OCS Study

BOEM 2016-072

U.S. Department of the Interior

Bureau of Ocean Energy Management

Gulf of Mexico OCS Region

MAG-PLAN GOM 2016

Economic Impact Model for the

Gulf of Mexico
OCS Study

BOEM 2016-072

Published by

U.S. Department of the Interior

Bureau of Ocean Energy Management

Gulf of Mexico OCS Region

New Orleans, LA

November 2016

MAG-PLAN GOM 2016

Economic Impact Model for the

Gulf of Mexico

Authors

Maureen F. Kaplan

Jordan Marvakov

Brielle Meade

Daniel Ertis

Prepared under BOEM Contract

M14PD00056

by

Eastern Research Group, Inc.

110 Hartwell Avenue

Lexington, MA 02421
iii

Disclaimer 

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

of Ocean Energy Management (BOEM), Environmental Studies Program, Washington, DC, under 

Task Order Number M14PD00056. This report has been technically reviewed by BOEM and it has 

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

the authors and should not be interpreted as representing the opinions or policies of the US 

Government, nor does mention of trade names or commercial products constitute endorsement or 

recommendation for use.

Report Availability 

To download a PDF file of this Gulf of Mexico OCS Region report, go to the US Department of the 

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

System website, and search on “OCS Study BOEM 2016-072.”

This report can be viewed at select Federal Depository Libraries. It can also be obtained from the 

National Technical Information Service; the contact information is below.

US Department of Commerce 

National Technical Information Service 

5301 Shawnee Rd. 

Springfield, VA 22312 

Phone: (703) 605-6000, 1(800)553-6847 

Fax: (703) 605-6900 

Website: http://www.ntis.gov/ 

Citation 

Kaplan MF, Marvakov J, Meade B, Ertis D. 2016. MAG-PLAN GOM 2016: economic impact model for 

the Gulf of Mexico. New Orleans, LA: US Dept. of the Interior, Bureau of Ocean Energy 

Management, Gulf of Mexico OCS Region. (OCS Study BOEM 2016-072.) 129 pp.
v

Contents 

List of Figures..................................................................................................................................viii

List of Tables.....................................................................................................................................ix

Abbreviations....................................................................................................................................xi

1 Summary....................................................................................................................................1

1.1 Purpose...............................................................................................................................1

1.2 Report Organization.............................................................................................................2

2 Introduction................................................................................................................................3

2.1 History................................................................................................................................3

2.2 Basic Concepts.....................................................................................................................3

2.2.1 Activity Types and Activity Functions.............................................................................4

2.2.2 Two-Stage Architecture for MAG-PLAN..........................................................................5

2.3 Running MAG-PLAN.............................................................................................................7

2.3.1 Prerequisite IMPLAN Analyses.......................................................................................7

2.3.2 Setting Up MAG-PLAN...................................................................................................7

2.3.3 Sample MAG-PLAN Calculation Flow..............................................................................7

2.3.4 Stage 2 Calculations......................................................................................................8

2.4 Revenue Functions in MAG-PLAN..........................................................................................9

3 Activities to Industry Sector Profiles...........................................................................................10

3.1 Industry Sectors for Vessel Day Rates..................................................................................10

3.1.1 IAGC Data ..................................................................................................................10

3.1.2 Census, Service Annual Survey Data.............................................................................13

3.2 Geological and Geophysical Prospecting..............................................................................17

3.2.1 Introduction and Overview..........................................................................................17

3.2.2 Vessel Day Rate..........................................................................................................19

3.2.3 Addition of Mobilization Costs.....................................................................................19

3.3 Subsea Installations...........................................................................................................20

3.3.1 Introduction and Overview..........................................................................................20

3.3.2 Industry Sector Identification ......................................................................................25

3.3.3 Installation.................................................................................................................29

3.3.4 Summary Subsea to Industry Sector Profile..................................................................30
vi

3.4 Floating, Production, Storage and Offloading Vessels...........................................................31

3.4.1 Introduction and Overview..........................................................................................31

3.4.2 Equipment.................................................................................................................32

3.4.3 Development of Industry Sector Profile........................................................................34

3.5 Decommissioning...............................................................................................................39

3.5.1 Introduction and Overview..........................................................................................39

3.5.2 IMPLAN Sectors for Decommissioning..........................................................................43

3.5.3 Bill of Sale Approach to Industry Sector Identification...................................................44

3.6 Production Operations and Maintenance............................................................................46

3.6.1 Introduction and Overview..........................................................................................46

3.6.2 Cost Profile and Integration with Water Transportation Costs.......................................47

3.7 Remaining Activities...........................................................................................................49

4 Onshore Distributions for Labor.................................................................................................50

4.1 Overview...........................................................................................................................50

4.2 Onshore Distribution for Drilling Activities...........................................................................51

4.3 Onshore Distribution for Production O&M Activities............................................................55

4.3.1 Labor Needs Survey....................................................................................................55

4.3.2 2016 Methodology Updates for Processing LNS Data....................................................56

4.4 Derivation of Labor Percentages.........................................................................................63

5 Onshore Distributions for Non-labor Expenditures......................................................................65

5.1 Introduction and Overview.................................................................................................65

5.1.1 OSAs..........................................................................................................................65

5.1.2 Sector Characterization...............................................................................................66

5.2 Bottom-Up Approach.........................................................................................................67

5.2.1 IMPLAN Sectors 28 and 29: Drilling Oil and Gas Wells and Support Activities for Oil and 

Gas Operations...........................................................................................................68

5.2.2 Selected Manufacturing Industries..............................................................................68

5.2.3 IMPLAN Sector 369 (Professional, Scientific, and Technical Services) .............................78

5.2.4 IMPLAN Sector 412 (Other Accommodations) ..............................................................78

5.3 Top-Down Approach..........................................................................................................78

5.3.1 “Rest of World” Estimate............................................................................................79

5.3.2 “Rest of US” Estimate .................................................................................................79

5.3.3 “Rest of State” Estimates............................................................................................80
vii

5.3.4 Counties and Parishes.................................................................................................80

5.4 Avoiding Areas with Zero IMPLAN Multipliers......................................................................81

5.5 Gulf-Wide Distributions and Regional Variations..................................................................82

5.5.1 Major, Non-local.........................................................................................................82

5.5.2 Major, Local ...............................................................................................................83

5.5.3 Non-major, Non-local .................................................................................................83

5.5.4 Non-major, Local........................................................................................................83

6 Sensitivity Analysis Results and Observations..............................................................................84

6.1 Sensitivity Analysis Results.................................................................................................84

6.2 Observations.....................................................................................................................86

7 References................................................................................................................................87

Appendix A Activity Cost Summaries..............................................................................................95

A.1 GOM Activity Cost Summary...............................................................................................95

A.2 Western GOM Activity Cost Summary.................................................................................97

A.3 Central GOM Activity Cost Summary...................................................................................99

Appendix B Evaluation of Construction Industries for Subsea Installation ...................................... 101

Appendix C Industry Sector Profiles for Remaining MAG-PLAN Activities....................................... 103

 

 
viii

List of Figures 

Figure 1. MAG-PLAN and IMPLAN interrelationship ..............................................................................6

Figure 2. Offshore seismic survey.......................................................................................................17

Figure 3. Marine seismic vessel towing multiple hydrophone streamers..............................................18

Figure 4. 2D and 3D seismic data collection configurations..................................................................18

Figure 5. Schematic of production system..........................................................................................21

Figure 6. Example manifolds..............................................................................................................21

Figure 7. Subsea pump......................................................................................................................22

Figure 8. Hybrid riser system.............................................................................................................23

Figure 9. Umbilical cross-sections......................................................................................................23

Figure 10. Pendulous deployment method.........................................................................................24

Figure 11. S-lay and J-lay installation..................................................................................................24

Figure 12. Pipe- and umbilical-laying vessel........................................................................................25

Figure 13. FPSO schematic ................................................................................................................33

Figure 14. BW Pioneer.......................................................................................................................33

Figure 15. Offshore platform.............................................................................................................40

Figure 16. “Shallowing” or “hopping” a large jacket............................................................................42

Figure 17. Offshore employee residence map: national.......................................................................52

Figure 18. Offshore employee residence map: GOM...........................................................................53

Figure 19. Other coastal Texas distribution.........................................................................................59

Figure 20. Other southern Louisiana distribution................................................................................60

Figure 21. Steel plants of North America............................................................................................71

Figure 22. Inland waterways of the US ...............................................................................................72

 

 
ix

List of Tables 

Table 1. Activity functions and E&D scenario mapping..........................................................................5

Table 2. Costs for typical 2D, 3D, and WA 3D seismic sampling trips....................................................12

Table 3. Day rate cost components for seismic surveys.......................................................................13

Table 4. Census data, Service Annual Survey—industry expenses........................................................14

Table 5. Comparison of NAICS 5413 and NAICS 483 cost profiles.........................................................15

Table 6. Subsectorization summary for other activities in NAICS 483 (water transportation).................16

Table 7. Customization by expensed equipment and materials............................................................16

Table 8. Industry sector profile for G&G data collection activities........................................................19

Table 9. Industry sector profile for G&G data collection and mobilization costs....................................20

Table 10. Summary costs for four subsea systems..............................................................................26

Table 11. Example subsea system cost breakdown .............................................................................27

Table 12. Aligning subsea system costs and IMPLAN sectors................................................................27

Table 13. NAICS codes for umbilical plants.........................................................................................28

Table 14. Production function components for IMPLAN 334 (Water Transportation)............................29

Table 15. Production function components for IMPLAN 338 (Water Transportation)............................30

Table 16. Summary sector table for subsea systems activity................................................................31

Table 17. GOM FPSO cost breakdown: topsides US-built.....................................................................35

Table 18. GOM FPSO cost breakdown: foreign-built............................................................................36

Table 19. Foreign-built and foreign-operating FPSO............................................................................37

Table 20. Summary sector table for FPSO activity...............................................................................38

Table 21. Correspondence between NAICS codes and IMPLAN sectors associated with decommissioning

....................................................................................................................................................44

Table 22. Costs of decommissioning in the GOM by NAICS and IMPLAN sector as a percentage of total 

platform decommissioning costs, by water depth ...........................................................................44

Table 23. Integration of decommissioning industry sectors.................................................................45

Table 24. Summary sector table for decommissioning activities..........................................................46

Table 25. Production O&M costs.......................................................................................................47

Table 26. Non-labor production O&M costs to IMPLAN sectors...........................................................47

Table 27. Summary sector table for production O&M.........................................................................48

Table 28. Alabama congressional district 1 by county..........................................................................54

Table 29. Alabama congressional district 1 by county with employment estimate ................................54

Table 30. Onshore labor distribution estimate for drilling activities......................................................55

Table 31. LNS onshore distribution for labor in offshore oil and gas operations....................................56

Table 32. Texas onshore labor distribution for production O&M..........................................................57

Table 33. Texas onshore labor summary by county and OSA for production O&M, Sector 29 ................58

Table 34. 2016 update to previously undistributed labor.....................................................................59

Table 35. Louisiana onshore labor summary by county and OSA for production O&M, Sector 29...........60

Table 36. Alabama and Mississippi OSA adjustment for production O&M, Sector 29.............................61

Table 37. Alabama and Mississippi county adjustment for production O&M ........................................62

Table 38. Florida OSA adjustment for production O&M.......................................................................62

Table 39. Florida county adjustment for production O&M...................................................................63
x

Table 40. LNS unchanged allocations to “rest of US” OSA....................................................................63

Table 41. Labor percent by activity function.......................................................................................64

Table 42. Parishes and counties in BOEM economic impact areas by state...........................................66

Table 43. Harris County, Texas, and industry distribution....................................................................68

Table 44. 2012 county business patterns—IMPLAN 206 employment..................................................69

Table 45. States with access to inland waterways...............................................................................73

Table 46. 2012 county business patterns—IMPLAN 170 employment..................................................73

Table 47. 2012 county business patterns—IMPLAN 171 employment..................................................74

Table 48. Production sources for subsea production umbilicals, Gulf of Mexico....................................75

Table 49. Onshore distribution for subsea umbilicals—IMPLAN 273.....................................................75

Table 50. Floating production systems—hull manufacturing—2010 through 2014................................76

Table 51. Floating production systems—topsides manufacturing—2010 through 2014.........................77

Table 52. Onshore distribution for shipbuilding and repair—IMPLAN 290 ............................................77

Table 53. Activity type by percentage of expenditures remaining in GOM region..................................84

Table 54. Activity type by effective investment...................................................................................85

Table 55. GOM activity cost summary................................................................................................95

Table 56. WGOM activity cost summary.............................................................................................97

Table 57. CGOM activity cost summary..............................................................................................99

Table 58. Production function components for IMPLAN 35 ............................................................... 101

Table 59. Production function components for IMPLAN 36 ............................................................... 102

Table 60. Activity sector profiles for exploratory and non-productive well drilling .............................. 103

Table 61. Activity sector profiles for development well drilling, G&G, subsea, FPSO, onshore/offshore gas 

processing, and pipeline.............................................................................................................. 108

Table 62. Activity sector profiles for platform installation, platform removal (decommissioning), and 

production O&M......................................................................................................................... 114
xi

Abbreviations 

AISI American Iron and Steel Institute

BOEM US Department of the Interior’s Bureau of Ocean Energy Management

BSEE US Department of the Interior’s Bureau of Safety and Environmental Enforcement

CBP County Business Patterns

DOI US Department of the Interior

E&D exploration and development

EIS Environmental Impact Statement

ESP Environmental Studies Program

FPSO floating, production, storage, and offloading

G&G geological and geophysical prospecting (e.g., seismic surveys)

GOM Gulf of Mexico

IAGC International Association of Geophysical Contractors

LNS Labor Needs Survey

MMS Minerals Management Service

NAICS North American Industry Classification System

NEPA National Environmental Policy Act

O&M operations and maintenance

OCS Outer Continental Shelf

OCSLA Outer Continental Shelf Lands Act

OCTG oil country tubular goods

OSA onshore area

RPC regional purchase coefficient

ROS rest of state

SDP supply-demand pool

TCS total commodity supply

TGD total gross demand
1

1 Summary 

1.1 Purpose 

The Bureau of Ocean Energy Management (BOEM) plays a key role in the United States’ energy 

supply by managing the mineral resources on nearly 160 million acres in the Gulf of Mexico (GOM) 

Outer Continental Shelf (OCS) region. BOEM integrates environmental values into its decisionmaking processes. To support these analyses, BOEM (formerly known as the Minerals Management 

Service, or MMS) developed MAG-PLAN, a two-stage input-output model to estimate employment, 

personal income, and similar economic impacts from OCS activities (Saha et al. 2005). 

MAG-PLAN’s Stage 1 starts with BOEM estimates of the level of exploration, development, 

production, and infrastructure likely to result from a proposed OCS lease sale (auction) or set of 

sales. The model allocates estimated industry expenditures among industry sectors in IMPLAN (a 

commercial regional economic modeling program and database),1 then distributes the expenditureby-sector spending to onshore areas (OSAs). Stage 2 uses OSA-specific IMPLAN multipliers to 

calculate the jobs, earnings, and output resulting from oil and gas operations on the OCS.

The purpose of this 2016 update is to:

• Improve the profile of industries and their contributions to offshore oil and gas activities in 

the GOM (also called “industry sector allocations”) by revising and expanding descriptions 

ofthe industries contributing to geological and geophysical prospecting; subsea 

installations; floating, production, storage, and offloading vessels; decommissioning; and 

operations and maintenance (O&M).

• Update and expand the methodology for distributing non-labor expenditures by sector from 

offshore oil and gas activities to onshore economic impact regions (also called “onshore 

distributions”). MAG-PLAN 2016 incorporates refined geographic distributions for iron and 

steel (primary and secondary manufacturing) and umbilicals (equipment used in subsea 

production systems) as a modified method for the onshore distributions based on 

supply/demand pools.

• Update and revise the BOEM-defined OSAs and their IMPLAN multipliers and onshore 

distributions.

• Update the onshore distribution of labor earnings, including identifying activities and 

sectors for which household expenditures are likely to occur in OSAs other than where the 

labor is performed. For example, offshore drilling crews have personnel who live outside 

the five-state region that borders on the GOM and their wages would likely be spent in the 

state of residence rather than in the GOMregion.

 1 IMPLAN (IMpact Analysis for PLANning) is a commercially available input-output analysis (I-O) software 

package with modeling and data components. I-O is a means of examining relationships within an economy, 

both between businesses and between businesses and final consumers, that captures all monetary market 

transactions for consumption in a given time period. The resulting mathematical formulae allow examination 

of the effects of a change in one or several economic activities on an entire economy (impact analysis). 

IMPLAN v.3 disaggregates the US economy into 440 industry sectors and can be used to estimate change in 

employment (jobs), output, and earnings from increases or decreases in economic activity. IMPLAN industry 

sectors are consistent with NAICS codes.
2

Data that have not been updated from MAG-PLAN 2012 are contained in the appendices to this 

report.

1.2 Report Organization 

The report is organized as follows:

• Chapter 2 provides an overview of MAG-PLAN, covering basic concepts, logic flow, and 

other general information. It sets the context for the rest of the chapters. Sections 2.2 and 

2.3 introduce basic concepts such as the different types of multipliers used to estimate 

impacts and the activity types and functions used in MAG-PLAN, respectively.

• Chapter 3 presents the activity to industry sector profiles developed for the 2016 MAGPLAN GOM update.

• Chapter 4 discusses the three onshore distributions for labor expenditures developed for 

the industry sectors.

• Chapter 5 describes the onshore distributions for non-labor expenditures for the 440 

industry sectors in IMPLAN.

• Chapter 6 presents a sensitivity analysis of the model’s results and provides some 

concluding observations.
3

2 Introduction 

2.1 History 

The Outer Continental Shelf Lands Act (OCSLA), as amended, established a policy for managing oil 

and natural gas on the OCS and protecting the region’s marine and coastal environments. OCSLA 

requires the federal government to prepare and maintain a current five-year schedule of proposed 

lease auctions. BOEM is the administrative agency responsible for leasing submerged federal lands 

and evaluates the environmental impacts, including onshore socioeconomic impacts, of oil and gas 

activities on the OCS.

After the passage of OCSLA Amendments of 1978, BOEM’s predecessor agencies began their efforts 

to model the implications of offshore development on onshore communities. Luton and Cluck 

(2000) tracked 15 years of data, methodology development, and analyses performed by what is 

now BOEM’s Environmental Studies Program, from the first large-scale studies published in the 

mid-1980s. In the late 1990s, MMS’s Developmental Benefits Model Assessment Team developed a 

consistent approach to regional economic modeling across OCS regions, and the first OCS Economic 

Impact Model for the GOM was created soon thereafter. This model used a two-stage, input-output 

framework to estimate employment, personal income, and similar economic impacts from OCS 

activities.

By 2005, MMS had developed the second generation of OCS Economic Impact Models, collectively 

named MAG-PLAN, which extended the consistent approach and incorporated both the GOM and 

Alaska OCS models into a single software framework (Saha et al. 2005). MAG-PLAN’s Stage 1 starts 

with BOEM estimates of the level of exploration, development, production, and infrastructure likely 

to result from a proposed OCS lease sale or set of sales (called an exploration and development, or 

E&D, scenario). The model allocates industry expenditures among IMPLAN industry sectors and 

then distributes the expenditure-by-sector spending to OSAs. Stage 2 uses input-output multipliers 

from IMPLAN to estimate employment, personal income, and other economic effects associated 

with different E&D scenarios by OSA and type or impact.

In 2010, BOEM undertook a major upgrade to MAG-PLAN for the GOM (Kaplan et al. 2012). Called 

MAG-PLAN 2012, this update moved the model to Access 2010, realigned its structure to 

accommodate IMPLAN’s update from a 506-industry data set to a 440-industry data set, and 

improved its functionality. The content expansion focused on incorporating deepwater projects 

that now represent the majority of the oil production and about half the gas production in the GOM 

OCS (BOEM 2015) and developing updated activity costs. 

As the offshore oil and gas industry evolves, BOEM continues to update MAG-PLAN to respond to 

these changes. MAG-PLAN 2016 is a continuation of BOEM’s efforts to update, expand, and refine its 

socioeconomic impact analysis capabilities.

2.2 Basic Concepts 

BOEM uses an input-output (I-O) modeling framework to evaluate the potential impacts of oil and 

gas activities on the federal OCS. I-O analysis examines relationships within an economy: those 

between businesses and those between businesses and final consumers. I-O models allow 

researchers to study how an expenditure (also called an “exogenous shock”) affects the entire 

economy. This approach is limited in that commercial models, such as IMPLAN, are based on 

national data. That is, they assume that industries in an area will use inputs in the same proportion 

as the national average. 
4

The onshore and offshore oil and gas industries differ,2 however, and the onshore industry is 

substantially larger than the offshore industry. National data may not adequately describe offshore 

oil and gas activities, meaning BOEM cannot allocate the full expenditures for drilling an offshore 

well to the drilling and extraction sectors (e.g., IMPLAN Sector 28) and receive accurate results. 

BOEM’s MAG-PLAN model uses a profile of an activity’s (e.g., well drilling) constituent industries

(e.g., steel, water transportation), then uses a modified “bill of sale” approach3 to divide the 

activity’s expenditures proportionately among those constituents identified in the profile. To 

provide context for these industry sector profiles, Chapter 3 describes several of the industry’s 

activities in detail.

Traditional I-O models capture only the economic impacts that occur within a region, meaning 

interregional expenditures (i.e., when income from the region of interest goes to purchase 

something outside of the region) are treated as zero. However, for a complete impact analysis of 

OCS activities, MAG-PLAN must consider the impacts on multiple regions (or OSAs as previously 

described). Chapters 4 and 5 provide in-depth discussions for the methods and data used to 

develop the “onshore distributions” which allocate industry activity into specific OSAs to prevent 

(or at least minimize) leakage in calculating the economic impact.

2.2.1 Activity Types and Activity Functions 

The starting point for a BOEM socioeconomic analysis is the identification of a series of discrete 

activities (e.g., drilling an exploratory well or decommissioning a production structure) and the 

different types of revenue generated by these activities (e.g., lease bids, rents, and royalties). 

BOEM’s regional resource evaluation offices estimate the oil-and-gas-related activities that could 

reasonably take place as a result of a proposed project, lease sale, or set of lease sales. These 

estimates are compiled into an E&D scenario that describes activities likely to occur each year. 

These E&D activities, called activity types, are associated in MAG-PLAN with activity functions.4

Table 1 cross-references the activity types in the E&D scenarios with the activity functions in MAGPLAN 2016. The “cradle-to-grave” (from geological and geophysical [G&G] prospecting to 

decommissioning) approach is characteristic of BOEM impact analyses. As Table 1 shows, the 

activity types in an E&D scenario do not necessarily have a 1:1 correspondence to MAG-PLAN 

activity functions. For example, the installation of a production system starts a 15-year period of 

O&M. 

 2 Also, activity functions for offshore oil and gas activities differ considerably depending on the region (e.g., 

Gulf of Mexico and Alaska), climate, and water depth. MAG-PLAN’s activity functions allocate spending to a 

variety of sectors, mirroring as closely as possible the flow of spending necessary for an OCS oil and gas 

project in a given offshore area at a given water depth.

3 A bill of sale approach requires BOEM to include all spending, so the industry sector profile (considered 

“direct expenditures”) includes all first-round spending, even if the supplying sectors would usually be 

considered indirect. Direct, indirect, and induced effects are all defined in Section 2.2.2. 

4 Activity functions are essentially production functions, but BOEM uses a different term to avoid confusion 

with those in IMPLAN and other such data sources. 
5

Table 1. Activity functions and E&D scenario mapping

Activity Types in E&D Scenario Activity Function in MAG-PLAN

Exploratory well drilled Geological and geophysical prospecting

Exploratory well drilling

Non-productive well drilled Non-productive well drilling

Productive well drilled Productive well drilling

Platform added

Platform fabrication and installation

Operations and maintenance (O&M) costs

Subsea added

Subsea completion(s)

O&M costs

Floating, production, storage, and offloading 

(FPSO) added

FPSO

O&M costs

Gas processing facility—offshore Gas processing facility—offshore

Gas processing facility—onshore Gas processing facility—onshore

Gas production Gas processing O&M costs

Pipeline miles added Pipeline construction

Platform removed—no explosives Platform removed—no explosives

Platform removed—with explosives Platform removed—with explosives

2.2.2 Two-Stage Architecture for MAG-PLAN 

Figure 1 illustrates the computational flow within MAG-PLAN. IMPLAN calculations and outputs are 

shown in the thick lines that surround and enter the center box, which holds the MAG-PLAN 

calculations. In Stage I, the model reads in an E&D scenario that identifies the number and type of 

activities estimated to occur each year. The activity types are mapped to activity functions (see also 

Table 1 above). The model looks up the expenditure (cost or shock) associated with the activity 

(some of which vary by water depth or well depth, or both). The cost is inflated from the year 

dollars in which the value is stored in MAG-PLAN to the base year dollars for the first year in the 

analysis. Each activity function is examined to evaluate whether the workers reside in the region in 

which they work. If not,5 the model allocates a user-specified percentage of the activity expenditure 

to labor costs. Non-labor costs are allocated among the different industries according to the 

industry sector profile for the activity. The non-labor costs are distributed to OSAs by activity and 

industry while labor costs are distributed to OSAs by activity. Stage 1 output is a year-by-year 

matrix of costs by industry and OSA.

MAG-PLAN estimates the number of jobs, earnings, and economic output associated with oil and 

gas activities on the GOM OCS. Stage II estimates other “direct effects” (e.g., employment associated 

with the spending in Stage I) and the associated “indirect” and “induced” economic effects:

• Indirect effects are associated with the economic activities involved with backfilling a 

supply chain. For example, drilling a well consumes steel pipe and cement, creating a 

demand to replenish these commodities; this supports jobs in the steel and cement 

industries.

• Induced effects occur through household spending of the wages earned from drilling the 

well and associated activities.

 5 For example, offshore drilling crews have a schedule that permits a worker to reside at some distance from 

the GOM. This is examined in more detail in Chapter 4.
6

For these Stage II calculations, MAG-PLAN incorporates multipliers calculated by an I-O model for 

each region. BOEM uses the commercial program and database developed by IMPLAN for this 

purpose.

Figure 1. MAG-PLAN and IMPLAN interrelationship
7

2.3 Running MAG-PLAN 

To set up MAG-PLANfor its initial run with a particular set of data, the user must first use IMPLAN 

to calculate multipliers for each of the OSAs. 

2.3.1 Prerequisite IMPLAN Analyses 

The overall steps for running IMPLAN analyses before conducting a MAG-PLAN analysis are:

• Identify the geographic OSAs of interest6

• Create an IMPLAN model for each OSA

• Generate OSA-specific multipliers for non-labor expenditures

• Create an IMPLAN analysis with a $1 million change in labor income for each OSA7

• Create a matrix of induced multipliers by OSA for labor expenditures

• Export and copy into MAG-PLAN for use in Stage II calculations

With IMPLAN Professional v.3 software, the user generates the direct, indirect, and induced 

multipliers for the non-labor expenditures by industry sector. 

2.3.2 Setting Up MAG-PLAN 

Before analyzing an E&D scenario, the user must first confirm that the OSAs defined in MAG-PLAN 

correspond to those in the OSA-specific IMPLAN models. The OSAs must also have the same names 

and the same set of counties or parishes within them as were used in developing the IMPLAN 

models. The user will import an E&D scenario, select the offshore modeling area (e.g., western GOM, 

central GOM, or the combined western and central areas), designate the dollar base year for the 

analysis and select the start and end years, choose the OSAs to include in the analysis, and import 

the associated sets of IMPLAN multipliers for labor-income and non-labor expenditures for these 

OSAs (if that has not already been done for a previous run).8

2.3.3 Sample MAG-PLAN Calculation Flow 

The logic flow within the white box in Figure 1 illustrates the calculations that take place when the 

model is executed for a given E&D scenario; see Section 2.2.2. Updated costs (the activity function 

expenditure) for each activity were revised in development of MAG-PLAN 2012, but these costs 

have not been further revised for MAG-PLAN 2016. They are included as Appendix A for reference.

 6 Usually, these correspond to the OSAs already defined in MAG-PLAN.

7 Running the $1 million change in labor income to calculate the induced effect multipliers replaces the 

approach in MAG-PLAN 2005, which calculated disposable income, distributed the income among several 

income categories (as spending patterns differ by income level), and distributed the spending through the 

personal consumption expenditure matrix to estimate spending by industry sector within Stage I (Saha et al. 

2005). All these computational steps are now done within IMPLAN v.3 as the shock to labor income, thus 

minimizing the need to update the data for each of these data sets within MAG-PLAN. 

8 The user must also select or confirm the remaining input class selections. The default input class selections 

will normally be acceptable for most analyses.
8

2.3.3.1 Non-labor Expenditures 

Non-labor expenditures are allocated among the 440 IMPLAN industry sectors. This is done by 

different methods for different activities. Chapter 3 details the industry sector profiles developed 

for:

• G&G

• Subsea installations

• Floating, production, storage, and offloading (FPSO) vessels

• Decommissioning (with and without explosives)

• Production O&M

The sector allocations for well drilling (exploratory, non-productive, and productive wells), 

production system installation, onshore and offshore gas processing facilities, and pipeline 

installation have not been changed from MAG-PLAN2005 (Saha et al. 2005).

In MAG-PLAN 2016, non-labor expenditures by sector are distributed to OSAs by one of two 

approaches. The first approach is an industry-specific onshore distribution built from the bottom 

up by examining company and facility data. The second approach uses IMPLAN’s “regional purchase 

coefficients” (RPCs) as proxies to estimate the proportion of demand supplied from sources within 

the region (“regional shares” or RSs). Chapter 5 presents the methodology for both methods of 

onshore distributions for non-labor expenditures. The end result is a matrix of expenditures by 

industry sector by OSA. The sum of all the Stage 1 non-labor entries should equal the inflationadjusted non-labor expenditure for the activity.

2.3.3.2 La bor Income Expenditures 

MAG-PLAN 2016 has three onshore distributions for labor expenditures. The first assumes that the 

household expenditures will be made in the OSA where the income is earned. The other two 

distributions were developed to tailor MAG-PLAN to the offshore oil and gas industry where drilling 

and production crews might reside at substantial distances from the work site. Chapter 4 describes 

the data and methods used to develop the labor onshore distributions.

2.3.4 Stage 2 Calculations 

In Stage 2, the matrix of expenditures by industry sector and OSA from Stage 1 are multiplied by the 

eight IMPLAN multipliers to derive the aggregate economic impacts from the activity.The results 

can be exported as .csv files, summarized into tables, or otherwise processed as needed for BOEM 

reports. The non-labor expenditures—allocated into industry sectors and distributed to OSAs—are 

multiplied by the direct, indirect, and induced effect OSA multipliers generated by the regional 

IMPLAN models. The labor income expenditures—distributed to OSAs by activity function—are 

multiplied by the induced effect OSA multipliers estimated by the $1 million change in labor income 

generated in the OSA-specific IMPLAN models. The multiplier represents the number of jobs 

created in each OSA by a $1 million change in labor income, and is a weighted average of the labor 

income multipliers for each of the 440 industry sectors for each OSA.
9

2.4 Revenue Functions in MAG-PLAN 

BOEM collects funds from oil and gas operations on the OCS through:

• Bonus bids

• Rental payments

• Royalties on oil and gas production

A bonus is the cash consideration to be paid to the US by the successful bidder for a mineral lease

(and is the only bid variable). Rental payments are paid (usually annually) on a lease from the time 

of the sale until oil and gas production begins on the lease or the lease expires, whichever comes 

first. Royalties are a percentage of the value of production from the lease. 

OCSLA, as amended, establishes revenue sharing between state and federal governments to account 

for the possibility of drainage of state resources by projects in federal waters.9 The federal 

government sets aside 27% of the bonus, rental, and royalty income received from leases within 3 

miles of the edge of state waters. The 3-mile band of federal waters is known as the “8(g) zone” 

after the section of the legislation that created the requirement. The BOEM Economics Division staff 

calculates the annual “8(g)” and “non-8(g)” revenues for an E&D scenario from which anticipated 

bonuses, rentals, and royalties are calculated.

MAG-PLAN 2012 estimated disbursement patterns for bonus, rental, and royalty income based on 

data from the Office Natural Resources Revenue (see USDOI ONRR 2015 for current data). All non8(g) revenues go to the federal government. That is, 100% of the funds are assigned to the US with 

the associated IMPLAN Sector 429 (federal government enterprises other than electric utilities).

8(g) revenues are split 73% federal: 27% state. The 73% of 8(g) funds that go to the federal 

government are allocated to IMPLAN Sector 429. The 27% of the 8(g) funds that go to the GOM 

states are divided among the states according to the state waters adjacent to the location of the site 

where the bonus, rent, or royalty was generated.

All state monies are allocated to IMPLAN Sector 432 (state and local government enterprises other 

than passenger transit or electric utilities).

 

 9 The Gulf of Mexico Energy Security Act of 2006 established additional revenue-sharing for four Gulf of 

Mexico states that have OCS oil and gas activities off their coasts. Although the effects of that sharing will 

become more important, modeling them would increase complexity, and there have been both 

Administration and Congressional proposals that would modify the sharing provisions for the periods for 

which BOEM is currently using MAG-PLAN estimates.
10

3 Activities to Industry Sector Profiles 

A reason to subdivide non-labor expenditures for an activity into industry sectors is to capture 

aspects that are unique to offshore oil and gas operations. Some activities, such as the installation of 

platform or subsea production systems, are unique to the offshore oil and gas industry. Even for 

aspects that are common to all oil and gas operations, the proportional use of steel, labor, 

transportation, and many other factors can vary considerably. For example, allocating all industry 

expenditures for drilling to IMPLAN Sector 28 (drilling oil and gas wells) would grossly 

underestimate the waterborne aspects of offshore oil and gas operations because offshore 

operations are a relatively small part of the combined offshore and onshore drilling industry, which 

is represented by IMPLAN Sector 28. Water transportation plays an integral part of gathering G&G 

data, installing subsea systems and FPSOs, decommissioning structures, and transporting 

production operations and maintenance (O&M) crews to and from the production systems. 

MAG-PLAN 2016 uses a three-step approach to developing industry sector profiles for certain 

activities. The first step is to develop the industry sectors associated with the water-borne nature of 

some operations. Section 3.1 examines the costs that make up a vessel’s day rate. The second step is 

to develop industry sectors for the non-water-transportation component for the following 

activities:

• Section 3.2: G&G (or seismic)

• Section 3.3: subsea installations

• Section 3.4: FPSO vessels

• Section 3.5: decommissioning

• Section 3.6: production O&M

The third step is to define the industry sector allocations for the remaining activities (well drilling, 

production structure and pipeline installation, and onshore and offshore gas processing facilities)

based on earlier work.These are described in Section 3.7.

Each section in this chapter begins with an introduction to and an overview of the activity. This 

provides the context for the industry sectors associated with the activity. As needed, we discuss and 

incorporate mobilization activities at harbors, installation procedures, and specialized equipment.

3.1 Industry Sectors for Vessel Day Rates 

The International Association of Geophysical Contractors provided vessel day rate data for this 

project (IAGC 2014, IAGC 2015). Section 3.1.1 discusses the primary data for vessel day rates. 

Though the underlying data are for vessels directly associated with seismic operations, they are 

used to approximate the costs and categories of spending for all vessel day rates associated with 

multiple activities. We are indebted to the IAGC for contributing their knowledge and expertise for 

this effort. Section 3.1.2 uses data from Census’s annual survey of service industries to further 

define and subcategorize the costs included in the IAGC data (Census SAS 2013).

3.1.1 IAGC Data 

3.1.1.1 IAGC Data—July 2014 

IAGC provided recent, detailed cost data (e.g., mobilization, day rates, and survey durations) on the 

costs of a seismic trip, which form the foundation for the estimate of a typical trip for other 

activities that require water transportation; see Table 2 (IAGC 2014). Mobilization costs are $5 

million for 2D seismic and 3D seismic, and between $10 million and $15 million for wide azimuth 

3D seismic. Day rates are $97,500/day, $325,000/day, and $875,000/day, respectively. IAGC 

reports survey durations of three months for a proprietary survey and from three to 12 months for 
11

a multi-client survey. To estimate typical costs, we examined a four- to six-month trip for 2D 

seismic, a nine- to 12-month survey for 3D seismic, and a four-to nine-month survey for wide 

azimuth 3D seismic. Using the midpoint of each trip duration, a 2D seismic survey would cost about 

$19.8 million, 3D seismic would cost about $108.8 million, and wide azimuth 3D seismic would cost 

about $331.9 million (the different types of seismic surveys are discussed in detail in Section 3.2.1).

Table 2 shows the substantial differences in the collection of 2D seismic and 3D seismic data. For 

2D seismic, mobilization costs represent 25.2% of the total trip cost. For 3D seismic—either narrow 

or wide azimuth—mobilization costs represent between 3.8% and 4.6% of total trip cost. This is 

partially due to the fact that 2D seismic collectionoccurs with a single vessel, while 3D seismic

(particularly wide azimuth 3D seismic) involves multiple vessels.

The IAGC information provides additional insight into G&G activities. From the staffing numbers, 

we see that about half the personnel are ship crew and the other half are seismic crew. On the basis 

of the pattern seen for G&G (an equal mix of crew involved in vessel duties and crew involved in the 

technical operations for that activity), we assumed that the personnel for decommissioning and 

subsea installation would also be split equally between ship crew and technical crew.

The per-day provisioning cost for an extra person can be combined with the crew size and average 

trip duration to estimate the proportion of the activity cost that would flow to local food 

preparation and catering services. The provisioning costs range from 0.2% to 1.6% depending on 

the type of trip.
12

Table 2. Costs for typical 2D, 3D, and WA 3D seismic sampling trips

2D Seismic 3D Seismic WA 3D Seismic

Parameter Lower Upper Midpoint Lower Upper Midpoint Lower Upper Midpoint

Mobilization $5,000,000 $5,000,000 $10,000,000 $15,000,000 $12,500,000

Day rate $97,500 1 $325,000 $875,000

Duration (days) 122 183 152.5 274 365 319.5 122 274 365

Typical cost $19,868,750 $108,837,500 $331,875,000

Crew—ship 20 30 25 20 30 25 20 30 25

Crew—seismic 25 30 28 25 30 28 25 30 28

Provisioning 

($/day/person)

$40 $40 $40

Provisioning cost 

per trip

$323,300 $677,340 $773,800

Percent of total 

costs

1.6% 0.6% 0.2%

Mobilization as a 

percent of type of 

seismic

25.2% 4.6% 3.8%

Source: IAGC 2014
13

3.1.1.2 IAGC Day Rate Component Data—May 2015 

IAGC provided additional information on the relative relationship of cost components for G&G 

vessel day rates (i.e., proportions, not absolute values) (IAGC 2015). Table 3 presents the range of 

values provided by IAGC members and the average value. The data represent all forms of seismic 

processing (e.g., 2D, 3D, and wide azimuth 3D), which might explain the range in values presented. 

The largest component is vessel overhead, at 37.5%. The second largest is labor and benefits, at 

18.3%. About 16% of the day rate is represented by a mix of components, including repair, 

maintenance, and support vessels, etc.; food and insurance represent 1.8% and 1.5% of the costs. 

The sum of the average percent by cost item is 88.1%. The rightmost column in Table 3 shows the 

IAGC average data scaled to 100%). About 18.2% is in an “other” category. Census data provided a 

further breakdown of that category (see next section).

Table 3. Day rate cost components for seismic surveys

Cost Component Range Average Scaled

Vessel overhead (including depreciation, finance charges, management 

overhead, etc.)

High: 60%

Low: 22%

37.5% 42.6%

Labor (salaries) High: 18%

Low: 9% 

15.0% 17.0%

Benefits High: 9%

Low: 0.3% 

3.3% 3.7%

Insurance High: 2.5%

Low: 0.3%

1.5% 1.7%

Food High: 2.5%

Low: 1% 

1.8% 2.0%

Fuel and lubricants High: 16%

Low: 5%

13% 14.8%

Other (repair, maintenance, subcontractors, support vessels, logistics) High: 24%

Low: 7.8%

16% 18.2%

Sum of average percent 88.1% 100.0%

Source: IAGC 2015

3.1.2 Census, Service Annual Survey Data 

The Census Bureau conducts an annual survey of service industries. Table 4 presents the 2012 

Census data for selected business expenses for NAICS 5413 (services: architectural, landscape 

architectural, engineering, drafting, building inspection, geophysical surveying and mapping, 

surveying and mapping [except geophysical], and testing laboratories) and NAICS 483 (water 

transportation) (Census SAS 2013). Indented lines below a total show the variables that are 

aggregated in the total. For example, employer's cost for fringe benefits is the sum of health 

insurance, defined benefit and defined contribution plans, payroll taxes, insurance, and other 

benefits. 

We examined the Census data for two purposes:

• Determine whether cost items consistent with those listed in the IAGC “Other” category 

were identified in the Census data.

• Evaluate the industry expense distribution for the NAICS code in which G&G activities are 

classified and the industry expense distribution for where the G&G activities take place (i.e., 

water transportation) to choosethe more appropriate profile for offshore G&G activities.
14

We inspected the results shown in Table 4 and identified cost items that were consistent with 

repair, maintenance, subcontractors, support vessels, and logistics—the items listed in the IAGC 

“Other” category. 

Water transportation (NAICS 483) includes two cost items that are absent from the G&G list: 

purchased freight transportation and purchased repairs and maintenance to transportation 

equipment. This is consistent with the inclusion of container ships and cargo ships within NAICS 

483. Although the vessels performing G&G, decommissioning, and subsea installation are large, they 

do not reach the size of transoceanic container ships, nor do they have the associated freight 

transportation costs. These cost items do not need to be included in the offshore activity industry 

profiles.

Table 4. Census data, Service Annual Survey—industry expenses

Item

2012 Expense (Millions)

NAICS 5413 NAICS 483

Total operating expenses 191,746 35,094

Gross annual payroll 82,420 5,636

Total employer's cost for fringe benefits 22,309 1,565

Health insurance 7,696 548

Defined benefit pension plans 748 279

Defined contribution plans 3,279 128

Payroll taxes, employer paid insurance premiums (except health), and other 

employer benefits 

10,586 610

Temporary staff and leased employee expense 7,675 116

Expensed equipment 1,668 70

Expensed purchases of other materials, parts, and supplies 13,191 1,919

Purchased freight transportation 3,781

Expensed purchases of software 846 44

Total purchased electricity and fuels (except motor fuels) 1,106 102

Purchased electricity 843 31

Purchased fuels (except motor fuels) 263 71

Total lease and rental payments 6,997 993

Lease and rental payments for machinery, equipment, and other tangible items 1,123 788

Lease and rental payments for land, buildings, structures, store spaces, and 

offices 

5,874 205

Total purchased repairs and maintenance 1,372 1,805

Purchased repairs and maintenance to transportation equipment 1,517

Purchased repairs and maintenance to machinery and equipment 967 263

Purchased repairs and maintenance to buildings, structures, and offices 405 25

Purchased advertising and promotional services 862 758

Cost of insurance 494

Depreciation and amortization charges 4,282 3,827

Governmental taxes and license fees 1,319 360

Total other operating expenses 47,699 8,346

Data processing and other purchased computer services 744 20

Purchased communications services 1,129 67

Water, sewer, refuse removal, and other utility payments 102 19

Purchased professional and technical services 13,414 262

All other operating expenses 32,310 7,978

Source: Census SAS 2013
15

We extracted candidate “Other” costs to compare which NAICS code appeared to be the better fit for 

offshore G&G operations; see Table 5. The columns labeled “Census” reflect the estimates as 

calculated from Table 4 and the columns labeled “Scaled” reflect the cost profiles scaled to fit the 

18.2% allocated to “Other” in the IAGC data. The line item shares for lease and rental payments for 

land, buildings, structures, store spaces, and offices is higher for NAICS 5413 (3.1%) than NAICS 

483 (0.6%),but the opposite is true for lease and rental payments for machinery, equipment, and 

other tangible items. The higher costs for land, buildings, structures, and more seen in the NAICS 

5413 cost profile are a reason to prefer the NAICS 483 cost profile for supplementing offshore oil 

and gas activity industry sector profiles. Table 6 is a summary of the subsectorization for “Other” 

activities in NAICS 483.

Table 5. Comparison of NAICS 5413 and NAICS 483 cost profiles

Item

Census Scaled

IMPLAN Sector Name

NAICS 

5413

NAICS 

483

NAICS 

5413

NAICS 

483

Expensed equipment 0.9% 0.2% 1.1% 0.3% Differs according to activity

Expensed purchases of other 

materials, parts, and supplies 

6.9% 5.5% 8.9% 8.3%

Expensed purchases of software 0.4% 0.1% 0.6% 0.2% 345 Software publishers 

Purchased electricity 0.4% 0.1% 0.6% 0.1% 31 Electric power generation, 

transmission, and 

distribution

Lease and rental payments for 

machinery, equipment, and 

other tangible items 

0.6% 2.2% 0.8% 3.4% 365 Commercial and industrial 

machinery and equipment 

rental and leasing 

Lease and rental payments for 

land, buildings, structures, store 

spaces, and offices 

3.1% 0.6% 4.0% 0.9% 360 Real estate 

Purchased repairs and 

maintenance to machinery and 

equipment 

0.5% 0.7% 0.7% 1.1% 417 Commercial and industrial 

machinery and equipment 

repair and maintenance

Purchased repairs and 

maintenance to buildings, 

structures, and offices 

0.2% 0.1% 0.3% 0.1% 39 Maintenance and repair 

construction of 

nonresidential maintenance 

and repair

Purchased advertising and 

promotional services 

0.4% 2.2% 0.6% 3.3% 377 Advertising and related 

services 

Purchased communication 

services 

0.6% 0.2% 0.8% 0.3% 351 Telecommunications 

Water, sewer, refuse removal, 

and other utility payments 

0.1% 0.1% 0.1% 0.1% 33 Water, sewage, and other 

systems

Total of sector percentages 14.1% 11.9% 18.2% 18.2%

Source: Census SAS 2013
16

Table 6. Subsectorization summary for other activities in NAICS 483 (water transportation)

Item Percent IMPLAN Sector Name

Purchased electricity 0.1% 31 Electric power generation, transmission, 

and distribution

Water, sewer, refuse removal, and other utility 

payments 

0.1% 33 Water, sewage, and other systems

Purchased repairs and maintenance to 

buildings, structures, and offices 

0.1% 39 Maintenance and repair construction of 

nonresidential maintenance and repair

Expensed purchases of software 0.2% 345 Software publishers 

Purchased communication services 0.3% 351 Telecommunications 

Lease and rental payments for land, buildings, 

structures, store spaces, and offices 

0.9% 360 Real estate 

Lease and rental payments for machinery, 

equipment, and other tangible items 

3.4% 365 Commercial and industrial machinery 

and equipment rental and leasing 

Purchased advertising and promotional services 3.3% 377 Advertising and related services 

Purchased repairs and maintenance to 

machinery and equipment 

1.1% 417 Commercial and industrial machinery 

and equipment repair and maintenance

Expensed purchases of other equipment, 

materials, parts, and supplies 

8.6% Differs according to activity

Source: Table 5 and IMPLAN 2015

Two cost items in Table 5 could vary according to the activity: expensed equipment and expensed 

purchases of other materials, parts, and supplies. For the cost profile, these two categories are

combined on the assumption that parts, supplies, and materials for the equipment are made by the 

manufacturers of the equipment.

Table 7 presents the customization of these costs by activity function. G&G activities are 

distinguished by IMPLAN 256 (watch, clock, and other measuring and controlling device 

manufacturing), which includes NAICS 334519 (geophysical instruments manufacturing). Subsea 

installation contains IMPLAN 186 (plate work and fabricated structural product manufacturing) 

because this industry contributes between 4.5% and 7.2% in the IMPLAN industry production 

functions for Sectors 36 and 334, both of which had been considered for subsea installation. 

Decommissioning activities involve severing the platform legs for removal; IMPLAN 220 (cutting 

tool and machine tool accessory manufacturing) was included for this activity. 

Table 7. Customization by expensed equipment and materials

Activity

Expensed Equipment and Materials

IMPLAN Name

G&G 256 Watch, clock, and other measuring and controlling device manufacturing

Subsea installation 186 Plate work and fabricated structural productmanufacturing

Decommissioning 220 Cutting tool and machine tool accessory manufacturing

Production O&M

Source: ERG estimates

No specialized activities are associated with the transport of personnel and supplies for production 

O&M activities.
17

3.2 Geological and Geophysical Prospecting 

3.2.1 Introduction and Overview 

Within the earth’s crust, different types of rock have different acoustical characteristics. As a sound 

wave passes through different layers, the way it is reflected back to the surface reveals some of the 

characteristics of the rock layers. Seismology includes the study of the vibration of the earth’s 

interior caused by man-made sound pulses. In offshore surveys, the reflected sound waves are 

picked up by hydrophones (underwater sound detectors); see Figure 2 (Kaplan et al. 2011).

Figure 2. Offshore seismic survey

Source: Rigzone 2014a

Marine seismic vessels use a combination of air guns, water guns, and other acoustic sources to 

create the pulse needed to take seismic readings. Typical marine seismic sources are air guns and 

water guns. The first releases compressed air into the water, creating an acoustical energy pulse 

that penetrates the seafloor. Similarly, a water gun injects water into the surrounding water to 

create the acoustical pulse (Rigzone 2014a; BOEM 2014). 

Regardless of which method is used, the returning pulses are picked up by an array of geophones 

attached to lines towed by the ship. These arrays are called streamers, and consist of long net-like 

bands with geophones spaced evenly along the streamer; see Figure 3.
18

Figure 3. Marine seismic vessel towing multiple hydrophone 

streamers

Source: Schlumberger 2014

A single vessel can conduct 2D and 3D (“narrow azimuth 3D”) seismic surveys. In 2D operations, a 

single streamer is towed behind the survey vessel. The reflections from the subsurface are assumed 

to lie below the line traveled by the survey vessel. Thus the image has two dimensions (horizontal 

and vertical) (OGP 2011). In 3D operations, groups of sail lines are acquired with the same 

orientation, producing a much denser collection of measurements. Wide azimuth 3D surveys 

involve multiple vessels making multiple passes over the same area with different lateral 

separations between source vessels and streamers (OGP 2011). 

Figure 4 illustrates the difference between 2D and 3D streamer survey coverage. Spacing between 

adjacent ship tracks for 2D will typically be greater than 1 km (0.6 mi); spacing for 3D surveys 

varies, but the data density typically will be 15 to 20 times greater than for 2D surveys (BOEM 

2014).

Figure 4. 2D and 3D seismic data collection 

configurations

Source: BOEM 2014
19

3.2.2 Vessel Day Rate 

The sector allocation for G&G data includes components of both the vessel day rate and the 

mobilization costs. First, Table 8 integrates the information in Table 3 (IAGC) and Table 4 (Census 

SAS) to create the sector allocation for the operation of the vessel to collect the seismic data. The 

“Source” column indicates whether the information comes from Census (Table 4) or IAGC (Table 3). 

The 16 sectors in Table 8 show the maritime nature of offshore G&G collection,with entries for 

shipbuilding, ship repair, and water transportation. IMPLAN Sector 369 (architectural, engineering, 

and related services)—100%of the allocation in MAG-PLAN2012 for G&G—is now 10.4% of the 

allocation and represents the specialized seismic crew on the boat.

Table 8. Industry sector profile for G&G data collection activities

MAG-PLAN Inputs

IMPLAN

Sector G&G Source

Electric power generation, transmission, and distribution 31 0.1% Census SAS 2013

Water, sewage, and other systems 33 0.1% Census SAS 2013

Maintenance and repair construction of nonresidential 

maintenance and repair

39 0.1% Census SAS 2013

Petroleum refineries 115 14.8% IAGC 2015 (fuel and lubricants)

Watch, clock, and other measuring and controlling 

device manufacturing

256 8.6% Census SAS 2013

Ship building and repairing 290 42.6% IAGC 2015 (vessel costs)

Water transportation 334 10.4% IAGC 2015 (ship crew)

Software publishers 345 0.2% Census SAS 2013

Telecommunications 351 0.3% Census SAS 2013

Insurance carriers 357 1.7% IAGC 2015 (insurance)

Real estate 360 0.9% Census SAS 2013

Commercial and industrial machinery and equipment 

rental and leasing

365 3.4% Census SAS 2013

Architectural, engineering, and related services 369 10.4% IAGC 2015 (seismic crew)

Advertising and related services 377 3.3% Census SAS 2013

Food services and drinking places 413 2.0% IAGC 2015 (provisions)

Commercial and industrial machinery and equipment 

repair and maintenance

417 1.1% Census SAS 2013

Total non-labor 100.0%

3.2.3 Addition of Mobilization Costs 

To fully capture all activities relating to G&G activities, the sector allocation in MAG-PLAN 2016

includes a modified version of Table 8 which incorporates the mobilization costs shown in Table 2. 

Port and harbor operations are classified as NAICS 488310, which is included in IMPLAN 338 

(scenic and sightseeing transportation and support activities for transportation). IMPLAN 338 also 

includes NAICS 433320 for marine cargo handling. 

Table 9 lists the IMPLAN sector percentages for day rates only (exactly as presented in Table 8) and 

with mobilization costs included. As noted above, mobilization costs for 2D seismic constitute about 

25% of the total survey cost, so each percentage shown under “Day Rates” is scaled to sum to the 

remaining 75%. MAG-PLAN 2016 uses the 3D G&G sector allocation because most of the G&G 

activity in the GOMis expected to be 3D.
20

Table 9. Industry sector profile for G&G data collection and mobilization costs

Day Rate

Sectors

G&G Sectors (Mobilization 

and Day Rate)

MAG-PLAN Inputs

IMPLAN 

Sector

2D G&G 

Sectors 

3D G&G 

Sectors 

Electric power generation, transmission, and distribution 31 0.1% 0.1% 0.1%

Water, sewage, and other systems 33 0.1% 0.1% 0.1%

Maintenance and repair construction of nonresidential 

maintenance and repair

39 0.1% 0.1% 0.1%

Petroleum refineries 115 14.8% 11.0% 14.1%

Watch, clock, and other measuring and controlling 

device manufacturing

256 8.6% 6.5% 8.3%

Ship building and repairing 290 42.6% 31.9% 40.8%

Water transportation 334 10.4% 7.7% 9.9%

Scenic and sightseeing transportation and support 

activities for transportation

338 25.2% 4.2%

Software publishers 345 0.2% 0.1% 0.2%

Telecommunications 351 0.3% 0.2% 0.3%

Insurance carriers 357 1.7% 1.3% 1.6%

Real estate 360 0.9% 0.7% 0.9%

Commercial and industrial machinery and equipment 

rental and leasing

365 3.4% 2.6% 3.3%

Architectural, engineering, and related services 369 10.4% 7.7% 9.9%

Advertising and related services 377 3.3% 2.5% 3.2%

Food services and drinking places 413 2.0% 1.5% 2.0%

Commercial and industrial machinery and equipment 

repair and maintenance

417 1.1% 0.9% 1.1%

Total non-labor 100.0% 100.0% 100.0%

Source: Table 2; Table 8; ERG estimates

3.3 Subsea Installations 

3.3.1 Introduction and Overview 

MAG-PLAN 2016 includes subsea systems as an option for an offshore oil and gas production 

system. Section 3.3.1.1 provides an overview of the equipment associated with subsea systems 

while Section 3.3.1.2 describes some of the available installation processes. Section 3.3.2 develops 

an industry sector profile for this activity using a bill-of-sale approach. Section 3.3.3 accounts for

installation and investigates subsea system installation as a waterborne activity. Section 3.3.4

presents the industry sector profile.

3.3.1.1 Equipment 

The term “subsea system” refers to the equipment, methods, and technology used to develop oil 

and gas fields below the water surface. Figure 5 provides an example subsea layout. In this example, 

the subsea production system connects to an FPSO vessel, but subsea systems can connect to any 

type of floating production structure or a fixed structure with excess processing capacity. The 

discussion below is based on DNV GL 2014; FMC 2014a–b; OneSubsea 2014; Rigzone 2014b–d; and 

Haq 2013.
21

Figure 5. Schematic of production system

Source: FMC 2014a

For the purpose of incorporating subsea systems into MAG-PLAN, we begin the subsea system after 

the set of valves on top of the well that control the well’s flow (called a Christmas tree or XT 

because the tapering tower of valves resembles a Christmas tree) because the XTcosts are included 

in the well drilling costs. 

Manifolds are arrangements of valves, piping, and controls that collect and combine fluid from 

subsea wells and route the combined flow to a processing unit. They may be placed at a multi-well 

template, placed at a single well, or located separately with flowlines connecting them to the wells. 

The left-hand image in Figure 6 illustrates the size of a manifold, while the right-hand image shows 

a manifold with protection from trawl equipment, anchors, and dropped equipment.

Figure 6. Example manifolds

Source: OneSubsea 2014; DNV GL 2014
22

Well jumpers are umbilicals that connect wells. They are often located between two fixed 

positions, e.g., from a well to a manifold, and are designed to accommodate flowlineor pipeline 

movement due to thermal expansion.

Pumps (Figure 7) boost the fluid toward the production structure, relieving the backpressure on 

the formation. As such, they enhance reservoir flow and increase recovery. Subsea pumps are also 

used in waterflood operations. Recent technological developments have led to full subsea 

separationand pumping systems. In 2010, the Perdido field in the GOM activated its subsea 

processing system where the gas flows freely to the topside host while the liquid is pumped (Shell 

2010). Other systems perform sand and solid separation or oil and water separation. The discharge 

of the sand or water at the seafloor means that no energy is expended in bringing the material to 

the water surface.

Figure 7. Subsea pump

Source: FMC 2014b

Flowlines or pipelines transport the fluids horizontally among the subsea components and to the 

risers. They might use metal pipes or hoses.

Risers are designed to transport the fluids vertically to the surface. Top-tensioned risers are 

completely vertical rigid systems and are usually used with tension-leg platforms and spars. Motion 

compensators (which expand or contract with the motion of the structure) or buoyancy cans (with 

flexible pipes connecting to the structure) are two methods of addressing the engineering problem 

of joining a rigid system to a structure that moves with wave action. Steel catenary risers are based 

on the same curve theory used to build bridges. Hybrid systems, such as the one illustrated in

Figure 8, have rigid vertical components topped by buoyancy devices where the system switches to 

flexible pipes.
23

Figure 8. Hybrid riser system

Source: Airborne Oil and Gas 2014

The nerve network of a subsea system, so to speak, is its umbilicals—composite cables that link 

the surface structure to the subsea processing systems, manifolds, subsea trees, etc. Umbilicals may 

contain fiber optics, steel tubes, thermoplastic hoses, power lines, etc., to serve such diverse 

functions as communications between the surface structure and subsea processing units, subsea 

well activation via hydraulics, and chemical injection into the production stream. Figure 9

illustrates the complexity possible in umbilical design.

Figure 9. Umbilical cross-sections

Source: UMF 2014a–c

Umbilical manufacture begins with the selection and production of the components. These are 

woven into bundles and a protective sheath is applied. Steel armor wires may be applied for 

protection, strength, or ballast. A corrosion-resistant outer sheath completes the package (UMF 

2014c).

3.3.1.2 Installation 

3.3.1.2.1 Equipment

Installation methods for subsea equipment vary according to the water depth at the site. For 

shallower waters, crane barges, anchor handling tug supply vessels, and cranes on semisubmersible 

vessels are feasible methods. A submersible block-and-tackle or sheave method can be used to 

lower production systems to the seabed, often incorporating a motion compensator or an 

additional vessel providing tielines for guidance. 
24

Figure 10 illustrates the pendulous method. The left-hand vessel transports the unit to the 

deployment site and hangs the unit over the water. At the site, a second vessel attaches a line to the 

unit and travels a set distance away (depending on the water depth). The unit is released and 

swings down into position (Roveri et al. 2006). Finally, submersible remotely operated vehicles 

may be used to position equipment on the sea floor when the depths exceed that where divers can 

operate safely.

Figure 10. Pendulous deployment method

Source: Roveri et al. 2006

3.3.1.2.2 Pipes and Umbilicals

Specialized vessels are used to lay pipe and umbilicals for subsea operations. The pipe or umbilical 

is slid off the back of the vessel while the vessel is in transit. The pipe curves downward from the 

stern through the water until it reaches its final destination on the seafloor. Pipe may be welded in 

sections on the vessel or coiled on enormous circular spools. Umbilicals are wound on spools for 

transit and installation. Depending on the angle in which the pipe/umbilical enters the water, the 

pipe forms the shape of an "S" or a “J” in the water; see Figure 11. The single curve in a “J-lay” puts 

less stress on the pipe and is more commonly used in deepwater situations (Rigzone 2014e).

Figure 11. S-lay and J-lay installation

Source: Rigzone 2014e
25

Figure 12 is an example of a pipe- and umbilical-laying vessel. This one can install pipe with a J-lay 

or S-Lay method due to its vertical reel. Umbilicals can be laid from below-deck carousels.

Figure 12. Pipe- and umbilical-laying vessel

Source: Technip 2014a

3.3.2 Industry Sector Identification 

As the descriptions in Sections 3.3.1.1 and 3.3.1.2 suggest, the spending pattern for subsea oil and 

gas development in the GOM needs to address both the equipment and installation costs.

Equipment costs are discussed in Section 3.3.2.1 and installation is discussed in Section 3.3.3. The 

final sector distribution is given in Table 16 of Section 3.3.4.

A joint industry project contained detailed cost tables for subsea systems (DNV and Goldsmith 

Consulting 2000); these are summarized in Table 10. Only the 12-well systems are assumed to have 

nearby field extensions. The report examined the costs of both vertical (“conventional”) and 

horizontal subsea Christmas trees. Differences in well and subsea equipment costs lead to the 

conventional trees being about 2% more expensive for six-well systems and 3% to 3.5% more 

expensive for 12-well systems. The difference in water depth from 4,000 feet to 6,000 feet leads to 

a less than 0.5% increase in total cost. The material and installation costs for the pipelines and 

umbilicals are within 2% of each other for the main system. For the extension, the installation cost 

is 75% of the materials cost.
26

Table 10. Summary costs for four subsea systems

Parameters System A System B System C System D

Number of wells 6 6 12 12

Water depth (ft) 4,000 6,000 4,000 6,000

Pipeline size (in.) 12 12 12 12

Pipeline length 

(mi)

35 35 35 35

Infield extension

(mi)

5 5

Conventional

($000)

Horizontal

($000)

Conventional

($000)

Horizontal

($000)

Conventional

($000)

Horizontal

($000)

Conventional

($000)

Horizontal

($000)

One well 

hardware 

$3,255 $2,570 $3,255 $2,570 $3,255 $2,570 $3,255 $2,570

Subsea 

hardware

$10,977 $10,683 $11,810 $11,050 $10,977 $10,683 $11,810 $11,050

Pipelines and 

umbilicals 

(materials)

$91,240 $91,240 $91,240 $91,240 $91,240 $91,240 $91,240 $91,240

Pipelines and 

umbilicals 

(installation)

$93,040 $93,040 $93,040 $93,040 $93,040 $93,040 $93,040 $93,040

Infield extension

and umbilicals 

(materials)

$20,499 $20,499 $20,499 $20,499

Infield extension

and umbilicals 

(installation)

$15,749 $15,749 $15,749 $15,749

Total cost $214,787 $210,383 $215,620 $210,750 $270,565 $262,051 $271,398 $262,418

Percent 

difference

2.1% 2.3% 3.2% 3.4%

Source: DNV and Goldsmith Consulting 2000

For the purpose of developing a bill-of-sale approach to subsea systems, System D, a 12-well system 

with horizontal subsea trees at a water depth of 6,000 feet, was chosen. Given the minor variations 

among the four systems described above, the general industry sector profile will not vary 

dramatically from the example system. 

For MAG-PLAN, drilling costs are assumed to include the cost up to and including the installation of 

the Christmas tree (Kaplan et al. 2011). The $2,570,000 for one-well hardware shown in Table 10

includes the cost of the Christmas tree and its tubing hangers, wireline plugs, and tree cap. These 

should not be counted as subsea system costs. As derived from the detailed tables in DNV and 

Goldsmith Consulting (2000), the per-well hardware cost for a subsea system should be $280,000 

(for the hydraulic and electrical flying leads and a 6-inch well jumper).

Table 11 summarizes the cost breakdown for a subsea system. The $3,360,000 shown for well 

hardware is $280,000 times the 12 wells. The costs for the remaining equipment are unchanged.

The removal of the Christmas tree costs from the DNV and Goldsmith Consulting (2000) estimate 

lowers the estimated cost of the system from $262,418,000 to $234,938,000.
27

Table 11. Example subsea system cost breakdown

Equipment Cost ($000)

Percentage of 

Total Cost

Subsea-specific well hardware $3,360 1.4%

Subsea hardware $11,050 4.7%

Pipeline end manifolds $6,150 2.6%

Manifold $2,000 0.9%

Pipelines $80,357 34.2%

Umbilicals $23,232 9.9%

Installation $108,789 46.3%

Total $234,938

Source: DNV and Goldsmith Consulting 2000

3.3.2.1 IMPLAN Sectors for Equipment and Umbilicals 

The next step is to link each type of the equipment listed in Table 11 to NAICS and IMPLAN industry 

sectors. The subsea system and its components are summarized in Table 12. The well and subsea 

hardware, pipeline end manifolds, and well manifolds are all characterized in IMPLAN Sector 206, 

mining and oil and gas field equipment and machinery. 

Table 12. Aligning subsea system costs and IMPLAN sectors

Equipment Cost ($000)

Percentage of Total Cost

Individual Aggregate NAICS IMPLAN Sector Name

Well hardware $3,360 1.4% 9.6% 333132 206 Mining and oil and gas 

field machinery

manufacturing

Subsea hardware $11,050 4.7%

Pipeline end manifolds $6,150 2.6%

Manifold $2,000 0.9%

Pipelines $80,357 34.2% 17.1% 3311 170 Iron and steel mills and 

ferroalloy manufacturing

17.1% 3312 171 Steel product 

manufacturing from 

purchased steel

Umbilicals $23,232 9.9% 9.9% 273 Wiring device 

manufacturing

Installation $108,789 46.3% 46.3% See Section 3.3.3 below

Total $234,938 100.0%

Source: ERG estimates and IMPLAN 2015

Pipelines are estimated to be approximately 34.2% of the total subsea system cost (29.9% of the 

cost is for main field flowlines and 4.3% of the cost is for infield extension flowlines). They can be 

manufactured by integrated mills (where both the steel and the final product are made) or 

manufactured from purchased steel. The first category is NAICS 3311 (iron and steel mills and 

ferroalloy manufacturing), which corresponds to IMPLAN Sector 170 (iron and steel mills and 

ferroalloy manufacturing). The second category is NAICS 3312 (steel product manufacturing from 

purchased steel), which corresponds to IMPLAN Sector 171 (steel product manufacturing from 

purchased steel. Pipelines and other oil country tubular goods might be manufactured in either 

sector, so we split the allocation equally between IMPLAN Sectors 170 and 171.

We examined the NAICS codes associated with the four umbilical plants in the GOM region (see 

Table 13) using three commercial databases. 
28

Table 13. NAICS codes for umbilical plants

Company Location

BOEM 

Region

NAICS

AtoZ D&B DemographicsNOW

Aker Subsea, Inc. Mobile, AL AL-1 423810a 333132b 333132

Oceaneering International, Inc. Panama City, FL FL-1 335921c 335921/335931d

Parker-Hannifin Corp. Freeport, TX TX-3 423510e 333249f 333249

Technip Umbilicals, Inc. Houston, TX TX-3 237110g/

211111h

541330i

Source: AtoZdatabases 2014; DemographicsNow2014; Dun and Bradstreet 2014

a Construction and mining (except oil well) machinery and equipment merchant wholesalers

b Oil and gas field machinery and equipment manufacturing

c Fiber optic cable manufacturing

d Current-carrying wiring device manufacturing

e Metal service centers and other metal merchant wholesalers

f Other industrial machinery manufacturing

g Water and sewer line and related structures construction

h Crude petroleum and natural gas extraction

i Engineering services

Because umbilicals are a relatively new technology for offshore oil and gas operations and NAICS 

codes are self-assigned by a company, a range of codes is reported. The codes span fivemajor 

NAICS sectors:

• 21: mining, quarrying, and oil and gas extraction

• 23: construction

• 31–33: manufacturing

• 42: wholesale trade

• 54: professional, scientific, and technical services

This distribution demonstrates how the codes vary depending on whether the establishment 

focuses on designing them (Sector 54), manufacturing them (Sectors 31–33), installing them

(Sector 23), selling them to other companies for installation (Sector 23), or using them itself (Sector 

21). 

For this project, the focus is on the manufacture of umbilicals. This reduces the industries 

considered to:

• 333132: oil and gas field machinery and equipment manufacturing

• 333249/333298: other industrial machinery manufacturing10

• 335921: fiber optic cable manufacturing

• 335931: current-carrying wiring device manufacturing

The three-digit NAICS industries in which the six-digit industries appear are machinery 

manufacturing (NAICS 333) and electrical equipment, appliance, and component manufacturing 

(NAICS 335). The latter group is a better match for umbilical manufacturing. The best matches are 

IMPLAN Sector 272, communication and energy wire and cable manufacturing (which corresponds 

to NAICS 33592), and Sector 273, wiring device manufacturing (which corresponds to NAICS 

 10 NAICS 333249 is a NAICS 2012 category. The model incorporates IMPLAN 440-sector data based on the 

NAICS 2007 sectors. Wire and cable insulating machinery manufacturing is in NAICS 333249 in the 2012 data 

set but in NAICS 333298 (all other industrial machinery manufacturing) in the NAICS 2007 data set.
29

33593). We examined the IMPLAN multipliers for Sectors 272 and 273 by BOEM OSA. AL-l does not 

have a multiplier for Sector 272 but has one for Sector 273. FL-1 and TX-3 have multipliers for both 

sectors. IMPLAN Sector 273 is the only sector occurring in all three BOEM areas with known 

umbilical production.11 The 2012 County Business Patterns (CBP) report employment12 in IMPLAN 

Sector 273 for Alabama, Florida, and Texas (Census CBP 2015). Because of the availability of 

IMPLAN multipliers, IMPLAN Sector 273 is used for umbilical manufacturing (as shown in Table 

12). 

3.3.3 Installation 

As shown in Table 11, 46.3% of the subsea cost is installation. Several data limitations were 

encountered when attempting to assign an IMPLAN sector to the installation of subsea systems. As 

Figure 12 shows, installation vessels:

• Are much larger than vessels used for crew and supplies transport.

• Contain extremely specialized equipment unique to subsea placement of pipe and 

umbilicals.

We examined the production function for IMPLAN Sector 334 (water transportation). Table 14

presents the commodities with a contribution of 5% or more. The largest contributor is 

noncomparable imports at 31%. Though installation vessels might be of foreign manufacture, crews 

are likely to contain local labor, most pipe is likely to be made domestically, and there are several 

umbilical manufacturers in the GOM. Also, the production function has no entry for fuel purchases 

as a retail commodity (IMPLAN commodity 3326 [gasoline stations] or 3331 [nonstore, including 

fuel dealers]) or a more primary commodity such as refined petroleum products [IMPLAN 

commodity 3115]). 

Table 14. Production function components for IMPLAN 334 (Water Transportation)

Sector IMPLAN 334 Allocation Percent

436 Not an industry (noncomparable imports) 31.0%

338 Scenic and sightseeing transportation and support activities for transportation 13.1%

186 Plate work and fabricated structural product manufacturing 7.2%

290 Ship building and repairing 6.9%

360 Real estate 5.5%

339 Couriers and messengers 5.5%

Source: IMPLAN 2014

 11 See Section 5.2.2.3 for the proportions of umbilicals imported into the US and made domestically. The data 

source (Quest 2015), however, does not track the origin of the components used in the manufacture of the

umbilicals (i.e., within the OSA, imported into the OSA but made elsewhere in the US, or imported into the 

US). The more important umbilicals are to overall spending, the more important it is to account for leakage, 

and the converse also is true—the effect on the final estimates of not capturing leakage of small sums may not 

be worth the effort and additional complexity.

12 We mapped NAICS 2012 to NAICS 2007 to the IMPLAN 440 sector definitions. CBP reports the number of 

establishments, employment (by size category if not by number), and payroll. We consider employment and 

payroll to be a better indicator of economic contribution because a single large establishment has a larger 

impact than a single small establishment. We used employment data because they were more complete than 

payroll data.
30

The second largest contributor to Sector 334 is Sector 338 (scenic and sightseeing transportation 

and support activities for transportation). Table 15 shows this sector’s production function 

components. Though the sector has a component for fuel (refined petroleum products contribute 

5.2% to the function), couriers, messengers, and the postal service represent a combined 

contribution of 20.6%. This would seem reasonable for conducting a tourism-related business, but 

it seems high for installing subsea production systems. Given difficulties in Sector 334 and 338, we 

used an alternative approach for determining the sector allocations, described in Section 3.3.4. 

Table 15. Production function components for IMPLAN 338 (Water Transportation)

Sector IMPLAN 338 Allocation Percent

339 Couriers and messengers 15.0%

338 Scenic and sightseeing transportation and support activities for transportation 7.7%

382 Employment services 5.6%

427 Postal service 5.6%

115 Petroleum refineries 5.2%

Source: IMPLAN 2014

We also examined whether a construction sector might be more representative of subsea system 

installation (see Appendix B) and found it was not a good match for subsea system installation. 

Ultimately, we designed an alternate approach to integrate equipment and installation costs for the 

subsea system activity industry profile, see Section 3.3.4.

3.3.4 Summary Subsea to Industry Sector Profile 

Given the difficulties outlined in Section 3.3.3 above and in more detail in Appendix B, we evaluated 

the activities involved in installing a subsea system:

• Mobilization and demobilization: layout, loading, and vessel preparation

• Crew members

• Supplies for crew members

• Fuel 

• Materials consumed during installation

The industry sectors involved would look similar to those for G&G. 

Table 16 shows how the equipment and installation costs for a subsea system were integrated with 

the installation costs derived from the G&G calculations in Table 9. Equipment costs are 53.7% of 

total costs (see Table 12). We split the 34.2% of the cost associated with flowlines equally between 

IMPLAN Sectors 170 and 171 because oil country tubular goods and pipelines are manufactured in 

both sectors. Section 3.3.2.1 explains the rationale for assigning umbilical manufacturing to 

IMPLAN Sector 273. 

Installation costs are 46.3% of the total subsea system cost. The industry sectors listed under 

“Installation” in Table 16 are reproduced from Table 9 (that is, vessel day rates plus mobilization 

costs). We assumed that mobilization costs would be relatively high due to the specialized nature of 

loading the umbilicals and pipelines. We used the 2D seismic mobilization value of 25.2% (compare 

the percentages in Table 16 and Table 9 under the “Mobilization 2D” columns). The middle column 

in Table 16 repeats the industry sector allocations from Table 9 with the exception of the 

substitution of IMPLAN 186 (plate work and fabricated structural product manufacturing) for

IMPLAN 256 (watch, clock, and other measuring and controlling device manufacturing), as 

proposed in Table 7. These installation allocations sum to 100%, but are scaled to 46.3% so that the 

industry allocations for the equipment and installation sum to 100%. The scaled percentages are 
31

shown in the right-hand column of Table 16 and incorporated in the MAG-PLAN model as the 

subsea sector distribution.

Table 16. Summary sector table for subsea systems activity

MAG-PLAN Inputs Sector

Mobilization 

2D

Subsea 

Systems

Equipment 53.7%

Iron and steel mills and ferroalloy manufacturing 170 17.10%

Steel product manufacturing from purchased steel 171 17.10%

Mining and oil and gas field machinery manufacturing 206 9.60%

Wiring device manufacturing 273 9.90%

Installation 46.3%

Electric power generation, transmission, and distribution 31 0.1% 0.05%

Water, sewage, and other systems 33 0.1% 0.03%

Maintenance and repair construction of nonresidential maintenance and 

repair

39 0.1% 0.04%

Petroleum refineries 115 11.0% 5.11%

Plate work and fabricated structural product manufacturing 186 6.5% 2.99%

Ship building and repairing 290 31.9% 14.76%

Water transportation 334 7.7% 3.59%

Scenic and sightseeing transportation and support activities for 

transportation

338 25.2% 11.65%

Software publishers 345 0.1% 0.07%

Telecommunications 351 0.2% 0.10%

Insurance carriers 357 1.3% 0.59%

Real estate 360 0.7% 0.31%

Commercial and industrial machinery and equipment rental and leasing 365 2.6% 1.18%

Architectural, engineering, and related services 369 7.7% 3.59%

Advertising and related services 377 2.5% 1.14%

Food services and drinking places 413 1.5% 0.71%

Commercial and industrial machinery and equipment repair and 

maintenance

417 0.9% 0.39%

Sum 100.00

%

Source: Table 7; Table 9; Table 12; ERG estimates

3.4 Floating, Production, Storage and Offloading Vessels 

3.4.1 Introduction and Overview 

FPSOs are offshore floating production systems that house both processing equipment and storage 

for produced hydrocarbons. The basic FPSO design is a ship-shaped vessel, with processing 

equipment, or topsides, aboard the vessel's deck and hydrocarbon storage below in the double hull. 

After processing, an FPSO stores oil or gas before offloading periodically to shuttle tankers (Rigzone 

2014f; Petrobras 2012; Petrobras America 2007). FPSOs can be used to develop fields where there 

are no pipelines to transport the hydrocarbons to shore for processing (lack of infrastructure), sea 

bottom topography precludes pipeline installation (technical hurdles), or it would be uneconomical 

to install a pipeline (marginal field). 
32

Though FPSOs have been used to develop oil fields since the 1970s, only one has been installed in 

the GOM—BW Pioneer—to develop the Cascade and Chinook fields at water depths of 8,000 to 

9,000 feet. BW Pioneer entered the GOM in 2010 (Petrobras 2012) and production began in early 

2012 (Petzet 2012). Shell plans to develop the Stones field with an FPSO, which would make it the 

second such floating production system in the GOM (Shell 2014).

Like any other floating production system, it is necessary to connect the structure to the sea 

bottom. Wood Group Mustang (2014) lists 11 different systems to moor an FPSO to the sea bottom. 

BW Pioneeruses a detachable turret buoy that sinks to a depth of 56m (below storm damage) while 

the vessel moves to a safer location (Petrobras 2012).

3.4.2 Equipment 

Figure 13 is an annotated schematic of BW Pioneerwhile Figure 14 is a picture of the vessel in the 

steel. We see that the topsides of an FPSOlook much like the topsides equipment—such as 

processing equipment, accommodations, flares, and cranes—found on other floating production 

systems.

Previous research indicated that hull construction was highly likely to happen outside the US but 

that there was a dearth of information on any cost breakdown among components (Kaplan et al. 

2012). To address this information gap, project team members attended the 5th FPSO Vessel 

Conference, held in Houston, Texas, on November 12 and 13, 2014. They conducted three

interviews, from which three sets of FPSO cost breakdowns were compiled:

• Built for use in the GOM, with topsides built and assembled in the US (Table 17)

• Built for use in the GOM, with both topsides and hull foreign-built (Table 18)

• Foreign-built for use outside the GOM (Table 19)

Some components are comparable over all three types. The hull is foreign-made in all three cases. 

Project management ranges from 5% to 10%, hull cost ranges from 20% to 23%, assembly of the 

topsides to the hull is about 5%, and insurance ranges between 1% and 2%.

The largest difference in costs appears to be the mooring system turret. The cost for a detachable 

turret and mooring system that meets the requirements for operating in the US GOM is 

approximately twice as high as the cost for foreign projects. Turret and mooring systems represent 

about 30% to 34% for GOM projects and 15% for foreign projects.
33

Figure 13. FPSO schematic

Source: Petrobras America 2007

Figure 14. BW Pioneer

Source: Ball 2010
34

3.4.3 Development of Industry Sector Profile 

The project team assumed that new FPSO projects for the GOM would resemble the data in Table 17

meaning the topsides are US-built (see Table 20 for a summary 13). The cost for assembling the 

topsides and hull are categorized as labor costs because the components are costed separately.

Given that the turret for the previously mentioned BW Pioneerwas manufactured by BW Offshore 

(Norway) and the one for the Shell Stones field will be made by SBM Offshore (Netherlands), it is 

likely that the turret will not be made domestically (Scandinavian Oil-Gas Magazine 2007; 

Petrobras 2012; SBM Offshore 2012). As a result, even when the topsides and assembly are 

assumed to take place domestically, more than 50% of the expenditures will leak out of the US (as 

shown in Table 20). Consistent with MAG-PLAN 2012, MAG-PLAN 2016 assumes that a fraction of 

the insurance would be domestically supplied. Table 20 shows the summary sector allocation for an

FPSO used in MAG-PLAN 2016. 

 13 Note that accommodations are included in hull costs.
35

Table 17. GOM FPSO cost breakdown: topsides US-built

Major Component Percent Subcomponents Percent

Domestic 

(Y/N)

If Domestic, 

Where IMPLAN Industry

Project management 

and engineering

10% Y Houston, TX

Hull: refit 20% N Shipbuilding

Ship 50% N Shipbuilding

Conversion 50% N Shipbuilding

Topsides (remainder) 25% Y Oil and gas field machinery and equipment

Topsides: values for 

topsides assembled in 

Corpus Christi, TX; % of 

the total topside cost

Production equipment 63.5% Y Corpus Christi, TX Oil and gas field machinery and equipment

Accommodations 0.5% Y Corpus Christi, TX Accommodations included in hull costs

Generators 15% Y Corpus Christi, TX Motor and generator manufacturing

Compressors 20% Y Corpus Christi, TX Air and gas compressor manufacturing

Flare(s) < 0.5% Y Corpus Christi, TX Oil and gas field machinery and equipment

Cranes < 0.5% Y Corpus Christi, TX Oil and gas field machinery and equipment

Assembly of topsides 

and hull

5% Y Corpus Christi, TX Labor; shipbuilding

Transportation—watera 4% N Transportation—water (China to GOM)

Turret (mooring 

system)

34% Y Corpus Christi, TX Complex type for GOM (detachable)

Insurance 25 N Insurance carriers (large companies are 

self-insured)

Total 100%

Source: COMM Engineering, Inc. 2014

a Transporting hull to yard that assembles topsides to hull.
36

Table 18. GOM FPSO cost breakdown: foreign-built

Major Component Percent Subcomponents Percent

Domestic 

(Y/N)

If Domestic, 

Where IMPLAN Industry

Project management 

and engineering

10% Y Houston, TX

Hull: refit or new 20% N Shipbuilding

Topsides 34% N

Topsides’ 

subcomponents

Production equipment 67.5% N Oil and gas field machinery and equipment

Accommodations 2.5% N Accommodations included in hull costs

Generators 10% N Motor and generator manufacturing

Compressors 15% Partial Unknown Air and gas compressor manufacturing

Flare(s) 2.5% N Oil and gas field machinery and equipment

Cranes 2.5% N Oil and gas field machinery and equipment

Assembly of topsides 

and hull

5% N Labor; shipbuilding

Transportation and 

installationa

NAb Transportation—water: where topsides and 

hull are not at the same yard

Turret (mooring 

system)

30% N Complex type for GOM (detachable)

Insurance 1% N Insurance carriers

Total 100% 100%

Source: COMM Engineering, Inc. 2014

a Transporting hull to yard that assembles topsides to hull.

b Not available.
37

Table 19. Foreign-built and foreign-operating FPSO

Major Component Percent Subcomponents Percent

Domestic 

(Y/N)

If Domestic, 

Where IMPLAN Industry

Project management and 

engineering

5% N

Hull: refit or new 23% N Shipbuilding

Topsides 50% N

Topsides' subcomponents Production equipment 77% N Oil and gas field machinery and equipment

Accommodations 0.5% N Accommodations included in hull costs

Generators 10% N Motor and generator manufacturing

Compressors 10% Partial Unknown Air and gas compressor manufacturing

Flare(s) 0.5% N Oil and gas field machinery and equipment

Cranes 2% N Oil and gas field machinery and equipment

Assembly of topsides and 

hull

5% N Labor; shipbuilding

Transportation—watera NA Transportation—water: topsides and hull at 

same yard

Turret (mooring system) 15% N Not the complex type for GOM (detachable)

Insurance 2% N Insurance carriers

Total 100% 100%

Source: COMM Engineering, Inc. 2014

a Transporting hull to yard that assembles topsides to hull.

b No information provided.
38

Table 20. Summary sector table for FPSO activity

Major Component Percent Percent IMPLAN Industry

Geographic 

Distribution

Project management and engineering 10% 10.00% 369 Architectural, engineering, and related services

Hull 20% 20.00% Rest of world

Generators 3.75% 3.75% 267 Motor and generator manufacturing

Compressors 5% 5.00% 227 Air and gas compressor manufacturing

Production equipment 16% 16.25% 206 Oil and gas field machinery and equipment

Flare(s) 0.125% Oil and gas field machinery and equipment

Cranes 0.125% Oil and gas field machinery and equipment

Assembly of topsides and hull 5% 5.00% Labor

Transportation—water 4% 4.00% Transportation—water (Asia to GOM) Rest of world

Turret (mooring system) 34% 34.00% Rest of world

Insurance 2% 2.00% 357 Insurance carriers

Total 100% 100%

Source: COMM Engineering, Inc. 2014; Kaplan et al. 2012

a Transporting hull to yard that assembles topsides to hull.

b No information provided.
39

3.5 Decommissioning 

3.5.1 Introduction and Overview 

Platform decommissioning represents the end of the production life cycle of offshore structures 

used to produce oil and gas. Decommissioning costs can vary widely due to location and complexity 

of the facility, number of structures, water depth, weight of structure, and removal method and 

transportation options. Water depth and weight are considered key variables in determining the 

decommissioning costs.

This section discusses the distribution of decommissioning costs for fixed platforms, which are 

generally constructed in the GOM in waters of less than about 400 meters depth (1,300 feet).14

After the wells are plugged and abandoned, the system is unmoored and moved to a new locale. See 

Kaiser and Liu (2014) and Liu et al. (2014) for a description of the deepwater structures that would 

ultimately need decommissioning. Existing literature on the logistics and costs of platform 

decommissioning has focused on activities in the GOM (Kaiser et al. 2009; TSB 2000; Proserv 

Offshore 2009). 

Sections 3.5.1.1 and 3.5.1.2 discuss the regulatory requirements and recent policies for 

decommissioning facilities. Section 3.5.1.3 describes the elements of offshore structures. Section 

3.5.1.4 outlines the different steps in the platform decommissioning process. Section 3.5.2 develops 

a list of IMPLAN industry sectors and Section 3.5.3 walks the reader through the process of 

developing the cost profile and presents the proposed industry sector.

3.5.1.1 Regulatory Requirements 

OCSLA requires the decommissioning of wells and platforms that have ended their economic life. 

OCSLA regulations are administered by Bureau of Safety and Environmental Enforcement (BSEE) 

and decommissioning requirements are part of every OCS lease (BSEE 2015). BSEE requires that 

operators apply for a well abandonment or platform removal permit. BSEE reviews the 

methodology, BOEM prepares a site-specific environmental assessment, and BSEE ensures that the 

assessment is adequate and imposes any necessary protective mitigation measures as conditions of 

permit approval. 

Federal Register30 §250.1703 describes the general requirements for platform decommissioning. 

According to regulatory requirements, the operator of an offshore platform should “permanently 

plug all wells, remove all platforms...clear the seafloor of all obstructions created by the lease and 

pipeline right-of-way operations.” Moreover, “decommissioning activities should take place in a 

manner that is safe, does not unreasonably interfere with other uses of the OCS, and does not cause 

undue harm to the human, marine, or coastal environment” (MMS 2002). The operator may choose 

to either keep these activities in house or contract out to a third party.

3.5.1.2 Infrastructure 

The offshore infrastructure used to produce oil and gas has different levels of complexity depending 

on a number of operating, economic, and strategic conditions: see Kaiser et al. (2009) and TSB and 

CES (2004), among others. Below is a review of the typical elements of offshore installations, 

summarizing information from these two sources.

 14 This section does not discuss floating production structures, which have a different cost profile. For 

example, they have no jackets, linking the seabed and the surface, to be removed in decommissioning.
40

Wells are unique paths from a hydrocarbon reservoir under the sea floor to a surface location. They 

typically consist of vertical piping protected by a caisson or a well protector (see below). Other 

associated infrastructure elements may include platforms, sub-sea tiebacks, and pipelines.

Caissons are large-diameter steel pipes that enclose a well. They may range from simple straight 

pipes to more complicated structures including braces, skirt pilings, and tripods for added support.

Well protectors are structures that use a jacket to support one or more wells. The jacket is made of 

steel and covers the well conductors (pipes used to transport the hydrocarbons to the topside 

structure). These conductors rise from the sea floor to above the waterline. 

Fixed platforms (see Figure 15) are offshore structures that resemble simple well protectors. They 

are, however, more complex and include topsides with varying facilities. A fixed platform consists 

of a deck, foundation, and jacket. The deck often has space for drilling rigs and hydrocarbon 

production facilities; manned platforms have living quarters for platform crew. The deck is 

supported by a jacket structure with concrete or steel legs affixed directly to the ocean bottom. The 

jacket also protects the conductor pipes. Piles support the jacket below the seafloor.

Figure 15. Offshore platform

Source: CA DOC 2015

Pipelines are used to transport fluids between offshore facilities or between an offshore facility 

and an onshore location. Typically, pipelines are made of steel, but there are also flexible versions 

made of a combination of thermoplastic and wound steel elements (Technip 2014b). Pipelines

differ by diameter, length, and wall thickness, among other factors. 
41

3.5.1.3 Decommissioning Process 

The basic steps of the platform decommissioning process, as discussed below, follow Rigzone 

(2015); additional details can be found in TSB and CES (2004) and Proserv Offshore(2009).

• Project management, planning,and engineering.This initial phase usually starts three

years before the platform becomes uneconomical to operate. Itincludes record collection, 

platform inspection, and an engineering analysis that assesses the offshore platform’s 

structural elements, connections, and lift points (points on the platform where the structure 

or portion of the structure can be safely lifted by a derrick or crane). If any parts of the 

decommissioning process are going to be outsourced, this step will also include the bidding 

process for those parts (e.g., derrick barges, dive services).

• Permitting. Obtaining the necessary permits may take up to three years. Permits and 

approvals are needed from BSEE, the US Army Corps of Engineers, the US Fish and Wildlife 

Service, the National Oceanic and Atmospheric Agency, and the US Coast Guard, among 

others. Operators often contract with local consulting firms that are familiar with the 

regulatory framework to make sure all necessary permits have been properly obtained.

• Platform preparation.This step includes all the work that can be performed before the 

arrival of the heavy-lift vessel (typically a derrick barge or a semi-submersible crane vessel; 

see ProservOffshore 2009, Appendix 5.1.2). This phase includes flushing and clearing all 

pipes and equipment that contained hydrocarbons to remove those residual hydrocarbons, 

cutting pipe and cables, severing modules (portions of the structure that will be removed 

separately) from the deck, installing padeyes15 that provide attachment points for shackles 

and slings used to lift the modules, and reinforcing the structure to allow for its safe 

removal.

• Well plugging and abandonment.These activities involve filling the well with fluid and 

placing cement plugs at multiple intervals within the well and in the space between the well 

and the surrounding casings. Tubing is pulled and casings are removed. The placement of 

plugs is situational and depends on the well’s location, depth, condition, and other 

parameters (MMS 2002). Well plugging activities may take place with or without the use of 

a rig to pull tubing and remove casings. A typical rig consists of a mast, hoisting machinery, 

and attendant equipment. The decommissioning crew will either bring in a small portable 

rig or use a drilling rig already present at the site if a rig method is chosen. The rigless 

process uses barges and crane vessels instead to pull tubing and remove casings (Fields and 

Martin 1998). Typically, decommissioning projects in the GOM are done with a rigless setup.

• Conductor removal.Conductors must be removed to at least 15 feet below the ocean floor 

(MMS 2002). The cost of conductor removal depends on the length and number of 

conductors and the removal method chosen. There are three different processes for 

conductor removal: (1) severing, which involves explosive, mechanical, or abrasive cutting; 

(2) pulling or sectioning, which involves raising conductor segments with hydraulic-driven 

sets of cylinders called casing jacks; or (3) offloading, in which a crane is used to lift 

conductor segments to a platform. After conductors are removed, they are transported to an 

onshore disposal site.

 15 Also called a fairlead; a ring fixed to the vessel structure through which a line is run or to which a line is 

attached.
42

• Mobilization and demobilization of derrick barges for platform removal.This step is 

the core of the decommissioning work. Mobilization and demobilization of derrick barges, 

used to remove the platform components, contribute to a major portion of 

decommissioning costs (Rigzone 2015). The personnel, equipment, and materials with 

which the derrick barges will need to be equipped vary given the location (nearer or further 

offshore, shallower or deeper water) and size and complexity of the decommissioning 

project. Depending on the decommissioning method used (and the number of pieces into 

which the platform is divided and the initial size and weight of the platform), derrick barge 

lifting capacity and number of module lifts required may vary widely, along with cost. The 

platform removal process may require mobilization and demobilization of other watercraft, 

diving and abrasive cutting equipment, etc. 

Platform jackets may be decommissioned on site or towed to shallow water. Onsite 

decommissioning involves removing the jacket with a single lift, or severing the jacket abrasively or 

explosively, and removing the pieces with multiple lifts. “Shallowing” or “hopping” involves cutting 

and removal above the water line as the structure is towed to shallow waters. Shallowing typically 

requires multiple cuts and removals until the structure is completely removed (see Figure 16). 

Platform fragments might be removed to shore or deposited into artificial reef sites. TSB and CES 

(2004) and CSA (2004) examine different methods of jacket removal in more detail.

Figure 16. “Shallowing” or “hopping” a large jacket

Source: TSB and CES 2004

• Pipeline and power cable operations.Pipelines and power cables may be abandoned in 

place if they do not constitute a hazard to navigation or commercial fishing operations and 

do not interfere with other uses of the OCS. Pipelines abandoned in place are flushed, filled 

with seawater, and then cut and plugged with the ends buried at least three feet below the 

mud line. The operations are performed by divers or remotely operated vehicles, depending 

on water depth. Typically, pipelines in the GOM are abandoned in place; there are very few 

complete removals.
43

• Site clearance.The site clearance operation ensures that no debris or potential 

obstructions to other users of the OCS remain at the platform location. This phase may 

require the use of remotely operated vehicles or divers, or both, to identify and remove 

remaining debris or test trawling, or both, to verify that there are no potential obstructions 

remaining. Sonar might also be used to confirm clearance in addition to one or more other 

methods (Proserv Offshore 2009).

3.5.2 IMPLAN Sectors for Decommissioning 

To determine the sector breakdown of decommissioning costs, we identified a short list of 

operations most likely to be associated with each step in the decommissioning process. This section 

discusses how these operations were mapped to NAICS industries and IMPLAN sectors.

Having examined the types of contractors that might be needed to perform the tasks outlined in 

Section 3.5.1.3 and the level of granularity in the cost estimates provided in Proserv Offshore 

(2009), we identified the following NAICS industries as candidates to absorb the different aspects of 

decommissioning costs:

• NAICS 213112, support activities for oil and gas operations (includes derrick building, 

repairing, and dismantling at oil and gas fields on a contract basis, dismantling of oil well 

rigs on a contract basis, and site preparation at oil and gas fields on a contract basis).

• NAICS 483, water transportation (includes barge transportation, freight transportation, 

passenger transportation, and ship chartering with crew).

• NAICS 4883, support activities for water operations (includes piloting services, port and 

harbor operations, docking, undocking, and harbor tugboat services).

• NAICS 238910, site preparation contractors (includes blasting and demolition contractors).

• NAICS 481211, nonscheduled air passenger transportation (includes nonscheduled 

helicopter passenger carriers).

• NAICS 5413, architectural, engineering, and related services (includes hydrographic survey 

services, which provide sonar services needed for site clearance activities).

• NAICS 541620, environmental consulting services, which may provide government contract 

labor for various environmental monitoring, such as National Marine Fisheries Service 

observers. 

• NAICS 237120, oil and gas pipeline and related structures construction (includes 

construction management of oil and gas pipelines).

• NAICS 561990, all other support services (includes diving services).

Table 21 shows the 2007 IMPLAN sectors and corresponding NAICS industries. It should be noted

that port operations—when the mobilization and demobilization activities will occur—fall under 

IMPLAN 338, scenic and sightseeing transportation; the incongruity between the IMPLAN sector 

title and the activities in the sector is acknowledged. Despite its name, IMPLAN 338 also includes 

the entire NAICS 488 (support activities for transportation), of which port operations are a part.
44

Table 21. Correspondence between NAICS codes and IMPLAN sectors associated with 

decommissioning

Industry Name NAICS IMPLAN Sector Name

Water transportation 483 334 Water transportation

Support activities for water operations 4883 338 Scenic and sightseeing transportation

Support activities for oil and gas operations 213112 29 Support activities for oil and gas operations

Oil and gas pipeline and related structures 

construction

237120 39 Maintenance and repair construction of 

nonresidential structures (includes construction 

management of oil and gas pipelines, as well as 

blasting and demolition contractors)

Site preparation contractors 238910

Nonscheduled air passenger transportation 481211 332 Air transportation

Architectural, engineering, and related 

services

5413 369 Architectural, engineering, and related services

Environmental consulting services 541620 375 Environmental and other technical consulting 

services

All other support services 561990 389 All other support services (includes professional 

diving services)

Source: IMPLAN 2015

3.5.3 Bill of Sale Approach to Industry Sector Identification 

3.5.3.1 Cost Profile 

We developed a preliminary cost profile for decommissioning operations based on information in 

Proserv Offshore (2009) (see Table 22). Unlike the data on subsea systems, these data include 

mobilization costs. The largest portion of decommissioning costs, around 40% for platforms in less 

than 200m (656 feet) water depth and around 60% for platforms in more than 200m, is allocated to

IMPLAN 334 (water transportation and its subsectors). IMPLAN 338 (scenic and sightseeing 

transportation, representing the mobilization and demobilization activities) has the second largest 

allocation, with 17% to 20% costs going to this sector. IMPLAN 389 (other support services) is 

more prominent in the decommissioning of platforms in shallow waters (around 15%) than in deep 

waters (under 5%). IMPLAN 39 (maintenance and repair construction of nonresidential structures) 

is dominated by a fixed-percent engineering cost estimate and will not likely vary across platforms 

unless explosives are used. Other industries are allocated no more than 1% of total costs.

Table 22. Costs of decommissioning in the GOM by NAICS and IMPLAN sector as a percentage of total 

platform decommissioning costs, by water depth

Name NAICS IMPLAN

Up to 200m WD 200m+ 

Explosive Non-explosive WD

Water transportation 483a 334a 41.9% 39.2% 53.9%

Scenic and sightseeing transportation 4883 338 21.4% 19.5% 18.2%

Support activities for oil and gas operations 213112 29 11.0% 16.1% 13.6%

Maintenance and repair construction of 

nonresidential structures

237120

238910

39 9.3% 7.4% 7.5%

Air transportation 481211 332 0.3% 0.2% 0.0%

Architectural, engineering, and related services 5413 369 0.0% 0.0% 0.0%

Environmental and other technical consulting services 541620 375 0.7% 0.0% 0.0%

All other support services 561990 389 15.4% 17.6% 6.8%

Total 100.0% 100.0% 100.0%

Source: ERG estimates based on Proserv Offshore 2009

a Costs associated with water transportation are allocated into the water transportation subsectors in Table 23. 
45

Table 23 shows the first step in integrating the water transportation subsectors into the 

decommissioning industry profile. Its first section repeats the information from Table 22 except for 

water transportation: because Proserv Offshore (2009) identified mobilization costs, Table 23

splits the water transportation mobilization costs into the individual industry sectors for vessel day 

rates identified in Table 9.16 Table 23 uses IMPLAN 220 (cutting tool and machine tool accessory 

manufacturing) to better resemble decommissioning activities than IMPLAN 256 (watch, clock, and 

other measuring and controlling device manufacturing), as proposed in Table 7 (customization by 

activity function-specific expensed equipment and materials). IMPLAN Sectors 39 and 369 appear 

twicein. Table 24 presents the consolidated summary.

Table 23. Integration of decommissioning industry sectors

MAG-PLAN Inputs Sector

Vessel 

Day 

Rate

Up to 200m WD

200m+ 

Explosive WD

Nonexplosive

Sectors identified in Proserv Offshore 2009

Scenic and sightseeing transportation 338 21.4% 19.5% 18.2%

Support activities for oil and gas operations 29 11.0% 16.1% 13.6%

Maintenance and repair construction of nonresidential 

structures

39 9.3% 7.4% 7.5%

Air transportation 332 0.3% 0.2% 0.0%

Architectural, engineering, and related services 369 0.0% 0.0% 0.0%

Environmental and other technical consulting services 375 0.7% 0.0% 0.0%

All other support services 389 15.4% 17.6% 6.8%

Subtotal 58.1% 60.8% 46.1%

Water transportation

Electric power generation, transmission, and distribution 31 0.1% 0.1% 0.1% 0.1%

Water, sewage, and other systems 33 0.1% 0.0% 0.0% 0.0%

Maintenance and repair construction of nonresidential 

structures

39 0.1% 0.0% 0.0% 0.1%

Petroleum refineries 115 14.8% 6.2% 5.8% 8.0%

Cutting tool and machine tool accessory manufacturing 220 8.6% 3.6% 3.4% 4.7%

Ship building and repairing 290 42.6% 17.8% 16.7% 23.0%

Water transportation 334 10.4% 4.3% 4.1% 5.6%

Software publishers 345 0.2% 0.1% 0.1% 0.1%

Telecommunications 351 0.3% 0.1% 0.1% 0.2%

Insurance carriers 357 1.7% 0.7% 0.7% 0.9%

Real estate 360 0.9% 0.4% 0.3% 0.5%

Commercial and industrial machinery and equipment rental 

and leasing

365 3.4% 1.4% 1.3% 1.8%

Architectural, engineering, and related services 369 10.4% 4.3% 4.1% 5.6%

Advertising and related services 377 3.3% 1.4% 1.3% 1.8%

Food services and drinking places 413 2.0% 0.9% 0.8% 1.1%

Commercial and industrial machinery and equipment repair 

and maintenance

417 1.1% 0.5% 0.4% 0.6%

Subtotal 41.9% 39.2% 53.9%

Sum 100.0% 100.0% 100.0%

Source: ERG estimates based on Table 7, Table 9, and Table 23

 16 Unlike subsea systems, where Table 16 contains the industry sector profile for vessel day rates plus 

mobilization.
46

Table 24. Summary sector table for decommissioning activities

MAG-PLAN Inputs Sector

Up to 200m WD 200+ 

Explosive Non-explosive WD

Support activities for oil and gas operations 29 11.0% 16.1% 13.6%

Electric power generation, transmission, and distribution 31 0.1% 0.1% 0.1%

Water, sewage, and other systems 33 0.0% 0.0% 0.0%

Maintenance and repair construction of nonresidential structures 39 9.3% 7.4% 7.5%

Petroleum refineries 115 6.2% 5.8% 8.0%

Cutting tool and machine tool accessory manufacturing 220 3.6% 3.4% 4.7%

Ship building and repairing 290 17.8% 16.6% 23.0%

Air transportation 332 0.3% 0.2% 0.0%

Water transportation 334 4.3% 4.1% 5.6%

Scenic and sightseeing transportation 338 21.4% 19.5% 18.2%

Software publishers 345 0.1% 0.1% 0.1%

Telecommunications 351 0.4% 0.3% 0.5%

Insurance carriers 357 0.7% 0.7% 0.9%

Real estate 360 0.4% 0.3% 0.5%

Commercial and industrial machinery and equipment rental and 

leasing

365 1.4% 1.3% 1.8%

Architectural, engineering, and related services 369 4.4% 4.1% 5.6%

Environmental and other technical consulting services 375 0.7% 0.0% 0.0%

Advertising and related services 377 1.4% 1.3% 1.8%

All other support services 389 15.4% 17.5% 6.7%

Food services and drinking places 413 0.9% 0.8% 1.1%

Commercial and industrial machinery and equipment repair and 

maintenance

417 0.5% 0.4% 0.6%

Sum 100.0% 100.0% 100.0%

Source: ERG estimates

3.6 Production Operations and Maintenance 

3.6.1 Introduction and Overview 

Production activities involve bringing the product to the surface, separating the liquid and gas, and 

removing impurities. Day-to-day activities include monitoring oil and gas production, identifying 

maintenance and servicing needs, and addressing those needs. For onshore operations, a well site 

might need to be visited periodically to ensure that all is in working order. For offshore operations, 

unmanned structures might be inspected by vessel only when there is a problem with production. 

Nearshore structures might be staffed eight hours per day, with staff commuting to and from the 

structure each day. Beyond a certain distance from shore, the workers live on the production 

structure. They typically have 12-hour shifts for one or twoweeks and then a comparable number 

of weeks off work. Depending on the size and location of the production system, structures might 

be staffed eight or 24 hours per day and have sleeping quarters for the staff. Offshore operations 

involve a series of jobs, most of which involve personnel who are employees of the operator. For 

example, the offshore installation manager is responsible for managing the offshore operations on 

the platform or vessel, including the health, safety, and welfare of all personnel onboard. The staff 

might include production technicians who operate the plant and equipment used to produce and 

process the oil and gas; a production supervisor (depending on the number of production 

technicians); equipment maintenance personnel; welders; crane operators; a steward to oversee 

laundry, accommodation, and cleaning services; pipefitters; chef(s); and kitchen support. In effect, a

production structure is a mini-city with offices, crew quarters, a galley, and recreation room(s), 
47

with a crew including cooks and other service staff (Van Dyke, 1997). For production O&M 

activities, expenditures might represent replacement of equipment on the topside of the system, 

operating supplies, workover activities to maintain production from each of the wells, food, 

communications, insurance, and air or water transport from shore to the structure and back.

3.6.2 Cost Profile and Integration with Water Transportation Costs 

Kaplan et al. (2012) developed an initial list of cost components for production O&M costs based on 

USDOE EIA (2010); these are reproduced in Table 25. MAG-PLAN uses the 200–400m cost profile 

for the cost profile for water depths the greater than 400m category because USDOE EIA (2010) 

does not include data for platforms in water depths exceeding 400m.

Table 25. Production O&M costs

2008 Cost Items

0–60m 60m 200m 200–400m

4 Slots 6 Slots 6 Slots 12 Slots

Labor share 25.4% 22.3% 21.4% 19.5%

Payroll overhead 7.1% 6.2% 5.9% 5.5%

Food expense 1.5% 1.4% 1.4% 1.2%

Labor transportation 46.4% 40.1% 38.6% 31.7%

Surface equipment 3.1% 2.6% 2.8% 2.6%

Operating supplies 0.6% 0.5% 0.6% 0.5%

Workover 12.7% 22.3% 22.3% 26.6%

Communications 0.5% 0.6% 0.6% 0.6%

Insurance 2.8% 4.0% 6.5% 11.9%

Total 100.0% 100.0% 100.0% 100.0%

Source: Kaplan et al. 2012, Table 30; based on USDOE EIA 2010

Table 26 shows how the cost components were allocated to IMPLAN sectors. For example, for the 4-

slot structure, labor cost is 32.5%—the sum of labor share and payroll overhead from Table 25. We 

scale the data in Table 25 to exclude labor costs. In the 4-slot structure example, the proportion of 

the total cost represented by operating supplies and workover is calculated as (0.6% + 12.7%) ÷ (1

– 32.5%) or 19.7%. We averaged the cost components for a 6-slot structure beforescaling the data. 

Travel to and from the production system can occur by helicopter or boat; in the absence of detailed 

information on the relative amounts spent on each mode of transportation, the transportation 

percentage was split equally between air and water modes.

Table 26. Non-labor production O&M costs to IMPLAN sectors

2008 Cost Items

IMPLAN

Sector

0–60m 60–200m 200–400m IMPLAN

4 Slots 6 Slots 12 Slots Sector Name

Operating supplies 

and workover

29 19.7% 31.7% 36.0% Support activities for oil and gas 

operations

Surface equipment 206 4.6% 3.7% 3.5% Mining and oil and gas field 

machinery manufacturing

Labor transportation 332 34.3% 27.3% 21.1% Air transportation

Labor transportation 334 34.3% 27.3% 21.1% Water transportation

Communications 351 0.7% 0.8% 0.8% Telecommunications

Insurance 357 4.1% 7.3% 15.9% Insurance carriers

Food expense 413 2.2% 1.9% 1.6% Food services and drinking places

Total 100.0% 100.0% 100.0%

Source: ERG estimates based on USDOE EIA 2010
48

Table 27 presents the final industry sectors for production O&M costs. The top part of the table lists 

the six non-water-transportation sectors identified in Table 26. We assumed that the typical 

loading/unloading of production structure crews, equipment, and supplies is a much simpler 

process for a workboat than for the specialized vessels for subsea installation or decommissioning 

activities. Thus, we began with the water transportation sector profile for 3D seismic with 

mobilization shown in Table 9 where mobilization accounts for 4.2% of total activity costs. We 

removed the sectors already accounted for in Table 26 (telecommunications, insurance carriers, 

and food services and drinking places) along withtwo other sectors17 because transportation of 

crews, equipment, and supplies does not involve specialized personnel or equipment. The set of 

water transportation sectors were scaled to address the removal of the five sectors from the suite 

of water transportation plus mobilization cost profile, then performed a second rescaling to 

integrate these sectors in the production O&M profile.

Table 27. Summary sector table for production O&M

MAG-PLAN Inputs Sector

Mobilization 

3D

Production O&M

0–60m 60–200m 200–400m

Non-water transportation sectors 

Support activities for oil and gas 

operations

29 19.7% 31.7% 36.0%

Mining and oil and gas field machinery 

manufacturing

206 4.6% 3.7% 3.5%

Air transportation 332 34.3% 27.3% 21.1%

Telecommunications 351 0.7% 0.8% 0.8%

Insurance carriers 357 4.1% 7.3% 15.9%

Food services and drinking places 413 2.2% 1.9% 1.6%

Subtotal 65.7% 72.7% 78.9%

Water transportation

Electric power generation, transmission, 

and distribution

31 0.16% 0.05% 0.04% 0.03%

Water, sewage, and other systems 33 0.10% 0.03% 0.03% 0.02%

Maintenance and repair construction of 

nonresidential maintenance and repair

39 0.14% 0.05% 0.04% 0.03%

Petroleum refineries 115 18.14% 6.22% 4.95% 3.83%

Ship building and repairing 290 52.37% 17.97% 14.28% 11.06%

Water transportation 334 12.72% 4.37% 3.47% 2.69%

Scenic and sightseeing transportation 

and support activities for transportation

338 5.36% 1.84% 1.46% 1.13%

Software publishers 345 0.23% 0.08% 0.06% 0.05%

Real estate 360 1.09% 0.38% 0.30% 0.23%

Commercial and industrial machinery 

and equipment rental and leasing

365 4.20% 1.44% 1.15% 0.89%

Advertising and related services 377 4.04% 1.39% 1.10% 0.85%

Commercial and industrial machinery 

and equipment repair and maintenance

417 1.40% 0.48% 0.38% 0.30%

Subtotal 34.30% 27.26% 21.11%

Sum 100.0% 100.0% 100.0%

Source: ERG estimates based on Table 9 and Table 26

 17 Architectural, engineering, and related services (IMPLAN 369) and the 8.6% allocated to special 

equipment; see Table 6.
49

3.7 Remaining Activities 

Saha et al. (2005) developed industry sector allocations for exploratory, non-productive, and 

productive well drilling; platform installation; onshore and offshore gas processing facilities; and 

pipeline installation. They included an IMPLAN model of 31 parishes in southern Louisiana which 

then examined the five IMPLAN sectors that contributed the largest percentage of expenditures in 

the original data (called “primary sectors” in this discussion). Based on the production function for 

each of the five primary sectors, the spending was redistributed among the secondary sectors to 

incorporate first round spending effects. Details about these calculations are provided in the MAGPLAN 2005 model documentation report (Saha et al. 2005). These activity-to-sector allocations are 

retained in MAG-PLAN 2016 and are included in Appendix C for reference.

 
50

4 Onshore Distributions for Labor 

BOEM developed MAG-PLAN to capture distinctive characteristics of the offshore oil and gas 

industry. One such characteristic is that drilling crews and production crews have staff that reside 

at great distances from the workplace. That is, household spending associated with four activities

are likely to have specialized onshore distributions:

• Drilling

o Exploratory wells

o Non-productive wells

o Development wells

• Production O&M

A second factor in how labor expenditures are handled within MAG-PLAN changed with the 2012 

version. The previous approach conducted an “analysis-by-parts” by conductingtwo separate 

analyses—one for payroll and labor and the other for intermediate goods. The updated version

conducts a series of events (one for each industry sector and one for payroll). But, because each 

activity involves many industry sectors, each with its own labor percentage, MAG-PLAN 2016

retains the separate analysis approach shown in Figure 1. The IMPLAN models are used to generate 

multipliers by industry sector and by household spending in each of the economic areas of 

interest.18 IMPLAN V.3’s production functions partition the shock to each sector into labor and nonlabor components to calculate the direct, indirect, and induced multipliers. The calculations within 

MAG-PLAN, however, assume that percentages within the industry sector profiles for an activity 

sum to 100% (see tables in Chapter 3) with a separate variable for the percentage of the amount of 

the activity expenditures associated with labor (“labor share” or “labor percent”). The need for a 

separate variable is to address the situations where workers might reside at great distances from 

the workplace. 

4.1 Overview 

We compiled studies on the mobility of oil and gas workers.19While evaluating the studies, we 

recognized that a distinction should be made between workers in the drilling phase and those in 

the operation phase. The combined research indicates that jobs associated with putting new areas 

into production, such as drilling, are highly likely to be filled with temporary skilled workers 

coming from outside the GOM. In an area of continuous drilling operations, such as the mature area 

of the GOM, the temporary nature of these jobs is less obvious. For offshore oil and gas operations, 

the multiple days on and multiple days off scheduling permits extended commuting for the 

production operations. This phenomenon was documented in BOEM’s Labor Needs Survey (LNS)

(ICF Consulting 2008). Four activity functions (exploratory drilling, non-productive development 

drilling, development drilling, and production operations and maintenance) have onshore 

distributions that do not assume a worker lives within the same area as their place of work.

 18 Employment multipliers are in the units of jobs per $1 million. This explains the $1 million shock to create 

the induced multipliers for household spending in each region.

19 Bangsund et al. 2012; Bangsund and Hodor 2012; Brasier et al. 2011; Cahuc and Zylberberg 2004; Deller 

and Schreiber 2012; Fannin et al. 2008; Gramling and Brabant 1986; Keithly 2001; KLJ 2014; ICF Consulting 

2008.
51

Sections 4.2 and 4.3 present the data sources and methodology used to develop the labor onshore 

distributions drilling and production activities, respectively.

4.2 Onshore Distribution for Drilling Activities 

Consistent with the academic studies discussed in Section 4.1 is information from the International 

Association of Drilling Contractors (IADC). IADC conducted a study on behalf of the drilling 

industry, following the 2010 Deepwater Horizonoil spill. After the spill, a moratorium was placed 

on new drilling in the GOM and the IADC study spoke on the potential impacts this moratorium 

could have on the national economy. IADC gathered data from nine offshore drilling contractors and 

one boat company on the residency of their workers. The data on the residences of 11,875 offshore 

employees showed that these workers call two-thirds of all US Congressional Districts home (IADC 

2010). Figure 17 and Figure 18, provided by IADC (2015) show these workers’ residency by 

district.

As the two maps show, IADC assigned one of seven employment ranges to each congressional 

district in the US. The first step in transforming these data into a MAG-PLAN-compliant format (i.e., 

broken down by economic impact area) was to refigure them from a congressional district basis to 

a county basis. To do so, we used the “Age Groups and Sex: 2010—Congressional District—Census 

Tract by County” table (Census 2010), which breaks down each congressional district by its 

constituent counties. Because congressional districts are drawn to contain a specific number of 

people, many split into multiple counties. Common occurrences include (1) a congressional district 

comprising a mix of whole counties and portions of counties, and (2) a congressional district 

consisting of part of one large county, the rest of which is distributed among neighboring districts. 

We calculated the proportion of each county’s population that fell into each congressional district. 

Table 28 provides an example of this approach. Alabama Congressional District 1 (CD 1) represents 

687,841 people in six counties. Baldwin County lies entirely within CD 1 and contains 26.5% of the 

population within CD 1; Clarke County lies partially within CD 1 and contains around 2% of the 

population; and so forth.
52

Figure 17. Offshore employee residence map: national

Source: IADC 2010
53

Figure 18. Offshore employee residence map: GOM

Source: IADC 2010
54

Table 28. Alabama congressional district 1 by county

Congressional 

District

Congressional 

District 

Population Geographic Area

County 

Population

Share of 

Congressional 

District

1 687,841 Baldwin County 182,265 0.26498

1 687,841 Clarke County (part) 13,616 0.01980

1 687,841 Escambia County 38,319 0.05571

1 687,841 Mobile County 412,992 0.60042

1 687,841 Monroe County 23,068 0.03354

1 687,841 Washington County 17,581 0.02556

Source: Census 2010

We tabulated the IADC employment category for each congressional district. For the first six 

employment categories, we used the midpoint of the range as the number of offshore oil and gas 

workers in the district. For example, Alabama CD 1 is in the 101–250 range: see Figure 17 and

Figure 18. The midpoint of the range—175.5 workers—is assigned to Alabama CD 1; see Table 29.

The final step was to multiply the IADC worker estimate by the portion of the population in each 

county in CD 1, resulting in 46.5 workers in Baldwin County, 105 workers in Mobile County, etc. 

Table 29. Alabama congressional district 1 by county with employment estimate

Congressional 

District

Congressional 

District 

Population Geographic Area

County 

Population

Share of 

Congressional 

District

IADC 

EstimateEmployment 

Estimate

1 687,841 Baldwin County 182,265 0.26498 175.5 46.5042

1 687,841 Clarke County 

(part)

13,616 0.01980 175.5 3.4741

1 687,841 Escambia County 38,319 0.05571 175.5 9.7769

1 687,841 Mobile County 412,992 0.60042 175.5 105.3733

1 687,841 Monroe County 23,068 0.03354 175.5 5.8857

1 687,841 Washington 

County

17,581 0.02556 175.5 4.4857

Source: Census 2010; IADC 2010; ERG estimates

The exception to the midpoint rule is the last size category, which spans 251 to 1,363 workers. The 

midpoint of that range is 807 workers, but it could be skewed (by a single district with 1,363 

workers, with most others clustered at the lower end of the range). After applying the 807 value for 

the number of workers in this category to each district and summing the results,20 we found the 

anticipated overestimate. The midpoint value was lowered and the total number of workers was 

recalculated. At a midpoint value of 651, the estimated number of workers in the analysis is 11,873 

compared to the 11,875 workers reported in IADC’s survey.

Table 30 presents the estimated onshore labor distribution included in MAG-PLAN 2016. The 17% 

shown for the rest of Mississippi is somewhat higher than anticipated, but it is consistent with the 

IADC data shown in Figure 17 and Figure 18. 

 20 IADC does not have data for Congressional District 16 of Texas or Congressional District 23 of Florida. We 

suspect this will have minimal impact on our onshore labor distribution. Out of the six counties in these 

congressional districts, only one—Hendry County, Florida—is in an economic impact area, and it only 

represents 1% of Florida 23.
55

Table 30. Onshore labor distribution estimate for drilling activities

OSA

Offshore GOM 

Employees

Share of 

Total

TX-1 124 1.04%

TX-2 101 0.85%

TX-3 2,478 20.87%

TX-4 92 0.77%

TX-5 128 1.08%

TX-6 39 0.33%

LA-1 192 1.62%

LA-2 86 0.72%

LA-3 551 4.64%

LA-4 367 3.09%

LA-5 310 2.61%

LA-6 223 1.88%

LA-7 103 0.86%

MS-1 368 3.10%

MS-2 58 0.49%

AL-1 152 1.28%

AL-2 38 0.32%

FL-1 169 1.42%

FL-2 22 0.19%

FL-3 6 0.05%

FL-4 17 0.14%

FL-5 27 0.23%

FL-6 9 0.07%

Rest of TX 1,324 11.15%

Rest of LA 1,161 9.78%

Rest of MS 2,022 17.03%

Rest of AL 760 6.40%

Rest of FL 80 0.67%

Rest of US 866 7.29%

Sum 11,873 100%

Source: IADC 2015; ERG estimates

4.3 Onshore Distribution for Production O&M Activities 

4.3.1 Labor Needs Survey 

The ability of offshore production oil and gas workers to live at substantial distances from the work 

location is discussed in Section 4.1 above. This phenomenon was investigated by the LNS, which 

developed a distribution of the percent of the labor force by home ZIP code (ICF Consulting 2008). 

To protect the confidentiality of workers’ home addresses, the study aggregated data by one-, two-, 

or three-digit ZIP codes as well as by state and multistate areas. Table 31, on the next page, is a copy 

of the ZIP code, area, and percentage data from the LNS.

LNS does not provide a finer breakdown of the data and ZIP code boundaries do not necessarily 

correspond to county or parish boundaries. For use with MAG-PLAN’s production O&M activity 

function, the onshore distribution for labor needs to be distributed among counties and parishes.
56

Table 31. LNS onshore distribution for labor in offshore oil and gas operations

ZIP 

Code Area Percent

32 Northern Florida 1.94%

36 Mobile, Montgomery, AL 3.33%

39 Biloxi, Jackson, Southern MS 4.28%

Arkansas & Tennessee 0.82%

700 Metairie, Chalmette, LA 3.67%

701 New Orleans, LA 0.66%

703 Houma, Donaldsonville, LA 20.78%

704 Hammond, Ponchatoula, Bogalusa, LA 4.62%

705 Lafayette, New Iberia, Abbeville, LA 18.75%

706 Lake Charles, LA 1.40%

Other southern LA 0.58%

71 Shreveport, LA 4.01%

75–76 Dallas and Fort Worth 0.89%

770 Houston, TX 9.81%

773 Humble, Kingwood, Spring, TX 9.14%

774 Katy, Park Row, Sugarland, TX 1.20%

775 Deer Park, Galveston, Pearland, TX 5.23%

Other coastal TX 0.69%

78 Austin, Corpus Christi, San Antonio, TX 6.46%

9 West Coast 0.79%

Other lower 48 0.94%

Sum 99.99%

Source: ICF Consulting 2008, Table 5.4

4.3.2 2016 Methodology Updates for Processing LNS Data 

Section 5.4 of the MAG-PLAN 2012 documentation report (Kaplan et al. 2012) presented the initial 

processing of the LNS data into onshore counties, parishes, and economic impact areas. This 

approach was updated for MAG-PLAN 2016 by incorporating:

• Census’s 2007 Governments Integrated Directory (GID) to create a crosswalk between GOM 

ZIP codes and counties and parishes (Census GID 2007) and

• American Community Survey 2005–2009 labor force data (Census ACS 2010).

These references bring the labor force data and the ZIP code descriptions into closer temporal 

alignment with the time the LNS was administered. 

Section 4.3.2.1 describes how Census GID 2007 and Census ACS 2010 were integrated to estimate 

the proportion of the labor force by county and parish. Sections 4.3.2.2 through Section 4.3.2.5

present the onshore distributions for Texas, Louisiana, Alabama-Mississippi-Florida, and the rest of 

the US, respectively. 

4.3.2.1 Methodology 

The first step in the methodology is to create a crosswalk between GOM ZIP codes and counties, 

using Census’s 2007 Governments Integrated Directory (Census GID2007) and noting which 

counties and parishes fell completely within the LNS ZIP codes and which were only partially 

within a ZIP code. For all counties and included in the LNS, wedownloaded the 2005–2009 labor 

force data from the American Community Survey (Census ACS 2010). The entire labor force was 
57

counted for counties and parishes that lay entirely within the ZIP code. Half of the labor force was 

counted for counties and parishes that lay partly in the ZIP code. The two exceptions to this 

approach, one in Texas and the other in Louisiana, are described in Sections 4.3.2.2.1 and 4.3.2.3.1, 

respectively. 

4.3.2.2 Texas 

Section 4.3.2.2.1 walks the reader through the approach for three Texas ZIP codes; the same 

approach is used for the majority of the ZIP codes and states. Section 4.3.2.2.2 discusses 

classification of the area labelled “Other Coastal Texas” in the LNS, and Section 4.3.2.2.3 summarizes

the “rest of Texas” contributions. 

4.3.2.2.1 General Method

Table 32 illustrates the calculations for ZIP codes 773, 774, and 775 in Texas. The column “Split” 

notes how many ZIP codes—if any—a county is divided into. For example, Grimes County is divided 

between two ZIP codes and has a “2” in the “Split” column; Montgomery County is entirely within 

ZIP code 773 and has a “1.” The column labeled “Weights” is the fraction of the labor force in the ZIP 

code region that falls within a county. For example, in ZIP code 773, the regional labor force is the 

sum of the labor force of Montgomery, Walker, and San Jacinto Counties (384,177), half the labor 

force in Liberty County (28,693), Grimes County (10,175), and Polk County (18,975), and one-tenth 

the labor force in Harris County (289,548). 

Table 32. Texas onshore labor distribution for production O&M

ZIP 

Code County OSA

County Labor 

Force Split

Allocation

ZIP Code 

Labor Force Weights

LNS 

Percent

Allocated 

Percent

773 Grimes Rest of TX 20,350 2 10,175 1.39% 9.14% 0.13%

Harrisa TX-3 2,895,476 4 289,548 39.58% 3.62%

Liberty TX-4 57,386 2 28,693 3.92% 0.36%

Montgomery TX-3 309,791 1 309,791 42.35% 3.87%

Polk Rest of TX 37,950 2 18,975 2.59% 0.24%

San Jacinto TX-4 19,555 1 19,555 2.67% 0.24%

Walker Rest of TX 54,831 1 54,831 7.50% 0.69%

774 Austin Rest of TX 20,691 1 20,691 2.32% 1.20% 0.03%

Brazoria TX-3 219,825 2 109,913 12.35% 0.15%

Colorado Rest of TX 16,342 2 8,171 0.92% 0.01%

Fort Bend TX-3 375,095 1 375,095 42.14% 0.51%

Harris1 TX-3 2,895,476 4 289,548 32.53% 0.39%

Matagorda TX-2 27,955 1 27,955 3.14% 0.04%

Waller Rest of TX 27,690 1 27,690 3.11% 0.04%

Wharton TX-2 30,983 1 30,983 3.48% 0.04%

775 Brazoria TX-3 219,825 2 109,913 16.45% 5.23% 0.86%

Chambers TX-5 22,157 1 22,157 3.32% 0.17%

Galveston TX-3 217,685 1 217,685 32.59% 1.70%

Harris1 TX-3 2,895,476 4 289,548 43.35% 2.27%

Liberty TX-4 57,386 2 28,693 4.30% 0.22%

Source: ERG estimates based on Census GID 2007 and Census ACS 2010

a Harris County is a special case; see text for details.
58

Harris County is treated separately because it contains an entire ZIP code (770) plus parts of three 

other ZIP codes (773, 774, and 775). ZIP code 770 now represents approximately 85% of Harris 

County’s labor force; for consistency with when the LNS was administered, though, we assumed 

that ZIP code 770 represents 70% of the Harris County labor force and assigned the remaining 30%

of the labor force equally over the three partial ZIP codes. ZIP code 773 is assigned one-tenth of the 

labor force in Harris County, making the labor force in ZIP code 773 an estimated 731,568. 

Montgomery County, with its labor force of 309,791, accounts for 42.35% of the ZIP code labor 

force.

The next column, “LNS Percent,” is the fraction of the offshore workforce in that ZIP code (see Table 

31). The LNS percent is multiplied by the weight to calculate the “Allocated Percent.” For 

Montgomery County, the calculation is 42.35% times 9.14%, or 3.87%. 

Because several counties are located in more than one ZIP code, the allocated percentages must be 

summed back to county totals (Table 33 below). For example, the 1.01% for Brazoria County 

reflects the 0.15% from ZIP code 774 plus 0.86% from ZIP Code 775. The labor percentage for 

Harris County reflects the sum of 9.81% from ZIP code 770 (see Table 31), 3.62% from ZIP code 

773, 0.39% from ZIP code 774, and 2.27% from ZIP code 775. Table 33 also provides summary 

statistics for the Texas OSA and the “rest of state” distributions. 

Table 33. Texas onshore labor summary by county and OSA for production O&M, Sector 29

County Percent County Percent OSA Percent

Aransas 0.03% Kennedy 0.00% TX-1 1.51%

Bee 0.04% Kleberg 0.04% TX-2 1.19%

Brazoria 1.01% Liberty 0.58% TX-3 23.17%

Brooks 0.01% Live Oaks 0.01% TX-4 0.83%

Calhoun 0.09% Matagorda 0.04% TX-5 0.17%

Cameron 0.40% Montgomery 3.87% TX-6 0.005%

Chambers 0.17% Newton 0.00% Rest of TX 6.54%

Duval 0.01% Nueces 0.37%

Fort Bend 0.51% Orange 0.00%

Galveston 1.70% Refugio 0.02%

Goliad 0.03% San Jacinto 0.24%

Hardin 0.00% San Patricio 0.04%

Harris 16.08% Starr 0.06%

Hidalgo 0.72% Victoria 0.37%

Jackson 0.06% Webb 0.23%

Jasper 0.00% Wharton 0.04%

Jefferson 0.00% Willacy 0.02%

Jim Hogg 0.01% Zapata 0.01%

Jim Wells 0.05%

Source: Table 32; ICF Consulting 2008, Table 5.4

4.3.2.2.2 Other Coastal Texas

MAG-PLAN 2016 sought to distribute the “other coastal Texas” data, at least in part, to individual 

OSAs. The first step in that process was to determine which ZIP codes in Texas (1) were coastal and 

(2) did not appear in the LNS list of areas (ICF Consulting 2008, Table 5.4, reproduced as Table 31

above). As mentioned, LNS combined data where necessary to preserve confidentiality. Red 

outlines in Figure 19 show Texas ZIP codes enumerated in the LNS, and yellow (779) and green 

(776) outlines show the two ZIP codes that are coastal and not otherwise reported in LNS for 
59

distributing the outstanding Texas labor.21 Thus, we distributed “other coastal Texas” data to ZIP 

codes 779 and 776.

Figure 19. Other coastal Texas distribution

Source: USNaviguide 2007

ZIP codes 779 and 776 contain some counties that are in multiple OSAs. For example, ZIP code 779 

contains part of Refugio County (TX-2). The other part of Refugio County is in ZIP code 78, which is 

included in the LNS as “Austin, Corpus Christi, San Antonio, Texas.” Considering both the proximity 

of ZIP codes 779 and 776 to ZIP codes in the LNS and the equal opportunities to redistribute labor 

from the rest of Texas to OSAs, we chose ZIP code 779 for two primary reasons. First, it removes a 

disjunction from LNS’s coverage of Texas’s coastline—a logical step, since this labor is categorized 

as “Other coastal TX.” Second, it is firmly embedded in Texas and induced spending distributed to 

ZIP code 779 is more likely to stay in Texas than 776, which shares a substantial border with 

Louisiana.

4.3.2.2.3 Rest of Texas

With the updated ZIP code definitions and a more definitive crosswalk between the ZIP codes and 

area boundaries, there are some changes to the LNS area previously considered to be entirely 

within the “rest of Texas” area. These changes are summarized in Table 34.

Table 34. 2016 update to previously undistributed labor

ZIP Code Area Percent

MAG-PLAN 2012 

OSA MAG-PLAN 2016 OSA

75–76 Dallas and Fort Worth 0.89% Rest of TX TX-2, TX-6, rest of TX

Other coastal TX 0.69% Rest of TX TX-2, rest of TX

78 Austin, Corpus Christi, San Antonio, TX 6.46% Rest of TX TX-1, TX-2, rest of TX

Source: ICF Consulting 2008; Table 5.4; ERG estimates

 21 The two-digit ZIP code Texas 79 is also available. ZIP code 79, however, covers the northwest part of the 

state and does not qualify as “coastal.”
60

4.3.2.3 Louisiana 

4.3.2.3.1 General Method

Table 35 shows the same summary distributions for Louisiana. Jefferson Parish is split between ZIP 

codes 700, 701, and 703. Since Jefferson Parish does not represent any of those ZIP codes in full, we

assigned 33.3% of the Jefferson Parish labor force to each one. 

Table 35. Louisiana onshore labor summary by county and OSA for production O&M, Sector 29

County Percent County Percent OSA Percent

Acadia 1.94% Plaquemines 0.26% LA-1 1.06%

Allen 0.11% Pointe Coupee 0.02% LA-2 0.34%

Ascension 2.25% St. Bernard 0.46% LA-3 15.83%

Assumption 1.10% St. Charles 0.60% LA-4 14.84%

Beauregard 0.19% St. James 0.02% LA-5 3.88%

Calcasieu 1.01% St. John the Baptist 0.55% LA-6 10.78%

Cameron 0.04% St. Landry 1.63% LA-7 3.93%

East Baton Rouge 0.37% St. Martin 1.70% Rest of LA 3.82%

Evangeline 1.16% St. Mary 2.00%

Iberia 2.43% St. Tammany 2.30%

Iberville 0.03% Tangipahoa 1.17%

Jefferson 9.00% Terrebonne 4.96%

Jefferson Davis 0.59% Vermilion 1.84%

Lafayette 6.86% Vernon 0.15%

Lafourche 4.36% Washington 0.46%

Livingston 0.63% West Baton Rouge 0.02%

Orleans 0.46%

Source: ICF Consulting 2008, Table 5.4; Census GID 2007; Census ACS 2010; ERG estimates

4.3.2.3.2 Other Southern Louisiana

Distributing LNS’s “Other South Louisiana” labor was more straightforward. As Figure 20 below

shows, there was only one appropriate ZIP code in Louisiana for the outstanding labor share. ZIP 

code 707, however, surrounds ZIP code 708, so the latter ZIP was included so as to not create a gap.

Figure 20. Other southern Louisiana distribution

Source: USNaviguide 2007
61

4.3.2.4 Alabama-Mississippi-Florida 

BOEM revised the OSA definitions in MAG-PLAN 2016 for Alabama, Mississippi, and Florida based 

on Fannin et al. (in preparation). The areas of economic activity are AL-1, AL-2, MS-1, MS-2, FL-1, 

FL-2, and FL-3. The specific counties are:

• Alabama: Baldwin, Mobile, Clarke, Conecuh, Escambia, Monroe, and Washington.

• Mississippi: Hancock, Harrison, Jackson, Pearl River, George, Greene, Perry, and Stone,

• Florida: Bay, Escambia, Okaloosa, Santa Rosa, Walton, Calhoun, Franklin, Gadsden, Gulf, 

Holmes, Jackson, Leon, Liberty, Wakulla, Washington, Bradford, Columbia, Hamilton, 

Jefferson, Lafayette, Madison, Suwannee, Taylor, and Union.

For these three states, the geographical range of the two-digit ZIP codes in Table 31 above extends 

beyond the clusters of economic activity identified in Fannin et al. (in preparation). After the 

percentage-by-county estimates are made with the general methodology, they must be adjusted to 

shift any percentages that would have been assigned to counties outside the OSA to the counties in 

the OSAs.

The “Pre-adjustment OSA” column in Table 36 below shows the OSA labor distributions for 

Alabama and Mississippi including the “rest of”OSAs. From LNS data, approximately 3.33% of the 

GOM Sector 29 labor force resides in Alabama with 0.96% in AL-1, 0.19% in AL-2, and 2.18% in the 

rest of Alabama based on the proportion of county labor force to total Alabama labor force (see 

Table 31 above and Kaplan et al. 2012). To distribute the “rest of” allocations to the OSAs, we first 

calculated the share of Alabama and Mississippi represented by each OSA with “rest of” areas 

zeroed out (“Share Without Rest of State OSA” column) and then multiplied the OSA share by the 

“Pre-adjustment OSA” value for both “rest of” areas. For example, AL-1 represents 83% of 

Alabama’s Sector 29 labor when no share is given to the rest of Alabama. Multiplying that 83% by 

the labor originally going to the rest of Alabama (2.18%) yields a product of 1.81% (“Proportional 

Distribution of Rest of State OSA”). Adding that product to the original “Pre-adjustment OSA” value 

generates an adjusted OSA percentage. The sum of AL-1 and AL-2 is 3.33%, the LNS estimate for the 

proportion of GOM Sector 29.

Table 36. Alabama and Mississippi OSA adjustment for production O&M, Sector 29

OSA

Pre-adjustment 

OSA

Share without

Rest of State OSA

Proportional Distribution 

of Rest of State OSA

Post-adjustment 

OSA

Rest of AL 2.18% 0% 0% 0%

Rest of MS 3.29% 0% 0% 0%

AL-1 0.96% 83% 1.81% 2.77%

AL-2 0.19% 17% 0.37% 0.56%

MS-1 0.86% 87% 2.85% 3.71%

MS-2 0.13% 13% 0.43% 0.57%

Source: ICF Consulting 2008, Table 5.4; Kaplan et al. 2012; Table 31

Table 37 distributes the “Post-adjustment OSA” percentages developed for Table 36 at the county 

level. The “Pre-adjustment county” column shows the share of Sector 29 labor going to each 

Alabama and Mississippi county included in an OSA based on the proportion of county labor force 

to total state labor force. For example, the sum of Baldwin and Mobile Counties (the two counties in 

AL-1) is 0.96% (with rounding) and the sum of the five counties that make up AL-2 is 0.19%—the 

same values as in the pre-adjustment column in Table 36. 
62

Table 37, in the column labeled “OSA Share,” lists the proportion that each county in an OSA 

contributes to that OSA, again, the split is based on labor force. Multiplying these percentages by the 

appropriate “Post-adjustment OSA” share developed in Table 36 generates the adjusted countylevel labor distribution. For example, Clarke County, Alabama, originally represented 0.04% of 

Alabama’s Sector 29 labor distribution and 22% of AL-2’s labor distribution. Multiplying this 22%

by the adjusted AL-2 allocation from Table 36 (0.56%) equals an adjusted labor distribution of 

0.13% for Clarke County. Due to rounding, figures may not sum properly in these summary tables.

Table 37. Alabama and Mississippi county adjustment for production O&M

County OSA

Pre-adjustment 

County OSA Share 

Post-adjustment 

County

Alabama

Baldwin AL-1 0.29% 31% 0.84%

Mobile AL-1 0.66% 69% 1.92%

Clarke AL-2 0.04% 22% 0.13%

Conecuh AL-2 0.02% 11% 0.06%

Escambia AL-2 0.06% 33% 0.18%

Monroe AL-2 0.04% 19% 0.11%

Washington AL-2 0.03% 15% 0.08%

Mississippi

Hancock MS-1 0.09% 10% 0.38%

Harrison MS-1 0.38% 44% 1.63%

Jackson MS-1 0.28% 32% 1.19%

Pearl River MS-1 0.12% 14% 0.51%

George MS-2 0.04% 33% 0.19%

Greene MS-2 0.03% 23% 0.13%

Perry MS-2 0.02% 19% 0.11%

Stone MS-2 0.03% 25% 0.14%

Source: ICF Consulting 2008, Table 5.4; Census GID 2007; Census ACS 2010; ERG estimates

For Florida, the 1.94% of labor identified in the LNS is split over 24 counties in OSAs FL-1, FL-2, and 

FL-3. The calculations provided for adjusting the Florida OSAs (Table 38) and counties (Table 39) 

are identical to those described for Table 36 and Table 37, respectively. A key exception is that the 

Florida adjustment involves zeroing out labor distributed to certain OSAs in addition to the “rest of” 

area. For this reason, some OSA counties listed in Table 39 will have no labor distributed to them 

(unlike their Table 37 counterparts). As above, due to rounding, figures may not sum properly in 

these summary tables. 

Table 38. Florida OSA adjustment for production O&M

OSA

Pre-adjustment 

OSA

OSA Share Without FL-4,

-5, -6, and "Rest of"

Proportional 

Distribution of FL-4, -5,

-6, and "Rest of" Post-adjustment OSA

FL-4 0.21% 0% 0% 0%

FL-5 0.00% 0% 0% 0%

FL-6 0.00% 0% 0% 0%

Rest of FL 1.20% 0% 0% 0%

FL-1 0.29% 54% 0.76% 1.05%

FL-2 0.17% 31% 0.44% 0.61%

FL-3 0.08% 15% 0.21% 0.28%

Source: ICF Consulting 2008, Table 5.4; Census GID 2007; Census ACS 2010; ERG estimates
63

Table 39. Florida county adjustment for production O&M

County OSA

Pre-adjustment 

County

OSA Share Without FL-4, -5, -

6, and "Rest of" Post-adjustment County

Bay FL-1 0.06% 19% 0.20%

Escambia FL-1 0.10% 36% 0.38%

Okaloosa FL-1 0.06% 21% 0.22%

Santa Rosa FL-1 0.05% 17% 0.18%

Walton FL-1 0.02% 6% 0.07%

Calhoun FL-2 0.00% 3% 0.02%

Franklin FL-2 0.00% 2% 0.01%

Gadsden FL-2 0.02% 9% 0.06%

Gulf FL-2 0.01% 3% 0.02%

Holmes FL-2 0.01% 4% 0.02%

Jackson FL-2 0.02% 10% 0.06%

Leon FL-2 0.09% 55% 0.33%

Liberty FL-2 0.00% 2% 0.01%

Wakulla FL-2 0.01% 6% 0.04%

Washington FL-2 0.01% 5% 0.03%

Bradford FL-3 0.01% 13% 0.04%

Columbia FL-3 0.02% 30% 0.08%

Hamilton FL-3 0.00% 6% 0.02%

Jefferson FL-3 0.00% 6% 0.02%

Lafayette FL-3 0.00% 3% 0.01%

Madison FL-3 0.01% 8% 0.02%

Suwannee FL-3 0.01% 17% 0.05%

Taylor FL-3 0.01% 9% 0.03%

Union FL-3 0.01% 7% 0.02%

Source: ICF Consulting 2008, Table 5.4; Census GID 2007; Census ACS 2010; ERG estimates

4.3.2.5 Rest of US 

No changes needed to be made to the LNS for Arkansas, Tennessee, West Coast, and other lower 48 

states (see Table 31 and Table 40).

Table 40. LNS unchanged allocations to “rest of US” OSA

ZIP Code Area Percent

MAG-PLAN 2012 

OSA MAG-PLAN 2016 OSA

Arkansas and Tennessee 0.82% Rest of US Rest of US

9 West Coast 0.79% Rest of US Rest of US

Other lower 48 0.94% Rest of US Rest of US

Source: ICF Consulting 2008, Table 5.4

4.4 Derivation of Labor Percentages 

In the activity function definition, MAG-PLAN splits the expenditures associated with each activity 

function into a labor and a non-labor component. Within an activity function MAG-PLAN allocates 

the non-labor expenditures to numerous IMPLAN sectors. From there, IMPLAN partitions the shock 

to each sector into labor and non-labor components to calculate the direct, indirect, and induced 

multipliers. As a result, the IMPLAN multipliers assume that the household spending associated 

with that sector occurs in the same economic area as the labor takes place. This implies that the 

activity function labor percentage for all activities where people are assumed to work near where 

they live should be set to zero. Doing so will allow IMPLAN to calculate labor spending associated 
64

with each of the sectors and allocate that activity in the same area as the other non-labor expenses 

occur (based on the non-labor onshore distribution by sectors described in Chapter 5). 

As described, we determined that four activities required different treatment because labor 

spending is expected to take place in locations farther from expenditure location. Section 4.2

presents the onshore distribution for labor associated with the three drilling activities (exploratory, 

non-productive, and development wells). The same distribution is used for all three drilling 

activities, and it is based on the IADC data collected in 2010. The fourth activity is production O&M. 

In MAG-PLAN, the installation of a production structure (platform or floating), subsea installation, 

or FPSO triggers 15 years of production O&M. The onshore distribution for the labor percentages 

are based on LNS data (ICF Consulting 2008) and described in Section 4.3.

Table 41 presents the labor percentages by activity for incorporation in MAG-PLAN 2016 and the 

sources for the values. As described, for those activity functions in which labor expenses are 

expected to occur in the same location as other non-labor expenses, the labor percentage is set to 

zero. 

Table 41. Labor percent by activity function

Activity

Water 

Depth

Labor 

Percentage Data Source

G&G (3D) 0.0%

Exploratory well drilling 19.9% Kaplan et al. 2012, Table 24

Nonproductive well drilling 24.2% Kaplan et al. 2012, Table 25

Development well drilling 23.8% Kaplan et al. 2012, Table 26

Platform installation 0.0%

Subsea 0.0%

FPSO 0.0%

Onshore gas processing facility 0.0%

Onshore gas O&M 0.0%

Offshore gas processing facility 0.0%

Offshore gas O&M 0.0%

Pipeline 0.0%

Pipeline O&M 0.0%

Platform removed with explosives 0–200m 0.0%

Platform removed—no explosives 0–200m 0.0%

200+m 0.0%

Production O&M 0–60m 32.5% Kaplan et al. 2012, based on USDOE EIA 2010

60–200m 27.9% Kaplan et al. 2012, based on USDOE EIA 2010

200+m 25.0% Kaplan et al. 2012, based on USDOE EIA 2010

 
65

5 Onshore Distributions for Non-labor Expenditures 

5.1 Introduction and Overview 

Unlike the labor portion of an activity expenditure, the non-labor portion is separated into industry 

sectors. The next step is to distribute these expenditures by sector to OSAs to calculate the Stage 1 

MAG-PLAN results. Onshore distributions for intermediate products will reflect the local supply of 

those products within each OSA. The Stage 1 outputs are multiplied in Stage 2 by IMPLAN 

multipliers modeled for each OSA analyzed for lease sales in the GOM.

5.1.1 OSAs 

MAG-PLAN 2016 incorporates a matrix of spending by industry by user-defined OSA. The 2016

matrix contains:

• 133 counties and parishes BOEM considers in 23 GOM economic impact areas (Fannin and 

Varnado, in preparation).22 These are listed in Table 42.

• Five “rest of state” areas for the remaining counties and parishes in Texas, Louisiana, 

Alabama, Mississippi, and Florida.

• GOM OSA (five-state region).

• “Rest of US” for the other 45 states.

• “Rest of world” for imports.

 22 The economic impact areas have been redefined for the 2016 update.
66

Table 42. Parishes and counties in BOEM economic impact areas by state

Texas: 37 Counties in Six Economic Impact Areas

Aransas Fort Bend Jefferson (TX) Montgomery Victoria

Bee Galveston Jim Hogg Newton Webb

Brazoria Goliad Jim Wells Nueces Wharton

Brooks Hardin Kenedy Orange Willacy

Calhoun Harris Kleberg Refugio Zapata

Cameron (TX) Hidalgo Liberty San Jacinto

Chambers Jackson Live Oak San Patricio

Duval Jasper Matagorda Starr

Louisiana: 33 Parishes in Seven Economic Impact Areas

Acadia East Baton Rouge Lafourche St. James Terrebonne

Allen Evangeline Livingston St. John the Baptist Vermilion

Ascension Iberia Orleans St. Landry Vernon

Assumption Iberville Plaquemines St. Martin Washington

Beauregard Jefferson (LA) Pointe Coupee St. Mary West Baton Rouge

Calcasieu Jefferson Davis St. Bernard St. Tammany

Cameron Lafayette St. Charles Tangipahoa

Mississippi: Eight Counties in Two Economic Impact Areas

George Hancock Jackson Perry

Greene Harrison Pearl River Stone

Alabama: Seven Counties in Two Economic Impact Areas

Baldwin Conecuh Mobile Washington

Clarke Escambia Monroe

Florida: 48 Counties in Six Economic Impact Areas

Alachua Escambia Highlands Liberty Sarasota

Bay Franklin Hillsborough Madison Sumpter

Bradford Gadsden Holmes Manatee Suwannee

Calhoun Gilchrist Jackson Marion Taylor

Charlotte Glades Jefferson Monroe Union

Citrus Gulf Lafayette Okaloosa Wakulla

Collier Hamilton Lake Pasco Walton

Columbia Hardee Lee Pinellas Washington

DeSoto Hendry Leon Polk

Dixie Hernando Levy Santa Rosa

Source: Fannin and Varnado (in preparation)

In other words, MAG-PLAN uses a 440 by n matrix (440 industry sectors by n geographic areas) 

where the row totals sum to 100% to model the onshore distributions. MAG-PLAN 2012 developed

top-down onshore distributions in a manner consistent with (1) using IMPLAN data to estimate the 

proportion of an industry sector that could not be supplied within an OSA for a series of OSAs that 

decreased in size and (2) being able to redefine the counties or parishes in an OSA within MAGPLAN without re-coding the model. MAG-PLAN 2016 refines this approach as described below. 

5.1.2 Sector Characterization 

Kaplan et al. (2012) divided the 440 IMPLAN sectors into four groups:

• Major, non-local. These sectors are intimately connected with offshore oil and gas 

operations and do not vary by the planning area of the lease sale. Onshore distributions for 

these sectors are developed from detailed analyses of businesses and locations offering 
67

these services and commodities; that is, the onshore distributions are built from the 

“bottom-up.”

• Major, local. These sectors also are intimately connected with offshore oil and gas 

operations and have “bottom-up” distributions. However, the onshore distributions for 

these sectors vary by the planning area of the lease sale.

• Non-major, non-local. Allother sectors are considered non-major and are developed from 

national data (called a top-down approach). Onshore distributions for sectors in this 

category do not vary by planning area.

• Non-major, local. Onshore distributions for sectors in this category are developed with a 

top-down approach but vary by planning area.

For the 2016 update, we re-examined the major and non-major and local and non-local sectors and: 

• Redefined the following IMPLAN sectors as major industries: 

o 170, iron and steel mills and ferroalloy manufacturing

o 171, steel product manufacturing from purchased steel

o 273, wiring device manufacturing (umbilicals)

• Developed onshore distributions for these sectors based on CBP and Quest data.

• Removed Sector 412 (Other Accommodations) as a major industry.

Section 5.2 discusses the improvements, expansions (i.e., new sectors), and removals considered for 

sectors with bottom-up distributions.

Section 5.3 discusses potential issues identified on the 2012 top-down approach and the 

improvements to the model to address them Section 5.4 summarizes the industry sectors in each of 

the four categories as well as steps taken to ensure that no expenditures go to a region for an 

industry with 0.0 multipliers for that region and industry combination. The information in Sections 

5.2 through 5.4 pertains to the entire GOM region. Section 5.5 identifies which sectors are 

considered to have different onshore distributions depending on whether a sale takes place in the 

western or central GOM planning areas, as well as how those distributions would change.

5.2 Bottom-Up Approach 

BOEM’s focus is on oil and gas operations in the federal offshore waters. There is a need to isolate 

offshore operations from onshore operations when national data sets present the data on a 

combined basis. To address this need, bottom-up onshore distributions for 10 IMPLAN sectors 

were developed in MAG-PLAN 2012: 

• 28: drilling oil and gas wells

• 29: support activities for oil and gas operations

• 332: air transportation

• 334: water transportation

• 369: architectural and engineering services

• 412: other accommodations

• 413: food services

• 206: oil and gas field equipment and machinery
68

• 290: shipbuilding and repairing (for platform fabrication)

• 357: insurance carriers (for insurance policies for well drilling operations)

The distributions for the first seven sectors (i.e., Sector 28 through Sector 413) were based on Gulf 

Coast Oil Directory (GCOD 2008) data collected during BOEM’s analysis of the GOM’s oil services 

contract industry (Kaplan et al. 2011). For Sector 206, the data also came from GCOD (2008), 

modified to include subsea equipment manufacturers. Kaplan et al. (2012) describe how the 

onshore distributions for Sectors 206, 290, and 357 were developed.

The effects of the bottom-up distributions on interregional results were examined as part of this 

effort. As Table 43 shows, four key industries were being substantially distributed to Harris County, 

Texas. As a result of the findings shown in the table, we examined the bottom-up distributions for 

these four IMPLAN sectors to determine whether a different approach, using major industry 

sectors, was warranted. Section 5.2.1 discusses the IMPLAN sectors in NAICS Sector 21 (mining, 

quarrying, and oil and gas extraction). Section 5.2.2 examines selected manufacturing industries 

with bottom-up distributions. Section 5.2.3 reviews NAICS Subsector 541—professional, scientific, 

and technical services—as it relates to IMPLAN 369. Section 5.2.4 discusses the sector removed 

from the list of industries with bottom-up distributions.

Table 43. Harris County, Texas, and industry distribution

IMPLAN 

Sector Sector Name

Harris 

County

28 Drilling oil and gas wells 85.02%

29 Support activities for oil and gas operations 49.88%

206 Oil and gas field equipment and machinery 43.32%

369a Geological and geophysical prospecting 87.98%

Source: Kaplan et al. 2011

a IMPLAN Sector 369, “Architectural, Engineering, and Related Services,”maps to NAICS 5413. 

NAICS 541360 is Geophysical Surveying and Mapping Services. 

5.2.1 IMPLAN Sectors 28 and 29: Drilling Oil and Gas Wells and Support Activities for Oil and Gas 

Operations 

MAG-PLAN distinguishes between drilling oil and gas wells as an IMPLAN sector and as an activity 

function. For example, for the activity of drilling an exploratory well in 1,600m to 2,400m of water, 

27.4% of the non-labor expenditures are allocated to IMPLAN Sector 28. Of this expenditure, 

85.02% (or 23.3%—27.4% times 85.02%—of the total) is distributed to the OSA of Harris County. 

Following the same methodology, we allocated 5% of the non-labor costs for the development well 

drilling activity to IMPLAN Sector 29 (support activities). Although Harris County receives nearly 

50% of the Sector 29 non-labor expenditures, this represents only 2.5% of the non-labor costs of 

the development well drilling activity. That is, the activity function sector allocation mitigates the 

impact of the high onshore distribution value. 

5.2.2 Selected Manufacturing Industries 

We examined onshore distributions for certain key contributors for offshore oil and gas operations. 

These are described in

• Section 5.2.2.1: IMPLAN Sector 206 (oil and gas field equipment and machinery 

manufacturing).

• Section 5.2.2.2: oil country tubular goods/IMPLAN Sectors 170 and 171 (steel products 

from mills and purchased steel).
69

• Section 5.2.2.3: umbilicals and subsea equipment.

• Section 5.2.2.4: hulls and topsides.

5.2.2.1 IMPLAN Sector 206: Oil and Gas Field Equipment and Machinery Manufacturing 

Although GCOD identified locations that served the offshore, it does not distinguish between sales 

locations and manufacturing locations. We cannot tell if a large proportion of expenditures flow 

from Harris County to other counties and parishes within the GOM states, and to other locations in 

the rest of the US and the rest of the world (imports). This would happen if large primary 

contractors in Harris County subcontract much of the procurement outside the county. 

Alternatively, Harris County may actually have such a large OSA distribution.

The 2012 CBP data for NAICS 33313/IMPLAN Sector 206 was used to estimate the relative size of 

the industry by Gulf state; see Table 44 (Census CBP 2015). The county and parish data for 

employment served as a measure of industry size because it is more complete than payroll data. In 

addition, the use of employment counts rather than receipts lessens the potentially non-offshorebiasing effects of expenditures for onshore and international activities that flow through 

headquarter locations. Table 44’s third column reports the employment for the county/parish as a 

percent of total domestic employment. In terms of the entire industry, the employment in Texas 

(35,723, approximately 46.72%) is roughly equal to that in the 45 non-GOMstates (35,791,

approximately 46.81%). The employment in Harris County, Texas, represents nearly 28% of total 

domestic employment in this industry. 

IMPLAN Sector 206, however, includes equipment on the topsides of an offshore production system 

as well as land-based operations. Quest (2011) indicates that approximately about 23% of the

offshoreoil and gas field equipment originates in the rest of the US. We modified the CBP 

distribution to take this into account, and the revised distribution is shown in Table 44, column 4. 

Harris County, Texas, is still the dominant area with 39% of the distribution, but this represents a 

decrease from the 49% estimate based on the GCOD data (Kaplan et al. 2012, Table 41).

Table 44. 2012 county business patterns—IMPLAN 206 employment

County or Parish OSA Percent US MAG-PLAN Allocation

Mobile AL_1 0.49% 0.73%

Bay FL_1 0.23% 0.34%

Alachua FL_4 0.23% 0.34%

Lake FL_4 0.01% 0.01%

Marion FL_4 0.23% 0.34%

Hillsborough FL_5 0.08% 0.12%

Polk FL_5 0.01% 0.01%

Calcasieu LA_1 0.08% 0.12%

Beauregard LA_2 0.08% 0.12%

Acadia LA_3 0.08% 0.12%

Jefferson Davis LA_3 0.08% 0.12%

Lafayette LA_3 1.39% 2.07%

St. Landry LA_3 0.08% 0.12%

St. Martin LA_3 0.31% 0.46%

Iberia LA_4 0.20% 0.30%

St. Mary LA_4 0.20% 0.30%

Terrebonne LA_4 1.69% 2.52%

Jefferson, LA LA_6 0.38% 0.57%

Plaquemines LA_6 0.07% 0.10%
70

County or Parish OSA Percent US MAG-PLAN Allocation

Tangipahoa LA_7 0.01% 0.01%

Cameron TX_1 0.08% 0.12%

Bee TX_2 0.01% 0.01%

Jackson TX_2 0.01% 0.01%

Jim Wells TX_2 0.49% 0.73%

Matagorda TX_2 0.01% 0.01%

Nueces TX_2 0.12% 0.18%

Victoria TX_2 0.08% 0.12%

Brazoria TX_3 0.49% 0.73%

Fort Bend TX_3 0.91% 1.36%

Galveston TX_3 0.15% 0.22%

Harris TX_3 27.91% 39.32%

Montgomery TX_3 3.02% 4.50%

Liberty TX_4 0.01% 0.01%

San Jacinto TX_4 0.01% 0.01%

Chambers TX_5 0.23% 0.34%

Jefferson, TX TX_5 0.01% 0.01%

Jasper TX_6 0.08% 0.12%

Rest of Alabama 0.03% 0.04%

Rest of Florida 0.13% 0.19%

Rest of Louisiana 0.05% 0.07%

Rest of Mississippi 0.33% 0.49%

Rest of Texas 13.09% 19.52%

Alabama 0.52% 0.78%

Florida 0.92% 1.37%

Louisiana 4.70% 7.01%

Mississippi 0.33% 0.49%

Texas 46.72% 67.35%

Rest of US 46.81% 23.00%

Total 100.00% 100.00%

Source: Quest 2011 for the “rest of US” estimate; Census CBP 2015 for all other 

estimates. Numbers may not sum due to rounding.

5.2.2.2 Oil Country Tubular Goods and IMPLAN Sectors 170 and 171 

The term “oil country tubular goods” (OCTG) refers to drill pipe, pipe casings, oil pipes, and similar 

products used in the petroleum industry. These might be made at integrated steel mills that process 

iron ore into steel, at mini-mills that recycle scrap steel in electric arc furnaces, or from purchased 

steel. That is, OCTG would be included in IMPLAN Sectors 170 and 171. Multiple data sources were 

used to examine which steel plants manufacture OCTG and where the manufacturing sites might be 

located. Gravity-weighted models account for both the distance goods travel and the ease of said 

transportation (i.e., steel produced in Michigan might be “closer” to the GOM than steel produced in 

Oklahoma because large components could be transported on the Mississippi River rather than 

over land). This approach is used to refine the Sector 170 and 171 distributions. This section 

describes the logic and geographic areas included for the onshore distributions for steel products.
71

5.2.2.2.1 Metal Bulletin Plant Database

We extracted a list of pipe and tube mills from the Metal Bulletinplant database (Metal Bulletin 

2015) and identified plants that listed OCTG as one of its products. We verified that OCTG is 

manufactured in IMPLAN Sectors 170 and 171. Unfortunately, the database did not contain capacity 

information for most of the entries, and an onshore distribution could not be developed without 

this information. Also, although all the listed mills produce OCTG, it is impossible to identify what 

share of their capacity is dedicated to OCTG production and, of that production, the split between 

offshore and onshore oil and gas customers.

5.2.2.2.2 American Iron and Steel Institute Map

American Iron and Steel Institute (AISI) data were examined to identify steel plants in the US (see 

Figure 21). 

Figure 21. Steel plants of North America

Source: AISI 2013

Red dots mark basic oxygen furnace (BOF) plants, yellow dots mark electric arc furnaces (EAF) plants, open circles 

are rolling mills. Rolling mills do not melt steel but are included on the map because they are members of AISI. The 

bottom part of the figure lists the states of Mexico.
72

5.2.2.2.3 Inland Waterways

As Figure 21 indicates, steel plants are located nationwide. However, we considered plants that had 

access to water transportation to the GOM to be more likely to supply the GOM than steel plants 

lacking such access. As a result, we examined the inland and intracoastal US waterways maintained 

by the Army Corps of Engineers: see Figure 22. These waterways would provide the transportation 

access for steel to travel from a manufacturing plant to the GOM region.

Figure 22. Inland waterways of the US

Source: NSTPRSC 2007

Altogether, the information in Figure 21 and Figure 22 suggests that steel could travel by barge 

from Minnesota to the GOM. The upper Mississippi waterway begins in Minnesota and forms part of 

the border between Minnesota and Wisconsin, then between Iowa and Illinois. The likely route for 

steel from the Wisconsin mills would be barge transport on Lake Superior or Michigan until it is 

transferred to the Illinois River, which joins the Mississippi River about St. Louis, Missouri. 

Although the Missouri River is part on the inland waterway system, Figure 21 does not identify any 

steel plants in that state.23 The Ohio River is the transportation artery for Ohio, Indiana, and 

Kentucky. The Arkansas River provides transportation access to the Mississippi for that state. The 

Tennessee-Tombigbee waterway serves Tennessee, Alabama, and Mississippi, and the Red and 

Ouachita Rivers serve Louisiana. For Texas, however, we limited the steel plants to those along the 

intracoastal waterway.24 Inestimating the onshore distributions, we included the data for the states 

listed in Table 45.

 23 The circle marked “22D” in Figure 21 is the US Steel plant in Granite City, Illinois.

24 For example, the circle marked “48” in the northeast part of Texas is the Joy Global plant (formerly listed as 

the RP Le Tourneau plant; see Elswick 2012), which manufactures steel plate for aircraft purposes. Gerdau 
73

Table 45. States with access to inland waterways

Minnesota Indiana Tennessee Mississippi

Wisconsin Ohio Texas (coastal EIAs only)

Iowa Kentucky Louisiana

Illinois Arkansas Alabama

Source: Figure 21; Figure 22; ERG estimates

5.2.2.2.4 County Business Pattern Data

The supply chains for steel products used in offshore oil and gas operations could not be traced to 

specific locations. The 2012 CBP NAICS data for the initial onshore allocation of IMPLAN Sectors 

170 (NAICS 3311) and 171 (NAICS 33121/33122) were used, but limited the data to the states and 

counties listed in Table 45. The distribution is based on the estimated share of employment as a 

percent of the US total for each industry (see Table 46 and Table 47 for IMPLAN 170 and 171, 

respectively).

Table 46. 2012 county business patterns—IMPLAN 170 employment

County State OSA Percent Total

Mobile AL AL_1 0.56%

Washington AL AL_2 2.62%

Collier FL FL_6 0.01%

Hillsborough FL FL_5 0.14%

Sumter FL FL_4 0.26%

East Baton Rouge LA LA_5 0.01%

Lafayette LA LA_3 0.01%

St. James LA LA_5 0.01%

St. John the Baptist LA LA_5 0.56%

Tangipahoa LA LA_7 0.09%

Harrison MS MS_1 0.01%

Perry MS MS_2 0.01%

Harris TX TX_3 0.82%

Jefferson TX TX_5 0.09%

Liberty TX TX_4 0.09%

Orange TX TX_5 0.56%

Rest of Alabama 7.42%

Rest of Florida 0.79%

Rest of Louisiana 0.19%

Rest of Mississippi 1.69%

Rest of US 84.02%

Total 100.00%

Source: Census CBP 2015. Numbers may not sum due to rounding.

 

Long Steel North America plant in Midlothian, Texas (circle “11J”) does not manufacture steel products for 

the oil and gas industry (Gerdau 2015). The steel plant in El Paso is too far away from water transportation to 

be included.
74

Table 47. 2012 county business patterns—IMPLAN 171 employment

County State OSA Percent Total

Mobile AL AL_1 0.61%

Washington AL AL_2 2.62%

Bay FL FL_1 0.61%

Columbia FL FL_3 0.03%

Hillsborough FL FL_5 0.03%

Lee FL FL_6 0.03%

Marion FL FL_4 1.31%

East Baton Rouge LA LA_5 1.31%

Jefferson LA LA_6 0.21%

Lafayette LA LA_3 0.03%

Hancock MS MS_1 0.61%

Jackson MS MS_1 0.21%

Brazoria TX TX_3 0.03%

Chambers TX TX_5 0.21%

Fort Bend TX TX_3 0.21%

Harris TX TX_3 6.49%

Hidalgo TX TX_1 0.03%

Jefferson TX TX_5 0.21%

Liberty TX TX_4 2.62%

Montgomery TX TX_3 1.31%

Rest of Alabama 8.87%

Rest of Florida 1.64%

Rest of Louisiana 1.43%

Rest of Mississippi 3.87%

Rest of US 65.42%

Total 100.00%

Source: Census CBP 2015. Numbers may not sum due to rounding.

5.2.2.3 Umbilicals and Subsea Equipment 

Quest (2015) provided information on the amount of umbilical and subsea equipment that was 

imported or manufactured domestically and the locations of the domestic production (Table48).

Umbilicals are composite cables that link the surface structure to the subsea processing systems, 

manifolds, subsea trees, etc. (see Section 3.3.1.1 above). They function as the nerve network of a 

subsea system. Umbilicals are classified in IMPLAN Sector 273, wiring device manufacturing. In 

2012, all production was domestic; in 2013, 11% of umbilicals were imports; and in 2014, the 

percentage of imports dropped to 7%.

Due to the yearly fluctuations, the three-year average for the onshore distribution was used: 94% of 

the umbilicals are domestically made and 6% is assigned to the rest of the world. Umbilicals are 

manufactured at four locations in the US: two in Texas and one each in Alabama and Florida. Table 

49 lists the onshore distribution for subsea umbilicals based on the three-year average value 

produced. 
75

Quest (2015) provided similar onshore cost distribution information for subsea hardware. Data 

were obtained for wet Christmas trees (which are considered within the well cost profile) but not 

the associated hardware, which has numerous manufacturers and very little trail of origin. Quest 

reported that it does not track the manufacturing origin of the manifolds, junction plates (j plates), 

pipeline end manifolds (plems), terminals (plets), jumpers, or other equipment (Quest 2015). The 

onshore distribution for IMPLAN Sector 206 (oil and gas field equipment), shown in Table 44

above, are assumed to apply to subsea hardware as well as other offshore activities.

Table 48. Production sources for subsea production umbilicals, GOM

Parameter 2012 2013 2014 Average

Value ($mm) $30.00 $281.10 $85.82 $132.31

Volume (km) 59.9 371.804 136.37 189.36

Domestic ($) 100% 89% 93% 94%

International ($) 0% 11% 7% 6%

100% 100% 100%

Domestic (km) 100% 90% 93% 94%

International (km) 0% 10% 7% 6%

100% 100% 100%

Mobile, AL ($mm) 79% 33% 61% 58%

Panama City, FL ($mm) 9% 58% 20% 29%

Freeport, TX ($mm) 13% 5% 19% 12%

Houston, TX ($mm) 0% 3% 0% 1%

100% 100% 100% 100%

Mobile, AL (km) 79% 47% 70% 65%

Panama City, FL (km) 8% 41% 20% 23%

Freeport, TX (km) 13% 7% 10% 10%

Houston, TX (km) 0% 5% 0% 2%

100% 100% 100% 100%

Source: Quest 2015

Table 49. Onshore distribution for subsea umbilicals—IMPLAN 273

Region Distribution

Rest of world 6%

Mobil County, AL 55%

Bay County, FL 27%

Brazoria County, TX 11%

Harris County, TX 1%

Total 100%

Source: Quest 2015

5.2.2.4 Hulls and Topsides 

5.2.2.4.1 FPSOs

The project team collected data on the cost breakdown among various parts of FPSOs. Hulls are 

consistently reported as being manufactured outside the US. Accommodations were always 

included in the cost estimate for the hull, so there is no allocation for IMPLAN Sector 412 (other 

accommodations). In the example where the topsides were US-built, the experts interviewed 

reported two locations in Texas (Houston and Corpus Christi). Although these might be the 
76

headquarters or sales locations for processing equipment manufacturers, we believe the onshore 

distribution described in Section 5.2.2.1 more accurately represents the manufacturing locations 

for equipment that is installed on topsides.

5.2.2.4.2 Other Floating Production Systems

Quest (2015) provided data for all floating production systems (semisubmersibles, SPARs, etc.) for 

fiveyears (2010 through 2014) to have enough observations (eight) to maintain confidentiality of 

the underlying data; see Table 50. Only one of eight hulls was manufactured in the US, and that was 

at the Gulf Island site in Aransas Pass.

Table 50. Floating production systems—hull manufacturing—2010 through 2014

Parameter 2010 2011 2012 2013 2014 Average

Value ($ of hulls) $1,046 $1,090 $331 $299 $470 $647 

Volume (# of hulls) 2 3 1 1 1 1.6

Domestic (# of hulls) 0 1 0 0 0 0.2

International (# of hulls) 2 2 1 1 1 1.4

Domestic (# of hulls) 0% 33% 0% 0% 0% 7%

International (# of hulls) 100% 67% 100% 100% 100% 93%

Domestic ($ of hulls) $0 $258 $0 $0 $0 $52

International ($ of hulls) $1,046 $832 $331 $299 $470 $596

Domestic ($ of hulls) 0% 24% 0% 0% 0% 5%

International ($ of hulls) 100% 76% 100% 100% 100% 95%

Domestic #

Aransas Pass (Gulf Island) 0 1 0 0 0 NA

Aransas Pass (Gulf Island) 0% 100% 0% 0% 0% NA

Domestic $

Aransas Pass (Gulf Island) $0 $258 $0 $0 $0 NA

Aransas Pass (Gulf Island) 0% 100% 0% 0% 0% NA

Source: Quest 2015

Table 51 is the topsides counterpart to Table 50. In this case, seven out of eight topsides were 

manufactured in the US. The topsides were manufactured and assembled to the hull in two 

locations, one in Texas and the other in Louisiana.25

MAG-PLAN is structured to accommodate one onshore distribution per IMPLAN sector. FPSO hull 

expenditures were assigned to IMPLAN Sector 436 (noncomparable imports) because these 

expenditures will not enter the US economy. IMPLAN Sector 290 (shipbuilding and repair) includes 

all types of vessel construction and repair from supply boats to FPSOs. Using the information in 

Table 50 and Table 51 for the onshore distribution for IMPLAN Sector 290. For this reason, MAGPLAN 2016 retains the GOM onshore distribution for IMPLAN Sector 290 fromMAG-PLAN 2012, 

which is reproduced in Table 52.

 25 The spreadsheet provided by Quest had rows for the McDermott facility in Morgan City, Louisiana, but no 

entries for 2010–2014.
77

Table 51. Floating production systems—topsides manufacturing—2010 through 2014

Parameter 2010 2011 2012 2013 2014 Average

Value ($ of topsides) $1,482 $1,423 $1,284 $701 $780 $1,134 

Volume (# of topsides) 2 2 2 1 1 1.6

Domestic (# of topsides) 2 2 2 0 1 1.4

International (# of topsides) 0 0 0 1 0 0.2

Domestic (# of topsides) 100% 100% 100% 0% 100% 80%

International (# of topsides) 0% 0% 0% 100% 0% 20%

Domestic ($ of topsides) $1,482 $1,423 $1,284 $0 $780 $994

International ($ of topsides) $0 $0 $0 $701 $0 $140

Domestic ($ of topsides) 100% 100% 100% 0% 100% 80%

International ($ of topsides) 0% 0% 0% 100% 0% 20%

Domestic #

Ingleside, TX (Kiewit) 1 1 2 0 1 1

Houma, LA (Gulf Island) 1 1 0 0 0 0.4

Ingleside, TX (Kiewit) 50% 50% 100% 0% 100% 60%

Houma, LA (Gulf Island) 50% 50% 0% 0% 0% 20%

Domestic $

Ingleside, TX (Kiewit) $668 $814 $1,284 $0 $780 $709

Houma, LA (Gulf Island) $814 $609 $0 $0 $0 $285

Ingleside, TX (Kiewit) 45% 57% 100% 0% 100% 60%

Houma, LA (Gulf Island) 55% 43% 0% 0% 0% 20%

Source: Quest 2015

Table 52. Onshore distribution for shipbuilding and repair—IMPLAN 290

State County or Parish Revenue (Millions) Percent

AL Mobile $35.16 0.94%

LA Iberia $433.75 11.63%

LA Jefferson (LA) $41.16 1.10%

LA Lafayette $9.40 0.25%

LA Lafourche $0.60 0.02%

LA Plaquemines $67.13 1.80%

LA Saint Mary $131.85 3.54%

LA Terrebonne $387.43 10.39%

LA Vermilion $32.05 0.86%

MS Jackson $398.00 10.67%

MS Warren $249.06 6.68%

TX Brazoria $5.24 0.14%

TX Cameron (TX) $270.50 7.25%

TX Galveston $4.50 0.12%

TX Harris $298.42 8.00%

TX Jefferson (TX) $19.88 0.53%

TX Nueces $420.62 11.28%

TX Orange $29.30 0.79%

TX San Patricio $895.54 24.01%

Sum 100.00%

Source: Kaplan et al. 2012
78

5.2.3 IMPLAN Sector 369 (Professional, Scientific, and Technical Services) 

As noted in Table 43, nearly 90% of the IMPLAN sector 369 is allocated to Harris County. In MAGPLAN 2012, 100% ofthe G&G activity was assigned to IMPLAN Sector 369. This concentration has 

been mitigated in MAG-PLAN 2016 with the subsectorization of the G&G activity function. IMPLAN 

Sector 369 is now assigned between 8% and 10% of the G&G activity expenditures.

5.2.4 IMPLAN Sector 412 (Other Accommodations) 

Kaplan et al. (2011) identified businesses that designed and built the accommodation modules 

installed on the topsides of fixed and floating production systems. These businesses were classified 

as IMPLAN Sector 412 (other accommodations). Accommodation modules were not identified as 

separate cost components for any type of production system (fixed or floating). Accommodation 

costs for FPSOs are typically included as part of the hull costs. As a result, no expenditures have 

been assigned to Sector 412. Thus, IMPLAN Sector 412 no longer has a “bottom-up” distribution.

5.3 Top-Down Approach 

As mentioned in Chapter 2 and Section 5.1, MAG-PLAN needs to incorporate a matrix of spending 

by industry by OSA in Stage 1 in order to use the OSA-specific IMPLAN multipliers to estimate in 

impacts on employment, earnings, and output. One of the enhancements to MAG-PLAN 2012 was 

the ability to define new OSAs within the model. This enhancement necessitates the development of 

a methodology to distribute the spending in the GOM OCS to geographic areas as small as an 

individual county or parish as well as to the rest of the world. MAG-PLAN 2012 contains five 

OSAs—rest of Texas, rest of Louisiana, rest of Mississippi, rest of Alabama, and rest of Florida—that 

contain the counties and parishes not in the OSAs already defined.

The top-down approach uses IMPLAN’s regional purchase coefficients (RPCs) as proxies to estimate 

the proportion of demand supplied from sources within the region. This simplification does not 

include all the trading considerations that IMPLAN calculates for a regional share or (RS). The RS is 

used in a binary decision calculation—demand that is not supplied by a region must be supplied 

from outside the region and can be calculated as (1-RS) for any region. The process works from 

larger to smaller OSA, beginning with the rest of the world.

To start, the project team built IMPLAN regional models with 2012 data for:

• “Rest of world” for imports.

• “Rest of US” for the other 45 states.

• GOM (five-state regions).

• Five “rest of state” (ROS) areas for the remaining counties and parishes in Texas, Louisiana, 

Alabama, Mississippi, and Florida

• 133 counties and parishes in 23 BOEM-defined GOM economic impact areas (also called the 

“GOM OSAs). 

The next sections trace the methods used for estimating the percent of expenditures distributed to 

OSAs, beginning with the “rest of the world,” through smaller OSAs, and ending with counties and 

parishes. Each section contains two subsections: the first for non-major industries in IMPLAN 

Sectors 1 through 319 and the second for IMPLAN Sectors 320 through 440. The rationale for the 

different approaches is that many of the industries in IMPLAN Sectors 1 through 319 deal with 

agricultural produce, extracted natural resources, manufacturing products, or goods distributed 
79

through wholesale trade. Shipping charges are likely to be a relatively small proportion of total 

costs, so it would likely be other factors (quality, base price, reliability, etc.) that would lead to the 

supplier choice. We consider products from IMPLAN Sectors 1 through 319 to be equally likely to 

come from economic impact areas within a state as the ROS region, based on the available supply in 

each of the regions.

IMPLAN Sectors 320 through 440 cover retail trade, transportation, and services within the 

information, finance/insurance, health care, accommodations/food, and other sectors. For the most 

part, these are services where person-to-person interactions are a key part of the relationship and, 

thus, are assumed to be locally provided. In this case, “locally provided” means that the 

distributions are limited to the economic impact areas and not the more distant ROS region. 

5.3.1 “Rest of World” Estimate 

5.3.1.1 IMPLAN Sectors 1 through 319 

The initial assumption is what the US does not produce for itself is supplied by the “rest of world” 

region. The percent that is distributed to the rest of the world is calculated as:

rest of world onshore distributioni = 1 – US national RPCi

for IMPLANSectors 1 through 319.

5.3.1.2 IMPLAN Sectors 320 and Higher 

We anticipate the services described by Sectors 320 and higher to be provided from regions 

abutting the GOM (see Section 5.3.3.2). We re-distributed amounts that would have been allocated 

to the “rest of world” region proportionally among all OSAs.

5.3.2 “Rest of US” Estimate 

5.3.2.1 IMPLAN Sectors 1 through 319 

The onshore distribution coefficients for the “rest of US” RPCs are derived as: 

all US RPCs for industryi – (all GOM OSAs RPCs for commodityi + ROS RPCs for commodityi)

That is, we start with the proportion distributed to the rest of the US OSA and subtract what is 

represented by the GOM and rest of State OSAs.26

5.3.2.2 IMPLAN Sectors 320 and Higher 

We expect the services described by Sectors 320 and higher to be provided from regions abutting 

the GOM (see Section 5.3.3.2). We re-distributed amounts that would have been allocated to the 

“rest of US” region proportionally among all economic impact areas.

 26 MAG-PLAN 2012 calculated the proportion distributed to the rest of the US as the difference between the 

national and total five-state GOM RPC for commodity. Either method will yield similar, but not identical, 

results in most cases.
80

5.3.3 “Rest of State” Estimates 

5.3.3.1 IMPLAN Sectors 1 through 319 

The average RPC values for each of the five ROS regions were calculated. However, both the 

regional supply quantities and regional demand quantities vary by state. A large state like Texas 

could have a very a small RPC by producing a small regional supply relative to a large regional 

demand, but its supply for a given commodity may be larger than a smaller state with a larger RPC. 

The product of the five-state GOM region total and the ROS total were used to estimate a more 

accurate weighted average RPC, e.g., as follows:

(total five-state GOM region average RPC for commodityi) × (ROS average RPC for commodityij)

where RPC for commodityijis the regional purchase coefficient for commodityi in statej

This approach yields slightly lower RPC values than the original approach, which used the entire 

state to derive ROS coefficients.

5.3.3.2 IMPLAN Sectors 320 and Higher 

IMPLAN Sectors 320 through 440 cover retail trade, transportation, and services within the 

information, finance/insurance, health care, accommodations/food, and other sectors. For the most 

part, these are services where person-to-person interactions are a key part of the relationship and, 

thus, are assumed to be locally provided.27 This implies that these services would be provided from 

the regions abutting the GOM and not the inland areas the ROS regions represent. For each IMPLAN 

sector within a state, the amount that would have been allocated to the ROS region is re-distributed 

proportionally among the OSAs for that state.

5.3.4 Counties and Parishes 

Next, we extracted the following parameters from the “Social Accounts” section from each GOM OSA 

model:

• Total commodity supply (TCS)

• Total gross demand (TGD)

• Supply-demand pool (SDP) estimates

• Regional Purchase Coefficients (RPC)

The SDP is the maximum amount of regional supply that is available to meet regional demand. It is 

the ratio of regionally produced net commodity supply to gross regional demand. An SDP of less 

than one means that the commodity in question will be imported even if none of the regional supply 

is a domestic export. The RPC is a measure of the actual amount of local demand that is satisfied by 

local production. For a given commodity, it represents the ratio between county purchases of 

county output and total net county supply of the commodity. RPCs take into account the situation 

where a commodity is both imported to and exported from a county. An SDP is the upper limit 

value for an RPC (Alward et al. 1998).

We examined two approaches for estimating the onshore distribution percentages for individual 

counties and parishes in the BOEM economic impact areas. In Approach 1,the default IMPLAN SDP

method is modified to use total commodity supply rather than net commodity supply as follows:

 27 The exceptions are IMPLAN 357 (insurance carriers) and 369 (architectural, engineering, and related 

services).
81

SDPij = TCSij/TGDi

where: 

SDPij = Commodity-specific supply and demand pool ratio for commodityi in regionj

TCSij = Total commodity supply for commodityi in regionj

TGDi = Total gross demand in the five-state region for commodityi

In Approach 2,the Approach 1 estimate is scaled by the ratio for the average RPC and the SDP 

estimate such that both the RPD and SDP are calculated with IMPLAN’s default methodology:

Modified SDPij = [TCSij/TGDi] × [ARPCij/DS-DPij]

where: 

Modified SDPij = Scaled commodity-specific supply and demand pool ratio for commodityi in 

regionj

TCSij = Total commodity supply for commodityi in regionj

TGDi = Total gross demand in the five-state region for commodityi

ARPCij = Average regional purchase coefficient (IMPLAN default calculation)

DS-DPij = Commodity-specific supply and demand pool ratio for commodityi in regionj

(IMPLAN default calculation)

That is, Approach 2 uses the [ARPCij/DS-DPij] parameter to measure the economies of scale in each 

region. Both approaches generate very similar results. We decided to use Approach 1 for the 

onshore distributions because it is the more parsimonious model.

5.4 Avoiding Areas with Zero IMPLAN Multipliers 

The onshore distributions developed in Section 5.3 may assign expenditures for an IMPLAN sector 

to an OSA even if the produces no output in that industry. As a result, these expenditures will be 

modified by a zero multiplier in MAG-PLAN 2016 and will not be factored into the local impacts.

This issue occurs under the top-down approach because RPCs use commodity accounts rather than 

industry accounts in the distribution calculation.28Although commodity accounts follow the 440-

sector structure of industry accounts, they are fundamentally different in that a commodity can be 

produced from different industries. This type of conflation of commodity and industry can result in 

non-zero local supply of a commodity corresponding to an industry that has no output in that 

particular OSA (and hence has a zero multiplier). MAG-PLAN cannot correctly process any 

expenditures assigned to such an industry-OSA combination.

For example, looking at a test case (“rest of Alabama”), we found at least four sectors with onshore 

distribution to industries that were not present in the region (IMPLAN 57, 172, 175, and 182). This 

occurs because the corresponding commodities are also produced in other industries. For example, 

several industries produce each of the following commodities: 

• Commodity 3057 (dried/condensed dairy) is produced by industries 55 (fluid milk/butter), 

56 (cheese), and 58 (ice cream).

 28 Zero multipliers might also occur as a result of year-to-year data changes as companies go out of business, 

change focus, or select a different NAICS code to describe their operations. This situation is more common for 

OSAs with small populations and few businesses in a particular sector.
82

• Commodity 30172 (aluminum refining) is produced by industry 173 (secondary 

smelting/alloying of aluminum). 

• Commodity 30175 (copper) is produced by industry 177 (copper rolling, drawing, etc.).

• Commodity 30182 (custom rolled forming) is produced by industry 189 (metal tank 

manufacturing).29

We adjusted the onshore distributions, where necessary, to ensure that no expenditures would be 

assigned to an OSA with a zero IMPLAN multiplier, so avoiding losses of local impacts. Our basic 

approach was to keep expenditures with missing multipliers within the same state, where possible. 

The steps taken to reassign the distributions are as follows:

• Find all OSA-IMPLAN industry code combinations that have a zero IMPLAN multiplier and a 

non-zero onshore distribution.

• Calculate the total onshore percentage associated with zero IMPLAN multipliers by 

industry/state combination.

• Redistribute the calculated percentage for each industry to counties within the same state 

with non-missing multipliers, proportionally to the expenditures already distributed to 

them.

• If no counties with non-missing multipliers are available within the state, assign the 

calculated percentage to the ROS OSA.

• If the ROS OSA is missing its multiplier, assign the calculated percentage to the “rest of US.”

We also cross-checked the bottom-up distributions against IMPLAN multipliers to make sure 

similar issues did not occur.

5.5 Gulf-Wide Distributions and Regional Variations 

5.5.1 Major, Non-local 

These nine sectors are intimately connected with offshore oil and gas operations, do not vary by the 

planning area of the lease sale, and the distributions are built from the bottom up.

• 28: drilling oil and gas wells

• 29: support activities for O&G operations 

• 170: iron and steel mills and ferroalloy manufacturing

• 171: steel product manufacturing from purchased steel

• 206: mining, oil and gas field machinery manufacturing

• 273: wiring device manufacturing

• 290: ship building and repairing

• 357: insurance

• 369: architectural, engineering, and related services

 29 IMPLAN commodity accounts are labeled as 30XXX, where XXX is the IMPLAN code of the underlying 

industry. Hence, commodity 3057 is primarily associated with IMPLAN 57.
83

The reasons why the onshore distributions are not likely to vary by planning area differ according 

to the sector. For example, competition within the well drilling and support sectors would minimize 

the incentive for an operator to select a business on the basis of lease planning area. The next four 

sectors are goods and products and the onshore distributions are unlikely to differ by lease sale 

planning area. Competition among the shipbuilding and repair facilities would also minimize the 

incentive to change suppliers by lease sale planning area. The onshore distribution for insurance is 

either “rest of US” or “rest of world,” and seismic survey companies are clustered in Harris County, 

so the onshore distribution for these sectors will not vary.

5.5.2 Major, Local 

Three additional sectors are connected with offshore oil and gas operations and have bottom-up 

distributions:

• 332: air transportation

• 334: water transportation

• 413: food services

However, their onshore distributions vary by the planning area of the lease sale.

MAG-PLAN 2016 assumes that for sales in the western GOM, 100% of these services originate from 

Texas. For sales in the central GOM, 100% these services are assumed to originate from Louisiana, 

Alabama, and Mississippi.

5.5.3 Non-major, Non-local 

IMPLAN Sectors 1 through 319 cover agriculture, extractive industries such as mining and oil and 

gas extraction, manufacturing, and wholesale trade. With the seven exceptions listed in Section 

5.5.1, IMPLAN Sectors 1 through 319 are considered “non-major.” 30The onshore distributions for 

these sectors are developed with the “top-down” approach described in Section 5.3. Because these 

non-major sectors typically deal with goods and products, the assumptions for why the onshore 

distributions do not vary by lease sale planning area are the same as those given in Section 5.3.3.1.

5.5.4 Non-major, Local 

For the reasons given in Section 5.3.3.2, the onshore distributions for IMPLAN Sectors 320 and 

higher31 are assumed to vary by lease sale location. For sales in the western GOM, 100% of these 

services are assumed to originate from Texas. For sales in the central GOM, 100% these services are 

assumed to originate from Louisiana, Alabama, and Mississippi. 

 30 These sectors are IMPLAN 28 (drilling oil and gas wells), 29 (support activities for O&G operations), 170 

(iron and steel mills and ferroalloy manufacturing), 171 (steel product manufacturing from purchased steel), 

206 (mining, oil and gas field machinery manufacturing), 273 (wiring device manufacturing), and 290 (ship 

building and repairing).

31 The exceptions are IMPLAN 357 (insurance carriers) and 369 (architectural, engineering, and related 

services).
84

6 Sensitivity Analysis Results and Observations 

6.1 Sensitivity Analysis Results 

The project team created a series of MAG-PLAN runs for the GOM, each with one example of one 

activity type occurring in 2030, and exported the Stage I results. We focused on the Stage I results 

because this is the only place where we can identify the proportion of expenditures for an activity 

that is lost to the US economy. The loss occurs when expenditures are distributed to the “rest of the 

world” region. We also examined the proportion of activity expenditures lost to the GOM economy 

but staying within the “rest of the US” region.

Table 53 presents the results, sorted by the percent of expenditures that remain in the GOM region. 

Production O&M and decommissioning (with and without explosives) are the activities with the 

largest percentage of expenditures remaining in the GOM (~94%). The next activity group has from 

77% to 81% of the expenditures remaining in the GOM; these are the three well-drilling activities. 

Offshore gas processing facilities, pipeline installation, and subsea installation retain about 68% to 

70% of the spending in the GOM. About 60 percent of the expenditures for platforms and onshore 

gas processing facilities remain in the GOM. 

FPSOs are in a class by themselves, as only 30% of the expenditures are distributed to the GOM. The 

right-most column in Table 53 lists the “effective” investment—the amount of money that stays in 

the GOM region—and is calculated as the product of the cost and the GOM percentage.

Table 53. Activity type by percentage of expenditures remaining in GOM region

Activity Type

Cost (Thousands, 

2012$)

Percent Distributed to Effective GOM 

Rest of World Rest of US GOM Investment

Platform O&M (1 of 14 years) $1,028 3.6% 2.5% 93.9% $965

Platform removed—with 

explosives

$1,863 4.0% 2.1% 93.9% $1,749

Platform removed—no 

explosives

$1,620 4.3% 2.3% 93.5% $1,515

Productive well drilled $8,366 4.5% 14.8% 80.7% $6,754

Exploratory well drilled 

including G&G

$15,887 7.4% 14.0% 78.6% $12,483

Non-productive well drilled $7,858 4.0% 19.0% 77.0% $6,049

Gas processing facility—

offshore

$599,898 11.5% 18.2% 70.3% $421,539

Pipeline added (1 mile) $2,195 5.1% 25.4% 69.5% $1,525

Subsea added (3-year and 1-

year O&M)

$201,499 3.3% 28.5% 68.3% $137,526

Platform added (0–60m, 3-

year and 1-year O&M)

$7,133 10.7% 28.5% 60.9% $4,340

Gas processing facility—

onshore

$98,414 10.3% 30.9% 58.8% $57,858

FPSO added (3-year and 1-

year O&M)

$634,402 62.4% 7.4% 30.2% $191,896

Source: Costs taken from Kaplan et al. 2012; percent distributed based on MAG-PLAN GOM 2016 Stage 1 

expenditure results aggregated over all industry sectors by region
85

Table 54 presents the same summary table sorted by effective investment. Although an offshore gas 

processing facility and an FPSO both have a cost of about $600 million, the contribution of an 

offshore gas processing facility to the GOM economy is more than twice that of a FPSO. Although a 

FPSO costs about three times more than a subsea system, a FPSO contributes only about 40% more 

to the GOM economy. Platform installation is in the lower half of the table, but this is a factor of 

selecting an example in the shallowest water depth (0–60m); the largest production system would 

fall between the offshore gas processing system and the FPSO in Table 54. 

Table 54. Activity type by effective investment

Activity Type

Cost (Thousands, 

2012$)

Percent Distributed to Effective GOM 

Rest of World Rest of US GOM Investment

Gas processing facility—

offshore

$599,898 11.5% 18.2% 70.3% $421,539

FPSO added (3-year and 1-

year O&M)

$634,402 62.4% 7.4% 30.2% $191,896

Subsea added (3-year and 

1-year O&M)

$201,499 3.3% 28.5% 68.3% $137,526

Gas processing facility—

onshore

$98,414 10.3% 30.9% 58.8% $57,858

Exploratory well frilled 

including G&G

$15,887 7.4% 14.0% 78.6% $12,483

Productive well drilled $8,366 4.5% 14.8% 80.7% $6,754

Non-productive well drilled $7,858 4.0% 19.0% 77.0% $6,049

Platform added (0–60m, 3-

year and 1-year O&M)

$7,133 10.7% 28.5% 60.9% $4,340

Platform removed—with 

explosives

$1,863 4.0% 2.1% 93.9% $1,749

Pipeline added (1 mile) $2,195 5.1% 25.4% 69.5% $1,525

Platform removed—no 

explosives

$1,620 4.3% 2.3% 93.5% $1,515

Platform O&M (1 of 14 

years)

$1,028 3.6% 2.5% 93.9% $965

Source: Costs taken from Kaplan et al. 2012; percent distributed based on MAG-PLAN GOM 2016 Stage 1 

expenditure results aggregated over all industry sectors by region

Table 54 includes other artifacts due to the selected options within an activity. For example, 

pipeline installation is third from the bottom in Table 54. This is because the cost unit is $/mile. If a 

project involved laying 10 miles of pipeline, the activity would rank above an exploratory well. 

Similarly, the 14 additional years of O&M associated with a production structure would place the 

activity, on a cumulative basis, above exploratory well drilling and below gas processing facilities, 

FPSOs, and subsea systems.

The examination of Table 54, in turn, highlights some differences between the exploratory and 

production phases in the industry. Once a system goes into production, the O&M expenditures feed 

the local economy year-in and year-out until it is no longer possible to economically produce. This 

multi-year level spending effect is enhanced by the thousands of active production systems in the 

GOM. This is in contrast to drilling operations where the level of activity can fluctuate sharply with 

oil and gas prices. In other words, whether BOEM considers an activity to be a driver in the GOM 

economy might also depend on how the Bureau qualitatively values the volatility of whether and 

when an activity will take place. 
86

6.2 Observations 

MAG-PLAN 2016 is only the latest in a series of BOEM’s socioeconomic models (e.g., MAG-PLAN 

2012 and MAG-PLAN 2005). As such, the MAG-PLAN model continues to be updated in response to 

industry developments and new data. An examination of BOEM permit data might make it possible 

to disassociate G&G operations from exploratory well drilling and treat G&G as an independent 

activity in an E&D scenario. Well costs and the good and services associated with drilling and 

completing a well will change according to new technologies, water depths, and well depths; the 

industry profiles for well drilling operations were last updated in MAG-PLAN 2016. New activities, 

as yet unknown, might need to be defined in future analyses. Methodological pursuits might include 

an examination of the industry/commodity relationship to develop a conceptually consistent means 

to avoid distributing industry expenditures to an OSA without multipliers for that industry and OSA 

combination. With BOEM’s commitment to sound socioeconomic analyses, as the industry evolves, 

so will MAG-PLAN (or its successor).

 
87

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Appendix A Activity Cost Summaries 

A.1 GOM Activity Cost Summary 

Table 55. GOM activity cost summary

Activity Function Water Depth

Cost Per Unit

Labor

Thousands 

$2008

Thousands 

$2015

Geological and geophysical prospecting (G&G) 0–60m $2,600 $2,905 0.0

G&G 60–200m $4,380 $4,894 0.0

G&G 200–400m $5,324 $5,949 0.0

G&G 400–800m $6,376 $7,125 0.0

G&G 200–800m $5,850 $6,537 0.0

G&G 800–1,600m $11,476 $12,823 0.0

G&G 1,600–2,400m $18,649 $20,839 0.0

G&G 2,400+m $19,674 $21,984 0.0

Exploratory drilling 0–60m $12,381 $13,835 19.89

Exploratory drilling 60–200m $20,857 $23,306 19.89

Exploratory drilling 200–400m $25,354 $28,331 19.89

Exploratory drilling 400–800m $30,364 $33,929 19.89

Exploratory drilling 200–800m $27,859 $31,130 19.89

Exploratory drilling 800–1,600m $54,648 $61,065 19.89

Exploratory drilling 1,600–2,400m $88,803 $99,230 19.89

Exploratory drilling 2,400+m $93,688 $104,689 19.89

Nonproductive development drilling 0–60m $7,410 $8,280 24.22

Nonproductive development drilling 60–200m $9,283 $10,373 24.22

Nonproductive development drilling 200–400m $11,584 $12,944 24.22

Nonproductive development drilling 400–800m $14,744 $16,475 24.22

Nonproductive development drilling 200–800m $13,164 $14,710 24.22

Nonproductive development drilling 800–1,600m $27,985 $31,271 24.22

Nonproductive development drilling 1,600–2,400m $34,106 $38,111 24.22

Nonproductive development drilling 2,400+m $30,073 $33,604 24.22

Development drilling and production 0–60m $7,889 $8,815 23.84

Development drilling and production 60–200m $9,820 $10,973 23.84

Development drilling and production 200–400m $12,191 $13,622 23.84

Development drilling and production 400–800m $15,450 $17,264 23.84

Development drilling and production 200–800m $13,821 $15,444 23.84

Development drilling and production 800–1,600m $29,101 $32,518 23.84

Development drilling and production 1,600–2,400m $35,412 $39,570 23.84

Development drilling and production 2,400+m $31,254 $34,924 23.84

Platform fabrication and installation 0–60m $5,758 $6,434 0.0

Platform fabrication and installation 60–200m $17,102 $19,110 0.0

Platform fabrication and installation 200–400m $99,024 $110,651 0.0

Platform fabrication and installation 400–800m $178,823 $199,820 0.0

Platform fabrication and installation 200–800m $138,924 $155,235 0.0

Platform fabrication and installation 800–1,600m $360,887 $403,261 0.0

Platform fabrication and installation 1,600–2,400m $565,679 $632,099 0.0

Platform fabrication and installation 2,400+m $587,666 $656,668 0.0

Subseabed $185,757 $207,568 0.0

Floating, production, storage, and offloading (FPSO) $587,666 $656,668 0.0

Offshore pipeline construction $2,070 $2,313 0.0
96

Activity Function Water Depth

Cost Per Unit

Labor

Thousands 

$2008

Thousands 

$2015

Offshore pipelineoperations and maintenance (O&M) $280 $313 0.0

Decommission platform (explosives) 0–60m $1,528 $1,707 0.0

Decommission platform (explosives) 60–200m $4,445 $4,967 0.0

Decommission platform (explosives) 200–400m $0 $0 0.0

Decommission platform (explosives) 400–800m $0 $0 0.0

Decommission platform (explosives) 200–800m $0 $0 0.0

Decommission platform (explosives) 800–1,600m $0 $0 0.0

Decommission platform (explosives) 1,600–2,400m $0 $0 0.0

Decommission platform (explosives) 2,400+m $0 $0 0.0

Decommission platform (no explosives) 0–60m $1,757 $1,963 0.0

Decommission platform (no explosives) 60–200m $5,111 $5,711 0.0

Decommission platform (no explosives) 200–400m $40,525 $45,283 0.0

Decommission platform (no explosives) 400–800m $45,198 $50,505 0.0

Decommission platform (no explosives) 200–800m $42,862 $47,894 0.0

Decommission platform (no explosives) 800–1,600m $25,133 $28,084 0.0

Decommission platform (no explosives) 1,600–2,400m $24,973 $27,905 0.0

Decommission platform (no explosives) 2,400+m $16,692 $18,652 0.0

Offshore gas processing construction $565,679 $632,099 0.0

Offshore gas processing O&M $396 $442 0.0

Onshore gas processing construction $92,800 $103,696 0.0

Onshore gas processing O&M $360 $402 0.0

Production O&M (structure) 0–60m $969 $1,083 32.5

Production O&M (structure) 60–200m $969 $1,083 27.9

Production O&M (structure) 200–400m $4,249 $4,748 25.0

Production O&M (structure) 400–800m $4,249 $4,748 25.0

Production O&M (structure) 200–800m $4,249 $4,748 25.0

Production O&M (structure) 800–1,600m $10,548 $11,787 25.0

Production O&M (structure) 1,600–2,400m $10,548 $11,787 25.0

Production O&M (structure) 2,400+m $10,548 $11,787 25.0

Production O&M (subseabed) $4,249 $4,748 25.0

Production O&M (FPSO) $10,548 $11,787 25.0

Source: Kaplan et al. 2012, Chapter 3 ($2008 costs);Chapter 4 (labor percentages)
97

A.2 Western GOM Activity Cost Summary 

Table 56. WGOM activity cost summary

Activity Function Water Depth

Cost Per Unit

Labor

Thousands 

$2008

Thousands 

$2015

Geological and geophysical prospecting (G&G) 0–60m $2,261 $2,526 0.0

G&G 60–200m $4,409 $4,927 0.0

G&G 200–400m $5,999 $6,703 0.0

G&G 400–800m $7,186 $8,030 0.0

G&G 200–800m $6,593 $7,367 0.0

G&G 800–1,600m $11,046 $12,343 0.0

G&G 1,600–2,400m $19,635 $21,940 0.0

G&G 2,400+m $11,088 $12,390 0.0

Exploratory drilling 0–60m $10,769 $12,033 19.89

Exploratory drilling 60–200m $20,993 $23,458 19.89

Exploratory drilling 200–400m $28,567 $31,921 19.89

Exploratory drilling 400–800m $34,220 $38,238 19.89

Exploratory drilling 200–800m $31,394 $35,080 19.89

Exploratory drilling 800–1600m $52,602 $58,778 19.89

Exploratory drilling 1,600–2,400m $93,500 $104,478 19.89

Exploratory drilling 2,400+m $52,802 $59,002 19.89

Nonproductive development drilling 0–60m $7,410 $8,280 24.22

Nonproductive development drilling 60–200m $8,939 $9,989 24.22

Nonproductive development drilling 200–400m $16,114 $18,006 24.22

Nonproductive development drilling 400–800m $19,471 $21,757 24.22

Nonproductive development drilling 200–800m $17,793 $19,882 24.22

Nonproductive development drilling 800–1,600m $29,280 $32,718 24.22

Nonproductive development drilling 1,600–2,400m $37,076 $41,429 24.22

Nonproductive development drilling 2,400+m $23,205 $25,930 24.22

Development drilling and production 0–60m $7,889 $8,815 23.84

Development drilling and production 60–200m $9,465 $10,576 23.84

Development drilling and production 200–400m $16,863 $18,843 23.84

Development drilling and production 400–800m $20,323 $22,709 23.84

Development drilling and production 200–800m $18,593 $20,776 23.84

Development drilling and production 800–1,600m $30,436 $34,010 23.84

Development drilling and production 1,600–2,400m $38,474 $42,992 23.84

Development drilling and production 2,400+m $24,173 $27,011 23.84

Platform fabrication and installation 0–60m $5,756 $6,432 0.0

Platform fabrication and installation 60–200m $17,100 $19,108 0.0

Platform fabrication and installation 200–400m $99,000 $110,624 0.0

Platform fabrication and installation 400–800m $178,790 $199,783 0.0

Platform fabrication and installation 200–800m $138,895 $155,204 0.0

Platform fabrication and installation 800–1,600m $360,810 $403,175 0.0

Platform fabrication and installation 1,600–2,400m $565,560 $631,966 0.0

Platform fabrication and installation 2,400+m $587,540 $656,527 0.0

Subseabed $214,690 $239,898 0.0

Floating, production, storage, and offloading (FPSO) $587,540 $656,527 0.0

Offshore pipeline construction $2,070 $2,313 0.0

Offshore pipeline operations and maintenance (O&M) $280 $313 0.0

Decommission platform (explosives) 0–60m $1,528 $1,707 0.0
98

Activity Function Water Depth

Cost Per Unit

Labor

Thousands 

$2008

Thousands 

$2015

Decommission platform (explosives) 60–200m $4,445 $4,967 0.0

Decommission platform (explosives) 200–400m $0 $0 0.0

Decommission platform (explosives) 400–800m $0 $0 0.0

Decommission platform (explosives) 200–800m $0 $0 0.0

Decommission platform (explosives) 800–1,600m $0 $0 0.0

Decommission platform (explosives) 1,600–2,400m $0 $0 0.0

Decommission platform (explosives) 2,400+m $0 $0 0.0

Decommission platform (no explosives) 0–60m $1,757 $1,963 0.0

Decommission platform (no explosives) 60–200m $5,111 $5,711 0.0

Decommission platform (no explosives) 200–400m $40,525 $45,283 0.0

Decommission platform (no explosives) 400–800m $45,198 $50,505 0.0

Decommission platform (no explosives) 200–800m $42,862 $47,894 0.0

Decommission platform (no explosives) 800–1,600m $25,133 $28,084 0.0

Decommission platform (no explosives) 1,600–2,400m $24,973 $27,905 0.0

Decommission platform (no explosives) 2,400+m $16,692 $18,652 0.0

Offshore gas processing construction $565,679 $632,099 0.0

Offshore gas processing O&M $396 $442 0.0

Onshore gas processing construction $92,800 $103,696 0.0

Onshore gas processing O&M $360 $402 0.0

Production O&M (structure) 0–60m $969 $1,083 32.5

Production O&M (structure) 60–200m $969 $1,083 27.9

Production O&M (structure) 200–400m $4,249 $4,748 25.0

Production O&M (structure) 400–800m $4,249 $4,748 25.0

Production O&M (structure) 200–800m $4,249 $4,748 25.0

Production O&M (structure) 800–1,600m $10,548 $11,787 25.0

Production O&M (structure) 1,600–2,400m $10,548 $11,787 25.0

Production O&M (structure) 2,400+m $10,548 $11,787 25.0

Production O&M (subseabed) $4,249 $4,748 25.0

Production O&M (FPSO) $10,548 $11,787 25.0

Source: Kaplan et al. 2012, Chapter 3 ($2008 costs), Chapter 4 (labor percentages)
99

A.3 Central GOM Activity Cost Summary 

Table 57. CGOM activity cost summary

Activity Function Water Depth

Cost Per Unit

Labor

Thousands 

$2008

Thousands 

$2015

Geological and geophysical prospecting (G&G) 0–60m $2,678 $2,992 0.0

G&G 60–200m $4,427 $4,947 0.0

G&G 200–400m $5,124 $5,726 0.0

G&G 400–800m $6,136 $6,856 0.0

G&G 200–800m $5,630 $6,291 0.0

G&G 800–1,600m $11,732 $13,110 0.0

G&G 1,600–2,400m $18,614 $20,800 0.0

G&G 2,400+m $22,558 $25,207 0.0

Exploratory drilling 0–60m $12,752 $14,249 19.89

Exploratory drilling 60–200m $21,079 $23,554 19.89

Exploratory drilling 200–400m $24,402 $27,267 19.89

Exploratory drilling 400–800m $29,221 $32,652 19.89

Exploratory drilling 200–800m $26,812 $29,960 19.89

Exploratory drilling 800–1,600m $55,867 $62,427 19.89

Exploratory drilling 1,600–2,400m $88,636 $99,043 19.89

Exploratory drilling 2,400+m $107,420 $120,033 19.89

Nonproductive development drilling 0–60m $7,410 $8,280 24.22

Nonproductive development drilling 60–200m $9,346 $10,443 24.22

Nonproductive development drilling 200–400m $10,883 $12,161 24.22

Nonproductive development drilling 400–800m $14,013 $15,658 24.22

Nonproductive development drilling 200–800m $12,448 $13,910 24.22

Nonproductive development drilling 800–1,600m $27,697 $30,949 24.22

Nonproductive development drilling 1,600–2,400m $33,639 $37,589 24.22

Nonproductive development drilling 2,400+m $37,664 $42,086 24.22

Development drilling and production 0–60m $7,889 $8,815 23.84

Development drilling and production 60–200m $9,885 $11,046 23.84

Development drilling and production 200–400m $11,469 $12,816 23.84

Development drilling and production 400–800m $14,696 $16,422 23.84

Development drilling and production 200–800m $13,083 $14,619 23.84

Development drilling and production 800–1,600m $28,804 $32,186 23.84

Development drilling and production 1,600–2,400m $34,930 $39,031 23.84

Development drilling and production 2,400+m $39,080 $43,669 23.84

Platform fabrication and installation 0–60m $5,758 $6,434 0.0

Platform fabrication and installation 60–200m $17,102 $19,110 0.0

Platform fabrication and installation 200–400m $99,024 $110,651 0.0

Platform fabrication and installation 400–800m $178,823 $199,820 0.0

Platform fabrication and installation 200–800m $138,924 $155,235 0.0

Platform fabrication and installation 800–1,600m $360,887 $403,261 0.0

Platform fabrication and installation 1,600–2,400m $565,679 $632,099 0.0

Platform fabrication and installation 2,400+m $587,666 $656,668 0.0

Subseabed $185,757 $207,568 0.0

Floating, production, storage, and offloading (FPSO) $587,666 $656,668 0.0

Offshore pipeline construction $2,070 $2,313 0.0

Offshore pipeline operations and maintenance (O&M) $280 $313 0.0
100

Activity Function Water Depth Cost Per Unit Labor

Decommission platform (explosives) 0–60m $1,528 $1,707 0.0

Decommission platform (explosives) 60–200m $4,445 $4,967 0.0

Decommission platform (explosives) 200–400m $0 $0 0.0

Decommission platform (explosives) 400–800m $0 $0 0.0

Decommission platform (explosives) 200–800m $0 $0 0.0

Decommission platform (explosives) 800–1,600m $0 $0 0.0

Decommission platform (explosives) 1,600–2,400m $0 $0 0.0

Decommission platform (explosives) 2,400+m $0 $0 0.0

Decommission platform (no explosives) 0–60m $1,757 $1,963 0.0

Decommission platform (no explosives) 60–200m $5,111 $5,711 0.0

Decommission platform (no explosives) 200–400m $40,525 $45,283 0.0

Decommission platform (no explosives) 400–800m $45,198 $50,505 0.0

Decommission platform (no explosives) 200–800m $42,862 $47,894 0.0

Decommission platform (no explosives) 800–1,600m $25,133 $28,084 0.0

Decommission platform (no explosives) 1,600–2,400m $24,973 $27,905 0.0

Decommission platform (no explosives) 2,400+m $16,692 $18,652 0.0

Offshore gas processing construction $565,679 $632,099 0.0

Offshore gas processing O&M $396 $442 0.0

Onshore gas processing construction $92,800 $103,696 0.0

Onshore gas processing O&M $360 $402 0.0

Production O&M (structure) 0–60m $969 $1,083 32.5

Production O&M (structure) 60–200m $969 $1,083 27.9

Production O&M (structure) 200–400m $4,249 $4,748 25.0

Production O&M (structure) 400–800m $4,249 $4,748 25.0

Production O&M (structure) 200–800m $4,249 $4,748 25.0

Production O&M (structure) 800–1,600m $10,548 $11,787 25.0

Production O&M (structure) 1,600–2,400m $10,548 $11,787 25.0

Production O&M (structure) 2,400+m $10,548 $11,787 25.0

Production O&M (subseabed) $4,249 $4,748 25.0

Production O&M (FPSO) $10,548 $11,787 25.0

Source: Kaplan et al. 2012, Chapter 3 ($2008 costs), Chapter 4 (labor percentages)
101

Appendix B Evaluation of Construction Industries for Subsea Installation 

The project team investigated several ways to model the installation of umbilicals and other parts 

of subsea systems. The basic question is whether the activity resembles a construction industry or 

another type of industry. The discussion is complicated because IMPLAN construction sectors do 

not map to detailed NAICS industries. Companies identify what they do in their selection of a NAICS 

code or codes. First, wesearched 2007 NAICS codes on the Census website and identified possible 

candidate industries:

• NAICS 237990: other heavy and civil engineering construction (includes development of 

marine facilities, underwater trenching, caisson construction, etc.).

• NAICS 237120: oil and gas pipeline and related structures construction.

• NAICS 237110: water and sewer line and related structures construction.

• NAICS 237130: power and communication line and related structures construction.

Corroborating this shortlist, Technip uses NAICS 237110 to classify its Houston, Texas, operation 

(AtoZdatabases 2014).

Second, we examined the IMPLAN sectors associated with construction operations in search of a 

sector that correlated to subsea installation activities. The 2007 IMPLAN sector options for new 

construction are:

• IMPLAN 34—construction of new nonresidential commercial and health care structures.

• IMPLAN 35—construction of new nonresidential manufacturing structures.

• IMPLAN 36—construction of other new nonresidential structures.

• IMPLAN 37—construction of new residential permanent site single- and multi-family 

structures.

• IMPLAN 38—construction of other new residential structures.

Each corresponds to the two-digit NAICS 23. That is, it is not possible to map more detailed NAICS 

23 industries to any one of the IMPLAN construction sectors. Weexamined the production 

functions for IMPLAN 35 and IMPLAN 36.

Table 58 lists the five top commodities to IMPLAN 35. Lighting fixtures are the primary commodity, 

representing 15.2% of the expenditures. This makes the sector less suitable: lighting is important in 

the function of a land-based manufacturing site, but not in subsea systems installation. 

Table 58. Production function components for IMPLAN 35

IMPLAN Commodity Name Percent

3260 Lighting fixtures 15.2%

3230 Other general purpose machinery 13.4%

3319 Wholesale trade distribution services 7.8%

3115 Refined petroleum products 6.6%

3369 Architectural, engineering, and related services 6.2%

Source: IMPLAN 2014
102

Table 59 shows IMPLAN 36’s top five commodities. They show that this sector is a better fit for 

subsea installation than IMPLAN 35, with the “plates and fabricated structural products” as an 

analog for steel, umbilicals, and oil and gas field equipment manufacturing. What is missing is a 

sector to reflect the fact that the installation is done by a vessel. As a result of this investigation, we 

decided to model the waterborne aspects of subsea system and umbilical installation.

Table 59. Production function components for IMPLAN 36

IMPLAN 

Commodity Name Percent

3369 Architectural, engineering, and related services 13.5%

3115 Refined petroleum products 11.0%

3319 Wholesale trade distribution services 4.6%

3186 Plates and fabricated structural products 4.5%

3365 Commercial and industrial machinery and equipment rental and leasing services 3.1%

Source: IMPLAN 2014
103

Appendix C Industry Sector Profiles for Remaining MAG-PLAN Activities 

The following tables contain the activity-to-sector allocations in MAG-PLAN GOM 2016 and the labor percentage for each activity. 

Columns in yellow are from Saha et al. (2005), and the sector allocations for the remaining activities were developed as part of this 

project.

Table 60. Activity sector profiles for exploratory and non-productive well drilling

IMPLAN Exploratory Well Drilling Nonproductive Well Drilling

Sector Name Code 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

LABOR 19.9% 19.9% 19.9% 19.9% 19.9% 19.9% 24.2% 24.2% 24.2% 24.2% 24.2% 24.2%

NON-LABOR

Oil and gas extraction 20 2.9% 6.7% 9.4% 11.3% 12.8% 13.9% 3.0% 6.7% 9.5% 11.3% 12.8% 13.9%

Sand, gravel, clay, and ceramic 

and refractory minerals mining 

and quarrying

26 6.5% 4.4% 3.3% 2.7% 2.4% 2.1% 8.6% 5.8% 4.4% 3.6% 3.1% 2.8%

Drilling oil and gas wells 28 22.0% 26.6% 27.8% 27.7% 27.4% 26.9% 21.8% 27.0% 27.9% 27.8% 27.3% 27.0%

Support activities for oil and gas 

operations

29 1.6% 1.1% 0.8% 0.7% 0.6% 0.5% 0.2% 0.1% 0.1% — — —

Support activities for other 

mining

30 — — — — — — 0.1% — — — — —

Electric power generation, 

transmission, and distribution

31 0.7% 0.6% 0.5% 0.5% 0.5% 0.5% 0.9% 0.7% 0.7% 0.6% 0.6% 0.6%

Natural gas distribution 32 0.2% 0.3% 0.4% 0.4% 0.4% 0.4% 0.3% 0.3% 0.4% 0.4% 0.4% 0.4%

Water, sewage, and other 

systems

33 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Construction of other new 

nonresidential structures

36 0.5% 0.3% 0.2% 0.2% 0.2% 0.1% 0.1% — — — — —

Petroleum refineries 115 1.6% 2.5% 3.0% 3.4% 3.7% 3.9% 1.7% 2.5% 3.1% 3.4% 3.7% 3.9%

Petroleum lubricating oil and 

grease manufacturing

118 0.3% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4%

Alkalies and chlorine 

manufacturing

123 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Carbon black manufacturing 124 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

All other basic inorganic 

chemical manufacturing

125 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.2% 0.2% 0.2% 0.2%

Other basic organic chemical 126 0.6% 0.6% 0.5% 0.5% 0.5% 0.5% 0.3% 0.4% 0.4% 0.4% 0.4% 0.4%
104

IMPLAN Exploratory Well Drilling Nonproductive Well Drilling

Sector Name Code 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

manufacturing

All other chemical product and 

preparation manufacturing

141 3.7% 2.7% 2.1% 1.8% 1.6% 1.4% 1.1% 0.9% 0.8% 0.7% 0.7% 0.6%

Other plastics product 

manufacturing

149 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Cement manufacturing 160 3.0% 2.0% 1.6% 1.3% 1.1% 1.0% 3.0% 2.0% 1.6% 1.3% 1.1% 1.0%

Ground or treated mineral and 

earth manufacturing

167 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%

Iron and steel mills and 

ferroalloy manufacturing

170 4.7% 3.4% 2.7% 2.2% 2.0% 1.8% 9.1% 6.3% 4.9% 4.1% 3.6% 3.2%

Steel product manufacturing 

from purchased steel

171 7.1% 4.7% 3.6% 3.0% 2.5% 2.2% 14.1% 9.5% 7.2% 5.9% 5.1% 4.4%

Primary smelting and refining of 

nonferrous metal (except 

copper and aluminum)

176 0.2% 0.1% — — — — 0.4% 0.2% 0.2% 0.2% 0.1% 0.1%

Plate work and fabricated 

structural product 

manufacturing

186 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%

Machine shops 195 — 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Valve and fittings other than 

plumbing

198 0.2% 0.3% 0.3% 0.3% 0.3% 0.3% 0.2% 0.3% 0.3% 0.3% 0.3% 0.3%

Plumbing fixture fitting and trim 

manufacturing

199 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1%

Construction machinery 

manufacturing

205 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5%

Mining and oil and gas field 

machinery manufacturing

206 3.4% 2.5% 2.0% 1.7% 1.6% 1.4% 4.9% 3.5% 2.8% 2.4% 2.1% 1.9%

Pump and pumping equipment 

manufacturing

226 3.2% 2.4% 1.9% 1.6% 1.5% 1.3% 1.0% 0.9% 0.8% 0.7% 0.7% 0.6%

Air and gas compressor 

manufacturing

227 2.4% 1.6% 1.2% 1.0% 0.9% 0.8% 0.6% 0.4% 0.3% 0.2% 0.2% 0.2%

Material handling equipment 

manufacturing

228 — 0.1% 0.1% 0.1% — — 0.1% 0.1% 0.1% 0.1% 0.1% —

Bare printed circuit board 242 — — — — — — 0.0% — — — — —
105

IMPLAN Exploratory Well Drilling Nonproductive Well Drilling

Sector Name Code 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

manufacturing

Semiconductor and related 

device manufacturing

243 — — — — — — 0.1% — — — — —

Electronic capacitor, resistor, 

coil, transformer, and other 

inductor manufacturing

244 — — — — — — 0.0% — — — — —

Electronic connector 

manufacturing

245 — — — — — — 0.0% — — — — —

Printed circuit assembly 

(electronic assembly) 

manufacturing

246 — — — — — — 0.1% — — — — —

Other electronic component 

manufacturing

247 — — — — — — 0.0% — — — — —

Industrial process variable 

instruments manufacturing

251 1.0% 0.7% 0.5% 0.4% 0.4% 0.3% 0.1% — — — — —

Totalizing fluid meters and 

counting devices manufacturing

252 0.5% 0.3% 0.3% 0.2% 0.2% 0.2% — — — — — —

Watch, clock, and other

measuring and controlling 

device manufacturing

256 3.1% 2.2% 1.7% 1.5% 1.3% 1.1% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2%

Motor vehicle parts 

manufacturing

283 0.2% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% 0.2%

Ship building and repairing 290 0.2% 0.4% 0.6% 0.7% 0.8% 0.8% 0.2% 0.4% 0.6% 0.7% 0.8% 0.8%

Boat building 291 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Wholesale trade 319 2.1% 2.3% 2.4% 2.4% 2.5% 2.5% 3.1% 3.0% 2.9% 2.9% 2.8% 2.8%

Air transportation 332 1.0% 2.3% 3.2% 3.8% 4.3% 4.7% 1.0% 2.3% 3.2% 3.8% 4.3% 4.7%

Rail transportation 333 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1%

Water transportation 334 2.0% 4.6% 6.4% 7.7% 8.6% 9.4% 2.0% 4.6% 6.4% 7.7% 8.6% 9.4%

Truck transportation 335 0.8% 0.7% 0.6% 0.6% 0.5% 0.5% 0.8% 0.7% 0.6% 0.6% 0.6% 0.5%

Pipeline transportation 337 0.2% 0.4% 0.5% 0.6% 0.7% 0.7% 0.2% 0.4% 0.5% 0.6% 0.7% 0.7%

Couriers and messengers 339 — — — 0.1% 0.1% 0.1% — — — 0.1% 0.1% 0.1%

Warehousing and storage 340 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%

Telecommunications 351 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1%

Data processing, hosting, and 352 — — — — — — 0.1% 0.1% 0.1% — — —
106

IMPLAN Exploratory Well Drilling Nonproductive Well Drilling

Sector Name Code 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

related services

Monetary authorities and 

depository credit intermediation

354 0.4% 0.5% 0.5% 0.6% 0.6% 0.6% 0.5% 0.6% 0.6% 0.6% 0.6% 0.6%

Nondepository credit 

intermediation and related 

activities

355 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.2% 0.3% 0.3% 0.3% 0.3% 0.3%

Securities, commodity contracts, 

investments, and related 

activities

356 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.6% 0.6% 0.6% 0.5% 0.5%

Insurance carriers 357 0.4% 0.7% 1.0% 1.1% 1.2% 1.3% 0.4% 0.7% 1.0% 1.1% 1.2% 1.3%

Insurance agencies, brokerages, 

and related activities

358 1.5% 1.0% 0.8% 0.6% 0.5% 0.5% — — — — — —

Real estate 360 0.3% 0.4% 0.4% 0.5% 0.5% 0.5% 0.4% 0.4% 0.5% 0.5% 0.5% 0.5%

General and consumer goods 

rental except video tapes and 

discs

363 1.7% 1.1% 0.9% 0.7% 0.6% 0.6% 0.5% 0.3% 0.3% 0.2% 0.2% 0.2%

Commercial and industrial 

machinery and equipment 

rental and leasing

365 3.4% 2.5% 2.1% 1.8% 1.6% 1.5% 1.2% 1.0% 0.9% 0.9% 0.8% 0.8%

Lessors of nonfinancial 

intangibleassets

366 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%

Legal services 367 3.6% 2.8% 2.4% 2.1% 2.0% 1.8% 3.6% 2.8% 2.4% 2.1% 2.0% 1.8%

Accounting, tax preparation, 

bookkeeping, and payroll 

services

368 — 0.1% 0.2% 0.2% 0.2% 0.2% 0.1% 0.2% 0.2% 0.2% 0.2% 0.2%

Architectural, engineering, and 

related services

369 3.1% 2.2% 1.8% 1.5% 1.4% 1.2% 3.2% 2.2% 1.8% 1.5% 1.4% 1.3%

Management, scientific, and 

technical consulting services

374 1.3% 0.9% 0.8% 0.7% 0.6% 0.6% 0.4% 0.4% 0.3% 0.3% 0.3% 0.3%

Scientific research and 

development services

376 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%

Advertising and related services 377 0.4% 0.6% 0.8% 0.8% 0.9% 0.9% 0.4% 0.6% 0.8% 0.9% 0.9% 1.0%

All other miscellaneous 

professional, scientific, and 

380 — 0.1% 0.1% 0.1% 0.1% 0.1% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1%
107

IMPLAN Exploratory Well Drilling Nonproductive Well Drilling

Sector Name Code 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m 0–60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

technical services

Management of companies and 

enterprises

381 3.6% 4.4% 4.6% 4.6% 4.6% 4.5% 3.9% 4.6% 4.7% 4.7% 4.7% 4.6%

Other support services 389 — 0.1% 0.1% 0.1% 0.1% 0.1% — 0.1% 0.1% 0.1% 0.1% 0.1%

Waste management and 

remediation services

390 0.2% 0.1% 0.1% — — — — — — — — —

Fitness and recreational sports 

centers

407 0.3% 0.3% 0.4% 0.4% 0.3% 0.3% 0.3% 0.3% 0.4% 0.4% 0.3% 0.3%

Food services and drinking 

places

413 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Electronic and precision 

equipment repair and 

maintenance

416 — — — — — — 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Commercial and industrial 

machinery and equipment 

repair and maintenance

417 — — — — — — 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Personal and household goods 

repair and maintenance

418 — 0.1% 0.1% 0.1% 0.1% 0.2% — 0.1% 0.1% 0.1% 0.2% 0.2%

Other state and local 

government enterprises

432 0.1% 0.1% — — — — 0.3% 0.2% 0.2% 0.1% 0.1% —

*Not an industry 

(noncomparable imports)

436 0.5% 0.9% 1.1% 1.3% 1.4% 1.5% 0.5% 0.9% 1.1% 1.3% 1.4% 1.5%

Total Non-labor 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Saha et al. 2005 for data in yellow columns; otherwise Chapter 3 of this report
108

Table 61. Activity sector profiles for development well drilling, G&G, subsea, FPSO, onshore and offshore gas processing, and pipeline

IMPLAN

Development Well 

Drilling

G&G

(3D) Subsea FPSO

Onshore Gas 

Processing Facility

Onshore Gas O&M

Offshore Gas 

Processing Facility

Offshore Gas O&M

Pipeline

Pipeline O&M

Sector Name Code

LABOR 23.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

NON-LABOR

Oil and gas extraction 20 — — — — 5.3% 35.9% 1.1% 16.8% 1.1% 2.1%

Sand, gravel, clay, and ceramic and refractory minerals 

mining and quarrying 26 5.0% — — — 5.0% — 4.7% — 4.7% —

Drilling oil and gas wells 28 24.4% — — — — — — — — —

Support activities for oil and gas operations 29 5.0% — — — — 5.1% — 10.9% — 3.8%

Electric power generation, transmission, and distribution 31 0.3% 0.1% 0.0% — 0.5% 0.7% 0.6% 1.6% 0.6% 0.3%

Natural gas distribution 32 0.2% — — — 0.2% 6.2% 0.1% — 0.1% —

Water, sewage, and other systems 33 — 0.1% 0.0% — — — — — — —

Construction of other new nonresidential structures 36 — — — — 10.7% — 16.1% — 16.1% —

Maintenance and repair construction of nonresidential 

maintenance and repair 39 — 0.1% 0.0% — 0.1% 0.9% 0.2% 0.8% 0.2% 1.2%

Paperboard container manufacturing 107 — — — — 0.2% 0.1% — — — —

Printing 113 — — — — — — — — — 0.1%

Petroleum refineries 115 0.9% 14.1% 5.1% — 1.1% 2.3% 4.1% 3.3% 4.1% 1.2%

Petroleum lubricating oil and grease manufacturing 118 0.3% — — — — — — — — —

Petrochemical manufacturing 120 — — — — — 0.2% — 0.1% — —

Other basic organic chemical manufacturing 126 0.3% — — — — — — — — —

Paint and coating manufacturing 136 — — — — — — — 1.7% — —

All other chemical product and preparation manufacturing 141 0.3% — — — — — — 0.1% — —

Other plastics product manufacturing 149 0.1% — — — 0.2% 0.2% 0.2% 0.1% 0.2% —

Other rubber product manufacturing 152 0.9% — — — 0.1% — — — — —

Cement manufacturing 160 5.0% — — — 5.0% — 4.8% 0.1% 4.8% —

Ready-mix concrete manufacturing 161 — — — — — — 0.1% — 0.1% —

Concrete pipe, brick, and block manufacturing 162 — — — — — — 0.8% — 0.8% —

Other concrete product manufacturing 163 — — — — — — 1.5% — 1.5% —

Ground or treated mineral and earth manufacturing 167 0.2% — — — — — — — — —
109

IMPLAN

Development Well 

Drilling

G&G

(3D) Subsea FPSO

Onshore Gas 

Processing Facility

Onshore Gas O&M

Offshore Gas 

Processing Facility

Offshore Gas O&M

Pipeline

Pipeline O&M

Sector Name Code

Miscellaneous nonmetallic mineral products 169 — — — — — — 0.2% — 0.2% —

Iron and steel mills and ferroalloy manufacturing 170 3.8% — 17.1% — 4.8% 0.4% 9.6% 0.2% 9.6% —

Steel product manufacturing from purchased steel 171 6.7% — 17.1% — 22.1% — 11.3% — 11.3% —

Primary smelting and refining of nonferrous metal (except 

copper and aluminum) 176 0.1% — — — 0.2% — 0.3% — 0.3% —

Copper rolling, drawing, extruding and alloying 177 — — — — — — 0.3% — 0.3% —

Ferrous metal foundries 179 0.2% — — — 0.8% 0.3% 0.2% — 0.2% —

Nonferrous metal foundries 180 — — — — 0.4% 0.2% — — — —

All other forging, stamping, and sintering 181 — — — — 0.1% — — — — —

Plate work and fabricated structural product manufacturing 186 0.2% — 3.0% — 0.7% 0.4% 0.6% 0.1% 0.6% —

Metal tank (heavy gauge) manufacturing 189 — — — — — — 0.8% — 0.8% —

Spring and wire product manufacturing 194 — — — — — — — — — —

Machine shops 195 0.2% — — — 0.4% 0.2% 0.2% 0.2% 0.2% —

Turned product and screw, nut, and bolt manufacturing 196 — — — — 0.2% 0.1% — — — —

Coating, engraving, heat treating and allied activities 197 — — — — — — — — — —

Valve and fittings other than plumbing 198 0.4% — — — 2.0% 0.3% 1.3% 0.1% 1.3% —

Plumbing fixture fitting and trim manufacturing 199 0.1% — — — 0.4% 0.0% 0.2% 0.0% 0.2% —

Ball and roller bearing manufacturing 200 — — — — 0.1% — — — — —

Fabricated pipe and pipe fitting manufacturing 201 — — — — 2.0% — 8.7% — 8.7% —

Other fabricated metal manufacturing 202 0.1% — — — — — — — — —

Construction machinery manufacturing 205 0.5% — — — 2.0% 0.2% — 0.1% — —

Mining and oil and gas field machinery manufacturing 206 3.6% — 9.6% 17.1% — — 5.7% 0.1% 5.7% —

Other engine equipment manufacturing 225 — — — — 0.3% 0.2% — — — —

Pump and pumping equipment manufacturing 226 5.5% — — — 2.0% 0.2% — 0.6% — 1.8%

Air and gas compressor manufacturing 227 — — — 5.3% 8.7% 3.8% — 8.1% — 1.4%

Fluid power process machinery 233 — — — — 0.3% 0.1% — — — —

Other communications equipment manufacturing 239 — — — — 1.0% — 1.1% — 1.1% 1.7%

Bare printed circuit board manufacturing 242 — — — — 0.0% 0.0% 0.0% — 0.0% —

Semiconductor and related device manufacturing 243 — — — — 0.2% — 0.2% — 0.2% —
110

IMPLAN

Development Well 

Drilling

G&G

(3D) Subsea FPSO

Onshore Gas 

Processing Facility

Onshore Gas O&M

Offshore Gas 

Processing Facility

Offshore Gas O&M

Pipeline

Pipeline O&M

Sector Name Code

Electronic capacitor, resistor, coil, transformer, and other 

inductor manufacturing 244 — — — — 0.0% 0.0% 0.0% — 0.0% —

Electronic connector manufacturing 245 — — — — 0.0% 0.0% 0.0% — 0.0% —

Printed circuit assembly (electronic assembly) 

manufacturing 246 — — — — 0.1% 0.1% 0.1% — 0.1% —

Other electronic component manufacturing 247 — — — — 0.1% 0.0% 0.0% — 0.0% —

Search, detection, and navigation instruments 

manufacturing 249 2.0% — — — — — — — — 5.1%

Watch, clock, and other measuring and controlling device 

manufacturing 256 0.2% 8.3% — — — — — — — —

Lighting fixture manufacturing 260 — — — — — — 0.1% — 0.1% —

Motor and generator manufacturing 267 — — — 3.9% 1.0% 0.5% — — — —

Relay and industrial control manufacturing 269 — — — — 0.2% — — — — —

Communication and energy wire and cable manufacturing 272 — — — — — — 0.1% — 0.1% —

Wiring device manufacturing 273 — — 9.9% — — — — — — —

Motor vehicle parts manufacturing 283 0.2% — — — — 0.2% 0.2% 0.1% 0.2% —

Aircraft manufacturing 284 — — — — — — — 0.2% — —

Aircraft engine and engine parts manufacturing 285 — — — — — — — 0.3% — —

Other aircraft parts and auxiliary equipment manufacturing 286 1.0% — — — — — — 1.2% — —

Ship building and repairing 290 0.5% 40.8% 14.8% — — 0.1% — 0.8% — 0.6%

Boat building 291 0.0% — — — 0.0% 0.0% 0.0% 0.0% 0.0% —

All other transportation equipment manufacturing 294 — — — — — — 1.1% — 1.1% —

Institutional furniture manufacturing 299 — — — — — — 1.1% — 1.1% —

Gasket, packing, and sealing device manufacturing 315 — — — — 0.2% — — — — —

Wholesale trade 319 2.4% — — — 3.1% 1.3% 3.5% 0.8% 3.5% 0.8%

Retail—motor vehicle and parts 320 — — — — — — 0.1% — 0.1% —

Retail—health and personal care 325 — — — — — 0.3% — 0.3% — 0.7%

Retail—sporting goods, hobby, book and music 328 — — — — — 0.1% — 0.1% — 0.3%

Retail—miscellaneous 330 — — — — — 0.1% — 0.1% — 0.2%
111

IMPLAN

Development Well 

Drilling

G&G

(3D) Subsea FPSO

Onshore Gas 

Processing Facility

Onshore Gas O&M

Offshore Gas 

Processing Facility

Offshore Gas O&M

Pipeline

Pipeline O&M

Sector Name Code

Retail—nonstore 331 — — — — — 0.2% — 0.2% — 0.6%

Air transportation 332 5.4% — — — 0.2% 0.2% 0.4% 8.3% 0.4% 2.0%

Rail transportation 333 0.1% — — — 2.1% 2.0% 0.2% — 0.2% —

Water transportation 334 5.7% 9.9% 3.6% — — — 0.9% 10.8% 0.9% 10.6%

Truck transportation 335 0.5% — — — 2.4% 2.2% 2.5% 0.2% 2.5% —

Pipeline transportation 337 — — — — 0.3% 3.5% — 0.1% — 0.1%

Scenic and sightseeing transportation and support activities 

for transportation 338 — 4.2% 11.7% — — — — — — —

Couriers and messengers 339 — — — — — 0.1% 0.1% 0.1% 0.1% 0.3%

Warehousing and storage 340 0.3% — — — 0.1% 0.1% — 0.2% — 0.1%

Software publishers 345 — 0.2% 0.1% — — — — — — —

Internet publishing and broadcasting 350 0.1% — — — — 0.1% — 0.1% — 0.1%

Telecommunications 351 1.6% 0.3% 0.1% — 0.3% 0.5% 0.4% 0.4% 0.4% 0.8%

Data processing, hosting, and related services 352 0.1% — — — 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Other information services 353 0.1% — — — — 0.1% — 0.0% — 0.1%

Monetary authorities and depository credit intermediation 354 0.5% — — — 0.4% 0.5% 0.5% 0.4% 0.5% 0.6%

Nondepository credit intermediation and related activities 355 0.2% — — — 0.2% 0.4% 0.2% 0.5% 0.2% 0.4%

Securities, commodity contracts, investments, and related 

activities 356 0.5% — — — 0.2% 0.2% 0.3% 0.2% 0.3% 0.2%

Insurance carriers 357 0.8% 1.6% 0.6% 2.1% — 0.3% 0.8% 1.4% 0.8% 2.4%

Real estate 360 0.5% 0.9% 0.3% — 0.7% 0.8% 0.6% 0.8% 0.6% 1.9%

Automotive equipment rental and leasing 362 — — — — — 0.1% 0.2% — 0.2% 0.1%

General and consumer goods rental except video tapes and 

discs 363 — — — — — 0.2% — 0.2% — 0.3%

Commercial and industrial machinery and equipment rental

and leasing 365 0.4% 3.3% 1.2% — — 0.6% 1.0% 0.8% 1.0% 0.8%

Lessors of nonfinancial intangibleassets 366 0.1% — — — 0.2% 5.6% 0.2% 3.7% 0.2% 0.2%

Legal services 367 0.7% — — — 0.1% 0.9% 0.1% 0.9% 0.1% 4.6%
112

IMPLAN

Development Well 

Drilling

G&G

(3D) Subsea FPSO

Onshore Gas 

Processing Facility

Onshore Gas O&M

Offshore Gas 

Processing Facility

Offshore Gas O&M

Pipeline

Pipeline O&M

Sector Name Code

Accounting, tax preparation, bookkeeping, and payroll 

services 368 0.2% — — — — 0.2% 0.1% 0.3% 0.1% 0.5%

Architectural, engineering, and related services 369 4.0% 9.9% 3.6% 10.5% 7.8% 7.8% 6.3% 5.2% 6.3% 39.3%

Specialized design services 370 — — — — — 0.3% — 0.2% — 0.4%

Custom computer programming services 371 — — — — — 0.7% — 0.5% — 0.3%

Computer systems design services 372 — — — — — — — 0.2% — 0.1%

Other computer related services, including facilities 

management 373 — — — — — — — 0.1% — 0.1%

Management, scientific, and technical consulting services 374 0.2% — — — 0.1% 0.2% 0.2% 0.2% 0.2% 0.3%

Environmental and other technical consulting services 375 0.1% — — — 0.2% 0.2% 0.1% 0.1% 0.1% 0.8%

Scientific research and development services 376 0.2% — — — — 0.2% — 0.1% — —

Advertising and related services 377 0.7% 3.2% 1.1% — 0.3% 0.7% 0.2% 1.1% 0.2% 1.3%

All other miscellaneous professional, scientific, and 

technical services 380 0.1% — — — 0.2% 0.3% 0.2% 0.2% 0.2% 0.2%

Management of companies and enterprises 381 4.1% — — — 1.1% 1.4% 0.8% 2.1% 0.8% 1.3%

Employment services 382 0.2% — — — 0.3% 0.6% 0.3% 0.3% 0.3% 1.4%

Office administrative services 384 — — — — 0.1% 0.2% 0.1% — 0.1% 0.5%

Business support services 386 — — — — — 6.5% — 6.4% — 0.5%

Investigation and security services 387 — — — — — — — — — 0.1%

Services to buildings and dwellings 388 — — — — — 0.2% — 0.2% — 0.4%

Other support services 389 0.1% — — — 0.1% 0.2% — 1.1% — 1.0%

Junior colleges, colleges, universities, and professional 

schools 392 — — — — — — — — — 0.2%

Fitness and recreational sports centers 407 0.3% — — — — — — — — —

Hotels and motels, including casino hotels 411 — — — — — — — — — 0.2%

Food services and drinking places 413 0.1% 2.0% 0.7% — 0.2% 0.2% 0.2% 0.9% 0.2% 0.6%

Automotive repair and maintenance, except car washes 414 — — — — — — 0.1% — 0.1% —

Electronic and precision equipment repair and maintenance 416 — — — — — — 0.2% — 0.2% —
113

IMPLAN

Development Well 

Drilling

G&G

(3D) Subsea FPSO

Onshore Gas 

Processing Facility

Onshore Gas O&M

Offshore Gas 

Processing Facility

Offshore Gas O&M

Pipeline

Pipeline O&M

Sector Name Code

Commercial and industrial machinery and equipment repair 

and maintenance 417 — 1.1% 0.4% — 0.1% — 0.5% — 0.5% —

Personal and household goods repair and maintenance 418 0.1% — — — — — 0.1% 0.1% 0.1% 0.2%

Postal service 427 — — — — — 0.2% — — — 0.4%

Other federal government enterprises 429 — — — — — — — — — —

Other state and local government enterprises 432 0.2% — — — 0.4% 0.2% 0.4% — 0.4% —

*Not an industry (noncomparable imports) 436 1.1% — — 61.1% — 0.1% 0.2% 2.2% 0.2% 2.3%

Total non-labor 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Saha et al. 2005 for data in yellow columns; otherwise Chapter 3 of this report
114

Table 62. Activity sector profiles for platform installation, platform removal (decommissioning), and production O&M

IMPLAN Platform Installation

Platform Removed with 

Explosives

Yes No Production O&M

Sector Name Code

0–

60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

0–

200m

0–

200m 200+m 0–60m

60–

200m

200+

m

LABOR 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 32.5% 27.9% 25.0%

NON-LABOR

Oil and gas extraction 20 3.8% 6.2% 7.4% 8.0% 8.5% 8.9% — — — — — —

Support activities for oil and 

gas operations

29 — — — — — — 11.0% 16.1% 13.6% 19.7% 31.7% 36.0%

Electric power generation, 

transmission, and 

distribution

31 0.6% 0.7% 0.7% 0.8% 0.8% 0.8% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0%

Natural gas distribution 32 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% — — — — — —

Water, sewage, and other 

systems

33 — — — — — — 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Maintenance and repair 

construction of 

nonresidential maintenance 

and repair

39 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% 9.3% 7.4% 7.5% 0.0% 0.0% 0.0%

Paperboard container 

manufacturing

107 0.1% 0.1% 0.1% — — — — — — — — —

Printing 113 — — — — — — — — — — — —

Petroleum refineries 115 0.8% 1.2% 1.5% 1.6% 1.7% 1.7% 6.2% 5.8% 8.0% 6.2% 4.9% 3.8%

Alkalies and chlorine 

manufacturing

123 — — 0.0% 0.0% 0.0% 0.0% — — — — — —

Carbon black manufacturing 124 — — 0.0% 0.0% 0.0% 0.0% — — — — — —

All other basic inorganic 

chemical manufacturing

125 — — 0.1% 0.1% 0.1% 0.1% — — — — — —

Paint and coating 

manufacturing

136 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% — — — — — —

Adhesive manufacturing 137 0.3% 0.6% 0.7% 0.7% 0.8% 0.8% — — — — — —

Soap and cleaning compound 

manufacturing

138 0.4% 0.7% 0.9% 0.9% 1.0% 1.0% — — — — — —

Other plastics product 

manufacturing

149 0.1% 0.1% — — — — — — — — — —
115

IMPLAN Platform Installation

Platform Removed with 

Explosives

Yes No Production O&M

Sector Name Code

0–

60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

0–

200m

0–

200m 200+m 0–60m

60–

200m

200+

m

Abrasive product 

manufacturing

165 0.2% 0.3% 0.3% 0.4% 0.4% 0.4% — — — — — —

Iron and steel mills and 

ferroalloy manufacturing

170 5.6% 5.3% 5.0% 4.8% 4.6% 4.5% — — — — — —

Steel product manufacturing 

from purchased steel

171 23.7% 20.5% 17.9% 16.2% 15.0% 14.0% — — — — — —

Aluminum product 

manufacturing from 

purchased aluminum

174 — — — — — 0.1% — — — — — —

Primary smelting and refining 

of nonferrous metal (except 

copper and aluminum)

176 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% — — — — — —

Ferrous metal foundries 179 0.4% 0.3% 0.3% 0.3% 0.3% 0.2% — — — — — —

Nonferrous metal foundries 180 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% — — — — — —

Plate work and fabricated 

structural product 

manufacturing

186 0.9% 1.2% 1.3% 1.3% 1.4% 1.4% — — — — — —

Machine shops 195 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% — — — — — —

Turned product and screw, 

nut, and bolt manufacturing

196 0.7% 1.0% 1.2% 1.3% 1.3% 1.4% — — — — — —

Coating, engraving, heat 

treating and allied activities

197 0.7% 1.1% 1.3% 1.4% 1.4% 1.5% — — — — — —

Valve and fittings other than 

plumbing

198 3.7% 2.0% 1.4% 1.2% 1.1% 1.0% — — — — — —

Plumbing fixture fitting and 

trim manufacturing

199 0.7% 0.4% 0.3% 0.2% 0.2% 0.2% — — — — — —

Fabricated pipe and pipe 

fitting manufacturing

201 2.1% 1.9% 1.6% 1.5% 1.4% 1.3% — — — — — —

Construction machinery 

manufacturing

205 — 0.1% 0.1% 0.2% 0.2% 0.2% — — — — — —

Mining and oil and gas field 

machinery manufacturing

206 6.0% 2.8% 1.8% 1.3% 1.1% 0.9% — — — 4.6% 3.7% 3.5%
116

IMPLAN Platform Installation

Platform Removed with 

Explosives

Yes No Production O&M

Sector Name Code

0–

60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

0–

200m

0–

200m 200+m 0–60m

60–

200m

200+

m

Other industrial machinery 

manufacturing

207 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% — — — — — —

Air purification and 

ventilation equipment 

manufacturing

214 0.1% 0.2% 0.3% 0.3% 0.3% 0.3% — — — — — —

Air conditioning, 

refrigeration, and warm air 

heating equipment 

manufacturing

216 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Cutting tool and machine tool 

accessory manufacturing

220 — — — — — — 3.6% 3.4% 4.7% — — —

Speed changer, industrial 

high-speed drive, and gear 

manufacturing

223 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% — — — — — —

Mechanical power 

transmission equipment 

manufacturing

224 0.2% 0.3% 0.4% 0.4% 0.4% 0.4% — — — — — —

Other engine equipment 

manufacturing

225 0.4% 0.5% 0.6% 0.6% 0.6% 0.7% — — — — — —

Pump and pumping 

equipment manufacturing

226 6.2% 3.0% 1.9% 1.5% 1.2% 1.0% — — — — — —

Air and gas compressor 

manufacturing

227 4.1% 3.5% 3.1% 2.8% 2.6% 2.4% — — — — — —

Other general purpose 

machinery manufacturing

230 0.0% 0.0% 0.1% 0.1% 0.1% 0.1% — — — — — —

Industrial process furnace 

and oven manufacturing

232 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Fluid power process 

machinery

233 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% — — — — — —

Broadcast and wireless 

communications equipment

238 — 0.1% 0.1% 0.1% 0.1% 0.2% — — — — — —
117

IMPLAN Platform Installation

Platform Removed with 

Explosives

Yes No Production O&M

Sector Name Code

0–

60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

0–

200m

0–

200m 200+m 0–60m

60–

200m

200+

m

Bare printed circuit board 

manufacturing

242 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% — — — — — —

Semiconductor and related 

device manufacturing

243 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% — — — — — —

Electronic capacitor, resistor, 

coil, transformer, and other 

inductor manufacturing

244 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% — — — — — —

Electronic connector 

manufacturing

245 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% — — — — — —

Printed circuit assembly 

(electronic assembly) 

manufacturing

246 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Other electronic component 

manufacturing

247 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Electricity and signal testing 

instruments manufacturing

253 — 0.0% 0.0% 0.0% 0.0% 0.0% — — — — — —

Motor and generator 

manufacturing

267 0.6% 0.6% 0.5% 0.5% 0.5% 0.5% — — — — — —

Relay and industrial control 

manufacturing

269 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% — — — — — —

Heavy duty truck 

manufacturing

278 4.0% 1.9% 1.2% 0.9% 0.7% 0.6% — — — — — —

Motor vehicle parts 

manufacturing

283 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% — — — — — —

Ship building and repairing 290 10.6% 14.9% 17.2% 18.7% 19.5% 20.1% 17.8% 16.6% 23.0% 18.0% 14.3% 11.1%

Boat building 291 0.0% 0.0% — — — — — — — — — —

All other transportation 

equipment manufacturing

294 — — — — 0.1% 0.1% — — — — — —

Institutional furniture 

manufacturing

299 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% — — — — — —

Surgical appliance and 

supplies manufacturing

306 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —
118

IMPLAN Platform Installation

Platform Removed with 

Explosives

Yes No Production O&M

Sector Name Code

0–

60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

0–

200m

0–

200m 200+m 0–60m

60–

200m

200+

m

Wholesale trade 319 2.9% 3.2% 3.3% 3.3% 3.3% 3.3% — — — — — —

Air transportation 332 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.2% 0.0% 34.3% 27.3% 21.1%

Rail transportation 333 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Water transportation 334 5.8% 9.3% 11.1% 12.2% 12.9% 13.4% 4.3% 4.1% 5.6% 4.4% 3.5% 2.7%

Truck transportation 335 0.6% 0.7% 0.7% 0.7% 0.7% 0.7% — — — — — —

Pipeline transportation 337 0.2% 0.3% 0.4% 0.4% 0.4% 0.4% — — — — — —

Scenic and sightseeing 

transportation and support 

activities for transportation

338 — — — — — — 21.4% 19.5% 18.2% 1.8% 1.5% 1.1%

Couriers and messengers 339 — 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Warehousing and storage 340 0.2% 0.3% 0.3% 0.3% 0.3% 0.3% — — — — — —

Software publishers 345 — — — — — — 0.1% 0.1% 0.1% 0.1% 0.1% 0.0%

Telecommunications 351 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.4% 0.3% 0.5% 0.7% 0.8% 0.8%

Data processing, hosting, and 

related services

352 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% — — — — — —

Monetary authorities and 

depository credit 

intermediation

354 0.4% 0.5% 0.5% 0.5% 0.5% 0.5% — — — — — —

Nondepository credit 

intermediation and related 

activities

355 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% — — — — — —

Securities, commodity

contracts, investments, and 

related activities

356 0.2% 0.3% 0.3% 0.3% 0.3% 0.3% — — — — — —

Insurance carriers 357 — — 0.1% 0.1% 0.1% 0.1% 0.7% 0.7% 0.9% 4.1% 7.3% 15.9%

Real estate 360 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% 0.3% 0.5% 0.4% 0.3% 0.2%

Automotive equipment 

rental and leasing

362 — 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Commercial and industrial 

machinery and equipment 

rental and leasing

365 — — — — — — 1.4% 1.3% 1.8% 1.4% 1.1% 0.9%
119

IMPLAN Platform Installation

Platform Removed with 

Explosives

Yes No Production O&M

Sector Name Code

0–

60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

0–

200m

0–

200m 200+m 0–60m

60–

200m

200+

m

Lessors of nonfinancial 

intangibleassets

366 0.5% 0.7% 0.8% 0.9% 0.9% 1.0% — — — — — —

Legal services 367 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% — — — — — —

Accounting, tax preparation, 

bookkeeping, and payroll 

services

368 — 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Architectural, engineering, 

and related services

369 5.2% 4.6% 4.1% 3.8% 3.5% 3.4% 4.4% 4.1% 5.6% — — —

Computer systems design 

services

372 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% — — — — — —

Management, scientific, and 

technical consulting services

374 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% — — — — — —

Environmental and other 

technical consulting services

375 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.7% 0.0% 0.0% — — —

Scientific research and 

development services

376 0.2% 0.2% 0.2% 0.3% 0.3% 0.3% — — — — — —

Advertising and related 

services

377 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 1.4% 1.3% 1.8% 1.4% 1.1% 0.9%

All other miscellaneous 

professional, scientific, and 

technical services

380 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% — — — — — —

Management of companies 

and enterprises

381 1.3% 1.5% 1.6% 1.7% 1.7% 1.8% — — — — — —

Employment services 382 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% — — — — — —

Office administrative services 384 — — — — — — — — — — — —

Other support services 389 — — — — — — 15.4% 17.5% 6.7% — — —

Waste management and 

remediation services

390 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% — — — — — —

Hotels and motels, including 

casino hotels

411 — 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Food services and drinking 

places

413 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.9% 0.8% 1.1% 2.2% 1.9% 1.6%
120

IMPLAN Platform Installation

Platform Removed with 

Explosives

Yes No Production O&M

Sector Name Code

0–

60m

60–

200m

200–

800m

800–

1600m

1600–

2400m

2400+

m

0–

200m

0–

200m 200+m 0–60m

60–

200m

200+

m

Electronic and precision 

equipment repair and 

maintenance

416 — 0.1% 0.1% 0.1% 0.1% 0.1% — — — — — —

Commercial and industrial 

machinery and equipment 

repair and maintenance

417 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.5% 0.4% 0.6% 0.5% 0.4% 0.3%

Other state and local 

government enterprises

432 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% — — — — — —

Total non-labor 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Saha et al. 2005 for data in yellow columns; otherwise Chapter 3 of this report
The Department of the Interior Mission

As the Nation’s principal conservation agency, the Department of the Interior has 

responsibility for most of our nationally owned public lands and natural 

resources. This includes fostering the sound use of our land and water 

resources; protecting our fish, wildlife, and biological diversity; preserving the 

environmental and cultural values of our national parks and historical places; 

and providing for the enjoyment of life through outdoor recreation. The 

Department assesses our energy and mineral resources and works to ensure 

that their development is in the best interests of all our people by encouraging 

stewardship and citizen participation in their care. The Department also has a 

major responsibility for American Indian reservation communities and for people 

who live in island communities.

The Bureau of Ocean Energy Management Mission

The Bureau of Ocean Energy Management (BOEM) works to manage the 

exploration and development of the nation's offshore resources in a way that 

appropriately balances economic development, energy independence, and 

environmental protection through oil and gas leases, renewable energy 

development and environmental reviews and studies.