Technical Report No. 165 OCS Study MMS

2002 – 060

Sub-Arctic Economic Impact Model for

Petroleum Activities in Alaska

(Sub-Arctic IMPAK)

Final Technical Report

 
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS i Sub-Arctic IMPAK

Technical Report No. 165 OCS Study MMS

2002-060

Final Technical Report

Sub-Arctic Economic Impact Model for Petroleum Activities in Alaska (Sub-Arctic IMPAK)

Prepared for:

U.S. Department of Interior

Minerals Management Service

Alaska Region

949 E. 36th Avenue

Anchorage, Alaska 99508

Prepared by:

Jack Faucett Associates, Inc

4550 Montgomery Avenue, Suite 300 North

Bethesda, Maryland 20814

In association with

Mr. John Schwochert

Great Northern Engineering

June 2003
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DOI-MMS ii Sub-Arctic IMPAK

This report has been reviewed by the Minerals Management Service and approved for publication. Approval does

not signify that the contents necessarily reflect the view or policies of the Service, nor does mention of trade names 

or commercial products constitute endorsement or recommendations for use. The United States government

assumes no liability for its contents or use thereof.

The study was funded by the Minerals Management Service, U.S. Department of the Interior, Washington, D.C.

under Purchase Order Number 01-00-PO-17115 and Purchase Order Number 01-02-PO-85307.

Document is available to the public through the National Technical Information Service, 5285 Port Royal Road, 

Springfield, Virginia 22161, Fax: 703-605-6900, www.ntis.gov
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS iii Sub-Arctic IMPAK

STUDY TITLE: Sub-Arctic IMPAK Model

REPORT TITLE: Sub-Arctic Economic Impact Model for Petroleum Activities in Alaska

(Sub-Arctic IMPAK)

CONTRACT NUMBERS: Purchase Order Number 01-00-PO-17115

Purchase Order Number 01-02-PO-85307

SPONSORING OCS REGION: Alaska

APPLICABLE PLANNING AREAS: Alaska

FISCAL YEARS OF PRODUCT FUNDING: FY 2000 and 2002

COMPLETION DATE OF REPORT: June 2003

COST: FY 2000 $76,363

FY 2001 $29,955

FY 2002 $12,869

CUMULATIVE PROJECT COST: $119,187

PROJECT MANAGER: Jonathan Skolnik

AFFILIATION: Jack Faucett Associates, Inc.

ADDRESS: 4550 Montgomery Ave. Suite 300 North, Bethesda Maryland 20814

PRINCIPAL INVESTIGATORS: Jonathan Skolnik, Chris D. Holleyman, John Schwochert

KEY WORDS: IMPLAN, OCS Sub-Arctic Subregion, oil industry, economic impacts, employment, earnings,

input-output, manpower.

BACKGOUND: Production of oil and gas in the offshore Alaskan Sub-Arctic relies upon a set of technologies

unlike those used anywhere else in the world. Economic impact modeling of these activities also requires a set of

methods that are unique. Readily available regional economic impact models contain production functions that are

based on national averages. These national-level input coefficients cannot accurately reflect the unique Alaskan

production function. These models are also unable to accurately trace the regional distribution of purchases made

by the industry or the workers who commute to the site. Finally, these readily available models do no have enough

detail to accurately model the differing impact of specific projects.

This report describes the development of a first step model that can be combined with a readily available regional

model to produce more accurate estimates of economic impacts. The first step model utilizes vectors of purchases, 

disaggregated by both geographic area and activity, to allow a more accurate accounting of the inputs required for a 

specific project. The vectors are constructed by coding detailed engineering estimates of inputs to the individual

activities. These direct inputs can then be used to stimulate the standard regional impact models.

OBJECTIVES: The Outer Continental Shelf Lands Act, as amended, established a policy for the management of

oil and natural gas in the Outer Continental Shelf (OCS) and for protection of the marine and coastal environments. 

The Act authorizes the conduct of studies in areas or regions to determine the "environmental impacts on the marine 

and coastal environments of the OCS and the coastal areas which may be affected by oil and gas development." The 

U.S. Minerals Management Service (MMS) is the administrative agency responsible for leasing submerged Federal

lands.

The National Environmental Policy Act (NEPA) of 1969 requires use of the natural and social sciences in any

planning and decision making that may have an effect on the human environment. To this end, the MMS prepares
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DOI-MMS iv Sub-Arctic IMPAK

Environment Impact Statements (EIS) and environmental assessments (EA); acquires marine environmental data;

analyzes data, literature surveys, socioeconomic studies, and special studies; and holds public conferences. These

undertakings often call for assessing the regional economic impacts of a proposal such as a lease or a sale. 

In the past, an assortment of models and methods were used to estimate economic impacts, and these typically

varied by planning areas. At present, the existing models used to develop direct OCS and secondary employment

projections for the Alaska OCS Region are outdated and do not produce results comparable to other OCS regions

such as the Gulf of Mexico. As a result, regional comparisons are difficult to make. Section 18 of the OCS Lands

Act, however, requires that the U.S. Department of the Interior prepare a 5-year schedule of lease sales that

considers "an equitable sharing of developmental benefits and environmental risks among the various regions." For 

this reason, MMS decided to standardize the approach used to estimate regional economic impacts and has settled

on IMPLAN, an economic input-output model, for that purpose. 

To facilitate EIS work for Alaska's OCS Sub-Arctic sub-regions and to develop a tool for the "equitable sharing"

analysis, a new model was developed. It can estimate industry employment and expenditures, by region, of offshore 

oil exploration and development (E&D) activities in the Alaskan Sub-Arctic. The new model is known as the SubArctic Impact Model for Petroleum in Alaska (Sub-Arctic IMPAK). Unlike the current model, this new model is

designed to produce a set of outputs that can be used to stimulate IMPLAN.

In a parallel but separate study, a similar model was developed for the Arctic Alaska. This second model is known 

as Arctic IMPAK.

DESCRIPTION: The Sub-Arctic IMPAK model forecasts the input requirements needed to carry out oil

exploration and development on Alaska's Sub-Arctic OCS. A variety of primary and secondary data sources are

utilized to develop vectors of commodity and labor input requirements on a per unit basis. Multiplying these vectors 

by projected annual activity levels developed from an E&D scenario generates estimates of the total input

requirements for each year in the forecast horizon.

The Sub-Arctic IMPAK model is contained in a Microsoft Excel platform and is driven by data from the E&D

report, as well as other data, which are manually input into the model. Since the activities listed in the E&D reports 

are not identical to those used in IMPAK, the model has to convert the E&D data into the corresponding IMPAK

activity levels.

The model inputs are then transposed into a matrix compatible with the regional input-output matrices. An Excel

array function is used to accomplish the task. The transposed input is then multiplied by each region's input-output 

matrix to yield the total direct impacts by region and IMPLAN sector. Again, an Excel array function is used to

accomplish the matrix multiplication. Note that each year in the forecast horizon requires a separate formula.

STUDY RESULTS: The final output is a matrix that provides total input requirements by IMPLAN sector

separately for each year and geographic area. This output then becomes the input for the Microsoft-Access model

developed by the MMS. The MMS model estimates the ripple effects in each corresponding, proximate onshore

area.

REPORTS: Jack Faucett Associates, Inc. 2003. Sub-Arctic Economic Impact Model for Petroleum Activities

in Alaska (Sub-Arctic IMPAK), Final Technical Report. Prepared for the U.S. Department of Interior, Minerals

Management Service, Alaska OCS Region, Anchorage, Alaska. Technical Report No. 165.

MODELS: SUB-ARCTIC IMPAK: An Economic Impact Model on CD-Rom
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DOI-MMS v Sub-Arctic IMPAK

TABLE OF CONTENTS

GLOSSARY ........................................................................................................................................................... VIII

1 INTRODUCTION ...............................................................................................................................................1

1.1 THE CURRENT MODELING PROCESS ....................................................................................................2

1.2 PURPOSE AND OBJECTIVE ......................................................................................................................2

1.3 STUDY AREAS............................................................................................................................................3

1.4 ORGANIZATION OF THE REPORT..........................................................................................................4

2 OVERVIEW OF OIL AND GAS ACTIVITIES...............................................................................................5

2.1 GEOLOGICAL SURVEY...........................................................................................................................10

2.2 SPILL CONTINGENCY RESPONSE.........................................................................................................11

2.3 CONSTRUCT EXPLORATION SHORE BASE ........................................................................................12

2.4 OPERATE EXPLORATION SHORE BASE..............................................................................................13

2.5 INSTALL EXPLORATION PLATFORM ..................................................................................................14

2.6 OPERATE EXPLORATION PLATFORM.................................................................................................15

2.7 DRILL EXPLORATION WELL.................................................................................................................16

2.8 CONSTRUCT PRODUCTION SHORE BASE ..........................................................................................17

2.9 OPERATE PRODUCTION SHORE BASE ................................................................................................19

2.10 INSTALL PRODUCTION PLATFORM ....................................................................................................20

2.11 OPERATE PRODUCTION PLATFORM...................................................................................................21

2.12 DRILL PRODUCTION WELL ...................................................................................................................22

2.13 LAY OFFSHORE PIPE...............................................................................................................................23

2.14 LAY ONSHORE PIPE.................................................................................................................................25

2.15 CONSTRUCT ONSHORE PRODUCTION FACILITY.............................................................................26

2.16 OPERATE PRODUCTION FACILITY......................................................................................................28

2.17 CONSTRUCT MARINE TERMINAL........................................................................................................29

2.18 OPERATE MARINE TERMINAL..............................................................................................................30

2.19 MAJOR PLATFORM MAINTENANCE....................................................................................................31

2.20 WELL WORKOVER ..................................................................................................................................32

2.21 HELICOPTER SUPPORT...........................................................................................................................33

2.22 BOAT SUPPORT (LARGE WORKBOATS)..............................................................................................34

2.23 SMALL WORK BOAT ...............................................................................................................................36

2.24 LANDING CRAFT......................................................................................................................................36

2.25 DIVE BOAT ................................................................................................................................................37

2.26 CAMP SUPPORT........................................................................................................................................37

3 LABOR INPUTS ...............................................................................................................................................39

3.1 OVERVIEW................................................................................................................................................39

3.2 ESTIMATES OF PRODUCTION EMPLOYMENT...................................................................................40

3.3 ESTIMATES OF NON-PRODUCTION EMPLOYMENT AND WAGES.................................................45

3.4 WORKERS BY PLACE OF RESIDENCE..................................................................................................47

3.5 ESTIMATES OF SPENDING BY GEOGRAPHIC REGION.....................................................................48

3.6 ESTIMATES OF TAXES, SAVINGS AND PERSONAL CONSUMPTION EXPENDITURES ..............49

3.7 FINAL ESTIMATES OF SPENDING BY AREA.......................................................................................50

3.8 OTHER EMPLOYEE RELATED COSTS..................................................................................................50

3.9 CONVERSION FACTORS.........................................................................................................................52

4 PURCHASED SERVICES................................................................................................................................54

4.1 NATIONAL INPUT/OUTPUT DATA........................................................................................................54

4.2 THE CALCULATION OF TOTAL PURCHASED SERVICES.................................................................59

4.3 INVESTMENT FINANCE CHARGES.......................................................................................................59

4.4 PURCHASED SERVICES BY GEOGRAPHIC AREA..............................................................................60

4.5 FINAL ESTIMATES OF PURCHASED SERVICES .................................................................................61
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5 CAPITAL AND MATERIAL INPUTS ...........................................................................................................70

5.1 CAPITAL INPUTS......................................................................................................................................70

5.2 MATERIAL INPUTS..................................................................................................................................73

6. GOVERNMENT VECTORS AND REAL ESTATE COSTS .......................................................................75

6.1 GOVERNMENT VECTORS ......................................................................................................................75

6.2 REAL ESTATE COSTS..............................................................................................................................75

7. DESCRIPTION OF THE MODEL..................................................................................................................77

7.1 INSTALLATION ........................................................................................................................................79

7.1 INSTALLATION ........................................................................................................................................80

7.2 USER INTERFACE ....................................................................................................................................80

7.2.1 Documentation Screen.........................................................................................................................80

7.2.2 Model Setup Screen..............................................................................................................................80

7.2.3 Parameters Screen...............................................................................................................................82

7.2.4 Data Entry Screen................................................................................................................................89

7.2.5 Output Screens.....................................................................................................................................90

7.2.6 Graphs .................................................................................................................................................92

7.3 MODEL PROCESSING ENGINE..............................................................................................................92

7.3.1 Conversion of Data Entry Input into IMPAK Activity Levels..............................................................92

7.3.2 Secondary Drivers Worksheet..............................................................................................................99

7.3.3 TransposeInput Worksheet.................................................................................................................100

7.3.4 Activity Cost Vectors..........................................................................................................................100

7.3.5 Generation of Model Output..............................................................................................................100
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DOI-MMS vii Sub-Arctic IMPAK

TABLE OF EXHIBITS

EXHIBIT 2-1 SUB-ARCTIC PLANNING AREAS................................................................................................6

EXHIBIT 2-2 ALASKA PLANNING AREAS .......................................................................................................6

EXHIBIT 2-3 HYPOTHETICAL OIL DEVELOPMENT INFRASTRUCTURE ..................................................7

EXHIBIT 2-4 PRIMARY AND SECONDARY ACTIVITIES – DRIVERS AND DEFAULT FACTORS ..........9

EXHIBIT 2-5 EMPLOYMENT COMPENSATION – INSTALL EXPLORATION PLATFORM I...................15

EXHIBIT 2-6 EMPLOYMENT COMPENSATION – INSTALL EXPLORATION PLATFORM II..................15

EXHIBIT 2-7 EMPLOYMENT COMPENSATION – OPERATE EXPLORATION PLATFORM ....................16

EXHIBIT 2-8 EMPLOYMENT COMPENSATION – DRILL PRODUCTION WELL.......................................16

EXHIBIT 2-9 EMPLOYMENT COMPENSATION – OPERATE PRODUCTION SHORE BASE ...................20

EXHIBIT 2-10 EMPLOYMENT COMPENSATION – INSTALL PRODUCTION PLATFORM I .....................21

EXHIBIT 2-11 EMPLOYMENT COMPENSATION – INSTALL PRODUCTION PLATFORM II....................21

EXHIBIT 2-12 EMPLOYMENT COMPENSATION – OPERATE PRODUCTION PLATFORM ......................22

EXHIBIT 2-13 EMPLOYMENT COMPENSATION – LAY OFFSHORE PIPE, ONSHORE..............................24

EXHIBIT 2-14 EMPLOYMENT COMPENSATION – LAY OFFSHORE PIPE, OFFSHORE............................25

EXHIBIT 2-15 EMPLOYMENT COMPENSATION – LAY ONSHORE PIPE....................................................26

EXHIBIT 2-16 EMPLOYMENT COMPENSATION – CONSTRUCT ONSHORE PRODUCTION FACILITY27

EXHIBIT 2-17 EMPLOYMENT COMPENSATION – OPERATE PRODUCTION FACILITY .........................29

EXHIBIT 2-18 EMPLOYMENT COMPENSATION – OPERATE MARINE TERMINAL.................................30

EXHIBIT 2-19 EMPLOYMENT COMPENSATION – MAJOR PLATFORM MAINTENANCE I.....................31

EXHIBIT 2-20 EMPLOYMENT COMPENSATION – MAJOR PLATFORM MAINTENANCE II....................32

EXHIBIT 3-1 NUMBERS PRODUCTION WORKER MANPOWER ESTIMATES BY ACTIVITY ...............41

EXHIBIT 3-2 CALCULATION OF NON-PRODUCTION EMPLOYMENT AND PAYROLL ........................46

EXHIBIT 3-3 NUMBERS AND WAGES OF NON-PRODUCTION WORKERS..............................................47

EXHIBIT 3-4 PERCENT OF PRODUCTION EMPLOYEES BY PLACE OF RESIDENCE.............................48

EXHIBIT 3-5 PERCENT OF SPENDING BY PLACE OF FULL-TIME RESIDENCE .....................................50

EXHIBIT 3-6A SPENDING BY ALL WORKERS BY AREA FOR COOK INLET PROJECTS..........................52

EXHIBIT 3-6B SPENDING BY ALL WORKERS BY AREA FOR REMOTE PROJECTS.................................52

EXHIBIT 3-6C SPENDING BY ALL WORKERS BY AREA FOR REMOTE PROJECTS NEAR A POP.........53

EXHIBIT 3-7 CALCULATION OF PRODUCTION WORKER LODGING EXPENSES..................................54

EXHIBIT 3-8 CONVERSION FACTORS FOR PRODUCTION WORKER MAN-HOURS..............................55

EXHIBIT 4-1 OIL AND GAS INDUSTRY INPUT DATA FROM THE 1992 BEA I-O TABLE ......................57

EXHIBIT 4-2 MISCELLANEOUS SECTOR INPUT DATA FROM THE 1992 BEA I-O TABLE ...................58

EXHIBIT 4-3 PERCENTAGE ESTIMATES OF PURCHASED SERVICES BY SECTOR AND AREA I.......61

EXHIBIT 4-4 PERCENTAGE ESTIMATES OF PURCHASED SERVICES BY SECTOR AND AREA II......61

EXHIBIT 4-5 ESTIMATES OF PURCHASED SERVICES BY SECTOR AND AREA ....................................63

EXHIBIT 6-1 ESTIMATES OF REAL ESTATE AND EASEMENT COSTS ....................................................78

EXHIBIT 7-1 IMPAK ACTIVITES AND THEIR RESPECTIVE UNITS...........................................................80

EXHIBIT 7-2 MODEL FLOWCHART.................................................................................................................81

EXHIBIT 7-3 E&D DATA ENTRY REQUIREMENTS AND THEIR RESPECTIVE UNITS...........................92
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DOI-MMS viii Sub-Arctic IMPAK

GLOSSARY

BP British Petroleum, Inc.

Cat Caterpillar, Inc. 

COTU Crude Oil Topping Unit

CPU Central Processing Unit

BEA Bureau of Economic Analysis

E&D Exploration and Development

GPS Global Positioning System

IBT Indirect Business Taxes

IFR Instrument Flight Rules

IMPAK Impact of Petroleum Activities in Alaska

I-O Input-Output

KW Kilowatt

KPB Kenai Peninsula Borough

Margin A cost category that splits the purchase price of a commodity into various cost

components. These categories include the production margin, transportation

margins (the cost of shipping a finished product from the factory gate to its

ultimate destination), wholesale trade margins, and retail trade margins. A

margin rate is a margin cost divided by the total purchase price of the

commodity.

MLLWL Mean Low Level Water Level

MMS Minerals Management Service

NIPA National Income and Product Accounts. A national accounting system

published by the U.S. Bureau of Economic Analysis.

NSB North Slope Borough

OCS Outer Continental Shelf

PCE Personal Consumption Expenditures. These numbers reflect household

purchases of commodities and services in an area and should be used to estimate 

the induced impacts in a region. The figures are derived from estimates of

disposable income (total income minus taxes and savings) and take into account 

differences between where income is earned and where it is spent.

PF Permanent Fund

Production Coefficient The cost of a production input divided by total industry output.
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DOI-MMS ix Sub-Arctic IMPAK

Production Manpower This term is used to identify personnel directly involved in oil exploration,

development and production activities. Management and overhead personnel

who are not directly involved in the activities are not included.

RPC Regional Purchase Coefficient. The percentage of demand accounted for by

local production or a particular geographic region.

RTK Real Time Kinematic

SIC Standard Industrial Classification 

SUV Sport Utility Vehicle

TAPS Trans-Alaska Pipeline System

TPI Total Personal Income. The amount of earnings paid to workers for labor

associated with E&D activities.

VP Vibration Point. A geographic location used seismic surveys. 

VSM Vertical Support Member. A supporting framework used to elevate pipelines

several feet above ground.
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DOI-MMS 1 Sub-Arctic IMPAK

1 INTRODUCTION

The Outer Continental Shelf Lands Act, as amended, established a policy for the management of 

oil and natural gas in the Outer Continental Shelf (OCS) and for protection of the marine and

coastal environments. The Act authorizes the conduct of studies in areas or regions to determine 

the “environmental impacts on the marine and coastal environments of the OCS and the coastal

areas which may be affected by oil and gas development.” The Minerals Management Service

(MMS) of the U.S. Department of the Interior (DOI) is the administrative agency responsible for 

leasing submerged Federal lands.

The National Environmental Policy Act (NEPA) of 1969 requires use of the natural and social

sciences in any planning and decision making that may have an effect on the human

environment. To this end the MMS prepares Environment Impact Statements (EIS) and

environmental assessments (EA); acquires marine environmental data; analyzes data, literature

surveys, socioeconomic studies, and special studies; and holds information transfer meetings and 

workshops. These undertakings often call for assessing the regional economic impacts of a lease 

or sales. 

In the past, an assortment of models and methods were used to estimate economic impacts, and

these typically varied by planning areas. As a result, comparisons MMS regions were often

difficult to make. Section 18 of the OCS Lands Act, however, requires that DOI prepare a 5-year 

schedule of lease sales that considers “an equitable sharing of developmental benefits and

environmental risks among the various regions.” For this reason, MMS decided to standardize

the approach used to estimate regional economic impacts and has settled on IMPLAN, an

economic input-output model, for that purpose. Using one model will help ensure consistency

among MMS regions. IMPLAN, originally developed by the U.S. Forest Service, is the most

widely used input-output model for estimating regional economic impacts. 

The existing models used to develop direct OCS and secondary employment projections for

Alaska sub-Arctic regions are either outdated and/or do not produce results comparable to other 

MMS regions such as the Gulf of Mexico. However, MMS’ need for a new sub-arctic model is 

imminent. The analysis for development of the OCS Oil and Gas Leasing Program for 2002-

2007, expected to take place in 2001, will require data on the possible impacts on coastal and

offshore areas resulting from E&D activities in the Arctic Sub-region of the Alaska OCS.

To facilitate EIS work for Alaska’s North Slope Borough (NSB), the authors of this report

recently revised a model that estimates industry employment and expenditures, by region, of

offshore oil exploration and development (E&D) activities in the Beaufort Sea. The new model

is known as the Arctic Impact Model for Petroleum in Alaska (Arctic IMPAK). Unlike the

previous version of the models used to estimate economic impacts, the new model produces a set 

of output that can be used to stimulate IMPLAN. The purpose of this project will be to develop a 

similar model, SUB-ARCTIC IMPAK, which estimates economic impacts for the Sub-arctic 

regions of Alaska. 
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DOI-MMS 2 Sub-Arctic IMPAK

1.1 THE CURRENT MODELING PROCESS

Analysis of lease sales in all areas begins with the Exploration and Development (E&D)

Scenarios. The first step model refers to any model that translates the E&D Scenario into direct

effects. Direct effects are defined as those resulting from the first round of spending by

companies working directly on an OCS project(s). The first-step model must estimate the level

of industry expenditure, and employment and how that spending/employment is allocated to 

onshore geographic areas. The MMS calls the spending allocation to industry a “cost function”

and these cost functions are used to customize the inputs for IMPLAN.

For Alaska, the original first-step model was called the Manpower model. It simply converted 

OCS activities levels (number of wells drilled, platforms installed, pipeline miles laid, etc.) into

estimates of direct employment using ratios such as employees per mile of pipelines laid. It was 

developed in the late 1970s and then refined in the early 1980s. However, the model is now

outdated and no formal documentation of the model exists. The main objective of this study is to 

update this model for the Sub-Arctic areas.

The second-step model is used to estimate the additional impacts that result as the initial

spending reverberates throughout the economy. These secondary impacts are often referred to as 

indirect and induced effects. Such models are often developed specifically for OCS or

customized to reflect the unique expenditure and commuting patterns of OCS-related companies 

and their employees.

For Alaska, the original second-step model that was used in conjunction with Manpower was the 

Rural Alaska Model (RAM), which was developed by the University of Alaska. Like

Manpower, RAM is a set of spreadsheets that uses simple multipliers to estimate results. A

drawback of this model is that it was only designed to estimate impacts at the local level and

does not allow for the estimation of impacts at the national level, which are required by the MMS 

for the “equitable sharing” analysis.

1.2 PURPOSE AND OBJECTIVE

The purpose of this study is to describe the development of SUB-ARCTIC IMPAK, a model to

replace the Manpower Model for E&D activities that take place in the Sub-Arctic OCS. Since 

the early 1980s, when the Manpower model was constructed, there have been significant

technological changes in offshore E&D activities. As such, activities specified in the Manpower 

model were examined and revised as required. The model described in this study was

specifically developed based on conditions and methods for E&D activities in the Cook

Inlet/Shelikof Strait. A secondary purpose was to develop a methodology that would allow the

model to estimate impacts in other Sub-Arctic planning areas, in particular the Gulf of Alaska. 

In developing the new model, the latest available data are used to develop employment and

expenditure factors for the revised E&D activities. With these updated factors, projections of

direct and indirect employment impacts in the Sub-Arctic region will be more accurate. With
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DOI-MMS 3 Sub-Arctic IMPAK

more accurate projections, stakeholders will have more confidence in the economic sections of

an EIS. More accurate projections may also be used in decisions regarding post-lease mitigation.

The new first-step model converts E&D inputs into direct employment and expenditure impacts 

for the local project area, the Kenai Peninsula Borough (KPB), Anchorage, and the other United 

States. Expenditure impacts are itemized by IMPLAN sector. MMS analysts can use the model 

to estimate the direct impacts of a project and then enter these impacts into IMPLAN to estimate 

the indirect and induced effects.

1.3 STUDY AREAS

The sub-arctic model is intended to be used to estimate the economic impact of E&D scenarios 

that take place within the sub-arctic planning areas. The model provides the user with a choice

of three study areas. These selections specify where the E&D scenario takes place in Sub-Arctic 

Alaska and the user must choose one. The three choices include (1) Cook Inlet, (2) semi-remote 

regions that are near population centers and (3) remote regions that are not close to a population 

center. Based upon the circumstances and location of the E&D scenario, the analyst will need to 

use his/her own judgment to determine which choice best applies to the scenario under

consideration. The choice determines which matrices, manpower vectors, PCE vectors and TPI

drivers are used in the model. It should be noted that only one type of scenario can be modeled 

at one time. It should be emphasized that the choices provided are not synonymous with MMS

planning areas.

The following descriptions of the three study areas describe the proper application of each area:

• Cook Inlet – The development of data for this model was based on current information

on the technologies and costs in the Cook Inlet where actual oil and gas development is

taking place. It is considered the base model. This model is best applied for an E&D

scenario which is taking place in close proximity to existing development. While at

present this may only consist of developments actually in the Cook Inlet, in future years it 

may apply to any development that takes place near a series of other developments.

• Semi-remote regions that are near population centers – The purpose of this study area 

is to simulate the conditions that would be found for an E&D scenario that takes place in 

an area where little or no E&D activity is currently taking place. However, for this model 

it is assumed that there is a nearby population center that can supply and house some

labor and provide some minimal materials, supplies and services. While this study area

selection can be used in simulating any E&D scenario, it was designed primarily based

on conditions in the Gulf of Alaska

• Remote regions that are not close to a population center - The purpose of this study

area is also to simulate the conditions that would be found for an E&D scenario that takes 

place in an area where little or no E&D activity is currently taking place. However, for

this model it is assumed that there are no nearby population centers that can provide

significant labor or other resources. While this study area selection can be used in
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DOI-MMS 4 Sub-Arctic IMPAK

simulating any E&D scenario, it was also designed primarily based on conditions in the

Gulf of Alaska

1.4 ORGANIZATION OF THE REPORT

The economic impact of a particular set of oil and gas activities on the Sub-arctic Alaska

depends on both the size of the project and the set of technologies chosen. In the second chapter 

of the report, an overview of oil and gas activities is provided, followed by a set of twenty-six

activities chosen to be included in the model. Brief description of construction and operation

practices most likely to be in use are provided, as appropriate, throughout the chapter. The

activities are defined mainly through review of activities in the Artic IMPACT model, where

applicable, the expert knowledge of project staff, and interviews with oil company personnel,

and owners and employees of various contractors involved in the construction and operation of

existing facilities. The information and data in Chapter Two provides a basis for (or are inputs)

to chapter Three, Four, and Five.

The third, fourth, and fifth chapters provide overviews of the methods used to develop the inputs 

to the 26 activities. In some sense, this study develops a production function for each activity,

where the production function is defined in terms of expenditures for various types of inputs. 

These inputs can be broadly grouped into the following categories: labor, purchased services,

capital and materials with the latter including raw, intermediate and energy material and inputs. 

Labor inputs are discussed in Chapter Three, purchased services in Chapter Four and capital and 

material inputs in Chapter Five.

Chapter Six provides an overview of the inputs and outputs of the Sub-Arctic IMPAK model.
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DOI-MMS 5 Sub-Arctic IMPAK

2 OVERVIEW OF OIL AND GAS ACTIVITIES

The development of offshore oil and gas involves a series of distinct economic activities. These 

activities are generally categorized into two phases, exploration and development/production

with multiple activities occurring under each phase. Specific activities include the following:

Exploration:

ß Seismic Surveys - Exploratory seismic surveys collect data used to interpret subsurface

geology. These surveys also occur during production.

ß Exploration Drilling - Exploration drilling, including the development of exploration

shore bases and exploration platforms, is conducted to confirm the presence of

recoverable resources, and to evaluate potential volumes. Several wells are typically

required to provide sufficient data to prepare a development/production plan.

Development/Production:

ß Development/Production Drilling - This set of activities typically involves the installation 

of several oil production wells and platforms. In addition, reservoir development may

require water or gas injection wells. Operation of production wells involves routine well 

and platform maintenance procedures. 

ß Oil and Gas Processing - Processing facilities may be located at the production site if

sufficient space is available, or they may be located at a distant site. Sometimes produced 

fluids are only partially separated into oil, gas, and produced water components prior to

transport to offsite processing facilities.

ß Transportation of Produced Fluids - Produced fluids may be transported from offshore

sites by pipeline, marine tankers, or barges during open water, and pipelines or trucks

during winter. Pipelines, railroad, and trucks may be used year-round at onshore

locations. In the Alaskan OCS, pipelines are presently the most widely used method of

moving fluids in both offshore and onshore areas.

Planning Areas

There are twelve planning areas that are included in the Sub-Arctic area analyzed in this report. 

However, as discussed in section 1.3, above, the study areas used in the model do not necessarily 

correspond with planning area boundaries. These areas are listed in Exhibit 2-1. All of Alaska’s 

planning areas are illustrated in Exhibit 2-2. Exhibit 2-1 also provides information on likely

marine and air base locations. Exhibit 2-3 provides an illustration of hypothetical oil

development infrastructure and transportation routes used in the 1995 national resource

assessment conducted by MMS.
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Exhibit 2-1: Sub-Arctic Planning Areas

Planning Area Assumed Marine & Air Base

Cook Inlet/Shelikof Strait Anchorage/Kenai

Navarin Basin St. Paul Island

St. George Basin St. Paul Island

Norton Basin Nome

St. Mathew-Hall Nome

Gulf of Alaska Yakutat

Shumagin Basin City of Kodiak

Kodiak Basin City of Kodiak

Aleutian Basin Adak Island

Bowers Basin Adak Island

Aleutian Arc Basin Adak Island

North Aleutian Basin Moratorium on leasing until 2012

Exhibit 2-2: Alaskan Planning Areas
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Exhibit 2-3: Hypothetical Oil Development Infrastructure Used in the 1995 National

Resource Assessment
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Overview of Cook Inlet and Gulf of Alaska

There are two main planning areas that are of primary importance for this study. However, as

discussed in section 1.3, above, the study areas used in the model do not necessarily correspond

with planning area boundaries. The two planning areas are the Cook Inlet/Shelikof Strait and the 

Gulf of Alaska. Conditions vary greatly between the two.

The Cook Inlet has some of the highest tides in the world. These tides tend to move ice rapidly

up and down the inlet in the winter and stir silt year-round, making visibility almost zero for

divers. The winter ice is never stable or stationary. Consequently, ice roads, surveys on ice or

any ice related activities are not applicable for this model. The Shelikof Strait, Price William

Sound and the Inland Passage of Southeastern Alaska are similar to the Cook Inlet area.

The Gulf of Alaska is fairly ice free, except for occasional icebergs. Wind, high seas, and

varying water depths, however, create conditions similar to the North Sea. Existing shore-based 

communities, road, and railroad accesses are few and far between along the Gulf. For the most

part, rugged shoreline and mountains border the Gulf. According to engineering staff, the

remote nature of this location will increase transportation costs by approximately 50 percent.

Oil and gas production in the Cook Inlet has been ongoing for over thirty years and is in the

process of expanding outward into the Shelikof Strait. The tasks used in this model are based on 

actual data for the Cook Inlet and were adapted for the Gulf and other areas by using multiples of 

units such as feet, miles, barrels per day, remote area multipliers etc.

Road and marine highway systems offer direct transportation of supplies to the Kenai based

warehousing facilities. Anchorage us not as important as a hub, like it is for North Slope based

operations, even though it is much closer geographically.

The Cook Inlet oil and gas is processed and sold in five ways:

1) Oil is processed at the Tesoro refinery and transported via the Tesoro pipeline to Anchorage 

to supply the International Airport, military bases, and domestic gasoline and heating oil

outlets. Some supplemental crude oil is shipped in from the Valdez terminal.

2) Natural gas is processed on the platforms and transported via the Enstar gas line to service

the Anchorage and surrounding areas with natural gas.

3) The Marathon Kenai gas facility services the peninsula communities with natural gas.

4) Philips Petroleum has a liquefaction plant in North Kenai and ships liquid natural gas to

Japan and other Pacific Rim countries.

5) Unichem (recently sold to Agrium) processes natural gas into fertilizer to be used all over the 

world.
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Offshore helicopters and boats service platforms. Survey crews, specialty crews and onshore

support personal are housed in hotels in the Kenai area. Most hotels have crew rates and make

boxed lunches for the noon meal.

The Kenai Peninsula Borough Oil and Gas Industry

During 1980 there were 1,233 employees in the Kenai oil and gas extraction and production

industry with about one quarter of them in petroleum product manufacturing. This was 16

percent of the Kenai Peninsula Borough (KPB) total employment. In 1999, there were 1,454

positions accounting for 8.9 percent of the total employment accounting for 12.9 percent of the

total KPB payroll. Development of other industries caused the decline in the percentages. 

Industry property taxes account for less than one percent of KPB totals. In 1999, the average

monthly wages for oil and gas workers was $6,040 compared to $2,544 in other KPB jobs. The

oil and gas industry average monthly wage remained stable from 1993 to 1998, at around $5,000, 

and then increased to around $6,000 in 1999. Although the 1999 information is preliminary, it

might indicate that wage data collected for older projects may have slightly lower wage rates

than newer projects. This data was reported by the KPB Economic Analyst and the Executive

Director of the Kenai Peninsula Economic Development District, Inc. 

Brief descriptions of the activities that are considered to be part of the typical exploration and

development process in the Sub-Arctic area are presented in the following subsections. Out of

twenty-six activities, twenty-three of them are primary activities. The other six activities are

secondary support activities. These activities, the unit of measure (e.g. miles of pipeline, barrels 

of oil) in which they are expressed, and the interrelationship between primary and secondary

activities are shown in Exhibit 2-4.

Exhibit 2-4: Primary and Secondary Activities - Drivers and Default Factors

Secondary Activities

Primary Activities

21. 

Helicopter 

Support

22. 

Large 

Workboat

23. 

Small 

Workboat

24. 

Landing 

Craft

25. 

Dive 

Boat

26. 

Camp 

Support

Units Per Hour Per Hour Per Hour Per Hour Per Hour Per Year

1. Geological Survey Per Month X X X

2. Spill Contingency Response Per Year X X X

3. Construct Exploration Shore Base Per Shore Base X

4. Operate Exploration Shore Base Per Year X

5. Install Exploration Platform Per Platform X X X

6. Operate Exploration Platform Per Year X X X

7. Drill Exploration Well Per Well X X

8. Construct Production Shore Base Per Shore Base X

9. Operate Production Shore Base Per Year X

10. Install Production Platform Per Platform X X X

11. Operate Production Platform Per Year X X X

12. Drill Production Well Per Well X X

13. Lay Offshore Pipeline Per Mile X X X X

14. Lay Onshore Pipeline Per Mile X

15. Construct Onshore Production Facility Per Facility X

16. Operate Production Facility Per Year X X X

17. Construct Marine Terminal Per Facility X X

18. Operate Marine Terminal Per Year X X X

19. Major Platform Maintenance Per Platform X

20. Well Workover Per Well Workover X X

27. Abandonment Per Platform X X X
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2.1 GEOLOGICAL SURVEY

 

This task was developed primarily from an interview with a construction manager for VECO, at 

Kenai. VECO is one of the major support contractors in this state and is very active in the Cook 

Inlet area. Unlike the arctic surveys, Cook Inlet offshore surveys are conducted from boats.

The crews are much smaller than in the Arctic due to size constraints on the boat. Hence, a

longer time is needed to survey an area. Tides are a major factor in the Cook Inlet surveys. 

Twenty hours of daylight and a short summer season requires work to continue around the clock. 

Part of the survey crew will remain onboard for the duration of a survey and the labor portion of

the crew will be shuttled back and forth to shore in twelve-hour shifts. The boat crews also

remain onboard.

Equipment

All of the survey equipment is loaded on the survey boat at the Offshore Systems-Kenai (OSK) 

dock before it leaves for the site. Total cost of the equipment used by surveyors for location on

water, including RTK (Real Time Kinematics) and GPS (Global Positioning Satellite), is

$300,000.

The seismic equipment includes one CPU data collection unit in a skid mounted doghouse, five

sets of 15,000 feet seismic recording lines, and one ultra-sound generator to be located on the

dive boat. The seismic equipment is purchased from a Louisiana or Texas based company as a

complete unit including anchors, reels and associated hardware. The cost is $2,000 a channel or 

about $5 million per setup. As technology advances, the equipment will be replaced every ten

years.

The survey will use two of the boats described in the sections describing the ocean marine

services. The smaller work boat will be staffed and used as described. It will lease for $10,000 

per day due to a 24-hour workday. A dive boat will also be leased at $4,000 per day.

The five seismic recording lines (jug lines) are reeled off the work boat by the workers known as 

jug hounds, with the surveyors guiding the captain. The lines are laid about a quarter mile apart, 

then attached to the CPU doghouse on the now anchored workboat. The dive boat has the ultra

sound unit and operator aboard. The dive boat guided by the surveyor travels up and down the

Inlet over the lines operating the ultra-sound generator at vibration points (VPs). The data is

received and recorded by the CPU and operator in the doghouse. The lines are then reeled up

and reset until the entire site has been surveyed.

Personnel

The survey crew is composed of one oil company representative, two surveyors, two CPU 

operators/foreman, eight jug hounds, two divers, and two ultra-sound operators. The

representative is paid $80,000 to $120,000 annually. The two surveyors are paid $400 per day

and provide 24-hour coverage as needed. Each of the CPU operators, jug hounds, and ultra-
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sound operators has a 12-hour shift, and has an hourly wage of $18, $16, and $18 respectively. 

The two divers stay on the dive boat and are used as necessary. They are paid $600 per day on

average.

The offshore personnel are shuttled to shore-based facilities described in section 2.26. 

Approximately 25 percent of them are local hire in the KPB and can drive their own vehicles to 

their residences when their shift is over.

2.2 SPILL CONTINGENCY RESPONSE

This task was developed primarily from an interview with a materials specialist in the Kenai area 

for 20 years. This example is based on the ARCO facility that housed the ARCO spill

contingency equipment. The production shore base crew was trained to assist the permanent

spill contingency employees. Oil company employees are also trained and used to assist in case

of the oil spill. Established production areas with multiple oil companies involved will

contribute to a fund for one central spill team that covers the whole area. The Cook Inlet area

spill response company is called the Cook Inlet Spill Prevention & Response, Inc. (CISPRI). 

CISPRI is a non-profit corporation formed in 1990 to provide oil spill prevention and response

capabilities in Cook Inlet.

Equipment

Special equipment used for spill management consist of two 28 foot aluminum boats, one 18 foot 

inflatable boat and motor, three skimmers, one oil water separator, and several conex and chassis 

containers full of booms, recovery supplies, and other equipment. 

The cost of the equipment used is as follows. The two aluminum boats cost $85,000 each, while 

the inflatable boat costs $16,000. The three Shawnacy skimmers cost $20,000 each. The

portable oil water separator costs $150,000. Each forty-foot conex, which are storage trailers

often found at construction sites, costs $20,000. Three of them will be filled with various length 

plastic booms and eight anchor systems costing $40,000 per conex. The other will be full of

recovery supplies such as oily waste bags, absorbent rolls, booms and pads, visqueen and 55

gallon barrels, also costing $40,000. In addition, the twenty-foot conex will have a 7Kw

generator, wildlife capture and stabilization equipment, also costing $40,000 total.

The rolling stock used in operating the production shore base (Section 2.3) will also contribute

about ten percent to spill response. Those equipment include one 966 Caterpillar loader, one

propane fueled inside forklift, one five-ton flatbed delivery truck, and two pickup trucks.

Personnel

All shore-based personnel work a standard 40-hour week, with 24 hour, seven day a week, oncall coverage, including one spill response coordinator at $40,000 to $65,000 annually and one

maintenance technician at $18 to $20 per hour. In addition, shore based operations support
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personnel are also trained and used for spill response. About seven percent of their time is

dedicated to this task. 

2.3 CONSTRUCT EXPLORATION SHORE BASE

This task was developed primarily from interviews with the Kenai-Soldotna area material

specialist, a local contractor, and a structural engineer. This example is based on the ARCO

facility. There are about five other similar facilities servicing the Cook Inlet area during peak

exploration periods.

A typical exploration shore base requires about 3,000 square feet of warehouse under roof with

an office and 5 acres of outside storage.

Land

In the ARCO example, ten acres of raw land was purchased for $7,500 per acre for a total of

$75,000. The well was contracted locally for $5,200. The commercial septic system was

contracted locally for $4,800.

Warehouse Pad

The total installation cost of the pad was $165,785. The cost of the complete task included the

following subtasks. A D8 Caterpillar dozer with operator was employed to clear the pad of

stumps and topsoil at $120 per hour for forty hours. The stumps and topsoil were pushed to a

low area on the property. The trees were removed for the wood. Three operators with two dump 

trucks and one 966 loader were employed to place 16,178 cubic yard of gravel at $10 per cubic

yard.

Concrete

The total cost of the concrete work was $12,500. The task required two finishers and two

laborers working ten-hour days for six days to pour the concrete. Their labor, equipment, trucks, 

and the delivered concrete was contracted on a per cubic yard basis. The foundation was

contracted at $150 per cubic yard for $7,500. The 60-foot by 50 foot by five-inch slab was

contracted at $100 per cubic yard for a total of $5,000.

Prefabricated Metal Building

The total construction cost of this building was $396,286. This facility will be used, in part, as

an operations shore base. The building was contracted as a basic shell to be erected in place. 

Local contractors added doors, windows, insulation and interior carpentry.

The cost of each of the components of the building was as follows. The basic prefabricated

metal building was erected at $10 per square feet for a total of $30,000. The door window and

insulation package was installed at $6 per square feet for a total of $18,000. The mechanical, the 
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carpentry, and the painting were contracted locally at $15,389, $15,390, and $2,600 respectively. 

The electrical installation cost $24,622 in total, which required two journeymen and two

apprentices who worked 80 hours at $38.85 and $29.14 per hour, respectively for a total of

$10,878.40. Electrical materials were purchased locally for $13,744.

Equipment

Equipment used for this activity will include an office with a $20,000 computer system, about

$100,000 worth of pipe racks, pallet racks, and shelving, and approximately $10,000 worth of

office supplies and furniture.

Additional equipment used for this activity include a portable banding station purchased for

$1,000, one pallet jack purchased for $600, and 75 pallets at $25 each.

Rolling Stock

The 966 Caterpillar loader with forks and bucket cost $260,000 base plus $5,000 Alaska

upgrade. The propane fueled inside forklift was leased from NC Cat for $800 a month. A fiveton flatbed delivery truck and two pickup trucks were purchased from a local fleet dealer for

$35,000 and $25,000 each, respectively. One of the pickup trucks was equipped with a $3,000

snowplow.

Personnel

The constitution and setup of the exploration shore base is mainly contracted out to local

builders. As a result, no labor was originally specified. However, engineering staff for this

study indicated that some staff would be required for planning, construction, supervision and

setup. Therefore, it has assumed that operating personnel would be hired one year before

operations began to perform these functions and their cost for that year were added to this task. 

These personnel are described in the following section.

2.4 OPERATE EXPLORATION SHORE BASE

The sources of information for this activity were similar to the previous construction activity. 

They include a Kenai-Soldotna area material specialist, a local contractor, and a structural

engineer.

Supplies

Annual supplies for this activity will include $5,000 worth of computer equipment replacement, 

$10,000 of replacement or additional racks and shelving, $5,000 of replacement office supplies,

and five to ten pallets every month. In addition, each pallet jack will require $60 in maintenance 

per year.
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Utilities

Utility costs for the structure will include $75 per month for heating, $250 for interior lighting, 

$400 for exterior lighting and $100 for fuel to operate the water and garbage systems. Fuel will 

cost $1.50 per gallon for the fuel plus 10 cents per gallon for delivery.

Local Transport

One or two contracted trucks and drivers will be required to haul materials from their source to

the warehouse. The source may be the Marine Highway or local manufacturers. These trucks

may also be used to haul large loads to the service boat dock. These trucks are generally owner 

operated and are hired for around $75 per hour for both the truck and driver.

Personnel

All shore-based personnel work a standard 40-hour week, with on-call coverage on weekends.

The staff will be composed of one materials manager or supervisor salaried at $70,000 to

$80,000 annually, two materials specialist or coordinator salaried at $40,000 to $65,000

annually, two warehousemen at $18 to $20 per hour, and one expediter at $15 to $18 per hour.

Employees of the company that is performing the exploration drilling often staff the exploration

shore bases. These employees will likely move from one exploration project to the next along

with the other drilling company employees.

2.5 INSTALL EXPLORATION PLATFORM

This task was developed primarily from an interview with a project manager for Udelhoven

Oilfield Services. This example is based on the Osprey platform used on the Redoubt Shoals

area of the Cook Inlet. The Osprey was built in Hyundai Korea and delivered to the site for a

total of $35 million. The Osprey is a very small 100 by 100-foot platform. Aboard the platform 

are a 52-man camp, a water maker, two generators, and a sewerage disposal plant. 

Osprey Installation

The Osprey that was modeled for this task was towed in place and held with anchors while the

legs were lowered to the sea floor. The platform installation required 33 workers working thirtyfive days for 12 hours each day. The composition of the installation labor is provided in Exhibit 

2-5. Platform-based personnel work 12 hour days, seven days a week for two weeks and then

take two weeks off. As a result, half of them will be on the platform at a time.
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Exhibit 2-5 Employment Compensation - Install Exploration Platform, Osprey Installation

Title Hourly Wage Total for Each Number

Welding Foreman $37.50 $18,375 2

Welders $34.20 $16,758 4

Fitters $32.50 $15,145 4

Helpers $22.00 $10,780 6

Electricians $38.86 $19,041 2

Apprentices $32.50 $15,145 2

Mechanical $34.20 $16,758 2

Carpenters $34.20 $16,758 2

General Labor $22.00 $10,780 6

Cook $22.00 $10,780 1

Bull Cook $18.00 $8,820 2

Drilling Support Personnel for Osprey Platform

Before drilling actually begins, for about 30 days, drilling support personnel are used to install

the drilling equipment. The costs for the actual drilling are shown on related activities for

exploration well and production well drilling. Labor costs, for the drilling support crew time for 

equipment installation on the Osprey platform, are shown in Exhibit 2-6. Costs shown are for

one month.

Exhibit 2-6 Employment Compensation - Install Exploration Platform, Osprey Drilling Support

Title Hourly Wage Total for Each Number

Support foreman $37.50 $7,350 2

Welder $34.20 $6,703 2

Fitters $32.50 $6,370 4

Maintenance man $32.50 $6,370 2

SDS and systems operator $32.50 $6,370 2

Laborers $22.00 $4,312 6

2.6 OPERATE EXPLORATION PLATFORM

Information on the costs for operating a production platform was developed primarily from an

interview with the Alaska Planning Manager for Forest Oil Corporation. Forrest Oil is drilling

the Redoubt Shoals development in the lower Cook Inlet and operates the Osprey platform

described in Section 2.5.

Data were actually collected for operating a shallow-water production platform. For the

purposes of this study, a shallow-water platform is defined as a platform operating in water

depths of up to 150 feet. However, according to the information sources, the Osprey is used for 

a production platform as well as an exploratory platform and OCS deep-water production

platforms double the operating costs and required personnel of the Osprey.

Personnel

Employees are permanent and the operating crews work 12-hour days, two weeks on and two

weeks off, so one-half of them will be on the platform at one time. There is only one shift,
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however, skeleton crew of two operators (one onshore), a cook and a maintenance technician

work the night shift. The composition and compensation rates for operating an exploration 

platform are provided in Exhibit 2-7.

Exhibit 2-7 Employment Compensation - Operate Exploration Platform

Title Hourly Wage Annual Wage Number

Production Superintendents $87,000 2

Operators (6 on shore) $37.50 10

Logistic personnel $32.20 4

Maintenance technicians $34.50 4

General Labor $22.00 4

Cook $22.00 2

Bull Cook $18.00 2

Operating Costs

The cost to provide food, laundry, water, and sewer facilities is estimated to be $37 a day per

person. Helicopter and boat support costs are transferred out and handled as separate activities.

They are discussed in Sections 2.21 through 2.25.

2.7 DRILL EXPLORATION WELL

This task was also developed primarily from an interview the Alaska Planning Manager for

Forest Oil Corporation.

Personnel

Drilling employees are permanent are in addition to the platform operating staff (section 2.6) and 

the drilling support crew (section 2.5). The crews work two12-hour shifts per day with two

weeks on and two weeks off. Therefore, half of them will be on the platform at one time and

eight will be working each 12-hour shift. Details of personnel including their titles, wage rates

and numbers are provided in Exhibit 2-8.

Exhibit 2-8 Employment Compensation - Drill Production Well

Title Hourly Wage Annual Wage Number

Drilling Pushers (Supervisors)$37.50 $87,000 2

Drillers $32.20 4

Floor hands $32.50 16

Motormen $32.50 4

Mudmen $32.50 4

Electricians $34.50 2

There will also be technical support people on call 24 hours a day. Most of the time they can

analyze problems over the phone or on-line and have the platform or drilling personnel make

repairs. Sometimes they must be flown out to make repairs. Technical support costs can be

expected to average about $1,200 a month.
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Operating Costs

The cost to provide food, laundry, water, and sewer facilities is estimated to be $37 a day per

person. Helicopter and boat support costs are transferred out and handled as separate activities. 

They are discussed in Sections 2.21 through 2.25.

Each exploration well costs approximately $10 million to drill and test. At minimum, four to

five exploration wells are drilled per location. For example, ten exploration wells were drilled at 

Redoubt Shoals. The wells are usually abandoned in place and all exploration costs are lost. Of 

the $10 million in total costs, $1.5 million will be platform-related expenses. Another $800,000 

of the well cost are durable costs, or permanent to the well, like casing, production tubing, valves 

and blowout prevention equipment. In addition, $400,000 will generally be required for

nondurable costs, including drilling mud, chemicals and consumables. The remaining costs are

for labor and testing, with about half of them being direct to the well drilling and about the other 

half being indirect, to order, handle, and transport materials to the drilling location and process

test results.

2.8 CONSTRUCT PRODUCTION SHORE BASE

This task was developed primarily from interviews with the Kenai area material specialist, a

local contractor, and a structural engineer. This example is based on the ARCO facility,

however, there are other similar facilities servicing the Cook Inlet area.

The production shore base is modeled as an expansion of the exploration shore base (see Section 

2.3). About 75 percent of the exploration shore bases assets are used as part of the production

shore base. This conversion is part of natural process of maturation of an oil and gas

development as the exploration phase slows and the production phase begins. To expand the

shore base for the production phase an additional 2.5 acres pad will be required along with an

additional 7,200 square feet of warehouse and office space. The total construction cost of this

addition at the ARCO facility was $387,552. Including 75 percent of the contracted construction 

cost of the exploration shore base, at $276,965, the total cost of the production shore base would 

have been $655,517.

Warehouse Pad

As discussed above, the existing five-acre pad was expanded by 2.5 acres. The total installed

cost of the pad extension was $82,893. One operator with D8 Caterpillar bulldozer spent twenty 

hours to clear the pad of stumps and topsoil at $120 per hour for a total of $2,000. The stumps

and topsoil were pushed to a low area on the property. The trees were removed previously for 

the wood. Three operators with two dump trucks and one 966 loader placed 8,089 cubic yards of 

gravel at $10 per cubic yard.
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Concrete

Four finishers and four laborers worked ten-hours a day for seven days to pour the concrete. 

Their labor, equipment, trucks, and the delivered concrete was contracted on a per cubic yard

basis. The total cost of the concrete work was $29,900. The foundation cost $150 per cubic yard 

for a total of $16,500 and the slab cost $100 per cubic yard for a total of $13,400.

Prefabricated Metal Building

The basic prefabricated metal building was erected at $10 per square feet for a total of $72,000. 

The door and window and insulation package was installed for $6 per square feet for $43,200

total. Roughly 50 percent of this cost was for the insulation and the remainder for the doors and

windows. The total installed cost for the electrical systems was $56,116. This included the labor 

of four journeymen and four apprentices working for eighty hours at $38.85 and $29.14 per hour, 

respectively. In addition, locally purchased electrical supplies and materials totaled $34,360.

The mechanical, the carpentry, and the painting were contracted locally at $38,473, $46,170, and 

$7,800, respectively. The mechanical costs included installation.

Paving

A total of 4,000 square feet of paving was installed for entrance roads, storage and parking. The 

paving was two inches thick with two inches of D1, which is a base course consisting of gravel

of less than one inch diameter. The paving was contracted locally at $1.20 per square feet for a 

total of $4,800.

Landscaping

A local contractor planted lawn, flowerbeds, and trees in planters between the highway and

office entrance for a total of $6,200.

Equipment

Equipment used for this activity will include a $50,000 upgrade to the office computer system,

an additional $100,000 worth of pipe racks, pallet racks, and shelving, and approximately

$100,000 worth of additional office supplies and furniture installed.

Additional equipment used for this activity include two portable banding stations at a cost of

$1,000 each, two pallet jacks at $600 each, and 100 pallets at $25 each.

Rolling Stock

Five additional pieces of rolling stock were added along with the production phase of the shore

base. A 966 Caterpillar loader with forks and bucket cost $260,000 for the base vehicle plus

$5,000 for Alaska upgrades. A propane-fueled inside forklift was leased from NC Cat for $800 a 

month. A five-ton flatbed delivery truck and two pickup trucks were purchased from a local
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fleet dealer for $35,000 and $25,000 each, respectively. One of the pickup trucks was equipped

with a $3,000 snowplow.

Personnel

The constitution and setup of the production shore base is mainly contracted out to local builders. 

As a result, no labor was originally specified. However, engineering staff for this study indicated 

that some staff would be required for planning, construction, supervision and setup. Therefore, it 

has assumed that operating personnel would be hired one year before operations began to

perform these functions and their cost for that year were added to this task. These personnel are 

described in the following section.

2.9 OPERATE PRODUCTION SHORE BASE

This task was developed primarily from an interview with a materials specialist with 20 years

experience in the Kenai area. This example once again is based on the ARCO facility. There are 

several other similar facilities servicing the Cook Inlet area.

As described in section 2.8, this production shore base was built on the same property as the

exploration shore base and utilized 75 percent of the existing 3,000 square feet of warehouse,

with an office, and the 5 acres of outside storage. Addition required to upgrade the facility to 

compete the production shore base included an additional 2.5 acres of pad and 7,000 square feet 

of building. Nine offices and a conference room were sheltered in the building addition. 

$100,000 worth of pipe racks, pallet racks, and shelving was added. $100,000 worth of office 

supplies and furniture was installed. A $50,000 computer system upgrade was also required.

This shore base also housed the spill contingency equipment and the facility crew that were

trained to assist the spill crew during spill response. An estimate10 percent of the rolling stock

capitalization and 7 percent of personnel time of this task will be dedicated to the spill

contingency task.

Supplies

Annual supplies for this activity will include $12,500 worth of computer equipment replacement, 

$10,000 of replacement or additional racks and shelving, $10,000 of replacement office supplies, 

and ten to 15 additional pallets every month. In addition, each pallet jack will require $60 in

maintenance per year.

Utilities

Utility costs for the structure will include $150 per month for heating, $475 for interior lighting, 

$400 for exterior lighting and $200 for fuel to operate the water and garbage systems. Fuel will 

cost $1.50 per gallon for the fuel plus 10 cents per gallon for delivery.
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Local Transport

One or two contracted trucks and drivers will be required to haul materials from their source to

the warehouse. The source may be the Marine Highway or local manufacturers. These trucks

may also be used to haul large loads to the service boat dock. These trucks are generally owner 

operated and are hired for around $75 per hour for both the truck and driver.

Personnel

All shore-based personnel work a standard 40-hour week. One specialist and one expediter will

rotate days that are off to provide coverage on weekends. The composition of labor for this task 

is provided in Exhibit 2-9.

Exhibit 2-9 Employment Compensation - Operate Production Shore Base

Title Hourly Wage Annual Wage Number

Production/Operations Manager 80-120K 1

Engineers 70-100K 2

Safety engineer 60-90K 1

Materials Manager/Supervisor 70-80K 1

Materials Specialist/Coordinator 40-65K 1

Warehousemen 18-20 2

Expediter 15-18 1

Secretary 14-17 1

Receptionist 37K 1

2.10 INSTALL PRODUCTION PLATFORM

This task was also developed primarily from an interview the Alaska Planning Manager for

Forest Oil Corporation.

OCS deep-water production platforms double the construction and installation costs of the

shallow-water Osprey ($35 million) for a total of approximately $70 million. Project

engineering staff estimates that over the next decade approximately 80 percent of the platforms

used in the Alaskan OCS will be U.S. made while 20 percent will be foreign made.

Each production platform supports about 28 wells. Two caissons can be added for $10 million

each to bring the total up to approximately 45 wells. Production wells are drilled one for every

80-acre tract, with one injection well drilled for every four production wells that are drilled. 

Enhanced recovery may require a higher ratio of production to injection wells later in a field’s

life.

Personnel

Installing (or commissioning) a platform requires 66 workers for up to one year. They work 12-

hour days, two weeks on and two weeks off, so one-half of them will be on the platform at one

time. The numbers, titles and wages of the staff used to install a production platform are

provided in Exhibit 2-10.
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Exhibit 2-10 Employment Compensation - Install Production Platform

Title Hourly Wage Annual Wage Number

Welding Foreman $37.50 4

Welders $34.20 8

Fitters $32.50 8

Helpers $22.00 12

Electricians $38.86 4

Apprentices $32.50 4

Mechanical $34.20 4

Carpenters $34.20 4

General Labor $22.00 12

Cook $22.00 2

Bull Cook $18.00 4

Drilling Support Personnel

Before drilling actually begins, for about 60 days, drilling support personnel are used to install

the drilling equipment. The costs for the actual drilling are shown on the related activity for

production well drilling. Labor costs, for the drilling support crew time for equipment

installation, are shown in Exhibit 2-11. Costs shown are for two months.

Exhibit 2-11 Employment Compensation - Install Production Platform, Drilling Support

Title Hourly Wage Total for Each Number

Support foreman $37.50 $14,700 2

Welder $34.20 $13,406 2

Fitters $32.50 $12,740 4

Maintenance man $32.50 $12,740 2

SDS and systems operator $32.50 $12,740 2

Laborers $22.00 $8,624 6

2.11 OPERATE PRODUCTION PLATFORM

This task was developed primarily from an interview with the Alaska Planning Manager for

Forrest Oil Corporation. Data were collected for an actual operating shallow-water production

platform. However, according to the information sources, OCS deep-water production platforms 

double the operating costs and required personnel. The actual production vector is constructed

based on data for a shallow water platform and the model doubles the costs for deep-water 

platforms. 

Personnel

Employees are permanent and operating crews work 12-hour days, two weeks on and two weeks 

off, so one-half of them will be on the platform at one time. There is only one shift, however,

skeleton crew of four operators (two onshore), two cooks and two maintenance technicians work 

the night shift. The composition of the production platform operating crew is provided in

Exhibit 2-12.
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Exhibit 2-12 Employment Compensation - Operate Production Platform

Title Hourly Wage Annual Wage Number

Production Superintendents $87,000 2

Operators (6 on shore) $37.50 10

Logistic personnel $32.20 4

Maintenance technicians $34.50 4

General Labor $22.00 4

Cook $22.00 2

Bull Cook $18.00 2

Operating Costs

The cost to provide food, laundry, water, and sewer facilities is estimated to be $37 a day per

person. Helicopter and boat support costs are transferred out and handled as separate activities. 

They are discussed in Sections 2.21 through 2.25.

2.12 DRILL PRODUCTION WELL

This task was also developed primarily from an interview with the Alaska Planning Manager for 

Forest Oil Corporation. Each production well costs $4 million according to oil company

accounting methods, which allocate platform plus other development costs to the well. Of the $4 

million, approximately $1.5 million will be platform-related expenses.

Of the true well costs, approximately $800,000 of the well cost is durable, or permanent to the

well, like casing, production tubing, valves and blowout prevention equipment. Another

$400,000 is for nondurables, like drilling mud, chemicals and consumables. The remaining cost 

(about $1.3 million) is labor, with about half being direct to the well drilling and about half being 

indirect. Indirect labor is employed to order, handle, and transport materials to the drilling

location. These indirect labor costs are covered as separate activities in this model and include

the production shore base construction and operations activities and the helicopter and boat

activities. 

The length of time required to drill a production well will vary considerably based on the

circumstances. However, drilling a well every 30 to 45 days is common and the midpoint of this 

range was used in the IMPAK model.

During oil production, lifting costs including the $4 million for drilling costs spread out over a

five to seven year period, are assigned by the oil company to each barrel produced. This

accounting is necessary to establish the cot of production versus the profit. The total cost for

current Cook Inlet production is allocated at $1.57 per barrel, while gas production costs are

allocated at $1.62 per 5,000 cubic feet.

Personnel

Personnel for this task are identical to those required for drilling an exploration well. For a full

description of the composition of the drilling crew see Section 2.7.
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Drilling Costs

The costs discussed above for durable items ($800,000 for casing, production tubing, valves and 

blowout prevention equipment) and nondurable items ($400,000 for drilling mud, chemicals and 

consumables) are included in this activity.

2.13 LAY OFFSHORE PIPE

This task was developed primarily from an interview with the Alaska Planning Manager for

Forest Oil Corporation. Forrest Oil is drilling the Redoubt Shoals development in the lower

Cook Inlet and operates the Osprey platform. The information for this task is based on offshore

pipeline construction for that project. 

The pipelines to the Osprey will be assembled on shore and pulled with tugs to the platform. 

OCS deep-water production platforms will require a lay-barge, as the pipe can not be pulled. 

The cost per unit will be about the same for either method. However, the lay-barge and crews

are all from the lower 48 states, as no lay-barges are licensed in Alaska. Cook Inlet pipelines

vary in diameter from eight to 16 inches.

Specific installed costs are listed below. Using a chart of weights and dimensions of seamless

welded pipe, an estimating formula was developed by project engineering staff for pipeline

fabrication. This will cover various coatings, geographic considerations and equipment

variations. The formula is as follows:

Installation Cost Per Foot = (pipe weight per foot in pounds @$2.00 per pound) +

($60.00 per foot for fabrication) +

($37.50 per foot for offshore installation)

As discussed in the preceding paragraph, these costs will not vary for deep-water operations.

Data on real estate easement purchases or permitting, as they very greatly per installation, were 

not available from the sources used to collect information for this activity. Instead real estate

and easement costs were collected separately and are discussed in Chapter 6. 

Pipeline Installation

According to the estimation formula, pipelines of 8, 10, and 16 inches in diameter can be

installed at $140.50, $168.50, and $263.50 per foot.

Onshore Equipment

The onshore fabrication equipment has a ten-year lifetime and therefore costs will be capitalized 

over a ten-year period and will prorate at about $ 0.32 per foot per $100,000 of original 

investment or about $29.50 per foot for this example.
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Equipment used onshore for pipe fabrication includes the following. One 966 Caterpillar loader 

with forks and bucket that costs $260,000 for the base model plus $5,000 for Alaska upgrade. 

Four D6 side boom caterpillars that cost $330,000 each for the base model plus $5,000 for

Alaska upgrade. Two pickup trucks at $25,000 each from a local fleet dealer. Two 20 ton

cranes at a cost of $260,000 each. Two welding trucks (fully equipped with welders, torches,

and tools) at $34,000 each.

Offshore Equipment

Offshore equipment such as tugs, dive boats, and lay-barges are leased by the day for pipeline

installation. Some of these boats have been in service for over 30 years, so that calculation of

lifetimes and capitalization of costs would be difficult. Each of four tugs has two 55 hundred

horse engines and two generators. The fuel consumption is 180 per hour at $1.50 per gallon.

This tug leases for $10,000 per day. Each of the two 50 feet by 12 feet dive boats has two 1000 

horsepower engines, a generator and an air compressor. The dive boats consume 40 gallons of

fuel an hour.

This activity involves “dragging” the pipelines from shore to the platform. A large onshore

staging area is prepared where the pipe will come ashore. Four 40-foot pieces of pipe are welded 

in sections and their joints are coated and wrapped. The 160-foot sections are stacked in the

staging area until they are to be dragged off shore. The sections of pipe welded onshore are 

carried to cribs on the beach by the side boom D6 Cats. Two side by side cribs are used as two

pipelines, one for oil and one for gas, are pulled at one time. The 20-ton cranes hold the ends

being joined until they are welded and the joints coated and wrapped.

The pipes are then pulled by the tugs towards the platform they serve. Several platforms may

manifold to one that has pipelines going ashore. The divers look for abnormalities in the ocean 

bottom that could stress the pipe. The Cook Inlet ocean floor is mostly silt and causes few

bedding problems. Each set is 160 feet long and about five sets on each pipeline can be placed in 

a 12-hour day. The onshore equipment is serviced and fueled before and after work and at

lunchtime if necessary. The equipment uses about 600 gallons of fuel per day at $1.50 per

gallon.

Personnel

Onshore personnel supporting offshore piping laying work a 72-hour week during pipeline 

construction. Detailed information on their compensation is provided in Exhibit 2-13.

Exhibit 2-13 Employee Compensation - Lay Offshore Pipe, Onshore Support Personnel

Title Hourly Wage Annual Wage Number

Construction Manager $80,000 1

Operators $24 6

Welders $26 2

Pipe Fitter / Welder Helpers $22 2

Laborers $18 2

Dive Boat Diver $66.67 4
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Offshore crew that operate and live aboard the tugs work a two week on and two week off 

schedule averaging 12 hours per day. Their compensation is detailed in Exhibit 2-14. Note that 

the crew listed below is for one shift only and must be multiplied by two for the second shift.

Exhibit 2-14 Employee Compensation - Lay Offshore Pipe, Offshore Personnel

Title Hourly Wage Annual Salary Number

Captain $85,000 1

Mates $28 2

Engineers $28 1

Engineer Helper $18 1

Aable Bodied Seamen $18 2

Cook $18 1

The crew of the dive boats consists of a Captain, Mate and Engineer. It leases for $4,000 per 

day. In this case, two divers per boat at $800 per day each will be used. In the model, this 

activity will lease the boats from the various boat sectors. Only the onshore crews and the divers 

will be considered to be part of this activity.

If a lay-barge is used, the onshore crews and equipment will work on the barge. As discussed 

above, the costs per unit for the two construction techniques are very similar.

2.14 LAY ONSHORE PIPE

This task was developed primarily from an interview with a construction manager for VECOKenai. VECO is a major support contractor for the Cook Inlet area and has installed several of

the onshore pipelines in the area. Cook Inlet pipelines are constructed from pipe that varies from 

8 to 16 inches in diameter. 

The costs modeled for this activity are based on various sizes of pipelines that have been

installed and their cost per foot. The costs for equipment and personnel assume that the

easement has been prepared. Data on real estate easement purchases or permitting, as they very

greatly per installation, were not available from the sources used to collect information for this

activity. Instead real estate and easement costs were collected separately and are discussed in

Chapter 6. 

Pipeline Installation

Using a chart of weights and dimensions of seamless welded pipe, an estimating formula has 

been developed by project engineering staff for underground onshore pipelines. The formula is 

as follows:

Installation Cost Per Foot = (pipe weight per foot in pounds @$2.00 per pound) +

($60.00 per foot for fabrication)
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This formula will cover various coatings, geographic considerations and equipment variations. 

According to the estimation formula, pipelines of 8, 10, and 16 inches can be installed at $103,

$131, and $226 per foot.

Equipment

The equipment costs will be capitalized over a ten-year period and will be prorated at about

$0.32 per foot per $100,000 of original investment. For this example, about $29.50 per foot may 

be used in cost allocation.

Equipment used onshore for pipe fabrication includes the following. One 966 Caterpillar loader 

with forks and bucket that costs $260,000 for the base model plus $5,000 for Alaska upgrade. 

Five D6 side boom caterpillars that cost $330,000 each for the base model plus $5,000 for

Alaska upgrade. One crawler backhoe (Cat 215) for $400,000. Two pickup trucks at $25,000

each from a local fleet dealer. Two 20 ton cranes at a cost of $260,000 each. Two welding

trucks (fully equipped with welders, torches, and tools) at $34,000 each.

A trench is dug with the crawler backhoe. Four previously welded sections of pipe are carried to 

the trench by the five side boom D6 Cats. The ends that are being joined are held together using 

the two 20 ton cranes while they are welded and the joints are coated. Then the pipe is lowered 

in the ditch, bedded with sand and covered by the 966 loader. Each set is 160 feet long and

about ten sets can be placed in a ten-hour day. The equipment is serviced and fueled before and 

after work and at lunchtime if necessary. The equipment uses about 700 gallons of fuel per day

at $1.50 per gallon.

Personnel

All personnel work a 60-hour week at ten hours a day for six days a week. The composition of

the crew including titles and wages is provided in Exhibit 2-15.

Exhibit 2-15 Employee Compensation - Lay Onshore Pipe

Title Hourly Wage Annual Wage Number

Construction Manager $80,000 1

Operators $24 9

Welders $26 2

Pipe Fitter / Welder Helpers $22 2

Laborers $18 2

2.15 CONSTRUCT ONSHORE PRODUCTION FACILITY

This task was developed primarily from an interview with a procurement buyer and QC inspector 

on the Alpine Production Facility module construction who was contracted through Alaska

Petroleum Contractors (APC). These modules were constructed in Kenai and used on the North

Slope. However, Philips and BP spokesmen say that this facility will be a “cookie cutter” model 

for future on-shore production facilities. These spokesmen also state that the production

philosophy has changed primarily due to environmental concerns and offshore support costs. 
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Platforms in the past contained the production equipment and processed oil and gas was piped to 

shore. Future plans call for minimum equipment and personnel on the platforms and wellhead

gas and oil being piped ashore and processed in these facilities. Future facilities will basically be 

the same; with modifications for each the production needs of the specific area, such as

pressures, flow rates and viscosity.

This project spanned a four-year period with the first year used for design and permitting. Six

procurement agents worked for one year certifying venders and buying materials, before

construction began. Construction took one year and placement and start up took another. The

total cost of this initial facility is about $200 million. The advantage of duplication, using these

pre-constructed modules, is expected to save up to 40 percent and two years of time in future

installations.

The modules and oil trains were constructed in north Kenai. The gas train was constructed in

Corpus Christi Texas and shipped to the slope on skids to be installed in the modules. Oil and

gas trains refer to the process where a series of vessels and heaters separate out the impurities

from the gas or oil and prepare it for shipping. Future Cook Inlet and Shelikof Strait facilities

would likely be constructed in their entirety on site. Construction personnel peaked at 350 in

Kenai on the oil train and modules and 250 in Texas on the gas train.

Personnel

The estimates of employee compensation that are provided in Exhibit 2-16 reflect average

operations. Over 230 employees involved in construction of the production facility.

Exhibit 2-16 Employment Compensation - Construct Onshore Production Facility

Title Hourly Wage Annual Wage Number

Procurement buyers (40hr/wk*2yr) $30.00 5

Superindentents (1.5yr) $90,000 5

Foremen (60hr/wk*1.5yr) $35.00 15

Craftsmen and apprentices $22.00 125

Laborers (60hr/wk*1.5yr) $18.00 75

Inspectors (60hr/wk*2yr) $30.00 8

The total labor cost was $52,042,000, with $32,526,250 for the Kenai labor and $19,515,750 for 

the Corpus Christi labor. Eighty-five percent of the Kenai labor is local hire, the other 15

percent are hired from the lower 48 states.

Other Expenditures

About $8 million was spent on various items including welding machines, rod, hardware, tools

and expendables. Eighty percent of this amount was purchased locally while the other 20

percent was bought from the lower 48 states.

Materials cost approximately $79 million. Most of the vessels, piping and rotating equipment

were purchased outside of the local area. About 20 percent of the materials were local Kenai

purchase, consisting of structural steel, hardware and accessories.
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For the shipping and setup portion of the activity, the North Slope costs were $50 million for the 

Alpine project. Shipping the gas train to the North Slope cost around $11 million. In the Cook

Inlet area the cost of setup and tie-ins would be less than $10 million.

As discussed above, a duplicated facility, built on site on the Kenai Peninsula or Kodiak Island, 

would cost about 65 percent of the original Alpine facility.

2.16 OPERATE PRODUCTION FACILITY

This task was developed primarily from an interview with a VECO construction manager for the 

Kenai area. VECO is a major support contractor for the Cook Inlet area. The construction

manager has been involved in major re-construction and maintenance of Drift River, Granite

Point, and Trading Bay production facilities and oil terminals. These facilities are on the West

Side of the Cook Inlet and are not accessible by road.

Granite Point, and Trading Bay are primarily production facilities while Drift River is more of a 

combined production facility and oil terminal. According to the construction manager the

operation requirements of the Granite Point and Trading Bay are similar to that of the Drift River 

except one more operator and labor technician will be required.

DRIFT RIVER: The onshore Drift River facility consists of a tank farm, offshore dock, camp

and runway, and services platforms that have primary separation. This is the least likely type of 

terminal to be used in the future.

The total cost of this facility was about $50 million with that cost made up of the following

components. Installing four crude oil storage tanks cost $3 million each. These tanks are 200-

feet diameter by 40-feet tall. Four 1000 horsepower turbine electric generators cost $250,000

each. Shipping pumps, piping, valves and vessels cost a total of $25 million. The helicopter

hanger cost $200,000. The 3,000 feet by 75 feet lighted runway cost $2.00 per square feet for a 

total of $450,000. The offshore dock cost $3 million.

The total installed camp cost was about $1.2 million, including one 12-room staff camp, one 12-

room construction camp, dinning room, wash room and utility areas. During construction the

camps accommodated 50 construction workers using double occupancy.

GRANITE POINT AND TRADING BAY: These onshore terminals are likely to be expanded

and used for future lower Cook Inlet development. 

The construction varies from above due to the fact the crude and gas primary separation is

accomplished at the facility and gas and oil pipelines run in and out reducing the need for tank

storage. A total of $9 million less was required for tanks and $20 million each for two primary

separation trains had to be added. The offshore loading dock ($3 million) was not needed. 

These facilities cost an additional $28 million to construct. The cost of the metal buildings

covering the trains is included in the above cost. These buildings have gravel floors, however,

any future construction would require concrete or steel floors with containment.
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Personnel

All of the personnel below are permanent and work a two week on and two week off schedule. 

The estimated staffing for the operation of a production facility is provided in Exhibit 2-17. In

order to develop an estimate of staffing for both rotations the following crew would need to be

multiplied by two.

Exhibit 2-17 Employment Compensation - Operate Production Facility

Title Hourly Wage Annual Wage Number

Production foreman $90,000 1

Mechanic $75,000 1

Electrician $80,000 1

Operators $24.00 3

Labor technicians $18.00 3

Cook $18.00 1

Bull Cook $16.00 1

Additional Expenditures

Meals and camp service run about $38.00 per day per employee. The helicopter and pilot on site 

cost $28,000 per month. The helicopter shuttles most of the personnel for shift change and hauls 

some supplies. About four chartered aircraft flights at $600 per flight can be expected each

month.

2.17 CONSTRUCT MARINE TERMINAL

This task was developed primarily from interviews with a VECO construction manager for the

Kenai and with the Superintendent of Pipelines and Terminals for Tesoro Alaska.

Unfortunately, no examples of modern stand-alone oil terminals were available to directly collect 

construction cost estimates from. The closest example was the Drift River facility. 

Consequently, the major components of the Drift River facility, as detailed in the previous

section, were used as a starting point. Where possible, the costs of the major components were

updated with more recent construction cost data from a recent facility. For, example, the cost of 

the airstrip was available from the interview with the Superintendent of Pipelines and Terminals 

for Tesoro Alaska.

The costs of the components of the facility were collected and summed. Labor costs were based 

on the percentages and distributions of skills required for the construction of the production

facility.
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2.18 OPERATE MARINE TERMINAL

This task was developed primarily from an interview with the Superintendent of Pipelines and

Terminals for Tesoro Alaska. According to this source, the existing pipelines and onshore

production facilities have the capacity for all projected increases of oil and gas production in the 

Cook Inlet for many years to come.

New onshore production facilities would require about two to five years just for the permitting

process. This process would include the following permitting: land and land use, pipeline right 

of ways, facility, utility, tankage and containment, ballast water, spill and shipping risk studies,

and tide water and draft studies.

Dock construction would run about $30 million. The dock would be capable of handling tankers 

of size (length and barrels of oil. A tank farm with one million barrels of crude storage, ballast

water storage and treatment, vapor recovery, crew quarters, and piping, pumps and controls

would cost about $25 million. An airstrip would cost about $2 million.

Oil is pumped ashore from platforms that have primary separation onboard. The crude oil is

stored in the tanks. Once a week a tanker is loaded at the off shore dock and hauls the crude to

market.

Personnel

The staff modeled in this activity is based on the staff that currently operates the Kenai Pipeline

(KPL), the Tesoro dock and marine terminal. The estimated staffing for the operation of a marine 

terminal is provided in Exhibit 2-18. All of the personnel below are permanent, live at home,

and work a 12 hour day, two week on and two week off schedule; consequently, they must be

multiplied by four.

Exhibit 2-18 Employment Compensation - Operate Marine Terminal

Title Hourly Wage Annual Wage Number

Managers (indirectly involved) $50,000 2

Instrument technician $85,000 1

Electrician $85,000 1

Operators (Coast Guard licensed) $34.00 6

Dock hands (Coast Guard licensed) $28.00 2

Cook $18.00 1

Bull Cook $16.00 1

There are about ten more “on call” consultants for logistics, on call support, environmental and

engineering services. These services run about $400,000 annually.

Oil is pumped ashore from platforms or from a West Side production facility that have primary

separation. The crude oil is stored in the tank farm. Tankers are loaded at the dock and haul the 

crude to market. Tidewater lease for the dock costs $600 per month.
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2.19 MAJOR PLATFORM MAINTENANCE

This task was developed primarily from interviews with a Project Manager for Udelhoven

Oilfield System Services, the Alaska Planning Manager for Forest Oil Corporation, and a 

Construction Manager for VECO Kenai. VECO and Udelhoven supply craftsmen, labor and

equipment for major maintenance. Forest operates the Osprey platform. They also have

fabrication shops for pre-turnaround work.

Major platform maintenance is performed annually. OCS deep-water production platforms at

depths more than 150 feet double the operating costs and required personnel of the Osprey. A

deep-water platform is modeled in this task.

Personnel

Major platform maintenance causes an interruption of production. Consequently, the shutdown

portion of the maintenance is held to a maximum of one week. Multiple tasks must be

accomplished simultaneously. About 60 people are used during the turn-around week. Thirty

people are used 20 days before turn-around for preparation and prefabrication and 10 days after

turn-around for cleanup.

Labor for this activity includes platform staff, prefabrication and cleanup personnel, and onsite

turnaround personnel. The platform staff works several months before a turn-around ordering

parts and planning the shut down. During the shut down they issue permits and monitor systems 

for safety. Related costs associated with platform operation have been discussed in section 2.11. 

This part focuses only on prefabrication and cleanup personnel and onsite turnaround personnel.

Prefabrication and cleanup personnel work six ten-hour days per week in the fabrication shops. 

The composition of the prefabrication and cleanup workforce is provided in Exhibit 2-19.

Title Hourly Wage Annual Wage Number

Welding Foreman $37.50 2

Welders $34.20 8

Fitters $32.50 8

Helpers $22.00 10

Electricians $38.86 1

Apprentices $32.50 1

Exhibit 2-19 Employment Compensation - Major Platform Maintenance, Prefabrication and 

Cleanup

Onsite turnaround personnel work two 12-hour shifts per day for one week. During each shift,

half of them are on the job and the other half are sleeping. The composition of the onsite

turnaround workforce is provided in Exhibit 2-20.
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Exhibit 2-20 Employment Compensation - Major Platform Maintenance, Onsite Turnaround

Title Hourly Wage Annual Wage Number

Welding Foreman $37.50 4

Welders $34.20 16

Fitters $32.50 12

Helpers $22.00 8

Electricians $38.86 4

Apprentices $32.50 2

Instrument Technicians $34.20 2

Mechanical $34.20 2

Carpenters $34.20 2

General Labor $22.00 6

Extra Cook $22.00 1

Extra Bull Cook $18.00 1

In addition, it is estimated that the platform operations personnel devote two weeks of their time 

to this activity. Therefore, 50 weeks of their wages were assigned to the platform operations task 

and two weeks to this task.

2.20 WELL WORKOVER

This task was developed primarily from interviews the Alaska Planning Manager for Forest Oil 

Corporation. Well workovers are performed every five years after initial construction and 

generally take 10 to 20 days to perform. In a well workover, the wells themselves undergo 

maintenance. This maintenance will almost never require replacing the casing, but usually 

replaces or repairs production tubing, packing, etc. (the “jewelry”). Well workovers are a 

distinct operation from a platform maintenance which involves maintaining the platform.

Personnel

Drilling personnel have already been listed in Section 2.7, Exhibit 2-8. Crews work two12-hour 

shifts per day, two week on and two weeks off so one-half of them will be on the platform at one 

time and eight will be working each 12-hour shift.

There will also be technical support people on call 24 hours a day. Most of the time they can 

analyze problems over the phone or on-line and have the platform or drilling personnel make 

repairs. Occasionally they must be flown out to make repairs. Technical support costs average 

about $1,200 a month.

Operating Costs

The cost to provide food, laundry, water, and sewer facilities is estimated to be $37 a day per

person. Helicopter and boat support costs are transferred out and handled as separate activities. 

They are discussed in Sections 2.21 through 2.25.

Each production well workover costs between $100,000 and $2 million, with the average being 

about $ 1 million. If the costs go over half ($2 million) of new well costs ($4 million), a new 
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DOI-MMS 33 Sub-Arctic IMPAK

well will be drilled. One third of the workover coasts will be platform related expenses. One 

eighth of the well cost is tangible, or permanent to the well, like casing, production tubing, 

valves and blowout prevention equipment. One eighth is for intangibles, like drilling mud, 

chemicals and consumables. The remaining cost is labor, with about one half being direct to the 

well drilling and the other half being indirect, to order, handle, and transport materials to the 

drilling location.

Completing a workover every 10 to 20 days is common. According to project engineering staff, 

the midpoint estimate of 15 days, a one shift per day, would works well for the model.

2.21 HELICOPTER SUPPORT

This task was developed primarily from an interview with the Vice President/General Manager

of Kenai Air. Kenai Air is an independent company that provides 25 percent to 35 percent of the 

service to offshore platforms. Seventy-five percent of their business is oil and gas related. 

Offshore Systems Kenai (OSK) provides the remaining 65 percent to 75 percent of the service. 

Oil companies and the helicopters lease the OSK shore base and pilots are leased from ERA

Helicopter. Kenai Air will be a typical example of future offshore support.

Equipment

The Kenai Air leased its facility from the city of Kenai. The 6,000 square feet hanger space,

including offices and waiting room, cost $203,390 to build originally and are leased for $850 per 

month. The terminal space leased for $1.65 per square foot. The one-acre ramp with a fueling

facility is leased for $600 per month. The fuel facility has been upgraded to last for 10 years at a 

cost of $120,000. Portable fuel trucks have been decommissioned and sold due to environmental 

considerations.

The helicopters are 20 to 25 years old. They have to be maintained in accordance with Bell

Helicopters standards and FAA regulations. Given the amount of major maintenance and parts

replaced, capitalization is applied every six to ten years. They have three Bell 206 Long Rangers 

($700,000 each) and three Bell Jet Rangers ($450,000 each) in service. Each of the six

helicopters flies about 60 to 100 hours per month. The Bell 206 Long Ranger has an hourly rate 

of $900, while the Bell Jet Ranger has an hourly rate of $685. These rates include pilots and

long term contracts may reduce the hourly rate by 10 percent.

On average, a Jet Ranger uses 28 gallons per hour and a 206 Long Ranger uses 35 gallons per

hour. The fuel costs $2.25 per gallon. Kenai Air also has one extra Bell 206 Long Ranger and

two extra Bell Jet Rangers that are not used at this time due to a decline in Cook Inlet

requirements.

Kenai Air has two pickup trucks, two vans, two cars, and two three-quarter ton flatbed trucks. 

Their respective values are $18,000, $20,000, $17,000, and $21,000 each. Kenai Air replaces 

their vehicles about every ten years. Gasoline is $1.83 a gallon and their gas bill is about $160

per week.
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Additionally, Kenai Air spent $100,000 in the purchase of special tools to maintain Bell

helicopters. About $10,000 is spent annually on replacements and upgrades of these tools. The

two helicopter dollies cost $20,000 each and have an estimated life of ten years. General tools

and equipment for maintenance cost $100,000 and their annual replacement and upgrades cost

$5,000.

Personnel

Currently there are two managers, four full time pilots, three shop mechanics and one office

manager. The two managers are also pilots and will fly when needed. The manger pilots are

paid $50,000 to $60,000 annually, while the full time pilots are paid $40,000. Each of the three 

mechanics has an annual salary of $35,000. The office manager is paid a wage of $12 to $14 per 

hour. All of the employees are local, except one pilot who lives in Anchorage and works a week 

on and week off schedule. Pilots are paid by the day and flight time. Kenai Air peaked at 30

employees in the early eighties.

2.22 BOAT SUPPORT (LARGE WORKBOATS)

The model has four activities for boat support, one for each type of boat. In the model there is a 

general overhead cost vector for boat support, but the labor and selected other inputs vary for the 

different boats. In this section, general information on the boat activities is provided along with 

information on the large work boats. The following sections provide crew information for the

small work boat (Section 2.23), the landing craft (Section 2.24), and the dive boat (Section 2.25).

This activity was developed primarily from an interview with the operations manager of the

Offshore Systems-Kenai (OSK) facility. OSK owns and manages the dock, office building and

cargo storage area. Their primary responsibility is the storage and handling of cargo. About 90

percent of their business is supporting the oil company platforms and Cook Inlet west side

operations (there is no road structure connecting the west side of the Cook Inlet to the main road 

system in the rest of Alaska). Ten percent of their business supports fishing, timber and private 

enterprise. Sister companies own and repair five of the boats: Nikiski Ship Repair and Ocean 

Marine Services.

Tidewater Marine is contracted from the Gulf of Mexico area and has two boats and one landing

craft, which are manned by crews from Louisiana. Sea Bulk is another company that is hired for 

specific jobs. They are based on the West Coast of the lower 48 states and are manned by out of 

state crews. Presently they provide the spill response vessel.

Facility

The facility is built on 89 acres purchased for $3,500 per acre. The dock was constructed from

two ship hulls and fill for a cost of $1.5 million. The dock requires a state tidewater lease of

$600 per month. The dock is about four acres and has a warehouse measuring 80 feet by 250 on 

it. 
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The construction of the 80 feet by 250 feet warehouse cost $30 per square feet for a total of

$500,000. The construction of the 60 feet by 80 feet office complex cost $45 per square feet for 

a total of $216,000. The original construction cost for the outside storage pad was $331,570.

Boats

The fuel used by these boats cost about $1.50 per gallon.

Ocean Marine Service

There are two workboats, one landing craft, and two dive boats used for marine service.

The large workboat is 217 feet long and 56 feet wide, equipped with two 55 hundred horse

engines and two generators. It can haul 400 tons of cargo and 16 passengers. The fuel

consumption is 180 gallons per hour This boat can be leased for $10,000 per day.

The smaller workboat is 170 feet and 36 feet wide, equipped with two 39 hundred horsepower

engines and two generators. It can haul 280 tons and 16 passengers. It consumes 127 gallons of 

fuel per hour. It can be leased for $8,000 per day.

The landing craft is 100 feet long and 40 feet wide, equipped with two 2800 HP engines and a

generator. It can haul 200 tons and consumes 90 gallons of fuel per hour. It can be leased for

$6,000 per day.

The two dive boats are 50 long and 12 feet wide, equipped with two one thousand horse engines, 

a generator and an air compressor. It consumes 40 gallons of fuel an hour and can be leased for 

$4,000 per day.

Tidewater Marine and Seabulk Boats

These boats are very similar in size, rates, and fuel consumption as Ocean Marines boats. 

Seabulk boats have a contract to assist spill response and support the survey crew.

Personnel

At Facility

There are twelve permanent longshoremen dock personnel working 50 hours per week. Their

hourly wages range from $20 to $22. Staff size peaks at twenty during summer months. In

addition, the operations manager and the office manager are salaried at $85,000 and $40,000 

annually.
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Boat Crew 

The crew lives abroad and works two weeks on and two weeks off schedule averaging ten hours 

per day. These are the crew in a single shift. If both shifts are considered, then the numbers of

personnel will need to be multiplied by two. A Captain, a Mate, and an Engineer generally

operate a boat. The captain has an annual salary of $85,000. The mate and the engineer are paid 

hourly wage of $28, with monthly average of $5,600.

The workboats are additionally served with one Engineer helper, two Able Bodied seamen (AB), 

and one cook. The engineer helper, the seamen, and the cook are paid $18 per hour for a

monthly average of $3,600. The large boat takes two mates, while the smaller boat has only one 

mate working abroad.

The landing craft is additionally crewed with one engineer helper and one AB. The crews in

Tidewater marine boats and Seabulk boats are similar, except that those in Tidewater boats are

from out of state and those in Seabulk boats are from the West Coast. Crews of Seabulk boats

also provide spill response personnel.

2.23 SMALL WORK BOAT

The smaller workboat is 170 feet and 36 feet wide, equipped with two 39 hundred horsepower

engines and two generators. It can haul 280 tons and 16 passengers. It consumes 127 gallons of 

fuel per hour. It can be leased for $8,000 per day.

A Captain, a Mate, and an Engineer operate the small workboat. The captain has an annual

salary of $85,000. The mate and the engineer are paid hourly wage of $28, with monthly

average of $5,600. Additional crew for the small workboat includes an engineer helper, two

Able Bodied seamen (AB), one cook. The engineer helper, the seamen, and the cook are paid

$18 per hour for a monthly average of $3,600. The small boat also has one mate working

abroad.

2.24 LANDING CRAFT

The landing craft is 100 feet long and 40 feet wide, equipped with two 2800 HP engines and a

generator. It can haul 200 tons and consumes 90 gallons of fuel per hour. It can be leased for

$6,000 per day.

A Captain, a Mate, and an Engineer operate the landing craft. The captain has an annual salary

of $85,000. The mate and the engineer are paid hourly wage of $28, with monthly average of

$5,600. Additional crew for the small workboat includes an engineer helper and an Able Bodied 

seaman (AB). The engineer helper and the seamen are paid $18 per hour for a monthly average 

of $3,600.
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2.25 DIVE BOAT

The dive boats are 50 long and 12 feet wide, equipped with two one thousand horse engines, a

generator and an air compressor. It consumes 40 gallons of fuel an hour and can be leased for

$4,000 per day.

A Captain, a Mate, and an Engineer operate the dive boat. The captain has an annual salary of

$85,000. The mate and the engineer are paid hourly wage of $28, with monthly average of

$5,600.

2.26 CAMP SUPPORT

This task was developed primarily from an interview with a hotel owner in North Kenai for 15

years. This example is the Place Hotel and Restaurant facility. There are several other hotels

servicing the Kenai area with varying rates. The conventional hotels have higher rates and only

about 20 percent of their business is oil and gas related. There are some camp type hotels that

have multiple rooms per bath and serve limited menu, chow line type meals. This example is

typical, as about 70 percent of the Place’s business is oil and gas related. Some of the offshore

companies have provided helicopter service direct from the Place to their offshore operations. 

The Place has 22 double rooms (each with a bathroom), a restaurant and a bar.

The rates in the Kenai area vary seasonally due to construction, tourism and the famous Kenai

area fishing. On average, summer rates are $79.50 for single occupancy plus $10 for double,

while winter rates are $59.50 for single occupancy plus $7.50 for double. Long term negotiated 

contractor rates average $69 in the summer to $59 in winter with no additional charge for double 

occupancy.

The restaurant menu is reasonable. A couple of examples would be the Prime Rib special at

$10.95, roasted top sirloin at $7.95 and breakfast at $6.95. Crew meals can be purchased for $20 

per day, per man, including a box lunch for the noon meal.

Rolling Stock

There is one Limousine available for rent or crew transportation of up to 10 people at $50 per

hour. The Limousine was bought for $60,000 with 15 years of estimated remaining life. In

addition, one nine passenger courtesy van, which was also used to haul supplies, was bought for 

$25,000 with a 10 year estimated remaining life.

Supplies

Kitchen supplies and food are purchased locally from Country Foods and Echo Lake Supply. 

Supply costs are around $100 per day, with labor at $140 and the gross return around $320 per

day.
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Bar supplies are delivered by Anchorage based companies that service the Kenai area,

Anchorage Cold and K&L. The bar can gross up to $800 per day, with costs about 60 percent of 

gross. The owner offers a payroll check cashing service.

Personnel

Employees are local hire and permanent. Personnel work a variety of shifts to provide coverage 

as needed. The Owner Manager makes $80,000 to $120,000 annually. The cleaning person

works $8 to $9 per hour plus tips. The Swampper/maintenance man/morning bar tender works

$8 to $9 per hour plus tips and housing. Two Bartenders have hourly wage of $8 to $10 plus

tips. Tips vary; however can go as high as $100 per shift.

The owner normally has the kitchen leased to keep his daily activities at a manageable level. 

Personnel serving the kitchen include two combination cooks and servers and one breakfast cook 

and serve. Their hourly wages are $8 to $10 plus tips.
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3 LABOR INPUTS

The purpose of this chapter is to provide an overview of the methods used to develop the labor

inputs to the various activities in the Sub-Artic IMPAK model that comprise oil exploration,

development and production. Subsequent chapters provide similar discussions for purchased

services, materials and equipment. In some sense, this study is developing a production function 

for each activity, where the production function is defined in terms of expenditures for various

types of inputs. These inputs can be broadly grouped into the following categories: labor,

purchased services, capital, and materials with the latter including raw, intermediate and energy 

material and inputs.

The data developed in this study are based on information collected in the year 2000 for projects 

installed in the 1997-2000 period, and published reports providing data for various years, but

mostly for the years 1997 to 1999. As such, the estimates provided in this study should be

considered to be reported in 1999 dollars.

The question of dollar wages is complicated by a recent change from a labor surplus situation to

a labor shortage situation. According to the KPB Borough Economic Analyst, oil and gas related 

wages remained stable at an average of around $5,000 per month from 1993 to 1998, and then

jumped to $6,000 in 1999. Based on this data, an initial option that was considered was to

multiply wage rates for years before 1999 by a twenty percent factor to reflect the recent tight

labor market. 

However, further research, based on data from the State of Alaska’s Employment and Earnings

Summary Reports for the years 1997 through 2001, reveals that the jump in earnings did not 

occur until 2000 and further revealed that wages declined in 2001. Therefore, in consultation

with MMS staff, it was determined that this adjusting the original data would skew wages to

reflect a tight labor market rather than an average labor market. As a result, it was decided to

simply report wages as they were collected.

The model developed in this study is designed to be stimulated by activity levels contained in the 

MMS E&D scenarios. These activity levels then activate input vectors for each activity. This

chapter and those that follow describe the general methods used to develop the expenditure

estimates for each of the major input categories. The vectors themselves, which are tabulated by 

activity, are provided in the Sub-arctic IMPAK spreadsheet model. This chapter provides an

overview of the techniques used to develop later inputs as well as describing some common data 

and data development techniques used in the following chapters.

3.1 OVERVIEW

Labor inputs include the direct labor used in the construction and operation of the oil and gas

facilities as well as the overhead or headquarter salaried non-production staff that provides

support functions over a range of operations. As a result, estimates of labor inputs considered

not only employment in the field, but also in local and regional offices and headquarters.
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Estimates are made for both man-weeks of employment and employee compensation, in order to 

allow for easier updating of the data in future studies and for use in estimating lodging and food 

costs.

In calculating estimates of economic impact in cases where workers are commuting, it is

necessary to consider both where the employee works and where the employee spends their

income and pays their taxes. Therefore, while data is initially developed based on the location of 

the workplace of the individual, these estimates are then converted to estimates of the location in 

which the expenditures of wages and payment of taxes are made.

3.2 ESTIMATES OF PRODUCTION EMPLOYMENT

The first step is to estimate the actual labor used in the field. These direct construction labor

inputs are estimated through interviews with representatives of construction contractors and oil

companies that have experience in constructing or operating the structures under consideration. 

These estimates are often the most clearly defined, since the work efforts of these types of

employees are most easily assignable to a particular activity. These estimates, developed

separately for each individual activity, are discussed in detail in the previous chapter. In most

cases, data were collected by activity on the number of employees by trade, wages for employees 

by trade, task crew size, duration of task, number of shifts, shift duration and rotation pattern.

These data were tabulated and are presented in Exhibit 3-1. For each activity, the crew members 

are listed by trade. For hourly employees, the wage rate is recorded along with the hours worked 

per day and days per week to calculate a weekly wage. For salaried employees the hourly wage 

is found based on hours per day, days per week, and rotation pattern. Weekly wages are

converted to total wages based on crew sizes, shift factors, number of crews, rotation patterns

and the length of the activity in weeks. Note that for some activities this is simplified as all the

crew members work the same schedule, while for other tasks these calculations must be made at 

the crew member level. For those tasks were all crew members work the same schedule large

areas of the tables are blank, as the detail at the crew member level was not necessary.

Wages are then adjusted to include an estimate of the value of fringe benefits. Data for this

purpose are from the 1997 Census of Mineral Industries. The U.S. Oil and Gas Industry volume 

contains data on fringe benefits used in the analysis. According to data provided in that

publication, fringe benefits not included in payroll amount to 20.4 percent of take home wages

for U.S. oil and gas industry employees.

Some fragmentary data on fringe benefits were reported in the industry interviews conducted for 

this study. However, these data were incomplete and therefore, the Census data were believed to 

be more accurate. Note that although the Census data represent an accurate average for the 

industry as a whole, actual rates may vary among activities.
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3.3 ESTIMATES OF NON-PRODUCTION EMPLOYMENT AND WAGES

While data on field or production employees by activity could be estimated directly from

primary sources, estimates of office and headquarters personnel attributable to each activity were 

developed using secondary data sources. These estimates are based on industry-level ratios of

total to production employees. Note that these employees are not necessarily associated with an 

individual activity, but rather represent an allocation of an overhead type function.

The numbers of headquarters and support staff are estimated based on published Census data on 

the ratio of total workers to production workers. Exhibit 3-2 provides these ratios from the 1997 

Census of Mineral Industries, U.S. Department of Commerce, for a variety of areas and

industries for which data are available. Data are also provided on the ratio of total to production

employee wages and average payroll per non-production employee. All data are presented on a

North American Industry Classification System (NAICS) code basis.

Region

North 

American 

Industry 

Classification 

System 

(NAICS) Code

Number *

of Total 

Employees

Number* of 

Production,

 Development,

 and 

Exploration 

Workers

Ratio: 

Total to 

Production 

Employees

Payroll* 

for All 

Employees 

($, 1,000)

Wages* for 

Production, 

Development, 

and Exploration 

Workers ($, 

1,000)

Ratio: 

Total to 

Production 

Employee 

Wages

Number* of 

NonProduction 

Employees

Payroll* for 

NonProduction 

Employees 

($, 1,000)

Average 

Payroll Per 

NonProduction 

Employee 

($, 1,000)

Alaska 211 2,389 1,715 247,884 173,143

213111 1,023 791 54,802 46,364

213112 5,071 3,782 284,113 231,417

Total 8,483 6,288 1.35 586,799 450,924 1.30 2,195 135,875 61,902

U.S. 211111 100,308 58,289 4,968,722 2,717,588

211112 10,549 8,870 541,593 456,083

213111 53,865 45,219 1,918,086 1,539,296

213112 106,339 80,734 3,628,416 2,821,468

Total 271,061 193,112 1.40 11,056,817 7,534,435 1.47 77,949 3,522,382 45,188

Source: 1997 Census of Mineral Industries, U.S. Department of Commerce.

Exhibit 3-2: Calculation of Non-Production Employment and Payroll

The ratios for the sum of the NAICS codes 21111, 213111 and 213112, which combines

exploration, drilling and extraction, were selected to be used in this study, as comparable data 

were available for both Alaska and the U.S. Note that non-production employment within

Alaska is 35 percent of direct production employment, while non-production employment within 

the U.S. is 40 percent of the direct production employment. It is assumed that the difference

between the 35 and 40 percent ratios are due to Alaska-related non-production work located in

other parts of the country, not a difference in the number of employees required to accomplish

equivalent tasks. Therefore, it is estimated that for every 100 production workers on an Alaska

OCS project, there are 35 non-production workers in Alaska and five non-production workers in 

the other 49 states.

Non-production employment within Alaska is assigned to Anchorage based on data provided by

industry sources. Based on these interviews, all of the Alaskan non-production employment 

related to sub-arctic activities is assigned to Other Alaska.

Exhibit 3-3 provides the estimates of non-production workers and their wages. The number of

full time equivalent (FTE) production workers is estimated as the product of the task work force 

and task length. The resulting estimates of non-production workers are then derived for Alaska 
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Exhibit 3-3: Calculation of the Numbers and Wages of Non-Production Worker Wages by

Activity by Geographic Area

Activity

Total 

Task 

Work 

Force

Total 

Task 

Length 

(weeks)

Number of 

Production 

Workers 

(FTE)

Number of 

Alaskan 

NonProduction 

Workers 

(FTE)

Wages for 

Alaskan NonProduction 

Workers

Technical 

Support 

Wages

Wages for 

Alaskan NonProduction 

Workers 

Including 

Technical 

Support

Fringe 

Benefits 

@20.4% of 

Wages

Alaska NonProduction 

Wages and 

Fringe 

Benefits

Number of 

U.S. NonProduction 

Workers 

(FTE)

Wages for 

U.S. NonProduction 

Workers

Technical 

Support 

Wages

Wages for U.S. 

NonProduction 

Workers 

Including 

Technical 

Support

Fringe 

Benefits 

@20.4% of 

Wages

U.S. NonProduction 

Wages and 

Fringe 

Benefits

1. Geological Survey 29 4 2.4 0.8 51,647 51,647 10,536 62,183 0.1 5,894 5,893.72 1,202 7,0962. Spill Contingency Response 2 52 2.0 0.7 43,217 43,217 8,816 52,034 0.1 4,932 4,931.763. Construct Exploration Shore Base 6 52 6.0 2.1 129,652 129,652 26,449 156,101 0.3 14,795 14,795.27 3,018 17,8144. Operate Exploration Shore Base 6 52 6.0 2.1 129,652 129,652 26,449 156,101 0.3 14,795 14,795.27 3,018 17,8145. Install Exploration Platform 41 5.0 3.9 1.4 85,188 85,188 17,378 102,566 0.2 9,721 9,721.25 1,983 11,7046. Operate Exploration Platform 18 52 18.0 6.3 388,955 388,955 79,347 468,302 1.0 44,386 44,385.82 9,055 53,4417. Drill Exploration Well 32 12.9 7.9 2.8 170,969 3,857 172,898 35,271 208,169 0.4 19,510 3,857 21,438.828. Construct Production Shore Base 12 52 12.0 4.2 259,303 259,303 52,898 312,201 0.7 29,591 29,590.559. Operate Production Shore Base 12 52 12.0 4.2 259,303 259,303 52,898 312,201 0.7 29,591 29,590.5510. Install Production Platform 82 52 82.0 28.6 1,771,907 1,771,907 361,469 2,133,376 4.5 202,202 202,202.07 41,249 243,45111. Operate Production Platform 18 50 17.3 6.0 373,995 373,995 76,295 450,290 0.9 42,679 42,678.67 8,706 51,38512. Drill Production Well 36 5 3.7 1.3 80,142 80,142 16,349 96,491 0.2 9,145 9,145.43 1,866 11,01113. Lay Offshore Pipeline 21 1 0.4 0.1 8,228 8,228 1,678 9,906 0.0 939 938.93 192 1,13014. Lay Onshore Pipeline 16 0 0.1 0.1 3,134 3,134 639 3,774 0.0 358 357.69 73 43115. Construct Onshore Production Facility 233 78 349.5 122.0 7,552,213 7,552,213 1,540,651 9,092,864 19.1 861,825 861,824.67 175,812 1,037,63716. Operate Production Facility 44 52 44.0 15.4 950,779 950,779 193,959 1,144,738 2.4 108,499 108,498.67 22,134 130,63217. Construct Marine Terminal 44 52 44.0 15.4 950,779 950,779 193,959 1,144,738 2.4 108,499 108,498.67 22,134 130,63218. Operate Marine Terminal 56 52 56.0 19.5 1,210,083 400,000 1,410,083 287,657 1,697,740 3.1 138,089 400,000 338,089.22 68,970 407,05919. Major Platform Maintenance 128 2 4.9 1.7 106,381 106,381 21,702 128,083 0.3 12,140 12,139.71 2,477 14,61620. Well Workover 32 2.1 1.3 0.5 28,495 643 28,816 5,879 34,695 0.1 3,252 643 3,573.14 729 4,30221. Helicopter Support 10 0 0.0 0.0 34 34 7 42 0.0 4 3.94 1 522. Large Workboat 8 0 0.0 0.0 69 69 14 83 0.0 8 7.89 2 1023. Small Workboat 7 0 0.0 0.0 61 61 12 73 0.0 7 6.94 1 824. Landing Craft 5 0 0.0 0.0 44 44 9 53 0.0 5 5.05 1 625. Dive Boat 6 0 0.0 0.0 53 53 11 63 0.0 6 5.99 1 726. Camp Support 8 52 8.0 2.8 172,869 172,869 35,265 208,134 0.4 19,727 19,727.03 4,024 23,751

Exhibit 3-3: Calculation of the Numbers and Wages of Non-Production Workers by Activity by Geographic Area
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DOI-MMS 47 Sub-Arctic IMPAK

by applying the 35 percent factor and for the U.S. by applying the five percent factor. The

number of non-production FTE are then multiplied by the Alaskan and U.S. wage rates from

Exhibit 3-2. Technical support wages are split equally between the two areas. Fringe benefits

are then calculated and added to the total for each area.

3.4 WORKERS BY PLACE OF RESIDENCE

Due to the remote location of many E&D activities in Alaska, a large percentage of the

workforce commutes to the project area. Because the geographic spending patterns of workers

depends heavily on their primary place of residence, an important first step in estimating worker 

spending by area is to establish the primary place of residence for the components of the

workforce.

According to expert project staff and based on their interviews with industry, oil and gas industry 

related workers in existing or new production areas are anticipated to be primarily drawn from

existing pools of workers in the Kenai, the Anchorage area, and the other 49 states. For projects 

in the Cook Inlet area, it is assumed that labor will continue to be drawn from the various areas

in the current percentages. These percentages, estimated by project staff, are presented in

Exhibit 3-4. Note that for all tasks other than geological surveys, a large percentage of workers

at present, 50 to 100, are drawn from the Kenai itself. The concentration of projects in this area

has slowly induced workers to move to the Kenai for long-term assignments and to avoid

commuting. The remaining workers are drawn in roughly equal percentages, from Anchorage

and the rest of the U.S. These represent more specialized workers and those hired for shorter

term assignments. As a result, more specialized and shorter-term assignments such as geological 

surveys, off-shore pipeline construction, and major platform maintenance tend to utilize higher

non-local labor percentages.

Kenai Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S.

Local (If 

Near 

Labor 

Supply) Kenai Anchorage

Other 

U.S.

1. Geological Survey 25 25 50 25 25 50 0 25 25 50

2. Spill Contingency Response 100 0 0 100 0 0 0 100 0 0

3. Construct Exploration Shore Base 100 0 0 50 50 0 20 40 40 0

4. Operate Exploration Shore Base 100 0 0 50 50 0 20 40 40 0

5. Install Exploration Platform 90 10 0 40 40 20 0 40 40 20

6. Operate Exploration Platform 90 10 0 40 40 20 0 40 40 20

7. Drill Exploration Well 60 20 20 50 25 25 0 50 25 25

8. Construct Production Shore Base 100 0 0 50 50 0 20 40 40 0

9. Operate Production Shore Base 100 0 0 50 50 0 0 50 50 0

10. Install Production Platform 90 10 0 40 40 20 0 40 40 20

11. Operate Production Platform 90 10 0 40 40 20 0 40 40 20

12. Drill Production Well 70 20 10 60 20 20 0 60 20 20

13. Lay Offshore Pipeline 50 10 40 45 10 45 0 45 10 45

14. Lay Onshore Pipeline 80 15 5 60 15 25 0 60 15 25

15. Construct Onshore Production Facility 70 15 15 40 45 15 0 40 45 15

16. Operate Production Facility 80 15 5 15 65 20 10 10 60 20

17. Construct Marine Terminal 80 15 5 40 45 15 0 40 45 15

18. Operate Marine Terminal 80 15 5 15 65 20 10 10 60 20

19. Major Platform Maintenance 50 30 20 20 50 30 0 10 50 30

20. Well Workover 70 20 10 60 20 20 0 60 20 20

21. Helicopter Support 90 10 0 50 50 0 10 40 50 0

22. Large Workboat 60 30 10 40 40 20 20 30 30 20

23. Small Workboat 60 30 10 40 40 20 20 30 30 20

24. Landing Craft 60 30 10 40 40 20 20 30 30 20

25. Dive Boat 60 30 10 40 40 20 20 30 30 20

26. Camp Support 85 10 5 45 50 5 10 40 45 5

Exhibit 3-4: Estimated Percent of Production Employees By Place of Residence and Activity

Activity

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 48 Sub-Arctic IMPAK

Labor percentages outside of the Cook Inlet are more hypothetical due to the lack of actual

examples. (See the discussion of the MMS Planning Areas in Chapter 2 and the section entitled 

“Overview of Cook Inlet and Gulf of Alaska.”) However, it is the opinion of expert project staff, 

that these projects will draw labor from the existing areas. In addition, it is further hypothesized 

that at least in the short run, these workers will tend to commute, due to the remote location of

these projects. However, projects that are near some labor supplies or town will tend to draw

some local relatively unskilled labor and will cause some experienced oil and gas industry

personnel to relocate. For that reason, two separate sets of estimates were made for projects that 

are remote from current development. The first set is for projects that are both remote from

current development and remote from any significant population centers. The second set is for

projects that are remote from current development, but are located near a source of labor supply 

and housing.

While in some cases labor will be flown in for the early work and then workers may settle locally 

for operations, this process may not always occur for the remotest areas and for the more

specialized technical tasks. For example, for Cook Inlet projects, workers have settled on the

Kenai, while resettlement to the Arctic areas has been rare. Similarly, activities such as

construction will have higher local percentages than operations.

Exhibit 3-4 also provides employee place of residence percentages for these types of projects. 

For remote projects, the pattern of residence is somewhat similar to that for the Cook Inlet

projects, except that the percentages of labor supply have shifted away from the Kenai and

towards Anchorage and the rest of the United States. For remote projects near a labor supply,

the pattern for remote projects holds, with the exception that selected tasks are assumed to draw

10-20 percent of their workforce from the local area. Labor supplies near remote projects in the 

Gulf of Alaska would be the communities of Ualdey, Condova, Yukutat and possibly other

communities in southeast Alaska.

3.5 ESTIMATES OF SPENDING BY GEOGRAPHIC REGION

As discussed above, where an employee spends his/her income will depend to a large extent on

where their primary place of residence is located. Since food and lodging are part of a

commuting employee's total compensation package, it is unlikely that non-residents will spend

much of their disposable income in the project area. This is especially true given the long hours 

of work and minimum amount of time for personal leisure. Study team members with extensive 

experience working in the area estimate that perhaps 5-15 percent of total income of commuting 

employees is spent at local businesses. Some of these are “portable” businesses operating on

barges that move along with the E&D projects. Since most employees make in the range of $500 

per day, it is assumed that $25 to $75 per day is spent on locally provided goods and services.

Full time local residents, on the other hand, will be inclined to spend most of their disposable

income in the local area. The extent of those expenditures in the local area will depend upon

cultural factors and the availability of goods and services. Since there is little or no

manufacturing in many local areas, the impacts of personal consumption there will be felt

primarily in the retail, wholesale, transportation, and service sectors. Expert project staff
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DOI-MMS 49 Sub-Arctic IMPAK

estimated for each category of project location (Cook Inlet and Shelikof Strait, Gulf of Alaska

near population centers) the percentages spent in each area for workers who reside in each area. 

These percentages are provided in Exhibit 3-5.

Kenai Anchorage

Other 

U.S. Local Kenai Anchorage

Other 

U.S. Local Kenai Anchorage

Other 

U.S.

Remote Area 100 0 0 0

Kenai 85 10 5 5 80 10 5 10 80 5 5

Anchorage 10 85 5 5 0 90 5 10 0 85 5

Other U.S. 15 5 80 5 0 5 90 10 0 5 85

Exhibit 3-5: Estimated Percent of Spending By Place of Full-Time Residence

Cook Inlet Projects Remote Projects

Place of FullTime Residence

Remote Projects Near Population Center

Place of Spending by Project Location

In stimulating the PCE vectors in IMPLAN, it may be desirable to modify these vectors to take

into account the atypical expenditure patterns of these employees. For example, in the state

model, the food and lodging expenditures of non-residents can be adjusted downward to avoid

potential double counting of the food and lodging provided as compensation.

3.6 ESTIMATES OF TAXES, SAVINGS AND PERSONAL CONSUMPTION 

EXPENDITURES

Once employees are paid wages, they will pay taxes, save a small part of these wages, and then

spend the rest on goods and services, generating induced impacts. To capture the induced

impacts, the wages will need to be converted into disposable income which can then be used to

stimulate IMPLAN's PCE vectors. Note that wages as defined here include fringe benefits,

which is compatible with IMPLAN PCE definitions and standard I-O model conventions.

For the purposes of this study, disposable wages are calculated by reducing Total Personal

Income by 20.5 percent. Of this, 2 percent reflects savings. This figure was estimated from a

trend analysis of personal income data published in the U.S. Statistical Abstract and compiled by 

the U.S. Bureau of Economic Analysis. Due to the modeling complexities involved and the

speed at which financial capital can move across geographic boundaries, IMPAK currently does 

not provide a way for estimating the regional economic impacts associated with savings. 

However, the amounts devoted to savings, by residence, are provided on the output screens and

can be used along with other resources to develop estimates of such impacts.

The combination of taxes paid to local, state and federal government entities reflects the

remaining 18.5 percent. These payments, captured in the model by multiplying tax rate

parameters by estimates of total personal income, are used to stimulate the government

expenditure vectors (See the "Government" section in 7.3.1 for more details).

As an input into the IMPLAN modeling system, the estimates of PCE can used to estimate the

induced impacts that are generated as employees spend their earnings. The preferred way to

estimate such impacts would be to allocate IMPAK's PCE estimates to consumer bundles using

IMPLAN's PCE data to develop the allocation ratios. The resulting vectors would then be used

to stimulate the outputs of the associated industries in IMPLAN. Note that IMPLAN provides

PCE vectors for several different income groups. Therefore, it will be up to the analyst running
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 50 Sub-Arctic IMPAK

the IMPLAN model to allocate disposable income to these income groups, or to assume that all

employees fall within the same income group.

In addition, the analyst should be aware that IMPAK's PCE estimates reflect where goods are

purchased, not where they are produced. As such, the estimates are different than the business

expenditure estimates, which do indicate not only where a good is produced but also where the

associated margins accrue. This means that the two types of expenditures will have to be

handled differently when they are input into IMPLAN. With IMPAK's business expenditures,

the user should not use IMPLAN to apply either margins or RPCs to the expenditure inputs. 

However, just the opposite is the case with IMPAK's PCE estimates, which do need to be

converted into margins and further divided into production regions.

In some cases it seems as if we have already allocated PCE to consumer bundles since some of

impacted sectors in IMPAK are "consumer oriented". This is only an appearance and is due to

the fact that several activities (e.g., seismic surveys, production operations, and camp support) 

involve house-keeping operations that make purchases similar to those conducted by households. 

Like all other industry impacts reported on the output screens, these impacts are still direct

impacts and will generate indirect impacts if used to stimulate IMPLAN.

3.7 FINAL ESTIMATES OF SPENDING BY AREA

In order to develop the final estimates of spending by area, estimates of wages by production and 

non-production workers are combined and then place of residence and place of spending

percentages are applied and the results summed. The derivations of the final estimates are

provided in Exhibit 3-6a, 3-6b and 3-6c.

Each of the three exhibits is roughly similar, except that they report results for the different areas 

of potential project location. Exhibit 3-6a presents results for the Cook Inlet. Exhibit 3-6b 

presents results for remote projects. Exhibit 3-6c presents results for remote projects near a

population center.

In each exhibit production worker wages including fringe benefits are transcribed from Exhibit

3-1 and distributed to place of residence based on percentages from Exhibit 3-4. Non-production 

wages, which were already distributed by place of residence, are taken from Exhibit 3-3. 

Production and non-production worker wages are then summed to provide total wages by place

of residence. These wages are then converted to spending by area based on the percentages from 

Exhibit 3-5.

3.8 OTHER EMPLOYEE RELATED COSTS

In addition to direct compensation, several contractors provided estimates of additional employee 

related costs such as housing and meals for commuting employees. While these costs are

theoretically not part of employee compensation, but rather part of overhead costs, their levels

are dependent upon the numbers and of employees and are therefore most accurately estimated
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 51 Sub-Arctic IMPAK

Exhibit 3-6a: Spending by All Workers by Area for Cook Inlet Projects

Exhibit 3-6b: Spending by All Workers by Area for Remote Projects

Exhibit 3-6c: Spending by All Workers by Area for Remote Projects Near a Population Center

Kenai Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S. Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S. Local Kenai Anchorage

Other 

U.S.

1. Geological Survey 255,539 25 25 50 63,885 63,885 127,770 62,183 7,096 63,885 126,068 134,866 12,912 40,631 100,641 104,047

2. Spill Contingency Response 110,792 100 0 0 110,792 - - 52,034 - 110,792 52,034 - 6,472 70,464 46,038 6,472

3. Construct Exploration Shore Base 353,205 50 50 0 176,603 176,603 - 156,101 17,814 176,603 332,703 17,814 20,953 112,319 252,797 32,990

4. Operate Exploration Shore Base 353,205 50 50 0 176,603 176,603 - 156,101 17,814 176,603 332,703 17,814 20,953 112,319 252,797 32,990

5. Install Exploration Platform 595,954 40 40 20 238,382 238,382 119,191 102,566 11,704 238,382 340,948 130,895 28,231 151,611 268,103 116,684

6. Operate Exploration Platform 1,515,231 40 40 20 606,092 606,092 303,046 468,302 53,441 606,092 1,074,394 356,487 80,970 385,475 831,084 321,866

7. Drill Exploration Well 699,997 50 25 25 349,999 174,999 174,999 208,169 - 349,999 383,168 174,999 36,100 222,599 308,938 154,355

8. Construct Production Shore Base 839,959 50 50 0 419,979 419,979 - 312,201 - 419,979 732,181 - 45,798 267,107 557,264 45,798

9. Operate Production Shore Base 839,959 50 50 0 419,979 419,979 - 312,201 - 419,979 732,181 - 45,798 267,107 557,264 45,798

10. Install Production Platform 5,164,878 40 40 20 2,065,951 2,065,951 1,032,976 2,133,376 243,451 2,065,951 4,199,327 1,276,427 299,783 1,313,945 3,219,600 1,162,328

11. Operate Production Platform 1,456,953 40 40 20 582,781 582,781 291,391 450,290 51,385 582,781 1,033,072 342,776 77,855 370,649 799,119 309,486

12. Drill Production Well 313,283 60 20 20 187,970 62,657 62,657 96,491 11,011 187,970 159,147 73,668 16,726 119,549 131,742 66,507

13. Lay Offshore Pipeline 51,480 45 10 45 23,166 5,148 23,166 9,906 1,130 23,166 15,054 24,297 2,485 14,734 13,579 18,903

14. Lay Onshore Pipeline 13,161 60 15 25 7,897 1,974 3,290 3,774 431 7,897 5,748 3,721 690 5,022 4,888 3,205

15. Construct Onshore Production Facility 29,427,686 40 45 15 11,771,075 13,242,459 4,414,153 9,092,864 1,037,637 11,771,075 22,335,323 5,451,790 1,572,438 7,486,403 17,133,433 5,256,485

16. Operate Production Facility 2,921,819 15 65 20 438,273 1,899,182 584,364 1,144,738 130,632 438,273 3,043,921 714,996 166,838 278,742 2,241,189 649,997

17. Construct Marine Terminal 23,394,237 40 45 15 9,357,695 10,527,407 3,509,136 1,144,738 130,632 9,357,695 11,672,145 3,639,768 980,617 5,951,494 9,240,037 3,440,190

18. Operate Marine Terminal 4,392,654 15 65 20 658,898 2,855,225 878,531 1,697,740 407,059 658,898 4,552,965 1,285,590 258,274 419,059 3,361,131 1,127,011

19. Major Platform Maintenance 531,702 20 50 30 106,340 265,851 159,511 128,083 14,616 106,340 393,933 174,127 26,807 67,632 297,235 144,474

20. Well Workover 116,666 60 20 20 70,000 23,333 23,333 34,695 4,302 70,000 58,028 27,635 6,188 44,520 48,183 24,862

21. Helicopter Support 77 50 50 0 39 39 - 42 5 39 80 5 5 25 61 8

22. Large Workboat 239 40 40 20 95 95 48 83 10 95 179 57 13 61 138 52

23. Small Workboat 205 40 40 20 82 82 41 73 8 82 155 49 11 52 120 45

24. Landing Craft 162 40 40 20 65 65 32 53 6 65 118 38 9 41 91 35

25. Dive Boat 228 40 40 20 91 91 46 63 7 91 155 53 12 58 120 48

26. Camp Support 281,688 45 50 5 126,760 140,844 14,084 208,134 23,751 126,760 348,978 37,836 20,415 80,619 261,275 45,982

Exhibit 3-6b: Spending by All Workers by Area for Remote Projects

Non-Production Wages by 

Place of Residence Total Wages by Place of Residence Spending by Area

Activity

Production 

Wages

Residence of Production 

Employees (Percent)

Production Wages by Place of 

Residence

Kenai Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S. Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S.

1. Geological Survey 255,539 25 25 50 63,885 63,885 127,770 62,183 7,096 63,885 126,068 134,866 69,275 95,630 93,325

2. Spill Contingency Response 110,792 100 0 0 110,792 - - 52,034 - 110,792 52,034 - 79,004 43,970 6,472

3. Construct Exploration Shore Base 353,205 100 0 0 353,205 - - 156,101 17,814 353,205 156,101 17,814 253,213 134,273 31,574

4. Operate Exploration Shore Base 353,205 100 0 0 353,205 - - 156,101 17,814 353,205 156,101 17,814 253,213 134,273 31,574

5. Install Exploration Platform 595,954.0 90 10 0 536,359 59,595 - 102,566 11,704 536,359 162,162 11,704 376,732 152,686 35,210

6. Operate Exploration Platform 1,515,231.1 90 10 0 1,363,708 151,523 - 468,302 53,441 1,363,708 619,825 53,441 977,175 529,386 112,834

7. Drill Exploration Well 699,997.3 60 20 20 419,998 139,999 139,999 208,169 - 419,998 348,168 139,999 328,188 274,230 119,574

8. Construct Production Shore Base 839,959 100 0 0 839,959 - - 312,201 - 839,959 312,201 - 592,422 277,747 45,798

9. Operate Production Shore Base 839,959 100 0 0 839,959 - - 312,201 - 839,959 312,201 - 592,422 277,747 45,798

10. Install Production Platform 5,164,878 90 10 0 4,648,390 516,488 - 2,133,376 243,451 4,648,390 2,649,864 243,451 3,380,845 2,169,870 444,941

11. Operate Production Platform 1,456,953 90 10 0 1,311,258 145,695 - 450,290 51,385 1,311,258 595,986 51,385 939,591 509,025 108,494

12. Drill Production Well 313,283 70 20 10 219,298 62,657 31,328 96,491 11,011 219,298 159,147 42,339 165,892 126,661 41,971

13. Lay Offshore Pipeline 51,480 50 10 40 25,740 5,148 20,592 9,906 1,130 25,740 15,054 21,723 21,181 13,083 15,437

14. Lay Onshore Pipeline 13,161 80 15 5 10,529 1,974 658 3,774 431 10,529 5,748 1,089 7,702 4,765 1,339

15. Construct Onshore Production Facility 29,427,686 70 15 15 20,599,380 4,414,153 4,414,153 9,092,864 1,037,637 20,599,380 13,507,017 5,451,790 15,643,965 10,981,726 4,823,068

16. Operate Production Facility 2,921,819 80 15 5 2,337,455 438,273 146,091 1,144,738 130,632 2,337,455 1,583,011 276,723 1,738,384 1,266,547 331,835

17. Construct Marine Terminal 23,394,237 80 15 5 18,715,389 3,509,136 1,169,712 1,144,738 130,632 18,715,389 4,653,874 1,300,344 13,171,973 4,684,417 1,755,947

18. Operate Marine Terminal 4,392,654 80 15 5 3,514,123 658,898 219,633 1,697,740 407,059 3,514,123 2,356,638 626,692 2,636,755 1,896,782 631,939

19. Major Platform Maintenance 531,702 50 30 20 265,851 159,511 106,340 128,083 14,616 265,851 287,593 120,957 216,936 220,284 98,928

20. Well Workover 116,666.2 70 20 10 81,666 23,333 11,667 34,695 4,302 81,666 58,028 15,969 61,704 46,340 15,709

21. Helicopter Support 77 90 10 0 70 8 - 42 5 70 49 5 51 39 8

22. Large Workboat 239 60 30 10 143 72 24 83 10 143 155 33 113 117 33

23. Small Workboat 205 60 30 10 123 61 20 73 8 123 135 29 97 102 29

24. Landing Craft 162 60 30 10 97 48 16 53 6 97 102 22 76 77 22

25. Dive Boat 228 60 30 10 137 69 23 63 7 137 132 30 107 101 30

26. Camp Support 281,688 85 10 5 239,435 28,169 14,084 208,134 23,751 239,435 236,303 37,836 185,096 180,221 42,974

Exhibit 3-6a: Spending by All Workers by Area for Cook Inlet Projects

Activity

Residence of Production 

Employees (Percent)

Production Wages by Place of 

Residence Spending by Area

Production 

Wages

Total Wages by Place of Residence

Non-Production Wages by 

Place of Residence

Local Kenai Anchorage

Other 

U.S. Local Kenia Anchorage Other U.S. Anchorage

Other 

U.S. Local Kenia Anchorage

Other 

U.S. Local Kenai Anchorage

Other 

U.S.

1. Geological Survey 255,539 0 25 25 50 - 63,885 63,885 127,770 62,183 7,096 - 63,885 126,068 134,866 25,823 85,775 53,542 93,091

2. Spill Contingency Response 110,792 0 100 0 0 - 110,792 - - 52,034 - - 110,792 52,034 - 12,945 - 76,936 39,566

3. Construct Exploration Shore Base 353,205 20 40 40 0 70,641 141,282 141,282 - 156,101 17,814 70,641 141,282 297,383 17,814 41,906 56,257 110,808 210,088

4. Operate Exploration Shore Base 353,205 20 40 40 0 70,641 141,282 141,282 - 156,101 17,814 70,641 141,282 297,383 17,814 41,906 56,257 110,808 210,088

5. Install Exploration Platform 595,954 0 40 40 20 - 238,382 238,382 119,191 102,566 11,704 - 238,382 340,948 130,895 56,463 83,249 179,842 245,074

6. Operate Exploration Platform 1,515,231 0 40 40 20 - 606,092 606,092 303,046 468,302 53,441 - 606,092 1,074,394 356,487 161,939 226,726 466,444 764,285

7. Drill Exploration Well 699,997 0 50 25 25 - 349,999 174,999 174,999 208,169 - - 349,999 383,168 174,999 72,199 111,300 258,699 279,795

8. Construct Production Shore Base 839,959 20 40 40 0 167,992 335,983 335,983 - 312,201 - 167,992 335,983 648,185 - 91,597 106,843 259,484 458,044

9. Operate Production Shore Base 839,959 0 50 50 0 - 419,979 419,979 - 312,201 - - 419,979 732,181 - 91,597 - 312,905 511,465

10. Install Production Platform 5,164,878 0 40 40 20 - 2,065,951 2,065,951 1,032,976 2,133,376 243,451 - 2,065,951 4,199,327 1,276,427 599,566 811,808 1,613,728 2,970,555

11. Operate Production Platform 1,456,953 0 40 40 20 - 582,781 582,781 291,391 450,290 51,385 - 582,781 1,033,072 342,776 155,711 218,005 448,504 734,889

12. Drill Production Well 313,283 0 60 20 20 - 187,970 62,657 62,657 96,491 11,011 - 187,970 159,147 73,668 33,452 46,853 136,275 117,944

13. Lay Offshore Pipeline 51,480 0 45 10 45 - 23,166 5,148 23,166 9,906 1,130 - 23,166 15,054 24,297 4,970 15,453 17,219 12,060

14. Lay Onshore Pipeline 13,161 0 60 15 25 - 7,897 1,974 3,290 3,774 431 - 7,897 5,748 3,721 1,381 2,367 5,713 4,346

15. Construct Onshore Production Facility 29,427,686 0 40 45 15 - 11,771,075 13,242,459 4,414,153 9,092,864 1,037,637 - 11,771,075 22,335,323 5,451,790 3,144,876 3,467,338 9,058,841 15,777,703

16. Operate Production Facility 2,921,819 10 10 60 20 292,182 292,182 1,753,091 584,364 1,144,738 130,632 292,182 292,182 2,897,830 714,996 333,677 640,565 352,666 2,009,858

17. Construct Marine Terminal 23,394,237 0 40 45 15 - 9,357,695 10,527,407 3,509,136 1,144,738 130,632 - 9,357,695 11,672,145 3,639,768 1,961,234 2,314,892 6,932,111 8,404,101

18. Operate Marine Terminal 4,392,654 10 10 60 20 439,265 439,265 2,635,593 878,531 1,697,740 407,059 439,265 439,265 4,333,332 1,285,590 516,548 1,097,008 537,647 3,014,273

19. Major Platform Maintenance 531,702 0 10 50 30 - 53,170 265,851 159,511 128,083 14,616 - 53,170 393,933 174,127 49,388 110,745 58,510 275,236

20. Well Workover 116,666 0 60 20 20 - 70,000 23,333 23,333 34,695 4,302 - 70,000 58,028 27,635 12,375 17,576 50,707 43,093

21. Helicopter Support 77 10 40 50 0 8 31 39 - 42 5 8 31 80 5 10 8 25 56

22. Large Workboat 239 20 30 30 20 48 72 72 48 83 10 48 72 155 57 26 67 59 112

23. Small Workboat 205 20 30 30 20 41 61 61 41 73 8 41 61 135 49 23 57 51 97

24. Landing Craft 162 20 30 30 20 32 48 48 32 53 6 32 48 102 38 18 45 40 73

25. Dive Boat 228 20 30 30 20 46 69 69 46 63 7 46 69 132 53 24 63 55 96

26. Camp Support 281,688 10 40 45 5 28,169 112,675 126,760 14,084 208,134 23,751 28,169 112,675 334,894 37,836 40,829 41,979 92,076 233,407

Exhibit 3-6c: Spending by All Workers by Area for Remote Projects Near a Population Center

Activity

Production 

Wages

Residence of Production Employees 

(Percent) Production Wages by Place of Residence

Non-Production Wages by 

Place of Residence Total Wages by Place of Residence Spending by Area
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 52 Sub-Arctic IMPAK

along with employee compensation. They are assumed not to be included in Bureau of the

Census’ estimates of fringe benefits and are coded directly to the appropriate IMPLAN sectors.

Interviews with several contractors conducted for this study revealed employee related costs of

$68.00 per day for food and lodging at local hotels and $37.50 per day on the platforms. These

overhead costs are assumed to apply to only production personnel working on-site who do not

normally reside in the local area. They are housed at hotel type facilities that provide meals

including a bag lunch. Employees who reside locally normally commute to the job site on a

daily basis and prepare their own meals and lunches.

Exhibit 3-7 provides estimates of production worker camp expenses. First, place of residence by 

activity is provided. Workers in all tasks are assumed to reside at the camp with the exception of 

the platform and drilling related tasks. For the production and marine terminal activities the

camp may be located on-site. Next, the number of man-nights is calculated as the product of the 

typical number of days in a workweek for the activity and the number of production worker man 

weeks for the activity. The number of room nights is then derived by multiplying man-nights by 

the percent non-local work force. Camp spending is the product of room nights and the $37.50

per night cost. Camp spending is calculated separately for Cook Inlet projects and remote

projects both near and not near a local labor supply.

NonLocal 

Work 

Force 

(%)

Number 

of Room 

Nights

Camp 

Spending

NonLocal 

Work 

Force 

(%)

Number 

of Room 

Nights

Camp 

Spending

NonLocal 

Work 

Force 

(%)

Number 

of Room 

Nights

Camp 

Spending

1. Geological Survey Camp 7 124.3 870.0 75 652.50 24,469 100 870.00 59,160 100 870.00 59,160

2. Spill Contingency Response Camp 5 104.0 520.0 - - - 100 520 35,360 100 520 35,360

3. Construct Exploration Shore Base Camp 5 312.0 1560.0 - - - 100 1,560 106,080 80 1,248 84,864

4. Operate Exploration Shore Base Camp 5 312.0 1560.0 - - - 100 1,560 106,080 80 1,248 84,864

5. Install Exploration Platform Platform 7 205.0 1435.0 10 144 5,381 100 1,435 53,813 100 1,435 53,813

6. Operate Exploration Platform Platform 7 468.0 3276.0 10 328 12,285 100 3,276 122,850 100 3,276 122,850

7. Drill Exploration Well Platform 7 205.7 1440.0 40 576 21,600 100 1,440 54,000 100 1,440 54,000

8. Construct Production Shore Base Camp 5 624.0 3120.0 - - - 100 3,120 212,160 80 2,496 169,728

9. Operate Production Shore Base Camp 5 624.0 3120.0 - - - 100 3,120 212,160 100 3,120 212,160

10. Install Production Platform Platform 7 1784.6 12492.0 10 1,249 46,845 100 12,492 468,450 100 12,492 468,450

11. Operate Production Platform Platform 7 450.0 3150.0 10 315 11,813 100 3,150 118,125 100 3,150 118,125

12. Drill Production Well Platform 7 96.4 675.0 30 203 7,594 100 675 25,313 100 675 25,313

13. Lay Offshore Pipeline Camp 6 16.0 96.2 50 48 3,270 100 96 6,540 100 96 6,540

14. Lay Onshore Pipeline Camp 6 7.5 45.3 20 9 615 100 45 3,077 100 45 3,077

15. Construct Onshore Production Facility Camp 6 18512.0 111072.0 30 33,322 2,265,869 100 111,072 7,552,896 100 111,072 7,552,896

16. Operate Production Facility Camp 7 1144.0 8008.0 20 1,602 108,909 100 8,008 544,544 90 7,207 490,090

17. Construct Marine Terminal Camp 6 14741.3 88448.1 20 17,690 1,202,894 100 88,448 6,014,471 100 88,448 6,014,471

18. Operate Marine Terminal Camp 7 1456.0 10192.0 20 2,038 138,611 100 10,192 693,056 90 9,173 623,750

19. Major Platform Maintenance Platform 7 212.6 1488.0 50 744 27,900 100 1,488 55,800 90 1,339 50,220

20. Well Workover Platform 7 34.3 240.0 30 72 2,700 100 240 9,000 100 240 9,000

21. Helicopter Support Camp 5 0.1 0.4 10 0 3 100 0 28 90 0 25

22. Large Workboat Camp 5 0.2 0.8 40 0 23 100 1 57 80 1 45

23. Small Workboat Camp 5 0.1 0.7 40 0 20 100 1 50 80 1 40

24. Landing Craft Camp 5 0.1 0.5 40 0 14 100 1 36 80 0 29

25. Dive Boat Camp 5 0.1 0.6 40 0 17 100 1 43 80 1 34

26. Camp Support Camp 5 416.0 2080.0 15 312 21,216 100 2,080 141,440 90 1,872 127,296

Exhibit 3-7: Calculation of Production Worker Lodging Expenses

Cook Inlet Projects Remote Projects

Remote Projects Near Labor 

Supply

Activity

Place of 

Residence 

for Non-Local 

Production 

Employees

Days/

Week

Production 

Worker

 Man-Weeks

ManNights

3.9 CONVERSION FACTORS

In some instances, analysts may wish to produce estimates of the amount of production labor that 

is utilized or compare the estimates of production labor generated by the model with data from 

another source. For this purpose a set of conversion factors, provided in Exhibit 3-8, were 

developed that allow the model to convert estimates of production labor from person-weeks to 

person-hours, person-days or person-years. These estimates are developed by activity and are

based on the schedules for the majority of workers within that activity. Note that in the Arctic 
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model, conversion factors by activity were not necessary as the vast majority of the workers 

operated under the same schedule.

1. Geological Survey 12 7 52

2. Spill Contingency Response 8 5 52

3. Construct Exploration Shore Base 8 5 52

4. Operate Exploration Shore Base 8 5 52

5. Install Exploration Platform 12 7 52

6. Operate Exploration Platform 12 7 26

7. Drill Exploration Well 12 7 26

8. Construct Production Shore Base 8 5 52

9. Operate Production Shore Base 8 5 52

10. Install Production Platform 12 7 26

11. Operate Production Platform 12 7 26

12. Drill Production Well 12 7 26

13. Lay Offshore Pipeline 12 6 52

14. Lay Onshore Pipeline 10 6 52

15. Construct Onshore Production Facility 10 6 52

16. Operate Production Facility 12 7 26

17. Construct Marine Terminal 10 6 52

18. Operate Marine Terminal 12 7 26

19. Major Platform Maintenance 12 7 52

20. Well Workover 12 7 26

21. Helicopter Support 8 5 52

22. Large Workboat 10 5 52

23. Small Workboat 10 5 52

24. Landing Craft 10 5 52

25. Dive Boat 10 5 52

26. Camp Support 8 5 52

Exhibit 3-8: Conversion Factors for Calculation of Production Worker Man-Hours, 

Man-Days, Man Weeks and ManYears

Weeks/

Activity Year

Hours/

Day

Days/

Week
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4 PURCHASED SERVICES

Purchases from service sectors represent overhead types of costs that are usually not separately

specified in the type of engineering cost estimates used in this study. If they are considered, they 

are generally lumped together in a common overhead category. Moreover, while these purchases 

are part of the real costs of doing business, no data is available to directly allocate them to the

different activities. Part of the problem is that these costs represent common overhead

components. The amount of advertising that is purchased by a large oil company, for example,

is probably fairly independent of the miles of pipelines constructed, but is probably somewhat

related to gallons of oil produced. On the other hand, a smaller company specializing in pipeline 

construction, although likely to have a small advertising budget, is likely to have spending fairly

related to the miles of pipelines it constructs in a year.

The assignment of these costs by area is also problematic. The oil and gas industry is an

amalgamation of a large number of companies, not just the big oil companies. For example, the

1992 Census of Mineral Industries, U.S. Department of Commerce, estimates that almost 17,000 

companies were involved in the Crude Petroleum and Natural Gas and Oil and Gas Field

Services industries. Therefore, one can not simply ask the large oil companies where they spend 

their overhead dollar, even assuming they would be willing to provide an answer. Instead,

estimates must be made of where the aggregate of all companies make their expenditures.

4.1 NATIONAL INPUT/OUTPUT DATA

As discussed above, most major inputs to the IMPAK model were estimated based on

information on cost and quantity gathered in the industry interviews or based on the expert

engineering knowledge of project staff. However, in order to determine what purchased services 

are utilized in quantities that are significant enough to warrant estimation, data from the latest

national-level input-output table of the U.S. economy were tabulated and analyzed. The latest

table available is for the year 1992, as developed by the U.S. Bureau of Economic Analysis, and 

published in September 1998. As the relationships between industries represented in the input

output models change slowly over time, the slight lag in these data are of minimal importance.

Moreover, the data are used to calculate percentages rather than absolute values. While there

maybe some changes in the absolute levels of the data over time, the percentages will not change 

significantly. Data from this table are tabulated and presented in Exhibits 4-1 and 4-2.

The data for the oil and gas industry, provided in Exhibit 4-1 are used for all of the activities

except for camp support, helicopter support and boat support. These activities are secondary 

support activities that are not part of the oil and gas industry as traditionally defined by inputoutput models. As a result, purchased services data for these activities were based on the inputoutput data for hotels, air transport, and water transport, respectively. These data are shown in

Exhibit 4-2.
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BEA #11.0601 BEA #11.0602 BEA #12.0215

BEA #8.0001 Construction: Construction: Construction:

Mining: Petroleum Petroleum, Maintenance

Crude and Natural and Repair

Petroleum Natural Gas, and of Petroleum

BEA I-O and Gas Solid and

Industry Natural Well Mineral Natural

Number BEA I-O Industry Name Gas Drilling Exploration Gas Wells

27.0100 Industrial inorganic and organic chemicals 853 394 7 25

27.0406 Chemicals and chemical preparations, n.e.c. 321 62 1 4

29.0203 Polishes and sanitation goods 5 0 0 27

31.0101 Petroleum refining 386 254 25 14

31.0102 Lubricating oils and greases 244 81 1 0

31.0200 Asphalt paving mixtures and blocks 0 0 0 23

36.0100 Cement, hydraulic 187 88 0 33

36.1100 Concrete products, except block and brick 0 0 0 14

36.1900 Minerals, ground or treated 0 108 0 3

37.0101 Blast furnaces and steel mills 1079 221 16 21

37.0103 Steel wiredrawing and steel nails and spikes 112 14 1 0

40.0400 Fabricated structural metal 19 138 7 9

42.0800 Pipe, valves, and pipe fittings 434 15 0 24

45.0100 Construction machinery and equipment 200 139 10 0

46.0300 Hoists, cranes, and monorails 0 0 0 16

50.0400 Industrial and commercial machinery and equipment, n.e.c. 157 127 0 0

53.0500 Relays and industrial controls 66 0 0 0

62.0200 Mechanical measuring devices 1 22 7 0

65.0100 Railroads and related services 99 76 0 7

65.0200 Local and suburban transit and interurban highway passenger transportation 61 6 1 1

65.0301 Trucking and courier services, except air 251 101 1 31

65.0400 Water transportation 264 32 0 1

65.0500 Air transportation 246 29 5 6

66.0100 Telephone and telegraph communications, and communications sevices, n.e.c. 196 45 11 4

68.0100 Electric services (utilities) 1626 55 12 8

68.0201 Natural gas transportation 2303 0 0 0

68.0202 Natural gas distribution 518 103 10 0

68.0301 Water supply and sewerage systems 82 5 0 0

69.0100 Wholesale trade 935 301 10 40

69.0200 Retail trade, except eating and drinking 126 15 1 1

70.0100 Banking 567 64 9 12

70.0400 Insurance carriers 113 11 3 3

71.0201 Real estate agents, managers, operators, and lessors 521 85 24 11

71.0202 Royalties 16661 5 152 1

72.0101 Hotels 264 30 5 5

73.0103 Personnel supply services 154 18 3 3

73.0104 Computer and data processing 115 16 1 4

73.0111 Management and consulting services 135 17 3 3

73.0200 Advertising 128 25 5 4

73.0301 Legal services 980 93 9 4

73.0302 Engineering, architectural, and surveying services 874 0 0 0

73.0303 Accounting, auditing, and bookeeping, and miscellaneous services, n.e.c. 28 5 0 15

74.0000 Eating and drinking places 312 35 6 7

75.0001 Automotive rental and leasing, without drivers 96 12 1 2

77.0501 Business associations and professional membership organizations 62 6 1 1

Total 31781 2853 348 387

INTRA-INDUSTRY PURCHASES

8.0001 Crude petroleum and natural gas 20296 0 0 0

11.0601 Petroleum and natural gas well drilling 0 107 0 0

11.0602 Petroleum, natural gas and solid mineral exploration 0 0 63 0

12.0215 Maintenance and repair of petroleum and natural gas wells 1719 0 0 0

Total 22015 107 63 0

OTHER COMPONENTS OF OUTPUT

80.0000 Noncomparable imports 1033 0 0 0

88.0000 Compensation of employees 14127 6529 1042 1019

89.0000 Indirect business tax and nontax liability 4729 515 56 37

90.0000 Other value added 30457 1337 143 201

Total 50346 8381 1241 1257

TOTAL OUTPUT 105369 11633 1673 1719

Percentage of all Inputs Accounted for 98.84% 97.49% 98.74% 95.64%

Percentage of all Intermediate Inputs Accounted for 96.28% 90.72% 94.31% 83.77%

Exhibit 4-1: Selected Oil and Gas Industry Input Data From the 1992 BEA Input-Output Table for All E&D 

Activities Except those Relating to Water Transport, Air Transport and Hotels ($, Millions)

MAJOR INTERMEDIATE INPUTS
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BEA # BEA # BEA # BEA #

BEA I-O 65.0200 65.0400 65.0500 72.0101

Industry Local Water Air Hotels

Number BEA I-O Industry Name Transport Transport Transport

MAJOR INTERMEDIATE INPUTS

12.0300 Other maintenance and repair - - - 1,390

19.0200 Housefurnishings, n.e.c. - - - 483

31.0101 Petroleum refining 1,352 727 9,432 -

32.0100 Tires and inner tubes 135 - - -

32.0500 Rubber and plastics hose and belting 103 - - -

42.0800 Pipe, valves, and pipe fittings 151 - - -

43.0200 Internal combustion engines, n.e.c. 191 217 - -

49.0200 Ball and roller bearings 177 184 - -

59.0302 Motor Vehicle parts and accessories 374 - - -

60.0200 Aircraft and missile engines and engine parts - - 1,375 -

60.0400 Aircraft and missile equipment, n.e.c. - - 921 -

61.0100 Ship building and repairing - 585 - -

65.0301 Trucking and courier services, except air 269 - - 279

65.0701 Freight forwarders and other transportation services - 873 734 -

65.0702 Arrangement of passenger transportation - 525 6,967 793

66.0100 Telephone and telegraph communications, and communications sevices, n.e.c. 346 - 1,204 363

66.0200 Cable and other pay television services - - - 369

68.0100 Electric services (utilities) - - - 1,830

68.0202 Natural gas distribution - - - 318

68.0302 Sanitary services, steam supply, and irrigation systems - - - 621

69.0100 Wholesale trade 1,120 505 1,462 402

69.0200 Retail trade, except eating and drinking 162 - - -

70.0100 Banking 169 469 601 1,670

70.0200 Credit agencies other than banks - 526 784 1,335

70.0400 Insurance carriers 158 - - -

71.0201 Real estate agents, managers, operators, and lessors 301 877 1,425 1,353

73.0102 Services to dwellings and other buildings - - - 619

73.0103 Personnel supply services 430 - - 504

73.0104 Computer and data processing - 280 2,224 341

73.0106 Detective and protective services - - - 406

73.0107 Miscellaneous equipment rental and leasing - 186 675 -

73.0109 Other business services - 198 - 941

73.0111 Management and consulting services - 911 - 971

73.0112 Testing and research labs - 743 - -

73.0200 Advertising - 1,244 1,389 974

73.0301 Legal services 189 164 944 289

73.0302 Engineering, architectural, and surveying services - 302 - -

73.0303 Accounting, auditing, and bookeeping, and miscellaneous services, n.e.c. - 217 - -

74.0000 Eating and drinking places - - 1,832 298

75.0001 Automotive rental and leasing, without drivers 325 - - -

78.0100 U.S. Postal Service - - - 264

Total 5,952 9,733 31,969 16,813

INTRA-INDUSTRY PURCHASES

65.0200 Local transportation - - - -

65.0400 Water transportation - 4,282 - -

65.0500 Air transportation - - 6,064 -

72.0101 Hotels - - - -

Total 0 4282 6064 0

OTHER COMPONENTS OF OUTPUT

80.0000 Noncomparable imports - 2,954 8,827 -

88.0000 Compensation of employees 8,704 7,140 32,761 19,934

89.0000 Indirect business tax and nontax liability 169 583 5,696 4,999

90.0000 Other value added 3,515 5,073 3,709 6,159

Total 12388 15750 50993 31092

TOTAL OUTPUT 20166 32440 94141 52407

Percentage of all Inputs Accounted for 90.95% 91.75% 94.57% 91.41%

Percentage of all Intermediate Inputs Accounted for 76.52% 78.44% 86.21% 78.88%

Exhibit 4-2: Selected Miscellaneous Input Data from the 1992 BEA Input-Output Table for E&D 

Activities Relating to Water Transport, Air Transport and Hotels ($, Millions)

As shown in Exhibit 4-1 under column headings, the various activities that comprise the oil and

gas industry are subsumed within four sectors in the national I-O table. The largest of these 

sectors is mining Sector 8.0001, Crude Petroleum and Natural Gas. The three smaller sectors are 
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all construction industries. These include Sector 11.0601 (Petroleum and Natural Gas Well

Drilling), Sector 11.0602 (Petroleum, Natural Gas, and Solid Mineral Exploration), and Sector

12.0215 (Maintenance and Repair of Petroleum and Natural Gas Wells).

Of these four sectors, the total output for the mining sector, Crude Petroleum and Natural Gas, is

far larger than the others combined with output of over $100 billion. This compares to total 

output of just over $10 billion for Petroleum and Natural Gas Well Drilling sector and between

$1 and $2 billion for the other two sectors.

Exhibit 4-1 provides the dollars of purchases for all input sectors that accounted for at least one

half of one percent of industry output for any of the four sectors. In total, there were 53 sectors

that met these criteria. Note that as shown at the bottom of Exhibit 4-1, the purchases from these 

53 sectors account for 96 to 99 percent of the total purchases of the four oil and gas sectors.

Many of these sectors were not relevant in the analysis of purchased services and were therefore 

dropped from the analysis. These sectors can be classified into seven groups. One such group of 

sectors is those that represent intra-industry purchases, such as the purchases the Crude

Petroleum and Natural sector makes from itself and the other three oil and gas sectors listed in

the table.

A second group of sectors includes those that represent other components of output such as

compensation of employees, and non-comparable imports. Estimates for these sectors were

made from primary sources. Non-comparable imports are estimated as foreign purchased

equipment.

A third set of industries that are not important in the analysis of purchased services are those that 

are often referred to as margin industries. In input-output analysis, the value of a purchase is

apportioned among the amount paid for the actual good, the amount paid others to transport, and 

wholesale and retail the good. Examples of margin industries in the BEA I-O table that are

shown in Exhibit 4-2 include Trucking (industry code 65.0301), Freight Forwarders (industry

code 65.0701) and Wholesale Trade (industry code 69.0100). While the values of purchases from 

these sectors are estimated as part of this study, these estimates are derived and subtracted from

the estimates made for purchases of capital and materials. The estimation of capital and material 

purchases and the assignment of transport, wholesale and retail margins are provided in Chapter 

5.

A fourth set of sectors are selected utility sectors such as electricity, natural gas, and water and

sewer. Since the oil and gas production in Alaska is so isolated, the production process normally 

generates its own power and waste disposal and does not separately purchase these inputs.

A fifth set of industries are those that supply or are related to the capital goods that are

purchased. Capital goods purchases from these sectors are derived from primary data sources

and are discussed in Chapter 5. 

A sixth set of industries are those that provide material inputs. These include the following

sectors:
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ß 27.0100 Industrial inorganic and organic chemicals

ß 27.0406 Chemicals and chemical preparations, n.e.c.

ß 29.0203 Polishes and sanitation goods

ß 31.0101 Petroleum refining

ß 31.0102 Lubricating oils and greases

ß 31.0200 Asphalt paving mixtures and blocks

ß 36.0100 Cement, hydraulic

ß 36.1100 Concrete products, except block and brick

ß 36.1900 Minerals, ground or treated

These inputs are also derived from primary sources and are discussed in Chapter 5, Section 5.2.

Two final sectors that were eliminated were sectors 89.0000 Indirect Business Taxes and

71.0202 Royalties. The calculation of the values associated with these sectors is addressed in

Section 7.3.1 under “Government.”

After eliminating these seven types of sectors, the 16 sectors that remain are considered to be the 

types of sectors supplying the purchased services that are of interest here. These include the

following BEA I-O codes and sectors:

ß 66.0100 Telephone and telegraph communications, and communications services, n.e.c.

ß 70.0100 Banking

ß 70.0400 Insurance carriers

ß 71.0201 Real estate agents, managers, operators, and lessors

ß 72.0101 Hotels

ß 73.0103 Personnel supply services

ß 73.0104 Computer and data processing

ß 73.0111 Management and consulting services

ß 73.0200 Advertising

ß 73.0301 Legal services

ß 73.0302 Engineering, architectural, and surveying services

ß 73.0303 Accounting, auditing, and bookkeeping, and miscellaneous services, n.e.c.

ß 74.0000 Eating and drinking places

ß 75.0001 Automotive rental and leasing, without drivers

ß 77.0501 Business associations and professional membership organizations

ß 90.0000 Other value added.

As was the case with the oil and gas input-output sectors, Exhibit 4-2 provides information for

inputs that accounted for at least one half of one percent. The list of included sectors is slightly

different than for Exhibit 4-1. Once again, sectors that were not considered purchased services

were eliminated from consideration.
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4.2 THE CALCULATION OF TOTAL PURCHASED SERVICES

The calculation of total overhead or purchased services expenditures is based on the ratio of

these expenditures to labor compensation. The choice of labor compensation is based on the

relative quality of the labor data and the availability of labor data for all of the activities 

including the secondary, non-oil and non-gas industry sectors.

Exhibits 4-3 and 4-4 list the purchased services sectors and their ratio to labor compensation

from the national input-output tables. The BEA I-O sector number and name is provided along

with the corresponding IMPLAN sector number. Exhibit 4-3 provides this data all E&D 

activities except those relating to water transportation, air transportation and hotels. Exhibit 4-4 

provides this data for R&D support activities relating to the water, air, and hotel sectors. The

ratios provided in these exhibits are multiplied by the total labor compensation for each of the

activities to generate estimates of purchased services inputs.

Kenai Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S.

Local (If 

Near 

Labor 

Supply) Kenai Anchorage

Other 

U.S.

66.0100 Telephone communications 441 1.13 70 20 10 20 60 20 40 10 30 20

70.0100 Banking 456 2.87 70 20 10 5 60 35 32.5 2.5 30 35

70.0400 Insurance carriers 459 0.57 70 20 10 5 60 35 32.5 2.5 30 35

71.0201 Real estate agents 462 2.82 70 20 10 5 60 35 32.5 2.5 30 35

72.0101 Hotels 463 1.34 60 20 20 5 50 45 27.5 2.5 25 45

73.0103 Personnel supply 474 0.78 60 20 20 5 50 45 27.5 2.5 25 45

73.0104 Computers & data processing 475 0.60 70 20 10 5 60 35 32.5 2.5 30 35

73.0111 Management & consulting 508 0.70 20 50 30 10 50 40 30 5 25 40

73.0200 Advertising 469 0.71 40 40 20 0 40 60 20 0 20 60

73.0301 Legal services 494 4.78 50 30 20 5 60 35 32.5 2.5 30 35

73.0302 Engineering, architectural & surveying 506 3.85 50 30 20 5 60 35 32.5 2.5 30 35

73.0303 Accounting, auditing & bookeeping 507 0.21 50 30 20 5 60 35 32.5 2.5 30 35

74.0000 Eating & drinking places 454 1.58 50 30 20 5 60 35 32.5 2.5 30 35

75.0001 Automotive rental & leasing 477 0.49 40 20 40 10 40 50 25 5 20 50

77.0501 Associations & professional org. 503 0.31 20 30 50 0 40 60 20 0 20 60

90.0000 Other value added n.a. 141.47 10 10 80 0 20 80 10 0 10 80

Remote Projects Remote Projects Near Labor Supply

Exhibit 4-3: Percentage Estimates of Purchased Services by Sector and Geographic Area for All E&D Activities Except Those Relating to Water Transport, Air Transport, and Hotels

BEA I-O Sector Name

CorrespondingIMP

LAN Sector

Percent of Labor 

Compensation

BEA I-O 

Sector 

Number

Cook Inlet Projects

65.0400 

Water 

Transport

65.0500 Air 

Transport

72.0101 

Hotels Kenai Anchorage

Other 

U.S. Kenai Anchorage

Other 

U.S.

Local (If 

Near Labor 

Supply) Kenai

66.0100 Telephone communications 441 - 3.68 1.82 70 20 10 20 60 20 40 10

66.0200 Cable TV 441 - - 1.85 15 15 70 10 20 70 15 5

70.0100 Banking 456 6.57 1.83 8.38 70 20 10 5 60 35 32.5 2.5

70.0200 Credit agencies 457 7.37 2.39 6.70 70 20 10 5 60 35 32.5 2.5

70.0400 Insurance carriers 459 - - - 70 20 10 5 60 35 32.5 2.5

71.0201 Real estate agents 462 12.28 4.35 6.79 70 20 10 5 60 35 32.5 2.5

73.0102 Services to dwellings/buildings 472 - - 3.11 60 20 20 5 50 45 27.5 2.5

73.0103 Personnel supply 474 - - 2.53 60 20 20 5 50 45 27.5 2.5

73.0104 Computers & data processing 475 3.92 6.79 1.71 70 20 10 5 60 35 32.5 2.5

73.0106 Detective services 476 - - 2.04 50 30 20 5 60 35 32.5 2.5

73.0107 Equipment rental & leasing 473 2.61 2.06 - 50 30 20 5 45 50 25 2.5

73.0109 Other business services 470 2.77 - 4.72 50 30 20 5 60 35 32.5 2.5

73.0111 Management & consulting 508 12.76 - 4.87 20 50 30 10 50 40 30 5

73.0112 Testing and research labs 509 10.41 - - 40 20 40 5 25 70 15 2.5

73.0200 Advertising 469 17.42 4.24 4.89 40 40 20 0 40 60 20 0

73.0301 Legal services 494 2.30 2.88 1.45 50 30 20 5 60 35 32.5 2.5

73.0302 Engineering, architectural & surveying 506 4.23 - - 50 30 20 5 60 35 32.5 2.5

73.0303 Accounting, auditing & bookeeping 507 3.04 - - 50 30 20 5 60 35 32.5 2.5

74.0000 Eating & drinking places 454 - 5.59 1.49 50 30 20 5 60 35 32.5 2.5

75.0001 Automotive rental & leasing 477 - - - 40 20 40 10 40 50 25 5

78.0100 U.S. Postal Service 513 - - 1.32 60 20 20 10 60 30 35 5

90.0000 Other value added n.a. 71.05 11.32 30.90 0 20 80 0 20 80 10 0

Exhibit 4-4: Percentage Estimates of Purchased Services by Sector and Geographic Area for E&D Support Activities Relating to Water Transport, Air Transport, and Hotels

BEA I-O 

Sector 

Number BEA I-O Sector Name

Corresponding 

IMPLAN Sector

Percent of Labor Compensation Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

4.3 INVESTMENT FINANCE CHARGES

Note that one BEA sector, "Other Value Added", is not assigned directly to an IMPLAN sector. 

This category is comprised of capital depreciation and finance charges. Mining industries are
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different from other production oriented industries (e.g., manufacturing) in that they are very

capital intensive and a large percentage of their total expenditures falls under research and

development (R&D), which can be capitalized. As a result, mining industries incur relative high 

finance charges to cover these capital and R&D expenditures. In the National Input-Output 

Accounts, these types of finance charges are grouped with depreciation charges under the

category called "Other Value Added."

In Chapter 5, capital depreciation was explicitly addressed by spreading equipment expenditures 

over the lives of the assets and taking into account usage rates. To account for finance charges,

we started by calculating total other value added for each activity. This was accomplished by

multiplying each activity's employee compensation estimate by a corresponding ratio of Other

Value Added to Employee Compensation (calculated using the National Input-Output tables). 

The results were then divided in half to eliminate the depreciation charges (this is based on the

assumption that finance charges are paid monthly over a 20 year period at an 8 percent interest

rate). The resulting interest payments were further divided and assigned to the sources of the

funds. Some of the charges reflect a return to personal savings and were assigned to PCE

accordingly. The remaining charges represent returns to financial service industries and were

distributed between the banking industry (IMPLAN sector 456), credit agencies (IMPLAN

Sector 457) and security/commodity brokers (IMPLAN sector 458).

It should be noted that some of the finance charges occur only in one time period whereas others 

span a number of years. This is to be expected and reflects the different nature of capital

investments being financed. The first case is generally associated with the use of equipment to

carry out a specific project: for example, using a bulldozer to help build an ice road. In this

example, a small fraction of the total finance charges the contractor incurred when he purchased 

the bulldozer are expensed to the project based upon how much the machine is used. Finance

charges paid over multiple years include not only equipment usage, but also the capitalization of 

labor, materials and installed equipment needed to conduct research and development. In

IMPAK, such charges are tied to oil production operations.

4.4 PURCHASED SERVICES BY GEOGRAPHIC AREA

The estimates of purchased services by activity and IMPLAN sector are then split among the

local area, the rest of Alaska and the 49 states. This disaggregation is based on percentage

distributions developed by engineering study staff, based on their familiarity with the area and

the production process. These percentages are provided in Exhibits 4-3 and 4-4. The percentage 

estimates provided in Exhibit 4-3 are for all E&D activities except those relating to water

transportation, air transportation and hotels. Those in Exhibit 4-4 provides this data for R&D 

support activities relating to the water, air, and hotel sectors. In each exhibit, separate

percentages are provided for projects located in the Cook Inlet, remote locations and remote

location near areas of labor availability.

The costs of purchased services are assumed to be the same regardless of the location of the

project. This is because the bulks of these costs are assumed to be of the overhead variety and

are thus assumed to occur where the operations and/or headquarters of the enterprises are 
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located. Note that in the remote scenario, all of these costs are assumed to remain in the Kenai,

Anchorage or the Other U.S. For a remote operation near a population center, some of the costs 

are assumed to be switched to the local area, as companies set up local operations offices.

4.5 FINAL ESTIMATES OF PURCHASED SERVICES

The final estimates of purchased services inputs by E&D activity, input sector and geographic

area are found by multiplying the national input-output ratios by the labor compensation 

calculated for sub-arctic Alaska and the percentages for geographic areas. These final estimates 

are provided in Exhibit 4-5. Exhibit 4-5 includes a specific table of results for each of the 26

E&D activities included in the IMPAK model with the exception of the abandonment activity

which is based on a combination of data from the platform installation and well workover

activities.

Activity # 1. Geological Survey

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 2,910 2,037 582 291 582 1,746 582 1,164 291 873 582

70.0100 Banking 456 7,411 5,188 1,482 741 371 4,447 2,594 2,409 185 2,223 2,594

70.0400 Insurance carriers 459 1,478 1,034 296 148 74 887 517 480 37 443 517

71.0201 Real estate agents 462 7,286 5,100 1,457 729 364 4,372 2,550 2,368 182 2,186 2,550

72.0101 Hotels 463 3,456 2,073 691 691 173 1,728 1,555 950 86 864 1,555

73.0103 Personnel supply 474 2,023 1,214 405 405 101 1,012 911 556 51 506 911

73.0104 Computers & data processing 475 1,546 1,082 309 155 77 928 541 502 39 464 541

73.0111 Management & consulting 508 1,796 359 898 539 180 898 718 539 90 449 718

73.0200 Advertising 469 1,841 737 737 368 - 737 1,105 368 - 368 1,105

73.0301 Legal services 494 12,345 6,172 3,703 2,469 617 7,407 4,321 4,012 309 3,703 4,321

73.0302 Engineering, architectural & surveying 506 9,935 4,967 2,980 1,987 497 5,961 3,477 3,229 248 2,980 3,477

73.0303 Accounting, auditing & bookeeping 507 546 273 164 109 27 327 191 177 14 164 191

74.0000 Eating & drinking places 454 4,092 2,046 1,228 818 205 2,455 1,432 1,330 102 1,228 1,432

75.0001 Automotive rental & leasing 477 1,262 505 252 505 126 505 631 315 63 252 631

77.0501 Associations & professional org. 503 796 159 239 398 - 318 477 159 - 159 477

90.0000 Other value added n.a. 365,321 36,532 36,532 292,257 - 73,064 292,257 36,532 - 36,532 292,257

88.0000 Compensation of Employees n.a. 258,230 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 69,480 51,955 302,609 3,394 106,791 313,860 55,092 1,697 53,395 313,860

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 2. Spill Contingency Response

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 1,459 1,021 292 146 292 875 292 583 146 438 292

70.0100 Banking 456 3,715 2,601 743 372 186 2,229 1,300 1,207 93 1,115 1,300

70.0400 Insurance carriers 459 741 519 148 74 37 444 259 241 19 222 259

71.0201 Real estate agents 462 3,653 2,557 731 365 183 2,192 1,278 1,187 91 1,096 1,278

72.0101 Hotels 463 1,732 1,039 346 346 87 866 780 476 43 433 780

73.0103 Personnel supply 474 1,014 609 203 203 51 507 456 279 25 254 456

73.0104 Computers & data processing 475 775 542 155 77 39 465 271 252 19 232 271

73.0111 Management & consulting 508 900 180 450 270 90 450 360 270 45 225 360

73.0200 Advertising 469 923 369 369 185 - 369 554 185 - 185 554

73.0301 Legal services 494 6,188 3,094 1,856 1,238 309 3,713 2,166 2,011 155 1,856 2,166

73.0302 Engineering, architectural & surveying 506 4,980 2,490 1,494 996 249 2,988 1,743 1,619 125 1,494 1,743

73.0303 Accounting, auditing & bookeeping 507 274 137 82 55 14 164 96 89 7 82 96

74.0000 Eating & drinking places 454 2,051 1,026 615 410 103 1,231 718 667 51 615 718

75.0001 Automotive rental & leasing 477 633 253 127 253 63 253 316 158 32 127 316

77.0501 Associations & professional org. 503 399 80 120 199 - 160 239 80 - 80 239

90.0000 Other value added n.a. 183,129 18,313 18,313 146,503 - 36,626 146,503 18,313 - 18,313 146,503

88.0000 Compensation of Employees n.a. 129,446 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 34,829 26,044 151,693 1,701 53,532 157,333 27,617 851 26,766 157,333

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 62 Sub-Arctic IMPAK

Activity # 3. Construct Exploration Shore Base

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 4,722 3,306 944 472 944 2,833 944 1,889 472 1,417 944

70.0100 Banking 456 12,027 8,419 2,405 1,203 601 7,216 4,210 3,909 301 3,608 4,210

70.0400 Insurance carriers 459 2,398 1,679 480 240 120 1,439 839 779 60 719 839

71.0201 Real estate agents 462 11,825 8,277 2,365 1,182 591 7,095 4,139 3,843 296 3,547 4,139

72.0101 Hotels 463 5,608 3,365 1,122 1,122 280 2,804 2,524 1,542 140 1,402 2,524

73.0103 Personnel supply 474 3,284 1,970 657 657 164 1,642 1,478 903 82 821 1,478

73.0104 Computers & data processing 475 2,509 1,756 502 251 125 1,505 878 815 63 753 878

73.0111 Management & consulting 508 2,915 583 1,457 874 291 1,457 1,166 874 146 729 1,166

73.0200 Advertising 469 2,988 1,195 1,195 598 - 1,195 1,793 598 - 598 1,793

73.0301 Legal services 494 20,033 10,017 6,010 4,007 1,002 12,020 7,012 6,511 501 6,010 7,012

73.0302 Engineering, architectural & surveying 506 16,123 8,061 4,837 3,225 806 9,674 5,643 5,240 403 4,837 5,643

73.0303 Accounting, auditing & bookeeping 507 885 443 266 177 44 531 310 288 22 266 310

74.0000 Eating & drinking places 454 6,641 3,320 1,992 1,328 332 3,985 2,324 2,158 166 1,992 2,324

75.0001 Automotive rental & leasing 477 2,048 819 410 819 205 819 1,024 512 102 410 1,024

77.0501 Associations & professional org. 503 1,291 258 387 646 - 517 775 258 - 258 775

90.0000 Other value added n.a. 592,849 59,285 59,285 474,279 - 118,570 474,279 59,285 - 59,285 474,279

88.0000 Compensation of Employees n.a. 419,060 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 112,753 84,314 491,079 5,507 173,302 509,337 89,405 2,754 86,651 509,337

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 4. Operate Exploration Shore Base

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 4,722 3,306 944 472 944 2,833 944 1,889 472 1,417 944

70.0100 Banking 456 12,027 8,419 2,405 1,203 601 7,216 4,210 3,909 301 3,608 4,210

70.0400 Insurance carriers 459 2,398 1,679 480 240 120 1,439 839 779 60 719 839

71.0201 Real estate agents 462 11,825 8,277 2,365 1,182 591 7,095 4,139 3,843 296 3,547 4,139

72.0101 Hotels 463 5,608 3,365 1,122 1,122 280 2,804 2,524 1,542 140 1,402 2,524

73.0103 Personnel supply 474 3,284 1,970 657 657 164 1,642 1,478 903 82 821 1,478

73.0104 Computers & data processing 475 2,509 1,756 502 251 125 1,505 878 815 63 753 878

73.0111 Management & consulting 508 2,915 583 1,457 874 291 1,457 1,166 874 146 729 1,166

73.0200 Advertising 469 2,988 1,195 1,195 598 - 1,195 1,793 598 - 598 1,793

73.0301 Legal services 494 20,033 10,017 6,010 4,007 1,002 12,020 7,012 6,511 501 6,010 7,012

73.0302 Engineering, architectural & surveying 506 16,123 8,061 4,837 3,225 806 9,674 5,643 5,240 403 4,837 5,643

73.0303 Accounting, auditing & bookeeping 507 885 443 266 177 44 531 310 288 22 266 310

74.0000 Eating & drinking places 454 6,641 3,320 1,992 1,328 332 3,985 2,324 2,158 166 1,992 2,324

75.0001 Automotive rental & leasing 477 2,048 819 410 819 205 819 1,024 512 102 410 1,024

77.0501 Associations & professional org. 503 1,291 258 387 646 - 517 775 258 - 258 775

90.0000 Other value added n.a. 592,849 59,285 59,285 474,279 - 118,570 474,279 59,285 - 59,285 474,279

88.0000 Compensation of Employees n.a. 419,060 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 112,753 84,314 491,079 5,507 173,302 509,337 89,405 2,754 86,651 509,337

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 5. Install Exploration Platform

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 6,363 4,454 1,273 636 1,273 3,818 1,273 2,545 636 1,909 1,273

70.0100 Banking 456 16,205 11,344 3,241 1,621 810 9,723 5,672 5,267 405 4,862 5,672

70.0400 Insurance carriers 459 3,231 2,262 646 323 162 1,939 1,131 1,050 81 969 1,131

71.0201 Real estate agents 462 15,932 11,152 3,186 1,593 797 9,559 5,576 5,178 398 4,780 5,576

72.0101 Hotels 463 7,556 4,534 1,511 1,511 378 3,778 3,400 2,078 189 1,889 3,400

73.0103 Personnel supply 474 4,424 2,655 885 885 221 2,212 1,991 1,217 111 1,106 1,991

73.0104 Computers & data processing 475 3,380 2,366 676 338 169 2,028 1,183 1,099 85 1,014 1,183

73.0111 Management & consulting 508 3,927 785 1,964 1,178 393 1,964 1,571 1,178 196 982 1,571

73.0200 Advertising 469 4,026 1,611 1,611 805 - 1,611 2,416 805 - 805 2,416

73.0301 Legal services 494 26,992 13,496 8,098 5,398 1,350 16,195 9,447 8,773 675 8,098 9,447

73.0302 Engineering, architectural & surveying 506 21,723 10,862 6,517 4,345 1,086 13,034 7,603 7,060 543 6,517 7,603

73.0303 Accounting, auditing & bookeeping 507 1,193 597 358 239 60 716 418 388 30 358 418

74.0000 Eating & drinking places 454 8,948 4,474 2,684 1,790 447 5,369 3,132 2,908 224 2,684 3,132

75.0001 Automotive rental & leasing 477 2,759 1,104 552 1,104 276 1,104 1,379 690 138 552 1,379

77.0501 Associations & professional org. 503 1,740 348 522 870 - 696 1,044 348 - 348 1,044

90.0000 Other value added n.a. 798,786 79,879 79,879 639,029 - 159,757 639,029 79,879 - 79,879 639,029

88.0000 Compensation of Employees n.a. 564,628 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 151,921 113,602 661,664 7,420 233,502 686,265 120,461 3,710 116,751 686,265

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 63 Sub-Arctic IMPAK

Activity # 6. Operate Exploration Platform

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 18,249 12,774 3,650 1,825 3,650 10,949 3,650 7,300 1,825 5,475 3,650

70.0100 Banking 456 46,478 32,535 9,296 4,648 2,324 27,887 16,267 15,105 1,162 13,943 16,267

70.0400 Insurance carriers 459 9,267 6,487 1,853 927 463 5,560 3,243 3,012 232 2,780 3,243

71.0201 Real estate agents 462 45,694 31,986 9,139 4,569 2,285 27,416 15,993 14,851 1,142 13,708 15,993

72.0101 Hotels 463 21,671 13,002 4,334 4,334 1,084 10,835 9,752 5,959 542 5,418 9,752

73.0103 Personnel supply 474 12,689 7,613 2,538 2,538 634 6,344 5,710 3,489 317 3,172 5,710

73.0104 Computers & data processing 475 9,695 6,786 1,939 969 485 5,817 3,393 3,151 242 2,908 3,393

73.0111 Management & consulting 508 11,263 2,253 5,632 3,379 1,126 5,632 4,505 3,379 563 2,816 4,505

73.0200 Advertising 469 11,548 4,619 4,619 2,310 - 4,619 6,929 2,310 - 2,310 6,929

73.0301 Legal services 494 77,416 38,708 23,225 15,483 3,871 46,450 27,096 25,160 1,935 23,225 27,096

73.0302 Engineering, architectural & surveying 506 62,304 31,152 18,691 12,461 3,115 37,382 21,806 20,249 1,558 18,691 21,806

73.0303 Accounting, auditing & bookeeping 507 3,422 1,711 1,027 684 171 2,053 1,198 1,112 86 1,027 1,198

74.0000 Eating & drinking places 454 25,663 12,831 7,699 5,133 1,283 15,398 8,982 8,340 642 7,699 8,982

75.0001 Automotive rental & leasing 477 7,913 3,165 1,583 3,165 791 3,165 3,956 1,978 396 1,583 3,956

77.0501 Associations & professional org. 503 4,990 998 1,497 2,495 - 1,996 2,994 998 - 998 2,994

90.0000 Other value added n.a. 2,290,975 229,098 229,098 1,832,780 - 458,195 1,832,780 229,098 - 229,098 1,832,780

88.0000 Compensation of Employees n.a. 1,619,394 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 435,719 325,818 1,897,700 21,282 669,699 1,968,255 345,491 10,641 334,850 1,968,255

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 7. Drill Exploration Well

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 8,136 5,695 1,627 814 1,627 4,882 1,627 3,254 814 2,441 1,627

70.0100 Banking 456 20,722 14,505 4,144 2,072 1,036 12,433 7,253 6,735 518 6,217 7,253

70.0400 Insurance carriers 459 4,132 2,892 826 413 207 2,479 1,446 1,343 103 1,239 1,446

71.0201 Real estate agents 462 20,372 14,261 4,074 2,037 1,019 12,223 7,130 6,621 509 6,112 7,130

72.0101 Hotels 463 9,662 5,797 1,932 1,932 483 4,831 4,348 2,657 242 2,415 4,348

73.0103 Personnel supply 474 5,657 3,394 1,131 1,131 283 2,829 2,546 1,556 141 1,414 2,546

73.0104 Computers & data processing 475 4,322 3,026 864 432 216 2,593 1,513 1,405 108 1,297 1,513

73.0111 Management & consulting 508 5,022 1,004 2,511 1,506 502 2,511 2,009 1,506 251 1,255 2,009

73.0200 Advertising 469 5,149 2,059 2,059 1,030 - 2,059 3,089 1,030 - 1,030 3,089

73.0301 Legal services 494 34,515 17,258 10,355 6,903 1,726 20,709 12,080 11,217 863 10,355 12,080

73.0302 Engineering, architectural & surveying 506 27,777 13,889 8,333 5,555 1,389 16,666 9,722 9,028 694 8,333 9,722

73.0303 Accounting, auditing & bookeeping 507 1,526 763 458 305 76 915 534 496 38 458 534

74.0000 Eating & drinking places 454 11,442 5,721 3,432 2,288 572 6,865 4,005 3,718 286 3,432 4,005

75.0001 Automotive rental & leasing 477 3,528 1,411 706 1,411 353 1,411 1,764 882 176 706 1,764

77.0501 Associations & professional org. 503 2,225 445 667 1,112 - 890 1,335 445 - 445 1,335

90.0000 Other value added n.a. 1,021,411 102,141 102,141 817,129 - 204,282 817,129 102,141 - 102,141 817,129

88.0000 Compensation of Employees n.a. 721,992 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 194,261 145,263 846,072 9,489 298,579 877,529 154,034 4,744 149,290 877,529

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 8. Construct Production Shore Base

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 10,322 7,225 2,064 1,032 2,064 6,193 2,064 4,129 1,032 3,097 2,064

70.0100 Banking 456 26,289 18,402 5,258 2,629 1,314 15,773 9,201 8,544 657 7,887 9,201

70.0400 Insurance carriers 459 5,242 3,669 1,048 524 262 3,145 1,835 1,704 131 1,573 1,835

71.0201 Real estate agents 462 25,846 18,092 5,169 2,585 1,292 15,507 9,046 8,400 646 7,754 9,046

72.0101 Hotels 463 12,258 7,355 2,452 2,452 613 6,129 5,516 3,371 306 3,064 5,516

73.0103 Personnel supply 474 7,177 4,306 1,435 1,435 359 3,589 3,230 1,974 179 1,794 3,230

73.0104 Computers & data processing 475 5,484 3,839 1,097 548 274 3,290 1,919 1,782 137 1,645 1,919

73.0111 Management & consulting 508 6,371 1,274 3,185 1,911 637 3,185 2,548 1,911 319 1,593 2,548

73.0200 Advertising 469 6,532 2,613 2,613 1,306 - 2,613 3,919 1,306 - 1,306 3,919

73.0301 Legal services 494 43,788 21,894 13,137 8,758 2,189 26,273 15,326 14,231 1,095 13,137 15,326

73.0302 Engineering, architectural & surveying 506 35,240 17,620 10,572 7,048 1,762 21,144 12,334 11,453 881 10,572 12,334

73.0303 Accounting, auditing & bookeeping 507 1,935 968 581 387 97 1,161 677 629 48 581 677

74.0000 Eating & drinking places 454 14,515 7,258 4,355 2,903 726 8,709 5,080 4,718 363 4,355 5,080

75.0001 Automotive rental & leasing 477 4,476 1,790 895 1,790 448 1,790 2,238 1,119 224 895 2,238

77.0501 Associations & professional org. 503 2,822 564 847 1,411 - 1,129 1,693 564 - 564 1,693

90.0000 Other value added n.a. 1,295,829 129,583 129,583 1,036,663 - 259,166 1,036,663 129,583 - 129,583 1,036,663

88.0000 Compensation of Employees n.a. 915,967 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 246,453 184,290 1,073,383 12,038 378,798 1,113,291 195,418 6,019 189,399 1,113,291

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 64 Sub-Arctic IMPAK

Activity # 9. Operate Production Shore Base

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 10,322 7,225 2,064 1,032 2,064 6,193 2,064 4,129 1,032 3,097 2,064

70.0100 Banking 456 26,289 18,402 5,258 2,629 1,314 15,773 9,201 8,544 657 7,887 9,201

70.0400 Insurance carriers 459 5,242 3,669 1,048 524 262 3,145 1,835 1,704 131 1,573 1,835

71.0201 Real estate agents 462 25,846 18,092 5,169 2,585 1,292 15,507 9,046 8,400 646 7,754 9,046

72.0101 Hotels 463 12,258 7,355 2,452 2,452 613 6,129 5,516 3,371 306 3,064 5,516

73.0103 Personnel supply 474 7,177 4,306 1,435 1,435 359 3,589 3,230 1,974 179 1,794 3,230

73.0104 Computers & data processing 475 5,484 3,839 1,097 548 274 3,290 1,919 1,782 137 1,645 1,919

73.0111 Management & consulting 508 6,371 1,274 3,185 1,911 637 3,185 2,548 1,911 319 1,593 2,548

73.0200 Advertising 469 6,532 2,613 2,613 1,306 - 2,613 3,919 1,306 - 1,306 3,919

73.0301 Legal services 494 43,788 21,894 13,137 8,758 2,189 26,273 15,326 14,231 1,095 13,137 15,326

73.0302 Engineering, architectural & surveying 506 35,240 17,620 10,572 7,048 1,762 21,144 12,334 11,453 881 10,572 12,334

73.0303 Accounting, auditing & bookeeping 507 1,935 968 581 387 97 1,161 677 629 48 581 677

74.0000 Eating & drinking places 454 14,515 7,258 4,355 2,903 726 8,709 5,080 4,718 363 4,355 5,080

75.0001 Automotive rental & leasing 477 4,476 1,790 895 1,790 448 1,790 2,238 1,119 224 895 2,238

77.0501 Associations & professional org. 503 2,822 564 847 1,411 - 1,129 1,693 564 - 564 1,693

90.0000 Other value added n.a. 1,295,829 129,583 129,583 1,036,663 - 259,166 1,036,663 129,583 - 129,583 1,036,663

88.0000 Compensation of Employees n.a. 915,967 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 246,453 184,290 1,073,383 12,038 378,798 1,113,291 195,418 6,019 189,399 1,113,291

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 10. Install Production Platform

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 67,566 47,296 13,513 6,757 13,513 40,539 13,513 27,026 6,757 20,270 13,513

70.0100 Banking 456 172,081 120,457 34,416 17,208 8,604 103,249 60,228 55,926 4,302 51,624 60,228

70.0400 Insurance carriers 459 34,311 24,017 6,862 3,431 1,716 20,586 12,009 11,151 858 10,293 12,009

71.0201 Real estate agents 462 169,178 118,425 33,836 16,918 8,459 101,507 59,212 54,983 4,229 50,753 59,212

72.0101 Hotels 463 80,234 48,140 16,047 16,047 4,012 40,117 36,105 22,064 2,006 20,059 36,105

73.0103 Personnel supply 474 46,979 28,188 9,396 9,396 2,349 23,490 21,141 12,919 1,174 11,745 21,141

73.0104 Computers & data processing 475 35,894 25,126 7,179 3,589 1,795 21,537 12,563 11,666 897 10,768 12,563

73.0111 Management & consulting 508 41,701 8,340 20,850 12,510 4,170 20,850 16,680 12,510 2,085 10,425 16,680

73.0200 Advertising 469 42,756 17,103 17,103 8,551 - 17,103 25,654 8,551 - 8,551 25,654

73.0301 Legal services 494 286,626 143,313 85,988 57,325 14,331 171,976 100,319 93,153 7,166 85,988 100,319

73.0302 Engineering, architectural & surveying 506 230,673 115,337 69,202 46,135 11,534 138,404 80,736 74,969 5,767 69,202 80,736

73.0303 Accounting, auditing & bookeeping 507 12,669 6,334 3,801 2,534 633 7,601 4,434 4,117 317 3,801 4,434

74.0000 Eating & drinking places 454 95,014 47,507 28,504 19,003 4,751 57,008 33,255 30,880 2,375 28,504 33,255

75.0001 Automotive rental & leasing 477 29,296 11,718 5,859 11,718 2,930 11,718 14,648 7,324 1,465 5,859 14,648

77.0501 Associations & professional org. 503 18,475 3,695 5,542 9,237 - 7,390 11,085 3,695 - 3,695 11,085

90.0000 Other value added n.a. 8,482,123 848,212 848,212 6,785,698 - 1,696,425 6,785,698 848,212 - 848,212 6,785,698

88.0000 Compensation of Employees n.a. 5,995,656 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 1,613,208 1,206,310 7,026,057 78,796 2,479,499 7,287,280 1,279,148 39,398 1,239,750 7,287,280

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 11. Operate Production Platform

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 17,547 12,283 3,509 1,755 3,509 10,528 3,509 7,019 1,755 5,264 3,509

70.0100 Banking 456 44,691 31,283 8,938 4,469 2,235 26,814 15,642 14,524 1,117 13,407 15,642

70.0400 Insurance carriers 459 8,911 6,237 1,782 891 446 5,346 3,119 2,896 223 2,673 3,119

71.0201 Real estate agents 462 43,937 30,756 8,787 4,394 2,197 26,362 15,378 14,279 1,098 13,181 15,378

72.0101 Hotels 463 20,837 12,502 4,167 4,167 1,042 10,419 9,377 5,730 521 5,209 9,377

73.0103 Personnel supply 474 12,201 7,320 2,440 2,440 610 6,100 5,490 3,355 305 3,050 5,490

73.0104 Computers & data processing 475 9,322 6,525 1,864 932 466 5,593 3,263 3,030 233 2,797 3,263

73.0111 Management & consulting 508 10,830 2,166 5,415 3,249 1,083 5,415 4,332 3,249 541 2,707 4,332

73.0200 Advertising 469 11,104 4,442 4,442 2,221 - 4,442 6,662 2,221 - 2,221 6,662

73.0301 Legal services 494 74,439 37,219 22,332 14,888 3,722 44,663 26,054 24,193 1,861 22,332 26,054

73.0302 Engineering, architectural & surveying 506 59,907 29,954 17,972 11,981 2,995 35,944 20,968 19,470 1,498 17,972 20,968

73.0303 Accounting, auditing & bookeeping 507 3,290 1,645 987 658 165 1,974 1,152 1,069 82 987 1,152

74.0000 Eating & drinking places 454 24,676 12,338 7,403 4,935 1,234 14,805 8,637 8,020 617 7,403 8,637

75.0001 Automotive rental & leasing 477 7,608 3,043 1,522 3,043 761 3,043 3,804 1,902 380 1,522 3,804

77.0501 Associations & professional org. 503 4,798 960 1,439 2,399 - 1,919 2,879 960 - 960 2,879

90.0000 Other value added n.a. 2,202,861 220,286 220,286 1,762,289 - 440,572 1,762,289 220,286 - 220,286 1,762,289

88.0000 Compensation of Employees n.a. 1,557,110 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 418,960 313,286 1,824,712 20,464 643,942 1,892,553 332,203 10,232 321,971 1,892,553

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 65 Sub-Arctic IMPAK

Activity # 12. Drill Production Well

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 3,770 2,639 754 377 754 2,262 754 1,508 377 1,131 754

70.0100 Banking 456 9,601 6,721 1,920 960 480 5,761 3,360 3,120 240 2,880 3,360

70.0400 Insurance carriers 459 1,914 1,340 383 191 96 1,149 670 622 48 574 670

71.0201 Real estate agents 462 9,439 6,607 1,888 944 472 5,664 3,304 3,068 236 2,832 3,304

72.0101 Hotels 463 4,477 2,686 895 895 224 2,238 2,014 1,231 112 1,119 2,014

73.0103 Personnel supply 474 2,621 1,573 524 524 131 1,311 1,180 721 66 655 1,180

73.0104 Computers & data processing 475 2,003 1,402 401 200 100 1,202 701 651 50 601 701

73.0111 Management & consulting 508 2,327 465 1,163 698 233 1,163 931 698 116 582 931

73.0200 Advertising 469 2,386 954 954 477 - 954 1,431 477 - 477 1,431

73.0301 Legal services 494 15,992 7,996 4,798 3,198 800 9,595 5,597 5,197 400 4,798 5,597

73.0302 Engineering, architectural & surveying 506 12,870 6,435 3,861 2,574 644 7,722 4,505 4,183 322 3,861 4,505

73.0303 Accounting, auditing & bookeeping 507 707 353 212 141 35 424 247 230 18 212 247

74.0000 Eating & drinking places 454 5,301 2,651 1,590 1,060 265 3,181 1,855 1,723 133 1,590 1,855

75.0001 Automotive rental & leasing 477 1,635 654 327 654 163 654 817 409 82 327 817

77.0501 Associations & professional org. 503 1,031 206 309 515 - 412 618 206 - 206 618

90.0000 Other value added n.a. 473,255 47,326 47,326 378,604 - 94,651 378,604 47,326 - 47,326 378,604

88.0000 Compensation of Employees n.a. 334,524 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 90,008 67,305 392,015 4,396 138,342 406,590 71,369 2,198 69,171 406,590

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 13. Lay Offshore Pipeline

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 560 392 112 56 112 336 112 224 56 168 112

70.0100 Banking 456 1,426 999 285 143 71 856 499 464 36 428 499

70.0400 Insurance carriers 459 284 199 57 28 14 171 100 92 7 85 100

71.0201 Real estate agents 462 1,402 982 280 140 70 841 491 456 35 421 491

72.0101 Hotels 463 665 399 133 133 33 333 299 183 17 166 299

73.0103 Personnel supply 474 389 234 78 78 19 195 175 107 10 97 175

73.0104 Computers & data processing 475 298 208 60 30 15 179 104 97 7 89 104

73.0111 Management & consulting 508 346 69 173 104 35 173 138 104 17 86 138

73.0200 Advertising 469 354 142 142 71 - 142 213 71 - 71 213

73.0301 Legal services 494 2,376 1,188 713 475 119 1,426 832 772 59 713 832

73.0302 Engineering, architectural & surveying 506 1,912 956 574 382 96 1,147 669 621 48 574 669

73.0303 Accounting, auditing & bookeeping 507 105 53 32 21 5 63 37 34 3 32 37

74.0000 Eating & drinking places 454 788 394 236 158 39 473 276 256 20 236 276

75.0001 Automotive rental & leasing 477 243 97 49 97 24 97 121 61 12 49 121

77.0501 Associations & professional org. 503 153 31 46 77 - 61 92 31 - 31 92

90.0000 Other value added n.a. 70,313 7,031 7,031 56,250 - 14,063 56,250 7,031 - 7,031 56,250

88.0000 Compensation of Employees n.a. 49,701 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 13,373 10,000 58,242 653 20,554 60,408 10,603 327 10,277 60,408

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 14. Lay Onshore Pipeline

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 156 109 31 16 31 93 31 62 16 47 31

70.0100 Banking 456 396 277 79 40 20 238 139 129 10 119 139

70.0400 Insurance carriers 459 79 55 16 8 4 47 28 26 2 24 28

71.0201 Real estate agents 462 390 273 78 39 19 234 136 127 10 117 136

72.0101 Hotels 463 185 111 37 37 9 92 83 51 5 46 83

73.0103 Personnel supply 474 108 65 22 22 5 54 49 30 3 27 49

73.0104 Computers & data processing 475 83 58 17 8 4 50 29 27 2 25 29

73.0111 Management & consulting 508 96 19 48 29 10 48 38 29 5 24 38

73.0200 Advertising 469 98 39 39 20 - 39 59 20 - 20 59

73.0301 Legal services 494 660 330 198 132 33 396 231 214 16 198 231

73.0302 Engineering, architectural & surveying 506 531 266 159 106 27 319 186 173 13 159 186

73.0303 Accounting, auditing & bookeeping 507 29 15 9 6 1 18 10 9 1 9 10

74.0000 Eating & drinking places 454 219 109 66 44 11 131 77 71 5 66 77

75.0001 Automotive rental & leasing 477 67 27 13 27 7 27 34 17 3 13 34

77.0501 Associations & professional org. 503 43 9 13 21 - 17 26 9 - 9 26

90.0000 Other value added n.a. 19,531 1,953 1,953 15,625 - 3,906 15,625 1,953 - 1,953 15,625

88.0000 Compensation of Employees n.a. 13,806 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 3,715 2,778 16,179 181 5,709 16,780 2,945 91 2,855 16,780

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 66 Sub-Arctic IMPAK

Activity # 15. Construct Onshore Production Facility

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 354,399 248,079 70,880 35,440 70,880 212,639 70,880 141,760 35,440 106,320 70,880

70.0100 Banking 456 902,610 631,827 180,522 90,261 45,130 541,566 315,913 293,348 22,565 270,783 315,913

70.0400 Insurance carriers 459 179,968 125,978 35,994 17,997 8,998 107,981 62,989 58,490 4,499 53,990 62,989

71.0201 Real estate agents 462 887,382 621,167 177,476 88,738 44,369 532,429 310,584 288,399 22,185 266,215 310,584

72.0101 Hotels 463 420,849 252,509 84,170 84,170 21,042 210,424 189,382 115,733 10,521 105,212 189,382

73.0103 Personnel supply 474 246,418 147,851 49,284 49,284 12,321 123,209 110,888 67,765 6,160 61,605 110,888

73.0104 Computers & data processing 475 188,274 131,792 37,655 18,827 9,414 112,965 65,896 61,189 4,707 56,482 65,896

73.0111 Management & consulting 508 218,731 43,746 109,365 65,619 21,873 109,365 87,492 65,619 10,937 54,683 87,492

73.0200 Advertising 469 224,268 89,707 89,707 44,854 - 89,707 134,561 44,854 - 44,854 134,561

73.0301 Legal services 494 1,503,427 751,714 451,028 300,685 75,171 902,056 526,199 488,614 37,586 451,028 526,199

73.0302 Engineering, architectural & surveying 506 1,209,940 604,970 362,982 241,988 60,497 725,964 423,479 393,231 30,249 362,982 423,479

73.0303 Accounting, auditing & bookeeping 507 66,450 33,225 19,935 13,290 3,322 39,870 23,257 21,596 1,661 19,935 23,257

74.0000 Eating & drinking places 454 498,374 249,187 149,512 99,675 24,919 299,024 174,431 161,971 12,459 149,512 174,431

75.0001 Automotive rental & leasing 477 153,665 61,466 30,733 61,466 15,367 61,466 76,833 38,416 7,683 30,733 76,833

77.0501 Associations & professional org. 503 96,906 19,381 29,072 48,453 - 38,762 58,144 19,381 - 19,381 58,144

90.0000 Other value added n.a. 44,490,919 4,449,092 4,449,092 35,592,735 - 8,898,184 35,592,735 4,449,092 - 4,449,092 35,592,735

88.0000 Compensation of Employees n.a. 31,448,759 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 8,461,692 6,327,407 36,853,482 413,304 13,005,613 38,223,663 6,709,458 206,652 6,502,806 38,223,663

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 16. Operate Production Facility

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 37,602 26,322 7,520 3,760 7,520 22,561 7,520 15,041 3,760 11,281 7,520

70.0100 Banking 456 95,768 67,038 19,154 9,577 4,788 57,461 33,519 31,125 2,394 28,731 33,519

70.0400 Insurance carriers 459 19,095 13,366 3,819 1,909 955 11,457 6,683 6,206 477 5,728 6,683

71.0201 Real estate agents 462 94,153 65,907 18,831 9,415 4,708 56,492 32,953 30,600 2,354 28,246 32,953

72.0101 Hotels 463 44,653 26,792 8,931 8,931 2,233 22,326 20,094 12,280 1,116 11,163 20,094

73.0103 Personnel supply 474 26,145 15,687 5,229 5,229 1,307 13,073 11,765 7,190 654 6,536 11,765

73.0104 Computers & data processing 475 19,976 13,983 3,995 1,998 999 11,986 6,992 6,492 499 5,993 6,992

73.0111 Management & consulting 508 23,208 4,642 11,604 6,962 2,321 11,604 9,283 6,962 1,160 5,802 9,283

73.0200 Advertising 469 23,795 9,518 9,518 4,759 - 9,518 14,277 4,759 - 4,759 14,277

73.0301 Legal services 494 159,516 79,758 47,855 31,903 7,976 95,710 55,831 51,843 3,988 47,855 55,831

73.0302 Engineering, architectural & surveying 506 128,377 64,188 38,513 25,675 6,419 77,026 44,932 41,722 3,209 38,513 44,932

73.0303 Accounting, auditing & bookeeping 507 7,050 3,525 2,115 1,410 353 4,230 2,468 2,291 176 2,115 2,468

74.0000 Eating & drinking places 454 52,878 26,439 15,863 10,576 2,644 31,727 18,507 17,185 1,322 15,863 18,507

75.0001 Automotive rental & leasing 477 16,304 6,522 3,261 6,522 1,630 6,522 8,152 4,076 815 3,261 8,152

77.0501 Associations & professional org. 503 10,282 2,056 3,085 5,141 - 4,113 6,169 2,056 - 2,056 6,169

90.0000 Other value added n.a. 4,720,561 472,056 472,056 3,776,449 - 944,112 3,776,449 472,056 - 472,056 3,776,449

88.0000 Compensation of Employees n.a. 3,336,766 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 897,800 671,348 3,910,216 43,852 1,379,917 4,055,594 711,885 21,926 689,959 4,055,594

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 17. Construct Marine Terminal

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 221,013 154,709 44,203 22,101 44,203 132,608 44,203 88,405 22,101 66,304 44,203

70.0100 Banking 456 562,893 394,025 112,579 56,289 28,145 337,736 197,013 182,940 14,072 168,868 197,013

70.0400 Insurance carriers 459 112,233 78,563 22,447 11,223 5,612 67,340 39,282 36,476 2,806 33,670 39,282

71.0201 Real estate agents 462 553,397 387,378 110,679 55,340 27,670 332,038 193,689 179,854 13,835 166,019 193,689

72.0101 Hotels 463 262,453 157,472 52,491 52,491 13,123 131,227 118,104 72,175 6,561 65,613 118,104

73.0103 Personnel supply 474 153,673 92,204 30,735 30,735 7,684 76,837 69,153 42,260 3,842 38,418 69,153

73.0104 Computers & data processing 475 117,413 82,189 23,483 11,741 5,871 70,448 41,095 38,159 2,935 35,224 41,095

73.0111 Management & consulting 508 136,407 27,281 68,203 40,922 13,641 68,203 54,563 40,922 6,820 34,102 54,563

73.0200 Advertising 469 139,860 55,944 55,944 27,972 - 55,944 83,916 27,972 - 27,972 83,916

73.0301 Legal services 494 937,580 468,790 281,274 187,516 46,879 562,548 328,153 304,713 23,439 281,274 328,153

73.0302 Engineering, architectural & surveying 506 754,553 377,277 226,366 150,911 37,728 452,732 264,094 245,230 18,864 226,366 264,094

73.0303 Accounting, auditing & bookeeping 507 41,440 20,720 12,432 8,288 2,072 24,864 14,504 13,468 1,036 12,432 14,504

74.0000 Eating & drinking places 454 310,800 155,400 93,240 62,160 15,540 186,480 108,780 101,010 7,770 93,240 108,780

75.0001 Automotive rental & leasing 477 95,830 38,332 19,166 38,332 9,583 38,332 47,915 23,957 4,791 19,166 47,915

77.0501 Associations & professional org. 503 60,433 12,087 18,130 30,217 - 24,173 36,260 12,087 - 12,087 36,260

90.0000 Other value added n.a. 27,745,799 2,774,580 2,774,580 22,196,639 - 5,549,160 22,196,639 2,774,580 - 2,774,580 22,196,639

88.0000 Compensation of Employees n.a. 19,612,338 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 5,276,951 3,945,950 22,982,877 257,748 8,110,669 23,837,361 4,184,209 128,874 4,055,335 23,837,361

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 67 Sub-Arctic IMPAK

Activity # 18. Operate Marine Terminal

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 58,210 40,747 11,642 5,821 11,642 34,926 11,642 23,284 5,821 17,463 11,642

70.0100 Banking 456 148,254 103,778 29,651 14,825 7,413 88,953 51,889 48,183 3,706 44,476 51,889

70.0400 Insurance carriers 459 29,560 20,692 5,912 2,956 1,478 17,736 10,346 9,607 739 8,868 10,346

71.0201 Real estate agents 462 145,753 102,027 29,151 14,575 7,288 87,452 51,014 47,370 3,644 43,726 51,014

72.0101 Hotels 463 69,125 41,475 13,825 13,825 3,456 34,562 31,106 19,009 1,728 17,281 31,106

73.0103 Personnel supply 474 40,474 24,285 8,095 8,095 2,024 20,237 18,213 11,130 1,012 10,119 18,213

73.0104 Computers & data processing 475 30,924 21,647 6,185 3,092 1,546 18,555 10,823 10,050 773 9,277 10,823

73.0111 Management & consulting 508 35,927 7,185 17,963 10,778 3,593 17,963 14,371 10,778 1,796 8,982 14,371

73.0200 Advertising 469 36,836 14,734 14,734 7,367 - 14,734 22,102 7,367 - 7,367 22,102

73.0301 Legal services 494 246,939 123,469 74,082 49,388 12,347 148,163 86,429 80,255 6,173 74,082 86,429

73.0302 Engineering, architectural & surveying 506 198,733 99,367 59,620 39,747 9,937 119,240 69,557 64,588 4,968 59,620 69,557

73.0303 Accounting, auditing & bookeeping 507 10,914 5,457 3,274 2,183 546 6,549 3,820 3,547 273 3,274 3,820

74.0000 Eating & drinking places 454 81,858 40,929 24,557 16,372 4,093 49,115 28,650 26,604 2,046 24,557 28,650

75.0001 Automotive rental & leasing 477 25,240 10,096 5,048 10,096 2,524 10,096 12,620 6,310 1,262 5,048 12,620

77.0501 Associations & professional org. 503 15,917 3,183 4,775 7,958 - 6,367 9,550 3,183 - 3,183 9,550

90.0000 Other value added n.a. 7,307,657 730,766 730,766 5,846,126 - 1,461,531 5,846,126 730,766 - 730,766 5,846,126

88.0000 Compensation of Employees n.a. 5,165,475 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 1,389,837 1,039,280 6,053,204 67,885 2,136,179 6,278,257 1,102,032 33,943 1,068,089 6,278,257

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 19. Major Platform Maintenance

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 6,042 4,229 1,208 604 1,208 3,625 1,208 2,417 604 1,813 1,208

70.0100 Banking 456 15,388 10,772 3,078 1,539 769 9,233 5,386 5,001 385 4,616 5,386

70.0400 Insurance carriers 459 3,068 2,148 614 307 153 1,841 1,074 997 77 920 1,074

71.0201 Real estate agents 462 15,128 10,590 3,026 1,513 756 9,077 5,295 4,917 378 4,539 5,295

72.0101 Hotels 463 7,175 4,305 1,435 1,435 359 3,587 3,229 1,973 179 1,794 3,229

73.0103 Personnel supply 474 4,201 2,521 840 840 210 2,101 1,890 1,155 105 1,050 1,890

73.0104 Computers & data processing 475 3,210 2,247 642 321 160 1,926 1,123 1,043 80 963 1,123

73.0111 Management & consulting 508 3,729 746 1,864 1,119 373 1,864 1,492 1,119 186 932 1,492

73.0200 Advertising 469 3,823 1,529 1,529 765 - 1,529 2,294 765 - 765 2,294

73.0301 Legal services 494 25,631 12,815 7,689 5,126 1,282 15,379 8,971 8,330 641 7,689 8,971

73.0302 Engineering, architectural & surveying 506 20,627 10,314 6,188 4,125 1,031 12,376 7,220 6,704 516 6,188 7,220

73.0303 Accounting, auditing & bookeeping 507 1,133 566 340 227 57 680 397 368 28 340 397

74.0000 Eating & drinking places 454 8,496 4,248 2,549 1,699 425 5,098 2,974 2,761 212 2,549 2,974

75.0001 Automotive rental & leasing 477 2,620 1,048 524 1,048 262 1,048 1,310 655 131 524 1,310

77.0501 Associations & professional org. 503 1,652 330 496 826 - 661 991 330 - 330 991

90.0000 Other value added n.a. 758,495 75,850 75,850 606,796 - 151,699 606,796 75,850 - 75,850 606,796

88.0000 Compensation of Employees n.a. 536,148 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 144,258 107,872 628,290 7,046 221,724 651,649 114,385 3,523 110,862 651,649

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 20. Well Workover

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 1,395 976 279 139 279 837 279 558 139 418 279

70.0100 Banking 456 3,552 2,486 710 355 178 2,131 1,243 1,154 89 1,066 1,243

70.0400 Insurance carriers 459 708 496 142 71 35 425 248 230 18 212 248

71.0201 Real estate agents 462 3,492 2,444 698 349 175 2,095 1,222 1,135 87 1,048 1,222

72.0101 Hotels 463 1,656 994 331 331 83 828 745 455 41 414 745

73.0103 Personnel supply 474 970 582 194 194 48 485 436 267 24 242 436

73.0104 Computers & data processing 475 741 519 148 74 37 445 259 241 19 222 259

73.0111 Management & consulting 508 861 172 430 258 86 430 344 258 43 215 344

73.0200 Advertising 469 883 353 353 177 - 353 530 177 - 177 530

73.0301 Legal services 494 5,916 2,958 1,775 1,183 296 3,550 2,071 1,923 148 1,775 2,071

73.0302 Engineering, architectural & surveying 506 4,761 2,381 1,428 952 238 2,857 1,666 1,547 119 1,428 1,666

73.0303 Accounting, auditing & bookeeping 507 261 131 78 52 13 157 92 85 7 78 92

74.0000 Eating & drinking places 454 1,961 981 588 392 98 1,177 686 637 49 588 686

75.0001 Automotive rental & leasing 477 605 242 121 242 60 242 302 151 30 121 302

77.0501 Associations & professional org. 503 381 76 114 191 - 153 229 76 - 76 229

90.0000 Other value added n.a. 175,074 17,507 17,507 140,059 - 35,015 140,059 17,507 - 17,507 140,059

88.0000 Compensation of Employees n.a. 123,752 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 33,297 24,899 145,020 1,626 51,178 150,412 26,402 813 25,589 150,412

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 68 Sub-Arctic IMPAK

Activity # 21. Helicopter Support

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 3.61 2.53 0.72 0.36 0.72 2.17 0.72 1.44 0.36 1.08 0.72

66.0200 Cable TV 441 - - - - - - - - - - -

70.0100 Banking 456 1.80 1.26 0.36 0.18 0.09 1.08 0.63 0.59 0.05 0.54 0.63

70.0200 Credit agencies 457 2.35 1.65 0.47 0.24 0.12 1.41 0.82 0.76 0.06 0.71 0.82

70.0400 Insurance carriers 459 - - - - - - - - - - -

71.0201 Real estate agents 462 4.27 2.99 0.85 0.43 0.21 2.56 1.50 1.39 0.11 1.28 1.50

73.0102 Services to dwellings/buildings 472 - - - - - - - - - - -

73.0103 Personnel supply 474 - - - - - - - - - - -

73.0104 Computers & data processing 475 6.67 4.67 1.33 0.67 0.33 4.00 2.33 2.17 0.17 2.00 2.33

73.0106 Detective services 476 - - - - - - - - - - -

73.0107 Equipment rental & leasing 473 2.02 1.01 0.61 0.40 0.10 0.91 1.01 0.51 0.05 0.46 1.01

73.0109 Other business services 470 - - - - - - - - - - -

73.0111 Management & consulting 508 - - - - - - - - - - -

73.0112 Testing and research labs 509 - - - - - - - - - - -

73.0200 Advertising 469 4.16 1.67 1.67 0.83 - 1.67 2.50 0.83 - 0.83 2.50

73.0301 Legal services 494 2.83 1.42 0.85 0.57 0.14 1.70 0.99 0.92 0.07 0.85 0.99

73.0302 Engineering, architectural & surveying 506 - - - - - - - - - - -

73.0303 Accounting, auditing & bookeeping 507 - - - - - - - - - - -

74.0000 Eating & drinking places 454 5.49 2.75 1.65 1.10 0.27 3.30 1.92 1.79 0.14 1.65 1.92

75.0001 Automotive rental & leasing 477 - - - - - - - - - - -

78.0100 U.S. Postal Service 513 - - - - - - - - - - -

90.0000 Other value added n.a. 11.12 - 2.22 8.90 - 2.22 8.90 1.11 - 1.11 8.90

88.0000 Compensation of Employees n.a. 98.22

Total 11.51 8.33 12.47 0.85 13.79 17.65 7.32 0.43 6.90 17.65

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 22. Large Workboat

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 - - - - - - - - - - -

66.0200 Cable TV 441 - - - - - - - - - - -

70.0100 Banking 456 17 12.1 3.5 1.7 0.9 10.4 6.1 5.6 0.4 5.2 6.1

70.0200 Credit agencies 457 19 13.6 3.9 1.9 1.0 11.6 6.8 6.3 0.5 5.8 6.8

70.0400 Insurance carriers 459 - - - - - - - - - - -

71.0201 Real estate agents 462 32 22.7 6.5 3.2 1.6 19.4 11.3 10.5 0.8 9.7 11.3

73.0102 Services to dwellings/buildings 472 - - - - - - - - - - -

73.0103 Personnel supply 474 - - - - - - - - - - -

73.0104 Computers & data processing 475 10 7.2 2.1 1.0 0.5 6.2 3.6 3.4 0.3 3.1 3.6

73.0106 Detective services 476 - - - - - - - - - - -

73.0107 Equipment rental & leasing 473 7 3.4 2.1 1.4 0.3 3.1 3.4 1.7 0.2 1.5 3.4

73.0109 Other business services 470 7 - - - - - - - - - -

73.0111 Management & consulting 508 34 6.7 16.8 10.1 3.4 16.8 13.4 10.1 1.7 8.4 13.4

73.0112 Testing and research labs 509 27 11.0 5.5 11.0 1.4 6.9 19.2 4.1 0.7 3.4 19.2

73.0200 Advertising 469 46 18.4 18.4 9.2 - 18.4 27.5 9.2 - 9.2 27.5

73.0301 Legal services 494 6 3.0 1.8 1.2 0.3 3.6 2.1 2.0 0.2 1.8 2.1

73.0302 Engineering, architectural & surveying 506 11 5.6 3.3 2.2 0.6 6.7 3.9 3.6 0.3 3.3 3.9

73.0303 Accounting, auditing & bookeeping 507 8 4.0 2.4 1.6 0.4 4.8 2.8 2.6 0.2 2.4 2.8

74.0000 Eating & drinking places 454 - - - - - - - - - - -

75.0001 Automotive rental & leasing 477 - - - - - - - - - - -

78.0100 U.S. Postal Service 513 - - - - - - - - - - -

90.0000 Other value added n.a. 187 - 37.4 149.8 - 37.4 149.8 18.7 - 18.7 149.8

88.0000 Compensation of Employees n.a. 264

Total 59.33 89.79 187.46 6.85 103.89 225.84 55.37 3.43 51.94 225.84

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 23. Small Workboat

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 4 2.9 0.8 0.4 0.8 2.5 0.8 1.7 0.4 1.2 0.8

66.0200 Cable TV 441 4 0.6 0.6 3.0 0.4 0.8 3.0 0.6 0.2 0.4 3.0

70.0100 Banking 456 19 13.4 3.8 1.9 1.0 11.5 6.7 6.2 0.5 5.7 6.7

70.0200 Credit agencies 457 15 10.7 3.1 1.5 0.8 9.2 5.3 5.0 0.4 4.6 5.3

70.0400 Insurance carriers 459 - - - - - - - - - - -

71.0201 Real estate agents 462 15 10.8 3.1 1.5 0.8 9.3 5.4 5.0 0.4 4.6 5.4

73.0102 Services to dwellings/buildings 472 7 4.2 1.4 1.4 0.4 3.5 3.2 1.9 0.2 1.8 3.2

73.0103 Personnel supply 474 6 3.5 1.2 1.2 0.3 2.9 2.6 1.6 0.1 1.4 2.6

73.0104 Computers & data processing 475 4 2.7 0.8 0.4 0.2 2.3 1.4 1.3 0.1 1.2 1.4

73.0106 Detective services 476 5 2.3 1.4 0.9 0.2 2.8 1.6 1.5 0.1 1.4 1.6

73.0107 Equipment rental & leasing 473 - - - - - - - - - - -

73.0109 Other business services 470 11 - - - - - - - - - -

73.0111 Management & consulting 508 11 2.2 5.5 3.3 1.1 5.5 4.4 3.3 0.6 2.8 4.4

73.0112 Testing and research labs 509 - - - - - - - - - - -

73.0200 Advertising 469 11 4.5 4.5 2.2 - 4.5 6.7 2.2 - 2.2 6.7

73.0301 Legal services 494 3 1.7 1.0 0.7 0.2 2.0 1.2 1.1 0.1 1.0 1.2

73.0302 Engineering, architectural & surveying 506 - - - - - - - - - - -

73.0303 Accounting, auditing & bookeeping 507 - - - - - - - - - - -

74.0000 Eating & drinking places 454 3 1.7 1.0 0.7 0.2 2.0 1.2 1.1 0.1 1.0 1.2

75.0001 Automotive rental & leasing 477 - - - - - - - - - - -

78.0100 U.S. Postal Service 513 3 1.8 0.6 0.6 0.3 1.8 0.9 1.1 0.2 0.9 0.9

90.0000 Other value added n.a. 70 - 14.1 56.3 - 14.1 56.3 7.0 - 7.0 56.3

88.0000 Compensation of Employees n.a. 228

Total 24.59 31.44 67.70 2.82 41.46 79.45 22.14 1.41 20.73 79.45

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 69 Sub-Arctic IMPAK

Activity # 24. Landing Craft

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 6 4.5 1.3 0.6 1.3 3.9 1.3 2.6 0.6 1.9 1.3

66.0200 Cable TV 441 - - - - - - - - - - -

70.0100 Banking 456 3 2.3 0.6 0.3 0.2 1.9 1.1 1.0 0.1 1.0 1.1

70.0200 Credit agencies 457 4 2.9 0.8 0.4 0.2 2.5 1.5 1.4 0.1 1.3 1.5

70.0400 Insurance carriers 459 - - - - - - - - - - -

71.0201 Real estate agents 462 8 5.3 1.5 0.8 0.4 4.6 2.7 2.5 0.2 2.3 2.7

73.0102 Services to dwellings/buildings 472 - - - - - - - - - - -

73.0103 Personnel supply 474 - - - - - - - - - - -

73.0104 Computers & data processing 475 12 8.3 2.4 1.2 0.6 7.2 4.2 3.9 0.3 3.6 4.2

73.0106 Detective services 476 - - - - - - - - - - -

73.0107 Equipment rental & leasing 473 4 1.8 1.1 0.7 0.2 1.6 1.8 0.9 0.1 0.8 1.8

73.0109 Other business services 470 - - - - - - - - - - -

73.0111 Management & consulting 508 - - - - - - - - - - -

73.0112 Testing and research labs 509 - - - - - - - - - - -

73.0200 Advertising 469 7 3.0 3.0 1.5 - 3.0 4.5 1.5 - 1.5 4.5

73.0301 Legal services 494 5 2.5 1.5 1.0 0.3 3.0 1.8 1.6 0.1 1.5 1.8

73.0302 Engineering, architectural & surveying 506 - - - - - - - - - - -

73.0303 Accounting, auditing & bookeeping 507 - - - - - - - - - - -

74.0000 Eating & drinking places 454 10 4.9 2.9 2.0 0.5 5.9 3.4 3.2 0.2 2.9 3.4

75.0001 Automotive rental & leasing 477 - - - - - - - - - - -

78.0100 U.S. Postal Service 513 - - - - - - - - - - -

90.0000 Other value added n.a. 20 - 4.0 15.9 - 4.0 15.9 2.0 - 2.0 15.9

88.0000 Compensation of Employees n.a. 176

Total 20.6 14.9 22.3 1.5 24.7 31.6 13.1 0.8 12.3 31.6

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 25. Dive Boat

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 - - - - - - - - - - -

66.0200 Cable TV 441 - - - - - - - - - - -

70.0100 Banking 456 16 10.9 3.1 1.6 0.8 9.4 5.5 5.1 0.4 4.7 5.5

70.0200 Credit agencies 457 18 12.3 3.5 1.8 0.9 10.5 6.1 5.7 0.4 5.3 6.1

70.0400 Insurance carriers 459 - - - - - - - - - - -

71.0201 Real estate agents 462 29 20.4 5.8 2.9 1.5 17.5 10.2 9.5 0.7 8.8 10.2

73.0102 Services to dwellings/buildings 472 - - - - - - - - - - -

73.0103 Personnel supply 474 - - - - - - - - - - -

73.0104 Computers & data processing 475 9 6.5 1.9 0.9 0.5 5.6 3.3 3.0 0.2 2.8 3.3

73.0106 Detective services 476 - - - - - - - - - - -

73.0107 Equipment rental & leasing 473 6 3.1 1.9 1.2 0.3 2.8 3.1 1.5 0.2 1.4 3.1

73.0109 Other business services 470 7 - - - - - - - - - -

73.0111 Management & consulting 508 30 6.1 15.2 9.1 3.0 15.2 12.1 9.1 1.5 7.6 12.1

73.0112 Testing and research labs 509 25 9.9 4.9 9.9 1.2 6.2 17.3 3.7 0.6 3.1 17.3

73.0200 Advertising 469 41 16.6 16.6 8.3 - 16.6 24.8 8.3 - 8.3 24.8

73.0301 Legal services 494 5 2.7 1.6 1.1 0.3 3.3 1.9 1.8 0.1 1.6 1.9

73.0302 Engineering, architectural & surveying 506 10 5.0 3.0 2.0 0.5 6.0 3.5 3.3 0.3 3.0 3.5

73.0303 Accounting, auditing & bookeeping 507 7 3.6 2.2 1.4 0.4 4.3 2.5 2.3 0.2 2.2 2.5

74.0000 Eating & drinking places 454 - - - - - - - - - - -

75.0001 Automotive rental & leasing 477 - - - - - - - - - - -

78.0100 U.S. Postal Service 513 - - - - - - - - - - -

90.0000 Other value added n.a. 169 - 33.8 135.0 - 33.8 135.0 16.9 - 16.9 135.0

88.0000 Compensation of Employees n.a. 238

Total 53.5 81.0 169.0 6.2 93.7 203.6 49.9 3.1 46.8 203.6

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply

Activity # 26. Camp Support

Kenai Anchorage Other U.S. Kenai Anchorage Other U.S.

Local (If 

Near Labor 

Supply) Kenai Anchorage Other U.S.

66.0100 Telephone communications 441 7,435 5,205 1,487 744 1,487 4,461 1,487 2,974 744 2,231 1,487

66.0200 Cable TV 441 7,558 1,134 1,134 5,291 756 1,512 5,291 1,134 378 756 5,291

70.0100 Banking 456 34,205 23,944 6,841 3,421 1,710 20,523 11,972 11,117 855 10,262 11,972

70.0200 Credit agencies 457 27,344 19,141 5,469 2,734 1,367 16,406 9,570 8,887 684 8,203 9,570

70.0400 Insurance carriers 459 - - - - - - - - - - -

71.0201 Real estate agents 462 27,712 19,399 5,542 2,771 1,386 16,627 9,699 9,007 693 8,314 9,699

73.0102 Services to dwellings/buildings 472 12,678 7,607 2,536 2,536 634 6,339 5,705 3,487 317 3,170 5,705

73.0103 Personnel supply 474 10,323 6,194 2,065 2,065 516 5,161 4,645 2,839 258 2,581 4,645

73.0104 Computers & data processing 475 6,984 4,889 1,397 698 349 4,191 2,445 2,270 175 2,095 2,445

73.0106 Detective services 476 8,316 4,158 2,495 1,663 416 4,989 2,911 2,703 208 2,495 2,911

73.0107 Equipment rental & leasing 473 - - - - - - - - - - -

73.0109 Other business services 470 19,274 - - - - - - - - - -

73.0111 Management & consulting 508 19,888 3,978 9,944 5,966 1,989 9,944 7,955 5,966 994 4,972 7,955

73.0112 Testing and research labs 509 - - - - - - - - - - -

73.0200 Advertising 469 19,950 7,980 7,980 3,990 - 7,980 11,970 3,990 - 3,990 11,970

73.0301 Legal services 494 5,919 2,960 1,776 1,184 296 3,552 2,072 1,924 148 1,776 2,072

73.0302 Engineering, architectural & surveying 506 - - - - - - - - - - -

73.0303 Accounting, auditing & bookeeping 507 - - - - - - - - - - -

74.0000 Eating & drinking places 454 6,104 3,052 1,831 1,221 305 3,662 2,136 1,984 153 1,831 2,136

75.0001 Automotive rental & leasing 477 - - - - - - - - - - -

78.0100 U.S. Postal Service 513 5,407 3,244 1,081 1,081 541 3,244 1,622 1,893 270 1,622 1,622

90.0000 Other value added n.a. 126,149 - 25,230 100,920 - 25,230 100,920 12,615 - 12,615 100,920

88.0000 Compensation of Employees n.a. 408,291

Total 44,061 56,334 121,324 5,046 74,293 142,381 39,669 2,523 37,146 142,381

Exhibit 4-5: Estimates of Purchased Services by Sector and Geographic Area for E&D Activities

BEA I-O 

Sector Sector Name

IMPLAN 

Sector

Service 

Purchases

Cook Inlet Projects Remote Projects Remote Projects Near Labor Supply
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DOI-MMS 70 Sub-Arctic IMPAK

5 CAPITAL AND MATERIAL INPUTS

The purpose of this chapter is to provide an overview of the methods used to develop estimates

of the capital and material inputs to the production process. The starting points for the estimates 

are the lists of equipment and purchases for each of the activities that were collected by the

project engineering staff. These purchases are described for each activity in Chapter 2.

In many cases, the assignment of these various purchases as capital of materials is counter

intuitive. From an accountant's viewpoint a large piece of equipment such as a production

platform would be a capital purchase that would be depreciated over many years. In this study,

however, the production platform is treated as a material. This is because this piece of

equipment is put in place in one year and never moved or used in another activity or project. The 

economic impact of producing, wholesaling and transporting this piece of equipment is,

therefore, all realized within that year. Only equipment that is used over multiple activities or

projects is treated as capital with an annualized cost. This allows their impact to be assigned to

the correct activity or year.

The two sections that follow provide an overview of the techniques and sources of data used to

develop estimates of capital and material inputs.

5.1 CAPITAL INPUTS

Unlike most labor and material inputs which are entirely and immediately consumed in the

production process, capital inputs are used up gradually over time. This defining aspect of

capital requires special attention when utilizing an input-output (I-O) framework to estimate

economic impacts. Capital expenditures are not included in the use coefficients of an industry,

which only account for inputs that are immediately consumed for current production. In an I-O 

model, annualized capital expenditures are included with value added. Unfortunately, these

expenses are frequently aggregated and, without a capital flow matrix, it is not possible to isolate 

specific types of investments or trace the secondary impacts associated with such investments. 

For this reason, exogenous estimates of capital investment are often developed outside of the I-O 

model, and then used as model catalysts along with other direct expenditures.

Capital investments represent a substantial portion of mineral exploration and development

(E&D) expenditures. Due to the harsh environment, this is especially true in Alaska. E&D

activities require transportation and earth moving equipment, drilling equipment, et cetera.

This section provides an overview of how expenditures for these items are developed and used to 

stimulate the IMPLAN input-output model.

Overview of the Capital Component

Estimates of annual capital expenditures were developed for each activity by IMPLAN sector

and geographic region. The numbers are based upon estimated expenditures for the different
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DOI-MMS 71 Sub-Arctic IMPAK

assets needed to carry out each activity. Each capital expenditure is based upon the total

delivered price of the asset. This cost is annualized (based upon the average life of the machine), 

converted into a "per unit" basis, and then divided into its various cost components: i.e.,

manufacturing, transportation and wholesale trade, and retrofitting. Each cost category is

assigned to an associated IMPLAN sector.

Finally, regional purchase coefficients (RPC) were used to allocate expenditures to impacted

geographic regions. This allocation is performed for each cost component. For example, the

manufacturing cost of a particular asset may have been assigned to the contiguous 48-states 

whereas part of the cost of delivering it to Alaska may have been assigned to Anchorage.

Identification of Assets Used in Each E&D Activity

The first step in the process was to identify the capital assets used in each E&D activity. It

should be noted that much of the equipment has to be retrofitted with special accessories before

it can be used in the harsh conditions found in Alaska. These accessories include insulation,

special engine lubricants, and hardware attachments. The accessories associated with each

primary piece of capital were also identified in this first step.

The numbers of assets required to carry out one unit of the activity were then estimated. This

information was compiled through surveys of construction and mining contractors and

supplemented with engineering and economic judgment.

Annual Cost Estimates by Asset

This step entailed developing an annual cost estimate for each asset per activity unit. 

To develop the annual cost estimates, it was necessary to make some assumptions regarding the

average life of the machine and the amount of time that it was devoted to the particular activity

in question. Average life was used to capitalize the investment in the machine. Dedication to

task was needed since some machinery can be used on multiple projects simultaneously during a 

given time period. Both of these numbers are based on professional engineering judgments

Total delivery cost was the final information needed to develop the annual cost estimates. This

information was gathered primarily in contractor surveys. Some of the information had to be

supplemented with additional estimates based upon professional judgment. 

For each activity and asset, an annual cost estimate was developed using the above information. 

The total delivery cost was multiplied by the number of assets needed, adjusted for the amount of 

time it was devoted to the activity, and then divided by the average life of the machine. For each 

asset type, this last step implies an assumption that the age distribution of the current population 

is uniform. In the judgment of project staff it would be too difficult and too costly to compute

this distribution through survey work. It was also assumed that each asset adheres to a straightline depreciation schedule. Again, in the judgment of project staff it would be too costly and

would make the model unnecessarily complicated to develop different depreciation schedules by
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DOI-MMS 72 Sub-Arctic IMPAK

asset type. The option of using established depreciation schedules at the national level was

rejected given Alaska's harsh environment.

Finally, the annual cost estimates were converted into a per unit basis by dividing them by the

number of activity units per year.

Margins

The annual cost estimates developed above are based on the total delivered price of the asset. 

This price includes, in addition to the manufacturing price, trade and transportation margins as

well as additional labor for retrofitting. To be used in the I-O model, it was necessary to break

out these expenditures from the total delivery price. This was accomplished by developing a

margin matrix. For each asset, the margin matrix shows the percentage of the delivery price that 

can be attributed to the following categories:

Production

Transportation to Alaska

Rail

Water

Truck

Air

Transportation within Alaska

Rail

Water

Truck

Air

Wholesale Trade

Retrofitting

During the contractor interviews conducted for the study, data was gathered on production costs, 

transportation costs to Alaska, transportation costs within Alaska, wholesale trade, and

retrofitting. Secondary data sources were used to develop the modal detail for the transportation 

cost categories; these include the 1993 Commodity Flow Survey and other sources available

from the U.S. Department of Commerce (e.g., the economic censuses, County Business Patterns, 

etc.). Data are extremely sparse in this area and in some instances IMPLAN data or professional 

judgment was relied upon.

Regional Purchase Coefficients

After each asset's total delivered price had been split into the above expenditure categories, it

was necessary to assign the expenditures to geographic locales. This was accomplished through

a regional purchase matrix, which allocates each expenditure to up to five geographic areas: the

local area of Alaska were the project takes place, the Kenai Peninsula, Anchorage, Other US, and 

Foreign. The geographic definitions were determined in part by MMS's need for equitable

sharing analysis.
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DOI-MMS 73 Sub-Arctic IMPAK

By associating the expenditures with the areas in which they take place, this step helps to ensure 

that both the direct and indirect regional impacts of an investment are accurately gauged. For

example, most of the heavy equipment utilized in Alaska is manufactured in the contiguous 48-

states or overseas. Therefore, there won't be any direct manufacturing employment generated in

a remote area as a result of a firm investing in one of these assets. Those impacts will occur

where the product is manufactured. On the other hand, employment in the local area may be

generated as a result of transportation and wholesale activities associated with a heavy

equipment purchase. Once these direct impacts have been estimated, they can be used in an I-O 

model to estimate the secondary impacts.

The regional purchase coefficients are based upon information gathered during the contractor

interviews, internet searches to identify production locations for brand name equipment and

secondary data sources such as the Survey of Manufactures, and professional judgment.

Assignment of Expenditures to IMPLAN Sectors

At this point, annual capital expenditure estimates by asset and activity unit have been divided

into production and margin categories and allocated to geographic regions. Each asset and

margin was then assigned to an IMPLAN sector. Annual expenditures were then summed across 

IMPLAN sectors.

In some cases, the cost of a larger asset was distributed to multiple IMPLAN sectors. In these

cases, the distribution among sectors was based on data in the national capital flow matrix or

data from IMPLAN vectors for construction.

5.2 MATERIAL INPUTS

Most major material inputs such as fuel were estimated based on information on cost and

quantity gathered in the industry interviews or based on the expert engineering knowledge of

project staff. However, in order to determine what materials and purchased services are utilized

in quantities that are significant enough to warrant estimation, data from the latest national-level 

input-output table of the U.S. economy was tabulated and analyzed. The latest table available is 

for the year 1992, as developed by the U.S. Bureau of Economic Analysis, and published in

September 1998. This tabulation was presented earlier in Exhibit 4-1.

As shown in Exhibit 4-1 and discussed in Chapter 4, the various activities that comprise the oil

and gas industry are subsumed within four sectors in the national I-O table. The largest of these 

sectors is Mining Sector 8.0001, Crude Petroleum and Natural Gas. The three smaller sectors are 

all construction industries. These include Sector 11.0601 (Petroleum and Natural Gas Well

Drilling), Sector 11.0602 (Petroleum, Natural Gas, and Solid Mineral Exploration), and Sector

12.0215 (Maintenance and Repair of Petroleum and Natural Gas Wells).

Of these four sectors, the mining sector, Crude Petroleum and Natural Gas, is far larger than the 

others with output of over $100 billion compared to just over $10 billion for Petroleum and

Natural Gas Well Drilling and between $1 and $2 billion for the other two sectors.
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Exhibit 4-1 provides the dollars of purchases for all input sectors that accounted for at least one

half of one percent of industry output for any of the four sectors. In total, there were 53 sectors

that met this criterion. Note that as shown at the bottom of Exhibit 4-1, the purchases from these 

53 sectors account for 96 to 99 percent of the total purchases of the four oil and gas sectors.

Many of these sectors were not of interest in the analysis of material goods or purchased services 

and were therefore dropped from the analysis. A discussion of these sectors is provided in

Chapter 4.

Of the remaining sectors, nine, which happen to be the first nine sectors listed in Exhibit 4-1, 

were considered to be material inputs. These include the following sectors:

27.0100 Industrial inorganic and organic chemicals

27.0406 Chemicals and chemical preparations, not elsewhere classified

29.0203 Polishes and sanitation goods

31.0101 Petroleum refining

31.0102 Lubricating oils and greases

31.0200 Asphalt paving mixtures and blocks

36.0100 Cement, hydraulic

36.1100 Concrete products, except block and brick

36.1900 Minerals, ground or treated

In summary, material inputs to the oil and gas production process are made up of four main types 

of commodities. The first, represented by the first three sectors on the list, are chemicals. The

second, corresponding to the fourth and fifth sectors on the list are the products of petroleum

refining such as gasoline as well as lubricating oils and greases. The third, corresponding to the 

sixth through eighth sectors on the list, are the various paving and building compounds, asphalt,

concrete and cement. The fourth and final group of major material inputs, corresponding to the

final sector on the list, is specialty minerals used in well drilling operations.

The type of products for each of these sectors and their associated SIC codes were useful input to 

the interviewing process. Estimates were solicited on the usage of these various inputs for the

particular activity under consideration. These estimates were often based on usage rates for

particular pieces of equipment that were then multiplied by the number of units in use, the hours

or days of use per piece of equipment and the cost per unit of the input. An example would be

the gallons of fuel used per day for a pickup truck. This estimate would then be multiplied by

the product of the number of pickup trucks and the number of days they were employed in the

task. Total usage would then be multiplied by the cost of fuel. Since the products were already

defined by SIC code and input-output sector it was a simple matter to code them to IMPLAN

sector. As the estimates were in purchasers prices, rough estimates of shipping costs by mode

and wholesale and retail margins (if applicable) had to be made prior to assignment to sectors. 

Finally, the area of production for each of the inputs was specified, so that the resulting values

could be divided among the local community, the KPB, Anchorage, and the 49 States.
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6. GOVERNMENT VECTORS AND REAL ESTATE COSTS

This Chapter provides information on the data development methodologies for the vectors of 

government spending and for costs for purchasing real estate for buildings or pipeline easements.

6.1 GOVERNMENT VECTORS

In addition to the E&D activities listed in Exhibit 2-4, IMPAK estimates direct economic

impacts associated with government related expenditures. The methods used to estimate these

impacts are somewhat different than the overall approach that was used to develop the other

vectors in the model. Government revenues, as described below in Section 7.3.1 are distributed

to a number of IMPLAN sectors. To carry out the allocation, separate input-output vectors were 

developed for local, state and federal governments. Each cell in the vectors represents a

percentage of the respective total government expenditures. For the most part, it is assumed that 

all expenditures will take place in the region in which the government is located. 

Vectors for state and local government expenditures were developed using data provided by

MMS. The MMS data was developed using location-specific State and local budget data from

the U.S. Census Bureau's Census of Governments and data from the national input-output 

accounts published by the U.S. Bureau of Economic Analysis. Table C in the national inputoutput accounts provides the commodity composition of Federal Government consumption and

investment expenditures. To minimize the number of industries added to the model, we

recalibrated the commodity expenditure shares using 95% of the value of commodity purchases. 

Expenditures in National Income and Products Accounts (NIPA) industry 82, reflecting

government value added, were adjusted for taxes and savings and assigned to PCE. The

proportion of the expenditures assigned to PCE was based on data from the Census of

Governments and from published budgets of the relevant State and local governments.

6.2 REAL ESTATE COSTS

The costs to purchase real estate, other than the revenue flowing to real state agents, are typically 

not included in input-output models as they are assumed to be merely transfers between two

parties creating no net economic impact. In the case of this model, however, where there are

multiple geographic areas under consideration, one area can see a positive economic impact as

money flows into the area. As this is an important source of revenue and economic impact in

remote areas, an estimate of the value of the real estate is made and assigned to personal income. 

Note that the offsetting value of economic funds which may be thought of as the opportunity

costs of the purchases, are not included.

Real estate costs are extremely variable, especially in remote costal areas, and therefore the

values selected are an attempt to select a median value. Data were collected on both the value

per acre and the number of acres required for the activities. Data were provided by both the

project engineering staff based on their extensive experience in facility development and the

many interviews conducted for this study and from the Manager of the Drift River Terminal who 
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provided specific experience on acreage requirements and land costs for petroleum production

facilities and marine terminals. The estimates of values per acre, acreage requirements and total 

real estate or easement costs are provided in Exhibit 6-1. For projects in the Cook Inlet, these

estimates were then allocated to total personal income by assuming that half of the value accrued 

to owners in the Kenai and half to owners in Anchorage. For remote projects, the Kenai

percentage was reduced to 10 percent and the balance was assigned to the local area. Personal

income was then converted personal consumption expenditures by area of spending using the

same techniques as discussed above for labor income.

Facility Type Acreage Cook Inlet Remote Cook Inlet Remote

Construct Exploration Shore Base 10.0 7,500 4,000 75,000 40,000

Construct Production Shore Base 5.0 7,500 4,000 37,500 20,000

Construct Onshore Production Facility 40.0 4,000 2,000 160,000 80,000

Construct Marine Terminal 160.0 4,000 2,000 640,000 320,000

Construct Onshore Pipeline 25.3 4,000 2,000 101,200 50,600

Construct Offshore Pipeline 25.3 4,000 2,000 101,200 50,600

Exhibit 6-1: Estimates of Real Estate and Easement Costs ($, 1,000)

Cost Per Acre Total Cost
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7. DESCRIPTION OF THE MODEL

This chapter provides an overview of the model and describes how to use it to forecast

manpower and expenditures needed to carry out oil exploration and development (E&D)

operations in Sub-Arctic Alaska.

The main purpose of the model is to forecast the direct manpower and expenditures needed to

conduct oil exploration and development (E&D) operations in Sub-Arctic Alaska. The model

can be adapted to Cook Inlet, semi-remote areas that are near population centers, and other

remote Sub-Arctic planning areas. The first round estimates are categorized in such a way that

the IMPLAN economic impact model can be used to estimate the secondary economic

repercussions associated with these E&D activities.

Sub-Arctic IMPAK is organized around a comprehensive set of activities which characterize oil

exploration and development in the Sub-Arctic areas of Alaska. These activities are shown in

Exhibit 7-1. For each activity, the model houses a cost vector of labor and commodity input

requirements on a per unit basis. The commodities are defined according to IMPLAN’s 1995

commodity/industry sector scheme. Costs are provided in 1999 dollars.

Beginning with the 2001 IMPLAN data (expected to be available near the end of the 2003),

IMPLAN’s sectors will be based on the new North American Industry Classification System

(NAICs), a new sectoring scheme to be used for all Federal economic statistics. After that time,

the Sub-Arctic IMPAK: First-Step model described in this documentation will remain a valid

stand alone model. However, some adjustments may be necessary to use it to provide inputs to

the IMPAK: Second-Step model files that MMS has developed to estimate employment,

personal income, total value added etc. 

The user is required to input some general data that describe a particular E&D scenario being

evaluated. To make things easy for the user, most of these data can be obtained from MMS’

E&D reports. These reports are prepared by MMS staff and describe any given proposed lease

sale.

The model translates these user inputs into IMPAK activity levels and then multiplies the results 

by the cost vectors described above. The product and primary output of the model is a vector of 

the estimated expenditures by IMPLAN sector. The model produces separate vectors for each

year in the forecast horizon. The model can handle up to 50 years in the forecast horizon.

As noted above, Sub-Arctic IMPAK allows the user to distinguish between three different types

of geographic areas where E&D activity takes place. The three areas include Cook Inlet, semiremote areas that are near population centers, and other remote Sub-Arctic planning areas.

The model also breaks down and assigns the cost estimates to geographic regions where the

associated economic impacts accrue. Four regions are utilized: local, Kenai Peninsula Borough, 

the rest of Alaska, and the continental United States. The output is organized according to these 

geographic definitions and is presented on separate worksheet tabs accordingly. A generalized

schematic of the model is presented in Exhibit 7-2.
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Exhibit 7-1: IMPAK Activities and Respective Units

Activity Unit Unit Cost

Seismic Survey One Month Cost Per Month

Spill Contingency Operations Support for 3 Platforms Annual Operating Cost†

Construct Exploration Base One 3000 Sq. Ft. Facility Construction Cost

Operate Exploration Base One 3000 Sq. Ft. Facility Annual Operating Cost†

Install Exploration Platform One Exploration Platform Installation Cost

Operate Exploration Platform One Exploration Platform Annual Operating Cost†

Drill Exploration Well One Exploration Well Cost to Drill 1 Well

Construct Production Base One 7200 Sq. Ft. Facility Construction Cost

Operate Production Base One 7200 Sq. Ft. Facility Annual Operating Cost†

Install Production Platform One Production Platform Installation Cost

Operate Production Platform One Production Platform Annual Operating Cost†

Drill Production Well One Production Well Cost to Drill 1 Well

Lay Offshore Pipeline One Mile of Offshore Pipeline Installation Cost

Lay Onshore Pipeline One Mile of Onshore Pipeline Installation Cost

Construct Production Facility One 50 Million Barrel Facility Construction Cost

Operate Production Facility One 50 Million Barrel Facility Annual Operating Cost†

Construct Marine Terminal One 40,000 Gallon Capacity Terminal Construction Cost

Operate Marine Terminal One 40,000 Gallon Capacity Terminal Annual Operating Cost

†

Major Platform Maintenance One Production Platform Cost to Conduct 1 Maintenance

Well Workover One Production Well Cost to Conduct 1 Workover

Helicopter Support One Hour Operating Cost Per Hour*

Large Workboat One Hour Operating Cost Per Hour*

Small Workboat One Hour Operating Cost Per Hour*

Landing Craft One Hour Operating Cost Per Hour*

Dive Boat One Hour Operating Cost Per Hour*

Camp Support One Year Annual Operating Cost†

Abandonment One Production Platform Cost to Abandon 1 Platform

*Includes annualized capital costs.

†

Takes into account the fact that some operations are not carried out over the entire year. 
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Exhibit 7-2: Model Flowchart

User

Input

Parameters

Local

Output

Model

Input

Cook Inlet Semi-Remote Remote

Transposed

Input

Transposed

Input

Transposed

Input

KPB*

Output

Local

Output

Local

Output

KPB*

Output

KPB*

Output

Other AK

Output

Other AK

Output

Other AK

Output

Other US

Output

Other US

Output

Other US

Output

Secondary

Drivers

Local

Matrix

Other AK

Matrix

KPB*

Matrix

Other US

Matrix

Other US

Matrix

Other US

Matrix

Other AK

Matrix

Other AK

Matrix

KPB*

Matrix

KPB*

Matrix

Local

Matrix

Local

Matrix

* Kenai Peninsula Borough
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7.1 INSTALLATION

The application consists of an Excel spreadsheet file with supporting documentation activated

through hyperlinks to PDF files. In order for the hyperlinks to work properly, the documentation 

and spreadsheet files should be copied to the same directory. The links will not work with

shortcuts. The files that should be copied include:

Sub-Arctic_IMPAK.xls (MS Excel spreadsheet application)

Sub-Arctic_IMPAK Model Description.pdf (model documentation)

Sub-Arctic IMPAK Final Report.pdf (final report)

To maintain the documentation in a different directory, use Excel's Properties option to set the

default address for hyperlinks in the file:

1.) On the File menu, click Properties. 

2.) Click the Summary tab. 

3.) In the Hyperlink base box, type the path you want to use. 

When opening the file, the user may be prompted with a caution and a choice about enabling the 

macros contained in the file. The application will not work properly if the macros are disabled.

Whether or not the user sees the message will depend upon the security level set for macros in 

the user's version of Excel (see the Security Level tab in the Security dialog box (Tools menu, 

Macro submenu). Under all settings, if antivirus software that works with Microsoft Office XP 

is installed and the file contains macros, the file is scanned for known viruses before it is opened. 

For information on how to change the security settings and/or verify trusted file sources using 

digital signatures, see Excel's help files on the topic.

7.2 USER INTERFACE

IMPAK is a Microsoft Excel workbook consisting of numerous worksheets or pages. Most of

these pages are designated by labeled tabs at the bottom of the screen and which the user can

select with the mouse. The main screens are described in more detail below.

7.2.1 Documentation Screen

This screen contains hyperlinks to this help file and the final report. These files are in PDF file 

format so the user must have a version of Adobe's Acrobat Reader in order to view the files.

7.2.2 Model Setup Screen

This screen provides an avenue for altering some of the default settings used in the model. 
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Calculation

Under this option the user can choose how formulas in the model are updated when the

user input data and/or parameters are changed.

• Automatic calculation: each time a cell's value changes, all other cells linked

to it through formulas are immediately updated to reflect the new value. With 

large spreadsheets, the updating process can be somewhat slow, especially if

the user's computer has limited memory and/or a relatively slow processor.

• Manual calculation: even though linked cell values change, formulas are not

updated until the user presses F9. When the updating process is slow due to

limited computer resources, this option allows the user to minimize the

amount of time spent waiting for formulas to update.

Study Area

These selections specify where the E&D scenario takes place in Sub-Arctic Alaska and

the user must choose one. The three choices include (1) Cook Inlet, (2) semi-remote 

regions that are near population centers and (3) remote regions that are not close to a

population center. Based upon the circumstances and location of the E&D scenario, the

analyst will need to use his/her own judgment to determine which choice best applies to

the scenario under consideration. The choice determines which matrices, manpower 

vectors, PCE vectors and TPI drivers are used in the model. It should be noted that only

one type of scenario can be modeled at one time.

Use of Existing Infrastructure

These options determine whether certain types of existing infrastructure will be used in

the scenario or whether new infrastructure will have to be constructed to support the

E&D operations. The potential types of existing infrastructure that are addressed include 

marine terminals, production facilities and shore bases. If an option is not selected, it is

assumed that new infrastructure of the respective type will have to be constructed. See

Section 7.3.1 for information on how the construction expenditure levels are estimated

and when construction activities are assumed to occur. 

• Use Existing Marine Terminal: If this box is not selected, the model assumes

that a new marine terminal will have to be constructed and estimates the

required resources to do so.

• Use Existing Production Facility: If this box is not selected, the model 

assumes that a new production facility will have to be constructed and

estimates the required resources to do so.
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• Use Existing Shore Base: If this box is not selected, the model assumes that a

new shore base will have to be constructed and estimates the required 

resources to do so.

Initialize Forecast Horizon

Here the user specifies the first year in the forecast horizon. Since the Model Setup

worksheet does not utilize a blinking cursor a the insertion point, it might be difficult to

see that the initial year is already selected. Simply select the cell to the right of Initialize

Forecast horizon (Average Water Depth) and enter the first year of the forecast.

Subsequent years that are printed on the data entry screen, the output screens, and the

manpower graph are determined by this initial year.

Average Water Depth

Average water depth is used to determine whether platforms are situated in deep water or 

shallow water. The value is compared to the parameter that specifies the criteria for deep 

water versus shallow water. If the scenario takes place in deep water, installation and

operating costs are increased. See Sections 7.2.3 and 7.3.1 for more details.

7.2.3 Parameters Screen

This screen allows the user to modify the parameters used in model equations to estimate the

activity levels for a given scenario. Unlike the variable inputs entered by the user on the Data

Entry screen, parameters remain constant throughout the forecasts horizon.

• Platform Related: These parameters are used to relate the number of platforms to other activity levels.

Parameter Description

Number of Platforms Supported by Each Spill 

Operation

The number of production and exploration platforms is divided by 

this parameter to estimate the size of the spill contingency 

operation needed for the scenario.

Number of Exploration Platforms Supported by a 

3000 sq. ft. Shore Base

The number of exploration platforms is divided by this parameter 

to estimate the size of the exploration shore base needed for the 

scenario.

Number of Production Platforms Supported by a 

7200 sq. ft. Shore Base

The number of production platforms is divided by this parameter 

to estimate the size of the exploration shore base needed for the 

scenario.
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• Water Depth: These parameters allow the model to differentiate between different cost factors that

apply to deep water versus shallow water scenarios.

Parameter Description

Water Depth Determining Deep Water from 

Normal (feet)

This parameter is used to determine whether platforms are situated 

in deep water or shallow water.

Deep Water Operating Cost Factor This factor is multiplied by the production platform operating cost 

vector to account for increased operating costs for platforms 

situated in deep water.

Deep Water Installation Cost Factor This factor is multiplied by the production platform installation 

cost vector to account for the increased costs of installing deep 

water platforms.

• Production Facility: These parameters are used to estimate the size and operating levels of the

production facility needed to support production levels in the scenario.

Parameter Description

Construction Cost Per Annual Volume of Crude 

Processed (Dollars)

This parameter is multiplied by the maximum barrels of annual oil 

production to estimate the total resources needed to construct a 

production facility.

Annual Operating Cost Per Barrel of Oil Treated 

(Dollars)

This parameter is multiplied by annual oil production to estimate 

annual operating cost to treat the volume of oil produced in the 

scenario.

Cost to Build Model Production Facility This parameter reflects the total construction cost of the facility 

upon which the production facility construction cost vector is 

based. It is used to calibrate the estimated construction costs in 

each scenario.

Annual Cost to Operate Model Production 

Facility

This parameter reflects the total operating cost of the facility upon 

which the production facility operating cost vector is based. It is 

used to calibrate the estimated operating costs in each scenario.

• Marine Terminal: These parameters are used to estimate the size and operating levels of the marine

terminals needed to support production levels in the scenario.

Parameter Description

Storage Capacity at Marine Terminal Given 

Daily Production Volume (Days)

This parameter reflects the average number of days that oil is 

stored at a marine terminal. The parameter is multiplied by 

average daily production to estimate the total number of days of 

storage needed for the scenario. This figure is then used to 

calculate construction cost of the terminal as well as annual 

operating cost.

Construction Cost Per Storage Capacity (Dollars 

Per Day of Storage Capacity)

This parameter reflects the average construction cost per day of 

storage capacity. It is multiplied by the maximum amount of 

daily storage capacity needed in the scenario to estimate the total 

construction cost of the marine terminal.

Annual Operating Cost Per Day of Storage 

Capacity

This parameter reflects the average annual operating cost per day 

of storage capacity. It is multiplied by the average daily storage 

capacity needed each year to estimate the annual operating cost of 
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the marine terminal.

Cost to Build Model Marine Terminal This parameter reflects the total construction cost of the facility 

upon which the marine terminal construction cost vector is based. 

It is used to calibrate the estimated construction costs in each 

scenario.

Annual Cost to Operate Model Marine Terminal This parameter reflects the total operating cost of the facility upon 

which the marine terminal operating cost vector is based. It is 

used to calibrate the estimated operating costs in each scenario.

• Boat Support: These parameters are used to estimate the total hours of boat support required under the 

given scenario. 

Parameter Description

Adjustment in Miles Added to Straight-line 

Distance (miles)

A figure added to the distance from base user input to take into

account the fact that most trips are not "as the crow flies".

Average Boat Speed (mph) The average distance per trip is divided by this parameter to

estimate the average hours of transit time per trip.

Hours Small Workboat Support Needed to

Conduct 1 Month of Seismic Survey

This parameter is multiplied by the months of seismic survey

work conducted to estimate the hours of small workboat related

support.

Hours Dive Boat Support Needed to Conduct 1

Month of Seismic Survey

This parameter is multiplied by the months of seismic survey

work conducted to estimate the hours of dive boat related support.

Number of Large Workboat Trips to Install 1 

Exploration Platform

This parameter is multiplied by the number of exploration

platforms installed each year to estimate the number of large 

workboat related support trips.

Number of Small Workboat Trips to Install 1 

Exploration Platform

This parameter is multiplied by the number of exploration

platforms installed each year to estimate the number of small 

workboat related support trips.

Number of Large Workboat Trips to Install 1 

Production Platform

This parameter is multiplied by the number of production

platforms installed each year to estimate the number of large 

workboat related support trips.

Number of Small Workboat Trips to Install 1 

Production Platform

This parameter is multiplied by the number of production 

platforms installed each year to estimate the number of small 

workboat related support trips.

Annual Number of Large Workboat Trips to

Operate 1 Production Platform

This parameter is multiplied by the number of operating

production platforms each year to estimate the number of large 

workboat related support trips.

Annual Number of Small Workboat Trips to

Operate 1 Production Platform

This parameter is multiplied by the number of operating

production platforms each year to estimate the number of small 

workboat related support trips.

Annual Number of Large Workboat Trips to

Operate 1 Exploration Platform

This parameter is multiplied by the number of operating

exploration platforms each year to estimate the number of large 

workboat related support trips.

Annual Number of Small Workboat Trips to

Operate 1 Exploration Platform

This parameter is multiplied by the number of operating

exploration platforms each year to estimate the number of small 

workboat related support trips.
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Number of Large Workboat Trips to Abandon 1

Production Platform

This parameter is multiplied by the number of production

platforms abandoned each year to estimate the number of large 

workboat related support trips.

Number of Small Workboat Trips to Abandon 1

Production Platform

This parameter is multiplied by the number of production

platforms abandoned each year to estimate the number of small 

workboat related support trips.

Number of Large Workboat Trips to Drill 1

Production Well

This parameter is multiplied by the number of production wells

drilled each year to estimate the number of large workboat related 

support trips.

Number of Large Workboat Trips to Drill 1

Exploration Well

This parameter is multiplied by the number of exploration wells

drilled each year to estimate the number of large workboat related 

support trips.

Number of Large Workboats to Lay 1 Mile of

Offshore Pipe.

This parameter is used to estimate the hours of large workboat

support needed to lay the offshore pipe in the scenario. It is

multiplied by the miles of pipeline, number of days to install 1

mile of pipe, and the average daily hours of support provided.

Number of Dive Boats to Lay 1 Mile of Offshore 

Pipe.

This parameter is used to estimate the hours of Dive Boat support 

needed to lay the offshore pipe in the scenario. It is multiplied by 

the miles of pipeline, number of days to install 1 mile of pipe, and 

the average daily hours of support provided.

Annual Number of Landing Craft Trips to

Construct 1 Marine Terminal

This parameter is used to estimate the hours of landing craft

support needed to construct a marine terminal. During years

which construction takes place, the parameter is multiplied by the 

average number of hours required to complete each trip.

Annual Number of Landing Craft Trips to

Construct 1 Marine Terminal

This parameter is used to estimate the hours of landing craft

support needed to construct a marine terminal. During years

which construction takes place, the parameter is multiplied by the 

average number of hours required to complete each trip.

Annual Number of Landing Craft Trips to

Operate 1 Marine Terminal

This parameter is used to estimate the hours of landing craft

support needed to operate a marine terminal for one year. During

years of operation, the parameter is multiplied by the average

number of hours required to complete each trip.

Annual Number of Large Workboat Trips 

Needed to Support Major Platform Maintenance

During years of oil production, this parameter is multiplied by the 

number of operating production platforms to estimate the number

of large workboat related support trips.

Annual Number of Small Workboat Trips 

Needed to Support Major Platform Maintenance

During years of oil production, this parameter is multiplied by the 

number of operating production platforms to estimate the number

of small workboat related support trips.

Number of Large Workboat Trips to Support 1

Well Workover

This parameter is multiplied by the number of well workovers

each year to estimate the number of large workboat related

support trips.
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• Helicopter Support: These parameters are used to estimate the total number of days of helicopter

support required under the given scenario. 

Parameter Description

Number of Helicopter Trips Per Month of 

Seismic Survey

This parameter is multiplied by the number of months of seismic 

survey work each year to estimate the number of helicopterrelated support trips.

Number of Helicopter Trips to Support a Spill 

Contingency Operation for 3 Platforms

This parameter is multiplied by the number of spill contingency 

operations each year to estimate the number of helicopter-related 

support trips.

Number of Helicopter Trips to Install a Platform 

in Shallow Water

This parameter is multiplied by the number of platforms installed 

in shallow water each year to estimate the number of helicopterrelated support trips.

Number of Helicopter Trips to Install a 

Production Platform in Deep Water

This parameter is multiplied by the number of production 

platforms installed in deep water each year to estimate the number 

of helicopter-related support trips.

Number of Helicopter Trips to Operate 1

Production Platform

This parameter is multiplied by the number of operating 

production platforms each year to estimate the number of 

helicopter-related support trips.

Number of Helicopter Trips to Operate 1

Exploration Platform

This parameter is multiplied by the number of operating 

exploration platforms each year to estimate the number of 

helicopter-related support trips.

Number of Helicopter Trips to Abandon 1 

Production Island

This parameter is multiplied by the number of production islands 

abandoned each year to estimate the number of helicopter-related 

support trips.

Number of Helicopter Trips to Drill 1 Well This parameter is multiplied by the number of wells drilled each 

year to estimate the number of helicopter-related support trips.

Number of Helicopter Trips to Lay 1 Mile of 

Offshore Pipe

This parameter is multiplied by the miles of offshore pipe laid to 

estimate the number of helicopter related support trips. It was 

assumed that it would take 6.6 days on average to lay 1 mile of 

pipe.

Number of Helicopter Trips to Operate 1 Marine 

Terminal

This parameter is multiplied by the number of operating marine 

terminals each year to estimate the number of helicopter-related 

support trips.

Number of Helicopter Trips to Conduct Major 

Platform Maintenance

This parameter is multiplied by the number of operating 

production platforms each year to estimate the number of 

helicopter-related support trips.

Number of Helicopter Trips to Conduct 1 Well 

Workover

This parameter is multiplied by the number of well workovers 

each year to estimate the number of helicopter-related support 

trips.

Average Helicopter Speed (mph) This parameter is used to convert the total number of helicopter 

trips into an hourly basis. Distance from base is divided by the 

parameter and the result is then multiplied by the number of trips.

Average Time to Load/Unload Cargo Personnel 

(hours)

This parameter is multiplied by 2 (to account for each trip end) 

and then added to the time it takes to complete each trip.
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• Government Revenue and Taxes: These parameters are used to estimate government revenues for the

local government, the State of Alaska, and the Federal government. 

Parameter Description

Royalty Paid for Oil Production This parameter is multiplied by the value of oil production to 

estimate royalty revenues to the Federal government. 

Fee Paid to Lease Land During E&D This parameter is multiplied by leased acreage to estimate acreage 

rental payments to the Federal government. 

Percent of 8(g) Revenues Returned to Alaska This parameter is multiplied by total 8(g) revenues to estimate the 

amounts that contribute to Federal government revenues and state 

government revenues.

Percent of 8(g) Revenues Allocated to General 

Fund

This parameter is used to estimate the amount of the state's 8(g) 

revenues that are allocated to the state's general fund. 

Percent of 8(g) Revenues Allocated to Permanent 

Fund

This parameter is used to estimate the amount of the state's 8(g) 

revenues that are allocated to the Alaska Permanent Fund. 

Percent of AK Tax and 8(g) Revenues 

Distributed to each local government

This parameter is used to estimate the amount of state government 

revenues that are distributed to the local government.

Percent of Permanent Fund Balance Distributed 

to the Populace

This parameter is used to estimate Permanent Fund dividends that 

can be attributed to the oil industry activity in the given scenario.

Percent of Permanent Fund Dividend Allocated 

to the local residents

This parameter is used to distribute Permanent Fund dividends 

between local residents and Other Alaska residents.

Percent of local Permanent Fund Dividend Spent 

Locally

This parameter is used to determine where local residents spend 

their Permanent Fund dividends. The amounts are added to PCE 

estimates in the various regions.

Local Tax Revenues as a Percent of Total Income This parameter is multiplied by the amount of personal income 

generated to estimate the amount of local government revenues 

generated from taxes.

State Tax Revenues as a Percent of Total Income This parameter is multiplied by the amount of personal income 

generated to estimate the amount of state government revenues 

generated from taxes.

Federal Tax Revenues as a Percent of Total 

Income

This parameter is multiplied by the amount of personal income 

generated to estimate the amount of federal government revenues 

generated from taxes.
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• Miscellaneous: These parameters are used to produce a variety of estimates used in the model.

Parameter Description

Total Camp Expenditures for 1 Camp Operation This parameter is used to determine the level of camp support 

operations required in the given scenario.

Gasoline Price (1999 Dollars Per Gallon) This parameter is used to estimate fuel purchases and is multiplied 

by the gallons of fuel consumed in each activity. The parameter 

reflects the price of gasoline at the factor gate and does not 

include transportation or retail margins.

Number of Days to Lay 1 Mile of Offshore Pipe This parameter converts mileage of pipe into days of activity. 

This is necessary in order to estimate the level of boat activity 

(calculated on a daily basis) needed to support the offshore pipe 

laying operation.

PCE as a Percent of Disposable Income This parameter is used to determine the amount of Permanent 

Fund income that is spent on consumption and allocated to PCE.

Personal Savings as a Percent of Disposable

Income

This parameter is multiplied by the amount of personal income 

generated to estimate personal savings.
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7.2.4 Data Entry Screen

The Data Entry screen presents the user with a table organized by year and E&D activity. The

analyst must enter the numbers of each activity that occur in a given year. For example, the

analyst will enter the number of production platforms constructed in each year. Shown below in

Exhibit 7-3, most of these activities can be obtained from MMS's E&D Scenario/Schedule. The 

one exception is "Distance from Base" which specifies the average straight-line distance between 

the shore base used and the platforms. This variable is used to calculate transit time for boat and 

helicopter operations.

Note that the activities in Exhibit 7-3 are somewhat different than the ones presented above in

Exhibit 7-1. Through a number of formulas, the data entered by the user are converted into

quantities that correspond to the activities defined in the Exhibit 7-1.

To develop an accurate analysis, the user should enter as much information as possible. The

temporal profile of the data that is entered should also reflect the actual timeline that MMS

expects to see for a given scenario: for example, aggregating the inputs and entering them into a 

single year may lead to anomalous results since many of the formulas have temporal

components.

Since the matrices, PCE vectors and TPI vectors were developed in 1999 dollar values, data

entry variables that are in dollar value units need to be stripped of inflation and computed in

constant 1999 dollars.

Once the data has been entered, the user should be able to review the results almost immediately

simply by clicking on the appropriate tab. If calculation is set to "manual", you will need to first 

press F9 so that the formulas are updated; otherwise the results will not correspond to the most

recent data inputs.

As described in Section 7.3.1, these inputs are converted into IMPAK activity (Exhibit 7-1) 

levels and then used to estimate corresponding expenditures. The conversion takes place on the

Data Entry screen in an area not visible to the user. To view these columns, please follow the

steps below:

1. Unprotect the sheet. From the menus system, choose Tools|Protection|Unprotect Sheet

and then enter the password.

2. Make sure that the column and row headers and vertical and horizontal scroll bars are

visible. From the menu system, choose Tools|Options|View and then enter the

appropriate selections.

3. Select and Display the hidden columns. Use your mouse to select column "T". Next,

while pressing the "Shift" key, use your mouse to select column "T" again and then while 

continuing to hold down the left mouse button move the pointer right off of the page into 

the gray area. Release the shift key. From the menu system, choose

Format|Columns|Unhide.
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Exhibit 7-3: E&D Data Entry Requirements and Respective Units 

Variable Unit

Distance from Base (Feet)

Seismic Survey (Months)

Exploration Wells (Number)

Delineation Wells (Number)

Exploration Platforms (Number)

Production Wells (Number)

Production Platforms (Number)

New Offshore Pipeline (Miles)

New Onshore Pipeline (Miles)

Total Oil Production (Million Barrels)

8(g) Oil Production (Million Barrels)

Oil Price (1999 Constant Dollars per Barrel)

Total Gas Production (Billion Cubic Feet)

8(g) Gas Production (Billion Cubic Feet)

Gas Price (1999 Constant Dollars Per Thousand Cubic Feet)

Total Lease Acreage (Thousand Acres)

8(g) Lease Acreage (Thousand Acres)

Total Bonus Bid (Millions of 1999 Constant Dollars)

8(g) Bonus Bid (Millions of 1999 Constant Dollars)

7.2.5 Output Screens

Output for a scenario is provided in tabular form on five different screens. The LocalOutput

screen presents industry expenditures (by IMPLAN sector) and direct manpower that take place

within and are provided by the local economy. Also included are expenditures and employment 

by the local government, personal consumption expenditures (PCE) that take place within the

local economy, and total personal income (TPI) and savings that are generated for local

residents. 

Note that the production manpower estimates are provided in four different metrics: man-hours, 

man-days, man-weeks, and man-years. A separate graph for each series is provided. Conversion 

factors used to derive the different metrics are provided in Chapter 3 in the final report. 
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The KenaiOutput screen presents industry expenditures (by IMPLAN sector), personal

consumption expenditures (PCE), total personal income (TPI), and savings that are generated

within the Kenai Peninsula Borough (KPB). When the Study Area is Cook Inlet, please note that 

the local borough is KPB; for this reason, industry purchases, PCE and TPI values are set to zero 

on the LocalOutput screen when the Study Area is Cook Inlet. 

The AKOutput screen presents industry expenditures (by IMPLAN sector), personal

consumption expenditures (PCE), total personal income (TPI), and savings that are generated

within Alaska areas other than the local borough and KPB.

The USOutput screen presents industry expenditures (by IMPLAN sector), personal

consumption expenditures (PCE), total personal income, and savings that are generated within

the continental US or Hawaii. 

The TotalOutput screen presents the sum of the expenditures from the four previous screens. 

The analyst should exercise caution in using the sums to estimate the total cost of a project since 

foreign purchases are not included.

Please note that personal consumption expenditures reflect household purchases of commodities

and services in an area and should be used to estimate the induced impacts in a region. The

figures are derived from estimates of disposable income (total earnings minus taxes and savings) 

and take into account differences between where income is earned and where it is spent.

It is possible that some of the IMPLAN industry sectors, which show positive values, may not be 

present in a given IMPLAN model of a local Alaska economy. This is particularly true for

economies that have not been specifically identified (i.e., remote or semi-remote economies) and 

which vary in terms of industry mix. There are a number of ways for an analyst to deal with this 

type of situation. For example, the impacts could be assigned to a neighboring region at the

same geographic level (e.g., the Kenai Peninsula Borough) or a region at a higher geographic

level (e.g., Other Alaska). A fair amount of subjectivity will be involved in making such an

assignment and the analyst will need to rely upon the particular circumstances at hand for

guidance. Another approach would involve using the IMPLAN software to construct a model of 

the specific economy in question. In this case, the analyst would first have to create a model of a 

similar economy that contained the missing industry. If this proves to be too difficult, a statelevel model would probably suffice. After this first model has been constructed, the analyst

should use IMPLAN's production function editing tools to save the missing industry's production 

function to IMPLAN's library. The next step is to construct an IMPLAN model of the actual

local economy being addressed. During this process, the analyst should use IMPLAN's

production function editing tool to import the production function of the missing industry and

which was previously saved to IMPLAN's library. After this has been accomplished, it will be

possible to retrieve the multipliers associated with the missing industry and needed to estimate

the indirect and induced effects.
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7.2.6 Graphs

Four screens graphically depict the amount of manpower needed to conduct the scenario under

consideration. A different metric is used for each chart. The data used to populate the graphs are 

taken from the LocalOutput screen and refer to labor directly involved in oil exploration,

development and production activities. Management and overhead personnel who are not

directly involved in the activities are not included in the totals. The figures also do not include

local government employment that is stimulated by the E&D activity; these data, however, are

provided at the bottom of the LocalOutput screen.

Also provided are graphs for total personal income and total expenditures. In both cases, data by 

area are presented together.

7.3 MODEL PROCESSING ENGINE

7.3.1 Conversion of Data Entry Input into IMPAK Activity Levels

Since the activities listed in the E&D reports are not identical to those used in IMPAK, the model 

has to convert the E&D data into the corresponding IMPAK activity levels. The result of this

translation takes place on the DataEntry Worksheet. The conversion is a function of model

equations, the model parameters contained in the Parameters Worksheet, and the secondary

activity drivers contained in the Secondary Drivers Worksheet. Details of the process are

provided below.

Activity 1: Geological Survey

Currently, there are no E&D data that can be used to estimate this activity level and the

user will have to enter the total number of months of geo-surveys required for all

activities in the E&D scenario.

Activity 2: Spill Contingency Response

The number of spill contingency response operations required is based on the number of

platforms in operation. The number of platforms needing spill containment support is

equal to the number of production platforms established since the inception date. To be

consistent with the expenditure vector, this figure is calibrated by dividing it by the

average number of platforms supported by a spill containment operation. This parameter 

is currently set at five platforms per spill response operations, but can be changed by the

analyst.

Activity 3: Construct Exploration Shore Base

This activity may not be required if existing underutilized exploration shore bases exist,

such as in the Cook Inlet area. The analyst selects whether to use existing shore bases.
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If existing exploration shore bases are not utilized the number needed is based on the

number of exploration platforms in operation. The number of exploration platforms

requiring shore base support is equal to the number of exploration platforms established

since the inception date. To be consistent with the expenditure vector, this figure is

calibrated by dividing it by the average number of exploration platforms supported by an 

exploration shore base operation. This parameter is currently set at three exploration

platforms per exploration shore base, but can be changed by the analyst, if data are

provided in the E&D report, for example.

Activity 4: Operate Exploration Shore Base

The number of exploration shore bases required to be operating is based on the number of 

exploration platforms in operation. The number of exploration platforms requiring shore 

base support is equal to the number of exploration platforms listed in the E&D report for 

that current year. Therefore, to estimate the required number of exploration shore bases, 

the model divides the number of exploration platforms by the average number of

exploration platforms supported by an exploration shore base operation, a parameter

which is specified on the Parameters Worksheet. The parameter is currently set at three

exploration platforms per shore base, but can be changed by the analyst, if data are

provided in the E&D report, for example.

Activity 5: Install Exploration Platform

The number of exploration platforms installed is equal to the number of exploration

platforms listed in the E&D report for that current year. All explorations platforms are

assumed to be installed in shallow water.

Activity 6: Operate Exploration Platform

The number of exploration platforms operated is equal to the number of exploration

platforms listed in the E&D report for that current year. All explorations platforms are

assumed to operate in shallow water.

Activity 7: Drill Exploration Well

The number of exploration wells drilled is equal to the number of exploration and

delineation wells listed in the E&D report for that current year. All exploration wells are 

assumed to be drilled from platforms situated in shallow water.

Activity 8: Construct Production Shore Base

This activity may not be required if existing underutilized production shore bases exist,

such as in the Cook Inlet area. On the Parameter Worksheet, the analyst selects whether 

to use existing shore bases.
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The number of production shore bases that need to be constructed is based on the number 

of production platforms in operation. The number of production platforms requiring

shore base support is equal to the number of production platforms established since the

inception date. Therefore, to estimate the required number of production shore bases,

the model divides the number of production platforms by the average number of

production platforms supported by a production shore base operation, a parameter which 

is specified on the Parameters Worksheet. The parameter is currently set at three

production platforms per production shore base, but can be changed by the analyst, if data 

are provided in the E&D report, for example.

Production shore bases are built the year before the production platforms are installed.

Activity 9: Operate Production Shore Base

The number of production shore bases required to be operating is based on the number of 

production platforms in operation. The number of production platforms requiring shore

base support is equal to the number of production platforms established since the

inception date. To be consistent with the expenditure vector, this figure is calibrated by

dividing it by the average number of production platforms supported by a production

shore base operation. This parameter is currently set at three production platforms per

production shore base, but can be changed by the analyst, if data are provided in the E&D 

report, for example.

Activity 10: Install Production Platform

The number of production platforms installed is equal to the number of production

platforms listed in the E&D report for that current year. The vector is calculated for a

shallow water platform and is scaled by a factor of two for deep-water platforms. The

analyst can change this factor on the Parameters Worksheet. In addition, please note that 

boat support and helicopter support are automatically increased to reflect the higher

installation costs in deep water.

Activity 11: Operate Production Platform

The number of production platforms in operation is equal to the sum of production

platforms listed in the E&D report since the inception date. The vector is calculated for a 

shallow water platform and is scaled by a factor of two for deep-water platforms. The

analyst can change this factor on the Parameters Worksheet. In addition, please note that 

boat support and helicopter support are automatically increased to reflect the higher

operating costs in deep water.

Activity 12: Drill Production Well

The number of production wells drilled is equal to the number of production wells listed

in the E&D report for that current year. The vector is calculated for a well drilled from a 

shallow water platform. By altering a factor on the Parameters Worksheet, the analyst
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can scale the costs for wells drilled from deep water platforms. The default value of the 

scalar was set to "1", implying no cost differential between shallow and deep water wells. 

Given the prevalence of non-vertical well drilling techniques, water depth in the Alaskan 

OCS is often only a small percentage of the total well depth (or length). High fixed costs 

for well set-up also mean that the difference between shallow and deep water depths will 

translate into relatively smaller cost increases. If the analyst does choose to increase the

well drilling cost in deep water, please note that boat support and helicopter support will

automatically increase to reflect the higher drilling costs in deep water.

Activity 13: Lay Offshore Pipeline

The number of pipeline miles is equal to offshore pipeline miles, specified in the E&D

report, for that current year. Please note that although different approaches are used to

lay pipe in shallow water versus deep water, the per-unit installation costs are the same. 

Therefore, no adjustment is made for installing pipeline in deep water.

Activity 14: Lay Onshore Pipeline

The number of pipeline miles is equal to onshore pipeline miles, specified in the E&D

report, for that current year.

Activity 15: Construct Onshore Production Facility

This activity may not be required if existing underutilized production shore bases exist,

such as in the Cook Inlet area. The analyst selects whether to use existing production

facilities. Production facilities are built in the two years before production begins. Their 

size is based on the maximum yearly oil production.

Activity 16: Operate Production Facility

The vector for the cost of operating the production facility is developed on a per barrel

basis. The number of barrels produced in each year, as specified in the E&D report, is

then multiplied by the per barrel costs.

Activity 17: Construct Marine Terminal

This activity may not be required if existing underutilized marine terminals exist, such as 

in the Cook Inlet area. The analyst selects whether to use existing terminal facilities. 

Terminal facilities are built in the two years before production begins. Their size is based 

on the maximum yearly oil production.

Activity 18: Operate Marine Terminal

The vector for the cost of operating the terminal facility is developed on a per barrel

basis. The number of barrels produced in each year, as specified in the E&D report, is

then multiplied by the per barrel costs.
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Activity 19: Major Platform Maintenance

The number of platform maintenance operations is based on the assumption that each

production platform listed in the E&D report will need maintenance every year. It is

assumed that all platforms continue operation until oil production ceases.

Activity 20: Well Workover

The number of well workovers is based on the assumption that each production well

listed in the E&D report will need maintenance every six years. It is assumed that all

wells continue operation until oil production ceases.

Activity 21: Helicopter Support

The amount of helicopter support is not directly entered by the user but is a function of

the activity levels of the activities 1-20. These levels are multiplied by parameters which 

specify the amount of helicopter support per unit of each activity. The helicopter cost

vector is based on an hourly rate, since this is the most accurate data available. The

model, therefore, calculates the hours of support required. For each activity requiring

helicopter support, the product of the number of helicopter trips per activity unit and the

number of activity units is calculated. These results are then summed and converted into 

total trips of helicopter support. Helicopter trips are then converted into hours of

operation. Hours are based on a formula that assumes a half-hour combined for take-off 

and landing and an average travel speed of 100 mph. Distance is an input that is

specified by the analyst. In deep water scenarios, please note that helicopter support is

indirectly elevated through cost increases for platform installation, platform operation, 

and well drilling.

Activities 22 - 25: Boat Support:

The amount of boat support is not directly entered by the user but is a function of the

activity levels of the activities 1-20. These levels are multiplied by parameters which

specify the amount of boat support per unit of each activity. The boat support cost

vectors reflect hourly costs and are based on a daily rate and a ten-hour day, since daily

rates are the most accurate data available. The model, therefore, calculates the hours of

support required. For each activity requiring boat support, the product of the number of

boat trips (by type of boat) per activity unit and the number of activity units is calculated. 

These results are then summed and converted into total trips of boat support by type of

boat. Boat trips are then converted into hours of operation. Hours are based on a formula 

that assumes an average travel speed. Distance is an input that is specified by the analyst 

and augmented by a circuitry factor. In deep water scenarios, please note that boat

support is indirectly elevated through cost increases for platform installation, platform

operation, and well drilling.
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Activity 26: Camp Support

The amount of camp support is not directly entered by the user but is a function of the 

activity levels of the activities 1-25. Expenditures for food and lodging were estimated

for every activity except general personnel transportation. These expenditures, presented 

on the Secondary Drivers Worksheet, are normalized by the total cost of running a camp, 

multiplied by the corresponding activity levels, and then summed. When the sum is

multiplied by the camp support input vector, the result will be the same as if the food and 

lodging expenditures had been allocated to input sectors based upon each commodity's

share of the total cost of a camp operation.

Activity 27: Abandonment

Expenditures to abandon production platforms at the end of their useful lives are based on 

the number of production platforms installed during the scenario. The vector for the cost 

of abandonment was developed on a per platform basis. It is assumed that all

abandonment activities take place the year after all other E&D activities have ceased. 

The total number of production platforms installed over the forecast horizon is then

multiplied by the per platform costs.

Activities 28 - 30: Government

The amount of government related expenditures is not directly entered by the user but is a 

function of the amount of personal income generated by the other activities in the model. 

The model uses various government revenue functions to stimulate three government

expenditure vectors: local government, the Alaska State government, and the US Federal 

government. In all three cases, government expenditures in the current period are

assumed to be equal to revenues generated in the previous year.

The revenue function for a specific jurisdiction can be modeled by trying to imitate each 

revenue instrument or by using proxies. For many revenue sources, the former approach

would be extremely time-consuming to implement, fraught with the potential of

compounding errors in estimation, and difficult to adapt for changing fiscal regimes. In

addition, the means by which State and local governments obtain revenues will vary over 

time and, certainly, from jurisdiction to jurisdiction. IMPAK instead uses a combination

of the two approaches to estimate revenues resulting from new OCS activities. It directly 

estimates State (and local shares of) revenues from the Federal Government but uses

proxies to estimate tax revenues.

State and Local Government

State and local government expenditures are a function of two primary revenue

sources: (1) state and local tax revenues and (2) state revenues obtained from 8(g) 

funds.
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Estimates of tax revenues by jurisdiction are based on ratios of total tax revenues

to total personal income developed from data in the Statistical Abstract of the

United States. To produce the revenue estimates, the ratios are multiplied by the

amount of total personal income generated from the E&D activities in an IMPAK 

scenario. Total Personal Income is used as a proxy for the general level of

economic activity, reflecting changes in infrastructure investment, production,

property assessments, and government tax revenues. By using the relationship

between Total Personal Income and government tax revenues, IMPAK can be

adapted to changing fiscal regimes or for use with other local government entities, 

such as individual villages. However, given the small size of these jurisdictions, 

and the difficulty of obtaining good data, the user should be careful to seek

independent confirmation of the revenue estimates.

Neither the State of Alaska nor local government has a broad-based income tax or 

a general sales tax, so state and local tax revenues are collected through property

taxes, indirect business taxes (IBT), licenses (hunting, motor vehicle, etc.), and

selective sales taxes (alcohol, insurance, motor fuel, and utility). The average

ratio between total state tax revenues and total personal income in Alaska was

calculated to be 1.6% between 1995 and 1997. The average ratio between total

local tax revenues and total personal income in the state was calculated to be

5.17% over the same period. This average local tax ratio was applied to all

Alaska residents. It should be noted that both the state and local tax parameters

can be changed on the Parameters screen.

OCS oil activities provide income for Alaska residents through worker earnings

and increases in the annual Permanent Fund dividends. Estimates of local

earnings are obtained by summing, across activities, the product of earnings per

unit and number of units. To estimate PF dividends, the model maintains a

running PF balance based upon annual disbursements and additions generated by

the level of E&D activities specified in the scenario. It should be emphasized that 

IMPAK's PF account only deals with funds related to the scenario under

consideration; its balance and dividends, therefore, do not correspond to the actual 

values associated with the fund itself. Total dividends to Alaska residents are

calculated by multiplying the dividend rate (a parameter) by the balance in the

previous year. Parameters are then used to assign a portion of the total dividends

to residents of the local community, the Kenai Peninsula Borough, and Other

Alaska residents.

As noted above, revenues are also derived from 8(g) funds. Under section 8(g) of 

the OCS Lands Act, as amended, the Federal Government must pay to the State

27 percent of all revenues (bids to obtain leases, annual lease rental payments, and 

royalties on production) for leases within 3 miles of State waters. In IMPAK,

8(g) revenues are directly estimated based upon projected 8(g) bids, leases and oil 

production. Estimated royalties are the product of the royalty rate (a parameter,)

8(g) oil production, and price per barrel; production and price are both user

inputs. Lease revenues are the product of 8(g) lease acreage (a user input) and the 
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acreage rental rate (a parameter). Bonus bids are input by the user. Twenty-seven 

percent of the total 8(g) revenue is then allocated to Alaska, where it is divided

equally between the State budget and the Alaska Permanent Fund. Through the

Parameters Worksheet, the user can change the default for any of the relevant

rates: the Federal royalty rate, the 8(g) payment rate, the percentage of 8(g)

revenues going into the Permanent Fund, etc.

Local governments receive none of these payments directly. However, a small

portion of State funds is distributed to these governments as intergovernmental

revenues. The proportion of the state revenues going to local governments can be 

changed on the Parameters Worksheet.

Federal Government

Federal government expenditures are a function of two primary revenue sources:

(1) federal tax revenues generated from earnings, and (2) federal revenues

obtained from royalties, lease revenues, and bonus bids. Government

expenditures in the current period are assumed to be equal to revenues generated

in the previous year.

Tax revenues are estimated by applying a federal tax rate to earnings that can be

attributed to E&D activities (including government) in the scenario. Earnings are 

obtained by summing, across activities, the product of earnings per unit and

number of units. These results are provided on the USOutput screen. The federal 

tax rate, a parameter, was estimated to be 11.7%. This was calculated as the

average ratio between 1996 federal individual income tax returns of Alaska

residents and personal income in the state in 1996 (The data were obtained from

the Statistical Abstract of the United States.). Tax revenues were estimated for all 

US residents involved in the scenario. These include production workers directly

involved in the E&D activities as well as overhead support personnel such as oil

company employees serving engineering or administrative functions.

Other Federal revenues were estimated from total royalties, lease rental revenues, and bonus

(auction) bids, less the portion of these amounts paid to Alaska under section 8(g) of the OCS

Lands Act (see above). Royalties are the product of the royalty rate (a parameter,) total oil

production, and price per barrel; production and price are both user inputs. Lease revenues are

the product of total lease acreage (a user input) and the acreage rental rate (a parameter). Bonus 

bids are input by the user.

7.3.2 Secondary Drivers Worksheet

This worksheet is not displayed but is used in the model to estimate the amount of camp support 

needed for a given scenario. Camp support is the only secondary activity in the Sub-Arctic 

model and it is a function of the amount of activity generated by all of the other primary

activities. The amount of camp support generated by one unit of each primary activity is
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maintained on this page as a vector of secondary activity. For each year in the forecast horizon,

the secondary activity vector is multiplied by the primary activity levels and the resulting

products are then summed to estimate total camp support. Before the multiplication occurs, note 

that the secondary activity levels are first calibrated by the level of camp support (i.e., the size of 

the camp) that was used to develop the camp support expenditure vectors. The calibration is

necessary to scale the activity and associated expenditures according to the size of the operation.

To view the page, select the following from Excel's menu system: Format | Sheet | Unhide |

SecondaryDrivers.

7.3.3 TransposeInput Worksheet

This worksheet is not displayed but is used as an intermediary step to facilitate the multiplication 

of the matrices and arrays in the model. The sheet transposes the data on IMPAK activities (see 

Exhibit 7-1), which are calculated from the data entry inputs (See Exhibit 7-3 and Section 7.3.1) 

by year and activity. An Excel array function (transpose) is used to accomplish the task.

To view the page, select the following from Excel's menu system: Format | Sheet | Unhide |

TransposeInput.

7.3.4 Activity Cost Vectors

These screens are not displayed but allow the user to view the input-output vectors and

coefficients associated with each IMPAK activity and geographic region. Please note that only

four out of the twelve matrices will be used for any model run, depending upon whether the

scenario is in Cook Inlet, a semi-remote region near a population center, or in another remote

Sub-Arctic region (See Section 7.2.2). The matrices show the commodities (IMPLAN sector)

and associated values purchased by each activity. Values are in constant 1999 dollars and reflect 

the amounts needed to produce one unit of each respective activity. Included in the matrices are 

expenditures for labor (referred to as total personal income (TPI)), personal consumption

expenditures generated from TPI, and manpower estimates.

Each column in a given matrix is multiplied by the corresponding activity level generated from

the scenario data to produce an estimate of purchases by activity, commodity and year. For each 

year, these results are then summed across activities, resulting in an estimate of total purchases

by year and commodity (See Section 7.3.5 below). 

To view a matrix, select the following from Excel's menu system: Format | Sheet | Unhide |

Name of WorkSheet. The worksheet names are self-explanatory and correspond to the

respective matrices on the sheets.

7.3.5 Generation of Model Output

The model inputs are first transposed into a matrix compatible with the regional input-output 

matrices (See Section 7.3.3). The transposed input is then multiplied by each region's input-
Jack Faucett Associates – 632-2 Final Report June, 2003

DOI-MMS 101 Sub-Arctic IMPAK

output matrix to yield the total direct impacts by region and IMPLAN sector. Again, an Excel

array function is used to accomplish the matrix multiplication (mmult). Note that each year in

the forecast horizon requires a separate formula.

It should be noted that annual Permanent Fund (PF) disbursements arising from E&D activities

in the scenario are converted and added to PCE at this time. As noted above, the dividends are

estimated for both local and "Other Alaska" residents. The disbursements are adjusted for

savings and taxes and then allocated to local spending areas. For example, after the tax and

savings adjustment, PF disbursements to local residents are then divided between the local

borough and Other Alaska. The adjustment for taxes is based upon the tax rate parameters found 

on the Parameters Worksheet. The PCERate parameter is used to adjust for savings and specify

the percentage of disposable income assigned to personal consumption expenditures (PCE). The 

parameter is currently set at 98% with the remaining 2% going to savings. A location parameter 

(LocalPFExpenditurePercent) is used to divide the PCE into the areas where it is spent. The

parameter is currently set at 10%, meaning that local residents spend 10% of their PF dividend,

after adjustments for taxes and savings, in the local borough; the remainder is assumed to be

spent in "Other Alaska". Estimated PF expenditures in "Other Alaska" are based upon the

dividends to all Alaska residents. PF expenditures by "Other Alaska" residents are assumed to

take place entirely in "Other Alaska". Added to these expenditures are purchases by local

residents. As implied above, it is assumed that 90% of local PF expenditures are made in "Other 

Alaska".