iI .-

. resulting changes in labor markets have contributed to constant change in Gulf communities that

are linked ito oes oil and gas development. All of these changes are a result, in one way or

another, of the increased pattern of vertical linkages to world markets, to multinational

corporatiohs, ari'd to international banking and finance. The outcome is that they have reduced in

a very subktanti'al way any control that oil dependent communities in the Gulf now have over the

trajectory hf theIr futures-to the extent that their futures remained linked to oil and gas. This is

I perhaps mhong'ihemost important conclusions that comes from this review. it also helps to set , . the stage for the research agenda that lies ahead. '

. I I . Although these are broad recommendations and conclusions, we believe they are

preferable!to more specific recommendations and suggestions that would, because of the breadth

of Gulf is~ues and the geographic, economic, demographic, social, and cultunil diversity in the

Gulf, not be applicable to many areas ih the Gulf. If MMS can maintain ongoing oes Gulf of

Mexico s6cioeebnomic modules of studies in the economic and fiscal, demographic and public

service, arld soCial and cultural areas noted above, we believe that MMS interests will be well

served by1such studies as will the interests of local residents and other stakeholders in the Gulf of

Mexico R~gi~nl~ ,

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, ,

" . Becker, H.A. 1995. Demographic impact assessment. Chapter 6 in F. Vanclay and D.A.

Bronstein, eds.-'Environmental and social impact assessment. Chicester, England: John Wiley

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Blanchard, D:AlI999. Stakeholders' issues in the Eastern Gulf of Mexico, v61ume 1: technical

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Gramling, R. 1995. Oil in the Gulf: past developments, future prospects. Prepared by the

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:: . ':I

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Leistritz, FI.L. 1995. Economic and fiscal impact assessment. 'Chapter 5 in F. Vanclay and D.A.

Bronstein, e~s. ~nvironmental and social impact assessment. Chicester, England: John Wiley

and Sons. 129-~39 pp.. • 0

Leistritz, F.L. 1998. Economic and fiscal impact assessment. Chapter 26 in A.L. Porter and J.J.

Fittipaldi, bds. Environmental methods review: retooling impact assessment for the new century.

Fargo, NDl AmlY Environmental Policy Institute and International Association for Impact I • Assessment. 219-225 pp.

I.

Leistritz, ~.L., a.nd S.H. Murdock. 1981. The socioeconomic impact of resource development:

methods for assessment. Boulder, Colorado: Westview Press. 286 pp.

Luke, R:T:( E.s,I'schubert, G. Olsson, and F.L. Leistritz. 1999. Socioeconomi~ baselin~ and

projectionJ of th'e impact of an OCS onshore base for selected Florida panhandle communities:

volume 1;folume 2: technical description of the MMS Florida panhandle model; volume 3.

Prepared b,y Research and Planning Consultants, Inc. for the U.S. Dept. of the Interior, Minerals

Management Service, Gulf of Mexico OCS Region, New Orleans, LA. OCS Study MMS 2002- \ 0 •

024; MMS 2002-025; MMS 2002-026. xiii, 262; ix, 73; ix, 26 pp.

MCKenzJL.s.,.in, PJ. Xander, M.T.C. Johnson, B. Baldwin, and D.W. Davis. 1993.

Socio~conbmic :impacts of declining Outer Continental Shelf oil and gas activities in the Gulf of '! .~ ;

Mexico.' ~rep,a~d by Applied Technology Research Corporation for the U.S. Dept. of the

Interior, Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, LA. OCS - \- . StudyJ\1MS93.0028. xv, 240pp. 0'

.!! '1 Mineral~ NIa~agement Service. 2002. Gulf of Mexico OCS oil and gas lease sales: 187 and 194. , . 2003-200~, vol~me II. U.S. Dept. of the Interior, Gulf of Mexico OCS Region, New Orleans,

LA. OCS EISIEA MMS 2002-015.179 pp.

Minetal~ ~a;~Jement Service. 1998. Gulf ofMexico OCS oil and gas lease sales 171, 174, 177,

and 180: Jestem planning area-final environmental impact statement. U.S. Dept. of the Interior,

Minerals management , Service, Gulf of Mexico Region, New Orleans, LA. oes EISIEA MMS

98-0008. 570 pp. 0

: 1 " Nationai Envirdtmental'POliCY Act. 1970. Public law PL-190.

,I J . National Resear,ch Council. 1991. The adequacy of environmental information for Outer

Continent~1 Shelf oil and gas decisions: Georges Bank. Washington, D.C.: National Academy

Press, NadonallA:cademy of Sciences. xi, 83 pp. '

j I

National Research Council 1993. Assessment of the U.S. Outer Continental Shelf environmental

studies prJgnird': IV. LessOlis and opportunities. Washington, D.C.: National Academy Press,

National Academy of Sciences. ix, 59 pp.

1 , Outer Continental Shelf Lands Act. 1953. 43 U.S.C. §§ 1331-1356. , .

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I

Plater, J.R., J.Q. Kelley, W.W. Wade, and R.T. Mott. 2000. Economic effects of costal Alabama

and Destin Dome Offshore natural gas exploration, development, and prdduction. Prepared by

Foster Associates Inc. for the U.S. Dept. of the Interior, Minerals Mapag~ment Service, Gulf of

Mexico OCS Region, New Orleans, LA. OCS Study MMS 2000-041. xi, 219 pp.

Porter, ~.L. and J.J. Fittipaldi, eds. 1998. Environmental methods r~vieJ retooling impact

as:;essment for the new century. Fargo, ND: Army Environmental Pblic~ Institute and

International Association for Impact Assessment. 309 pp.

PUllsipher, A.G., D. Tootle, and R. Pincomb. 1999. Economic and sdCial;consequences of the oil

spill in Lake Barre, Louisiana. Prepared by the Louisiana State University, Center for Energy

Studies for the U.S. Dept. of the Interior, Minerals Management Seryice,IGulf of Mexico OCS

Region; Louisiana State University, Coastal Marine Institute, New Orleans, LA. OCS Report

MMS 99-0028. 32 pp. . 'j [:

Pulsipher, A.G., 0.0. Hedare, and R.H. Baumann. 1995. Modeling the stJUcture and

performance of integrated and independent producers in the Gulf of Mexico Region. Prepared

by the Louisiana State University, Center for Energy Studies for the ~.sJ Dept. of the Interior,

Minerals Management Service, Gulf of Mexico OCS Region; Loui'siana State University, , Coastal Marine Institute, New Orleans, LA. OCS Study MMS 95-0Q56. 47 pp.

Pulsipher,

I'

A.G.,

.;

0.0. Hedare, D.V. Mesyanzhinov, A. Dupont, and Q.L.iZhu. 2001. Forecasting

the number of offshore platforms on the Gulf of Mexieo OCS to the 'yeai 2023. Prepared by the

Louisiana State University, Center for Energy Studies for the U.S. Qept. Iof the Interior, Minerals

Management Service, Gulf of Mexico OCS Region; Louisiana State iUniversity, Coastal Marine

Institute, New Orleans, LA. OCS Study MMS 2001-013. xi, 52 pp·i, Ii I

Seydlitz, R., and S. Laska. 1994. Social and economic impacts of petroleum boom and bust

cycles. Prepared by the University of New Orleans, Environmental Soci~1 Science Research

Institute for the U.S. Dept. of the Interior, Minerals Management SetvicJ,Gulf ofMexico OCS

Region; Louisiana Universities Marine Consortium, UniversjrY Res~arcH Initiative, New

Orleans, LA. OCS Study MMS 94-0016. xi, 131 pp. . ;

I' I

Shrimpton, M. and K. Storey. 2001. The effects of offshore employbentin the petroleum

industry: a cross-national perspective. Prepared by Community Res~urcb Services Ltd., St.

John's Newfoundland, Canada, for the U.S. Dept. of the Interior, Mi'nerdls Management Service,

Environmental Studies Program, Gulf of Mexico OCS Region, New!Orleans, LA. OCS Report , MMS 2001-041. 46 pp. I

Taylor, C.N., C.G. Goodrich and C.H. Bryan. 1998. Social assessment.,Chapter 25 in A.L. I .

Porter and J.J. Fittipaldi, eds. Environmental methods review: retoo)ingiimpact assessment for

the new century. Fargo, ND: Army Environmental Policy Institute and International Association'

for Impact Assessment. 210-218 pp. I .

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Tolbert C.M, 1994. Oil and gas development and coastal income inequality. A comprehensive . , ' . analysis; liJ.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico OCS

Region;~uisiana State University, Coastal Marine Institute, New Orleans, LA. OCS Study

MMS94-0052, 75 pp.

j :

VanclaY,I\. and D.A. Bronstein, eds. 1995. Environmental and social impact asSessment.

Chicester, England: John Wiley and Sons. 325 pp. I -

Wade, W.W., J.R. Plater, and J.Q. Kelly. 1999. History of coastal Alabama natural gas

exploratio~ arid development: final report. Prepared by Foster Associates Inc. for the U.S. Dept.

of the Inte6or, Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, LA. I - 'OCS Report MMS 99-0031. 189 pp.

Wallace, J., J. Kirkley, T. McGuire, D. Austin, and D. Goldfield. 2001a. Assessment of

historical, kocial, and economic impacts of OCS development on Gulf Coast communities:

volume I, bxecutive summary; volume 2, narrative of 2 volumes. Prepared by Techlaw Inc for

the U:S. Dbpt. of the Interior, Minerals Management Service, Gulf of Mexico Region, New

Orleans, d~. OCS Study MMS 2001-026; MMS 2001-027. 12; 489 pp.

- I I

Wallace, B., J. Duberg, and J. Kirkley. 2001b. The current dynamics ofthe oil and gas industry.

U.S. Dept. of the Interior. 186 pp. I ,. i

- I

Wilkinson. C.H; 1998. Environmental justice impact assessment: key components and emerging

issues. CHaptec32 in A.L. Porter and J.J. Fitlipaldi, eds. Environmental methods review:

retooling itnpact assessment for the new century. Fargo, NO: Army Environmental Policy

Institute artd International Association for Impact Assessment. 273-282 pp. - [

55
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APPENDIX A

. MMS STUDIES SELECTED BY MMS FOR REVIEW

Austin, D., K~ Coelho, A. Gardner, R. Higgins, T. McGuire, J. Schrag-James, S. Sparks and L.

Stauber. 2002. Social and economic impacts of Outer Continental Shelf activity on individuals

and familids, volume I: final report; volume 2: case studies of Morgan City and New Iberia, LA.

2 Volumes! Prepared by the University of Arizona, Bureau of Applied Research in

Anthropol6gy for the U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico

OCS Regidn, New Orleans, LA. OCS Study 2002, MMS 2002-022; MMS 2002-023. xvi, 293;

xv, 197 ppl i

Bianchard.lD.A.' 1999. Stakeholders' issues in the Eastern Gulf of Mexico, volume 1: technical

report. 2 Volumes. Prepared by University of West Florida, Department of Sociology and

Anthropol6gy for the U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico

OCS Regi6n, New Orleans, LA. OCS Report MMS 99-0063. vii, 82 pp.

o 1, " '

Carney, R.S., ed. 1998. Workshop on environmental issues surrounding deepwater oil and gas

developme~t. U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico OCS I ' Region, New Orleans, LA. OCS Study MMS 98-0022. 143 pp.

Centaur ALocia~es, Inc. 1986. Indicators of the direct economic impacts due to oil and gas

developmdnt in the Gulf of Mexico, year 1, executive summary; narrative, year 1, volume 1-

results of ~ear 1; exhibits, volume 2-results of year 1. 3 Volumes. U.S. Dept. of the Interior,

Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, LA. Technical

Report MIvIS 86-0014; MMS 86-0015; MIvIS 86-0016.33; x, 100; vi, 706 pp. j ,

Cluck, R.E. and H. Luton. 2002. Responding to social change and avoiding self-subversion: the

social and bconomic effects of offshore oil and gas development on communities, families, and

individuals in the Gulf of Mexico. Presented at the SPE International Conference on health,

safety and!environment in oil and gas exploration and production, March 20-22, Kuala Lumpur,

Malaysia. 27 pp.

Dismukes"D.E., W.O. Olatubi, D.V. Mesyanzhinov, A.G. Pulsipher. 2001. Modeling the

economic impacts of offshore oil and gas activities in the Gulf of Mexico: methods and

applicatiOl)s. U,s. Dept. of the Interior, Minerals Management Service, Gulf of Mexico OCS

Region, New Orleans, LA. 85 pp.

j

Gramling,iR. 1995. Oil in the Gulf: past developments, future prospects. Prepared by the

Louisiana pniversities Marine Consortium, University Research Initiative, for the U.S. Dept. of

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

, OCS Study MMS 95-0031. 72 pp. • , .

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57
i

I I.

Gramling, RB" S. Brabant, C.J. Forsyth, and C.E. Palmer. 1995. Outer Continental Shelf

is~:ues: Central Gulf of Mexico. U.S. Dept. of the Interior, Minerals Man1agement Service, Gulf

of Mexico OCS Region; Coastal Marine Institute, Louisiana State Univefsity, New Orleans, LA. , I I

OCS Report MMS 95-0032, IX, 74 pp. : I

Gramling, R. and S. Laska. 1993. A social science research agenda for the Minerals

Management Service in the Gulf of Mexico. Prepared by the Louisi~na Universities Marine

Consortium, University Research Initiative for the U.S. Dept: of the Inte~or, Minerals

Management Service, Gulf of Mexico OCS Region, New Orleans, LA. <DCS Study MMS 93-

0017. ix, 62 pp. . . :

Hiett, RL. and J.W. Milon. 2001. Economic impact of recreational fishing and diving associated

wi!th offshore oil and gas structures in the Gulf of Mexico. Final repbrt. [Prepared by QuanTech,

Inc. for the U.S. Dept. of the Interior, Minerals Management Servic~,Gulr of Mexico OCS

Region, New Orleans, LA. OCS Study MMS 2002-010. ix, 96 pp. i . ;

I

Hughes, D.W., J.M. Fannin, W. Keithly, W. Olatubi, and J. Guo. 2001. Lafourche Parish and , I

Port Fourchon, LA.: Effects of the Outer Continental Shelf petroleum industry on the economy

a~ld public services, part 2. Prepared by Coastal Marine Institute Lo4isi~na State University for

the U.S. Dept. of the Interior, Minerals Management Service, Gulf of M6xico OCS Region, New

Orleans, LA. OCS Study MMS 2001-020. xii, 49 pp. !

,

Kelley, W.R 1999. A socioeconomic and environmental issues anaiysis:of oil and gas activity

in the Outer Continental Shelf of the Western Gulf of Mexico. U.S. ~Dept. of the Interior,

Minerals Management Service, Gulf of Mexico OCS Region, New G>rle~ns, LA. OCS Study

MMS 2002-011. iii, 66 pp. '

,

, Kelly, J. and W.W. Wade. 1999. Social and economic consequences of onshore OCS-related

activities in coastal Alabama. Prepared by Foster Associates for theiU.S'. Dept. of the Interior,

M~nerals Management Service, Gulf of Mexico OCS Region, New 0rleails, LA. OCS Report

MMS 98·0046. 102 pp. Q ! I.

, : I

Liska, S.B., Vern K.B., R. Seydlitz, RE. Thayer, S. Barbant and C.}. F9rsyth, eds. 1993.

Impact of offshore petroleum and production on the social institutions of Coastal Louisiana.

Prepared by the University of New Orleans, Environmental Social SCienbe Research Institute for , ,I. I

the U.S. Dept. of the Interior, Minerals Management Service, Gulf ~f Mexico OCS Region, New

Orleans, LA. OCS Study MMS 93-0007. 246 pp. : I

;1 :

L~ke, R.T., E.S. Schubert, G. Olsson, and F.L. Leistritz. 1999. Soci6ecJnomic baseline and

projections of the impact of an OCS onshore base for selected Florida p~nhandle communities:'

volume 1; volume 2: technical description ofthe MMS Florida pan~andie model; volume 3.

P'iepared by Research and Planning Consultants, Inc. for the U.S. D6pt. or the Interior, Minerals

Management Service, Gulf of Mexico OCS Region, New Orleans, UA. OCS Study MMS 2002-

024; MMS 2002~025; MMS 2002-026. xiii, 262; ix, 73; ix, 26 pp. I i ; I

58

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McKenzie:L.S., III, PJ. Xander, M.T.C. Johnson, B. Baldwin, and D.W. Davis. 1993.

SociOeCOn?miC impacts of declining Outer Continental Shelf oil and gas activities in the Gulf of

Mexico. Prepared by Applied Technology Research Corporation for the U.S. Dept. of the .

Interior, Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, LA. OCS ;

StUdY'S 93-0028. xv, 240 pp.

Minerals Management Service. 2002. Gulf of Mexico OCS oil and gas lease sales: 187 and 194. , 2003-2007!, volume II. U.S. Dept. of the Interior, Gulf of Mexico OCS Region, New Orleans,

LA., OCS iEISIEA MMS 2002-015. 179 pp.

I

Minerals Management Service. 1998. Gulf of Mexico OCS oil and gas lease sales 171, 174, 177,

and 180: Jestem planning area-final environmental impact statement. U.S. Dept. of the Interior,

Minerals ¥anagement Service, Gulf of Mexico Region, New Orleans, LA. OCS EISIEA MMS

98-0008. 570 pp. . .I . . National Research Council. 1991. The adequacy of environmental informatiob for Outer

Continent~l Shelf oil and gas decisions: Georges Bank. Washington, D.C.: National Academy

Press, National Academy of Sciences. xi, 83 pp.

j

National Research Council 1993. Assessment of the U.S. Outer Continental Shelf environmental

studies prdgram: IV. Lessons and opportunities. Washington, D.C.: National Academy Press,

National Academy of Sciences. ix, 59 pp. ,

Plater, J.Rl, J.Q: Kelley, W.W. Wade, and R.T. Mott. 2000. Economic effects of costal Alabama

and DestirJ Dome Offshore natural gas exploration, development, and production. Prepared by

Foster As~ociates Inc. for the U.S. Dept. of the Interior, Minerals Management Service, Gulf of

Mexico oes Region, New Orleans, LA. OCS Study MMS 2000-044. xi, 219 pp.

PUlsiPherJA.G.:'D. Tootle, and R. Pincomb. 1999. Economic and social consequences of the oil

spill in Lake Barre, Louisiana. Prepared by the Louisiana State University, Center for Energy

Studies fo} the U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico OCS

Region; Lbuisiana State University, Coastal Marine Institute, New Orleans, LA. OCS Report

MMS 99-0028.32 pp.

PUlsiPherJA.G., 0.0. Iledare, and R.H. Baumann. 1995. Modeling the struct~re and

performan'ce of integrated and independent producers in the Gulf of Mexico Region. Prepared

by the Lo~isiana State University, Center for Energy Studies for the U.S. Dept. of the Interior,

Minerals Management Service, Gulf of Mexico OCS Region; Louisiana State University,

CoastalMarine Institute, New Orleans, LA. OCS Study MMS 95-0056. 47 pp.

PUlsiPher,jA.G., 0.0. Hedare, D.V. Mesyanzhinov, A. Dupont, and Q.L. Zhu. 2001. Forecasting

the number of offshore platforms on the Gulf of Mexico OCS to the year 2023. Prepared by the

Louisiana!State University, Center for Energy Studies for the U.S. Dept. of the Interior, Minerals

Managem~nt Service, Gulf of Mexico OCS Region; Louisiana State University, Coastal Marine

Institute, New Orleans, LA. OCS Study MMS 2001-013. xi, 52 pp.

59
Wade, W.W., J.R. Plater, and JrQ. Kelly. 1999. History of coastal Alabama natural gas

exploration and development: final report. Prepared by Foster AssoCiatds Inc. for the U.S. Dept.

of the Interior, Minerals Management Service, Gulf of Mexico OCS 'Re~on, New Orleans, LA.

oes Report MMS 99-0031. 189 pp.

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Tolbert C.M. 1994. Oil and gas development and coastal income in6quality. A comprehensive , ,I

analysis. U.S. Dept. of the Interior, Minerals Management Service, GUI~ofMexico OCS

Rl:gion; Louisiana State University, Coastal Marine Institute, New Orleans, LA. OCS Study

MMS94-0052, 75 pp. ' "

Wallace, B., J. Kirkley, T. McGuire, D. Austin, and D. Goldfield.ZOOla. Assessment of

historical, social, and economic impacts of OCS development on G~lf Cbast communities:

volume I, executive summary; volume 2, narrative of 2 volumes. Prepated by Techlaw Inc for , , the U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico Region, New

Orleans, LA. OCS Study MMS 2001-026; MMS 2001-027. 12; 489 ppJ

V.'allace, B., J. Duberg, and J. Kirkley. 2001b. The current dynamiC~ oflhe oil and gas industry.

U.S. Dept. of the Interior. 186 pp. :

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60

Seydlitz, R., and S. Laska. 1994. Social and economic impacts ofpe~roleum boom and bust

cycles. Prepared by the University of New Orleans, Environmental Soci~1 Science Research

Institute for the U.S. Dept. of the Interior, Minerals Management S.eIjvice:. Gulf of Mexico OCS

Region; Louisiana Universities Marine Consortium, University Research: Initiative, New

Orleans, LA. OCS Study MMS 94-0016. xi, 131 pp. : I,

, I ' . !.

Shrimpton, M. and K. Storey. 2001. The effects of offshore employment in the petroleum

industry: a cross-national perspective. Prepared by Community Res6urc~ Services Ltd., St.

John's Newfoundland, Canada, for the U.S. Dept. of the Interior, Mijlerals Management Service,

Environmental Studies Program, Gulf of Mexico OCS Region, New Orl6ans, LA. OCS Report

MMS 2001-041. 46 pp.
· The following studies are not reviewed because they are ongoing or were completed too late for

inclusion.

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APPENDIXB

LIST OF ONGOING GULF OF MEXICO REGION MMS

SOCIOECONOMIC STUDIES BY TOPIC

,. ! •

, i

: Baselines, area-wide analysis, history.

History of bffshore Oil Development in Louisiana

Deepwate~ pr:g'ram: Benefits and Burdens of OCS Deepwater Activities on Selected

Communities anl:I Local Public Institutions '

1 ;,

Effects on Local Human Communities of OCS Minerals Extraction in Frontier Areas

socioeconimi'c Baseline Gulf of Mexico Region - Phase I

Industry JnalYSiS and modeling.

Deepwatel PTgram: Assessing and Monitoring Industry Labor Needs

2002 NationalIMPLAN User's Conference , I ( , Changing . Patterns

, - of Ownership, Control, and Access to Global Resources in the Petroleum

Industry: Implications for Leasing and Development in the Gulf "

". 1 ;: . • An Analysis of the Effects of Crude Oil Price Movements and Instability on OCSDevelopment

Activities ~nd- the Economic Performance of the U.S. Coastal Gulf States "

I I'

Modeling Platform Installations and Removals by Water Depths and Planning Areas

profitabilit o~ 6ffshore Petroleum Ventures and Operations: Empirical Evidence from O&G

· Lease Salds aJid Development on the GOM OCS, 1983-1998

Capital iJestL~nt Decision Making and Trends: Implications on Petroleum ~esource Developmbnt in the U.S. Gulf of Mexico i . . - Economic lEffec~s of Changes in Oil and Gas Prices and Petroleum Resource Development in

OnshoreL'ouisiana and State Offshore Waters

j ;,

Infrastructure.

Deepwater Program: OCS-Related Infrastructure in the Gulf of Mexico

Deepwate'j p~oiram: Sl!pply Logistics of OCS Oil and Gas Development in the Gulf of

MexlcocEyal~atlOnof Technological and Economic Parameters of Ports as Supply and

• Manlifaftunng I?ases

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Deepwater Program: An Analysis of the Socioeconomic Effects of OCS-Activities on Ports and

Surrounding Areas in the Gulf of Mexico Region

Commuting, Migration, and Offshore Oil/Gas Extraction

(NOTE: Benefits and Burdens and Frontier Areas also have large demo aphic components.)

i I' l

i' Community-level and social effects.

Deepwater Program: Labor Migration and the Deepwater Oil Indus~ry

Labor Migration and the Deepwater Oil Industry in Houma

~!

Sustainable Socioeconomic Development in Oil and Gas Country: 'ACase Study of Abbeville,

Louisiana

Labor Demand in the Offshore Oil and Gas Industry: The Louisiana Case

The Coastal Division of Industrial Labor Over Time and Space

Oil and Gas Involved Areas Along the U.S. Gulf Coast: Evidence frbm Public Sources and NonPublic Population and Economic Censuses

Job Loss and Re-employment of Marginal Groups in the Gulf of Me~ico Region

. i I ,.-

The Relationship of Crime to Oil Development in the Coastal Regions of Louisiana

Environmental .'Justice Considerations in Lafourche Parish, Louisiana,

62

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The Department of the Interior Mission

As the Nation's principal conservation agency, the Department of the Interior has responsibility

for most of our nationally owned public lands and natural resources. This includes fostering

sound use of our land and water resources; protecting our fish, wildlife, and biological diversity;

preserving the environmental and cultural values of our national parks and historical places;

and providing for the enjoyment of life through outdoor recreation. The Department assesses

our energy and mineral resources and works to ensure that their development is in the best

interests of all our people by encouraging stewardship and citizen participation in their care.

The Department also has a major responsibility for American Indian reservation communities

and for people who live in island territories under U.S. administration.

Th~ Minerals Management Service Mission

As a bureau of the Department of the Interior, the Minerals Management Service's (MMS)

primary responsibilities are to manage the mineral resources located on the Nation's Outer

Continental Shelf (OCS), collect revenue from the Federal DCS and onshore Federal and Indian

lands, and distribute those revenues.

Moreover, in working to meet its responsibilities, the Offshore Minerals Management Program

administers the DeS competitive leasing program and oversees the safe and environmentally

sound exploration and production of our Nation's offshore natural gas, oil and other mineral

resources. The MMS Minerals Revenue Management meets its responsibilities by ensuring the

effiCient, timely and accurate collection and disbursement of revenue from mineral leasing and

production due to Indian tribes and anotlees, States and the U.S. Treasury.

The MMS strives to fulfill its responsibilities through the general guiding principles of: (1) being

responsive to the public's concerns and interests by maintaining a dialogue with all potentially

affected parties and (2) carrying out its programs with an emphasis on working to enhance the

quality of life for all Americans by lending MMS assistance and expertise to economic

development and environmental protection.

63
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