Offshore oil its impact on Texas communities

[From the U.S. Government Printing Office, www.gpo.gov]

OFFSHORE OIL:
ITS IMPACT ON TEXAS COMMUNITIES

Volume III Aggregate State Impacts And
Volume IV Appendices

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OFFSHORE OIL:

ITS IMPACT ON TEXAS COMMUNITIES

VOLUME III
AGGREGATE STATE IMPACTS

Texas Coastal Management Program
General Land Office of Texas
Bob Armstron& Commissioner

prepared by

Research and Planning Consultants, Inc.
Austin, Texas
June,1977

property of CSC Library

This report was funded through financial assistance provided by the Coastal Zone
C"
C"
Management Act of 1972, administered by the Office of Coastal Zone Management,
U.S. Department of Commerce
us Department of commerce
NOAA coastal services Center LibrarY
2234 south Hobson Avenue
charleston. SC 29405-2413

CONTENTS

VOLUME III: AGGREGATE STATE IMPACTS

Page

Chapter 1 Introduction and Summary . . . . . . . . . . . . . . . 2
Scope of Analysis . . . . . . . . . . . . . . . . 2
Results . . . . . . . . . . . . . . . . . . . . . 2

Chapter 2 Impact of Capacity Increases in Texas Refining
Capacity . . . . . . . . . . . . . . . . . . . . 4
Projected New Capacity . . . . . . . . . . . . . 5
Impact of Refinery Expansion on the
Texas Economy . . . . . . . . . . . . . . .... 9
Summary . . . . . . . . . . . . . . . . . . . . . 13

Chapter 3 Effects of OCS Development On Gas Processing
Sector . . . . . . . . . . . . . . . . . . . . . 14

'Chapter 4 Impact of OCS Development on the Offshore Exploratory
Drilling Rig ConstructidIn Sector . . . . . . . . 18
World Market . . . . . . . . . . . . . . . . . . 18
Activity in the Texas Gulf . . . . . . . . . . . 19

Chapter 5 Impact of OCS Development on the Fixed Platform
Fabrication Sector . . . . . . . . . . . . . . . 27

Chapter 6 Impact of OCS Oil and Gas Development on
Petrochemical Plants . . . . . . . . . . . . . . 34

Chapter 7 Impact of OCS Development on Petroleum
Storage Facilities . . . . . . . . . . . . . . . 41

ACCOMPANYING VOLUMES

VOLUME I Executive Summary

Chapter 1 Introduction
Chapter 2 Study Approach
Chapter 3 Organization of the Study
Chapter 4 Findings
Chapter 5 Status of Relevant Legislation
Chapter 6 Common Methodological Errors
Chapter 7 Major Policy Variables
Chapter 8 Conclusions and Recommendations

VOLUME II Local Impact Scenarios

Part A Scenario Descriptions
Part B Analysis of Scenarios
Part C Scenario I

Part D Scenario II

Part E Scenario III
Part F OCS Development: A Sociocultural
Portrait of a Small Community

VOLUME IV Appendices

Appendix A Study Methodology
Appendix B Reasonable Ranges for Location and Extent of
OCS Oil and Gas Development in the Texas
Gulf of Mexico
Appendix C Descriptions of Strikes
Appendix D Industry Practices
Appendix E The OCSOG Model
Appendix F Estimating Fiscal Costs
Appendix H Inventory of Existing Facilities
Appendix I Anthropological Methods and Perspectives for
Developing Community Profiles
Apoendix J Bibliography

1. INTRODUCTION AND SUMMARY

Scope of Analysis

As other parts of this study have noted, there are several economic
sectors which may not be impacted by any given OCS scenario in isolation
(because scenarios encompass only one defined geographical area and
include as a basis for analysis only the activities expected to take place
in that area) but may feel impacts when the aggregation of all potential
oil and gas activities in the Texas Federal OCS is considered. Among such
sectors are petroleum refining, gas processing, mobile rig construction,
platform construction, and petrochemical processing. Each of these
sectors is analyzed in this Volume.

The analysis of each of these sectors was directed primarily toward
determining if oil and/or gas production from the Texas Federal OCS was
likely to necessitate an enlargement of that sector in Texas, either in the
form of expansion of existing facilities or construction of new ones. To
the extent that enlargements were found to be likely, the impacts of such
development were assessed.

No attempt has been made to quantify the aggregated fiscal benefit or
deficit for the entire State of Texas due to all potential OCS oil and gas
activity. To make such an attempt would be, at best, hazardous, given the
uncertainty surrounding the level of future OCS development. Furthermore,
results of such an analysis are likely to be tentative and potentially
misleading. The state fiscal effects of lease sales which have recently
taken place or for future sales for which tract nominations have been
announced, can be calculated, and such calculations are included in the
scenario analyses.

Results

The analysis of petroleum refining activities in Texas results in the
conclusion that production from the Texas Federal OCS, in and of itself, is
extremely unlikely to necessitate any expansion of the refining sector in
Texas. It is important to remember that demand for refining capacity is
considered to be more a function of demand for finished products than of
supply of crude oil. It is also likely that future oil production from the
Texas Federal OCS will be substitutes for - not additions to - the 1.4
million barrels of foreign crude oil which were input to Texas refineries
on a daily basis in September, 1976.

When the overall energy supply picture is analyzed (rather than oil
production from the Texas Federal OCS only), refining capacity expansion in
Texas by 1985 could range from none to 1.7 million barrels per day,
depending on the set of variables selected. Accordingly, the impacts of
expansion, in terms of income and State and local tax payments, vary
widely. Chapter 2 contains a thorough analysis of future expansions of the
refining sector in Texas.

Chapter 3 compares estimates of additional Texas Federal OCS gas
production through 1985 with existing capacity and throughput of gas
processing plants in the Texas coastal region. The results reveal that if
an 80% utilization rate for gas plants is assumed, the anticipated increase
in OCS gas production by 1985 would require only 10% of the current excess
capacity in the region. The projected future production of OCS gas, then,
can reasonably be expected to reverse the current downward trend in
capacity utilization but not to require, in and of itself, significant new
capacity.

In Chapter 4, the impact of oil and gas activities in the Texas
Federal OCS on the exploratory drilling rig construction sector is
analyzed. The analysis suggests that while a surplus of mobile rigs
appears to be the current case, demand will balance supply in the latter
part of 1979. Moreover, it appears that if expansion were to be required
in yard capacity, such expansion would probably not take place-until the
1980's. Finally, it seems unlikely that Texas Federal OCS development, in
and of itself, would warrant such capacity expansions.

The impact of oil and gas development in the Texas Federal OCS on the
platform fabrication sector is analyzed in Chapter 5. In sum, the analysis
concludes that since demand for fixed platforms is a derived demand based
on such variables as rate of leasing, private investment, decisions, and
cost/price dynamics; any of dozens of future public or private policy
decisions could seriously alter the present platform supply/demand
picture. All other things being equal, however, demand for platforms is
likely to increase slightly in the near future leading most probably to
minor capacity increases primarily in the form of expansions of existing
facilities. Further, such expansions in existing facilities are most
likely to take place in Louisiana, rather than in Texas.

Chapter 6 analyzes the impact of OCS oil and gas development on
petrochemical plants. The analysis points out that petrochemical plants
ultimately depend on refineries and gas plants for feedstocks. Thus, since
it was concluded that oil and gas activity in the Texas Federal OCS is not
likely to generate capacity expansions of refining or gas processing in
Texas, Chapter 6 concludes that expansion of the petrochemical sector - due
to Texas Federal OCS activity - is equally unlikely.

In Chapter 7, the impact of OCS oil and gas production on storage
facilities is examined. Although existing, relevant data is very sketchy,
the analysis concludes that storage facilities construction or expansion
are unlikely to be undertaken simply due to Texas OCS production.

2. IMPACT OF CAPACITY INCREASES IN
TEXAS REFINING INDUSTRY

Petroleum refining is an extremely important industry in Texas, with
over 26 percent of the total U.S. refining capacity located within the
State. Consequently, any analysis of the impacts of OCS oil and gas
development on the State would be incomplete without an investigation into
its effect on the petroleum refining sector.

The demand for refining capacity is derived from the demand for
petroleum products, rather than from the supply of crude oil. Thus,
refining capacity is not automatically expanded to handle newly discovered
OCS crude oil. The construction of a new refinery is more likely if there
is no refining capacity reasonably close to the find, if the find is large,
and/or if the adjacent region is a large demand center for refined
products. If, however, the new crude could be refined with existing
capacity, traded with another oil company (assuming each has crude near the
other's excess capacity), or substituted for imported crude oil, it is very
unlikely that a new refinery would be built or an existing one expanded.

When these factors are considered, it becomes unlikely that refining
capacity will be expanded in the State solely to accommodate new OCS crude
oil. Crude capacity in Texas refineries was approximately 4 million
barrels per calendar day (B/CD) as of January 1, 1976 (Bureau of Mines,
Petroleum Refineries in the U.S. and Puerto Rico) while total Texas
production (including that from offshore wells) ing 1975 and through
October,.1976 averaged 3.2 million B/CD. Offshore production in the first
ten months of 1976 averaged 3,200 B/CD, or only 0.8 percent of the
difference between Texas crude production and refinery runs at 90 percent
utilization of refining capacity. Put another way, offshore crude pro-
duction would have to increase by 12,400 percent to replace all of the non-
Texas crude inputs to Texas refineries, given current onshore production
and 90 percent utilization of capacity. This is most improbable. Instead,
it is more reasonable to conclude that new OCS oil will merely replace
foreign crude oil inputs into Texas refineries, which entered State
refineries at a rate of over 1.4 million B/CD in September, 1976.

Even though an increase in capacity due to OCS oil development is
unlikely, the economic impact on the State of possible expansion through
1985 under different sets of assumptions is considered below in terms of
income and State and local tax payments. The analysis examines the
industry in general and provides one method for assessing the impact of
industrial expansion upon the State. The expansion, however, is not
assumed to be caused by OCS oil development.

Projected New Capacity

As mentioned above, the demand for refining capacity depends on the
demand for refined products. Because of this, the process of estimating
needed new capacity becomes, first, one of determining the level of refined
product demand which will be unmet by existing capacity. This was done for
the nation for the years 1980 and 1985 in Figure 1 and involved the
following steps:

1. Estimating total demand for refined products, which is the sum of
domestic demand and exports. Two forecasts were used to derive a
probable range of future domestic demand. The first is the FEA
Reference Case (FEA, National Energy Outlook, March, 1976); the
second is provided by the Bure u of Mines (U.S. Energy Through the
Year 2000 (Revised), December, 1975). Exports are assumed to remain
at the current 7e-vel.

2. Subtracti,ng from the total demand that portion which will be
supplied by natural gas processing plants. The current level of
output net of the amount used by refineries for blending purposes (and
therefore not included in final demand) is assumed. The result is the
demand to be met by refinery output.

3. Subtracting existing and planned capacity from the results in
step two gives that product demand that will be unmet by U.S.
refining capacity in 1980 and 1985. Planned capacity consists of new
refineries, expansions, and reactivations scheduled in the United
States through 1980. It does not include those projects which are
uncertain or are in the early stages of planning,

A glance at Figure 1 shows that estimates of unmet demand vary
depending upon which forecast of domestic demand is used. Many such
forecasts exist; the FEA estimates tend to be low, while the BOM pro-
jections assume a higher growth rate in final demand.

Additional refining capacity was then estimated for the nation as a
whole and for Texas under three sets of assumptions. In the first case, it
is assumed that the U.S. is self-sufficient in refined products. In the
second, the U.S. imports products at the current level of 1.9 MMB/D.
Finally, the U.S. is assumed to import products at the current level from
all areas except the Caribbean. From there it would import sufficient
products to utilize most of that area's exportable capacity. The results
are shown in Figure 2.

Inspection of Figure 2 reveals a wide range of required expansion.
Differences exist due to varying levels of final demand and product
imports. In 1980, for example, note the extremes of (1) surplus capacity

Figure I

Estimated Demand For Refined Products Unmet
By Current And Planned U.S. Refining Capacity
1980 and 1985
MMB/CD

1980 1985
I Bureau of 2 1 Bureau of
FEA Mines FEA Mines 2

Domestic demand
for refined products 17.7 20.4 20.7 22.6
Exports 3 -0.2 0.2 0.2 0.2
Total demand 17.9 20.6 20.9 22.8

Less:
natural gas liquids (NGL) 4 0.9 0.9 0.9 0.9
supplied by natural gas plants -

Demand to be met by refinery
output 17.0 19.7 20.0 21.9

Less refinery crude runs given
existing capacity and planned
increases through 1980 5 16.1 16.1 16.1 16.1

Refined product demand
unmet given planned refining
capacity and current gas
processing plant output 0.9 3.6 3.9 5.8

1. FEA Reference Case I National Energy Outlook (Washington, D.C.: GPO, 1976),
p. G-3, G-23. Assumes business-as-usual supply and demand cases and
imported oil priced at $13 per barrel.

2. Bureau of Mines, United States Energy Through the Year 2000 (Revised),
U.S. Department oT-rn-terior, December, 1975, p. 29.

3. Assumes that U.S. petroleum exports will remain at current levels,
which averaged 0.2 MMB/D for 1976. See Monthly Energy Review, FEA,
November, 1976.

4. Assumes that current levels of natural gas liquids produced at gas
processing plants net of that utilized by refineries for blending
purposes will continue.

5. FEA, Trends in Refinery Capaci V and Utilization, June, 1976, p. 8.
Includes new refineries, expansions, and reactivations scheduled in
the U.S. through 1980. Does not include those projects which are un-
certain or are in the early stages of planning. Assumes 90 percent
utilization of capacity.

Figure 2

Additional U.S. And Texas Refining
Capacity Needed
1980 and 1985
MMB/CD

1980 1985
1 Bureau of 1 Bureau of
U.S. FEA Mines 2 FEA Mines 2

Case I: No Imports
Added Crude Runs 0.9 3.6 3.9 5.8
Added Capacity3 1.0 4.0 4.3 6.4

Case II: Current Level of
Of Product Imports4 5
Added Crude Runs (1.0) 1.7 2.0 3.9
Added Capacity3 (1.1) 1.9 2.2 4.3

Case III: Full Utilization
of Carribbean Capacity6
Added Crude Runs (1.9) 0.8 1.1 3.0
Added Capacity3 (2.1) 0.9 1.2 3.3

Texas7

Case I: No Imports
Added Crude Runs .2 0.9 1.0 1.5
Added Capacity3 .3 1.0 1.1 1.7

Case II: Current Level
of Product Imports4
Added Crude Runs .3) 0.4 0.5 1.0
Added Capacity3 .3) 0.4 0.6 1.1

Case III: Full Utilization
of Carribbean Capacity6
Added Crude Runs .5) 0.2 0.3 0.8
Added Capacity3 .6) 0.2 0.3 0.9
1. FEA Reference Case, National Energy Outlook (Washington, D.C.: GPO,
1976), p. G-3, G-23. Assumes business-as-usual supply and demand cases and
imported oil priced at $13 per barrel.
2. Bureau of Mines, United States Energy Through the Year 2000 (Revised),
U.S. Department of Interior,,December, 1975.
3. Assumes 90 percen1t utilization.
4. Assumes product imports will remain at 1976 average level of 1.9 MMB/D.
5. Parentheses ( ) indica 'te surplus.
6. Assumes that the percentage of Caribbean product exported to the U.S. will
be approximately 80% of that area's total exports (C IA , Intelligence Hand-
book: Export Refinin2 Centers of the World, June, 1975). Total net ex-
portable capacity is o5tainea from FEA, Trends in Refinery Capacity and
Utilization,-June, 1976, p. 32.
7. Assumes the current ratio of Texas capacity to total U.S. capacity
(26 percent) will continue.
7

of 2.1 MMB/CD if case III and the FEA estimates of final demand are
assumed, and (2) needed expansion of 4 MMB/CD (about one-fourth of existing
capacity) given no product imports and the BOM forecast. The extremes of
needed capacity in 1985 are 1.2 MMB/CD and 6.4 MMB/CD.

Other projections of additional capacity required by 1980 also
exhibit a wide range. Estimates given in Senate hearings on oil refining
capacity in August, 1973 ranged from 1.9 to 8.0 MMB/D and averaged 4.5
MMB/D. These tend to be higher than the projections in Figure 2 since they
are based on pre-embargo demand figures and lower estimates of existing
capacity. One study of capacity assuming no product imports estimated
total required capacity to be about 18 MMB/D in 1980 and 21 MMB/D in 1985
(Murray, Mobile Oil, 1974). This would imply needed added capacity equal
to about 2 MMB/D in 1980 and 5 MMB/D in 1985, given about 16 MMB/D in
existing capacity.

Twenty-six percent of the U.S. refining capacity is located in Texas.
This proportion was applied to the national estimates in order to project
additions to Texas capacity, under the assumption that the current
relationship of Texas capacity to total capacity will continue.

Of the three cases examined, the last seems most likely because the
bulk of the refineries in the Caribbean are owned and operated by U.S.
corporations and were built to refine products primarily for export to the
U.S. By 1980, the FEA estimates that the area's net exportable capacity
will be equal to 3.1 MMB/CD. If it is assumed that about 80 percent of the
product exports will continue to go to the U.S., full utilization of the
area's capacity would permit the export to the U.S. of 0.9 MMB/CD in
addition to the quantity currently exported. It seems reasonable that, all
other things, being equal, existing capacity would be utilized before new
capacity is built. Given the BOM estimate of final demand, this would
require 3.3 MMB/CD in additional capacity nationally, and 0.9 MMB/CD in
Texas, by 1985.

Projects which are uncertain or are in the early stages of planning
are not included in Figures 1 and 2. The total capacity of such projects is
3.2 MMB/CD, or slightly less than the maximum required in case III.
Significantly, 76 percent of that is scheduled for the East Coast, and none
is planned in Texas. If these projects come to fruition, very little
expansion of the refining industry is seen in Texas through 1985. It
should be noted, however, that continued opposition to refinery con-
struction on the East Coast due to environmental concerns may prevent the
realization of many of these projects. Such obstruction of construction
would support the assumption that new capacity will be distributed among
regions as in the past.

In short, depending upon the case selected, refining capacity
expansion in Texas by 1985 could range from none to 1.7 MMB/CD. The former
would occur if the Caribbean capacity were fully utilized and if those
projects which are in the early stages of planning or are uncertain are
ultimately undertaken. The latter assumes no product imports, and the
higher final demand estimates.

Impact of Refinery Expansion on the
Texas EZ-o-nomy

The effects of added refining capacity on income and on State and
local tax payments were estimated by applying the appropriate multipliers
(summarized in Figure 3) from the Texas Input/Output (1/0) Model. The
coefficients were then multiplied by the value of increased output per year
for each case and each estimate of refined product demand. The results are
shown in Figure 4 (FEA forecast) and 5 (BOM forecast) for the years 1980
through 1985.

Figure 3

Coefficients From the Texas 1/0 Model
Petroleum Refining Sector
(Dollars per dollar of output per year)

Income (Direct & Indirect) 0.5494900703

State Tax Payment
Direct 0.00275821
Indirect 0.0334949

Local Tax Payment
Direct 0.00171558
Indirect 0.0173928

A determination of the value of increased output per year is central
to any use of the above 1/0 multipliers. This required that the following
assumptions be made:

1. The volume of refined product outputs is equal to the volume of
crude runs. Processing gains, which are small, are ignored.

2. Since it takes from three to five years to construct a new
refinery or undertake a major expansion, all the capacity projected by
1980 will become available in that year. The added capacity by 1985
will be phased-in in equal increments in the years between 1980 and
1985.

3. The value of output is the volume multiplied by an assumed price
of $14.40 per barrel. This is the weighted average.price of refined
products assumed in the FEA 1985 Reference case. The use of a higher
or lower price would increase or decrease estimates accordingly.

Figure 4

Economic Impact of Refinery Expansion in Texas
FEA Estimate of Final Demand
1980-1985
($1975)

1980 1 19811 19821 1983 1 1984 1 1985 1 Total

Case I: No Imports
Increased Output (MB/CD) 200 360 520 680 840 1,000 3,600
Value of Output2 $2,880,000 $5,184,000 $7,488,000 $9,792,000 $12,096,000 $14,400,000 $51,840,000
Increase in:
Income 1,582,531 2,848,557 4,114,582 5,380,607 6,646,632 7,912,657 28,485,566
State Tax Payments 104 409 187,937 271,463 354,990 438,517 522,045 1,879,361
Direct 72,944 --74-,299 -- -20-,6-53 ---f7-,008 3-3,363 3-9,718 --T42,985
Indirect 96,465 173,638 250,810 327,982 405,154 482,327 1,736,376
Local Tax Payments 35,870 64,566 93 262 121,958 150,654 179 350 645,660
Direct 4,941 F. F9T 12',846 --TC-,M ---M-,7S7 24:704 88,936
Indirect 30,929 55,672 80,416 105,159 129,902 154,646 556,724

Case 11: Current Level of
Product Imports
Increased Outpu@ (MB/CD) - 100 200 300 400 500 1,500
Value of Output - $1,440,000 $2,880,000 $4,320,000 $ 5,760,000 $ 7,200,000 $21,600,000
Increase in:
Income - 791,266 1,582,531 2,373,797 3,165,063 3,956,329 11,868,986
State Tax Payments - 52,205 104 '409 156 613 208 818 261,022 783 067
Direct - 3,972 7,944 11"915 19,887 ----IT-,859 59577
Indirect - 48,233 96,465 144,698 192,931 241,163 723,490
Local Tax Payments - 17,935 35,870 53 805 71,740 89,675 269,025
Direct 2,470 4, 71,411 ---- 1-2 -,3'5 -2 -3-7-, U 5 -6
Indirect 15,465 30,929 46,394 61,858 77,323 231,969

Case III: Full Utilization
Of Caribbean Capacity
Increased Outpul (MB/CD)@@ '060 120 180 240 300 900
Value of Output $ 864 00 $1,728,000 $2,592,000 $ 3,456,000 $ 4,320,000 $12,960,000
Increase in:
Income 474,759 949,519 1,424,278 1,899,038 2,373,797 7,121,391
State Tax Payments 31 '323 62,645 93,968 125,290 156,613 469,839
Direct 2,383 ---4, T6T --7-. r4_9 37 --- =,
Indirect 28,940 57,879 86,819 115,758 144,698 434,094
Local Tax Payments 10,761 21,522 32,283- 43,044 53,805 161,415
Direct --7-,M --TT6"9 --4-,474 -75', 9-2 9 --7-,M 22,234
Indirect 9,279 18,557 27,836 37,115 46,394 139,181

2. Average weighted price of refined products is assumed to be $14.40 per barrel (FEA price for 1985 Reference case,
$1975).

Figure 5

Economic Impact of Refinery Expansion in Texas
BOM Estimate of Final Demand
1980-1985
($1975)

19801 19811 1982 19831 1984 1 19851 Total

Case 1: No Imports
Increased Output (MB/CD) 900 1,020 1,140 1,260 1,380 11500 7,200
Value of Output2 $12,960,000 $14,688,000 $16,416,000 $18,144,000 $19,872,000 $21,600,000 $103,680,000
Increase in-
Income 7,121,391 8,070,910 9,020,429 9,969,948 10,919,467 11,868,986 56,971,131
State Tax Payments 469,840 532 486 5959131 657 776 720,422 783,067 3,758,722
Direct 40',513 45,279 50,'045 ____5_4,_81T ____5_9 _,5_77/
Indirect 434,094 491,973 549,852 607,731 665,611 7232490 3,472,751
Local Tax Payments 161 415 182,937 204 459 225,980 247 503 269,025 1,291,319
'9'
'234 ____T5_,1_9iT -----37,-T 27
Direct 22, 34',092 ____337, 0-57 ____T77_,87T
Indirect 139,181 157,739 176,296 194,853 213,411 231,968 1,113,448

Case 11: Current Level of
Product imports
Increased Output (MB/CD) 400 520 640 760 880 1,000 4,200
Value of Output4 $ 5,760,000 $ 7,488,000 $ 9,216,000 $10,944,000 $12,672,000 $14,400,000 $ 60,480,000
Increase in:
Income 3,165,063 4,114,582 5,064,101 6,013,619 6,963,138 7,912,657 33,233,160
State Tax Payments 208,818 271,463 334@1109 396 754 459 399 522,045 2,192,588
2 M
Direct _TF1W 0,653 OF 30,186 34:952 ____3_9,7T_8_ _____TF6_,_81_6
Indirect 192,931 250,810 308,689 366,568 424,447 482,327 2,025,772
Local Tax Payments 71:87,40 93,262 114 784 136,306 157 828 179,350 753,270
Direct g '2 12,846 15',811 ____r8 =, 21',740 ____T6 =,
Indirect 61,858 80,416 98,973 117,531 136,088 154,646 649,512

Case III: Full Utilization
Of 51 ipacity
Increased Outpu@ (MB/CD) 200 340 480 620 760 900 3,300
Value of Output $ 2,880,000 $ 4,896,000 $ 6,912,000 $ 8,928,000 $10,944,000 $12,960,000 $ 47,520.000
Increase in:
Income 1,582,531 2,690,303 3,798,075 4,905,847 6,013,619 7,121,391 26,111,766
State Tax Payments 104,409 177,495 250,582 323,677 396,754 469,840 1,722 747
Direct 7,941 --- TT,-5-o4- ----T-9,565 -24,625 -----3-o-, T-8r 35,746 131,'C7O
Indirect 96,465 163,991 231,517 299,042 366,568 434,094 1,591,677
Local Tax Payments 35,870 60 979 86,088 111,197 136,306 161,415 591,855
____IT, M 81,524
Direct 4,941 8,399 =1 -71'r79
Indirect 30,929 52,580 74,230 95,880 117,531 139,181 510,331

1. All capacity projected for 1980 will be available in that year, since it takes 3 to 5 years to complete a major expansion
or new refinery. The capacity increase from 1980 to 1985 will be phased-in in equal annual increments.
2. Average weighted price of refined products is assumed to be $14.40 per barrel (FEA price for 1985 Reference case, $1975).

As expected, the impacts vary, depending upon the case and demand
forecast selected. For example, the total increase in income through 1985
due to the postulated expansion could range from about $7.1 million (case
III/FEA forecast) to almost $57 million (case I/BOM forecast). The ranges
for State and local tax payments are $470,000 to $3.8 million, and $160,000
to $1.3 million, respectively.

A note of caution should be sounded at this point. The purposes of
this study is not to examine the economic impact of expansion in the
petroleum refining sector per se. Rather, it is to assess the effects of
OCS oil and gas development on the State economy. The latter, of course,
required a look at the probable impact of development on the Texas refining
industry, and it was concluded that new OCS finds, in and of themselves,
should not cause capacity increases. As a result, although a general
impact analysis was done, it is less detailed and complete than would be
the case if the impacts were seen to be related to OCS development.

A research effort primarily concerned with the refining sector would
require a more comprehensive analysis, including, for example, an estimate
of costs to State government. Such an analysis should be undertaken with
an awareness that certain methodological problems exist, to wit, rather
heroic assumptions must be made concerning, first, new employment
resulting from expansion, and second, State per capita expenditures.

Determination of total new employment requires that the projected
capacity increase be divided between new construction and expansion, and
that assumptions be made concerning the average size of each project and
number employed. The new employment thus generated must somehow be divided
between existing Texas residents and new residents.

Unfortunately, there is no direct relationship between the size of a
refinery, and the number employed. Both a large and small refinery can be
operated by the same number of operating personnel, although a large one
may require more maintenance and office personnel. Perhaps the best way to
determine a relationship between capacity and number employed is to divide
total employment in the sector by total capacity.

State per capita expenditures would then be multiplied by new
population to estimate increased costs. However, State expenditures vary
widely among regions. Thus, determination of per capita expenditures would
require added assumptions concerning location of capacity increases.

In pursuing this analysis, one must be careful that the addition of
these assumptions to those already employed in deriving postulated
capacity increases not result in specious impact estimates.

Summary

Estimates of capacity expansions for the Texas refining industry
through 1985 differ greatly because of differing estimates of demand for
refining products and assumptions concerning the level of product imports.
As a result, the economic impact of these expansion in terms of income and
.State and local tax payments also varies.

It is unlikely that refineries will be expanded in Texas solely to
process new OCS crude oil. Rather, the new crude would most probably
replace foreign crude currently being imported into State refineries.
Thus, although the economic impact of capacity expansion is analyzed, the
effects should not be thought of as caused by OCS development. Other
factors such as t e degree of environmental opposition to construction on
the East Coast, the development of a superport off the Texas coast, and
U.S. policies concerning refined product imports will have more of an
influence on future investment in Texas refineries.

IGAP

3. EFFECTS OF OCS DEVELOPMENT ON
GAS PROCESSING SECTOR

Gas processing plants perform a necessary function in preparing
natural gas for final consumption: they remove liquid hydrocarbons, carbon
dioxide and hydrogen sulfide from raw gas. The dry gas is then transferred
to a gas pipeline and the liquid products are removed from the plants by
truck, rail, or pipeline. Gas plants will therefore be found in an
adjacent onshore region if commercial quantities of natural gas are
discovered in an OCS area. More specifically, they will be located in line
with the landfall of the pipeline bringing the raw gas to shore and a
commercial pipeline.

The construction of new gas processing facilities is thus a potential
effect of OCS gas development. In order to determine whether expanded
capacity is a probable effect, estimates of additional OCS gas production
through 1985 were compared with existing capacity and throughput of plants
in the Texas coastal region.

Total Federal OCS gas production off the Texas coast equalled
101,434,765 MCF in 1975 or about 278 MMCF/D. Estimates of yearly pro-
duction, assuming a nine percent annual growth rate, are shown in Figure 6.
In 1985, for example, total production is postulated to be approximately
658 MMCF/D, representing an increase of 380 MMCF/D, or 137 percent, over
the 1975 production level.

This compares with average plant capacity and production in the Texas
coastal region in 1975 of 10,300 MMCF/D and 5,760 MMCF/D, respectively.
(See Figure 7.) If an eighty percent utilization rate were assumed, the
anticipated increase in OCS gas production by 1985 would require only ten
percent of the current excess capacity in the region. Consequently, no new
capacity should be required to protess newly-discovered OCS gas. This
analysis, of course, excludes a consideration of new construction needed to
replace older existing capacity which may be scrapped.

Almost forty percent of the U.S. gas processing capacity is located in
Texas, and almost fifteen percent is in the State's coastal region. All
three areas have experienced declining throughput and utilization in
recent years due to a combination of factors. First, total gas production
has decreased. Second, a growing portion of non-associated gas (that is,
gas not contained in oil) is dry, thus not requiring processing. The
trends are set forth in Figure 8. The current utilization rate in the
coastal region (56 percent), in fact, is lower than that of Texas as a
whole (63 percent), and of the nation (67 percent).

In short, it is anticipated that the increased OCS gas production will
be in quantities large enough to reverse the downward trend in capacity
utilization but not so large as to require significant new capacity.

Figure 6

Federal Texas OCS Gas Production
1975-1985

Gas Production Increased Production

MMCF MMCF/D Over 1975 (MMCF/D)
1975 1 101,435 278 -
1976 2 110,564 303 25
1977 120,515 330 52
1978 131,361 360 82
1979 143,183 392 114
1980 156,070 428 150
1981 170,116 466 188
1982 185,427 508 230
1983 202,115 554 276
1984 220,305 604 326
1985 240,133 658 380

1. Actual production figure taken from Texas Railroad Commission Offshore
Production Files.

2. Data from 1976 on were projected from the 1975 figure, assuming a
nine percent annual growth rate as stated in Product lAl.l.

Figure 7

Average Capacities And Production,
Gas Processing Plants In The Texas
Coastal Region, 1975

Gas Capacity 1 Gas Throughput Percent
County (MMCF/D) (MMCF/D) Capacity

Orange - - -
Liberty 117.0 53.6 45.8
Jefferson 570.0 178.9 31.4

Harris 333.0 238.9 71.7

Galveston 219.5 163.5 74.5

Chambers 452.0 416.1 92.1
Brazoria 2,039.0 1,170.3 57.4
Matagorda 1,002.0 415.4 41.5
Jackson 111.0 150.3 135.4

Victoria 154.0 63.8 41.4

Calhoun 231.5 126.2 54.5

Aransas 75.0 20.0 26.7
Refugio 207.5 174.6 84.1
San Patricio 443.8 213.4 48.1
Nueces 875.0 517.5 59.1
Kleberg 2,692.0 1,576.0 58.5
Kenedy 255.0 121.0 47.5
Willacy 64.0 3.4 5.3
Cameron - - -
Hidalgo 459.5 157.5 34.3
TOTAL 10,300.8 5,760.4 55.9

1. The capacities at the beginning and end of the year were summed and
divided by two to obtain average capacity during the year.

Source "Gas Processing," International Petroleum Encyclopedia, years
1975 and 1976.

Figure 8

Gas Processing Capacity And Production
U.S. And Texas/1972-1975
(MMCF/D)

1972 1973 1974 1975

Gas Capacity

Texas 28,882.4 29,336.0 29,666.9 29,236.9
U.S. 74,198.4 73,936.7 74,242.1 73,284.0

Gas Throughput

Texas 20,853.2 20,138.1 19,355.6 18,466.5
U.S. 56,656.1 55,624.4 53,229.4 49,256.9

Percent Utilization

Texas 72.2 68.6 65.2 63.2

U.S. 76.4 75.2 71.7 67.2

1. The capacities at the beginning and end of the year were summed and
divided by two to obtain average capacity during the year.

Sources: Oil And Gas Journal, Surveys of Gas Processing Plants,
1972-1974.

International Petroleum Encyclopedia, years 1975 and 1976.

4. IMPACT OF OCS DEVELOPMENT ON
THE OFFSHORE EXPLORATORY DRILLING
RIG CONSTRUCTION SECTOR

Mobile offshore drilling rigs are used to drill exploratory wells.
Four types are currently employed: barges, drillships, jack-ups, and semi-
submersibles. The kind actually utilized to drill a given well will depend
to a large degree on the depth of water and sea conditions expected. In the
Texas Gulf, jack-ups and semi-submersibles are the most common, the former
operating in depths up to 350 feet of water, and the latter in up to 2,000
feet.

The demand for drilling rigs is a derived demand, and depends upon the
level of exploration. Since rigs are not consumed in the drilling process,
but are moved from well to well throughout their 20 to 25 year life
expectancy, the demand for new rigs also depends upon the existing supply.
Drilling contractors will not order new rigs if there are sufficient rigs
to drill the anticipated number of wells. If, however, the demand for rigs
exceeds the number available such that profit expectations are high, new
rigs will be ordered. Thus, a potential effect of OCS oil and gas
development is expansion in the drilling rig construction industry if the
demand for new rigs were to exceed the capabilities of the yards to build
them.

The offshore exploratory drilling rig market was examined to
determine if this is a likely development, and if so, what its impact on
the State might be. Specifically, the demand for rigs by type was compared
with the supply world-wide and for Texas. The construction capabilities of
the Texas yards were also considered. These factors led to the conclusion
that OCS development will probably not lead to expanded rig construction
capability.

World Market

The drilling rig market is notoriously cyclical, characterized first
by shortages as the tempo of exploration quickens, charters lengthen, and
rates rise. In response, contractors may order new rigs. Because of the
lead-time required to build the rigs and their long life expectancy, orders
are based in part upon expectations concerning the market for 2 and 3 years
and longer in the future. As a result, contractors tend to react to a
shortage by over-ordering. When these rigs in turn enter the market, the
shortage often turns into a surplus as the number of rigs without contracts
increases, charters shorten, and rates decline. In short, although demand
may rise over time, supply tends to fluctuate around the demand, resulting
in periodic surpluses and shortages. The cycle for contractors has been
typified as one of feast in one year and famine three years later.

The market is now in the bust phase, a situation due more to over-
building than to a contraction in offshore exploration. In September, 1973,
the total world fleet numbered 230, with 22 idle (10% unemployment) and 90
under construction. As of January, 1977, there was a total of 435 rigs, 65
of which were without contracts (15% unemployment). In addition, 47 were
under construction.

A better measure of rig availability can be obtained by considering
only the competitive mobile rig fleet, which is comprised of those units
that are actually available and able to move from one body of water to
another. This excludes tenders, rigs politically tied to an area (for
example, the Communist nations), and rigs designed specifically for a given
area (Lake Erie, Lake Maracaibo, and Louisiana submersibles). This fleet
numbers 318, of which 54 are unemployed (17 percent).

Estimates of demand are available on a yearly basis through 1980.
One, by the New Orleans investment company, Howard, Weil, Labouisse,
Fredericks, Inc. (Marine Transportation Industry, August, 1976), is
displayed in Figure 9. Supply can be readily estimated by considering the
existing fleet and those units under construction, and then adjusting for
scrappings and losses (historically averaging about 2 percent of the
fleet). These results are also shown in Figure 9, as are the consequent
surpluses or deficits.

The data suggest that the market will approach equilibrium in 1979,
with slight deficits occurring in 1980 (if no new orders are placed). This
picture is consistent with current analyses of the offshore rig market.
Although estimates of the time that demand will again equal supply range
from 1979 to 1982, consensus seems to be that rig supply will not be tight
again until the latter part of 1979.

The current market surplus is reflected in construction activity.
Virtually no new orders have been placed since mid-1975. Of the 45 jack-
ups, semis and drillships under construction, 41 are due to be delivered in
1977, and 30 have no contract. By the time a significant pickup in orders
is expected in 1979, the construction yards will be virtually empty. It
would appear that a significant number of new orders would have to be
placed before construction capacity would be expanded.

Industry analysts agree that exploration off the U.S. coast will
provide the best opportunities during the next few years. Several U.S.
companies, in fact, have begun bringing rigs back into U.S. waters from
overseas.

Activity in,the Texas Gulf

Current leases and announced lease sales were considered with
historical exploratory patterns to estimate the demand for rigs off the
Texas coast through 1982. Two levels of activity were postulated. The

Figure 9

World Exploratory Drilling Rig Market

Demand Supply 2 Surplus (Deficit)

Semis & Semis & Semis &
Year Jack-ups Drillships, Jack-ups Drillships Jack-ups Drillships
Beginning 3 3
1977 150 131 173 159 23 28

1978 169 149 185 177 16 28

1979 179 168 181 174 2 6

1980 184 180 177 171 (7) (9)

1. Demand for beginning 1977 was determined by subtracting the number of rigs
without contracts from the total number of rigs. Data source was Offshore
Rig Location Report, January 10, 1977. Source for years 1978-1980 was
Howard, Wiel, Laouisse, Friedrichs, Inc., Marine Transportation Industry,
August, 1976.

2. Source for 1977: Offshore Rig Location Report, January 10, 1977. Supply for
other years was esfimated by averaging the number at beginning and end of the
year, assuming no new orders and a 2 percent scrapping and loss rate.

3. Includes those in port for repair or refitting, or being towed from 1 body
of water to another as well as those actually drilling.

first assumed that tracts ultimately explored as a percentage of those
leased would be equal to the historical average of 54 percent. The second
postulated a higher proportion of 80 percent to reflect post-Embargo energy
developments, and thus represents a high impact case.

In addition, both assumed the following:

1. Exploration would be distributed evenly throughout the life of
the lease, commencing 10 months after the effective date and ending
three months before its expiration.

2. As discussed in Appendix D, the average number of exploratory
wells per tract explored in the Texas Federal OCS has been 2.0, and
the average number of wells per rig per year has been 1.9.

3. In future sales, 37 percent of the tracts offered will be leased.
This has been the average in the Texas OCS sales.

4. Jack-ups will be used in water less than 80 meters and semi-
submersibles in water greater than 80 meters in depth.

Figure 10 reveals the anticipated number of wells drilled and rigs
required per year under both sets of assumptions. Activity tapers off
after 1979 because that is when the current leases start to expire.
Although announced Sales 47 and 45 are considered, they are small in
magnitude compared with sales such as 34 and 37. Three other sales have
been proposed (Sales 51, 58 and 62) and are scheduled over a two-year
period beginning in mid-1978. Their impacts were not considered because it
is unknown at this time how many tracts will be offered, or even if the
sales will take place. When more is known, their effects may be considered
by using the approach outlined in this analysis.

The percentage of world demand accounted for by anticipated Texas
activity is shown in Figure 11. The low impact case in effect postulated
that the Texas OCS share of total demand for jack-ups will increase
slightly, while the share of demand for semi -submersi bl es will actually
decline. Under the high impact case, Texas requirements for jack-ups as a
percentage of total demand more than doubles. The latter case is perhaps
the more likely in view of the fact that 30 percent of all working rigs are
employed in the Gulf where the high level of activity is expected to
continue, and a growing percentage of the nominated tracts in the announced
Gulf lease sales are off the Texas coast.

Current drilling and construction activity for Texas and the Gulf is
summarized in Figure 12. There are, for example, 20 jack-ups, including
seven in State waters, and 5 semi -submersibles and 3 ships drilling off the
Texas coast. In addition, 1 jack-up is in port for refitting, 1 ship is
without contract, and 3 jack-ups and 1 ship, all of which are either
available or under contract for the Gulf, are scheduled for delivery from
the construction yards this year.

Figure 10

Exploratory Wells Drilled/Offshore
Mobile Rigs Required
By Typel
1977 1982

1977 1978 1979 1980 1981 1982
Jack-ups Semis Jack-ups Semis Jack-ups Semis Jack-ups Semis Jack-ups Semis Jack-ups Semis
Low Imp ct Case 2

Total Wells
Per Year 28 3 37 3 39 6 13 0 8 2 5 0

Total Rigs
Per Year 15 2 20 2 21 4 7 7 5 1 3 3
rQ
rQ
High Impact Case 3

Total Wells
Per Year 55 16 67 19 69 10 17 2 14 2 6 1

Total Rigs
Per Year 29 9 36 10 37 6 9 1 8 1 4 1

1. Considers current leases and announced sales 47 and 45.

2. Assumes that 54 percent of the tracts leased will ultimately be explored (historical average for Texas) .

3. Assumes that 80 percent of the tracts leased will ultimately be explored.

Figure 11

Projected Texas OCS Rig
Demand As A Percentage
Of World Demand

Jack-ups Semis and Drillships

Percent of Percent of
Year Number Total Demand Number Total Demand
Beginning 2
1977 13 9% 8 6%

1977 15-29 10-19% 2-9 2-7%

1978 20-36 12-21% 2-10 1-7%

1979 21-37 12-21% 4-6 24%

1980 7-9 4-5% 1 1%

1. Total demand estimated from Howard, Weil, Labouisse, Friedrichs, Inc.,
Marine Transportation Industry, August, 1976. See Figure 1.

2. Number operating in Texas Federal waters in the beginning of 1977 was
obtained from The Offshore Rig Location Report, January 10, 1977.
Estimates in subsequent years are from Figure 2.

Figure 12

Current Status Of Mobile
Rigs In The Gulf Region

Texas Entire Gulf of Mexico

Semis and Semis and
Jack-ups Drillships Jack-ups Drillships
Working 202 8 49 24
Not Working 3
But Under Contract 1 0 2 1

Without Contract 0 1 4 5
Under Construction 4 3 1 4 2

Total 24 10 59 32

1. Includes Texas

2. Includes seven drilling in State waters

3. Rig is being repaired, refitted, or worked over.

4. These rigs are either without contracts or under contract for the
Gulf. Rigs under construction but under contract for another region
are excluded.

When this data is compared with the information presented in Figure
10, it becomes apparent that there will be enough semis and ships already
in Texas waters to meet the high impact requirements. A sufficient number
of jack-ups would be avilable to meet demand under the low impact case,
even if those now exploring state waters are excluded, by also considering
those in the Gulf region outside of Texas which are being worked over, are
without contracts or are under construction and available.

The critical question seems to be the availability of jack-ups under
the high impact case, with a projected requirement of 14 more in 1979 than
the combined total of those now working in Texas Federal waters, and those
not now working or under construction in the entire Gulf region. This
demand could be met in one or more of the following ways:

1. Semi-submersibles or barges could be used in place of the jack-
ups. Although jack-ups are less expensive than semis and are more
suited for shallower water, semis can be substituted if jack-ups are
unavailable. In the Gulf off Louisiana, semis rated for 600 feet are
now drilling in 20, 40 and 70 feet of water.

2. Jack-ups could be towed in from other regions of the world.
Mobile rigs are truly mobile, and rigs have been moved in the past
from one area to another. The move is time-consuming and expensive,
though. As a result, it is done only if exploration activity in the
new area is expected to be sufficiently high to make the move
worthwhile. If the market becomes tight enough, a charter may be
negotiated whereby the lessee pays the cost.

3. Jack-ups could be constructed in Texas yards or elsewhere. There
are five companies in Texas which construct mobile exploratory
drilling rigs. Two yards now have no rigs under construction, and
with the exception of 1 ship, all orders in the other yards will be
delivered by mid-1977. Capabilities of the yards are such that from
12 to 16 deep water jack-ups could be constructed at one time. If the
deliveries were scheduled to maximize efficiency, approximately 16
could be built in 2 years, and 26in 3.

Expansion of construction capacity due to OCS development would
require a sufficiently high level of exploratory drilling not only to
employ the existing fleet, but also to more than fill the currently empty
rig order books of the yards in Texas and elsewhere in the Gulf region. The
high impact level of exploration projected that more than double the number
of rigs currently employed would be required in 1979. Even this demand
could be met given the existing supply and yard capacity if the orders were
placed now.

As mentioned above, a significant pickup in orders is not anticipated
until 1979 when the market is expected to approach equilibrium, given the
current supply. It seems reasonable to conclude that if expansion were to
occur in yard capacity, it would not be until into the 1980's, and should

be.a result of much higher levels of exploration in other areas in addition
to that off the Texas coast. Expanded exploratory drilling in Texas Gulf
would undoubtedly be looked upon favorably by the depressed rig con-
struction industry, but it seems unlikely that Texas OCS development, in
and of itself, would warrant an increase in yard capacity.

5. IMPACT OF OCS DEVELOPMENT ON
FIXED PLATFORM FABRICATION SECTOR

Fixed platforms are used in the development and production phases of
an OCS activity sequence. Unlike mobile exploratory rigs, these structures
are permanently attached to the ocean floor; they are ordered to be placed
at a particular site and are designed to meet the requirements of that
location.

As with mobile rigs, the demand for platforms is a derived demand.
Since they are special-order items, there is a direct relationship between
the number of fields developed and platform demand. The number of
platforms needed depends upon the number of discoveries which is economic
to develop. The latter, in turn, is determined, at least in part, by the
level of exploration and oil and gas prices. If platform requirements were
greater than the present capacity of platform fabrication yards, then one
may expect expanded capacity as a consequence of oil and gas development.

Estimates of platform demand off the Texas coast were made by
considering current leases, announced lease sales, and historical Texas
offshore exploration and development patterns. The results are summarized
in Figure 13. Two levels of activity were postulated. The low level
supposed that tracts explored as a percentage of those leased and tracts
developed as a percentage of those explored would be equal to 54 percent
and 32 percent, respectively, to reflect historical trends. In contrast,
the value of the f i rst proportion was set at 80 percent and the second at 60
percent in the high case in anticipation of accelerated exploration and
development.

Other assumptions were made that are common to both:

1. All of the tracts that are developed will be put into production.

2. The platforms that will be installed are drilling/production
platforms. In other words, the same platform will be used during both the
development and exploration phases.

3. The number of fixed platforms installed per developed tract is
1.6. This has been the average in the Texas Federal OCS, as discussed in
Appendix D.

4. Of the tracts offered in announced Sales 47 and 45, 37 percent
will be leased. This is in the middle of the historical range for Texas OCS
sales.

Figure 13

Fixed Platforms Required
1977-1984

Low Impact High Impact
Year Case Case

1977 14 48

1978 18 55

1979 17 58

1980 18 52

1981 13 35

1982 5 11

1983 2 5

1984 1 3

TOTAL 88 267

NB: This figure considers the impact of lease sales since Sale 31
and announced Sales 47 and 45. Because of the assumptions con-
cerning activity over time,development activity from these sales
diminishes after 1980. Development of leases obtained in future,
unannounced sales may very well result in the pre-1981 levels
continuing rather than tapering off.

5. Tracts already developed are those in which platforms have been
set.

6. Platforms will be put in place throughout the period between the
22nd and 82nd months from the effective date of the lease.

The wide range presented in Figure 13 is due to the different
assumptions concerning exploratory and developmental activity. The low
number reflects a continuation of historical levels, while the high case
supposes much more intensive exploration and development. Of course, the
level actually achieved will depend upon such variables as federal govern-
ment energy programs, oil and gas prices, and the nation's relationships
with oil exporting countries.

An industry magazine recently published rule-of-thumb multipliers for
the Gulf of Mexico OCS which enable one to estimate equipment requirements
of future lease sales (Oil and Gas Journal, December 20, 1976). Appli-
cation of the multiplier of 69 platforms with 2 or more wells per million
acres to the Texas OCS results in a requirement of 125 new platforms. The
fact that the results are toward the lower portion of the range is to be
expected since the multipliers are based on a recent equipment survey and
thus reflect current practices for the entire Gulf OCS.

Figure 14 shows the number of platforms installed per year in the
Texas Federal OCS and reveals that 15 were installed during 1976. Achieve-
ment of the high impact case would thus imply that the number platforms
installed per year during the next few years would more than triple. Such
a sudden increase seems unlikely when one considers current platform orders
and their areas of intended use. This information is presented in Figure
15; it indicates that 16 platforms are specifically intended for Texas
federal waters.

The survey upon which Figure 15 is based is 80 percent complete, and
thus the data presented underestimates the actual number planned. Even
when this is considered, though, the level indicated fits within the range
postulated in the low impact case through 1980.

It should be remembered that the time distribution of platform
requirements in Figure 13 is based on the assumption that platforms will be
installed between the 22nd month and the 82nd month from the effective
lease date. This is consistent with the Texas historical average of 52.3
months (Appendix D). Of course, there is nothing dictating that platforms
must be installed during this period. Indeed, 295 months elapsed in one
case. Thus, if developers encountered constraints on development such as a
backlog of orders in fabrication yards, the number needed might very well
be spread out over a longer time period. In such a situation, while the
platforms installed per year might be about equal to the number postulated
in the low impact case through 1980, the level might be sustained for a few
more years, thus resulting in more ultimately set in place.

Figure 14

Platforms Installed in Texas
OCS by Year

Year Number

1955 1
1958 1
1961 1
1962 1
1963 5
1964 11
1965 6
1966 4
1967 4
1968 3
1969 3
1970 2
1971 3
1972 3
1973 3
1975 10
1976 15 2

TOTAL 76

1. Source: USGS.

2. Includes one lost in a storm which is due to be replaced.

Figure 15
Platforms Now Under Construction I
By Area of Intended
Use/Yard Location

Delivery Dates
Area of Intended Use 1976 1977 1978 1979 Unspecified Total

Texas OCS 0 10 1 0 5 16

Other Gulf 4 30 2 1 5 42

Location Unavailable,
But Built in Gulf Yards 2 6 6 3 2 19

Yard Location

Texas 2 1 3 1 0 7

Louisiana 4 41 6 3 5 59

Planned for Gulf,
But Yard Unavailable 0 4 0 0 7 11

1. Includes platforms planned, on order, and underconstruction.

Source: Ocean Industry, January, 1977. Survey is 80 percent complete.

Platforms themselves are built in sections. The lower part is the
jacket, made up primarily of welded steel and pinned to the seabed. The
upper part is the deck onto which the required drilling and/or development
equipment is attached. The entire unit may be fabricated by one yard, or
each section may be constructed by different companies.

The U.S. platform construction industry is centered in the Gulf states
of Louisiana and Texas, especially the former. These are the major
companies:

J. Ray McDermott
Brown and Root
Avondale Shipyard
Teledyne Movible
Dupont Fabricators
Delta Fabricators

Of those, only Brown and Root is situated in Texas. The rest are located in
Louisiana.

Figure 15 also outlines construction activity by yard. It shows that
platforms known to be ordered from Gulf Coast yards number 66, of which 7
(11 percent) were placed with the Texas company. The delivery dates of a
few extend into 1979. A comparison of these orders with the total annual
capacity (which has been estimated by industry analysis to be between 60
and 70) seems to indicate that some surplus capacity exists in the
industry. However, although the survey upon which the order information is
based is the most comprehensive one available, it is still only 80 percent
complete, leading one to conclude that less slack exists in the industry.

The industry has expanded within the past few years. Additions
include a second Brown and Root yard in Texas, located near Corpus Christi;
expansion of yards in Houma and New Iberia, Louisiana, and of Avondale's
yard in Morgan City, Louisiana; and a new facility at Intercoastal City,
Louisiana.

Conversations with industry analysts and individuals within the
industry reveal that while order books should remain full, a significant
expansion in capacity will probably not occur during the next few years.
Any increase which does take place will most likely take the form *of
expansion of existing facilities rather than construction of new yards.
Such a growth pattern implies that the bulk of expanded activity would
occur in Louisiana rather than in Texas.

. In summary, these conclusions can be drawn concerning the probable
impact of Texas OCS development on the platform fabrication industry in
Texas.

1. In the high impact case the number of platforms installed
annually is more than triple current levels, whereas in the low impact case

the number set in place increases only slightly. Present orders for
platforms point to an annual level for the next several years close to the
latter case rather than to a significant increase, and thus seem to confirm
the validity of the low impact case for the near term.

2. Levels of exploration and development approaching the high
impact case could result from specific government policy actions. For
example, the decontrol of natural gas prices could make some marginal
reserves economic and thus open more areas for development. Of course,
whether such policy changes will actually occur is unknown. Considering
present order books and expected capacity increases, it seems reasonable
that a high level of activity would be reflected in slightly increased
annual installations extended over a longer period of time in lieu of a
high number installed within the relatively short time-span of Figure 13.
Such an order pattern would be more easily absorbed by present industry
capacity.

3. The expected growth pattern is one of minor capacity increases
due primarily to expansion of existing facilities. Since only one company
is located in Texas, such a case implies that the effects of any expanded
fabrication capacity due to Texas OCS development would be felt primarily
by Louisiana.

As discussed above, demand for fabrication yards depends upon the
demand for platforms which in turn depends upon the rate and extent to
which field are developed. Since platforms are special order items, there
is no pre-existing supply. Rather, demand for platforms is translated
directly into orders. Unfortunately, one encounters data problems at this
point. Information about such basic matters as yard capacity and cureent
orders by shipyard, by delivery date, and by area of intended use tend to
be incomplete, contradictory, or unavailable. In addition, unlike during
the exploration phase, companies are not required to develop a field and
put it into production during a specific time period. This also increases
the difficulty of forecasting demand. Because of these factors, the
conclusions drawn in this analysis are less definitive than those reached
in the other industry analyses.

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I
\I. @A@ aiguAl l4goii@4"-il -

6. IMPACT OF OCS OIL AND GAS DEVELOPMENT
ON PETROCHEMICAL PLANTS

Very broadly defined, petrochemicals are those products derived from
petroleum and natural gas. They generally are considered to consist of
three components: basic petrochemicals (those made directly from petroleum
and natural gas fractions), intermediates (those for which a definite
chemical precursor can be identified and which will undergo further
chemical reactions), and end products such as fibers, plastic resins and
rubber. The last does not include fabricated products like plastic
articles and tires.

Crude oil and field natural gas are not used directly by the industry,
but are processed first by refineries and gas processing plants. The
petrochemical industry thus does not produce hydrocarbons but rather
purchases liquified hydrocarbon products and processed natural gas to be
used as feedstocks or raw materials.

The major petrochemical feedstocks are natural gas; liquified pet-
roleum gases (LPG) such as ethane, propane and butane; and heavy liquids
such as naptha and gas oil . The LPGs are produced in refineries or
extracted at gas processing plants; the heavy liquids are refinery pro-
ducts.

Total Texas production in 1975 of feedstock products is summarized in
Figure 16. Not all of the products are used solely as feedstocks. For
example, while most of the ethane and all of the iso-butane are utilized as
petrochemical raw materials, propane, butane and natural gas have other
applications. Thus, the industry must compete with other consumers of
natural gas, natural gas liquids, and refined products for their feed-
stocks.

Competition for refined products is not limited to particular LPG's
such as propane or butane. Petrochemical manufacturers also compete with
users of all possible products from a barrel of crude, since crude oil can
be refined into a multitude of refined products. The percentages of
refinery yields used as feedstocks are presented in Figure 17 for Texas and
the U.S. Even though the yield from Texas refineries (8.1 percent) is more
than double the national average, the bulk of refinery output is not used
as petrochemical feedstock.

Consumption of feedstocks by the industry in Texas has been estimated
by the Texas Governor's Energy Advisory Council; this information is shown
in Figure 18 for 1975 both as absolute values and as percentages of total
Texas production. The industry in Texas thus consumed amounts equal to
about 55 percent of the state's production of LPG, 91 percent of the
production of heavy liquids, and 2 percent of natural gas production.

Figure 16

1975 Texas Production of Products Which
Are Used As Major Petrochemical Feedstocks
(MB)

Texas Texas
Gulf Inland Total

Natural Gas (BCF) NA NA 7,486
Liquified Petroleum Gases 2
Ethane 17,440 45,893 63,333
Refineries f,_609 80 -T-,689
Gas Processing Plants 14,831 45,813 60,644

Propane 37,525 79,784 117,309
Refineries @1,027 2,886 23,913
Gas Processing Plants 16,498 76,898 93,396

Butane 11,956 36,980 48,936
Refineries 5,593 595 6,188
Gas Processing Plants 6,363 36,385 42,748

Butane-Propane Mix 625 1,326 1,951
Refineries 121 15 136
Gas Processing Plants 504 1,311 1,815

Iso-Butane 6,548 9,625 16,173
Refineries T, 0-6 8 73 _T, 1-41
.Gas Processing Plants 4,480 9,552 14,032

Total LPG 74,094 173,608 247,702
Refineries -31-,-4-1-8 3 P_9 35,067
Gas Processing Plants 42,676 169,959 212,635
Petrochemical Feedstocks 2 68,866 8,955 77,821

1. Marketed production of natural gas. Taken from Bureau of Mines, Mineral
Industry Surveys, Natural Gas Production and Consumption: 1975 (annual),
October, 1976. Breakdown between Texas Gulf and Texas Inland was not
given.

2. Taken from Bureau of Mines, Mineral Industry Surveys, Crude Petroleum,
Petroleum Products, and Natural Gas Liquids: 1975 (Final Summary),
February, 1977, p. 17. The category Petroleum Feedstocks consists of
all feedstocks produced by refineries other than those listed under
LPG.

Figure 17

Percentage of Refinery Yields Accounted
For By Petrochemical Feedstocks,
Texas And The U.S., 19751

Texas Texas Total Total
Gulf Inland Texas U.S.

Total Crude and Unfinished Runs
(MMB) 1,031 160 1,191 4,554

LPG 1.7%2 0.3 % 1.5% o.7 %

Ethane 0.3% 0.05% 0.2% 0.09%
Other LPG (Chemical Use Only) 1.5% 0.2 % 1.3% 0.6 %

Other Petrochemical Feedstocks 6.7% 5.6 % 6.5% 2.7 %

Total Yield Accounted 2
For By Feedstocks 8.4% 5.9 % 8.1% 3.4 %

1. Yields from crude and unfinished oil reruns. Data derived from Bureau
of Mines, Mineral Industry Surveys, Crude Petroleum, Petroleum Products
and Natural Gas Liquids: 1975 (Final Summary).

2. Totals do not add due to rounding.

Figure 18

Consumption of Feedstock By The Petrochemical
Industry In Texas During 1975

1 As Percentage of 2
Consumption Texas Production

LPG (MMB) 136 55%

Heavy Liquids (MMB) 71 91%
Natural Gas (Billion C F) 3 143 2%

1. Source: State of Texas Governor's Energy Advisory Council.
2. Derived by dividing consumption data by production data found in
Figure 1.
3. Consumption as a percentage of total Texas consumption is 3.3%.

Proximity to secure feedstock supplies is an important location
factor,, especially for the makers of basic and intermediate petro-
chemicals. For example, in one study of petrochemical plants in Texas, 47
out of 60 firms ranked "nearness to raw materials" as the primary site
selection factor (Whitehorn, 1973). Since Texas is the largest producer of
natural gas and has 26 percent of the U.S. refining capacity, it is not
surprising to discover that a large portion of the nation's basic chemical
capacity is located within the state. Figure 19 compares Texas' capacities
for major basic chemicals with total U.S. capacities and reveals that, with
the exception of ammonia, at least 40 percent of production capacity for
each product is found in Texas.

The industry within Texas is concentrated in the coastal region, as
Figure 20 indicates. The 56 plants in the area constitute 69 percent of
the number in Texas, and 17 percent of the number in the U.S. Also, 45
percent of the nation's announced construction projects are planned for the
Texas coastal region.

The survey upon which Figure 20 is based focuses on the basic and
intermediate segments of the industry and thus may be incomplete. An
earlier, broader survey identified 82 firms operating 139 plants, of which
67 percent by number and 88 percent by capacity were located in the Coastal
Zone (Whitehorn, 1973).

Figure 19

Basic Chemical Capacity, 1975
MM Lbs/Yr.

Texas Continental U.S. Texas as a
Product Capacity Capacity Percentage of U.S.

Ethylene 15,310 24,895 61%
Propylene 6,235 13,510 46%
Butadiene 3,295 3,965 83%
Acetic Acid 1,140 1,140 100%
Butyl Rubber 180 385 47%
Polybutene 280 460 61%
Butyl Alcohol 192 459 42%
Benzene 3,859 7,674 50%
Toluene 5,009 7,180 70%
Xylenes 3,123 4,191 75%
Carbon Black 1,865 4,223 44%
Ammonia 6,867 37,566 18%
Methanol 5,350 8,354 64%

TOTAL 52,705 114,002 46%

Source: Texas/Louisiana Petrochemicals, prepared for the Petrochemical
Energy Group (Houston: Groppe and Long, June, 1975).

Figure 20

Location of Texas Petrochemical
Plants By Region

Number of Plants
County Operating Under Construction 2

Gulf Coast 56 31
Orange 4 1
Jefferson 9 3
Chambers 1 0
Harris 25 14
Galveston 5 3
Brazoria 5 3
Matagorda 1 1
Calhoun I I
Victoria 0 1
Nueces 4 3
Cameron 1 0
Unspecified 0 1

Inland 25 0

TOTAL 81 31

1. -Taken from International Petroleum Encyclopedia (Tulsa, OK: Petroleum
Publishing Co., 1976).

2. Includes projects which are planned, proposed, or under construction.
Taken from the following issues of Oil and Gas Journal: 4 October
1976, 29 November 1976, 6 December 1976.

It should be emphasized that the petrochemical industry is an energy
consuming industry in that it depends upon refineries, gas processing
plants, and other petrochemical plants for its feedstocks; it does not
process crude oil or field natural gas. Moreover, the percentage of crude
oil or natural gas ultimately used as feedstock is relatively small. For
example, only about 8 percent of the refinery yields from crude and
unfinished oil reruns in Texas is accounted for by petrochemical feed-
stocks. Further, consumption of natural gas in Texas as feedstock equals
approximately 2 percent of Texas production.

The critical question concerning the impact of OCS development on the
petrochemical industry would seem to be this: Would the expected expansion
in refining and gas processing capacities due to an increase in OCS crude
oil and field natural gas production justify new petrochemical capacity,
considering, of course, the importance of proximity to raw materials as an
important site selection factor? As discussed elsewhere in this volume, no
expansion of refining and gas processing capacities is expected as a result
of OCS oil and gas development. Rather, new OCS oil will probably replace
foreign crude currently being imported into state refineries; the
increased OCS gas production should be enough to reverse downward trends in
total OCS gas production and the coastal region's gas processing capacity
utilization but insufficient to require significant new capacity. Since
the sectors upon which the petrochemical industry depends for its raw
materials are not expected to experience increased capacities, it seems
reasonable to conclude that expansion in the petrochemical sector because
of OCS oil and gas development is unlikely.

In Texas, the onshore industrial sectors such as refining, gas
processing, and petrochemicals which are dependent upon crude oil and
natural gas either directly or indirectly are fully developed. Con-
sequently, further OCS development will not automatically result in new
plants being established. Indeed, investigation has pointed out the
improbability of such expansions occuring primarily as a result of OCS
development. This contrasts with OCS frontier areas where few, if any, of
these types of plants operate and therefore where expansion of these
sectors is far more likely.

7. IMPACT OF OCS DEVELOPMENT
ON PETROLEUM STORAGE FACILITIES

The nation's physical petroleum distribution network consists of two
subsystems. As part of the primary system, pipelines, tankers, and barges
are used to transport crude oil to refineries and refined products in bulk
from these centers to bulk terminals. In the secondary system, trucks,
barges, railcars, and pipelines are employed to move products from terminals
to bulk stations and ultimately to the final consumers.

Petroleum storage facilities are important components of the total
network, for crude oil and refined products are first accumulated at these
facilities and then segregated, batched, and inventoried for further move-
ment through the system. The facilities are also used to hold crude oil and
products between the time of production and time of final use.

The latter function is especially important for motor gasoline and
distilllate fuel oil. Demand for these products is seasonal, and supply is
relatively constant. As a result of the time discrepancy, inventories must
be built up each year prior to the period of peak demand, a process usually
occurring around the end of March and during October for gasoline and fuel
oil, respectively. The inventories are then drawn down during the peak
demand seasons.

There are at least two major sources of information on storage capacity.
The first is a survey conducted periodically by the National Petroleum
Council (NPC). This survey provides data on primary storage capacity and
utilization; the latest was conducted in 1973.

The second is the Petroleum Bulk Stations and Terminals section of the
Census of Whole Trade. The Census is undertaken every five years; the most
recent was in 1972. Information is given concerning the storage capacities
of bulk terminals and bulk stations. The former are part of the primary
system while the latter are components of the secondary system. Data on bulk
terminals are thus provided by both sources. The Census may be more complete
than the NPC survey in terms of number of establishments included but, unlike
the NPC study, provides no information on utilization.

Primary capacity and utilization in Texas are shown in Figures 21 and
22. Crude storage capacity consists of tankage at refineries, along pipe-
lines, and on tank farms.. Refined product storage capacity encompasses the
tankage at refineries, along pipelines and on tank farms, and at bulk
terminals which have been assigned to the following products: motor and
aviation gasoline, kerosene, jet fuel, distillate fuel oil, and residual fuel
oil.

Since the NPC survey only provides crude storage information by Petro-
leum Administration for Defense (PAD) Districts, capacity in Texas was

Figure 21

Primary Storage Capacity
As Of
September 30, 1973
(MB)

Inland Gulf Total
Texas Texas Texas
Crude I NA2 NA 131,355
Refineries NA NA 33,592
Pipelines and Tank Farms NA NA 97,763

Product 3 32,021 96,655 128,676
Refineries 24,001 81,916 105,917
Pipelines and Tank Farms 1,669 9,561 11,230
Bulk Terminals 6,351 5,178 11,529

1. Crude storage capacity by PAD districts was given in the NPC study.
Capacity for Texas was estimated by assuming that the ratio of Texas
capacity to total District III capacity was equal to the ratio of Texas
crude stocks to total District III crude stocks on that date. The source
for the latter ratio was Bureau of Mines, Crude Petroleum, Petroleum
froducts, and Natural Gas Liquids: 1973 (Final Summary), Mineral
Industry Surveys, February, 1975.

2. NA means not available.

3. Taken from National Petroleum Council, Petroleum Storage Capacity,
September 10, 1974.

Figure 22

Primary Storage Utilization
As Of
September 30, 1973
(MB)

Crude Product

Texas Inland
Capacity 1 NA2 32,021
Amount In Tanks 3 NA 10,910
Percent Full NA 3461%

Texas Gulf
Capacity 1 NA 96,655
Amount In Tanks 3 NA 52,720
Percent Full NA 54.5%

Texas Total
Capacity 1 131,355 128,676
Amount In Tanks 72,473 4 63,630
Percent Full 55.2% 49.4%

1. Taken from Figure 21.

2. NA means not available.

3. Source: NPC, Petroleum Storage Capacity, September 10, 1974.

4. Source: Bureau of Mines, Crude .Petroleum. Petroleum Products, and
( ---1
Natural Gas Liquids: 1973 Fl-nal Summary), Mineral Industry Surveys,
February, 1975.

estimated by assuming that the ratio of Texas capacity to total District III
capacity (of which Texas is a part) was equal to the ratio of Texas crude
stocks to total District III crude stocks on that date. A comparison of this
result with crude stocks (information reported by the Bureau of Mines) gives
an estimate of capacity utilization of 55 percent.

Product storage capacity and utilization are available by Bureau of
Mines Refining Districts; thus a breakdown between inland Texas and the Texas
Gulf region is available. Close inspection of Figure 21 reveals that most of
the capacity in the Gulf region is located at the refineries and along
pipelines or on tank farms; that is, it is found toward the producing end of
the distribution system. Of the total State capacity in these two cate-
gories, 77 percent and 85 percent respectively are in the coastal region. In
comparison, the area has 45 percent of Texas' tankage at bulk terminals. The
large amount of capacity at refineries is not surprising when one realizes
that Texas coastal counties have 86 percent of the State's refining capacity,
and 23 percent of the nation's.

Utilization of the tankage assigned to refined products averaged 55
percent for the Gulf region, and 49 percent for the entire State.

Figure 23 summarizes the capacity of bulk stations and terminals by
county. Terminals are all those facilities having total bulk storage
capacity of 50 MB or more and smaller units which receive their products
primarily by tanker, barge, or pipeline. When the total census capacity of
the coastal counties of 6,403 MB is compared with the NPC estimate for the
region of 5,178 MB, it can be seen that most of the area's census storage
capacity is at terminals and thus part of the primary system, rather than at
stations.

A further disaggregation of Figure 23 which would distinguish between
terminal and station capacity for each county is not available. In the
entire State, there are 2,077 stations with a total capacity of 3,679 MB and
80 terminals with tankage of 12,636 MB. In other words, most of the storage
capacity in Texas is part of the primary system; this is especially true in
the Gulf region.

As discussed elsewhere in this volume, new OCS crude oil can reasonably
be expected to replace foreign crude currently being imported into state
refineries. Since, in such a case, the new crude oil will not represent a net
increase in the total flow through the system, new storage facilities should
not be required due to Texas Federal OCS activities.

Unfortunately, information concerning storage capacity and utilization
is limited. The two sources which are available are published relatively
infrequently, creating data problems if one's study does not happen to be
undertaken immediately after publication of the latest Census or Survey. In
short, although the data sources used are not as current as other data cited
in this study, they represent the most recent research efforts in this area.

Figure 23
Storage Capacity Of Petroleum 1
Bulk Stations And Terminals, 1972
(MB)

County Number Capacity

Gul-f Coast 315 69403.0
Orange 6 14.0
Liberty 14 20.1
Jefferson 18 109.1
Harris 68 4,930.3
Galveston 13 100.9
Chambers 8 15.0
Brazoria 30 29.7
Matagorda 18 16.5
Jackson 5 10.8
Victoria 11 106.2
Calhoun 7 8.7
Aransas 3 4.3
Refugio 4 7.1
San Patricio 12 11.3
Nueces 24 585.9
Kleberg 6 8.6
Kenedy - -
Willacy 7 7.5
Cameron 31 366.3
Hidalgo 30 50.7

Inland 1,842 9,912.2

Total 2,157 16,315.2

1. Taken from Bureau of Census, 1972 Census of Wholesale Trade. Capacities
were converted from gallons to barrels (42 gallons to a barrel) to facili-
tate comparisons with other figures.

OFFSHORE OIL:

ITS IMPACT ON TEXAS COMMUNITIES

VOLUMEIV
APPENDICES

Texas Coastal Management Program
General Land Office of Texas
Bob Armstrong, Commissioner

prepared by

Research and Planning Consultants, Inc.
Austin, Texas
June,1977

This report was funded through financial assistance provided by the Coastal Zone
Management Act of 1972, administered by the Office of Coastal Zone Management,
U.S. Department of Commerce

CONTENTS

VOLUME IV: APPENDICES

Page

Appendix A Study Methodology . . . . . . . . . . . . . . . . A - 1
Introduction . . . . . . . . . . . ** * * * A - 2
Methodology A- Scenario Description . . . . A - 4
Methodology B- Exploration . . . . . . . . . A - 11
Methodology C- Development . . . . . . . . . A - 22
Methodology D- Production . . . . . . . . . A - 23
Methodology E- Net Onshore Effects . . . . . A - 24
Methodology F- Environmental Impact
Assessment . . . . . . . . . . . . . . . A - 35
Methodology G - Social Impact
Assessment . . . . . . . . . . . . . . . A - 40

Appendix B Reasonable Ranges for Location and Extent
of OCS Oil and Gas Development in the
Texas Gulf of Mexico . . . . . . . . . . . . B - 1
Attachment BI, Geological Framework . . . . . B - 26
Attachment BII, Pipelines in the Texas
Federal OCS . . . . . . . . . . . . . . . B - 44

Appendix C Descriptions of Strikes . . . . . . . . . . . . . C - 1
Appendix D Industry Practices . . . . . . . . . . . . . . . D - 1
Time Scheduling . . . . . . . . . . . . . . . D - 2
Type and Amount of Required Equipment . . . . D - 5

Appendix E The OCSOG Model . . . . . . . . . . . . . . . . . E - 1
Input/Output Analysis . . . . . . . . . . . . E - 3
Sub-Regional Modifications of the
State Model . . . . . . . . . . . . . . . E - 5
Offshore Modifications of the
State Model . . . . . . . . . . . . . . . E - 7
Internal Operating Characteristics of
the OCSOG Model . . . . . * ' ' :I * * * E - 9
Attachment EI, Mathematical Explanation . . . E - 19
Attachment EII, Questionnaire . . . . . . . . E - 26

Appendix F Estimating Fiscal Costs . . . . . . . . . . . . . F - 1

Appendix G Survey of Selected Modeling Techniques . . . . . G - 1
Regional Economic Models . . . . . . . . . . G - 2
Environmental Impact Identification
Models . . . . . . . . . . . . . . . . . G - 5

iii

Infrastructural Costs Models . . . . . . . 6 G - 8
Estuary Water Quality Models . . . . . . . . G - 12
Outfall Models . . . . . . . . . . . . . . . G - 17
Spill Models . . . . . . . . . . . . . . . . G - 18
Groundwater Models . . . . . . . . . . . . . G - 18

Appendix H An Inventory of Existing OCS Related Oil and
Gas Facilities in Texas . . . . . . . . . . . H - 1
Petroleum Refineries and Petrochemical
Complexes . . . . . . . . . . . . . . . . H - 2
Ports . . . . . . . . . . . . . . . . . . . . . . H - 8
Offshore Drilling Rigs . . . . . . . . . . . . . H - 13
Support Services . . . . . . . . . . . . . . . . H - 15
Gas Plants . . . . . . . . . . . . . . . . . . . H - 15

Appendix I Anthropological Methods and Perspectives for
Developing Community Profiles . . . . . . . . I - 1

Appendix J Bibliography . . . . . . . . . . . . . . . . . . J - I

ACCOMPANYING VOLUMES

VOLUME I Executive Summary

VOLUME II Local Impact Scenarios

Part A Scenario Descriptions
Part B Analysis of Scenarios
Part C Scenario I

Part D Scenario II

Part E Scenario III
Part F OCS Development: A Sociocultural
Portrait of a Small Community

VOLUME III Aggregate State Impacts

Chapter I Introduction and Summary
Chapter 2 Refining
Chapter 3 Gas Processing
Chapter 4 Drilling Rig Construction
Chapter 5 Platform Construction
Chapter 6 Petrochemical Plants
Chapter 7 Storage Facilities

APPENDIX A

STUDY METHODOLOGY

INTRODUCTION

The Outer Continental Shelf (OCS) Oil and Gas Development Impact
Methodology was developed by RPC, Inc. for the Texas General Land Office as
part of a project to (1) develop a methodology to determine impacts of OCS
oil and gas development and (2) using that methodology, evaluate the Texas
onshore and nearshore impacts of OCS oil and gas development. This
methodology is one of several documents prepared by RPC, Inc. during Phase
I of its study. The analysis of OCS impacts is, in turn, one of several
special projects of the Coastal Management Program of the Texas General
Land Office

The Impact Methodology is actually seven separate methodologies: A
through G (see Figure Al). Each methodology is divided into tasks; each
task is described on a separate page in the document. Tasks for Method-
ology A are serialized Al, A2, A3, etc.; tasks for Methodology B are
referenced as B1, B2, B3; and so on. The tasks are described with respect
to their objectives, the inputs necessary for their conduct, the activities
included, task outputs, and the use of the task outputs.

Task outputs include "internal memoranda" (memos) which are informal
presentations of results; and "products," which are brief but formal
reports. Both types of outputs are identified in the text by the task
designation and one further number following the decimal point which
distinguishes between multiple outputs of a single task. Of these outputs,
only the "products" are shown in Figure Al.

Methodology A, Scenario Description, has as its ultimate purpose the
development of Texas Federal OCS development scenarios. Each scenario
derived from Methodology A is correctly seen not as a prediction, but as a
postulation of OCS oil and gas development to be used only for the purpose
of determining the impacts of the postulated activities if they were to
actually occur. That is, each scenario is a postulated event - not an
actual or a predicted event - which will be analyzed in Methodologies B
through G.

Methodologies B, C, and D provide for determination of the direct and
indirect onshore effects of each scenario's exploration, development, and
production phase, respectively.

Methodology E provides for the determination of net onshore effects of
offshore exploration, development, and production over time by region and
for the State of Texas as a whole. It results in net state economic impact
and net local economic impact.

Methodology F provides for an assessment of the environmental impact
of each scenario; Methodology G provides the same for social impact.

A - 2

The use of scenarios as an analytic tool is not new, nor is the
analysis of the impact of impending commercial or industrial developments a
novel concept. This impact methodology does, however, combine several
analytical techniques which have been used by themselves in other studies
at other times, to result in an approach which, in its totality, is
singular and is characterized by several distinguishing features.

1. The methodology provides for the determination of three separate
categories of impact: economic (including infrastructural), environ-
mental, and social.

2 The methodology provides for the determination of those three
categories of impact both by region and State.

3. The methodology utilizes a refinement of the Texas input/output
model to derive regional and State impacts.

4. The methodology is adaptable not only to other geographical
areas, but to other developments (either OCS-related or non-OCS
related) as well.

Finally, it should be noted that time and funding limitations pre-
vented the development and use of a rigorous and detailed methodological
approach which would provide a comprehensive identification and explicit
analysis of all the manifold economic, social, and environmental effects of
the postulated OCS development scenarios. Numerous simplifications were
necessary which omitted various known but minor interrelationships,
effects, and costs. Within the constraints of the simplifications made,
however, the described methodologies provide the fullest accounting of
effects and costs consistent with project scope. Each methodology has been
organized so as to facilitate its later extension as a basis for more
detailed studies.

A - 3

METHODOLOGIES

A. Scenario Description Methodology

The methodology employed for Scenario descriptions is shown in Figure
Al. It comprises four tasks; namely, the interpretation of available data
relating to potential OCS reserves (Al); the description of postulated
strikes (A2); an analysis of industry practices involved in OCS explor-
ation, development, and production (U); and the preparation of scenario
descriptions (A4).

A - 4

Task Al - Interpretation of Available Data

Objective: To identify the range in the size, location, likelihood, and
characteristics of an OCS strike which could reasonably
occur.

Input: - information on the number and dates of lease sales to be
held based on BLM projections;

- estimates, largely from federal agencies, of the total
recoverable reserves of oil and gas in the federal OCS off
Texas;

- geologic description of each producing trend prepared by
the Bureau of Land Management, U.S. Department of the
Interior;

- present trends of production in the Texas OCS area and the
federal OCS area off Texas derived from data supplied by
the Texas General Land Office, the United States Geo-
logical Survey, the Bureau of Land Management, and the
Texas Railroad Commission;

- description of existing pipelines and proposed pipelines
from data of the Texas General Land Office, the Federal
Power Commission, and private industries;

- data on the location and extent of exploratory drilling
presently under way in the OCS area derived from USGS and
BLM data, and other publications;

- data on overall energy supply, pricing, and other
matters.

Activities: Collection, organization and analysis of the available infor-
mation (including that obtained from interviews) to determine
the reasonable ranges in location, scale, and other char-
acteristics of a strike.

Output: An internal memorandum (memo A1.1) describing the available
information and data and the conclusions of analysis with
respect to the range of:

- tracts to be offered for lease in each sale;

- tracts to be leased as a percentage of tracts offered;

- tracts to be explored as a percentage of tracts leased;

A - 5

tracts developed as a percentage of tracts explored;

tracts put into production as a percentage of tracts
developed;

location and size of tracts put into production;

oil/gas ratio; and

assumptions concerning overall energy supply, inter-
national pricing, and other matters affecting the timing
and manner of exploration, development and production.

Use: Memo A1.1 will be the principal input to Task A2, Description
of a Strike.

A 6

Task A2 - Description of a Strike

Objective: To describe the general characteristics of a series of postu-
lated strikes.

Input: Internal memorandum A1.1 describing reasonable ranges in the
location, nature, and extent of a potential OCS strike and
subsequent production.

Activities: Postulate several alternative strikes which provide a range
in the assumptions of location, size, and other characteri-
stics.

Output: An internal memorandum (memo A2.1) describing each postulated
strike with respect to:
- hypothesized number and location of tracts offered for
lease in each sale,

- hypothesized number and location of tracts actually
leased in each sale as a percentage of tracts offered,

- hypothesized number and location of tracts actually ex-
plored as a percentage of tracts leased,

- hypothesized number and location of tracts actually de-
veloped as a percentage of tracts explored,

- hypothesized number and location of tracts which will
produce as a percentage of tracts developed,

- hypothesized amount of production from producing tracts,
including any previous activity not included in hypo-
thesis above, and

- assumptions related to overall national energy supply.

Use: Memo A2.1 will provide a partial basis for the descriptions of
scenarios to be developed in Task A4.

A - 7

Task A3 - Industry Practices

Objective: To identify the likely time scheduling of activities and
requirements of various types related to alternative OCS
development patterns.

Input: - USGS and BLM documents;

- other relevant books, articles, and reports;

- information collected by interview with private indus-
tries;

- analysis of current and previous experiences in other
federal OCS areas;

- data relating to the sensitivity of private investors'
OCS development decisions to government policy variables.

Activities: Analyze the available information and describe the most
likely sequence, scheduling and types of activities for each
described strike and development pattern including:

- the time period and equipment involved in seismographic
exploration,

- the time period in which lease sales take place,

- the time period for exploratory drilling,

- number and type of exploratory wells per explored tract,

- number and type of exploratory wells per rig per year,

- time sequence between exploratory drilling and develop-
ment drilling,

- number of platforms per developed tract,

- number of development wells per platform,

- number of development wells per platform per year,

- time sequence between development and production,

- number of platforms per producing tract,

- number of production wells per platform,

A - 8

transportation and storage facilities utilized and the
time sequence of their construction or expansion, and

operations and maintenance practices.

Output: An internal memorandum (memo A3.1) including a tabular
listing of requirements, scheduling, and other character-
istics of the development patterns associated with each
postulated strike.

.Use: Memo A3.1 will provide a partial basis for the description of
scenarios prepared in Task A4 and will serve as input to Tasks
B1, C1, and D1.

A 9

Task A4 - Preparation of Scenarios

Objective: To describe the OCS development scenarios to be evaluated.

Input: - memo A2.1 describing the characteristics of each postu-
lated strike (or set of strikes); and

- memo A3.1 describing the characteristics and requirements
of the development pattern likely to accompany each
postulated strike.

Activities: - Prepare comprehensive scenarios combining strike char-
acteristics and development pattern characteristics;

- Assure the internal consistency of each scenario; and

- Prioritize the scenarios for evaluation based on their
estimated likelihood of occurance but giving high
priority to at least one large scale development.

Output: Product A4.1 which describes each scenario and the prior-
itized listing of scenarios for evaluation.

Use: Product A4.1 provides the basis for the development of the
sub-scenarios for exploration (Task Bl), development (Task
CI) and production (Task D1).

A - 10

B. Exploration Methodology

The exploration methodology provides for determination of the primary
and indirect onshore effects of the offshore exploration phase associated
with each scenario evaluated. The interrelationship of the several tasks
comprising the methodology is shown in Figure Al.

As noted on Figure Al, Task Bl (Exploration Sub-Scenario Description)
and Task B2 (Distribution of Requirements to Coastal Study Sites) require
consideration of any or all study sites which might be significantly
affected by exploration activities or provide some part of the exploration
requirements. Subsequent tasks in the exploration methodology deal with
-each affected study site. In the event a hypothesized exploration sub-
scenario affects more than study site, Tasks B3 through B9 would be
repeated for each site.

A - 11

Task B1 - Exploration Sub-Scenario Description

Objective: To describe the requirements over time of the exploration
phase of a scenario with respect to requirements for land,
personnel, facilities, services, and supplies.

Input: - description of the scenarios and development patterns
which are to be evaluated (product A4.1), and

- description of industry practices (memo A3.1).

Activities: - Prepare a general description of the type, extent, and
timing of exploration assumed to take place; and

- Use available information on industry practices and
characteristics of the postulated scenarios to calculate
significant requirements over time for rigs and other
equipment, land for construction of needed equipment and
operation, personnel for conduct of exploration activi-
ties including those required for primary facilities,
services, and supplies.

Output: An internal memorandum (memo B1.1) including descriptions of
the exploration pattern for each scenario and a tabular
listing of significant exploration phase requirements over
time for each scenario without regard to the source or
location from which requirements will be met.

Use: Memo B1.1 is a partial basis for the distribution of explora-
tion phase requirements to study sites.

A - 12

Task B2 - Distribution of Requirements to Study Sites

Objective: To distribute the significant exploration phase requirements,
over time, to each affected study site.

Input- - memo B1.1, which describes the exploration sub-scenario
including primary land and manpower requirements over
time; and requirements for significant primary facili-
ties, services, and supplies over time; and

- information concerning the current availability and
accessibility of those resources in each affected study
site as determined from Department of Commerce documents
(pertaining to relevant SIC's); baseline economic, demo-
graphic, natural resources, and infrastructural inven-
tories; and the study sites' development goals.

Activities: - Determine the availability and accessibility of resources
in each affected study site based on both a survey of
existing resources in the site and on consideration of
the feasibility of drawing on those resources ("available
and accessible" will mean "usable" as well as
"existing"); and

- Allocate the resource demands to each affected study site
based on their availability and accessibility. Where
alternative locations for development exist within a
study site, a sub-allocation of requirements will be
made.

Output: Three outputs:

- primary land requirements (product B2.1);

- primary manpower requirements (product B2.2);

significant primary facilities, services, and supplies
requirements (memo B2.3).

The primary land requirements, (product B2.1) will describe
the allocation of primary land requirements by type of use and
amount, over time, for each affected study site.

The primary personnel requirements (product B2.2) will
describe the allocation over time of primary personnel re-
quirements for each affected study site.

The memorandum on requirements for significant primary faci-
lities, services, and supplies (memo B2.3) will detail the
cumulative requirements for the exploration phase by study
site and over time.

A - 13

Use: Information contained in products B2.1, B2.2 and memo B2.3
will be input directly into the determination of primary and
indirect land requirements (Task B4); primary and indirect
employment (Task B7); and primary facilities services and
supplies requirements (Task B3) for each affected study site.
In addition, Product B2.2 will be input to Task B5, Prepa-
ration of Input to 1/0 Model.

A - 14

Task B3 - Primary Facilities, Services, and SuppTies Requirements

Objective: To identify requirements and revenues stemming from primary
facilities, services and supplies.

Input: Memo B2.3 summarizing the allocation to study sites of re-
quirements over time for primary facilities, services and
supplies.

Activities: Analyze the primary facilities, services and supplies ex-
pected to be furnished from each study site to determine the
time pattern and amount of indirect land requirements by use;
primary water requirements; primary tax revenues; and ex-
penditures by relevant SIC categories.

Output: - product B3.1 describing types of indirect land require-
ments and including a tabular summary of indirect land
requirements by type of use over time for each affected
study site;

- product B3.2 describing primary water requirements and
including a tabular summary of primary water requirements
over time for each study site;

- product B3.3 describing primary tax revenues over time
derived in each affected study site from primary explor-
ation activities; and

- product B3.4 describing expenditures made to relevant SIC
categories over time by primary activities in each
affected study site.

Use: - product B3.1 is input to Task B4 as a partial basis for
determining accumulated primary and indirect land re-
quirements;

- product B3.2 is input to Task B9 as a partial basis for
determining accumulated primary and indirect water re-
quirements;

- product B3.3 is input to Task B8 as a partial basis for
the determination of total tax revenues; and

- product B3.4 is input to Task B5 as the basis for develop-
ment of the input data deck for the Input/Output model.

A - 15

Task B4 - Primary and Indirect Land Requirements

Objective: To determine the land requirements generated by the primary
activity; the land requirements of primary facilities,
services, and supplies; and the indirect land requirements
for each affected study site.

Input: - summary by type of use and amount, of primary land
requirements over time for each affected study site as
contained in product B2.1, Primary Land Requirements; and

- product B3.1, Indirect Land Requirements.

Activities: Aggregation of the direct and indirect land requirements over
time and by type of use and amount for each affected study
site, and by areas within the study site where sub-allo-
cations were made.

Output: Product B4.1 summarizing direct and indirect land require-
ments.

Use: Product B4.1 is partial input to Task E4.

A - 16

Task B5 - Preparation of Data for Input/Output Model
Objective: To prepare an input data deck for use in the Input/Output
model.

Input: - product B2.2, Primary Manpower Requirements;

- product B3.4, Expenditures by Relevant SIC's; and

- Additional information on the current Texas economy and
the characteristics of each affected study site
necessary for operation of the Input/Output model.

Activities: Prepare the input deck.

Output: The input data deck. (For purposes of reference, the data
deck will be identified as memo B5.1).

Use: The data deck (memo B5.1) is a direct input to Task B6,
Input/Output Model Operation.

A - 17

Task B6 - Input/Output Model Operation

Objective: - to determine indirect tax revenues,

- to determine personal income generated,

- to determine indirect employment, and

- to determine indirect water requirements.

Input: - the input data deck (memo B5.1), and

- the program deck for the Input/Output model

Activities: - Operate the Input/Output model for evaluation of in-
direct effects in each affected study site, and

- Interpret the output.

Output: Four products:

- product B6.1, a summary of indirect water requirements
over time in each affected study site;

- product B6.2, a summary of indirect tax revenues to
state and local governments in each affected study site;

- product B6.3, a summary of- personal income generated
over time in each affected study site; and

- product B6.4, a summary of indirect employment over time
in each affected study site.

Use: - product B6.1 will be a partial input to Task B9; Primary
and Indirect Water Requirements;

- product B6.2 will be a partial input to Task B8, Total
Tax Revenues;

- product B6.3 will be an input to Methodology G, Social
Impact Assessment; and

- product B6.4 will be a partial input to Task B7, Primary
and Indirect Employment.

A - 18

Task B7 - Primary and Indirect Employment

Objective: To determine the total employment requirements over time in
each affected study site.

Input- - product B2.2 describing primary personnel requirements
over time for each affected study site; and

- product B6.4 describing indirect personnel requirements
over time for each affected study site.

Activities: Aggregation of primary and indirect personnel requirements
over time for each affected study site.

Output: Product B7.1 describing primary and indirect employment
requirements over time for each affected study site.

Use: Product B7.1 is input to Task E2 as a partial basis for the
determination of employment requirements over time for all
phases of the OCS scenario.

A - 19

Task B8 - Total Tax Revenues

Objective: To estimate the total tax revenues derived over time in each
affected study site.

Input: - product B3.3 describing primary tax revenues; and

- product B6.2 describing indirect tax revenues.

Activities: Aggregate tax revenues of each affected study site over time
for local and state government.

Output: - product B8.1 describing tax revenues over time to state
government from each affected study site; and

- product B8.2 describing tax revenues over time to local
governments from each affected study site.

Use: - product B8.1 is input@o Task El as a partial basis for
determination of total tax revenues to state government
over time for all phases of the OCS scenario; and

- product B8.2 is input to Task E5 as a partial basis for
determination of the total tax revenues to local govern-
ments over time in each affected study site.

A - 20

Task B9 - Primary and Indirect Water Requirements

Objective: To determine the total water requirements over time in each
affected study site.

Input- - product B3.2 describing the primary water requirements;
and

- product B6.1 describing indirect water requirements.

Activities: Aggregate primary and indirect water requirements over time
for each study site.

Output: Product B9.1 describing primary and indirect water require-
ments over time for each affected study site.

Use: Product B9.1 is input to Task E3 as a partial basis for
determining the total primary and indirect water require-
ments over time f0-all phases of the OCS scenario.

A - 21

C. Development Methodology

The methodology utilized for assessment of the primary and indirect
onshore effects of the development phase of each offshore scenario will be
identical to the methodology employed for assessment of the same effects
during exploration. For the sake of graphic simplicity, only the explor-
ation methodology is shown in Figure Al. The tasks, inputs, outputs, and
products will be virtually the same. Tasks, of course, will be serialized
CX, and memoranda and products will be serialized CX.X.

A - 22

D. Production Methodology

The methodology utilized for assessment of the primary and indirect
onshore effects of the production phase of each offshore scenario will be
identical to the methodology employed for assessment of the same effects
during exploration. For the sake of graphic simplicity, only the explor-
ation methodology is shown in Figure Al. The tasks, inputs, outputs, and
products will be virtually the same. Tasks, of course, will be serialized
DX, and memoranda and products will be serialized DX.X.

A 23

E. Net Onshore Effects

This methodology will be utilized to determine the net onshore effects
of offshore exploration, development, and production over time in each
I affected study site and the state as a whole. It comprises Task El through
E9 and results in net state economic impact and net local economic impact.

A - 24

Task El - Aggregation of State Tax Revenues for all Phases in Each Affected
Study Site

Objective: To determine total state tax revenues generated in each
affected study site by the exploration, development, and
production phases.

Input: - product B8.1, State Tax Revenues generated in each
affected study site by the exploration phase;

- product C8.1, State Tax Revenues generated in each
affected study site by the development phase; and

- product D8.1, State Tax Revenues generated in each
affected study site by the production phase.

Activities: Aggregate the state tax revenues resulting from the three
phases in each affected study site.

Output: Product E1.1, Total State Tax Revenues generated in each
affected study site.

Use: Product E1.1 will be a partial input to Task E9, State
Economic Analysis.

A - 25

Task E2 - Aggregation of Primary and Indirect Employment for All Phases in
Each Affected Study Site and Analysis of Local Unemploymen-t-P-o-o7-

Objective: To determine total employment in each affected study site
generated by the OCS scenario.

Input: - product B7.1 describing primary and'indirect employment
over time in each affected study site resulting from the
exploration phase;

- product C7.1 describing primary and indirect employment
over time in each affected study site resulting from the
development phase;

- product D7.1 describing primary and indirect employment
over time in each affected study site resulting from the
production phase;

- information on available labor in each study site and
the state; and

- information on characteristics of in-migrant labor
force.

Activities: - Aggregate primary and indirect employment over time in
each affected study site resulting from the three
phases.

- Compare total employment requirements over time with
available labor in each affected study site and the
state to determine for each affected study site the time
distribution of:
-commuter employment;
-existifig resident employment; and
-new resident employment.

- Analyze new resident employment in each affected study
site to determine over time the numbers of
-new resident population;
-new housing units; and
-new students.

Output: - product E2.1 describing commuter employment over time in
each affected study site;

- product E2.2 describing existing resident employment
over time in each affected study site; and

A - 26

product E2.3 describing over time and for each affected
study site, the new resident employment, the new popu-
lation, new housing units, and new students related to
the OCS off-shore scenario.

Use: - products E2.1 and E2.2 are inputs to the social impact
assessment.

- product E2.3 is input to:
-Task E6, Identification of Significant Issues;
-Task E7, Infrastructural Models and Cost Determination;
-Methodology F, Environmental Impact Assessment; and
-Methodology G, Social Impact Assessment.

A - 27

Task E3 - Aggregation of Primary and Indirect Water Requirements for all
Phases

Object-ive: To determine total primary and indirect water requirements
in each affected study site generated by the OCS scenario.

Input: - product B9.1 describing primary and indirect water re-
quirements over time in each affected study site re-
sulting from the exploration phase;

- product C9.1 describing primary and indirect water re-
quirements over time in each affected study site re-
sulting from the development phase; and

- product D9.1 describing primary and indirect water re-
quirements over time in each affected study site re-
sulting from the production phase.

Activities: Aggregate primary and indirect water requirements for all
phases over time in each affected study site.

Output: Memo E3.1 describing aggregated primary and indirect water
requirements over time for each affected study site.

Use: Memo E3.1 is input to Task E6 as a partial basis for deter-
mining total new infrastructural water requirements.

A - 28

Task E4 - Aggregation of Primary and Indirect Land Requirements

Objective: To determine total primary and indirect land requirements in
each affected study site generated by the OCS off-shore
scenario.

Input: - product B4.1 describing the time pattern of primary and
indirect land requirements in each affected study site
resulting from the exploration phase;

- product C4.1 describing the time pattern of primary and
indirect land requirements in each affected study site
resulting from the development phase; and

- product D4.1 describing the time pattern of primary and
indirect land requirements in each affected study site
resulting from the production phase.

Activities: Aggregate over time the primary and indirect land require-
ments in each affected study site.

Output: Memo E4.1 describing aggregated primary and indirect land
requirements in each affected study site.

Use: Memo E4.1 is input to Task E6 as a partial basis for deter-
mining infrastructural requirements and to Methodology F,
Environmental Impact Assessment Methodology.

A 29

Task E5 - Aggregation of Study Site Tax Revenues

Objective: To determine total tax revenues to local governments in each
affected study site resulting from the OCS scenario.

Input: - product B8.2 describing exploration phase local tax
revenues over time in each affected study site;

- product C8.2 describing development phase local tax
revenues over time in each affected study site; and

- product D8.2 describing production phase local tax reve-
nues over time in each affected study site.

Activities: Aggregate local tax revenues over time for all phases in each
affected study site.

Output: Product E5.1 describing total local tax revenues over time
for each affected study site resulting from the OCS off-
shore scenario.

Use: Product E5.1 is input to Task E8 as a partial basis for the
local economic analysis.

A - 30

Task E6 - Identification of Significant Issues

Objective: To identify and evaluate requirements imposed on each
affected study site by the OCS scenario.

Input: - baseline natural resources data;

- baseline socio-economic data;

- baseline infrastructural data;

- product E2.3 describing new resident population, new
housing units, and new students over time for each
affected study site;

- memo E3.1 describing primary and indirect water require-
ments over time for each affected study site; and

- memo E4.1 describing primary and indirect land require-
ments over time for each affected study site.

Activities: - Compute domestic and municipal water requirements over
time for new population and combine with primary and
indirect water requirements to obtain total new water
requirements over time in each affected study site;

- Determine what proportion of the primary and indirect
land requirements over time for each affected study site
will be used for residences; and

- Compare requirements for land, water, and other re-
sources to baseline data in order to identify any poten-
tially critical issues.

Output: - product E6.1 describing the requirements of each
affected study site;

- memo E6.2 describing issues which require special con-
sideration in determination of infrastructural impacts.

- memo E6.3 describing total new water and land require-
ments over time for each study site.

Use: product E6.1 is input to:

- Methodology F, Environment Impact Assessment; and

- Methodology G, Social Impact Assessment.

memo E6.2 is input to Task E7, Infrastructural Models and
Cost Determination;

memo E6.3 is input to Task E7, Infrastructural Models and
Cost Determination.
A - 31

Task E7 - Infrastructural Models and Cost Determination

Objective: To determine infrastructural costs to state and local
governments.

Input: - product E2.3 describing new resident population, new
housing units- and new students over time for each
affected study site;

- memo E6.2 describing issues which require special con-
sideration in determination of infrastructural impacts;

- memo E6.3 describing total new water and land require-
ments for each affected study site;

- baseline natural resources data;

- baseline socio-economic data; and

- baseline infrastructural data.

Activities: - Evaluate infrastructural costs to state and local
governments in each affected study site using infra-
structural models;

- Evaluate the infrastructural impacts, other than costs,
to state and local governments associated with issues
requiring special consideration;

- Aggregate costs to state government over time; and

- Aggregate costs over time to local governments in each
affected study site.

Output: - product E7.1 describing costs over time to state govern-
ment resulting from the OCS scenario; and

- product E7.2 describing costs over time to local govern-
ments in each affected study site resulting from the OCS
scenario.

Use: - product E7.1 is input to Task E9, State Economic
Analysis; and

- product E7.2 is input to Task E8, Local Economic Analy-
sis.

A - 32

Task E8 - Local Economic Analysis

Objective: To identify the net economic impact on local governments
within each study site affected by the OCS scenario.

Input: - product E5.1 resulting from the analysis of each
affected study site and describing the total tax reve-
nues over time to each study site as a result of the OCS
scenario; and

- product E7.2 resulting from the analysis of each
affected study site and describing total cost over time
to each study site as a result of the OCS scenario.

Activities: - Aggregate tax revenues to local governments from each
study site analysis to obtain total tax revenues to
local governments over time;

- Aggregate costs to local governments from each study
site analysis to obtain total costs to local governments
over time;

- Compare total local government tax revenues and costs
over time for each study site; and

- Compare the present worth of total tax revenues and
costs accruing to local governments during the period of
analysis for each study site and for all affected study
sites.

Output: Product E8.1 describing the net economic impact on local
governments in each study site and for all study sites
resulting from the OCS scenario.

Use: Product E8.1 is used with product E9.1, describing the net
state economic impact, and with the environmental and social
impact analysis (Methodologies F and G) to determine the
overall impact of the OCS scenario.

A - 33

Task E9 - State Economic Analysis

Objective: To identify the net economic impact on the state from the OCS
scenario.

Input: - product E1.1 resulting from the analyses of all affected
study sites describing total tax revenues over time to
the state resulting from the OCS scenario; and

- product E7.1 resulting from the analyses of all affected
study sites describing total cost over time to the state
resulting from the OCS scenario.

Activities: - Aggregate tax revenues to the state from each study site
analysis to obtain total tax revenue to the state over
time;

- Aggregate costs to the state from each study site
analysis to obtain total cost to the state over time;

- Compare total tax revenues and total costs to state
government over time; and

- Compare the present worth of total tax revenues and
costs accruing to state government over the period of
analysis.

Output: Product E9.1 describing the net economic impact on the state
of the OCS scenario.

Use: Product E9.1 is used with product E8.1, describing the net
local economic impact, and with the environmental and social
impact analyses (Methodologies F and G) to determine the
overall impact of the OCS scenario.

A - 34

F. Environmental Impact Assessment Methodology

The assessment of environmental impacts resulting from the postulated
OCS development scenarios will be carried out in four specific tasks
including:

- Environmental Impact Matrix Development;

- General Environmental Impact Evaluation;

- Special Environmental Issue Analysis; and

- Preparation of Environmental Assessment.

A 35

Task F1 - Environmental Impact Matrix Development

Objective: To identify the environmental effects likely to result from
OCS development.

Input: - identification of critical environmental areas along the
Texas coast;

- Texas Coastal Management Program's Activity Assessment
Routine;-

- Procedure for Evaluating Environmental Impact, a matrix
model prepared by the U.S. Geological Survey; and

- memo A3.1 describing industry practices.

Activities: Reconstruct the matrix provided in the Procedure for Evalu-
ating Environmental Impact to:

- delete types of activities and environmental effects not
expected to occur as a result of OCS development or to be
considered as resulting from OCS development;

- supplement the matrix with any new activities and en-
vironmental effects expected to occur as a result of OCS
development which are not presently included; and

- refine the activities and environmental effects with
special reference to types of activities relevant to OCS
related development and to types of effects relevant to
critical environmental areas.

Output: Product F1.1, a matrix indicating the types of environmental
effects likely to result from each significant type of
action taken during OCS development.

Use: Product F1.1 will serve as a checklist for preparation in
Task F2 of the general environmental impact evaluation, for
preparation in Task F3 of the special environmental issue
analysis, and for preparation in Task F4 of the Environ-
mental Assessment.

A - 36

Task F2 - General Environmental Impact Evaluation

Objective: To describe the environmental effects likely to result from
OCS activities.

Input: - product F1.1, a matrix indicating the types of environ-
mental effects likely to result from each significant
type of action taken during the OCS development;

- baseline natural resources data;

- baseline socioeconomic data;

- baseline infrastructural data; and

- product E6.1, study site requirements.

Activities: Prepare a general description for each study site affected
under any OCS development scenario which:

- summarizes the existing environmental features of the
study site with consideration of areas of particular
concern;

- describes the relationship between OCS requirements,
activities in the study site, and types of environmental
effect in 'terms of positive or negative character of
change;

- identifies the intensity of OCS activity and the magni-
tude of environmental changes, if any, expected to
occur; and

- characterizes the importance of the principal types of
environmental change, and isolates special environmental
issues.

Output: Products F2.1, a description of general environmental im-
pacts related to OCS development for each study site
affected under any OCS development scenario, and including
the isolation of special environmental issues.

Use: Products F2.1 will be input to Task F3, Special Environ-
mental Issue Analysis, and to Task F4 as a partial basis for
preparation of the environmental assessment of each postu-
lated OCS development scenario.

A - 37

Task F3 - Special Environmental Issue Analysis

Objective: To describe the environmental aspects of each identified
special issue in more detail than provided by the general
environmental impact evaluation (Task F2).

Input: - product F1.1, a matrix indicating the types of environ-
mental effects likely to result from each significant
type of action taken during the OCS development;

- product F2.1, identifying special environmental issues;

- baseline natural resources data;

- baseline socioeconomic data; and

- baseline infrastructure data.

Activities: Prepare a description of the environmental aspects of each
special issue identified for each affected study site in
each OCS development scenario. The description will differ
from the general environmental impact evaluation in that it
will include:

- identification of any significant induced, as opposed to
direct or immediate, environmental effects;

- evaluation of present areas of particular concern to
determine further beneficial or adverse effect; and

- a separate evaluation of unique or sensitive environ-
mental features.

Output: Product F3.1, a description for each postulated OCS develop-
ment scenario of the environmental aspects of any special
issues arising in each of the affected study sites.

Use: Products F3.1 will be input to Task F4 as a partial basis for
preparation of the environmental assessment of each postu-
lated OCS development scenario.

A - 38

Task F4 - Preparation of Environmental Assessment

Objective: To prepare an environmental assessment of each postulated
OCS development scenario.

Input: - product F1.1, a matrix indicating the type of environ-
mental effects likely to result from each significant
type of action taken during OCS development.

- products F2.1 and others resulting from Task F2 which
describe the general environmental effects of OCS de-
velopment;

- products F3.1 and others resulting from Task F3 which
describe the environmental aspects of any special issues
identified for one or another of the study sites in each
postulated OCS development scenario;

Activities: - Prepare an environmental assessment of each postulated
OCS development scenario. The assessment will:

- synthesize the general environmental impact evalua-
tions and appropriate special environmental issue
analyses for each study site to describe the overall
environmental effects in each affected study site;
and

- summarize principal categories of environmental
affects (land use, lost habitat, and others) for
total affected area.

Output: Product F4.1, describing the environmental impacts of the
postulated OCS development scenario.

Use: Product F4.1 will be used as a partial basis for the identi-
fication of mitigative measures and for overall evaluation
of the proposed OCS development scenarios.

A - 39

G. Social Impact Assessment Methodology

This methodology will be used to assess social impacts resulting from
OCS activity scenarios and will comprise four tasks:

- Social Impact Matrix Development;

- Identification of General Social Impacts;

- Identification of Special Social Impacts; and

- Preparation of Social Impact Assessment.

A - 40

Task G1 - Social Impact Matrix Development

Objective: To identify the social effects likely to result from OCS
development.

Input: - various social impact reports which detail the social
impacts likely to result from assorted developments or
community change; and

- memo A3.1 describing industry practices.

Activities: Construct a social impact matrix which includes the type of
activities and social effects expected to occur as a result
of an OCS scenario.

Output: Product G1.1, a matrix presenting the types of social
effects likely to occur as a result of each significant
action taken in an OCS scenario.

Use: Product G1.1 will be input to Task G2, the preparation of
general social impact evaluation; to Task G3, the prepa-
ration of special social issue analysis; and to Task G4,
Social Assessment.

A - 41

Task G2 - General Social Impact Evaluation

Objective: To describe the general social effects likely to result from
OCS activities.

Input: - product G1.1, a matrix presenting types of social effect
likely to occur as a result of OCS development;

- baseline socio-economic data;

- baseline natural resources data;

- baseline infrastructural data;

- product B6.3, C6.3, and D6.3, personal income generated
by OCS exploration, development, and production in each
affected study site;

- product E2.1, commuter employment;

- product E2.2, existing resident employment;

- product E2.3, new resident employment; and

- product E6.1, study site requirements

Activities: Prepare a general description for each affected study site
which:

- summarizes existing social characteristics of the study
site;

- describes the nature of relationships between expected
activities and social effects, including positive and
negative changes;

- characterizes the importance of the principal types of
social change and isolates special social issues.

Output: Product G2.1, a description of general social impacts re-
lated to OCS activities for each affected study site under
each OCS scenario, and including the isolation of special
social issues.

Use: Product G2.1 will be partial input to Task G3, Special Social
Issue Analysis, and to Task G4, Preparation of Social Impact
Assessment.

A - 42

Task G3 - Special Social Issue Analysis

Objective: To describe the social aspects of each identified special
issue in more detail than that provided by the general social
impact evalution (Task G2).

Input: - product G1.1, a matrix presenting types of social effect
likely to occur as a result of OCS development;

- product G2.1, a general social impact evaluation and
isolation of special social issues.;

- baseline socio-economic data;

- baseline natural resources data;

- baseline infrastructural data;

- product B6.3, C6.3, and D6.3, personal income generated
by OCS exploration, development, and production in each
affected study site;

- product E2.1, commuter employment;

- product E2.2, existing resident employment; and

- product E2.3, new resident employment.

Activities: Prepare a description of the social aspects of each special
issue identified for each affected study site in each OCS
scenario. This description will differ from the general
social impact evaluation in that it will include:

- consideration of the magnitude and characteristics of
requirements resulting in identification of the issue;

- consideration of the manner in which requirements will
be met; and

- identification of any significant induced social
effects.

Output: Product G3.1, a description of special social impacts re-
lated to OCS activities for each affected study site under
each OCS scenario.

Use: Product G3.1 will be partial input to Task G4, Preparation of
Social Impact Assessment.

A - 43

Task G4 - Preparation of Social Assessment

Objective: To prepare a social.assessment of each OCS scenario.

Input: - product G1.1, a social impact matrix.

- product G2.1, describing general social impacts;

- product G3.1, describing special social impacts;

Activities: - Prepare a description of the social effects of offshore
activities associated with each OCS scenario.

- Prepare a social assessment of each OCS scenario. The
assessment will:

synthesize the general social impact evaluations and
appropriate special social impact analyses for each
study site to describe the overall social effects in
each affected study site; and

summarize principal categories of social effects
(population relocation, crime and violence, and
others) for the total affected area.

Output: Product G4.1, describing the social impacts of the scenario.

Use: Product G4.1 will be used as a partial basis for the identi-
fication of mitigative measures and for overall evaluation
of the proposed scenarios.

A - 44

Figure Al. ONSHORE IMPACTS OF OCS DEVELOPMENT STUDY METHODOLOGY

__METH0D0LO6Y MEIHODOLOGY "F'

LEG I ND:

F 2 F 2.1
GINILRAL DESCRIPTION
WROMOTAL Or GENERAL
TASK IMPACT NVIIII)NMOVAL
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KEPIEATED FOK ^LL AFFECTEP '3TVDY SITES

APPENDIX B

REASONABLE RANGES FOR LOCATION AND EXTENT OF OCS OIL
AND GAS DEVELOPMENT IN THE TEXAS GULF OF MEXICO

"pop"

IYA

REASONABLE RANGES FOR LOCATION AND EXTENT OF OCS

OIL AND GAS DEVELOPMENT IN THE TEXAS GULF OF MEXICO

In order that any study of the onshore and nearshore impacts of OCS
oil and gas development may proceed, it is necessary to determine, in the
form of reasonable ranges, the location, extent, and other characteristics
of OCS oil and gas exploration, development, and production which may
impact the area in question. In deriving those ranges for Texas, dozens of
geological estimates of petroleum reserves in the Texas Gulf in addition to
historical information concerning the extent and nature of Texas Gulf oil
and gas development were consulted. The results of that research are
presented in the following pages. Ranges are supplied for the following:

1. Tracts to be offered in each sale;
2. Tracts receiving bids;
3. Tracts leased as a percentage of tracts offered;
4. Tracts explored as a percentage of tracts leased;
5. Tracts developed as a percentage of tracts explored;
6. Tracts put into production as a percentage of tracts developed;
7. Location of tracts put into production;
8. Size of tracts put into production; and
9. Oil and gas ratio of production.

Ranges for items 1-6 were derived from past experience in the Gulf of
Mexico and particularly the Texas federal OCS portion thereof. (See Figure
B1.). In addition, Figure B1 illustrates acres offered, acres leased, and
other past trends.

Item 7, ranges for the location of tracts to be put into production,
were derived from current leasing activity in the federal OCS off Texas
(see Map B1), dates and location of tracts to be offered in future sales
(see Figure B2 and Map B1), geologic descriptions of the tracts (see Maps
B2,B3,B4, and B5), existing and proposed pipelines (see Attachment BII),
and location and extent of exploratory drilling currently underway.

Geologic data of BLM and AAPG indicate that the South Texas blocks
(Mustang and Padre Island) offer oil and gas, and that the North Texas
Blocks (Brazos, Galveston, and High Island) generally offer only gas.
Aside from that very basic geologic data, it is virtually impossible to
predict with accuracy the location of future, producing tracts. Such
locations can, however, be hypothesized, with some degree of certainty (see
Attachment BI). Recent leasing activity and future sales are more helpful.
Recent sales have been characterized by accelerated interest in the High
Island South Addition, the High Island East Addition South Extension, and
the Galveston South Addition Areas. Moreover, future sales indicate
interest in the same general area. Sale 44, held in October, 1976, offered

B - 2

Figure B1
Development of Reasonable Ranges of OCS Activity by Tract

of % Offered It Tract% Tracts Tracts Tracts Tracts In Acres
No. Whole Gulf No.Tracts Tracts No. Bidded on Leased as Explored Developed No. Tracts Production Leased
sale Tracts Leases in Receiving Receiving Tracts Actually % of No. Tracts as % of No. Tracts a % of Put Into as % of Acres Acres as % of
No . Sale Date Offe red Texas Bids Bids Leased Leased Offered Explored Leased Developed Explored Production Developed Offered Leased Offered
2 11.9-64 38 19 50% 19 100% 50% 10 53% 6 60% 6 100% 111,788 67.149 60%
3 7.12-55 39 27 69% 27 100% 69% 3 11% 0 -- 0 - 216.000 149.760 69t
7 2-24-60 97 48 49% 48 100% 49% 25 52% 8 32% a 100% 437.760 240.480 55%
70 3-16-62 30 10 33% 10 100% 33% 2 20% 0 - 0 - 90,720 28,800 32%
22 5-21-68 169 141 83% 110 78% 65% 54 49% 16 30% 7 44% 728,551 541.304 74%
31 6-19-73 124 104* 81%* 96 96%* 77% 77 80% 21 27% 8 38% 672,643 527,173 78%
34 5-29-74 245 123 50% 102 83% 42% 54 53% 12 22% 1 8% 1,355,678 565,112 42%
Sl 7-30-74 143 49* 19%* 10 39%* 7% 1 10% 0 - 0 -- 787.821 53.253 7%
37 2-4-75 515 143 28% 113 79% 22% 9 8% 2 22% 0 2,870,344 626,587 22%
38 5-28-75 36 13% KA MA 9 KA 25% -- - 192,660 51.840 27%
38A 7-29-75 176 51% so* 23%* 23 83% 13% - 963.832 132.480 14%
41 2-18-76 30 23% 13 43% 12 92% 40% - 157,269 63.427 40%
44 11-16-76 .--_ 7 11% 6 86% 4 67% 57% 34,@88 App.,20,00- App, 57%
TOTAL 1649 583 35% 226+4 54%++ 63++ 28%++ 30++ 48%+*

ABSOLUTE
RANGE 7.515 6-143 19-06% 4-113 39-100% 7-77% 1-77 8-801 0-21 22-60% 0-8 8-100%

EXPECTED
REASONABLE
RANGE (Texas
only Sale) 50.300* 15-180 30-60% 20-50% 45-80% 30-60% 100%
Louisiana and Texas data combA ad. Source: U.S.G.S. Computer Printouts
The high end of the historic absolute range Is used because data Is incomplete on sales USDI BLM Tentative Tract List for OCS Sale 44.
since 1973 and because this percentage appears to be increasing (see Executive Summary). + . Feb. 24. 1976
+ For Reasonable Range of Texas leases In a whole Gulf sale: 6-66%. Offshote 'June 20, 1976.
++ Excludes: data on activities from sales occurring since Sale 51 (7-30-74). Unr@M Final Environmental Statement Current
NA Information not available. Lease Status Maps (sales 34, 37. 38, 41)

MAP BI

TEXAS FEDERAL OCS

JEFF["",

HARR I S CHAORE@S

FORT BENO

W@ARTON
'ALVESTOPI

BPWORIA

JACKSr)N

T
MAWAROA
VICTOIRIA

- rdi
CALHOUN L

RErumn
Lj j --1 1
VI-15 A'
IL-1
PATRIC10 a v
0
rut d
tiotI

t
rt"h d I

CES
t

Pdd,

CO'PuS Chrfstj Bay @ity Carden Banks

Current leases
LACY [3 Exploratory drilling underway
or completed since 6/76.
TT M Tracts proposed for lease in
0 Sale #44.
7 RrN 0 Tracts proposed for lease in
Sale #47.

-,,t Isabel Say City @outh 0 1 Garden Banks So.th

B 4

PROPOSED O(@S PLANNING SCHEDULE J2nuary 1977
(Revises June 1975 Schedule)
SALIE AREA 1976 1977 1 97@8 1979 1 1980 *
JIAIS 0 NID JIFIM AIMIJIJIA S 0.Nj10)Ij M AIM J, J AIS101 I D J F ?A A M J J A S Nj J F hi@ A M J .1 A S 0 N 1)
44 Gulf of Mexico N S
T-T"
Cl Cook Wet
F
E P F N S-
@7 Gull of Alexico
42 Nonh Atlantic E, P, F NIS
43 South Atlantic E P F N S
46 Kodiak El P F NIS
45 Gull of Mexico T E P F N S
48 Southern Catifomia C-2 Tj E P. F 14
49 hid-Atlantic __ ___ 1 Tr r E
1-C I P IF
Beaufort Sea (near shore) state - Federal Sale

51 Gull of Mexico
53 Gencral Pacific C 0 1 IT E P, F N S
Ic D I T I E P F 11
54 S. Atlin:ic Blike Plateau C. D T E P F N S1
Vfecior, Bureau of Land Managernent
50 Beaufort Sea Icl 10 T E P F IN S
55 Norlhern Gull of A.1aW C 0 T E P F S
52 North Allintic C D T E P_ F N S
56 South Atlantic _113 - o- T_ El-I P
58 Gulf of Mexico 1cl o 1 T E P F N S
57 Bering - Norton, ic D -T E F N S
59 Mid-Ailantic C D, T E PI I F N S
.60 Bcring Sea St Geo rge 0- 1T, E P. F NIS
61 Cook Intel C 01 T IE P, _F NIS
.62 Gulf of Mexico C 01 T E P F_ Nis
63 General Pacific C B T E P F N S
64 Kod!ak - Aleutian F I
T E 14's
t.z.Cal S&S are iiewzng orpuw@ heamis: as a result of
0 - NGIninatiou. Due. I. VP Finzl Environmental Statement_ exp'oorati(m am dowtopent-. A- decision w*whrr'tTts.o4 the environmotim technical, ai4
T Announcen, @nl of Tracts N -'Nzfic_@ CIU6 wy 01 the ILase -silos lis"CA will not be Mada vntd emigoyed in the decision rnakO@, pimess. a dt:cism
r

completion ol all ncc6ssary slud;cs al 00 anvuonmilntal may, in 1XI, be made nol to W4 aq sale on ln@$ sdx6je.
E Drift EnvirintentaJ Valetnedi-I
il Stat: Llay Co8duct Sald: 2,1 With in $6. Foot U bath or technology tapabNly

Figure 132

MAP B2

PETROLEUM-DRILLING TREND

PLIOCENE

MIOCENE

.el

PLEI TOCENE

Zoom.-

00
re

10 C E E

'LEIS OCEqE

(Areas in OCS where drilling usually occurs to producing
stratigraphic unit. Boundary lines at 4,000 to 8,000
foot depth.)

B - 6

MAP B3

PLEISTOCENE

000

0 7z 0

00
W

Contour map of Pleistocene trend. Depth (approximate) in feet.

(Source of Mps B3, B4, and B5 in A.A.P.G. Memoir 15(2). 1971)

B - 7

MAP B4

PLIOCENE

C@,

C2,000

000

0
0

Contour map of bottom of Pliocene trend. Top of
Pliocene shown in Map 63. Depth (approximate)
in feet.

B - 8

MAP B5

MIOCENE

/Ir 1,000
000

@4%000

Contour map of bottom of Miocene trend. Top
of Miocene (approximate) in feet.

B 9

61 tracts; 7 are 1 ocated i n the f ederal OCS of f Texas. Of those 7, 1 -was i n
the Matagorda Area, 3 in the High Island Area at the 3-league line, 1 in the
High Island East Addition Area, and 2 in the High Island East Addition
South Extension Area (see Map B1). Sale 47, to be held in April, 1977, will
offer, in addition to other tracts, tracts on the continental slope to a
depth of 600 meters. To date, a total of 13 tracts have been leased in the
"deep" Texas federal OCS; they are all adjacent to the Galveston South
Addition or High Island South Addition Areas. Sale 45, scheduled for
December, 1977, also tentatively offers tracts in the areas referred to
above, in addition to other areas.

Pipeline activity in the Texas Gulf of Mexico is composed of pipelines
which have already been constructed to service existing, producing tracts
(see Attachment BII), or proposed pipelines. In terms of existing pipe-
lines, it is reasonable to assume the producers may be drawn to areas which
are currently served by pipelines since significant transportation costs
could thus be minimized. Attachment BII illustrates that all recent
proposals for pipeline activity in the Texas Gulf were for lines designed
to serve the High Island, High Island South Addition, High Island East
Addition, or High Island East Addition South Extension Areas.

Finally, the location and extent of exploratory drilling in the Texas
federal OCS is also telling. In June, 1976, for example, 11 exploratory
wells were being drilled in the federal OCS off Texas; 1 in the Galveston
South Addition Area, one in the Matagorda Island Area, one in the Mustang
Island East Addition Area, two adjacent to the High Island South Addition
Area three in the High Island South Addition Area, one in the High Island
Area, and two in the High Island East Addition South Extension Area. (see
Map B1). Exploratory drilling since that time has followed a similar
pattern.

Thus, when all the data is compiled, it is reasonable to infer the
following ranges for locations of future strikes (not necessarily in order
of likelihood):

1. High Island East Addition South Extension Area;
2. High Island South Addition Area;
3. Bay City Area, adjacent to the 200-meter line;
4. Matagorda Island Area;
5. Brazos South Addition Area;
6. Galveston South Addition Area;
7. South Padre Island East Addition Area;
8. Mustang Island Area;
9. Mustang Island East Addition Area; and
10. South Padre Island Area.
(see also Attachment BI.)

B - 10

Ranges for item 8, size of tracts to be put into production at some
future date, were derived from estimates of total recoverable reserves of
oil and gas in the federal OCS off Texas and from present trends of
production in that region.

Estimates of recoverable reserves vary widely (see Figure B3). Re-
serve estimates are further complicated by the fact that some include the
entire Gulf of Mexico and some provide estimates for sections of the Gulf.
The best estimates of total reserves available in the Texas portion of the
Gulf of Mexico are derived by multiplying a reasonable range of entire Gulf
of Mexico estimates by Texas' historical share of Gulf of Mexico pro-
duction.

Figure B3 provides a range for total Gulf of Mexico oil reserves of
10.9 - 69 billion BBLs; the range for gas is 152 - 384.3 trillion cubic
feet. Those figures must be considered with the fact that Texas has
historically accounted for between .4% and .7% of total Gulf oil and
condensate and for between 4.4% and 5.5% of total Gulf gas.

Those two sets of statistics taken together provide the following
ranges of total oil and gas production potential in the Texas portion of
the Gulf of Mexico:

Oi I and Condensate: .04 to .46 billion BBLs
Gas: 6.68 to 21.14 trillion cubic feet.

Production by tract in the Texas portion of the OCS for the past three
years indicates that annual oil production ranges from 24,294 to 620,321
barrels per tract, and that annual gas production ranges from 34,000 MCF to
54,730,000 MCF per tract. Reasonable ranges for an active producing tract
are:

Oil: 95,000 to 600,000 barrels annually
Gas: 14,000,000 MCF to 32,000,000 MCF annually

Item 9, ranges for the oil/gas ratio, were computed for the entire
Texas federal OCS and for individual tracts. Texas Railroad Commission
statistics indicate that production in the federal OCS off Texas in recent
years has been at a 1/153 to 1/329 barrel of oil to MCF gas ratio (see
Figure B4). Production by tract in the Texas federal OCS has been at a 1/29
to 1/530 oil to gas ratio. A reasonable range for oil to gas ratio in an
active production tract in the Texas Gulf is a 1/150 to 1/300 barrel of oil
to MCF gas ratio. It is important to note, however, that such a ratio is
largely dependent on location of the tract. Some will offer virtually no
oil.

In addition to providing reasonable ranges for the foregoing nine
items, a description of the assumptions concerning overall energy supply,
international pricing, and other matters affecting the timing and manner of
exploration, development, and production in the Texas federal OCS is
essential to the analysis of onshore impacts of OCS oil and gas production.

B - 11

Figure B3

RESERVE ESTIMATES

Source Location Oil Gas
(Billion Barrles) (Trillion cu. ft.)

BLM OCS Sale 37 Texas .2 - .6 4 - 12

Offshore 33:60
(April-'73) Texas .1 2.5

U.S. Energy Outlook
(Dec. '72) Gulf of Mexico 27.1 156.4

Kash (reports of
U.S.G.S.)* Gulf of Mexico 69 (OCS); 53(slope) 300(OCS); 236(slope)

U.S.G.S. '75 Gulf of Mexico
measured 2.2 35.3
indicated .05 -
inferred 2.4 67.0
undiscovered
recoverable
resource 3 - 8 18 - 91
(natural gas
liquids) 1.3 N.A.
TOTALS 10.9 152
USDI Energy Perspective Gulf of Mexico
measured 4.0** 43.3
indicated &
inferred 2.0-3.5** 21-41
undiscovered
recoverable
resource 20-40** 160-320

TOTALS 26-47.5 224-384.3

ultimate production

crude oil plus natural gas liquids

B - 12

Figure B4

PRESENT TRENDS IN PRODUCTION - FEDERAL TEXAS OCS

Gas and Casinghead Gas Oil and Condensate Gas/Oil
MCF Barrels Mcf/Bbls
1975 101,434,765 426,508 239
1974 141,338,180 493,602 286
1973 124,219,217 727,983 170

1-1976 8,250,062 34,265 241
1-1975 8,995,091 37,017 243
1-1974 14,487,351 43,977 329
1-1973 10,538,122 68,836 153
1-1972 12,088,698 68,008 178

Source: TRC Offshore Production Files

PRODUCTION PER ACRE

GAS OIL AND CONDENSATE
(MCF/ACRE) (-BBLS/ACRE)
1974 858 7

1973 850 9

1972 885 10

1971 870 12

1970 911 15

1969 1,523 33
1968 9,620 272
1967 2,644 76

Source: USGS OCS Statistics

B - 13

The rate at which OCS tracts are nominated, offered, leased, explored,
and developed is profoundly affected by the composite energy supply/demand
situation existing in the United States. Assumptions regarding the rate at
which OCS development will proceed in future years must be predicated on
past and current supply and demand trends as well as projected trends.

What has come to be known as the "energy crisis" can be simply defined
as a growing disparity between supply of energy and energy availability.
This disparity is especially evident with regard to petroleum and natural
gas. Figure B5 illustrates that U.S. gross energy consumption rose from
44.6 quadrillion BTUs in 1960 to 73.2 quadrillion BTUs in 1974: an increase
of 64%. During the same period, consumption of petroleum rose from 45% to
46% of the total consumption; consumption of gas rose from 28% to 30%.

Figure B6 details U.S. energy production and consumption for 1973 and
1974. While consumption declined slightly, U.S. production declined also;
the total difference between production and consumption in 1974 was still
12.5 quadrillion BTUs. Most of that disparity was accounted for by the
difference between petroleum production and consumption: 13.1 quadrillion
BTUs; the difference for natural gas was .7 quadrillion BTUs. (The overall
disparity was less severe due to the fact that coal production exceeded
consumption by 1.4 quadrillion BTUs.)

Projections indicate that consumption will not continue to decline
but will, in fact, rise over the long term. Figure B7 shows a 58% increase
in consumption between 1973 and 1990, even assuming an effective conserva-
tion program. (Figure B7 assumes Business as Usual and oil priced at $7
per barrel.) The consumption of petroleum is projected to rise by 14.1%,
assuming an accelerated nuclear power production effort. Natural gas
consumption is projected to climb by 13.6%.

The supply and production side of the equation gives cause for
concern. U.S. petroleum supply declined from 1973 to 1974 (see Figure B8),
but of more importance is the steady decline of U.S. domestic production as
a percentage of total supply since 1960 and in absolute quantity since 1970
(except for a slight increase in 1972). Imported petroleum, on the other
hand, has risen dramatically. In 1960, imported crude petroleum and
petroleum products accounted for 17% of total U.S. petroleum supply; in
1974 they accounted for 36%.

That portion of U.S. petroleum supply which was produced domestically
in 1974 can be broken into onshore production and federal OCS production
(see Figure B9). Production of both has declined in recent years: onshore
production from a high of 3737.1 million barrels in 1970 to 3425.8 in 1974,
and federal OCS production from a high of 455.4 million barrels in 1971 to
424.2 in 1974. The percentage of U.S. petroleum production which is
supplied from the federal OCS rose from 2% in 1961 to 11% in 1970 and has
remained relatively constant since.

B - 14

Figure B5
U.S. Gross Energy Consumption Patterns By Source, 1960-74

NUCLEAR 2%
70 H b 9 OE 4%

:C AL:

-- ----------
M11.1- -----------
50

4%
GAS 30%

.2 40
]fill
---:23%
ICU fill I]I]

30
1@ .. .. A
28%

20
PETROLEUM 46%

45%

1960 61 62 3 64 65 66 67 68 69 1970 71 72 73 74

SOURCE: Energy Perspectives, U.S. Dept. of Interior, 1975.

Figure bb
U.S. Energy Production and Gross Consumption, 1973 and 1974

74.7
73.2
........ ....

61.8 --- ------ ---
60.7
60

Till 1[1111

.2 40

NUCLEAR

20 HYDROPOWER

COAL

NATURALGAS

10
PETROLEUM
V-7

Production Consumption Production. Consumption
1973 1974

SOURCE: Energy Perspectives, U.S. Dept. of Interior, 1975.

Figure B7
U.S. Gross Energy Consumption, 1973-90
(Business as Usual, $7 Oil)
150-

NUCLEAR

HYDROPOWER &
GEOTHERMAL 129.2
COAL
125-

NATURAL GAS

PETROLEUM 109.0

....... .......
99.1 .......
100 -
....... ......
....... ......
WITHOUT WITH
91.4
CONSERVATION CONSERVATION
86.0 ......
82.6
80.0

74.7 -------
75 -

0
------- - - -

50 -

iuwiLL

25 -
>00

1973 1977 1980 1985 1990

SOURCES: Energy Perspectives, U.S. Dept. of Interior, 1975.

Figure 88
U.S. Petroleum Supply, 1960-74

U.S. Petroleum Supply

Crude
---------------
7-: Imports
--- ---- --------- 20%
-------------

-- - - - - - - - - - - - - - - - -
5 - - ------------------ ----------
---------------
-------- ---
- - - - - - - - - - - -
-7 7-7-7---7-7----:--

Product
---------- I mports
----------
. .. .. 16%
--7 -7@
4
- - - - - - - - - - - -

- - - - - - - - - - - -
- - - - - - - - - - - -
CO - - - - - - - - -7
- - - - - - - - - - - - - --
ca
-7 7-:
- - - - - - - - - - - - - - - - ... .. .
1 %

3
Domestic
Petroleum
Production
64%

2 -83%

1960 61 62 63 64 65 66 67 68 69 1970 71 72 73 74

SOURCE' Energy Perspectives, U.S. Dept. of Interior, 1975.

I ZI., - U-1
U.S. Petroleum Production, 1960-74
4,500 - (Millions of Barrels)

4,000 - Total Petroleum Production

Federal
io/
----------
- - - - - - - - OCS
3,500
..........

. . . . ..........
........................
2% - - - - - - - - - ... ..................................................
...............
...........................
.................
.................................................
3,000 - - - - - - ........................ ..........
....... ...
- - - - - - .....

.............
.......... ...........
..........
............... ................. .....
0 ...................
..........
.......... ............................
..................
........... .. ...................
.................
................. ..... ..... ..........
2,000
.. .... ............
....... ........ ............ X
.................. ........ ................
...................
..........
..............
........ ..... .......
.................
...............
............ .......... .....
............
Onshore
.................. ........
................. ................
........ ........................
1,500 44""
...................... *-*-'-'-*-*-'-*-*-'-'-*-'-'-'-* ....................
....................
.......... ..................................
.. ..................
............................ .................. ................ ......... ........
.................
.................................. .....................................................
..................

................
................. .. .......
..............
....................
1,000
........... ...... ...........
............
..................... ..................
.................
..................
.............
..................................... ................................... ......................
..........
.......... ..........
............. ....................................

..... ................
500
.. ..........
..................

SOURCE: Ehetgy Pettpectives, U.S. Dept. of Interior, 1975.

While the recent history of natural gas supply and demand has not been
as concerning as that of petroleum, domestic production has fallen and
imports have increased (see Figure B10). Total supply fell from a high of
23.61 trillion cubic feet in 1973 to 21.8 in 1974. Domestic production
climbed steadily to a high of 22.65 trillion cubic feet in 1973, then fell
to 20.8 in 1974. At the same time, imports rose to .96 in 1973, then
declined slightly to .94 in 1974. Imported natural gas as a percentage of
total supply, however, has not declined; it rose from 1.1% in 1960 to 2.6%
in 1965,3.3% in 1970, 4.1% in 1973, and 4.3% in 1974.

Natural gas production from the federal OCS, on the other hand, has
risen sharply in recent years: from 273 billion cubic feet in 1960 to
3553.4 billion cubic feet in 1974 (see Figure B11). Since 1970, annual
production increases have been 14.1% (1970-71), 9.4% (1971-72), 5.7%
(1972-73), and 10.6% (1973-74).

Thus, the petroleum and natural gas prospects include increasing
consumption, declining overall domestic production, and increasing re-
liance on imports. But these trends are not totally the result of de-
creasing availability of energy resources. Indeed, some estimates predict
that the nation's known reserves of fuel minerals will last 190 years at
1970 consumption rates and that potential resources of fuel minerals could
last 16,500 years at 1970 consumption rates. If those projections are
accurate, lack of recovery, not lack of availability, underlies the
"crisis".

It is true that the number of exploratory wells has declined from 1955
through 1971: from 14,937 to 6,922, a drop of 54% (see Figure B12). The
number rose from 1971 to 1973, however, by 7.8%. Oil and gas wells drilled
in the U.S. fell sharply from 1965 to 1973, but then rose again (see Figure
B13), to 31,813, a 15.5% increase.

For purposes of RPC's study of near shore and onshore impacts of OCS
oil and gas development, straight line projections of present trends and
"business as usual" assumptions will, for the most part, be used. These
assumptions include:
1. Business as usual; that is, existing policies continue and only
incremental, limited policy changes are considered; a constant
price of $11 per barrel of petroleum; and a ceiling price of 50
cents per thousand cubic feet of natural gas.

2. A continued long term growth in U.S. gross energy consumption of
approximately 3.5%.

3. U.S. petroleum supply will remain fairly constant at approxi-
mately 3.5%.

4. U.S. petroleum production will rise at an annual rate of approxi-
mately 1%.

B - 20

Figure BIO
U.S. Natural Gas Supply, 1960-74

25
Total Natural Gas Supply

. . . . . . . Imports
4%

15
1.0%
LL
co .2

U
N) C
0
Domestic
10 Production
96%

99.0%

1960 61 62 63 64 65 66 67 68 69 .1970 71 72 73 74

SOURCE: -Energy Perspectives, U.S. Dept. of Interior, 1975.

Figure B11
Federal OCS Gross Natural Gas Production, 1960-74

4,000

...........
...........
.............
.............
...............
...I ............
.................
..................
..................
3,000

............. .........
....................
....................................
............ ... ...
.........................................
.........................

................ ........................

2,000

.................
NO C
.............

................. .......

..............................
.................
....... ........

.............................

................
........................... ..... ..........
.......................... .............
..... . .............
..............................
............
1,000 .......................
(Cumulative Production: 23,547.5)::'*"-*"-'-'-'-'-
.............
.................. ..............
..........
..............
.......... ............ ..... ...........
................. .
..............
.................... . .............................
. ............
.. .. ............................. ... ........ ........
...............
. .................
...................
................
...........
..................
...........................
.....................................
...........
....... ........ ......... ... .......
..........

...............
........ .......... ............ ...... ....
......................................
................................ ................

1960 61 62 63 64 65 66 67 68 69 1970 71 72 3 74

SOURCE: Energy Perspectives, U.S. Dept. of Interior, 1975.

U.S. Exploratory Oil and Gas Wells, 1950-73

18,000 -

15,000 -

12,000 - TOTAL EXPLORATORY WELLS
00000, 0<@@DRY EXPLORATORY WELLS
ob 9,000
ft-ft 0 400000
0000,
E
M
z TOTAL NEW-FIELD WILDCATS
o'
400, 00 Ae'ool--
0-0 '010100 'e 0 . "%%
6,000 %%%"ft 0.010 @% * . 000'
00, "o ftftw@_%\ .040, \
00 DRY NEW-FIELD WILDCATS %%%...0001 dP #*-ft
% 0#0
%% .0

3,000 -

1950 51 53 55 57 59 61 63 65 67 69 71 73
amuft
0000@
D WI LDCA

SOURCE: Energy Perspectives., U.S. Dept. of Interior, 1975.

U.S. Oil and Gas Wells Drilled, 1965-74

50,000
SERVICE

DRY

GAS
41,423
OIL
40,000

31,813

irr. A*
29,341
30,000 -A 28,725
ve
27,551

AA
Au
E
3 .A
z P
20,000

10,000
m .

1965 1970 1972 1973 1974

SOURCE: Energy Perspectives, U.S. Dept. of Interior, 1975.

5. U.S. natural gas supply will remain relatively constant at
approximately 22 trillion cubic feet annually.

6. U.S. natural gas production will remain relatively constant at
approximately 21 trillion cubic feet annually.

7. Federal OCS areas will continue to account for approximately 11%
of domestic petroleum production.

8. Federal OCS areas will continue to provide an increasing share of
domestic natural gas production, climbing at an annual rate of
approximately 9%.

Clearly, if significant policy changes were to be enacted, the supply
and thus the price of oil and gas would undoubtedly be significantly
affected. Such changes could be significant enough to dramatically
accelerate OCS development. Those changes, however, are virtually
impossible to accurately predict and, thus, the "business as usual"
assumption is the most realistic. It must be borne in mind, however, that
RPC's ultimate conclusions regarding impacts of OCS development could be
varied upward or downward in accordance with presently unforeseen policy
changes.

B - 25

ATTACHMENT BI

GEOLOGIC FRAMEWORK AND METHODOLOGY FOR HYPOTHESIZING

TEXAS OCS OIL AND GAS PRODUCTION

GEOLOGIC FRAMEWORK AND METHODOLOGY FOR HYPOTHESIZING TEXAS OCS
HYDROCARBON PRODUCTION PATTERNS

Introduction

The design of a reasonable scenario for assessing coastal zone impact
of outer continental shelf oil and gas development requires that hypo-
thetical locations of oil and/or gas accumulations be made in a pattern
most like what may in fact be found. This approximation is based on the
review of the geological history and the present stratigraphic and struc-
tural framework of the western Gulf of Mexico continental shelf. Because
of its proprietary nature in a competitive market, extensive detailed
information on OCS potential hydrocarbon fields is 'not available. Only
regional characteristics are included in this report to be used in scenario
development.

The detailed location of new fields and calculations of new reserve
additions, either for oil or gas, is not crucial to this study. Only time
would tell if any estimates of future production characteristics are
accurate. It is sufficient that technical appraisals indicate that one
area is more prospective than another, at different depths of water and
strata thickness, and as an oil or gas reservoir.

Methodology

The procedure used in this report to estimate the probable future
location of oil and gas production in the Texas OCS is as follows:

1. Published descriptions of the Texas OCS producing trends were
reviewed;

2. Regions of present development and future petroleum potential in
the Texas OCS were mapped, based on the descriptions of (1)
above;

3. Regions of present activity in leasing and drilling were identi-
fied; and

4. Hypothetical sites for future petroleum finds were established,
and their local characteristics of water depth and drilling
depth were determined, based on (2) and (3) above.

In summary, this procedure uses only published information and quali-
fied judgements in the development of hypothetical production patterns. It

B - 27

does not include area or site-specific geophysical data in the deter-
mination of reservoir locations. It does not attempt to model production
schedules using such information as porosity, permeability, pressure,
viscosity, or well driving mechanism as innate characteristics of any of
the hypothetical finds.

General Geological Framework

In the Jurassic Period (about 180 to 150 million years ago) the Gulf
was a shallow enclosed sea similar to today's Caspian Sea. Extensive
carbonate reefs from Florida to the Yucatan Peninsula may have restricted
Gulf water interchange with the open ocean. Under arid climatic con-
ditions, little fresh water and sediment entered the basin from North
American streams, and evaporation from the Gulf surface resulted in
hypersaline conditions. There were extensive salt and anhydrous gypsum
deposits. The opening of the Gulf began in the Cretaceous period with a
change in the North American tectonic setting. Nearly continuous Gulf
sedimentation and subsidence has occurred since the beginning of the
Cenozoic. Figure BI 1 shows the shape of the western Gulf of Mexico
continental shelf at a depth of 200 meters.

The Tertiary and Pleistocene continental shelf strata is predom-
inantly deltaic in origin, with considerable lateral distribution of
sediments by paleo-Gulf currents. A striking characteristic of these
deltaic deposits is the cyclic nature of alternating and interfingering
sandstone and shale beds. Three major depositional areas may be recognized
across the strata of any one age, determined mainly by proximity to the
coast or sediment source and varying in the proportion of sand to shale
(Figure BI 2). The percent of sandstone decreases from about 65 percent at
the inner deltaic area to much less across the continental shelf and slope.

Regionally, each stratigraphic unit dips gulfward. The dip increases
and the section thickens beyond the edge of the shelf. The sediment
accumulation across the shelf during Tertiary time resulted in progressive
shifting of the edge of the continental shelf towards the Gulf. The shelf
edge for each. progressively older producing trend will be found more
towards the coast and deeper.

Sediments deposited on the outer shelf and upper slope through
geologic time have the greatest potential for producing hydrocarbons due to
the following:

1. This is where coarser nearshore sands interfinger with organic
rich marine shales, providing an optimal sand/shale ratio for
hydrocarbon source rock, movement, and reservoir;

2. Here the organic rich shales may be rapidly buried and protected,
and not oxidized as they might be in shallow water;

B - 28

FIGURE BI I

uj Trl

B 29

FIGURE BI 2

COASTLINE WATER DEPTK U
c-cw-ri AltVTq I- JRELF 5EA Lf-\/EL

50 ool-

"5\--Opr-
:5@AE LIP
15 lc@ N

140

B 30

3. Increased sediment load over plastic-behaving salt and marine
shale layers initiates salt flow, triggering the growth of salt
domes and related faults which serve as reservoir traps (see
Figure BI 3);
4. Pressure of overburden leads to heating of the clays, resulting
in the 'cooking-out' of hydrocarbons .

The discovery and development of major petroleum reserves in
strata of any one age in the Gulf has followed a general pattern of initial
discovery of shallow accumulations on salt uplifts. As drilling was
extended gulfward and to greater depths, significant new reserve@ were
found in thicker marine sections correlative with the earlier finds. This
pattern of development may be expected to be similar to that for future OCS
finds, especially in the upper Tertiary and Pleistocene, as discussed
later.

Descriptions of Producing Trends

I. Oligocene - Lower Miocene

Figure BI 4 illustrates Oligocene and Lower Miocene producing areas,
and future Miocene probable and possible producing areas. The probable
area was determined by the presence of favorable sand to shale ratios
downdip or along the trend from present producing areas. The possible area
was projected downdip to where sand content is estimated to be 5 to 10
percent. Future Oligocene production, mainly from the Frio Formation, will
probably not extend much farther downdip. Both trends increase downdip in
thickness to more than 6000 feet each. Drilling depths of 15,000 and
25,000 feet may be required to test parts of the Oliogocene and lower
Miocene, respectively. Much of the future yploration and development will
be for subtler, smaller, and deeper traps.

II. Upper Miocene

Structural elements of the mid-Tertiary time which affected both the
Upper Miocene and Pliocene sedimentation pattern were the Mississippi
Embayment, the Sabine Arch, the Houston Embayment, the San Marcos Arch, and
the Rio Grande Embayment (Figure BI 5). Upper Miocene sedimentation was
centered in the Mississippi Embayment. Optimum conditions for sizable
accumulations of hydrocarbons in the Texas OCS section apparently did not
exist. Either the Sabine Arch limited sediment transport from the east o
the sediments were deposited before they reached the Houston Embayment.
Also the Texas upper Miocene shelf was apparently reduced, limiting the
size of the basin. Therefore, the thickness of the Texas section is about

B - 31

FIGURE BI 3

North

CRETACEOUS Sea Level

Salt Layer

FsOCENE Sea Level

Salt stoc @@ase

OLIGOCENE Sea Level

Salt plug phase

MIO-PLIO-PLEISTOCENE Sea Level

N.,

Schematic illustration of the development of the Tertiary Gulf Coant
paraliageosyncline, as associated with the movement of salt; under
progressivel loading:
(a) Lateral displacement of salt under differential loading pres-
sure and growth of sal't stocks (salt stock phase of diapirism).
(b) Growth of salt plugs from sialt stock (salt plug phase of diapir-
ism during prograding sedimentation).

Salt dome development in the Gulf Coast Geosyncline

(from Wilhelm, 0. and M. Ewing. (1972) Geology and history
of the Gulf of Mexico. G.S.A. Bull. v83. pp575-600.)

B - 32

FIGURE BI 4

LI)

x02
< 0 0 a 0
00000000

LLJ

uj
ac
4-

B 33

MBAIMEgT

MOO

LEGEND
W 6MVE
PLIOCENE PRODUVrION

t ( S IADT t 5

AA;t r
0 uw"&p

7,000 feet compared to 10,000 feet in Louisiana. There is an estimated
13,000 cubic miles of upper Miocene rocks in the Texas OCS, about 30% of
which is reservoir rock. Future development will extend along current
trends and exploration may indicate reserves in the deeper shale area
downdip, where only gas is expected to be found (Figure BI 6).

III. Pliocene

The Pliocene is structurally and stratigraphically similar to the
older Miocene section. Although the trend accumulated half the volume of
sediment that occurs in the upper Miocene, conditions for petroleum
generation and storage evidently were significantly better. The Texas OCS
Pliocene is only 4,000 feet thick with 3,000 cubic miles of rock. Two
distinct provinces occur in the Texas Pliocene. The east Texas region has
the highest density of salt domes of all the producing trends. The south
Texas region is characterized by the lack of salt domes and fault blocks
with the down thrown block to the Gulf. Figure BI 6 indicates the probable
limits of future production in this trend.

IV. Pleistocene

The Pleistocene section thickens from 1,000 feet along the coast to
more than 10,000 feet at the shelf edge in the east Texas - Louisiana
region (Figure B1 7). It thins rapidly to the east and west across the
shelf, being no more than 4,500 feet thick in south Texas. Those parts of
Texas and Louisiana where thickness is less than 2,000 feet and where the
sediment is mostly deltaic sand, lacking in hydrocarb2n source rock, are
not considered to be favorable for future production. The area between
the 2,000 and 5,000 foot contours is similar to the highly productive
Louisiana Pleistocene and includes the transition between deltaic sands
and offshore sand and clays with many salt domes intruding. The most
promising Pleistocene section is the outer shelf and shelf edge sand and
shale area more than 7,000 feet thick. The amount of reservoir rock
decreases with depth from 50%.

Future Potential - Development of Hypothesis

The geologic information necessary to describe mock patterns of
future OCS development includes the general location of favorable pro-
ducing areas, the depth of strata to be drilled, the depth of water at the
area, and estimates of the volume of oil and gas which may be produced.

Most of the exploratory and production activity in the Texas OCS has
been within 50 to 100 miles from shore, northeast of Matagorda Island

B - 35

@EGEND
UPPEK MIOCENE PPODVCTIC)N

FIGURE BI 7

4L
0

;.76

B 37

(Figure BI 8). The depth of water is less than 40 meters. Most wells
extend between 8,000 and 12,000 feet deep. Production in this area is
mostly from the Miocene and Pliocene offshore sand and shale deposits
(Figure BI 9). Further offshore, these trends occur at greater depth and
have less reservoir rock (Figure BI 10). To the southwest the overall
section thickness decreases.

The expected regions of future activity are shown in Figure BI 11,
compiled from Figures BI 4,BI 5, and BI 6. This map in comparison to figure
BI 9 shows three expected patterns. Drilling in the Miocene and Pliocene
will extend along present trend to south Texas. Drilling may also be
expected to extend to greater depth downdip in these producing sections.
The third pattern is activity along the east Texas outer shelf edge in the
Pleistocene.

B - 38

FIGURE BI 8

c,l

........... ... ........

B 39

iIAMR

REGIOMS OF @STNBLISM PRODUCTION -OCS

FIGURE BI 10

WIL

SHORE 2 oo K S tME aDOM 5HOa 2J@OM. 5MORE 200M.

P1.1A.

Cross-sections in western Gulf of Mexico

transects as shown in figure BI1
Horizontal Scale about 1" 100 miles
Depth in feet

B 41

FIGURE BI 11

6 a
ace

LLJ

00 ll@

B 42

Footnotes to Attachment BI

1. U.S. Department of the Interior (1974) Final Environmental Statement
for Proposed OCS Oil and Gas General Lease Sale. pp. 83-84.

2. Powell, L. C. and H. 0. Woodbury (1971) Possible Future Petroleum
Potential of Pleistocene, Western Gulf Basin. AAPG Mem. 15(2) p. 813.

3. Tipsword, H. L., W. A. Fowler, Jr. and B. J. Sorrell (1971) Possible
Future Petroleum Potential of Lower Miocene - Oligocene, Western Gulf
Basin. AAPG Mem. 15(2). p. 854.

4. Shinn, A. D. (1971) Possible Future Petroleum Potential of Upper
Miocene and Pliocene, Western Gulf Basin. AAPG Mem. 15(2) p. 834.

B - 43

ATTACHMENT BII

PIPELINES IN THE TEXAS FEDERAL OCS

PIPELINES

Over seventy trunk or gathering pipelines extend from the Texas OCS or
the federal OCS off Texas to the Texas barrier islands or to the Texas
coast where there are no barrier islands. Twelve of these trunk or
gathering lines extend beyond the three marine league line into the federal
OCS. (see Map BII I and Figure BII 1.)

Most of the pipelines which are situated wholly within the Texas OCS
carry gas and are in the 2 3/8" to 12" size range. Although a few are
larger and some carry oil, these are relatively few.

Of primary concern are the twelve trunk or gathering lines which are
situated in the federal OCS off Texas.

1. Pipeline #2 on Map BII 1 is a 16-mile gathering line connecting
to a trunk line situated in the federal OCS off Louisiana. Pipeline
#2 gathers gas from tract number 129 in the High Island/East Addition
area. It has a 12" diameter and is owned by Tidal Pipeline Co.

2. Pipeline #9 is a 16" gas line extending approximately 33 miles
from tract number 88 in the High Island area to a trunk line in
Louisiana. It carries gas and is owned by United Gas Pipeline Co.

3. Pipeline #10 on Map BII 1 is a 16" natural gas pipeline. It
gathers production from tract number 88 in the High Island area and
carries it 26 miles to a natural gas trunk line in Texas. It is owned
by Natural Gas Pipeline Co.

4. Pipeline #13 extends approximately 32 miles from tract number 52
in the High Island area to a trunk line in Louisiana. It is a 1611 gas
line owned by Transcontinental Gas Pipeline Co.

5. Pipeline #16 on Map BII 1 is a 4 1/2" oil line extending from
tract number 52 in the High Island area to the Texas coast. That
distance is approximately 12 miles. The line is owned by Chevron Oil
Co.

6. Pipeline #20 is a 16" gas line which gathers production from
tract number 136 in the High Island area. It carries such production
approximately 56 miles to Texas City, Texas. It is owned by the Black
Marlin Pipeline Co.

7. Pipeline #21 is a 611 gas line which gathers production from tract
number 140 in the High Island area and carries it approximately 3
miles to feed into pipeline number 20. It too, is owned by Black
Marlin.

B - 45

8. Pipeline #26 gathers production from tract number 296 in the
Galveston area and carries it approximately 3 miles to feed into
pipeline #27. It is a 20" gas line owned by Blue Dolphin Pipeline Co.

9. Pipeline #27 gathers gas from tract number 288 in the Galveston
area and carries it approximately 40 miles to the Texas shores. It,
like pipeline #26 which feeds into it, is a 2011 gas line and is owned
by Blue Dolphin.

10. Pipeline #34, which is fed by both numbers 33 and 35 (see below)
is a 30" gas line. It extends from tract number 538 in the Brazos area
to Texas shore, approximately 28 miles away. It is owned by Trans-
continental gas Pipeline Co.

11. Pipeline #33 on Map BII 1 is a 20" gas line extending from tract
number A-1 in the Brazos area down to tract number 541 in the same
area and then westward to join pipeline #34. Its total length is
approximately 22 miles and is owned by Transcontinental.

12. Pipeline #35 originates in tract number A-76 in the Brazos/South
Addition area and extends approximately 32 miles to feed into pipeline
#34. It is a 20" gas line owned by Transcontinental.

Thus, the total mileage of pipeline seaward of the three league line
in the federal OCS off Texas is approximately 147 miles.

B - 46

Map Bll I
IWOR TE)(M OFFSHORE FIKLIZ RRIS

HOIAZJ-o,A

FORT BEND
10 20 3b 40

S,Mrvm MiLts

WHARTON
r
.ALVES

c
BRAZORIA

CKSON

HA GORDA
TORIA F83
cl-T

_: 4j P, _:

CALHOUN

R UGIO

r1a vest
AJ _AY@AS
J's
SAN PATRICIO
Brazo a s on'
S0uth Addit

Matago
rda Isfand
zos
th A dition
clor'Mi

7
NUECES mustal Island @Wo
51 Mustang is andt East ition 0

orth Padre North Pa re Islan
Island East Addition
Corpus Christi Bay City

KENEDY v

Outh a re Islan
WILLACY S, Outh Padre sland
tast Addition

0
v
CAMERON

P-,-t Isabel Bay City @ou

Pipeline Number Texas General Land
(From Map Office Easement No. Size Product Owner,

1 1211 Gas Tidal Pipeline Co.

2 1211 Gas Tidal Pipeline Co.

3 611 Gas Tidal Pipeline Co.

4 1611 Gas Tidal Pipeline Co.

5 611 Gas Tidal Pipeline Co.

6 1011 Gas Tidal Pipeline Co.

co
7 1011 Gas Chevron Oil Co.

8 1811 Gas Chevron Oil Co.

9 2184 1611 Gas United Gas Pipeline Co.

10 2391 1611 Natural Gas Natural Gas Pipeline Co.

11 1955 1011 Gas Transcontinental Gas Pipeline Co.

12 1557 6 5/811 Oil Zapata - C&K

13 1833 1611 Gas Transcontinental Gas Pipeline Co.

Figure BII 1 (con't.) Pipeline/Gulf of 'Mexico
(To accompany Map BI-I -T).

Pipeline Number Texas General Land
(From Map' Office Easement No. Size Product Owner

13a 2815 1011 Gas Transcontinental-Gas-Pipeline Co.

13b 2850 2 7/811 Gas Mi'tchell'Energy..Offshore

14 1852 1211 Gas Unite'd Gas.-Pioeli.ne..Co,

15 1827 1611 Gas. United Gas Pipeline Co.
1816 8 5/8', Oil Atl-anti-c..Richfield.-Co.

16 2421 4 1/211 Oil Chevron Oil-Co,

17 2018 1211 Gas Pennzoil..Pipel.i.ne Co..

17a 2005 4 1 211 -Gas King.-Resources.Co.

18 1572 311 Gas Occidental Petroleum Corp.

18a 1571 4 1/211 Gas Occidental Petroleum Corp,
2 1/2" Oil

19 445 411 P.an.Ameri.can..Petroleum.Corp.

20 1487 1611 Gas Bl ack Marl i n Pi pel ine Co.

21 611 Gas. Black.-Marlin Pipeline-Co.

V 1 9 U F C L@ I I I IL, I'l IZ A I t- t@ --
li@cT@lfal@c-/coumu@@nyulMap'BII 1)

Pipeline Number Texas General Land
(From Map Office Easement No. Size Product Owner
22 2470 811 Gas Natural Gas Pipeline Co.

23 2465 411 Oil Mitchell Energy Offshore

23a 2461 2 3/8" Oil Mitchell Energy Offshore

24 3252 6 5/811 Gas Tejas Gas Corporation

25 3089 3 lj8-- Oil Houston Oil and Mineral's

26 2011 Gas Blue Dolphin Pipeline Co.

27 3000 2011 Gas Blue Dolphin Pipeline Co.

28 3209 811 Gas Houston Pipeline Co.

29 2605 85/8" Oil Mobil Oil Corp.

30 2565 85/811 Oil Houston Pipeline Co.

31 3249 311 Gas Houston Pipeline Co.

32 3225 85/811 Gas Pipeline Technologists

32a 2857 .8-5/811 Gas Coastal States Gas.Prod. Co..

Figure BII 1. (con't.) Pi el.ine/Gulf of Mexico
@To accompany Map BrI

Pipeline Number Texas General Land
(From Map Office Easement No. Size Product Owner

33. 2011 Gas Transcontinental.Gas Pipeline Co.

34 2114 3011 Gas Transcontinental Gas Pipeline Co.

35 2011 Gas T.ranscontinental Gas Pipeline Co.

36 1453 8 5/811 Gas Lo-Vaca.Gathering Co.

37 1453 8 5/811 Gas Lo-Vaca Gathering Co.

38 1592 1211 Gas Lo-Vaca Gathering-Co.

--Ln
39 3170 .6 5/811 Gas Superior Oil-Company

40 1454 in 3/4" Gas Lo-Vaca.Ga'thering.Co.

40a 1567 1211 Gas Lo-Vaca Gathering Co..

41 1459 1611. Gas Lo-Vaca Gathering-Co.

42 2597 .611 Oil- Monsanto Co.

43 2588 5 5/811 Gas North American Royalties, Inc..

44 2587 5 5/811 Gas North American Royalties, Inc.

Figure BII 1. (con' ,t. Pi.peline/Gulf of .*Mexico
(To accompany Map BII 1)

Pipeline Number Texas General Land
(From Map* Office Easement No.. Size Product owner

45 2926 1011 Gas Corpus Christi Oil & Gas Co.

45a 2927 8.5/8" Gas Corpus Christi Oil and Gas Co.

46 3226 10 3/411 Gas 'Pipeline Technologists

46a 1566 1211 Gas Lo-Vaca Gathering Co.

47 2893 6 5/811 Gas OXY Petroleum

1 48 2882 611 Gas Sun-Oil Co.

49 1836 411 Gas Shell Oil Co.
1826 611 Gas Gulf Oil Co.

50 1717 811 Gas United Gas Pipeline Co.

50a 1630 811 Gas United Gas Pipeline Co.

51 1745 4 1/211 Gas Texaco, Inc.

52 2560 611 Gas Reynolds Mining Corp.

53 1641 1011 Gas Texas Eastern Transmission

53a 2849 1011 Gas Chevron Oil Co.

Figure B11 1. (con't.) Pi eline/Gulf of*Mexico
@To accompany Map BI1 1)

Pipeline Number Texas General Land
(From Map" Office Easement No. Size Product Owner

54 2790 .3 -1/21'. Gas Reserve.Gas Systems, Inc.

55 2933 4 1/211 -Oil Mobil Oil Corp.

56 2933 4-1/211 Oil Mobil Oil Corp.

57 2933 4 1/2" -OU Mobile'Oil Corp.

58 3115 .8 5/8" Mobile Oil Corp.

APPENDIX C

DESCRIPTIONS OF STRIKES

The following descriptions are based on Appendix B and the original
data thereof. The twenty-one strike descriptions which follow provide a
range in the assumptions of location, size and other characteristics of OCS
development, and include for each strike area:

1. Tracts to be offered in sales 44 and 47;
2. Tracts leased in each sale as percentage of tracts offered;
3. Tracts explored as percentage of tracts leased in sales 44, 47,
and in previous sales;
4. Tracts developed as percentage of tracts explored resulting from
sales 44, 47, and from previous sales;
5. Tracts put into production as percentage of tracts developed
resulting from sales 44, 47, and from previous sales;
6. Amount of hydrocarbon production from each producing tract;
7. Drilling depth range to a given producing trend; and
8. Water depth range across the strike area.

The descriptions are contained in Figure C1.

The time span during which these postulated described strikes occur is
from the present to after sale 47, through the period leading to peak
production in tracts leased in sale 47. It is assumed that in this period
tracts in the strike areas which are currently leased but not yet explored
or in production will not expire.

The number of strike areas described for each of the block locations
described in Appendix B are as follows (See Map Cl):

6 High Island East Addition South Extension
4 High Island South Addition
2 Galveston South Addition
2 Brazos South Addition
1 Matagorda Island
1 Mustang Island East Addition
I Mustang Island
1 South Padre Island East Addition
1 South Padre Island
2 Bay City & Garden Banks

This distribution follows the trend in percentage of tracts leased in
each of the blocks (see Figure C2). This distribution of strike areas
assumes that through sale 47, continued emphasis will follow past leasing
and exploratory interest, concentrating first in the High Island South
Addition and East Addition South Extension blocks. It also assumes that
the oil industry approach will be to further evaluate leased but unexplored
tracts before major new leases are sought.

C - 2

Figure Cl. Descriptions of Hypothesized Strikes in the Texas Federal OCS

Annual Amount of
Production From Each
Producing Tract
Million MCF Gas
Tracts Tracts Offered Tracts Leased # Tracts Leased Tracts # Tracts Tracts Tracts Put Into Tracts Put Into , Trac.s Put Into Thousand Bbl s oil
Strike Area Tracts Leased # Tracts Explored Tracts Explored # Tracts Explored Developed Developed Developed Production Production Produc:ion From Future Old Depth Range dater Depth
From 44 From 47 From 44 From 47 From Old Lease From 44 From 47 From Old Leases From 44 From 47 Old Leised Activity Acti vi tv Producing Trend (Feet) Meters
High Island 1 12 5(42%) 1 4 1000%) 1(25%) 1(100%) 1(100%) 2(40%) 1(100%) 1000%) 1(50%) 1000%) 1(100%) 11100%) 3@ 27G 1@ 30G Plio-Pleistocene 4,000 - 15,000 45-60
East Addition
South Extension 1540 1650
1(50%) 0-- -- 1000%) -- 1@ 22G 1@ 18G Pleistocene 4,000 - 9,500 55-65
2 12 3(25%) 1 6 0-- 3(50%) 2(67%) 2(67%) 1000 1000
3 9 3(33%) 0 6 0-- 2(33%) 2(100%) 1(33%) 1(50%) 0-- 1000%) -- 1@ 25G -- Pleistocene 4,000 - 10,500 75-100
4 11 7(64%) 0 2 0-- 2(100%) 2(100%) 3(43%) 1(50%) 2(67%) 1(100%) 2103%) 3@ 29G 3@ 30G Pleistocene 5,000 -11,000 80-150
5 8 3(38%) 0 1 0-- 1(100%) 1000%) 1(33%) 0(0%) 1(100%) -- 1100%) 1@ 15G Pleistocene 5,000 - 11,500 150-200
6 9 3(33%) 0 3 0-- 2(67%) -- 2(100%) 3(100%) -- 1(50%) 1(33%) 1000%) 1100%) 2@ 19G Pleistocene 5,000 - 11,000 80-150
Total 61 24(39%) 2 22 1(50%) 11(50%) 1000%) 10(91%) 11(46%) 1000%) 5(50%) 5(45%) 1(100%) 5(100%) %100%) 353G 294G
5620 2650
High Island 7 9 0-- 0 3 0-- 1(33%) -- 1(100%) 0-- -- 1000%) 0-- 1000%) 1@ 18G -- Pli o-Pleistocene 6,000 - 14vODO 45-55
South Addition 3000
1000%) 1000%) 1000%) 1,100%) Z@ 22G -- Pleistocene 5,000 9,000 60-80
8 9 2(22%) 0 4 0-- 2(50%) 1(50%) 1(50%) 1100
9 9 3(33%) 0 5 0-- 3(60%) 2(67%) 1(33%) 1(50%) 1000%) 1(100%) 1(100%) 1@ 27G 1@ 28G Pleistocene 5,000 10,000 85-200
10 9 2(22%) 0 2 0-- 1(50%) 1(100%) 1(50%) 1000%) 0-- 1000%) 1@ 23G -- Pleistocene 5 000 9,000 80-190
Total 36 7(19%) 0 14 0-- 7(50%) 5(71%) 3(43%) 4(80%) 2(67%) 4(100%) q'(100%) 90G 5OG
4100 1100
Galveston 11 16 1(6%) 0 4 0-- 2(50%) 1@ 20G 1@ 21G Pleistocene
South Addition 1(50%) 0-- 1(100%) 0-- 1(100%) -- 4,000 6,000 50-80
12 12 4(33%) 0 5 0-- 3(60%) 2(67%) 2(50%, 1(50%) 1(50%) 1(100%) 11000%) 1@ 21G 1@ 25C Plei,;to--ene 4 000 9,UDO 90-175
950 1000
Total 28 5(18%) 0 9 0-- 5(56%) 3(60%) 2(40%)' 2(67%) 1(50%) 2(100%) 1030%) 41G 46G
Brazos South 13 16 2(13%) 1 950 1000
Addition 0 4 3(75%) 2(67%) 2(100%) -- 2(100%) 0-- -- 2(100%) 1@ 29G -- Pleistocene 3,500 - 4,500 50-75
23G Mio-Pliocene 7,000 - 12,500
14 16 6(38%) 1 5 1 3(6D%) 1(100%) 3(100%) 2(33%) 1000%) 2(67%) 1(50%) 1000%) 2(100%) 1000%) 1@ 29G 3@ 24G Upper Miocene 8, COO - 13,000 45-65
1@ 19G
T 'a 22G
_otal 32 8(25%) 1 9 1(100%) 6(67%) 1(100%) 5(83%) 5(63%) 1(100%) 4(80%) 1(20%) 1(100%) 4(106%-) 11(100%) 144G
Matagorda 15 16 4(25%) 0 3 0-- 1(33%) 1000%) 3(75%) 1000%) 2(67%) 1000%) (100%) 3@ 13G 1@ lOG Lower Miocene
Island 6. WO 10,000 25-45
Mustang Island 16 16 6(38%) 0 3 0-- 1(33%) 1(100%) 4(67%) 0-- 2(50%) -- 2(100%) 2@ 22G Upper Miocene 6,DO9 12,000 60-100
East Addition @V
Mustang 17 16 2(13%) 0 4 0-- 3(75%) 2(67%) 1(50%) 1(50%) 1(100%) 1(100%) 1000%) 1@ 17G Lower Miocene 5,001) 10,000 30
Island 1@ 12G -50
South Padre 18 16 5(31%) 0 5 0-- 3(6Q%) 2(67%) 4(80%) 900
Island East .2(100%) 2@ 14G Plio-Pleistocene 2,000 6,000 6o-ao
Addition 950
1@ 2000
South Padre 19 16 2(13%) 0 4 0-- 1(25%) 1000%) 2(100%) 1(100%) 1(50%) 1(100%) (100%) 2@ 22G
Island 1250 Mio-Pliocene 3,003-- 12,000 30-45
Deepoa@ City) 20 20 7(35%) 0 .13 0-- 8(62%) 5(63%) 3(43%) 3(60%) 2(67%) ](33%) (100%) 3@ 30G 1@ 31G Pleistocene 5,009 - 10,000 150-300
Deep(Garden 21 20 0-- - 13 0-- 8(62%) 5(63%) 3(60%) 3(100%) 3@ 35G --
Bank$) Pleistocene 5, 000 - 11 500 190-375
GRAND 277 70(25%) 3 99 2(67%) 54(54%) 2(100%) 40(74%) 38(54%) 2(100%) 25(63%) W50%) 2,(100%) 13(92%) 1,057G 453G
TOTAL -1,6870 3650

2,0520
C - 3

MAP Cl

MAR415 CHAr'PEr!S

FORT BEND

WHART011
.ALY t

BRA7OqIA

JACKSON

VICTORIA IIATArnP.DA

CALHOU?l
J
IT
.--L- @@ 4-
REFUrAn I T- -7@r
APJ@S-, 7
2
7
'.N PATRICIO
ou

F@st 3-
Is' 14 14

,do
UECES T
Mu-,
I A- 1,t1j,"

+
,r

rt@Pdd-
?@;20@lh pad-
A
Corpus Christi Bay City CArdeo Banks

ENEDY

Legend

d1LACY 4dre I Postulated Strike
E ;.5 A d-@Tj@j -d 17
Area

:AIIERON
'I-9

P--t Isabel Day City @outh P I Garden Banks Soutt

C 4

Figure C2. Federal OCS Block Activity Characteristics

(2) (3) (4) (5) (6) (7) (8)
Tracts with Tracts with Tracts Proven Tracts with
Total No. No. Tracts Tracts Leased In It-acts Offered Current Exploration Post Exploration Producible/ Platforms approved
Block of Tracts Leased Sale 41 I-n Sale 44 /Percent of (2) /Percent of (2) Percent of (6) or set/Percent of (7)
High Island 145 8011-(55%) 4 (3%) 2 2 (1.4%) 53 (69%) 13 (25%) 7 (54%)
East Addition
South Extension

High Island
South Addition 184 84 (46%) 4 (5%) 0 3 (4%) 46 (58%) 14 (30%) 6 (43%)
Galveston 135 20 (15%) 0 0 1 (5%) 8 (40%) 1 (13%) 0
South Addition

Brazos 90 10* (11%) 0 1 0 8 (50%) 3 (38%) 1 (33%)
c--) South Addition
Matagorda Island 120 21--(18%) 2 (9.5%) 0 1 (5%) 3 (18%) 0 0
Mustang Island 143 21 (15%) 0 0 1 (5%) 1 (5%) 0 0
East Addition I - -
Mustang Island 163 40 (25%) 1 (2.5%) 0 0 2 (5%) 1 (50%) 0
So. Padre Island 132 112 (9@ 0 0 -
East Addition I

So. Padre Island 67 5 (7%) 0 0
Deep(Bay City) N.A. 13 N.A - =0 0 2 (15%) 2 (15%) 1 (50%) 0

Does not include 5 expired leases which had been explored

Does not include I exp ired lease which had been explored

The location of strike areas is based on past experience of recent
leasing trends, proven exploration, and on the basis of favorable geologic
conditions. The primary geologic indicator used here is descriptions of
the extent of sediment accumulation with favorable petroleum potential.
The strike areas therefore bound or include current leases. (See Attach-
ment BI of Appendix B.)

Different sized strike areas (9, 12, and 16 tract-sizes) represent
different degrees of likelihood that a petroleum field will be encountered
i n the area. As such, the selection of strike area size is largely
determined by the extent of past leasing and exploration in a block.

The postulated values for items 1-6 described above are guided by the
reasonable ranges for these items developed in Appendix B as applied to the
whole Texas federal OCS (see Figure Bl: Appendix B). The values for these
items given here may exceed either limit of those reasonable ranges, as
they are here described for small strike areas, and are therefore not
subject to an averaging effect in analyzing a larger area. The summation
and average of all the strike area strike characteristics, however, does
approximate the reasonable ranges previously described (see Figure BI:
Appendix B).

The number of tracts put into production as a percent of developed
tracts resulting from sale 47 in the Bay City Deep Gulf area (strike area
no.20) is not the prescribed 100%. This deviation is incorporated to
retain, in the development of scenarios, the option of not allocating to
that location production equipment throughout the time span assumed in this
series of strike descriptions.

Two categories are given for the amount of production from each
producing tract. Future activity includes production resulting from sales
44 and 47, as well as from currently leased tracts not yet in the
exploration to production sequence. Old activity includes production from
tracts included in the strike area which are currently being explored,
which have shut-in exploratory wells, or have platforms approved or set in
for production to commence in the near future.

The amount of production is based on the reasonable ranges of produc-
tion described in Appendix B and on tract-specific production history from
the Texas Rai'lroad Commission, which was used in developing the reasonable
production ranges. The production characteristics from the Pleistocene of
the southern High Island blocks is assumed to be similar to historic
production levels from the lower Miocene of High Island block tracts near
the three-league line. Successful exploratory wells indicate that gas
production will predominate over oil production near the shelf edge.
Production levels in the Brazos South Addition block, the Matagorda Island
block, and the Mustang Island block are postulated to continue the trend
from the northeast, yet not at so high a level of production. Production
estimates from the 2 South Padre blocks are very speculative yet reason-
able. Just as there is little data to support the estimates, there is
little to refute them.

C - 6

Drilling depth range to producing trend and water depth are read from
the structure contour map of the producing trends' base (Maps B3 to B5:
Appendix B) and from BLM maps. The range of drilling depth includes the
minimum and maximum depth at which the strike will be encountered in the
given trend.

C 7

APPENDIX D

INDUSTRY PRACTICES

fp%
... I

.--
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I

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I
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a 1 11 1---

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I - -
-

INDUSTRY PRACTICES

What follows is a description of requirements, scheduling, and other
characteristics of the development patterns associated with any given
postulated strike in the Texas federal OCS. Thus, the information con-
tained herein can be thought of as either time scheduling of OCS develop-
ment activities or type and amount of equipment associated with each step
in OCS oil and gas development.

The first section below presents time sceduling information, the
second section presents equipment information, and the third, (Figure D1)
combines the first two in a comprehensive display of time and equipment
requirements. The steps of OCS development examined in each section
include:

1. Pre-lease sale seismographic or other exploration;
2. The lease sale;
3. Exploratory drilling;
4. Development drilling;
5. Production;
6. Transportation and storage; and
7. Operations and maintenance.

In addition, a brief analysis of the sensitivity of private investors'
OCS development decisions to government policy variables is presented.
Such sensitivity can, of course, greatly affect the timing of OCS explora-
tion, development and production.

Time Scheduling

The information contained in this section was derived primarily from
six sources: Energy Under the Oceans, Kash, et al (1973), Effects of Off
shore Oil and Natural Gas Development on the Coastal Zone, a study for the
Ad Hoc Select Committee on Outer Continental Shelf, prepa-red by the Library
of Congress Congressional Research Service (1976); Enerqy Perspectives,
U.S. Dept. of Interior(1975); Leasing and Management of_E_ner5@ Resources on
the Outer Continental Shelf, U. S. Dept. of Interior (1974); information'
derived from U.S.G.S. comFuter printouts detailing OCS activity specific
to the Texas federal OCS (1976); and the BLM Leasing Schedule (January,
1977). This section is intended to be accompanied by Figure D1.

D - 2

1 . Pre-lease sale exploration. Most sources agree that presale
exploration takes place over an indeterminate period of time. Kash
hypothesizes a nine-month period, but acknowledges that such activity
could last five years and longer. The Ad Hoc Committee report simply
calls it an "indeterminate" period of time.

2. Lease sale. For purposes of this analysis, "lease sale" includes
review of the DEIS, review of the FEIS, the sale day, review of the
bids, and letting of leases.

The DEIS must be released at least 90 days before the sale date.
While that can be seen as the required time period, the Ad Hoc
Committee report estimates that the DEIS is released 9 months in
advance of the sale, and BLM itself estimates 5-7 months in advance of
Gulf of Mexico sales.

The FEIS must be released at least 30 days before the sale.
Again, this can be seen as the required period; the Ad Hoc Committee
report estimates 60 days, and BLM estimates 60-120 days.

The least sale itself, of course, takes place in one day. BLM
then has 30 days to decide to reject or accept bids. The lease is
effective on the first of the month following acceptance of the bid.
Thus, 30 days is the time period involved.

3. Exploratory drilling. After a lease bid has been accepted, the
developer submits an exploratory drilling- plan to USGS and applies for
a permit to drill. USGS has 30 days to decide if an EIS is required,
but the entire process of approving a plan and granting a drilling
permit could take, according to the Ad Hoc Committee report, 5 to 27
months. The actual exploratory drilling itself takes place in 3
months according to Kash, in 1 to 6 months according to the Ad Hoc
Committee report, and in 1 to 3 months according to Energy Perspec-
tives. Analysis of 71 cases (from 1973 to 1976) printed out in the
=computer runs indicates that the average length of time from the
effective date of the lease until completion-of the first exploratory
well has been 9.5 months. (The longest case was 29 months; the
shortest was one month.) Leasing and Management estimates the same
period to be 1.5 to 4.5 years. Thus, the total time from the
effective date of the lease until completion of the first exploratory
well can be, when all the foregoing estimates are considered, 3 to 54
months. It must be remembered, however, that that range of time in
the Texas federal OCS in recent years has been 1 to 29 months and that
9.5 months is the average.

4. Development drilling. Time estimates for development drilling
are of two types: those that provide estimates of the period of time
between the effective date of the lease and installation of the first
development platform and thus first production; and those that esti-
mate the length of time that development drilling continues. Kash

D - 3

estimates that as few as three months elapse between leasing and
beginning of development drilling; the Ad Hoc Committee report esti-
mates 20 to 51 months; Leasing and Management estimates 2.5 to 6.5
years until first production from a platform; and Energy Perspectives
estimates 27 to 54 months. The USGS printouts for the Texas Feder7a
OCS activities indicate that in 27 cases (from 1957 to 1976) the
average length of time from effective date of the lease until in-
stallation of a development platform has been 52.3 months. (The
longest time was 295 months; the shortest was nine months.)

The length of time that development drilling continues is
usually defined as the time required to reach significant production;
that is, until production equipment, gathering systems, and/or pipe-
lines are connected to OCS wells. Kash estimates that period to be 17
months; the Ad Hoc Committee report estimates it to be 15 to 27
months; and Energy Perspectives estimates it to be 9 to 33 months.

5. Production. Production is normally defined as that period of
time, after production equipment is installed on a platform, that the
well or wells continue to produce. It is widely agreed, needless to
say, that that is an indeterminate time. Estimates are sometimes
given, however, for the period of time between the lease sale and
commencement of,commercial production in permanent production facili-
ties. Kash, for example, estimates that time to be 40 months; the Ad
Hoc Committee report estimates it to be 126 months. The latter figure
may be an overestimation in that it considers all OCS drilling in
every location. Other estimates attempt to isolate the length of time
from the effective date of the lease until peak production is reached.
Leasing and Management estimates 84 to 168 months; Energy Perspec-
tives estimates 52 to T02 months in the Gulf of Mexico.

6. Transportation and storage. Kash estimates that 98% of all OCS
production in the Gulf of Mexico is transported to shore by pipeline;
barges or tankers are sometime used as temporary means of transport-
ation during exploration, development, or for low-yield fields. For
this reason, emphasis in this analysis is on pipeline transportation.

Two sources provide estimates for the length of time between
effective date of the lease and the pipeline permitting and construc-
tion process. The Ad Hoc Committee report estimates that time to be
45 to an indeterminate number of months. Energy Perspectives esti-
mates that in the Gulf of Mexico, pipelines are constructed and
connected to OCS wells within 36 to 60 months after the lease becomes
effective. Kash contends that offshore storage will not be necessary
for the U.S. OCS, at least in the foreseeable future. If additional
onshore storage is required to accomodate the production from a new
OCS discovery, it is reasonable to assume that construction of such
facilities would coincide reasonably well with construction of pipe-
line facitities.

D - 4

One further bit of evidence is available. The earliest date of
lease for any tract in the High Island South Addition or High Island
East Addition South Extension Areas was August, 1973. A large
pipeline to serve that area was approved in May, 1976. Assuming a 12-
month construction period, the length of time between effective date
of lease and construction of the pipeline would be 46 months.

7. Operations and maintenance. These activities continue over the
life of the field and are of indeterminate length.

Type and Amount of Required Equipment

The information contained in this section was derived primarily from
four sources: Energy Under the Oceans, Kash, et al (1973); Leasing and
Management of Energy Resources on the Outer Continental Shelf, U.S. Dept.
oT interior -(1974); information derived from U.S.G.T. -computer printouts
detailing OCS activity specific to the Texas federal OCS (1976); and Mid-
Atlantic Regional Study, Woodward-Clyde Consultants (1975). The following
items are contained in this section:

1. Equipment involved in seismographic or other pre-lease sale
exploration;
2. Number and type of exploratory wells per explored tract;
3. Number and type of exploratory wells per rig/per year;
4. Number of platforms per developed tract (included is a short
description of a development platform);
5. Number of development wells per platform;
6. Number of development wells per platform/per year;
7. Number of platforms per producing tract (included is a short
description of a production platform);
8. Number of production wells per platform;
9. Equipment involved in transportation and storage; and
10. Equipment involved in operations and maintenance.

It should be noted that the most widely referred-to study for equip-
ment information (not only in this analysis but also by previous impact
studies) is the Kash work. Its section on "Development of OCS Resources"
is excellent. The best information in regards to amount of equipment
entailed in each OCS development phase are the USGS printouts of Texas
federal OCS activity. Woodward-Clyde's (W/C) study provided estimates for
the amount of equipment needed for future development of the Mid-Atlantic
OCS, but it is important to remember that the situations in a frontier area
such as the Atlantic are undoubtedly very different from the Gulf of Mexico
in many important aspects. This section is intended to be accompanied by
Figure D1.

1. The equipment involved in pre-lease sale exploration, according
to Kash, usually involves air- or ship-borne passive measurement,
seismic surveying, or bottom sampling and coring.

D - 5

Air- or ship-borne passive measurement involves the reading of
changes in the earth's magnetic field, local variations in the
earth's gravity, and the existence of natural oil seeps." In addi-
tion, gravimetry (measurement of gravitational fields or density) is
used in the Gulf of Mexico to locate salt dome structures.

Seismic surveying from a ship is by far the most widely used pre-
lease sale exploratory method. It involves the generation of sound
waves which are bounced off the seabed's geologic strata. The echos
are picked up by ship-borne instruments, and cross-sections and
three-dimensional reproductions of the underlying geologic structures
can be constructed. Explosives were for many years used as a source
of sound waves; they have been replaced by contained gas explosions or
electronic vibrators.

On occasion, USGS will authorize bottom sampling or coring to a
maximum depth of 1000 ft. Such authorization is only granted if
seismic data reveals a need-for the additional information which
bottom sampling or coring can provide.

Because pre-lease sale exploration takes place over an indeter-
minate length of time, it is difficult to know or to estimate how many
exploratory ships would be involved in the exploration of a single
tract. It is relatively safe to assume, however, that no more than
three ships (even if bottom sampling and/or coring were authorized)
would be required to explore one tract.

2. Kash explains that four types of rigs are currently being used
for exploratory drilling: barges, drill ships, jack-ups, and semi-
submersibles.

Barges are much like drill ships and can be used to drill in
water up to 600 feet deep but are generally used only in shallow
water. Drill ships can drill in up to 3000 feet of water and are often
equipped with a dynamic positioning system which detects and com-
pensates for the water's movement, thus enabling the ship to maintain
a stationary position.

Jack-up rigs, with legs in the "up" position, can float and be
towed into position. Once in position, the legs are extended and the
platform is elevated above the water; a bottom-standing exploratory
platform is the result. Jack-ups can drill in water depths up to 350
feet.

Semi -submersibles have a platform deck supported by columns
which are connected to underwater displacement hulls. The hulls can
be flooded on site to anchor the rig to the seabed. They can operate
in up to 2000 feet of water.

Jack-up rigs seem the most likely to be used in the Texas federal
OCS except in water over 250 feet where semi-submersibles will
probably be used.

D -- 6

USGS computer printouts indicate that in 230 cases from 1947
through 1975, the average number of exploratory wells per explored
tract in the Texas federal OCS has been 2.0. (The most has been 9; the
least has been one.)

It is interesting to note that the W/C study used the same
figure: two exploratory wells per explored tract.

3. Number and type of exploratory wells per rig/per year. The type
of equipment involved in this item is the same as that for Item 2
above (barges, drill ships, jack-ups, or semi -submersibles). USGS
printouts indicate that in 131 cases from 1968 to 1976 the average
number of exploratory wells completed in a 12-month period was 1.9.
(242 wells completed in 1535 drilling months.) The figure used in the
W/C study was 4.

4. After commercial accumulations of oil or gas are found to exist
in any given OCS tract, field development will begin. Field develop-
ment entails the use of fixed platforms and/or underwater com-
pletions, sometimes'known as subsea completions.

Fixed platforms are permanently attached to the seabed by steel
pilings and support one or more decks on which drilling or production
equipment or quarters are mounted. Fixed platforms operate in water
depths up to 550 feet although the potential water depth is probably
greater. From these platforms, development wells are drilled in a
gradual curve by "controlled directional drilling." Such drilling
makes it possible to drill as many as 60 wells from one platform.

Underwater completions involve the placement of wellheads
directly on the seabed rather than on platforms.' The production from
underwater completions is pumped either to a nearby fixed platform or
to shore.

USGS printouts indicate that in 89 cases from 1959 to 1976
(including approximately 25 proposed platform cases) the average
number of platforms per developed tract (including both development
platforms and production platforms) is 1.6. (The most platforms in
one tract is 9; the least is one; there are a total of 89 platforms in
56 developed tracts.) The W/C study estimated 3 platforms per
developed tract.

5. As Item 4 above points out, one platform is capable of drilling
many development wells. USGS printouts indicate that in 53 cases from
1959 to 1976, the average number of development wells per platform in
the Texas federal OCS is 3.2. (The most is 17; the least is 0.) The
W/C study estimated 2 development rigs, each able to drill 8 wells per
year.

6. Number of development wells per platform/per year. USGS print-
outs indicate that in eight cases from 1968 to 1976, the average

'D - 7

number of development wells completed in a 12-month period is 4.6.
(31 wells in 80 drilling months.) The W/C study estimated eight
development wells per platform/per year.

7. A production platform may be distinguished from a development
platform by the type of equipment mounted on the platform. As the
development wells on each platform are completed, the development
rigs are removed to other platforms, and production equipment is
brought in. Production equipment is designed to separate sand, water,
gas, and oil and to regulate the flow of oil and gas. The system of
valves used to control such flow is known as a "Christmas tree."

USGS printouts indicate that in 15 cases from 1955 through 1975,
the average number of platforms per production tract (tracts out-
fitted with production equipment) in the Texas federal OCS is 1.2.
(The most is 2; the least is one.) The W/C study estimated 3
platforms per producing tracts.

8. USGS printouts indicate that for 18 cases from 1955 through 1975,
the average number of wells per production platform (platform out-
fitted with production equipment) in the Texas federal OCS is 5.4.
(The most is 17; the least is 0.) The W/C study estimated 24 wells per
production platform.

It must be noted that "producing" platforms and platforms out-
fitted with production equipment are not necesarily the same. Some
platforms are producing but are not outfitted with production equip-
ment; they pump their production to platforms which are so equipped.
For example, USGS printouts reveal 32 producing platforms in the Texas
federal OCS, 18 (56%) of which have production equipment. Thus, the
number of wells per producing platform is different than the number of
wells per production platform. We have already seen that the average
number of wells per production platform in the Texas federal OCS is
5.4. On the other hand, USGS printouts indicate that for 32 cases
from 1955 through 1975, the average number of wells per producing
platform in the Texas federal OCS is 4.0. ("Producing" platforms, of
course, include "production" platforms.) The fact that one production
platform can serve several "producing" platforms is relevant in the
completion of any OCS impact study.

In addition, the number of wells per producing or production
platform - derived from USGS printouts detailing current activity -
dramatically underestimates the potential number of wells per plat-
form. The most modern platforms, particularly when operating in deep
water, are capable of drilling up to 50 wells. Thus, the number of
wells per platform is to some extent dependent on the sophistication
of the platform and the depth of water in which the platform is
situated. In the Texas federal OCS, the number of wells per platform
could easily reach twenty-five.

D - 8

9. As previously mentioned, nearly all transportation of OCS oil
and gas production to onshore facilities is by pipeline. Kash tells
us that there are three primary techniques of laying pipeline off-
shore. The most common technique is the lay barge. Sections of the
pipeline are welded together on the barge and released as the barge
moves forward.

The second method is a reel barge. Sections of pipe are welded
together onshore, wound on to a reel on the barge, and released
directly from the reel. This technique is limited to 4 to 10 inch
diameter pipes.

The third technique is to pull pipe from fabricating facilities
onshore into the water. This technique is limited by the length of
pipeline which can be pulled (2 to 4 miles is maximum). Pipeline can
also be assembled onshore, floated out to the site, then sunk and
welded. This last method requires relatively calm seas and costly
diving activities.

Pipelines must, by law, be buried in the seabed when they are
laid in under 200 feet of water. They are usually buried in a trench
formed by a high-pressure water jet.

Storage facilities can be land-based or offshore. Kash expects
no pressing need for offshore storage in U.S. waters in the fore-
seeable future. Onshore storage is normally associated with
refineries or ports.

The extent to which additional pipeline, pipeline facilities,
and storage facilities will be required by future OCS oil and gas
development will undoubtedly be a direct result of the amount by which
such production exceeds the current capacity to transport or store it.

10. It is reasonable to assume that the type and amount of equipment
needed for operation and maintenance of producing or production
platforms will be essentially the same as those required for the
production phase of OCS activities, described in Items 7 and 8 above.

It has already been noted that the extent and rate of OCS oil and
gas development can be significantly impacted by private investors'
sensitivity to government policy variables. Among those variables
are control of gas prices, the depletion allowance, environmental
regulations, and many more. Appendix B notes that one of this study's
assumptions is a relatively stable governmental policy context. That
assumption notwithstanding, it remains necessary to point out that
substantive policy changes could affect private investment decisions
and, thus, conclusions reached by RPC in the conduct of its study.

It is also important to determine, given RPC's "straight line"
assumptions concerning pricing, supply, demand, production, and
governmental policy (as outlined in Appendix B), if adequate OCS

D - 9

development investment funds are expected to be available in the
future. Perhaps the best source of such information is the
Project Independence Report (PIR), published by the Federal Energy
Administration @FEA) in November, 1974.

The PIR projected Gross National Product (GNP) and business-
fixed investment to 1985. The traditional ratios of investments in
energy to GNP and business-fixed investment were used to calculate
future energy investment levels. Since World War II, energy invest-
ment has averaged approximately 23% of total business-fixed invest-
ment. When that 23% is applied to the projected total investment
until 1985, $435 billion (in 1973 dollars) is the result: the total
amount of energy investment from 1975 to 1985. That figure was then
compared to estimates of the amount of energy investment funds
required through 1985; those estimates range from $367 to $457
billion. FEA's estimate is $367 billion; thus, PIR concludes that
adequate investment funds will be available. The Federal Power
Commission estimated that $380 billion will be required, and Arthur D.
Little, Inc. estimated $396; both estimates would be attainable using
FEA's energy-investment-fund-available figure of $435.

The National Academy of Engineering, on the other hand, esti-
mated that $457 billion will be needed; such a requirement would
surpass FEA's estimate of energy investment funds available. To
attain the $457 billion mark, investment in energy from 1975 through
1985 would have to equal 24.2%, not 23% of total business fixed
investment.

The PIR continues by noting that "...while there may be enough
investment resources to support the projected energy investment in
the aggregate, specific sectors of the energy industry may not be able
to maintain their historical share of investment ... " Thus, the PIR
analyzed those individual sectors; among them was the oil and gas
sector.

"The oil and gas industries appear to have no financial problem
over the 1975 to 1985 period", according to PIR," ... the oil industry
will be able to finance internally all of its investment requirements
and still have additional funds to assist other energy projects
outside the oil and gas industry."

The PIR projections assume "a stable economy, a real annual
growth rate of 4%, an inflation rate falling to about 4.5%, and an
unemployment rate remaining around 5%."

D - 10

ACTIVITY

Pre-Lease Review Review Sale, Effective Exploratory Effective Development Effective Effective Effective Operations
Sale of of Review of Date of Drilling Date of the Drilling Date of the Date of Date of the and
Exploration DEIS FEIS Bids, and Lease Until To Comple- Lease Until Continues Lease Until the Lease Lease Until Maintenance
Letting of Exploratory tion Develop- ' Commercial Until Peak Pipeline
Leases Drilling (either ment Plat- Production/ Production Construcz
Figure D1 Begun dry hole form Permanent tion
or discov- Installed Production
ery) (first @ro Facilities
duction

Time Period Indeter- 3 Months 1 Month 1 Month 5-27 Months 3 Months 3 Months 17 Months 40 Months 84-186 Mos.45 mos. to Indeter-
Required minate Before Before (Kash and (Ad Hoc) (Kash) (Kash) (Kash) (Kash) (Leasing) Indetermin- minate
(Source) (Ad Hoc) Sale is Sale is Ad Hoc) ate(Ad Hoc)
Required Required At Least 1-6 Months 20-51 Mos. 15-27 Mos. 126 Months 52-102 Mos
9 to 60 By Law (Kash) 2 Months (Ad Hoc) (Ad Hoc) (Ad Hoc) (Ad Hoc) (Energy 36-60 Mos.
Months or (Kash) (Kash) (Energy)
Longer 2 Months 1-3 Months 48-132 Mos. 9-33 Mos.
(Kash) 9 Months Before (Leasing (Energy
Before Sale
Sale (Ad Hoc) 9.5 Months-(USGS) 27-54 Mos.
(Ad Hoc) 2 to 4 IS to 54 Months (Energy)
5-7 Months Months (Leasing) 52.3 Mos.
Before Before (USGS)
Sale Sale
(BLM) (BLM)

EQUIPMENT-
Type Air or Ship N/A N/A N/A N/A Barges/ Fixed Platforms and/or Fixed Platforms Equipped With'Production
(Source) Borne Pas- Ships/ Underwater Completions Equipment or Producin Platforms without
sive mea- Jack-Ups/ (Kash) Production Equipment ?Kash)
surement/ Semi-Sub- ------------
seismic sur mersibles Lay Barge;
veying/bot- (Kash) Reel Barge;
tom sampl- Pulling;
ing. Floating
(Kash) CKash)

Number Max. of N/A N/A N/A N/A 2 per 1.6 Fixed Platforms per 5.4 Hells Per Production Platform;
(Source) three ships explored Devoloped Tract; 3.2 4.0 Wells Per Producing Platform (USGS)
(RPC esti.) tract; 1.9 Development Wells Per
p-r rig/ Platform; 4.6 Develop- ------ -----
Requirements
per year mpnt WPlls per Platform) Depend On
(USGS) Per Year. (USGS) Poten- Potentially as high Amount Of
tially, 25 wells per as 25 Production
Vgj@s per

Legend: Kash Energy Under the Oceans, Kash, et al (1973) Leasinq = Leasing and Management of Enerqy Resources on the
Ad Hoc Effects of Offshore Oil and Natural Gas Outer Continental Shelf, U.S. Dept. OT Interior (1974)
Develo @t on !Fe- Coastal Zone, for the BLM = BLM Leasing Schedule (June, 1975)
Ad Hoc Committee on Outer--Co-ntinental Energy @ Ewrgy Perspectives, U.S. Dept. of Interior (1975)
Shelf, by Library of Congress Congressional USGS = USGS computer printouts for Texas Federal OCS
Research Service Development (1976)

APPENDIX E

THE OCSOG MODEL

Ink.

THE OCSOG MODEL

The direct effects of OCS oil and gas development - that is, the
direct employment, land, and water requirements - can be calculated on the
basis of activities postulated to take place. Those effects, however,
present only part of the total impact picture; indirect effects must also
be calculated. The determination of these indirect effects (indirect water
requirements, employment in subsidiary activities generated by primary OCS
activities, and taxes paid by these subsidiary activities are just a few
examples) is a more complex problem than calculation of primary effects.

The study methodology (Appendix A) specifies that these indirect and
induced effects (referred to throughout this study simply as "indirect"
effects) are to be calculated through the use of an input/output model. An
input/output analysis (sometimes referred to as an interindustry analysis)
is especially suited to the calculation of indirect effects in a research
effort such as this one because of these important features of an in-
put/output model:

1. It can be used to systematically describe a regional economy
through the use of equations which represent the trading patterns of
the area; 1

2. It is capable of inter-relating economic and natural resource
(water use) data; and

3. The model can be used to estimate future economic activity.

Because of the time and money constraints, the use of an input/output
model in this study would have undoubtedly been impossible if an 1/0 Model
for the State of Texas did not exist. Such a model has been developed,
however, and has been augmented from time to time by several sub-regional
(intra-state) models based on the original State model.

The first State model was developed by the Office of the Governor of
Texas in 1973 and has since been updated to incorporate 1972 Department of
Commerce data. This State model was the starting point from which the
Outer Continental Shelf Oil and Gas (OCSOG) Input/Output Model was con-
structed. The construction of the OCSOG Model, however, entailed two
significant modifications of the State model.

1. The State model was modified to facilitate analysis of the
substate regions relevant in this study; and

2. The existing model was modified to incorporate those industrial
activities which are specifically related to offshore oil and gas
development.

E - 2

This appendix has as its purpose, therefore, an explication of
precisely how these modifications were achieved and, thus, how the OCSOG
Model was constructed. Included herein is a brief description of 1/0
analysis generally and the Texas 1/0 Model specifically, sub-regional
modifications of the State model, offshore modifications of the State
model, and the internal operating characteristics of the OCSOG model.

Input/Output Analysis*

In its essence, an 1/0 Model is an accounting system which traces the
flow of goods and services throughout a regional economy. In such a model,
each producing entity is treated as both a producer and as a consumer, in
that it consumes resources necessary for production. Those entities which
consume only, of course, are treated simply as consumers. (A mathematical
description of input/output analysis can be found in Attachment E I.)

An input-output model is presented in matrix form and consists of
three tables:

1. The transactions table is the basic table of an input-output model.
Essentially, it is a description of sales and purchases for all sectors in
the regional economy. Figure El is a hypothetical example of an input-
output transactions table.

The transactions table consists of the processing or endogenous
sectors (agriculture, manufacturing, trades, etc.) plus the final demand
or exogenous sectors (households, exports, government, capital formation,
and final payments sectors), and imports, gross savings, and depreciation.
The processing sectors produce goods and services which are used as inputs
by other industries and which are also sold to the ultimate consumer in the
final demand sector. Row entries represent a sale by any given sector to
another sector. Column entries represent a purchase by any goven sector
from another sector. The flow of goods and services is continued through-
out the model, since the model employs a double entry accounting system
whereby a sale by one sector is purchased by another sector. Finally, the
sum of all outputs is equal to $710 (in Figure El) in a balanced model which
accounts for all transactions.

Figure El. Transactions Table

Sales Final
Manufac- Demand Total
Purchases Sector Agriculture turing Trades Households Output

Agriculture $ 30 $ 70 $ 50 $ 30 $180
Manufacturing 50 60 50 30 190
Trades 40 30 60 50 180
Final Payments Households 60 30 20 50 160
Total Inputs 180 190 180 160 710
Sales
Pur@ehases

*This section was taken from the report, "Coastal Economy" written by
RPC, Inc. under contract to the General Land Office of Texas, 1975.
E 3

2. The direct requirements table is a matrix of technical coefficents
which show the amount of input needed from each sector to produce a dollar
of output for any given sector. Technical coefficients are derived for
processing sectors by dividing each column entry by the sum of the column.
In Figure E2, the coefficients for agriculture show that in order to
produce a dollar of output, the agriculture sector would require 17 cents
of inputs from other agriculture businesses, 28 cents from manufacturing,
22 cents from the trade sectors and would pay 33 cents to households for
labor. Figure E2 is an example of an input-output direct requirements
table.

Figure E2. Direct Requirements Table

Sector Agriculture Manufacturing Trades Households

Agriculture .1667 .3684 .2778 .1875
Manufacturing .2778 .3158 .2778 .1875
Trades .2222 .1579 .3333 .3125
Households .3333 .1579 .1111 .3125
Total Inputs 1.0000 1.0000 1.0000 1.0000

3. Interdependence coefficients from the direct and indirect require-
ments table show the interrelations of the input of a sector to the outputs
of all other sectors both directly and indirectly. These coefficients are
important because they show not only the direct effect of a trade between
two sectors but also the indirect effect on the economy that is created by
the initial transaction. For this reason, the numerical value of these
coefficients is larger than the direct requirements coefficients. Figure
E3 is a hypothetical example of a direct and indirect requirements table.

F
4
iaure E3
Direct a,nd Indirect Requirements Table

Sector Agriculture Manufacturing Trades

Agriculture 2.0805 1.4607 1.4755
Manufacturing 1.2461 2.4919 1.5576
Trades .9885 L0770 2.3606
Multiplier 4.3151 5.0296 5.3927

E - 4

The direct and indirect requirements table presents a more detailed
explanation of the interrelations among all sectors in the model to any
given sector than does the transactions table or the direct requirements
table. The interdependence matrix can also be extended to include the
households row and column in the @alculations; the same procedure is used,
but the induced effects of households spending are included in the inter-
dependence matrix. This table also includes "multipliers" that can be used
in predicting the total economic impact in an area based on a known change
in the economy. The summation of each column is a multiplier that can be
used as an integral part of impact analysis. By incorporating employment
and natural resource data into the model, multipliers can be calculated
that show not only the income effect but the socio-economic impact on a
regional economy.

Sub-Regional Modifications of the State Model

The OCSOG Model, as was noted earlier, was based on the Texas State
Input/Output Model . The OCSOG Model is made up of seven sub-regional
models. In the first phase of its OCS study, RPC divided the Texas Coastal
Area into seven different regions; a sub-regional model was constructed for
each. The Regions are:

1. Region I - Orange and Jefferson Counties;
2. Region II - Harris, Galveston, and Chambers Counties;
3. Region III - Brazoria County;
4. Region IV - Matagorda, Jackson, Calhoun, and Victoria
Counties;
5. Region V - Aransas and Refugio Counties;
6. Region VI - San Patricio and Nueces Counties; and
7. Region VII - Cameron, Hidalgo, and Willacy Counties.

The initial step in developing the regional models was to estimate the
total value of output (control totals) for each sector in the model for the
region in question. This information at the county level is available from
a variety of sources, including the United States Department of Commerce.
When the value of output was not available or when it was available only at
the State level, Texas Employment Commission data were used to estimate the
regional totals. For example, total value of output for the construction
industry is available only at the State level from the 1972 Census of
Construction. In order to estimate the regional totals, a ratio of
construction employment in each region to construction employment in the
State was derived and applied to the State total value of output.

E - 5

Let: Rshare RemDCn x T.V.0. State
Sem@Cn
Where: Rshare regional share of total value of output
in construction
RempCn employment in construction in region
SempCn employment in construction in State
T.V.0. State = total value of output in construction
State of Texas

The following list shows the data sources that were used in estimating
the control totals for the OCS regional model.

Agriculture Publications from Texas Department of
Agriculture and the USDA; Texas Crop and
Livestock Reporting Services.

Mining Published and unpublished data from Texas
Railroad Commission and Texas Employment
Commission; Mineral Yearbook; 1972 Census
of Mineral Industries-

Construction Texas Employment Commission, unpublished
data; 1972 Census of Construction.

Manufacturing 1972 Census of Manufacturing.

Transportation Texas Employment Commission, unpublished
data.

Communications Texas Employment Commission, unpublished
data.

Utilities Electric utilities from Texas Employment
Commission, unpublished data; Water
utilities from 1972 Census of Governments;
Gas utilities from Texas Rai road
Commission.

Wholesale Trade 1972 Census of Wholesale Trade.

Retai I Trade 1972 Census of Retail Trade.

Finance, Insurance, Texas Employment Commission, unpublished
Real Estate data.

Services 1972 Census of Selected Services; Texas
Employment Commission unpublished data;
Texas Education Agency.

E - 6

Households 1972 Department of Commerce, Survey of
Current Business, 1972 and 1973.

Federal Government 1972 and 1973 Federal Outlays in Texas.

State Government Published data from the Governor's Office
of Budget and Planning.

Local Government 1972 Census of Governments.

Control total data for each regional sector were run in computer
program LOQUOT to construct the regional input-output models. Program
LOQUOT provides a new input-output model for a sub-region based on a
comparison with an existing model for a larger region. The State model was
used as the base model in developing each of the regional models.

Offshore Modifications of the State Model

The data sources used in developing the OCS regional input-output
models were generally available for county-level information. However, in
all but one case, the data sources did not provide information necessary to
identify the offshore oil and gas related services that are a part of OCS
activity. For example, the 1972 Census of Mineral Industries provides data
for oil and gas field services, such as cementing and well logging services
and mud suppliers. However, the data are aggregated into a total county
figure and do not specifically identify these industries. Furthermore, the
industries are not categorized as to whether they are onshore or offshore
related services. In order to identify offshore oil and gas services, it
was necessary to conduct personal interviews with appropriate industry
officials. The data were obtained by using the questionnaire in Attachment
EII and are based on a commonly used survey technique for developing input-
output models. The following descriptions denote data sources and
estimating procedures relative to each sector.

1. Offshore Drilling Contractors - The data for total value of
output and employment were listed in the 1972 Census of Mineral Industries
Industry Series MIC 72(l)-13C-5, Table 2A - General Statistics by Ge-o-
graphic Area. The data were listed for the State of Texas and were not
reported at the county level. In order to assign the data to various
geographic areas along the coast, personal interviews were conducted with
offshore drilling contractors in Texas. Also, unpublished data from the
Texas Employment Commission were used to substantiate the information from
these interviews.

2. Offshore Cementing Services The Census of Mineral Industries

E 7

provides data for onshore oil and gas field services other than drilling
contractors. Information from staff at the Bureau of Census confirmed that
this data was mainly related to mud, cementing and well logging services.
A ratio was derived of total revenue for onshore drilling contractors to
that of total revenue for all other oil and gas field services. This ratio
was also assumed to be reliable for estimating offshore services. This
ratio was applied to the data from the Census of Mineral Industries for
offshore drilling contractors to estimate a control total for off hore
services. The total was disaggregated into the separate components for mud
services, cementing services, and well logging services based on informa-
tion from offshore drilling contractors. They estimated that if total
payments to these sectors for a typical offshore drilling operation were
equal to 100%, mud service cost would be 47%, cementing costs would be 25%,
and well logging cost would be 28%. The technical coefficients for
cementing services were derived from interviews with representatives of
cementing services companies.

3. Offshore Well Logging Services - The estimates of total revenue
and employment were derived as described in the previous section. The
information necessary to allocate the data to specific study sites and to
derive the input-output coefficients were obtained from interviews with
well logging service company officials.

4. Offshore Mud Suppliers - The estimates of total revenue and
employment were derived in the manner described previously. Data for the
coefficients and for allocating revenue and employment to various geo-
graphic locations were obtained through interviews with mud supply company
officials.

5. Marine Pipeline Construction - This sector was restricted to
those major pipeline contractors which would take part in any new pipeline
construction brought about by increased offshore development. Estimates
of total revenue, employment, and data relative to the technical co-
efficients were obtained through interviews with major pipeline con-
tractors in Texas and in Louisiana.

6. Supply and Service Boats - Information for this sector came from
interviews with company officials in Texas and Louisiana. The data were
restricted to those companies whose business depends entirely on servicing
offshore petroleum activity.

7. Offshore Helicopter Service - Data for helicopter services were
provided by company representatives in Louisiana. These companies have
Texas-based operations and also have knowledge of other helicopter service
operations that are Texas-based. Therefore, they were able to provide the
necessary estimates of revenues, employment, and site-specific location of
this activity.

E - 8

8. Offshore Oil Well Supply - Data for this sector were reported in
the 1972 Census of Wholesale Trade.. The data were aggregated along with
other types of machinery and equipment dealers. Therefore, it was
necessary to estimate which part of this data was related to oilfield
supply business. Information from an interview with staff of the Bureau of
Census indicated that at the national level approximately 11% of the total
could be attributed to the oilwell supply sector. Their data also
indicated that Texas has approximately three times as many oil well supply
firms on a relative scale as does the national average. Therefore, 33% of
the total revenue data for this sector in Texas was assigned to the oil
well supply. The same technique was applied to data for the coastal
counties. It was also necessary to estimate what percentage of the oil
well supply business in the coastal area was attributed to offshore
activity.. This data and information regarding employment, technical
coefficients, and site specific location of this activity were obtained
through interviews with three major oil well supply companies.

9. Offshore Diving Service - Estimates of total revenue, employ-
ment, and site-specific location and data for input-output coefficients
were obtained from an interview with officials of a major diving company.
The data for this sector does not reflect activities of those marine
pipeline construction companies which employ their own diving teams.

Internal Operating Characteristics of the OCSOG Model

Some of the most valuable "tools" developed in an input-output model
are the various multipliers that can be used in regional impact analysis.
These multipliers are used to estimate changes in the level of income,
employment, tax or natural resources based on a changing economy. Multi-
pliers of this type were developed in each of the regional OCS input-output
models. One of the most useful of these is the tax multiplier. Tax
multipliers were calculated in the model to determine the relationship
between federal, state, and local government revenues and the production
levels of each industry. Specifically, tax multipliers measure the direct,
indirect, and induced effects on federal, state, and local tax revenue
resulting from a change in a given industry's sales of goods and services
to final users.* They are used to measure the total tax effect as a result
of an industry's sales to a final user.

In general, tax multipliers can be of assistance to public and private
officials in measuring the impact on public services as a result of a
change in the economy. For example, assume that a new manufacturing plant
is to be built in a community and the company estimates that total sales of
the first year are expected to be x million dollars. By using the tax

*Perrin, John S. "Output Multipliers in Input-Output Analysis,"
Office of the Governor, Austin, Texas, August, 1972.

E - 9

multipliers in the OCS input-output model for this manufacturing sector,
the potential increase in federal, state, and local taxes can be estimated.
This information can be weighed against the public cost of locating the new
plant, such as installing new public utility lines or increased demands on
government services to estimate the first year's benefits (or cost) to the
local government. Also, new state and federal tax revenues can be
estimated to determine the increase in total exogenous taxes paid by the
local area. This information can be very useful to public and private
planners in providing for the orderly management of a local, state, or
federal government.

The tax effects relevant to a discussion of the OCSOG Model are of two
types. The first type is the final demand-driven tax effect. This type of
tax effect quantifies the amount of additional taxes which will be paid to
any given tax sector resulting from an increase in sales to final demand by
a sector of the economy. The second type of tax effect is the output-
driven tax effect resulting from an increase in production by a sector.
The type of effect which is applicable in any given situation is dependent
upon that situation. For example, if planners are considering steps to
take to increase the export of a commodity, the tax effect which would be
realized is the final demand type. However, if a new factory were to
establish itself in a region, the tax effect of that factory would be the
output-driven type.

Tax effects are computed using a direct requirements table and
interdependence coefficients table of a regional input-output model. This
procedure outlines those direct, indirect, and induced effects on payments
to taxes resulting from changes in either production or final demand. For
purposes here, it is assumed that final demand has changed. While the
computation is the same for both types, to compute the output-driven
effects, each columnar element of the interdependence table must first be
divided by the diagonal element in that column.

Basically, the total tax effect is composed of the direct effect (that
payment to the tax sector directly by the sector whose final demand has
changed), the indirect effect (that payment to the tax sector by all the
other sectors of the economy whose output supports the output of the
original sector), and the induced effect (that payment to the tax sector by
all the sectors of the economy resulting from increased purchases by
households).

Mathematically, the tax effect resulting when the final demand for
gasoline, for example, increases by $1.00 consists of multiplying each
value in the gas service stations column of the interdependence matrix by
direct requirement of that value's row sector upon the tax sector, and then
summing the products.

E - 10

Let A = matrix of interdependence coefficients,
Ai'j = interdependence coefficient in the i-th row and j-th
column of the matrix A,
xt,i = direct requirement of the i-th sector upon the tax sector
't', and

m number of processing sectors in the regional model.

Then the total tax effect is:
n
TE (A xt'i)

Briefly, A. is the increase in production by sector i required to
support a $1.0014crease in sales to final demand by sector j. Of that
amount, sector i must pay to tax sector t an x t1i share. Therefore, sector
i pays to tax sector t an amount equal to (A. . xt .). Summing the tax
effect across all sectors which must increas@lih@ir P@oduction yields the
total tax effect.

If the interdependence table used in the above computation excludes
households (open model), then the total tax effect consists of only the
direct and indirect effects. The indirect portion can be found as follows:
Indirect i = TE j - xt,j
If the interdependence tabel used includes households (closed model),
then the total tax effect includes the induced effect which is computed as
follows:
Induced i TE i - Indirect j - xt,j
Figures E4 through E10 (for Regions I through VII, respectively)
present both final demand and output multipliers for those OCS-related
industries identified in the input-output model. Both Type I (open model)
and Type II (closed model, including households) are presented.

Besides tax multipliers, several other types of multipliers are
employed in the OCSOG Model; they are briefly described below.
1. EmployTent multipliers measure the total increase or decrease in
employment based on a change in employment for any given sector. For
example, assume that the employment multiplier for an industry is equal to
1.75. Also, assume that employment in this industry increases by 100

E - 11

Figure E4

Tax Multipliers - Region I (Orange/Jefferson)

Type I

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .078 .078 .002 .002 .003 .003

Cementing Services .055 .055 .011 .011 .006 .006

Well Logging Services .045 .045 .012 .012 .007 .007

Mud Services .049 .049 .012 .012 .006 .006

Marine Pipeline .039 .039 .028 .028 .008 .008

Boat Services .052 .052 .011 .011 .011 .011

Helicopter Service .082 .082 .009 .009 .061 .061

Oilwell Supply .054 .054 .011 .011 .008 .008

Diving Services .047 .047 .004 .004 .003 .003

Type II

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .084 .084 .003 .003 .003 .003

Cementing Services .063 .063 .012 .012 .007 .007

Well Logging Services .049 .049 .012 .012 .008 .008

Mud Services .057 .057 .013 .013 .007 .007

Marine Piepline .043 .043 .029 .029 .009 .009

Boat Services .058 .058 .012 .012 .012 .012

Helicopter Services .088 .088 .010 .010 .062 .062

Oilwell Supply .061 .061 .012 .012 .009 .009

Diving Services .054 .054 .005 .005 .004 .004

E - 12

Figure E5

Tax Multipliers - Region II (Harris/Galveston/Chambers)

Type I

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .094 .094 .004 .004 .005 .005

Cementing Services .066 .066 .013 .013 .007 .007

Well Logging Services .063 .963 .014 .014 .009 .009

Mud Services .058 .058 .013 .013 .007 .007

Marine Pipeline .057 .057 .033 .033 .011 oil-

Boat Services .053 .053 .012 .012 .012 .012

Helicopter Service .084 .084 .010 .010 .062 .062

Oilwell Supply .067 .067 .014 .014 .010 .010

Diving Services .054 .054 .005 .005 .004 .004

Type II

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .115 .115 .008 .008 .007 .007

Cementing Services .092 .092 .017 .017 .010 .010

Well Logging Services .080 .080 .017 .017 .011 .011

Mud Services .086 .086 .018 .018 .010 .010

Marine Piepline .073 .073 .036 .036 .012 .012

Boat Services .072 .072 .015 .015 .014 .014

Helicopter Services .104 .104 .013 .013 .064 .064

Oilwell Supply .092 .092 .017 .017 .012 .012

Diving Services .077 .077 .009 .009 .007 .007

E - 13

Figure E6

Tax Multipliers - Region III (Brazoria)

Type I

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .079 .079 .002 .002 .003 .003

Cementing Services .053 .053 .011 .011 .006 .006

Well Logging Services .045 .045 .012 .012 .007 .007

Mud Services .047 .047 .011 .011 .006 .006

Marine Pipeline .017 .017 .001 .001 .002 .002

Boat Services .098 .096 .005 .005 .009 .009

Helicopter Service .179 .179 .008 .008 .021 .021

Oilwell Supply .112 .112 .021 .021 .010 .010

Diving Services .064 .064 .005 .005 .004 .004

Type II

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .082 .082 .003 .003 .003 .003

Cementing Services .057 .057 .012 .012 .006 .006

Well Logging Services .048 .048 .012 .012 .008 .008

Mud Services .052 .052 .012 .012 .006 .006

Marine Piepline .018 .018 .001 .001 .002 .002

Boat Services .101 .099 .006 .006 .009 .009

Helicopter Services .183 .182 .009 .009 .022 .022

Oilwell Supply .116 .116 .021 .021 .010 .010

Diving Services .068 .068 .006 .006 .004 .004

E - 14

Figure E7

Tax Multipliers - Region IV (Matagorda/Calhoun/Jackson/Victoria)

Type I

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .086 .086 .003 .003 .003 .003

Cementing Services .061 .061 .012 .012 .006 .006

Well Logging Services .057 .057 .013 .013 .008 .008

Mud Services .053 .053 .012 .012 .006 .006

Marine Pipeline .059 .059 .036 .036 .009 .009

Boat Services .054 .054 .011 .011 .011 .011

Helicopter Service .085 .085 .009 .009 .062 .062

Oilwell Supply .057 .057 .012 .012 .009 .009

Diving Services .048 .048 .005 .005 .004 .004

Type II

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .094 .094 .004 .004 .004 .004

Cementing Services .071 .071 .013 .013 .007 .007
Well Logging Services .065 .065 .014 .014 .009 .009

Mud Services .065 .065 .014 .014 .007 .007

Marine Piepline .065 .065 .037 .037 .010 .010

Boat Services .063 .063 .012 .012 .012 .012

Helicopter Services .095 .095 .011 .011 .063 .063
Oilwell Supply .067 .067 .013 .013 .009 .009
Diving Services .057 .057 .006 .006 .005 .005

E - 15

Figure E8
Tax Multipliers - Region V (Aransas/Refugio)

Type I

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output
Offshore Drilling .081 .081 .003 .003 .003 .003

Cementing Services .058 .058 .011 .011 .006 .006

Well Logging Services .050 .050 .012 .012 .008 .008

Mud Services .051 .051 .012 .012 .006 .006

Marine Pipeline .056 .056 .036 .036 .009 .009

Boat Services .050 .050 .011 .011 .011 .011

Helicopter Service .080 .080 .009 .009 .061 .061
Oilwell Supply .056 .056 .012 .012 .009 .009
Diving Services .046 .046 .004 .004 .003 .003

Type II

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output
Offshore Drilling .085 .085 .003 .003 .003 .003

Cementing Services .062 .062 .012 .012 .007 .007

Well Logging Services .053 .053 .013 .013 .008 .008

Mud Services .055 .055 .012 .012 .007 .007

Marine Piepline .059 .059 .036 .036 .009 .009

Boat Services .053 .053 .011 .011 .011 .011

Helicopter Services .084 .084 .009 .009 .062 .062

Oilwell Supply .060 .060 .012 .012 .009 .009

Diving Services .050 .050 .005 .005 .004 .004

E - 16

Figure E9

Tax Multipliers - Region VI (San Patricio/Nueces)

Type I

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .087 .087 .004 ..004 .004 .004

Cementing Services .063 .063 .012 .012 .007 .007

Well Logging Services .059 .059 .013 .013 .009 .009

Mud Services .055 .055 .013 .013 .007 .007

Marine Pipeline .032 .032 .028 .028 .005 .005

Boat Services .048 .048 .011 .011 .011 .011

Helicopter Service .081 .081 .010 .010 .062 .062

Oilwell Supply .060 .060 .012 .012 .009 .009

Diving Services .050 .050 .005 .005 .004 .004

Type II

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output
Offshore Drilling .105 .105 .006 .006 .006 .006
Cementing Services .086 .086 .016 .016 .009 .009
Well Logging Services .075 .075 .016 .016 .010 .010
Mud Services .080 .080 .017 .017 .009 .009
Marine Piepline .038 .038 .029 .029 .005 .005
Boat Services .065 .065 .014 .014 .013 .013
Helicopter Services .099 .099 .012 .012 .064 .064

Oilwell Supply .081 .081 .016 .016 .011 .011
Diving Services .071 .071 .008 .008 .006 .006

E - 17

Figure ElO

Tax Multipliers - Region VII (Cameron Hidalgo/Wallacy)

Type I

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .088 .088 .003 .003 .004 .0.04

Cementing Services .061 .061 .012 .012 .007 .007
Well Logging Services .057 .057 .013 .013 .008 .008

Mud Services .057 .057 .013 .013 .007 .007

Marine Pipeline .047 .047 .032 .032 .008 .008

Boat Services .050 .050 .011 .011 .011 .011

Helicopter Service .080 .080 .009 .009 .062 .062
Oilwell Supply .059 .059 .012 .012 .009 .009
Diving Services .050 .050 .005 .005 ..004 .004

Type II

Federal State Local
Final Final Final
Demand Output Demand Output Demand Output

Offshore Drilling .107 .107 .006 .006 .005 .005

Cementing Services .085 .085 .016 .016 .009 .009
Well Logging Services .073 .073 .016 Oo6 .010 .010

Mud Services .082 .082 .017 .017 .009 .009

Marine Piepline .058 .058 .033 .033 .009 .009
Boat Services .067 .067 .014 .014 .013 .013
Helicopter Services .099 .099 .012 .012 .063 .063
Oilwell Supply .079 .079 .015 .015 .011 .011
Diving Services .071 .071 .008 .008 .006 .006

E - 18

ATTACHMENT EI

Mathematical Explanation of an
Input-Output Model

Attachment EI

Mathematical Explanation of an
Input-Output Model

The derivation of the static, open input-output model consists of four
basic components. These components include a transactions table; a direct
requirements table; a direct and indirect requirements table; and a direct,
indirect, and induced requirements table. All of these components have
been covered in the text of this appendix. However, the following symbolic
presentation is a more technical explanation of the four input-output
tables.

The static, open model is based on three fundamental assumption:*

1. Each group of commodities is supplied by a single production
sector.

2. The inputs to each sector are a unified function of the level of
output of that sector.

3. There are no external economies or diseconomies. The model also
assumes that demand and supply are equated through a horizontal
shift in the demand function for each sector as a result of changes
in the level of production in other sectors. That is, a change in
the demand function for a given industry is a result of a change(s)
in the production levels of other industries. This means the
factors of production for any given sector are stable over time,
i.e., the direct requirement coefficients and technology utilized
in production are constant. An assumption of this type is reason-
able in the short-run, but is questionable in the long-run
especially when there are significant changes in the level of
production caused by technological advances.

The transactions table is a production matrix of the economy, i.e.,
each column in the matrix for any given sector comprises the production
schedule for that sector in the static, short-run model. For example, the
cells in each column represent the inputs necessary for the total produc-
tion of that sector. The economy of the study area is composed of n + 1
sectors. All of the sectors except one, final demand, are endogenous. The
final demand component is an exogenous sector, that is, it is outside of
the processing sectors of the model and is automous. The endogenous
sectors are non-autonomous and interdependence coefficients can be
developed for these sectors.

*The information in this section was basically constructed from
William H. Miernyk, The Elements of Input-Output Analysis (New York:
Random House, 1969), pp. 147-151.

E - 20

workers. The total employment impact this change has on the area can be
estimated by multiplying the direct change of 100 employees x 1.75. The
total impact is estimated to be 175 employees including the 100 initially
employed.

Employment data for each sector in the OCSOG Model were obtained in
most cases from the Texas Employment Commission. The data came from
unpublished sources and includes employment for all sectors exclusive of
the offshore oil and gas related businesses and agriculture entities.
Agriculture employment was estimated from unpublished sources at the Texas
Water Development Board and was based on labor input coefficients for each
sector. A labor input coefficient (L.I.C.) shows the amount of labor
required to produce a given level of output:
L.I.C. = Total emeloyment in sector x
Iota] value of output in sector x
Employment totals for offshore oil and gas related sectors were
estimated in the manner previously described.

2. Type I Household Income Multieliers measure the direct and
indirect cMge in household income per do] lar change in direct payments to
households for any given sector. Type II Household Income Multipliers
measure the direct, indirect and induced chanFe in house-F-oTU' 'income per
dollar change in direct payment to households for any given sector. For
example, assume that total wage in a sector increased by $10,000 per year
and the Type II income multiplier was 1.65. The total income effect this
change would have on household income in the area would amount to $16,500.
3. Final Demand Multieliers measure the total income impact new
sales to a final consumer have on the regional economy. They are
calculated for each producing sector in the model. If, for example, sales
in a given sector increase by $10 million and the final demand multiplier
for that sector is 2.50, the total effect on trading patterns in the area
can be estimated to be $25 million.

4. Water Resource Multipliers measure the total increase in water
consumptid-n-in an area or a result of a change in water consumption by a
particular industry. Assume that a manufacturing industry's water con-
sumption increases by 100,000 acre feet annually and its water resource
multiplier is equal to 4.00. The estimated total demand placed on the
regional water supply would be 400,000 acre feet annually including the
100,000 acre feet of water required by that industry.

Water use data came from a number of sources including data that had
to be adjusted and data as reported in government publications. The
following is a description of the methodol'ogy and sources used in obtaining
the water use data for the OCSOG Model.

E - 21

Sector Methodology/Source

A. Irrigated Crops Inventories of Irrigation in Texas,
TM, 196,4, 1969, and 1974, Texas
Water Development Board, Report 196;
October 1975, Austin, Texas.

B. Livestock Water use on a per day basis times (x)
number of animals; data calculated on
a county basis and converted to acre
feet/year in each region.
Cattle - 15 gallons per day
Hogs - 4 gallons per day
Dairy Cows - 35 gallons per day
Sheep/Goats - 2.5 gallons per
day
Poultry - 11 birds per gallons
per day
Water use factors supplied by Texas
Water Development Board, Agriculture
Branch; Austin, Texas.

E - 22

Total production for any given sector is represented by the symbol X
Both endogenous (non-autonomous) and exogenous (autonomous) secto@s*
consume production from all other sectors. Therefore:
(1) x i = Xil + xi2 xi3 xin Xf (i = 1 . . . n)
where X f is the autonomous sector and X ill Xi2, x i3l Xin are the non-
autonomous sectors.

As previously stated, the inputs to each sector are a unique function
of the level of output of that sector. More specifically, the inputs
purchased by each sector are a function only of the level of output of that
sector, i.e., the input function is a linear homogenous function. Let X i
and X. be non-autonomous sectors in order to illustrate the previous
assum@tion:
(2) Xij = aijxi
which shows that the demand for part of the output of one non-autonomous
sector X 1 by another non-autonomous sector X i is a unique function of X j,
By substituting equation (1) in equation (2) a more complete equation
can be developed:
(3) Xi ail (Xj) + a i2(X2) + aia (Y + -
ain (Xn) + Xf (i=1 . . n)
This equation (3A may be reduced to:
(4) Xi = 7- a ij (Xi) + Xf (i = 1 . . . n)
j=1
where X. is*the demand function for production by the jth sector from the
ith sedor and where X f is the final demand (autonomous) for the output of
the ith sector.

Technical coefficients or direct requirements coefficients are cal-
culated from the transactions table by dividing each entry or cell in every
column by the sum of the column. These coefficients show the amount of
input needed from all sectors by the ith sector to produce one dollar's
worth of output. The coefficients are calculated for the non-autonomous
(endogenous) sectors only. Equation (2) may rewritten to show the direct
requirements equation:
xij
(5) aij

E - 23

In order to calculate these coefficients, the inventory change column
of the complete transactions model is subtracted from each sector's total
gross output to obtain adjusted gross output. Then, each entry in each
column of the processing sectors is divided by the adjusted gross output to
obtain the technical coefficients (a. -) in equation (5). The following is
a matrix of technical coefficents fr1A this equation.

all . . . alj . . . a ln

(6) A ail aii ain

ani ani ann

The next requirement consists of developing and inverting a Leontief
matrix in order to compute the table of direct and indirect requirements
per dollar of final demand. The Leontief matrix is equal to (I-A) where A
is the matrix of direct requirement coefficients and I is the identity
matrix. (The identity matrix is a matrix where all elements are zero
except the main diagonal elements from the top left to the bottom right
corner of the matrix which are equal to one). After (I-A) is completed,
the new matrix of coefficiqnts showing direct and indirect effects is
transposed to obtain (I-A )T-' This matrix (K) is as follows:

k11 klj kln

(7) K kil kii kin

kni kni knn

A further manipulation of the direct and indirect requirements matrix
by including the household sector provides an extended analysis of the
model. The same procedure used to construct the (K) matrix is followed but
the model is closed with respect to the household sector, i.e., the
household sector is included with the processing (endogenous) sectors.
After the new matrix is inverted the coefficients show not only the direct

E - 24

and indirect effects by sector but the induced income effects as a result
of including the household sector in the model. This analysis further
explains the interlinkages of the model and presents a more complete
explanation of the total effect on the model as a result of a change in any
given sector.

Input-output analysis is concerned with determining the interindustry
transactions which are required to sustain a given level of final demand.
The folowing equation is used to compute a new transactions table when a
new final demand sector is inserted into the model.

n 1
(8) >_' Xfi x Kif 1- Xi, then
j=1
(9) a ijXi = T

where T is the new transactions table.
The first equation (8) multiplies each column of (I-A T1 by the new
final demand of each corresponding row. The columns are summed to get a
new total from output (Xi). The second equation (9) multiplies the direct
requirements table @imes the new total gross output to obtain the new
transactions table T . The new transactions table T is described in the
new balanced equation:

I n
(10) X = >_ I I
i i=1 aij (Xi) + Xf, (i = 1 . . . n)

As previously mentioned, this model is a static, short-run model.
When changing to a dynamic, long-run model all computational procedures
remain unchanged. However, the fixed technical coefficients of the
original A matrix (6) are replaced by new coefficients computed for each
sector. This could be illustrated in equation (10) by changing the
technical coefficient a.. to a indicating that all components of the
balanced equation have 9den cha4@d in the dynamic model.

E - 25

ATTACHMENT EII

QUESTIONNAIRE USED IN SURVEY
OF OFFSHORE OIL AND
GAS INDUSTRIES

0 C 5 Q U E S T 1 0 N N A I R E

Date:

Firm SIC:

Interviewer:

A. List in order of importance the major groups of products sold for the
year:

B. Average monthly employment for the year:

C. Total revenue for the year:

D. Percent of total revenue derived from offshore activities:

E. Percent of total sales that would be considered a capital item

by the customer:

F. Percent of total sales according to location of customer:

1. Within Houston SMSA:

E - 27

2. Outside Houston SMSA but within Texas:

3. Out of State:

G. Net inventory change of finished goods, production materials, work

goods in progress: $

H. Cost of production (assume that total cost equals $1.00; give answers
in $.05, $.12, etc.) *Each firm should designate major intermediate
cost. Note: All goods and services imported from outside the
designatecT-study area should be assigned to #6 Imports:

Cost/Payment Location

1. Wages

2. Federal taxes

3. State taxes

4. Local taxes

5. Depreciation

6. Imported Goods (outside Houston SMSA)

7. Rents

8. Interest

9. Profits

10. Gas uti 1 ities

11. Electric utilities

12. Water utilities

13. Insurance

14. Radio & TV

E - 28

15. Telephone

16. Transportation

17. Meals

18. Lodging

19. Banks or S&L

20. Professional service

21. Medical

22. Retail(specify)

H. Cost/Payment Location

23. Wholesale(specify)

24. Construction

*25.

26. Imports

I. Sources of Revenue - List your major customers by type, by geographi-
cal location and percentage of total sale:

Revenue/Sales Location

1. Agriculture

2. Mining

3. Construction

4. Manufacturing

5. Transportation

6. Communication

7. Utilities

8. Wholesale Trade

9. Retail Trade

10. Finance, Insurance, Real Estate

11. Services

12. Government

J. Where do your workers live?

1. % In County

2. % Outside County

3. % Outside State

K. For OCS Service and Support firms - list the number of workers your
firm would need to provide service to the following rigs:

Type of R i g Workers Annual Salary

1. Jack-up

2. Drillship

3. Large semi -submersible

4. Small semi -submersi bl e

5. Fixed Pl atform

K. When applicable, what is your total fresh/saline water use per

day:

E - 30

APPENDIX F

ESTIMATING FISCAL COSTS

Much work has been done concerning methods-to forecast state and local
government expenditures. The purpose is usually to project total expendi-
tures for specific services over a given time period. While this type of
analysis may be extremely helpful to a budget officer, for instance, some
form of marginal analysis is preferred when examining the impact of
population increases on government expenditures. Methods currently avail-
able for examining the latter question are, in order of decreasing
sophistication and developmental investment, engineering models, com-
puterized fiscal impact models, simplified infrastructural models, or per
capita models.

The first are design tools to be primarily utilized in actually
designing expansions of capital facilities to meet growth requirements
rather than in assessing aggregate impacts.

The second approach normally incorporates models which, like the
engineering models, are very specific to particular communities and re-
quire extensive data collection. In addition, costs are disaggregated far
more than are the corresponding revenues.

The third type, the simplified infrastructural models, compute the
cost of additional service as a function of population, for example, and
one or more cost coefficients. Although the services can be estimated by
type (sewage, water, etc.), this again presupposes an unwarranted dis-
aggregation of effects. If this approach were employed in this study,
total expenditures would be regressed on population; the coefficient would
give marginal cost, a constant in linear regression. The regression would
be based on historical data, giving marginal cost on the basis of past cost
and population data. As a result, an extrapolation of results too far
beyond the relevant range (for example, the case of large population influx
into a low population area) would be open to question.

The last type, the per capita models, were used in this study; they
assume constant marginal costs. More specifically, constant per capita (or
average) costs are assumed, implying that marginal costs equal average
costs, which are constant. The theoretical validity of the approach then
depends on the constant cost assumption.

Studies have been made of the shape of average curves, most testing
the hypothesis that economies of scale exist in municipal services. That
is, they seek to discover if average costs decrease with increases in
population. In one of the more comprehensive analysis, Hirsch (see Figure
Fl) discusses the shape of average cost curves for three types of city
services.

F - 2

The first, horizontally integrated services, are those whereby a
single service is provided by a number of units (public education, police
and fire protection, libraries, parks, etc.). They normally account for 80
to 85 percent of all expenditures.

... the quasi-longrun cost functions will resemble a U with a flat
bottom over a very wide range. Furthermore, since most hori-
zontally integrated services incur relatively little overhead,
the short-run and long-run functions tend to approximate one
another. They coincide in their flatbottom portion" (Hirsch,
1968, p. 503).

Circularly integrated services (central administration) accounting
for three to six percent of expenditures are the second kind of service,
and have a U-shaped short-run average unit cost function, with the trough
in medium-sized communities. The third type, the veriically-inte rated
services of water and sewage (eight to ten percent of expenditures? have
declining quasi-longrun average unit cost functions until a very large
scale is reached.

Empirical studies summarized in Figure F1 confirm these conclusions,
as do three studies not included in the figure. Walzer examined economies
of scale of municipal police services in Illinois and came to two different
conclusions utilizing two approaches. When using a service index in a
multiple regression analysis, he concluded that significant economies of
scale were found; when using per capita expenditures and population, he
discovered that as population increased, expenditures per capita did not
vary significantly, other factors considered.

Gabler examined eight states, including Texas, to determine the
relationship between population size and varying levels of per capita
expenditures on six services. He found no significant statistical re-
lationship for Texas cities between population and per capita expenditures
and in general concluded that "...there were relatively few instances of
either economies or diseconomies of scale when cities of sizes 25,000 -
250,000 Were analyzed ... When the very large cities (1960 population of
250,000 or more) are included, the tendency towards diseconomies of scale
are more pronounced."

Scott and Feder discovered in their study of 196 California cities
with a population greater than 25,000 that per capita expenditures for all
local government services taken together were not significantly affected
by population size.

In short, from the sources cited, it can be seen that the average cost
curve for all services seems to be decreasing or horizontal over a wide
range. Within this range the assumption of constant per capita and

F - 3

Figure Fl

COST CURVE STUDIES OF SCALE EcoNO.MIES

Namne and Year ScrVI.Ce Type Result

Horkontally integrated services
Riew (1966) Secondary education S AUC is U-shaped with
trough at about 1,700
pupils
Kiesling (1966) Primary and secondary S AUC is about horizontal
education
Hirsch (1959) Primary and secondary AUC is about horizontal
education
Schmandt-Stephens (1960) Police protection S&Q AUC is about horizontal
Hirsch (1960) Police protection S&Q AUC is about horizontal
Will (1965) Fire protection E AUCis declining with ma.
jor economies reached
at 300,000 population
Hirsch (1959) Fire protection S AUC is U-shaped with
trouSb at about 110,000
population
Hirsch (1965) Refuse collection S AUC is about horizontal
Circularly integrated services
Hirsch (1959) School administration S AUC is U-shaped with
trough at about 44,000
pupils
Vertically integrated services
Nerlove (1961) Electricity S AUC is declining
Isard-Coughlin (1957) Sewage plants S AUC is declinin.-
Lomax (1951) Gas S AUC is declinin.-
Johnston (1960) Electricity S AUC is declining

Note: The following abbreviations are used: S = statistical data; AUC - average
unit cost; Q = questionnaire data; E - engineering data.

Source: Werner Z. Hirsch, "The Supply of Urban Public Services",
Issues in Urban Economics, Perloff and Wingo, eds.
(Baltimore: Johns Hopkins Press, 1968),P. 508.

F - 4

marginal costs is particularly valid: for the horizontal portion, marginal
cost is indeed equal to average cost. For the decreasing portion of the
curve, marginal cost is less than average cost, leading to an overstatement
of cost (and thus a worst case analysis).

Besides having theoretical justification, the per capita model has
the pragmatic advantage of being easy to use. As a result, many impact
studies examing the effect of industrial growth upon a locatity utilize per
capita expenditures, at least to some degree, in estimating costs.
Johnson, when examing an industrial location case in Alabama, estimated
costs for significant issues on a marginal basis, while the remaining costs
were estimated through the per capita cost method. Shaffer and Tweeten
estimated the municipal costs of new residents by multiplying per capita
municipal expenditures by number of new residents due to industrial
expansion. Hirsch (1964) used per capita operating and capital costs.
Finally, Garrison assumed that the cost of new students without reducing
the quality of education was equal to the average local revenue per
student.

OCS impact studies expecially tend to use per capita models to
estimate costs. Examples include those done by Wilcox and Mead (Santa
Barbara Channel), Woodward-Clyde Consultants (Mid-Atlantic), and Resource
Planning Associates, Inc.

To summarize, per capita models are an accepted method commonly
utilized to estimate the cost of government service. The underlying
constant cost assumption, while a simplification, does mirror reality
fairly well. It is doubtful that the increased accuracy produced by more
sophisticated approaches warrants the additional costs which would be
incurred.

F - 5

APPENDIX G

SURVEY OF SELECTED MODELING TECHNIQUES

Regional Economic Models

Regional models aim at identifying long-range, regional, economic
impacts of a given change. Such models include the Harris Model, the MIT
Sea Grant Models, input/output models, and the Regional Impact Multiplier
System (RIMS).

I. Harris Model

The Harris model is a multi-regional, multi-industry model. It makes
use of input-output relationships to reflect linkages among industries in a
region, but it is not an input-output model. Autonomous changes in the
components of final demand such as business investment, government
expenditues, or production as the result of the location of a new industry
in a region affect the output of regional industries based on national
inter-industry coefficients. Changes in the demand for the output of
regional industries lead to changes in regional payrolls and income and to
changes in the demand for retail trade and services. Induced changes in
investment are also permitted in the model. For example, it is hypothe-
sized that increases in industry output lead to additional investment in
equipment, and increases in area personal income induce new construction
for residences and public facilities.

The Harris model can be used to examine the effects of locating one or
more new industries in a region. It also attempts to capture the extent to
which the growth in one industry may attract new activities or expand the
output in existing industries, or the extent to which the location of one
or more new activities may lead to a decline in some other activities
because of a competition for resources.

The Harris model is considered to provide consistent results in two
senses. First, national control totals can be established for employment
and other economic variables in total and by industry. The regional model
then allocates shares of the national values to geographic areas based on
the historic structure of the area economy and estimated economic relation-
ships. This procedure ensures that forecasts for the industries in the
area are not independent of expected national and regional trends. Second,
the model allows for consistent analysis in that the results of all the
impact cases studied reflect the same assumptions regarding the economic
behavioral relations in the model. Thus, there is a basis for the

6 - 2

systematic comparison in evaluating, for example, the regional economic
consequences of petroleum refineries located in two areas because the
assumptions and methodology are the same for both cases. This is an
advantage when studying alternative development strategies.

II. MIT Sea Grant Models

A package of four models was developed by MIT to assist in identifying
regional economic impacts in the New England area resulting from OCS
development of Georges Bank resources. The models simulate the petroleum
flows, transport, processing and distribution activities, and the
financial flows through time associated with particular hypotheses.

EXCRUDE, the extraregional crude package, estimates the national cost
and investor cost of foreign crude landed at a specified refinery con-
sidering total amount delivered over time, distance to the source, ship
operation and port operation characteristics, payments to the exporting
nation, and other factors. To arrive at national and investor costs,
EXCRUDE simulates a set of decisions on selecting and chartering the number
and size of tankers needed to move crude on the hypothesized schedule
between loading and unloading ports. The model enables determination of
cost reductions which would result from port modifications increasing
draft.

OFFSHOR, the offshore package, determines the national-cost, regional
payrolls, and investor cost associated with the Georges Bank development.

The model considers the producibility of the formation and possible
regulatory constraints and simulates development decisions made by the
investor subject to a large set of variables concerning physical, economic
and other constraints. OFFSHOR generates oil and gas production over time,
shows platform drilling, pipeline and tanker activity over time,
identifies private and public revenues, and determines outlays for equip-
ment operation and acquisition. The production schedule used by the model
is that which maximizes the after-tax revenues of the investor.

REFINE TWO, the refinery package, develops investor costs for a
refinery based on the postulated laboratory analysis of the available crude
and the range of products which can be produced from that stock. Both
capital and operating costs are developed.

PRODIST, the product's distribution package, simulates the distribu-
tion of products from a refinery to each of eight specified New England
ports. Both vessel and pipeline systems are considered and selection is
based on maximizing investor profit. In addition to selecting the best

G - 3

general system, the model sizes barges or ships under the vessel option and
determines diameter and pumping power for pipelines.

III. Input/Output Models

Use of an input/output model provides a means of approximating the
economic activity generated throughout a sectoral range resulting from
activity in one or more driving sectors. In the case of OCS development
off Texas, activity in the industry sectors directly related to explora-
tion, production, refining and their immediately allied services provides
the basis for model operation. (see Appendix E.)

Input/output models typically are keyed to the inter-sectoral
relationships prevailing in the area for which they are designed. Their
application to other areas requires extensive revision, similar to
development of a new model.

The Texas Input/Output Model is a mathematical measurement of market
transactions among Texas industries and of the relationship of Texas to
out-of-state industries through imports and exports. The empirical esti-
mates of the relationships are based on survey data of Texas industries,
census data, and budget data for agricultural industries, updated most
recently in 1972.

The model is static-dynamic. That is, iterations of the computation
of required sectoral outputs related to activities in which final demand is
specified are done on an annual basis, but the program accomodates various
time inputs of final demands as well as technical changes, prices, and
other factors of the relationship. Construction of the model is such that
sectors can be identified at various levels of detail. Original develop-
ment of the model on a statewide and state-national basis aggregated
individually developed sets of intersectoral relationships for nine
regions of the state. Capability has been retained to operate the model
for selected sub-state areas.

Information resulting from the Texas Input/Output Model includes
employment levels; personal income; taxes paid to local, state, and federal
governments; water requirements; and other factors. In addition, the Texas
Input/Output Model provides a means to identify total employment and those
other requirements needed to generate infrastructural requirements.

The Texas Input/Output Model has potential future application in
assessment of impacts of OCS development. Particularly, it can be used to
help identify the types of structural changes likely to occur in
interindustry relationships if substantial quantities of new oil and gas

G - 4

production results from OCS activities which affect petroleum product
pricing. In this regard, the model's identification of industries'
dependence on various goods and services can be used to consider fuel
substitutions and quantities of fuel taken off the market by various
sectors at specific prices.

IV. Regional Impact Multiplier System (RIMS)

RIMS is a system through which input-output multipliers can be
developed without establishing an entire input-output model. The process
incorporates the industrial output multiplier for both the direct and
indirect effects of a given industrial sector. Direct effects are obtained
from a national regional input-output table and are regionalized through
use of location quotients generated with earnings data. The direct effect
is then inserted into a predictive equation to obtain indirect effects.
The results of the process are total requirements coefficients which can be
used to determine the interindustry impacts of a change in the demand for
the products of the primary industry.

Environmental Impact Identification Models

OCS activities can generate a wide range of environmental impacts
resulting from the offshore activities, directly related on-shore
industrial activities, and satisfaction of the induced requirements of an
expanded population and economy. Identification of the types and nature of
environmental impacts which will occur from postulated OCS development may
be carried out on several levels, depending on the extent to which effects
are to be traced and the need for quantification of the impact.

Described below are two modeling procedures which indicate the range
of sophistication available in impact identification. Models relating to
impact quantification are described in a subsequent section.

I. A Procedure For Evaluating Environmental Impact

This modeling procedure developed by L.B. Leopold, et al, for the U.
S. Geological Survey, is typical of several techniques for identification
and general evaluation of environmental impacts. A matrix is provided
which details 100 actions and 88 environmental characteristics giving the

G - 5

potential for identification of 8,800 possible interactions. The follow-
ing are representative of the degree of detail in which impacts and actions
are included:

Impacts Actions

water qual i ty industrial sites and buildings
atmospheric quality highways and bridges
deposition/sedimentation transmission lines
aquatic plants blasting and drilling
fish mineral processing
scenic views and vistas trucking
wilderness qualities emplacement of tailings
health and safety spills and leaks

While not totally comprehensive in either the types of actions which
might be taken or the environmental characteristics which might be noted,
it does provide the user a guide for identification of major impacts.

Beyond identification of action-impact relationships, the model
provides a system for the analysis and numerical weighting of probable
importance and magnitude of each identified relationship. The degree of
accuracy obtainable with the procedure depends upon the extent to which
factual bases can be established for the appraisal of magnitude and
importance. Those relationships which are assigned relatively high values
for either magnitude, importance, or both are intended to represent areas
requiring detailed consideration.

If desired, the matrix and the associated procedure for its use lend
themselves both to refinement by subdivision of the environmental charac-
teristics and actions listed into more basic units, and to extension by the
addition of other actions and characteristics. Various authors have
identified similar matrices or described the components of matrices, some
particularly applicable to the coastal areas of interest. The San Diego
planning system, described below, also provides significant input for
construction or refinement of an environmental action-effect matrix.

II. San Diego County Planning System

The San Diego County Planning System is representative of the types of
methodologies developed in recent years which use computerized modeling to
effect detailed accounting of interactions between development actions,
environmental impacts, and site-specific characteristics. The planning
system and others like it require very extensive knowledge of the area to
be studied, expressed as data on specific "cells", regarding slope, land

G - 6

capability, existing use, geology, vegetation, climate, precipitation,
drainage, and other characteristics. As an example of detail, 242 soil
types in the San Diego area are considered in the establishment of 12
capability classes according to suitability for mineral extraction,
effluent disposal, use for various crops and physical characteri sties.
Similar levels of detail are used for other site descriptions in each cell.
Cell sizes range from 1000 square feet to 111 square feet, resulting in
very large amounts of information to be obtained, screened, and coded.

Once the data base is complete, the San Diego Planning system enables:

1. evaluation of the environmental impact from a given development
in a specific location;
2. identification of the "best" location for a given de@elopment;
and/or

3. identification of the allowable extent of development in a
specific location for a given environmental impact.

The model also includes considerations for the cost of providing
services to various areas according to their location (distance) and of
site characteristics in determining the "best" plan.

The San Diego Planning System utilizes an approach to environmental
impacts different than the matrix approach described above. For example,
whereas the matrix approach identified "highways and bridges" as a develop-
mental action, the San Diego approach identifies components of highways
such as cut, fill, compaction, roads, fences, and motor vehicle operation.
Extensive charts are provided in the description of the system as examples
of the environmental effects of such actions.

It is not always feasible to identify and collect the types of data
needed to effectively use an approach such as that represented by the San
Diego Planning System. However, specific communities and/or regional
planning organizations may have use for such detailed analytical pro-
cedures after major OCS developmental decisions are made on a firm basis.
In the interim, at least two aspects of the San Diego approach are useful
for consideration, including:

1. use of the somewhat unusual approach of considering component
actions as a means of supplementing a matrix approach; and

2. use of the charts of component actions versus environmental
effects as a basis for preparing qualitative descriptions of
environmental impacts.

G 7

There are, of course, countless other environmental impact assessment
models, methodologies, or routines. The two models described above are
intended only to provide an indication of the range of complexity
available.

A more detailed listing of environmental impact evaluation models can
be found in any of several bibliographies. Among them are:
U.S. Department of Interior. National Park Service. Environmental Im2act
Assessment Methodologies: An Annotated BibliogFa-phy, by Richard C.
Viohl, Jr. and Kenneth G.M. Mason. Monticello, Illinois: Council of
Planning Librarians, 1974.

and

Warner, Maurice L. and Preston, Edward H. A Review of Environmental Impact
Assessment Methodologies. Washington: United States Environmental
Protection Agency, 1974.

Infrastructural Costs Models

Provision of the additional community services required by the OCS
activity-induced population. and industry growth will require some
presently unknown costs. The amount of those costs is expected to be
significant, particularly in areas where the present infrastructure is
small compared to potential growth, where services now provided are
inadequate, and in those cases where considerable lag time exists between
the cost of providing community services and tax revenues generated by OCS
or OCS-related activities. Various techniques have been used to approxi-
mate infrastructure costs resulting from growth.

Four general approaches to determining infrastructure costs are
described below; each differ substantially in their sophistication.
Generally, the more sophisticated approaches can be expected to produce the
most accurate estimates of cost. However, their complexity and costs of
use increase dramatically with increasing sophistication, and it is not
assured that the improvement of results warrant the additional cost.

I. Urban Systems Engineering Models

A number of packages of urban systems engineering models have been
developed through seven demonstration programs of the U.S. Department of

G - 8

Housing and Urban Development. The models include those for water supply,
sewage, solid waste, stormwater runoff, and other infrastructural systems.
Generally, the models enable the planner to rapidly translate assumed
development patterns into costs for the modeled services. Some models can
assist in optimization of procedures for providing services. Like the San
Diego Planning System, these models are complex, expensive to prepare for
use, and require extensive amounts of site-specific information.

The Urban Systems Engineering project carried out at Everett,
Washington, is a well developed example of such programs. Models developed
for use in the project include five basic sets of computer-based planning
tools for establishment and use of the solid waste management, sewage
planning, water systems planning, and storm drainage planning. Numerous
separable programs are included in each set.

The data base program set includes an activity allocation model to
allocate employment to subareas, demand forecasting to generate demands,
and the necessary programs to screen data for consistency and to store it
in easily retrievable form. The data base consists of past and current
census data, population and employment forecasts, historical demand
parameters, and climatic data. Land use, assessed dwelling units, natural
features, and other site-specific information are included in the data base
for 40-acre cells.

The solid waste planning program determines the optimal expansion
plan for waste processing facilities. The waste shipment problem is solved
for each year in the planning horizon to determine the optimal flow of
solid waste from source through processing to ultimate disposal. The
entire process results in a series of N-best plans ordered according to
cost. These plans may be examined in sequence when considering their
political and social consequences, which cannot be modeled directly.

The development of sewerage plans utilizing the methodology requires
several steps. Forecasts of average and peak sewage flows, population, and
infiltration per sewer basin are calculated to provide the primary demand
drive for the sewer planning program.

The sewer planning program has the capability to evaluate an existing
sewer network and define an expansion network. Treatment plants are
planned and/or expanded as required. In designing any element of the
system, the program selects the minimum cost element which will handle the
required flow without violating constraints. Since the sewer planning
program considers a multi-year interval, the final output is a minimum
cost-time phased expansion of the input network.

Four computer programs comprise the fl-ood control and storm drainage
facilities planning package. These four programs are used to analyze and
locate problem areas under assumed or existing land use configurations.

G - 9

Subsequently, the programs can be used to analyze the consequences of
proposed changes on the remainder of the flood control and drainage system.

As with the San Diego Planning System, the complexity and detail of
the Urban Studies Engineering System are greater than is required for
initial identification of OCS development impacts. In effect, they are
design tools and their primary use lies in the future when communities or
regions must consider actual design of facility expansions to meet growth
requirements. However, the eventual need for such detailed computerized
planning tools should be considered in any design of data bases and/or data
collection efforts undertaken in the near future.

II. Fiscal Impact Models

A series of computerized models have been developed as part of
Florida's effort to analyze coastal effects of offshore oil development.
These models are less detailed than the design models described in the
preceeding section. They differ in that their primary purpose is to assess
cost, based on an approximate design of facilities, whereas the identifi-
cation of costs is secondary to system design when using the urban systems
engineering models.

The fiscal impact models have been developed to treat a number of
community services including drainage, fire, libraries, streets and high-
ways, welfare, health, police, schools, and water. Estimates are prepared
either for the service or, where the service is easily divisible, by
component. Water service, for example, is subdivided into the components
of production and treatment, storage, transmission, and distribution.
Costs are determined for requirements due to various residential types and
income levels, retail and services categories, industries, and offices.

The fiscal impact models are specific to particular communities. They
reflect the type and capability of the existing system described by service
demand components, sets of decision rules for service expansion, and unit
cost coefficients. Input to the models are the characteristics to be
analyzed in terms of location, number of housing units, floor space in
manufacturing, and other information. Based on these inputs, the models
generate estimates of the additional demand or need for services resulting
from the development. Demands are compared with existing system capacities
to determine if expansions are required. If so, the decision rules are
used to determine the cost of the expansion and to allocate an appropriate
share of the expansion cost to the new development. Where existing system
capacity is sufficient, costs are allocated to the new development con-
sidering current replacement cost deflated to original cost and remaining
life.

G - 10

The allocation of costs is made among municipal, school, and special
district units. Revenue, considering various taxes, fees, permit costs,
and subventions is allocated among the same units.

Use of the fiscal models requires extensive data collection and
calibration efforts to prepare them for use in each community in which they
are to be applied.

III. Simplified Infrastructure Modeling

Costs for the expansion of communities' services can be modeled in
simplified forms suitable for manual computation. A simplified modeling
approach can vary greatly in the degree of detail with which system
requirements are determined and costs are estimated. A wide range of
latitude exists in adapting such models for a specific use to reflect more
detail in the consideration of those services thought to be particularly
sensitive to growth impacts.

In general form, the simplified models compute the cost of additional
service as a function of population, number of households, or other
appropriate growth measures and one or more cost coeffecients. For
example, sewer collector system costs, generally dependent on the number of
new households, might be represented as: cost = T CN where T is the local
share of cost for construction of collector syst@6s Lpress4 as a percen-
tage, NH is the number of new households associated with development and C
is a co fficient combining demand and cost.

Models of this type are not particularly convenient for use where
large numbers of alternatives are to be investigated. Nor do they lend
themselves to consideration of the economic implications of using, but not
exceeding, available capability. Their principal advantage lies in the
rapidity and ease with which they can be prepared and used to approximate
costs.

IV. Per Capita Models

Per capita models provide an extension of present total cost based on
expected population growth. (For an extensive discussion of per capita
cost models, see Appendix F).

Estuary Water Quality Models

OCS development-induced population growth and industrial activity is
expected to occur primarily adjacent to bays and estuaries. The effect of
any increased waste flow into these environmentally sensitive areas may be
of particular concern. Modeling offers one means of quantitatively
evaluating the impact of this aspect of growth if water quality is
identified as a critical issue.

A large variety of mathematical models have been developed for
simulating various aspects of water quality in rivers, estuaries and
impoundments. The numerous models are of differing degrees of complexity
and for various specialized purposes. While most relate the mass loading
of one or more constituents to its effect on water quality, some have
additional capabilities to cost treatment needs or to evaluate dilution
requirements to maintain given water quality levels.

With the exception of sedimentation studies, physical models have
only limited use for water quality related purposes. Generally, the
complexities of mathematically modeling estuarine-related sedimentation
problems is so complex that the cost and time is in the range of construc-
ting a physical model.

The following descriptions identify some of the estuary water quality
models which might be considered for use in an assessment methodology in
the event water quality becomes a critical concern.

I. Galveston Bay Models

A number of water quality models have been deve loped for Galveston Bay
and for the Houston Ship Cahnnel which are closely interrelated and
intended to be used with a single hydraulic model. The hydraulic model is
considered to be the basic Galveston Bay model. It predicts the distribu-
tion and quantity of wastes dischared into the system. The several water
quality models include those for BOD/DO, Nitrogen, Salinity, and
Temperature. In addition, a computerized data base has been developed to
assist in storage, retrieval and processing of the vast amounts of data
related to this modeling program.

G - 12

II. Corpus Christi-Aransas-Copano Bay Models

This model was developed at the University of Texas with support by
the Texas Water Development Board and the Office of Water Resources
Research, U.S. Depdrtment of the Interior. The overall model includes five
separate sub-models linked through a common set of input-output require-
ments. The five component models include: HYTID (tidal hydrodynamics);
STERM (short term transport model); LOTRAN (long term transport model);
TRANSS (steady-state, convective-dispersion model); and an unnamed dynamic
convective-dispersion model. The development was based on the previously
described modeling in Galveston Bay.

Thus far these models have had varying application. HYTID, the
hydrodynamic model, has been applied to San Antonio and Matagorda Bays and
to the combined Corpus Christi-Aransas-Copano Bay system. LOTRAN, limited
to the simulation of total dissolved solids, has been used as the quality
portion of the model in both applications to date.

III. Corpus Christi Bay Models

Subsequent to their original use and development, the HYTID and LOTRAN
models have been revised as part of a research project entitled "Establish-
ment of Operational Guidelines for Texas Coastal Zone Management." The
object of the modeling work was to develop and calibrate transport models
which simulate the effect of changing river inflows and wastewater
discharges in Corpus Christi Bay. Reducing the operational scope of the
original models to suit just Corpus Christi Bay required the development of
new boundary conditions at Rockport as the eastern boundary of the new
model. The advantage of the reduction in model coverage was the increase
in resolution by enabling smaller computational cells.

Information necessary for input to the hydrodynamic model includes
Gulf tides, Upper Laguna Madre and Aransas Bay Tides, freshwater inflows,
diversions, waste discharges, wind magnitude, wind direction, wind
duration, evaporation, and precipitation.

The model has one additional feature of particular interest. It can
be used to cost treatment works to maintain particular quality levels under
varying poF1`cy 'assumptions. Using this feature, the model can be an aid in
testing management schemes for multiple point discharges.

G - 13

IV. Other Estuary Models

If water quality proves to be an important consideration in bays and
estuaries to which specific models have not already been applied, a more
difficult choice exists as to the particular model to be applied. A number
of general models and variations thereof are available as illustrated by
the following descriptions of the Dynamic Estuary, Tidal Temperature,
RECEIV and RIVSCI models.

The Dynamic Estuary Model (DEM) was originally developed by Water
Resources Engineers, Inc. for the Public Health Service, Division of Water
Supply and Pollution Control, and was then developed further for the
Federal Water Pollution Control Administration (FWPCA) and for the State of
California. The Federal Water Quality Administration (FWQA), successor to
FWPCA, completed its development and refinements for use in studies of the
San Francisco Bay-Delta estuary and the San Diego Bay, resulting in the
FWQA version of the DEM. Further improvements resulted in the EPA version
described here.

DEM is a dynamic equilibrium model. Any non-stratified estuary which
does not contain extensive tidal flats may be modeled. DEM consists of two
distinct programs. The hydrodynamic program (DYNHYD) computes the dynamic
flows, velocities, and water surface elevations in the channels and nodes
of the network representing the estuary, and its physiographic charac-
teristics. These outputs from DYNHYD are then used by the quality program
(DYNQUA) as the hydrodynamic base for the water quality calculations.
DYNQUA computes the time varying concentrations of up to five water quality
constitutents throughout the network. These constituents may be a mixture
of conservatives and non-conservatives, and any two non-conservatives,
such as DO and BOD, may be linked.

The Tidal Temperature Model (TTM), also known as the Columbia River
Estuary Model, was developed by the Pacific Northwest Water Laboratory of
the FWPCA by incorporating meteorological inputs and dynamic water
temperature simulation into a version of the Dynamic Estuary Model. TTM is
a dynamic equilibrium model for use in the simulation of water quality
conditions including water temperature in estuaries. Any non-stratified
estuary which does not contain extensive tidal flats may be modeled. The
model is similar to the DEM model but has the added option that one of the
constituents modeled may be water temperature.

TTM consists of two distinct programs. The hydrodynamic program,
HYDRA, computes the dynamic flows, velocities, and water surface eleva-
tions in the channels and nodes of the estuary system as a function of
tidal, tributary, and waste inflows to the estuary, and its physiographic
characteristics. These outputs from HYDRA are then used by the quality
program QUALTEMP as the hydrodynamic base for the water quality and

G - 14

temperature calculations. QUALTEMP computes the time varying concen-
trations of up to five constituents, including temperature, throughout the
network. These constituents may be a mixture of conservatives and non-
conservatives, and any two non-conservatives, such as DO and BOD, may be
linked.

RECEIV is the receiving water module of the Storm Water Management
Model developed by Metcalf and Eddy, Water Resources Engineers, and the
University of Florida. RECEIV was developed by incorporating into a
previous dynamic equilibrium model the capability to simulate the
transient behavior and associated problems caused by dynamic storm water
inflows. While RECEIV was derived originally from the Dynamic Estuary
Model, it includes a number of modifications which make it significantly
different from DEM. Further development of the RECEIV model by Systems
Control, Inc., resulted in RIVSCI, a version having extended capabilities.

Any non-stratified stream or estuary system may be modeled with
RIVSCI. RIVSCI has the capability to simultaneously model five conserva-
tive constituents and eleven non-conservatives. RIVSCI models the
dissolved oxygen budget, nutrient cycles, coliform and algal life
processes, and benthic demands and releases. The model consists of two
distinct modules. The hydrodynamic portion, SWFLOW, computes the dynamic
flows, velocities and heads in the channels, and nodes of the system as a
function of the inflows and the @physiographic characteristics of the
system. The output from SWFLOW is used by the quality module, SWQUAL, as
the hydrodynamic base for the water quality calculations. SWQUAL computes
the dynamic constituent concentrations throughout the network as a
function of the concentration of constituents in inflows, advection,
dispersion, growth, decay, and settling.

RIVSCI has been tested and verified only for non-estuarine, steady-
state cases. Applications using tidal or other time-varying inflows should
be approached with caution, although they have been verified *with its
predecessor, RECEIV.

None of these four models are applicable to a strongly stratified
estuary. This should be kept in mind since it is a common occurrence for an
estuary to be effectively mixed during the low flow period of the year and
stratified into two distinct layers during the high flow period of the
year. Each of the estuary models utilize a chosen tidal cycle which
repeats itself, resulting in a quantified (hydrodynamic) solution which
also repeats itself every tidal period (dynamic equilibrium). The DEM and
TTM are truly dynamic equilibrium models, since they accept only steady-
state wasteload inputs. However, RECEIV is a dynamic model, and accepts
transient inputs, such as non-steady and non-cyclic storm water inflow
qualities.

G - 15

The Texas Water Development Board has also developed tidal hydrody-
namic and water quality models for use in shallow, irregular, non-strati-
fied estuaries. The models include HYD-I, the hydrodynamic model and SAL-
I, the quality model.

The HYD-I model can take into account submerged reefs, overflow over
barrier islands, fresh water inflow, evaporation, tides, winds, and other
variables. It computes the temporal and spatial distribution of velocities
and water surface elevations throughout the estuary based on full mixing.

SAL-1, the mass transport model, can be used to analyze the distribu-
tion of salinity, effect on salinity of increased or decreased withdrawals
or inflows, and effect of altered circulation patterns. The model can also
be used to simulate the transport of any other conservative quality-
constituents. Considerable data is required to calibrate the model.

In addition to the foregoing, several other types of estuary models
are available, each with its own characteristics as regards boundary
conditions, simulation method, and others. Several good descriptions of
estuary modeling techniques and problems are available in such publi-
cations as the following:

Pritchard, D.W. "Estuarine Circulation Patterns." Proceedings of the
American Society of Civil Engineers 81 (1955):-717-.

Idem. Estuarine Hydrology. New York: Academic Press, 1956.

Tracor, Inc. Estuarine Modeling: An Assessment. Washington: Government
Printing Office, 197T-.-

Another separate type of water quality model is represented by the
Estuary Ecologic Model (ECOMOD). The Estuary Ecologic Model is a dynamic
model for use in the simulation of water temperature and water quality in
non-stratified estuaries. ECOMOD has the capability to simultaneously
model two conservatives and nineteen non-conservatives. ECOMOD models the
dissolved oxygen budget, nutrient cycles, coliform and algal life
processes, benthic demands and releases, temperature, the-detritus cycle,
and zooplankton and fish cycles.

ECOMOD consists of two distinct modules. The hydrodynamic portion,
HYDRO, computes the dynamic flows, velocities and heads in the channels,
and nodes of the system as a function of the inflows and physiographic
characteristics of the system. The output from HYDRO is used by the
quality module, ECOSIM, as the hydrodynamic base for the water quality
calculations. ECOSIM computes the dynamic constituent concentrations and
water temperatures throughout the network as functions of the temperatures
and concentrations in the inflows, and of advection, dispersion, growth,
decay, settling, and meteorological conditions.

G - 16

Outfall Models

Increased population and economic activities will result in the
production of greater quantities of waste. Depending on the approach taken
to waste treatment and the extent to which environmental impacts are to be
evaluated, it may become desirable to evaluate various types of waste
outfalls with respect to their site or whether they reach either the
surface or bottom of the receiving water body. Waste discharges containing
oil also result from the operation of oil/water separators. Because of its
chronic occurrence and potentially toxic effect, the fate of the discharge
plume and its pattern of dispersion may become of interest in the evalua-
tion of environmental impacts. Several models useful for these types of
situations have been developed.

I. Plume Model

A general model for use in investigating outfalls into water bodies
without strong movements was developed in 1971 by the Pacific Northwest
Laboratory of the EPA, Region X. The present model, named PLUME, is based
on earlier ocean outfall design development work by the FWPCA. It solves
for the geometric and dynamic behavior of a buoyant round plume of sewage
or industrial waste issuing from a port into stagnant, density-stratified
surroundings.

II. MIT Dispersion Model

Discharges from oil/water separators could conta *in a high percentage
of water soluble aromatics, as separation processes are generally
ineffective against that portion of the oil. The aromatics are one of the
most toxic fractions and their fate is, therefore, of particular interest.
A dispersion model for estimating the hydrocarbon plumes emanating from the
oil/water separator was developed as part of the Georges Bank study by MIT.

This model uses two-dimensional dispersion to obtain estimates of the
area within which hydrocarbon concentrations exceeding a specified amount
will be found.

G - 17

Spill Models

The environental aspects of major oil spills are of great concern.
Effects of spills appear to be particularly adverse in cases in which oil
reaches shore or shallow depths before sufficient weatherings. Offshore
spills are moved by a combination of winds, tides and currents.

I. MIT Spill Trajectory Model

As part of the Georges Bank study by MIT, a computerized model was
prepared for analysis of the spread and movement of spills. The program
tracks a hypothetical spill from a postulated point of occurence by
randomly sampling the wind speed and moving the spill in accord with the
wind and user specified currents. Spills are tracked for a fixed period of
days of until they are computed to have reached shore.

Repetitive use of the spill trajectory model with winds and currents
characteristic of particular seasons and areas enables identification of
the likelihood of spills at certain points reaching land and the extent of
weathering which can be expected.

Groundwater Models

Population growth induced by OCS development may have significant
impact on groundwater availability both through interference with recharge
and increased withdrawals to meet water supply requirements. Quantifying
groundwater effects is complex and, if required in any detail, would
probably need to be determined through a model.

A specialized groundwater model (GWSIM) has been developed for use in
Texas by the Water Development Board. The Board has applied a finite-
difference model to simulate the hydraulic behavior of confined and
unconfined aquifers. The model, originally developed by the U.S.
Geological Survey (Pinder and Bredehoft, 1968), has been extensively
modified by the Board.

The finite difference model has the capability of simulating water
table elevations or piezometric levels under varying recharge and pumping
patterns. In order to simulate the hydraulic behavior of a groundwater
basin with this model, the basin must be represented by a grid of square or

G - 18

rectangular elements. Once the basin elements have been selected, the
computer program calculates the water table elevation (or Piezometric
head) in each element and all flows between for each time period simulated.
Normal practice indicates that computational intervals of one year or less
and total simulation periods of five to ten years are satisfactory to
verify the accuracy of the model. The computer program requires three
basic types of input data including: geometric data; aquifer charac-
teristics; and hydrologic data with regard to initial groundwater levels,
withdrawals, and recharge rates.

Verification of the groundwater simulation model involves assembling
historical information on pumpage, recharge, springflows, and water
surface elevations and using these data to simulate the historical water
level changes in the aquifer. Aquifer water levels are used as the
indicator of simulation verification and when all nodes of the model are
within the user-selected error criterion, the model is considered to be
verified. This is often a long and laborious procedure and involves
continued-adjustment by simulated and historical aquifer water levels.

G - 19

APPENDIX H

AN INVENTORY OF EXISTING OCS RELATED
OIL AND GAS FACILITIES IN TEXAS

LLJ

-Milo
Mdo-

d P_"A 0 -"T-,
,Orr

AN INVENTORY OF EXISTING OCS RELATED OIL AND GAS
FACILITIES IN TEXAS

Petroleum Refineries and Petrochemical Complexes

The Texas coastal area contains the largest concentration of
petroleum refineries and petrochemical complexes of any state in the
nation. Approximately 40% of the nation's petrochemical industries and 26%
of the refining capacity are located in coastal counties. In 1972, the
total value of output from petroleum refineries along the coast amounted to
$6.3 billion; the output value was $4.6 billion for petrochemical plants.
At the same time, the refineries employed nearly 32,000 workers, and the
petrochemical complexes employed approximately 45,000.

Figure H1

$ Million Output and Employment

Petro- Petroleum
Area chemical Emp. Refineries Emp.

Beaumont-Port Arthur Area $ 908 9,433 $ 2,476 14,997

Houston-Galveston Area 3,289 30,338 3,294 15,257

Victoria Area 184 1,953

Corpus Christi Area 202 2,708 522 1,371

Lower Rio Grande Valley 5 292

Total $4,588 44,724 $ 6,292 31,625

Source: 1972 Census of Manufacturers, Department of Commerce, Washington,
D.C. Texas Employment Commission, Austin, Texas, unpublished
data.

If the total effect of these industries on the economy was measured,
the impact would be significantly higher. For example, the total income
effect of these industries amounts to $16.3 billion for refining and $12.3
billion for petrochemicals. These industries not only employ many workers
and significantly contribute to the 'economy but they are also the most
capital -intensive industries in the coastal area. They also use more water
in their processing than any other manufacturing industries along the
coast.

H - 2

Figure H2

Petroleum Refineries

Company Location Capacity

Jefferson County 1,294,000

American Petrofina, Inc. Port Arthur 84,000
Gulf Oil Co. Port Arthur 312,000
Mobil Oil Corp. Beaumont 325,000
Texaco Port Arthur 406,000
Texaco Port Neches 47,000
Union Oil of California Nederland 120,000

Hardin County 18,100

South Hampton Co. Silsbee 18,100

Harris County 1,063,800

Atlantic Richfield Co. Houston 213,000
Charter International Oil Houston 64,000
Crown Central Petro Corp. Houston 100,000
Eddy Refining Co. Houston 2,800
Exxon Co. Baytown 390,000
Shell Oil Co. Deer Park 294,000

Galveston County 473,500

Amoco Oil Co. Texas City 333,000
Marathon Oil Co. Texas City 64,000
Texas City Refining Co. Texas City 76,500

Brazoria County 85,000

.Phillips Petroleum Co. Sweeny 85,000

Nueces County 474,100

Champlin Petroleum Co. Corpus Christi 67,700
Coastal States Petro Co. Corpus Christi 185,000
Quintana-Howell Joint Venture Corpus Christi 44,400
Southwestern Refining Co. Corpus Christi 120,000
Suntide Refining Co. Corpus Christi 57,000

Total Capacity 3,408,500

SOURCE: International Petroleum Encyclopedia (Tulsa, Ok: Petroleum
Publishing Co., 1976).

H - 3

Figure H3

Petrochemical Plants

Company Location Feedstock Major Products

Orange County

Allied Chemical Orange Ethylene Polyethylene

Firestone Synthetic Orange Butane, Styrene SBR-BR, Butadiene
Rubber & Latex Co. Butadiene

Gulf Oil Chemicals Orange Ethylene Hd polyethylene

Phillips Petro Orange Heavy oil Carbon Black

Jefferson County

Arco Polymers, Inc. Port Arthur NA Id polyethylene

Cosden Oil & Chemical Co. Groves Refinery products Ethylene, propylene

Goodyear Tire & Rubber Beaumont Propylene, C-5 Polybutadiene
streams, butadiene

Gulf Oil Chemicals Port Arthur Refinery fractions Ethylene, benzene,
& benzene derivative

Houston Chemical Co. Beaumont Ethylene Ethylene glycol,
ethylene oxide

Jefferson Chem. Co. Port Neches Refinery gases Ethylene, ethylene
& propylene deriva-
tives

Mobil Chemical Beaumont Petro fractions Ethylene, propylene,
benzene

Texaco Port Arthur Refinery fractions Benzene, cyclo-
hexane, toluene

Union Oil Co. of Calif. Beaumont Reformate Toluene

Hardin County

South Hampton Co. Silsbee NA Benzene

H 4

Figure H3 cont'd

Company Location Feedstock Major Products
Harris County

Arco Chemical Co. Channelview Butanes, Butylenes Butadiene, butylene@

Arco Chemical Co. Houston Refinery streams Benzene, paraxylene

Arco/Polymers, Inc. Houston NA Ethylene

Celanese Chemical Clear Lake Ethylene Methanol

Charter Int'l Oil Houston NA Solvents, toluene

Crown Central Petro Corp. Houston Reformate, toluene Benzene

Diamond Shamrock Deer Park Ethylene, vinyl Acetylene, ethylene
Pasadena chloride, methane dichloride, polyvin%
chloride

Diamond Shamrock Pasadena NA Polypropylene

Dixie Chemical Bayport NA Ethylene glycol

Ethyl Corp. Pasadena Ethylene Alphaolefins, ethyl
chloride, ethylene
dichloride

Exxon Baytown NA Benzene, ethylene,
propylene, & deriva-
tives

Goodyear Tire & Rubber Houston Butadiene-Styrene Styrene-butadiene
rubber

Gulf Oil Chemicals Cedar Bayou Ethane Ethylene,
Id polyethylene

Hercules, Inc. Bayport NA Polypropylene

J.M. Huber Corp. Baytown Refinery bottoms Carbon Black

Merichem Co. Houston Refinery treating Phenol
wastes

Oxirane Chemical Co. Bayport Propylene Propylene oxide

Petro-Tex Chem. Corp. Houston Petroleum base stock Butadiene

Phillips Petro. Corp. Pasadena Ethylene, propylene, Ammonia, polyethyler
natural gas

H 5

Figure H3 cont'd

Company Location Feedstock Major Products

Reichhold Chemicals Houston Methanol Formaldehyde

Rohm & Hass Co. Deer Park Natural gas Acrylic esters

Shell Chemical Houston Petro fractions Ethylene,-propylenp,
benzene, & deriva-
tives

Soltex Polymer Corp. Deer Park Ethylene Hd polyethylene

Tenneco Chemicals Pasadena Natural gas, vinyl Methanol, ammonia
chloride

US Industrial Houston Ethylene Ethylene derivatives
Chemicals Co.

Galveston County

Amoco Chem. Corp. Texas City Ethylene, benzene, Styrene
petro fractions,
refinery gases

Marathon Oil Texas City NA Cumene, toluene

Monsanto Co. Texas City Light crude oils, Ethylbenzene, styrenc
natural gas

Texas City Texas City Refinery streams Propylene
Refining Co.

Union Carbide Corp. Texas City Natural gas, refinery Ethanol, iso-
gases propanol

Fort Bend County

Dow Chemical Oyster Creek NA Ethylene derivatives

Chambers County

Union Texas Petro. Winnie Reformate, naptha Benzene

Brazoria County

Amoco Chemical Co. Chocolate Bayou Propylene, ethylene Ethylene

Dow Badische Co. Freeport Propylene, acetylene, Caprolactum
cyclohexane

Dow Chemical Co. Freeport NA Benzene & ethylene
derivatives

H - 6

Figure H3 cont'd

Company Location Feedstock Major Products

Monsanto Co. Alvin Light crude oil Ethylene

Phillips Petro Co. Sweeney Heavy oil, natural gas Ethylene
liquid, benzene

Matagorda County

Celanese Chemical Bay City Ethylene, cyclohexane Vinyl acetate

Calhoun County

Union Carbide Corp. Seadrift Ethane, propane Ethylbenzene,
styrene

Nueces County

Celanese Chemical Bishop Natural gas Formaldehyde

Champlin Petro Co. Corpus Christi NA Cyclohexane

Coastal States Petro- Corpus Christi Crude Oil Toluene, benzene
Chemical Co.

Suntide Refining Co. Corpus Christi Refinery streams Paraxylene, cumene

Cameron County

Union Carbide Corp. Brownsville Butane Acetic Acid

NA means not available

SOURCE: International Petroleum Encyclopedia (Tulsa, Ok: Petroleum Publishing
Co. , 1976T.-

H 7

While the petroleum refineries and petrochemical complexes are
generally thought of in the same light, they are separate processes. The
petroleum refining industries use crude oil as feedstock and produce
gasoline and other fuels used for transportation, power generation, and
heating purposes. The petrochemical industry uses natural gas, natural gas
liquids, and byproducts from petroleum refining as a feedstock. Petro-
chemical plants manufacture a multiplicity of products including rubber,
plastic, synthetic fibers, and organic chemicals.

The refining and petrochemical complex is concentrated along the
upper Texas Coast in the Houston and Beaumont-Port Arthur areas. Figures
H2 and H3 show the location and capacity of these plants. In total,
refineries in the Houston-Galveston area have a capacity of 1.5 million
barrels per day. The Beaumont-Port Arthur area refineries have a capacity
1.3 million barrels per day.

Ports

The ports and harbors of Texas can be thought of as comprising three
separate yet inter-related components: deep draft ports, shallow draft
ports, and the Gulf Intracoastal Waterway (GIWW).

1. Deep Draft Ports

There are eleven distinct deep draft ports or port systems scattered
along the Texas Gulf Coast. These ports, for the most part, have depths of
36 to 40 feet. (see Figure H4). In 1974, these ports handled a total of
229,440,637 short tons; of that total, approximately 171,780,000 short
tons - 74.9% of the total - was petroleum, natural gas, chemicals or
chemical products, or petroleum fuels or lubricants. The eleven deep draft
ports are:

1. Orange - port facilities include 447,000 barrels of storage for
crude petroleum and refined products storage. The port is well-
served by rail and highways, and there are 35 piers, wharves, and
docks. Nearly 31% of the tonnage handled in 1974 was petroleum-
related.

H - 8

figure H4

SLLEClED COMYODITItS HAN'XFD IN
(IN MIILI,@NS OF SH'kT TO%S)
TOIAL TONNAGE A 3 C
HANDLED (IN MILLIONS Crude -he::dcals Petroleuvi Total: A,B&C
OF SHORT TONS) Pei ro- @,nd Fuel s (As a @, of Petroleum
leum and Che;-iical Arid Total Tonnage Storage
PORT OR Natural Products Lubri- Handled in Number of Capacity
WATERWAY DRAFT -1969t1970 1974 Gas - cants- Total: A,B&C 1974) Berths 'In 1000 BBLs)
Orange 24-33 1.02 1.62 1.33 .05 30 .06 .41 30.8 35 4147
Beaumont 36-38 27.11 30.48 33.50 12.88 2.37 12.09 2-i.34 81.6 9 40,000

Port Arthur 36-41 28.21 22.67 27.80 10.30 .55 13.92 24.77 89.1 9 26,COO
Sabine Pass Harbor 30-40 .37 .28 .39 .29 .01 .04 .34 87.2 1 0

Houston 36-40 57.13 64.65 89.11 18.81 10.07 30.27 59.14 66.4 218 12,000

Texas City 36-40 15.40 17.10 20.15 6.27 6.43 7.36 20.06 99.6 30 11,000

Galveston 44 6.07 3.46 7.17 .21 .13 .15 .49 6.8 37 0

Freeport 32 3.65 5.28 8.90 3.07 4.34 1.18 8.59 96.5 3 2,050
Approx.
Corpus Christi 38-45 @24.84@ 25.23 32.84 8.32 2.64 12.90 23.86 72.7 43 25,000
Harbor Island 47 5.32 5.41 4.92 .49 5.41 100.0 5

Brownsville 36-38 .97 4.99 2.84 .38 .33 .66 1.37 48.2 18 1,000

Port Isabel 12 .44 .39 .18 .13 0 0 .13 72.2

Anahuac Approx. 6 .11 .48 .38 - .04 - .04 10.5

Trinity River to Approx. 6 .97 .36 .36 - .04 - .04 11.1
Liberty
Cedar Bayou Approx. 6 .23 .49 92 1.03 - .12 .15 16.3
Chocolate Bayou 12 - 2.53 2.88 .45 .72 .61 2.78 96.5

San Bernard River
to Sweeny 9 .84 .53 .51 .06 .04 .30 .40 78.4

Matagorda Ship
Channel 12 2.04 4.48 4.93 .17 .55 .08 .80 16.2

Channel to Victoria 9 .25 1.78 3.14 - 1.22 .08 1.30 41.4

Tributary Arroyo
Colorado to
Harlingen 12 .22 43 .58 .02 .05 .32 .39 67.2

Aransas Pass 12 .10 0 .02 - 0 - 0 0

Palacios 12 .14 .10 .07 0 - - 0 0

Port Bolivar 12 - - 0 - 0 0 0

Clear Creek Approx. 6 - - .22 - - -

Dickinson Bayou Approx. 6 - - .12 - - - -

Double Bayou Approx. 6 .06 - .03 - 0 - 0 0

Port Mansfield 8-16 .11 .02 .04 - .01 .01 25

Rockport 9 0 0 0 - -

T 170.28 192.67 243.82 67.36 29.83
_j1TAA1 80.64 177.83 72,9
Gulf Intracoastal 12 51.7 65.3 66.1 14.24 14.44 22.0
Waterway 1965) Sources: Waterborrip Coiu:ier(e of the U.S., U.S. Army Corps of Engineers
Final EnviT orir'.'antal 'Jatfnient: Mij i ntervj rice Dredginq: GIWW,
Note: 0 indicates less than .01 million U.S. Army Corps of Entlineers, 1975.
Anal i,@ of th" Role of the GIW'W in Tc-za-,, TAMIJ. 1975.
r'y E(.. nomic jr@qwct of tFi(-. Gll,.",l in iexas. TAMU, 1974.

H 9

2. Port Arthur - approximately 26,000,000 barrels of storage for
crude oil and refined products is available. There is a 1200-
foot wharf structure with nine docks and access to land trans-
portation is good. Over 89% of the tonnage handled in 1974 was
petroleum-related.

3. Sabine Pass Harbor - located directly on open gulf waters, it is
not an extremely active port. Nearly 90% of its 1974 tonnage,
however, was petroleum related. There is one dock and no
petroleum storage capacity.

4. Beaumont - the port is served by several rail companies and
highways and has a capacity for storage of crude oil and refined
products of nearly 40 million barrels. In 1974, almost 82% of
the total tonnage handled was petroleum related. There are nine
docks.

5. Galveston - the port has applied for an authorized depth of 67
feet. It is equipped with 22,639 linear feet of wharves and can
dock 37 ships simultaneously. Approximately 7% of the tonnage
handled in 1974 was petroleum-related. The port is well served
by rail and highway systems. It has virtually no petroleum
storage capacity.

6. Texas City - port facilities include storage capacity for over 11
million barrels of crude oil and refined products. Over 99% of
its 1974 tonnage was petroleum-related. There are 30 docks.

7. Houston - Texas' largest port system and the third busiest in the
nation has 218 wharves, piers, and docks in the vicinity. In
1974, over 66% of the total tonnage handled was petroleum-
related. Over 12 million barrels of storage for crude oil and
petroleum products is available.

8. Freeport - the port is well served by inland transportation
systems and has storage space for about 700,000 barrels of crude
petroleum and 1,350,000 barrels of finished products. Over
96.5% of the tonnage handled in 1974 was petroleum related.
There are three docks.

9. Harbor Island - the port is located on an island in Corpus
Christi Bay, has five docks, and is served by one highway in
addition to the Gulf Intracoastal Waterway. It has applied for
an authorized depth of 72 feet. A total of 100% of the tonnage
handled in 1974 was petroleum-related.

10. Corpus Christi - port facilities include storage space for over
25 million barrels of crude oil or refined petroleum products,

H - 10

nearly 7,000 linear feet of wharf frontage, and approximately 43
docks. Almost 73% of the total tonnage handled in 1974 was
petroleum-related.

11. Brownsville - port facilities include five liquid storage
terminal operators, 18 cargo docks (5 of which are oil docks),
and over 6,000 feet of wharf frontage. Over 48% of its 1974
tonnage was petroleum related.

II. Shallow Draft Ports

There are many small, shallow draft ports along the Texas Gulf Coast,
but the most significant (See Map H1) are the channel to Liberty, Anahuac,
Double Bayou, Port Bolivar, Cedar Bayou, Clear Creek, Dickinson Bayou,
Chocolate Bayou, the channel to Sweeny, Palacios, the channel to Victoria,
the Matagorda Ship Channel, Rockport, Aransas Pass, Port Mansfield, the
channel to Harlingen, and Port Isabel.

These ports combined handled a total of over 14 million short tons of
cargo in 1974; slightly over 6 million tons of that total (42%) were
petroleum-related. (See Figure H4.) The busiest of the shallow draft
ports are Chocolate Bayou, the Matagorda Ship Channel, and the channel to
Victoria.

III. Gulf Intracoastal Waterway

The Gulf Intracoastal Waterway (GIWW) extends along the entire Gulf
Coast from Brownsville, Texas to southern Florida. It serves as the
primary lane for nearly all small commercial and recreational vessels
berthed on the Gulf Coast. The Texas section of the GIWW extends along a
403 mile arc from the Sabine River at the Port Arthur Canal to the Port of
Brownsville. (See Map H1.) The channel is generally 12 feet deep and 125
feet wide.

Tonnage handled on the GIWW has remained relatively constant in recent
years. In 1968, 63.3 million short tons were handled; that figure
fluctuated somewhat until a high of 68.9 million short tons was reached in
1972. The 1973 figure was 63 million. In 1971, 30.4% of the cargo handled
on the Texas intracoastal waterway was petroleum products, 29.8% was crude
petroleum, and 17.4% was chemicals.

H 11

Map HI

5 4 1

2
14 6 3

2
1
15
17 16

21 8 1 Orange
20 2. Port Arthur
3. Sabine Pass Harbor
19 4. Beaumont
5. Channel to Liberty
6. Anahuac
7. Double Bayou
8. Port Bolivar
9. Galveston
25 23/ 10. Cedar Bayou
11. Clear Creek
12. Dickinson Bayou
13. Texas City
14. Houston
15. Chocolate Bayou
16. Freeport
17. Channel to Sweeny
18. Palacios
19. Port O'Connor
20. Matagorda Ship Channel
21. Channel to Victoria
26 22. Rockport
23. Harbor Island
24. Aransas Pass
29 25. Corpus Christi
28 7 26. Port Mansfield
27. Port Isabel
28. Brownsville
29. Channel to Harlingen

H 12

(To avoid the possibility of double-counting tonnage handled, the
GIWW is entered separately on Figure H4 and is not included in the "Total"
row. )

In addition to existing ports and port systems, three port proposals
merit attention. The Port of Galveston has applied for a permit to dredge
the port and a 35-mile channel to the Gulf of Mexico to a depth of 67 feet.
If the application is approved, the facility is projected to be in
operation by 1981. It is estimated that the port could import 125 million
tons of crude oil by the early 1990's.

Similarly, the Port of Corpus Christi has applied for a permit to
deepen the Harbor Island facility at Port Aransas to 72 feet.

Finally, a consortium of nine oil and chemical companies have planned
and designed an offshore, deepwater oil terminal 25 miles off Freeport,
Texas, in the Gulf of Mexico. The facility, which could be completed by
1980, will include four monobuoys and a four-acre platform. Two 52-inch
diameter pipelines would carry up to 2 million barrels of crude oil per day
to storage facilities 31 miles away. Two additional monobuoys, a second
platform and a third pipeline are projected for a later date.

Offshore Drilling Rigs

In Texas, there are numerous offshore drilling contractors; most are
located in Houston. However, the largest offshore drilling contractor in
the world, Ocean Drilling Exploration Co. (ODECO) is headquartered in
Dallas. A Texas base does not necessarily imply that the contractor is
operating offshore Texas. In most cases, Texas-based contractors are
world-wide operators. The data listed below show that in 1975 the number
of rigs owned by Texas-based contractors were:

Semi-submersibles 25

Jackups 78

Drillships 29

Fixed platforms 68

Also, during 1975, Texas-based contractors had 39 rigs under
construction devided into three groups:

H - 13

Semi-submersibles 9

Jackups 20

Drillships 10

At the present time, there is a worldwide surplus of offshore drilling
rigs. One reason for the surplus is because offshore activity has not
expanded as rapidly as expected. Another reason is, because of escalating
construction costs, older rigs can operate at a cheaper day rate than new
rigs. In the past few years, there has been three identifiable levels of
construction costs for offshore units - those units built before 1970,
those built from 1970 - 74, and those delivered after 1974. In most cases
the rig owner who bought the rig before 1970 will be the most competitive
and least hurt in an oversupply situation. Those rig owners who bought
after 1974 will be the ones most likely to be stacking their rigs or
working them at prices that are less than profitable. Figure H5 shows the
average cost of building offshore units for the three time periods.

Figure H5

Construction Cost - Offshore Units

$ Million

Jackups Semi-Submersibles Drillships

Prior to 1971 5.1 9.0 5.4

1971-74 10.3 22.8 13.1

After 1974 19.2 33.9 45.4

SOURCE: Offshore Rig Data Services, "Offshore Rig Newsletter", October
1975. P.O. Box 19247, Houston, Texas 77024.

In Texas, there are five yards that build offshore drilling rigs. The
two largest are Levingston and Marathon-Le Tourneau. In each yard there is
currently some activity although they are not operating at full capacity.

Name Location

Baker Marine Ingleside
Bethlehem Steel Beaumont

H - 14

Levingston Shipbuilding Orange
Marathon-LeTourneau Brownsville
Todd Shipyards Galveston

Support Services

The process of drilling and completing an offshore well involves not
only a drilling contractor and an oil company, but includes many different
support services and suppliers of materials and equipment. These support
services and suppliers may generally be classified into five groups:
(1) those which transport the rig to the well site and assist in making the
rig ready for drilling; (2) those which provide services and supplies for
the drilling process; (3) those which provide services and supplies in
completing the well; (4) those involved in pipeline construction; and
(5) those involved in production platform construction and operation.

Some support services may be classified in more than one of the five
groups. For example, marine transportation services are required for all
phases of a drilling operation. They assist in transportation and setting
up the rig, they provide supplies for the drilling operation and in
completing the well, they assist in pipeline construction and they are
necessary in production platform construction and operation. Others such
as cementing services are only required in one phase of operating, that of
completing the well. Figure H6 is a list of some of the support services
required for-each of the five phases.

All of the support groups have a common characteristic in that they
are dependent on marine or air transportation in providing their service.
In Texas, most of the offshore support groups are located in and around the
Houston area. The reason for this is mainly logistical in that most of the
offshore activity in Texas has been near the Houston area, and the Port of
Houston and other nearby ports provide adequate docking and storage
facilities for these activities. Figure H7 is a list of support services
and some of their locations in the Texas Coastal area.

Gas Plants

There are 79 gas plants located in the Texas Coastal Counties listed
in Figure H8. The total capacity of those plants is 10,541.8 MMCF/D. That
capacity represents 14.5% of the nation's total gas plant capacity and
36.3% of the State's. The State's total capacity, in turn, is 39.9% of the
nation's.

H - 15

Figure H6

Support Services and Supplies

1. Moving the Rig
Tug Boats Helicopters
Supply Boats Service Boats
Fabricators

2. Drilling
Supply Boats Tool Rental
Crew Boats Well Logging
Helicopters Drill Pipe Suppliers
Catering Services Drill Bit Suppliers
Mud Supply Welders
Divers Oil Well Supplies

3. Completion
Supply Boats Cementing Services
Crew Boats Tool Rental
Helicopters Welders
Catering Services Perforating Services
Cement Supply

4. Pipelines
Pipe Suppl iers Pipe Burying Services
Pipe Laying Barges Supply Boats
Helicopters Pipe Coating
Welders

5. Production
Helicopters Fabricators
Crew Boats Welders
Supply Boats Catering Services

H 16

Figure H7

Support Industry Locations

1. Tug Boats
Freeport Aransas Pass
Houston Galveston

2. Supply Boats
Houston Galveston
Freeport Brownsville
Aransas Pass

3. Fabricators
Corpus Christi Porter
Houston Brownsville
Beaumont Galveston

4. Helicopters
Houston Galveston
Sabine Pass Pt. O'Connor
Corpus Christi Pt. Isabel
Freeport Harlingen
Rockport

5. Crew Boats
Freeport Galveston
Houston Brownsville
Aransas Pass

6. Mud Supply
Houston Brownsville
Corpus Christi Bay City
Sabine Pass Pt. Lavaca
Freeport Ingleside
Rockport Victoria
Galveston Edinburg
Pt. 0 'Connor McAllen
Beaumont Robstown

H 17

7. Divers

Houston Beaumont
Corpus Christi Pt. Isabel
Freeport Orange
Galveston

8. Tool Rental

Houston Corpus Christi
Pasadena Edinburg
Beaumont Rockport

9. Well Logging
Houston Bay City
Corpus Christi Victoria
Sabine Pass McAllen
Freeport Pharr
Galveston Mission
Pt. O'Connor Portland
Beaumont

10. Drill Pipe Suppliers
Houston Beaumont
Corpus Christi Brownsville
Refugio Rockport

11. Drill Bit Suppliers
Corpus Christi Victoria
Houston Pasadena
Refugio Brownsville

12. Welders
Corpus Christi Edinburg
Beaumont Brownsville
Houston Rockport

13. Oil Well Equipment Supply
Beaumont Freeport
Houston Pt. O'Connor
Corpus Christi Pt. Lavaca
Refugio Brownsville
Pasadena McAllen

H 18

14. Cement Supply and Services

Houston Mission
Corpus Christi Edinburg
Freeport Victoria
Galveston McAllen
Beaumont

15. Perforating Services
Corpus Christi Bay City
Beaumont Refugio
Houston Mission
McAllen Pharr
Victoria

16. Pipeline Suppliers
Houston Corpus Christi
Beaumont

17. Pipeline Laying Barges/Burying Services/Coating
Houston Corpus Christi

H - 19

Figure H8

Gas Plants in the Texas Coastal Region

County No. Plants Total Capacity/MMCF/D

Orange - -
Liberty 3 117.0
Jefferson 7 570.0
Harris 4 333.0
Galveston 4 219.5
Chambers 5 452.0
Brazoria 6 2,039.0
Matagorda 7 1,002.0
Jackson 1 111.0
Victoria 3 154.0
Calhoun 4 231.5
Aransas 1 75.0
Refugio 4 207.5
San Patricio 7 443.8
Nueces 8 875.0
Kleberg 2 2,692.0
Kenedy 1 255.0
Willacy 1 64.0
Cameron - -
Hidalgo 6 459.5
Hardin 2 105.0
Fort Bend 3 136.0

TOTAL 79 10,541.8

H 20

APPENDIX I

ANTHROPOLOGICAL METHODS AND PERSPECTIVES
FOR DEVELOPING COMMUNITY PROFILES

K k',..',@

ANTHROPOLOGICAL PERSPECTIVES AND METHODS
FOR DEVELOPING COMMUNITY PROFILES

Although called by a different name, anthropologists have long been
involved in developing of community profiles. Their ethnographies have
described and analyzed the social, cultural, economic, and ecological
systems of communities throughout the world. Although most of their work has
been focused on small-scale social systems located outside of the United
States, their methods and perspectives are easily adapted to the study of
communities in complex societies.

The anthropological approach is holistic in nature and involves the
study of formal and informal structures and networks. While every
individual researcher has certain biases, the training of anthropologists
stresses the need to view situations through the eyes of those who are being
studied. The attitudes and perspectives of individuals who compose the
cultural and social systems under study are the basic data of the anthro-
pologist. Thus, the anthropological approach tends to qualitative as opposed
to quantitative.

In order to gather this qualitative information, the anthropologist
must participate in and observe a community. By interacting with the
residents of a community and observing their behavior and life styles, the
anthropologist is able to draw a portrait of their social and cultural
system. Anthropologists argue that this interactive approach produces more
complete and accurate information than a strict questionnaire or quantita-
tive approach. However, questionnaires, in conjunction with on-site
research can provide insights into a community's attitudes.

Unfortunately, the time frame of this study did not allow for the use of
questionnaires, but certain other secondary information sources were
utilized. These include: historical documents, 1970 census data, Calhoun
County land records, Calhoun County building permit records, Calhoun County
Independent School District records, Calhoun County voting records, and the
records of the Texas Department of Public Welfare, the Texas Department of
Mental Health and Mental Retardation, and the Texas Department of Health
Resources. The Texas Department of Community Affairs was contacted, but had
no information available on Port O'Connor due to its small size and unincor-
porated status.

Although these secondary information sources were helpful, the major
body of data was collected through interviews and observation of the com-
munity. Upon arrival in the community, the primary researcher spent a number
of days meeting individuals, talking with them briefly, and driving around
the community. When questioned as to the reason for this visit, the primary
researcher explained the nature and purpose of the study. Residents

I - 2

responded well. A number were very helpful in listing individuals who should
be interviewed and even arranging an introduction to these persons.
Fortunately, it was possible to conduct interviews with shrimpers, mer-
chants, a few OCS personnel and with natives, residents, and newcomers. The
primary researcher ate in a number of homes and frequented the local
restaurants and stores. One afternoon was spent taking a boat ride with
three shrimpers, two of whom were females, and one evening's activity
included participating in the weekly volleyball game at the school. In
short, the researcher was able to observe a wide variety of the daily
activity in the community. Certain basic questions were asked in all in-
depth interviews, but a variety of topics were usually covered. Four
interviews were taped and notes were taken during others. Field notes were
recorded at least daily. Only one individual was hesitant to talk with the
researcher.

informal discussions with various individuals occurred daily and these
allowed the interviewer to check her perceptions and conclusions. Of course,
in any field situation certain individuals appear to the researcher to be
more knowledgeable and reliable. However, all individuals' perceptions must
be carefully weighed and analyzed in order to produce an accurate portrait of
a community. Every interaction and interview can be an enlightening
experience, and this inductive research approach demands they all be con-
sidered.

After the on-site research was concluded, tapes were transcribed and
notes reviewed. A card file with the collected information was divided into
categories, such as social problems, attitudes toward growth, housing, etc.
The writing of the final report involved extensive use of this file as well
as field notes. These are the raw data of an ethnographic report.

While the small size of the community allowed a rather short time period
to be sufficient in establishing a baseline, it limited the study in certain
ways. For instance, it was not pos-s-1T Teo track down and interview recent
out-migrants or part-time residents. It was also impossible to observe the
community during the summer months. (One sunny weekend did give some idea of
the change in the community due to influx of tourists, however.) The
research was conducted during the bay shrimping off-season, and although this
made it easier to talk with bay shrimpers, it was impossible to actually
observe this activity.

The major focus of this study was on the residents' attitudes toward
growth and change in their community. While it is not possible to isolate
these attitudes from others, there were certainly many subjects which were
not discussed at length. (For instance, the religious attitudes of
residents.) In short, there were many aspects of the residents' lives that
were not observed or discussed because of the short time allowed for this
study. To produce a complete ethnography of this community would require at
least a year rather than three weeks.

One final note on the research conducted in Port O'Connor. The OCS
study involved persons from a variety of disciplines, and discussions with
them were most helpful in the analysis of collected data. This team included
an economist, a geologist, and two policy analyst one of whom is also a
lawyer. Two sociologists also visited Port O'Connor for two days each and
conducted informal interviews with residents; their observations were
valuable additions to those of the primary researcher. All individuals
mentioned above and another sociologist and two anthropoligists read a draft
of the report and submitted comments and suggestions. However, while the
primary researcher is indebted to all of these individuals for their helpful
insights, they are not responsible for the specific contents of this study.

1 4

APPENDIX J

BIBLIOGRAPHY

I I

. 0
1/1- 1 - 171
a 10 0
1 0 0 O'l, -Io

0 d5)
I

BIBLIOGRAPHY

Introduction

The following Bibliography is divided into two groups; each of them is
further broken into two sections. Entries are alphabetized within each of
the four sections.

GROUP I contains entries for impact studies - environmental, economic,
demographic, social, or infrastructural - including those related specifi-
cally to Texas and those not directly related to OCS oil and gas develop-
ment. GROUP I contains a section of annotated entries for documents which
are considered highly significant. The non-annotated entries, the second
section of GROUP I, are works which are similar in content to those in the
annotated section but which are not as widely available or are to some
extent duplicative of those detailed in the annotated section. This non-
annotated section also includes documents associated with OCS reserve
estimates and other general Gulf of Mexico studies.

Both sections of GROUP I include documents which contain information
associated with modeling techniques which are pertinent to evaluating OCS
impacts. Because modeling is an area of research worthy of individual
attention, a separate appendix dealing with modeling techniques was
prepared. (See Appendix G.)

GROUP II of the Bibliography contains entries for documents which are
considered to be inventories or descriptions of baseline data on the
environmental, economic, demographic, social, or infrastructural
characteristics of the Texas Gulf Coast. GROUP II is divided into two
sections: (1) Natural Resources; and (2) Social, Economic, Demographic,
and Intrastructural.

This Bibliography serves two purposes. First, it provides a list of
invaluable documents for other OCS development impact-related research
efforts. Secondly, it serves as a bibliography of materials gathered and
consulted by RPC, Inc. during its study.

J - 2

GROUP I: ANNOTATED

Arthur D. Little, Inc. Petroleum Development in New England. 4 vols.
Boston: New England Regional Commission, Novemb7r', 19/5.

This report analyzes the economic and environmental impacts on New
England by petroleum industry development, including development of
the OCS off New England. Volume I, the Executive Summary, includes
the study methodology and conclusions. Volume II analyzes the
impacts of 23 individual modules (scenarios) including several
which postulate development in the OCS on Georges Bank. Volume III
is more specific in terms of economic and environmental impacts, and
Volume IV is appendices.

Arthur D. Little, Inc. Potential Onshore Effects of Deepwater Oil
Terminal -Related Industrial Development. 4 vols. Cambridge:
Arthur U. Little, Inc., AM

This 5-part, 4-volume study is an assessment of the onshore effects
of deepwater terminal development in each of five areas: Machias,
Maine; Sandy Hook, New Jersey; Grand Isle, Louisiana; the Delaware
Bay, New Jersey; and Freeport, Texas. For each area, an economic
and environmental baseline profile was developed and growth in
industrial, economic, and environmental patterns that could be the
result of a terminal were assessed. Impacts on population, personal
income, tax revenues, land use, water demand, water pollution, air
pollution, and more are analyzed. Part V is a collection of
appendices and includes the economic and environmental method-
ologies.

Baldwin, Pamela L. and Baldwin, Malcolm F. Onshore Planning for Offshore
Oil: Lessons From Scotland. New Yor7- universe BOOKS, 19/5-.

This book focuses on a description of the North Sea OCS oil and gas
development experience and on the lessons which can be learned from
that experience and applied to U.S. OCS frontier areas, parti-
cularly the Atlantic OCS and the Gulf of Alaska. Included are
chapters concerning what to expect onshore when oil and gas are
discovered offshore, onshore development, construction of offshore
platforms, pipelines, refineries, and more. The book recommends
early planning for onshore impacts, dispersal of federal funds to
affected states and localities, and local and state environmental
impact statements to augment such federal statements.

Battelle Columbus Laboratories. A Study of Selected Coastal Zone Eco-
systems in the Gulf of Mexico in Relation to Gas ri-peTi"Ming
Activities: Final Keport to Offshore Pip7line Uommission.
Columbus,"Uhio: Battelle Mumbus I ratories, 19/b.

J - 3

The report provides terrestrial, aquatic, and marine field data
specifically collected at 6 sites to assess the environmental
aspects of gas pipelining activities. Appendices include extensive
sample records and statistical results. It demonstrates the kinds
of positive and negative changes that occur as a result of pipe-
lining. Responses to pipelining were found to vary depending on
location, type of activity, and season.

Battelle Columbus Laboratories. Environmental Aspects of Gas Pipeline
Operations in the Louisiana Coastal marshes: Repor =o Uttshore
Pipeline Commission. Golumbus, Uhio: t3atte I I eL. o I u m=u s
Laboratories, IV/7-

Results of initial studies by Battelle, which provide an overview of
the broad environmental issues confronting the gas pipeline
industry.

California. Office of the Governor. Offshore Oil and Gas Development:
Southern California. Sacramenfo: Go7Vernorls Off i ce, Off 1 ce _0T
Planning and Research. August, 1976; December, 1976; and Draft
Findings and Recommendations February, 1977.

A series of three preliminary reports drafted to help the state and
local governments deal with lease sale No. 35 and with resumed
activity in the Santa Barbara Channel. The first two volumes
identify major issues, problems and opportunities affecting OCS
development. Volume I contains an analysis of onshore and offshore
facilities and resources, of institutional issues affecting OCS
development, of the environmental impact of development, of the
transportation problems and petroleum industry operations. Volume
II is a revision of Vol. I with an economic impact analysis,
production forecasts and development scenarios added. Volume III
contains the findings and recommendations of the task forces
including recommendations for legislative changes in the OCS Lands
Acts that would increase state and local government participation
and strengthen environmental safeguards. New lease sales and
development are not recommended until changes are made.

Florida State University. Florida Coastal Policy Study: Impact of
Offshore Oil Development. Tal lahasee:" Moriaa @otate universiry-1
19/6.

A survey of impacts of OCS development in other states, a review of
offshore exploration in Florida, and an overview of facilities
associated with OCS oil and gas development are included. The study
assesses the socio-economic impacts of a hypothetical offshore
discovery with a maximum production of 136,000 barrels of oil and
215 million cubic feet of gas per day. Facilities, employment and
income are projected. The report also analyzes the impacts on local
government revenue and expenditures and on the environment. Deep-
water port policy issues and offshore reserves and fuel availa-
bility are also examined.

J - 4

Goldsmith, Oliver Scott and Morehouse, Thomas A. impact Problems and
Intergovernmental Aids in Alaska: Part 17 Juneau, Al aSKa:
TIniversity OT AIFSKa, Institute of Social and Economic Research,
1976.

The study comprises six sections: an overview of intergovernmental
aids, relevant governmental structures in Alaska, public finance
impacts of rapid development, criteria for distributing impact aid,
alternative administrative arrangements, and conclusions. The
report concludes that the key to effective impact aid allocation is
technical assistance on the part of state governments.

Goodman, Joel M. Decisions for Delaware: Sea Grant Looks at OCS
Development. Newark, Uelaware: Marine Advisory Serviceg-,
university of Delaware, 1975.

This report describes the Baltimore Canyon trough and its oil and
gas potential, the steps in developing OCS mineral resources, the
OCS experiences in the Gulf of Mexico and Pacific Ocean, and the
economic and environmental impacts of developing the Baltimore
Canyon trough. The report concluded that development of the Mid-
Atlantic OCS would require 1000 acres of shoreline and nearshore
upland, and would result in a population growth of 15,000. A
population growth of 45,000 for indirect support facilities is also
estimated. The study suggests that shoreside activity and thus
impact could be spread out along the coast. The final conclusion
was that public expenditures would increase faster than revenues,
substantially increasing tax burdens on area residents.

Grigalunas, Thomas A. Offshore Petroleum and New England: A Study of the
Regional Economic uonseqMces of Petroleum uttsnore uil an3=as
Production. Kingston, R. I.: university of Rhode Island Press,
19/5.

A study which examines the impacts on New England of hypothetical
offshore oil and gas development and possible petroleum refining
activity in the area. Two scenarios of oil and gas development on
the Georges Bank were tested - a low production case and high
production case. Both high and low oil and gas prices were hypoth-
esized as were two petroleum refinery scenarios. For each hypoth-
esized development, estimates of impact on income, employment and
other socio-economic indicators were made.

Gulf South Research Institute. Offshore Revenue Sharing. Baton Rouge:
Gulf South Research Institute, 1975.

Using the situation in Louisiana as its central focus, this study
evaluates the impact of OCS activities on state and local govern-
ments in adjacent areas. It includes a description of the OCS and
its energy potential, analyses of the environmental and economic

J - 5

impacts of OCS production, and a history of mineral leasing on
federal and offshore areas. Of particular interest is a section on
tax revenues vis-a-vis public service demand due to increased OCS
development. The study concludes that in 1972 over $260 million in
taxes were foregone in Louisiana because of a lack of taxing
authority over OCS developments. The report supports the sharing of
federal lease revenues with affected states.

Gulf University Research Consortium. The Offshore Ecolo@y Investi-
gation. Galveston, Texas: Gulf 75-i've-r-s-ITY Kesearcn Consortium-,
1913.

The report is the product of an effort to determine the ecological
impact of petroleum drilling and production in coastal Louisiana.
The study was conducted in a 400-square mile area including, and
southward from, Timbalier Bay, Louisiana. The study includes 24
scientific papers by investigators. Subjects included are effects
on phytoplankton, effects on zooplankton, descriptions of surface
and subsurface sediments and turbidity, and many others. This
volume is to be accompanied by Handbook on Procedures and Methods
Employed in the Offshore Ecolo2y InvestiU-ation.
Kash, Don E. , et al . Ener@y Under The Oceans. Norman, Oklahoma:
University of Oklah7m-a Press, 073.

This landmark work is a technology assessment of OCS oil and gas
operations; that is, it is "an attempt to systematically identify,
analyze, and evaluate the potential environmental, legal/political,
and other social impacts of OCS oil and gas technology." The book
is comprised of five parts: An Introduction to Technology Assess-
ment, The Development of OCS Oil and Gas Resources, Policy Issues
Raised By OCS Development, A Comparison and Recommendations, and
Appendices which include environmental pollution, offshore
reserves, leasing procedures, and more. The book's description and
graphics of OCS production equipment are very complete.

Mackin, J.G. A Review of Significant Papers on Effects of Oil Spills and
Oilfiel=rine Uischarges on Marine biotic Communi les. Kesearch
Foundation Project 737. Coi lege Station: lexas A&rUniversity,
1973.

Article includes summary and discussion of facts concerning oil
spills and brine discharges based upon an annotated bibliography of
836 references, international in origin. Includes case study
review of 3 oil spills and analyses of oil spill effects upon
different biotic groups: intertidal, planktonic, shore birds, etc.
Also includes review of bacterial degradation of petroleum.

Mackin, J.G. A Study of the Effects of Oilfield Brine Effluents on Biotic
Communities in lexas Estuaries. Kesearch Foundation Proj--ecf=.
Uollege Station: Texas A&M Triversity, 1971.

J - 6

This report of research at six Texas bay and lagoon oil production
sites may be outdated to the extent that brine effluents are now
prohibited from being directly discharged into Texas coastal
waters. The results are, however, relevant in their own right and
to other regions without these restrictions. The analysis of impact
is evaluated in terms of the distance from the point-source that
affects are seen. Affects are measured by spatial changes in
diversity, species abundance, ability to recolonize substrate, and
by yearly change in species numbers as a measure of the affect on
reproductive capability.

Mathematical Sciences Northwest, Inc. A Social and Economic Impact Study
of Oil Related Activities in the Gult ot Aiask-a--=e levue,
Washington: -Mathematical Sciences Northwest, Inc , 975

A study (done for the Gulf of Alaska Operators Committee) which
estimates the economic and social impact of resource development in
the Gulf of Alaska on the Alaskan communities of Juneau, Yakutat,
Cordova, Whittier, Seward, and Kodiak. Using basic projections of
120,000 barrels of oil per day/per field and by varying those
figures in alternative scenarios, indirect and direct employment,
wages, population, and more were projected. Impacts on the fishing
and canning industries are also included.

McAlister, John; Linvill, William; and Saunders, Harry, eds. A Techno-
logical Assessment of the Impact on California's Coastal To-n-e-f-rom
Proposea UtTsnore U11 and Uas Development. Palo Alto: St-a-7-677
University Press, 1973.

A California impact study which includes a description of such
background issues as national energy policy, preparedness for and
consequences of OCS development, and the application of the Coastal
Zone Management Act. It further analyzes California's projected
energy consumption; its supplies; its harbor and port facilities;
production and exploration equipment necessary for OCS development;
energy transportation systems; the likelihood of major oil spills;
and the impacts of natural gas and petrochemical facilities on the
State of California. It concludes with legislative options
regarding OCS development.

Mixon, J. Environmental Analysis for Development Planning in Chambers
County, lexas: A Proposed Increm I Chan@e System tor-re-7as.
Houston: Southwest Center tor Urban Research, IeChnical Ke-p-57,
1974.

Report includes service of regulations, legislation, and opinion
concerning natural resources, principally land and water use. The
review is used as a basis for designing a viable incremental change
system developed with a scenario for developing the change program.
The report includes specific proposals pursuant to the enactment of
the system of growth.

J - 7

Nelson-Smith, A. Oil Pollution and Marine Ecology. New York: Plenum
Press, 1973.

This is an excellent compendium of data, references, and opinions
evaluating the effects of oil pollution at sea. The history of
petroleum industry, shipping, and pollution control at sea is
summarized. Sources of oil pollution at offshore production,
shipping, and harbor terminals are described. The chemical,
physical, and behavioral properties of spilled oil on marine
organisms, marine communities, and on marine-based economies
(tourism and fishing) may be one of the most comprehensive treat-
ments on the subject currently available. Institutional and
technical approaches to dealing with spills are described and
evaluated in terms of performance, problems, and limitations.

New England River Basins Commission. A Methodology for the Sitinq of
Onshore Facilities Associated With UUS De elopment: -Dratt Interim
Report #1. Resource and Land estigation kKALI) Project: 17=,
1976 (corrected).

This study is designed to provide information which will be of
immediate assistance to states involved in planning for the onshore
effects of OCS oil and gas activities. The four distinct phases of
OCS development are defined, but major emphasis is given only to
exploration and development. The study includes requirements for
maintenance of OCS development such as service bases, -platform
construction yards, refineries, housing, and others. Estimates of
land space and labor requirements for specific projects are also
provided. A hypothetical analysis of OCS activity in the Georges
Bank area surveys the implications for high and low find scenarios
and quantifies the impacts therein. Finally, an annotated summary
of priorities lists valuable environmental and governmental
considerations for OCS impacts.

New Hampshire. Department of Resources and Economic Development. The
Impact of Offshore Oil - New Hampshire and the North Sea Experier7ce-
Concord, New Hampshire: New Hampshire Uepartment ot Resources
Economic Development, 1975.

The State of New Hampshire has only 18 miles of shoreline and no oil
or gas wells but is in the forefront of encouraging development of
the Atlantic OCS. This report analyzes the development of oil and
gas production in the North Sea and its impact on Scotland. A
"Background" chapter includes a discussion of North Sea and
Atlantic OCS exploration and production. The report includes an
overview of techniques and types of equipment used in the offshore
oil industry. Includes recommendations concerning New England port
development, heavy industry siting, refinery construction, oil
terminals, and more.

J - 8

Offshore Oil Task Group. The Georges Bank Petroleum Study. 3 vols.
Cambridge: Offshore Uil lask Group, Ucean Eng ing Dept.,
Massachusetts Institute of Technology, 1973.

A two volume study with executive summary reporting the expected
impacts of hypothetical Georges Bank petroleum development. Volume
I presents the model used to hypothesize petroleum prod"57 `7Mon
7chedules and the impact of several petroleum development scenarios
on the real regional income of New England. The "no offshore
petroleum cases" and 64 possible combinations of growth rate, cost
of capitol, refinery location, and distribution systems for off-
shore petroleum discoveries are analyzed. Volume II reports the
analysis of environmental implications of economic development
hypothesized in Volume I. The analysis is restricted to impacts on
air and water quality. Models are presented and results described
for estimating oil discharges and spill probability, trajectory,
and of specific biological impacts of such water pollution,
assuming no attempt is made to contain or remove spills. Two
chapters describe containment and removal practices and costs, and
background information on biological effects of spills, including
the physical and chemical qualities of different crudes. Impacts on
air quality are assessed for different sources of refinery
emissions, and are contrasted for the "all-oil" or oil and gas
offshore find cases.

Resources for the Future, Inc. Energy, Heavy Industry, and the Main Coast:
Report of the Governor's lasr orce. wasnington, D.C.: Resources
tor the Future, Inc., 19/2.

This document includes a background chapter on industrial develop-
ment on the Maine coast, projects possible futures and policies,
selects a preferred future, and makes policy recommendations.
Among the recommendations are: (1) heavy industry in the Maine
coastal zone should be confined to two zones and (2) oil development
should be limited to the Portland area with the addition of another
area at a 1 ater date. Appendix I includes an analysis of the
benefits and costs associated with the location of heavy industry on
the Maine coast, including effects on employment and income, impact
on tax base and public revenues, environmental damages, and more.

Resource Planning Associates, Inc. Identification and Analysis of Mid-
Atlantic Onshore OCS Imucts. 7ambridge, Massachusetts: Resource
Planning Associates, 19/b.

This study is primarily a critical analysis and evaluation of six
projects concerning OCS impacts. Although much of the book sorts
what is good and bad about the six individual studies, it is through
that comparison and sorting process that much can be learned about
the methodologies, points of interest, and policy issues of other
impact studies. For example, each of the analyses provides a

J - 9

particular projection concerning economic, social, land use, air
quality, water quality, and fiscal impacts of OCS development. For
each of the categories, the base cases are presented and the
methodology assumptions and findings of the six reports, where
applicable, are compared and analyzed.

Scott, John T. Profile Change When Industry Moves Into a Rural Area.
Madison: Oniversity OT Wisconsin Press, 19/3.

This report describes the economic and social impact experienced by
a rural area when industry is introduced. It includes a community
profile of resources and products of the community and concludes
that the primary impacts are on land use and support systems such as
water and energy supply. Impacts on labor force, retail sales,
housing, schools, and public services are also analyzed. Includes a
case study of the construction of a manufacturing establishment in
northern Illinois.

Smith, S. H. "Effects of Water Use Activities in Gulf of Mexico and South
Atlantic Estuarine Areas." In "Symposium on Estuarine Fisheries,"
pp. 93-101. Edited by R. F. Smith. In Transactions of the American
Fisheries Society. Vol . 95: American @ishery 5ociety`-7p`ec`1"5T
Publicati No. 3, 1966.

The effects of navigation projects' alterations of upland water
source, dredge and fill operations, and of hurricane protection
projects are evaluated with case examples from the Gulf of Mexico
and South Atlantic. The evaluation is conducted in the framework of
need and interest in the projects, benefit-cost ratios, and coastal
engineering factors such as tide, current, freshwater discharge,
salinity intrusion, flushing of pollutants, and shoreline
processes.

Texas A&M University. Analysis of the Role of the Gulf Intracoastal
waterway in Texas. College Station: lexas A&M University-,-=.
7ea Grant Doc. #IAMU-SG-75-202.)

Sections of this report describe environmental and economic
characteristics of the Texas regions bordering the G.I.W.W. or
being influenced by it. The value of this report lies in sections
other than this inventory. The chapter "Engineering Aspects of
Operation and Maintenance" includes for 17 sections of the Texas
G.I.W.W., maintenance requirements and dredging costs. The
economic impact on the State of Texas is summarized, alternatives to
federal funding of maintenance, and legal aspects involved in
continued operation and maintenance of the G.I.W.W. are contained
in three other significant chapters.

Texas. Office of the Governor. Office of Information Services. An
Economic Impact Analysis of the Proeosed 1974 Outer Continent-aT
7e IT 01 1 ana baS benera I Lease Sa le, UTTsnore I exas, by Herber=.
Grubb. Austin, lexas, 19/4.

J - 10

This report concludes that for each dollar of crude oil produced,
the Texas economy ef f ects are $2.41; and f or each dol 1 ar of ref i nery
output, the effect is $2.59. For each job in production, there are
6.8 jobs in the Texas economy; for each job in refining, there are
9.7 jobs elsewhere in Texas. In terms of OCS development, the
impacts from lease payments, construction, and production were
analyzed. The impact of the 1974 sale was estimated to range from
$16.3 billion to $29.9 billion in additional economic activity in
Texas.

Texas. Office of the Governor. Office of Information Services. Manage-
ment Science Division. Benefits and Costs to State and Local
Governments in Texas Resu=n from Uttshore Petroleum Leases on
@ederal Lands. Aus , lexas, 1974.

This study concludes that the impact on state and local revenue from
offshore production is less than from onshore production, and that
public service requirements cannot be financed using normal
mechanisms because a portion of the tax base (offshore physical
plant) is not available. The study estimates that the annual
revenue to state and local governments in Texas will be $48.9
million, but that services costing $111 million per year will be
required, resulting in a net cost of $62.1 million annually.

THK, Inc. Impact Analysis and Development Patterns Related to Oil Shale.
Denver: THK, Inc., 19/4.

This report assesses the impact of growth on the existing economic,
social, and physical conditions of a three-county area in Colorado.
Three scenarios are applied: (1) normal growth trends, (2) moderate
oil shale development, and (3) intensive oil shale development. A
discussion of land area and service requirements to meet the
projected population increases is included. Public facilities
needs and costs and population distribution in such areas as
development patterns, transportation, land use planning, and
housing.

U.S. Army Corps of Engineers. Crude Oil and Natural Gas Production in
Navigable Waters Alon@ the lexas Coast: Final Environmental Stat7'
Tent. Galveston: U.S. Corps of Engineers, 19/Z.

Following EPA guidelines for formating EIS's, this statement
summarizes the environmental setting of the Texas Coastal Zone,
especially pertaining to mineral resource development in the Texas
OCS. The section on environmental impact gives review of probable
and possible affects of permitting, production, including secondary
activities of dredging and spoil placement operations, construction
of drilling basins and access channels, as well as installation and
operation of producing platforms. Impacts discussed are of spills,
subsidence, navigation impairment, spoil disruption of marshland,
and of dredging turbidity.

J - 11

U.S. Army Corps of Engineers. Maintenance Dred@ing in the Corpus Christi
Ship Channel: Final Environmental 515-cemenf. Galveston:
Corps of Engineers, 19/5.

Following EPA guidelines for EIS formats, the report summarizes the
geology, climate, wildlife and natural resources, economies, and
port facilities in the region of the Corpus Christi Bay system. The
section on environmental impact includes evaluation of direct
impact of dredge and disposal operations on vegetation, benthic
organisms and water conditions. Results of a monitoring program to
assess the affect of dredging and a review of other studies provides
a good base for determining probable extent of impact of dredging
operations in other areas.

U.S. Congress. House of Representatives. Ad Hoc Select Committee on Outer
Continental Shelf. Effects of Offshore Oil and Natural Gas Develop--
ment on the Coastal Zone. 94th Uong., Znd @iess., 19/b.

This comprehensive study includes oil and gas resource estimates,
OCS development equipment descriptions, an analysis of leasing
systems, offshore and onshore environmental impact, socioeconomic
impact on the Coastal Zone, impacts on the fishing industry, and
alternative means of compensating coastal states for OCS impacts.
The report concludes that OCS operations are environmentally sound;
that oil spills are not a major problem; that onshore impacts will
be primarily local; and that local governments face expenditures in
advance of projected, future tax revenues.

U.S. Congress. Office of Technology Assessment. Ocean Assessment Program.
Coastal Effects of Offshore Ener@y Development: Oi 1 and Gas
@iystems. 9bth Cong. , 2nd Sess. , 1976. k Summary ot interim report.)

This study analyzes the coastal effects of offshore oil and gas
development and the consequences of such coastal effects for New
Jersey and Delaware. The issues of a federal management system,
state access to OCS information and decisions, fiscal effects on
state and local governments, oil spill liability and compensation,
management of technologies, and others are analyzed, and
Congressional options are outlined.

U.S. Congress. Office of Technology Assessment. Coastal Effects of
Onshore Ener@Z Systems. Vol. I and Vol. II: workin2 Papers.
WashingtoF7, U.U.: bOvernment Printing Office, November, 19/b.

A two-volume study which isolates the likely effects of OCS oil and
gas development, deepwater ports, and floating nuclear plants on
the coastal areas of New Jersey and Delaware. In terms of OCS oil
and gas production, the study fully described the technology and
equipment necessary for the operational ization of two distinct
production level scenarios. The study concluded, in part, that OCS

J - 12

production is not likely to damage the environment if properly
managed and monitored and that mid-Atlantic State governments will
probably realize a net fiscal benefit, although local dE!fiCitS
would occur. The study includes an extensive legal/insti-
tutional/regulatory analysis. Volume II contains ten working
papers including analyses of biological impacts, fiscal effects,
and oil spill risk. The project included a public participation
element.

U.S. Congress. Senate. Committee on Commerce. Development of Oil and Gas
on the Continental Shelf. 93rd. Cong., 2nd Sess., 1974.

.A short but complete report which estimates continental shelf
reserves, outlines legal and jurisdictional problems, isolates
environmental issues, describes offshore facilities and offshore
leasing procedures, and describes pending legislation associated
with the continental shelf. A reverse chronology of OCS activities
and lists of Congressional Reports and Hearings are included.

U.S. Congress. Senate. Committee on Commerce. Energy Facility Siting in
Coastal Areas. 94th Cong., Ist Sess., 1975-.,

A comprehensive analysis of current OCS activities, constraints on
and problems associated with energy facility siting in coastal
areas, and effects of OCS development. The report includes an in-
depth analysis of the Coastal Zone Management Act of 1972 and its
proposed amendments. Appendices include energy siting programs in
California, Montana, Maryland, and Minnesota; and a comparison of
alternative methods for distributing coastal energy impact funds.

U.S. Congress. Senate. Committee on Commerce. North Sea Oil and Gas:
Impact of Development on the Coastal Zone. 93rd Uong., Znd Sess.,
19/4.

Drawing on the North Sea experience, this study drew several
conclusions but did not recommend specific legislation. The
economic impact and leasing system, effect on employment, socio-
economic and marine environment problems, onshore planning, and a
Shetland Island case study are included. The study isolated several
implications for the United States: (1) the Federal government
should prepare and inform state and local governments as to coastal
facilities and services to be needed, (2) state and local govern-
ments should play significant roles in planning, and (3) broad
national, state, or local interests should be taken into consider-
ation in the planning process.

U.S. Congress. Senate. Committee on Commerce. Outer Continental Shelf
Oil and Gas Development and the Coastal Lone. gird Cong., 2nd
Sess., 19/4.

J - 13

An extensive discussion of OCS information needs; socio-economic
and environment impacts of OCS development on the Coastal Zone;
leasing, production, and transportation practices; and more. The
report recommends that (1) legislation to improve OCS policies and
practices should be enacted; (2) no leasing in frontier areas should
occur until the Interior Department demonstrates that such leasing
is necessary, safe, and in the public interest; and (3) OCS leasing
programs should be replaced with more realistic lease targets.

U.S. Congress. Senate. Committee on Commerce. Outer Continental Shelf
Oil and Gas Leasing Off Southern California: Analysis of issues.
93rd Cong -, 2nd Sess., 1974.

Includes a historical background of California offshore oil and gas
development and procedures for leasing OCS lands. The study
recommends that (a) current leasing schedules should be replaced
with a lower level of leasing and frontier areas should be avoided,
(b) leasing procedures should include participation by State,
local, and regional officials, (c) the Federal government should be
responsible for exploration, (d) impacts on the Coastal Zone should
be carefully assessed, and (e) leasing programs should be justified
to Congress.

U.S. Council on Environmental Quality. OCS Oil and Gas: An Environmental
Assessment: Report to the President. 5 vols. Washington, U
Council o vironmental Quality,=4.

This assessment was prepared in response to President Nixon's
Apri 1 , 1973 request to study the environmental impact of oi 1 and gas
production on the Atlantic OCS and in the Gulf of Alaska. The 5
volume report documents the national and worldwide energy resources
and -reserves, technology for OCS development and environmental
protection, institutional and legal mechanisms for managing OCS
development, and the effect of unusual natural phenomena, such as
earthquakes and hurricanes, on OCS operations. Hypothetical
locations of production on the Atlantic OCS and in the Gulf of
Alaska are the base for evaluating the impacts of OCS development in
these areas on coastal economics, social infrastructure, land use,
and pollution, and are also the base for evaluating the probability
of oil spills and their magnitude of effect. The impact of high and
low levels of development are extrapolated from an extensive 1971
baseline economic, social, and environmental inventory to the years
1985 and 2000.

U.S. Department of Commerce. National Oceanic and Atmospheric Admini-
stration. Office of Sea Grants. The Impact of Offshore Oil
Production on Santa Barbara County, Ca nia, by @iusan M. Wilcox,
and Walter J. me e. Washington, U.C.7=epartment of Commerce,
1973.

J - 14

This study attempts to identify and measure the impact of oil
activity directly or indirectly on Santa Barbara County revenues
and expenditures for the purpose of determining net gain or loss to
the County due to offshore oil production. Wage income, taxes,
government expenditures, other economic sectors (fishing, tourism,
etc.), and environmental changes are analyzed. The study concluded
that the net impact of offshore oil production on the Santa Barbara
County budget is $1,679,795 in annual revenues.

U.S. Department of Interior. Bureau of Land Management. Final Environ-
mental Statement: Outer Continental Shelf Oil and Gas General Lease
bales-Gult ot Mexico. New Orleans: U.S. Department of=e
Interior. tlexas 07 sales include numbers 34, 37, and 38; and
draft environmental statements for sales numbers 41 and 44.)

Environmental impact statements prepared pursuant to EPA guide-
lines. Include description of proposal, reserves, environment,
environmental impacts, mitigating measures, unavoidable impacts,
commitment of resources, alternatives, consultation and
coordination, 1:1,000,000 maps of the Texas coastal zone and OCS,
and various attachments.

U.S. Department of Interior. Bureau of Land Management. The Outer
Continental Shelf Oil and Gas Development Process: A BaCkgrouna
Paper for State Planners and Managers. Washington, U.C.: bLM, IV/b.

This paper provides an overview of the oil and gas development
process on the OCS in terms of development phases which can be
related to state coastal zone management efforts and other planning
programs. Brief discussions of each phase of OCS development
include approximate time frames; description of industry develop-
ment activities and correlated governmental actions; and the type
and rough magnitude, if available, of potential impacts that may be
expected from the activities of each phase.

U.S. Department of Interior. Bureau of Land Management, and College of
Marine Studies, University of Delaware. A Studx of the Socio-
Economic Factors Relatiu to the Outer Continental Snerr ot Tne =1-
Atlantic Uoast. 9 vols. Washington, U.C.: Liureau or=an
Managemen =, 3.

This study was designed to provide BLM with sufficient data to
describe the socio-economic impact of OCS development on the Middle
Atlantic Region. The study includes a description of the area's
industrial and commercial activities, including ports, manu-
facturing, tourism, and others; the area's petroleum industry; its
demography; and its land and water use, pollution sources, and
transportation systems. The report is not an assessment of impacts;
it provides data with which such impacts can be assessed.

.J - 15

U.S. Department of Interior. Geological Survey. Movement and Effects of
Spilled Oil Over the Outer Continental bheil- - Inadequacy
Lx1stent Data tor the Baltimore Canyon Irough Area-,-ry H. J. Kneoei.
Circular /UZ. Washington, U.L., 19/4.

An evaluation of the physical processes which determine the move-
ment and extent of oil spills on the outer continental shelf. The
paper includes a review of literature reporting on the Baltimore
Canyon Trough Area, and also an outline of the deductive approach to
the problem. It generally finds an inadequacy of data for suitable
predictions, a finding which is projected to other outer conti-
nental shelf areas in which leasing is occurring.

Vlachos, Evan, et al. Social Impact Assessment: An Overview. Fort
Belvoir,, Virginia`- U.@). Army Lngineer institure-=or Water
Resources, 1975.

This report, authored by a consultant team made up of members from
seven universities, presents an overview of the assumptions,
methodologies, procedures for data collection, and techniques of
conducting social impact assessment as part of an entire project
assessment package. The report recommends greater allocation of
resources to social impact assessment and the use of advisory boards
of social scientists. Also included is an extensive bibliography of
environmental social science reference works.

Washington, D.C. American Institute of Planners. David Stoloff and Judith
Stoloff. "Social Impact Assessment: A Tool for Project Planning."
Paper presented at the 58th Annual Conference, AIP, San Antonio,
Texas, 1975.

This paper describes a method of social impact assessment developed
as part of a study commissioned by the U.S. Corps of Engineers for
two water resource development projects in Eastern Kentucky. The
authors isolated five measures of quality of life: (1) Income, (2)
Housing, (3) Isolation-integration and subjective sense of well-
being, (4) Health, and (5) Outdoor recreational opportunities.
Positive and negative impacts on relocatees and residents of area
surrounding the project were analyzed, and recommendations for
project modification were made.

Woodward-Clyde Consultants. Mid-Atlantic Regional Stu y: An Assessment
of the Onshore Effects ot Uttshore ull and bas Lievelopment. wo-37-
ward-Clyde Consultants, 19/5.

This report attempts to describe certain efforts which may result
from OCS development and to provide a guide for informed decision-
making. The study developed an OCS development scenario. The
report concluded that: (a) development can proceed only if
accompanied by some onshore construction, but the environmental

J - 16

effects will be minor if suitable sites are selected; (b) OCS
related employment will be modest, and the demands on services will
be small compared to the demand created by growth unrelated to OCS
development; and (c) the economic benefits accruing to the region
may defray costs of providing services to an increased population.

J - 17

GROUP I: NON-ANNOTATED

Ahern, William R. Oil and the Outer Continental Shelf; The Georges Bank
Case. Cambridge: Ballinger Publishing Co., 1973.

Alaska Consultants, Inc. Marine Service Bases for Offshore Oil Development
Juneau: Alaska Consultants, Inc., 1977.-

American Petroleum Institute. Basic Petroleum Data Book: Petroleum
Industry Statistics. Washington, D.C., 1975.

American Petroleum Institute. Division of Production. Primer of Oil and
Gas Production. Dallas, Texas: API, 1962.

American Petroleum Institute. Joint Association Survey of the U.S. Oil and
Gas Producin Industry. Section 1: Drilling Uosts. washingfon,
D.C., A1317976.

American Petroleum Institute. The Why and How of Undersea Drilling.
Washington, D.C.: American Petroleum Institute, 1974.

Arthur D. Little, Inc. The Texas/Louisiana Petrochemical Industry: Its
Impact on the United States Economy. Keport to the Petroc-Fe-m-1-c-aT
Lnergy Group, June, 19/b.

Battelle Columbus Laboratories. Environmental Aspects of Gas Pipeline
Operations in the Louisiana Coastal Marshes. Columbus, Uhio:
Battelle Columbus Laboratories, 19/4.
Baumgartner, D. J. and Trent, D. S. Ocean Outfall Desi@n. P art I
Literature Review and Theoretical Developm t. April, 19N.

Baumgartner, D. J. ; Trent, D. S. ; and Byram, K. V. User's Guide and
Documentation for Outfall Plume Model. Working Paper RF=.
Corvallis, Oregon: Pacific Northwest W@ter Laboratory, 1971.

Blevins, Audie L.; Thompson, James G.; Ellis, Carl. Social Impact Analysis
of Campbell County, Wyoming. Wyoming Environmental lnstituFe-,
December, M4.

Booze, Allen and Hamilton, Inc. A Procedures Manual for Assessing the
Socioeconomic Im2act of the ConstruET-ion and Operation of Co7a
Utilizati3-nFacilities in the old West Reg'ion. Washington, 19

Bragg, Daniel M. and Bradley, James R. The Economic Impact of a Deepwater
Terminal in Texas. College Station, Texas: lexaS A&M universiry-1
Industriar-T-conomics Research Division, 1972. (Sea Grant Doc.
#TAMU-SG-72-213.)

J - 18

Bragg, Daniel M. Survey of the Economic and Environmental Aspects of an
Onshore Deepwater Port at Galveston, Texas. Part 1: Potential
Economic Effects, and Part 2: Environmental Considerations.
College Station,Texas: Texas A&M University, Industrial Economics
Research Division, 1974. (Sea Grant Docs. #TAMU-SG-74-213 & 214.)

California State Polytechnic University. Department of Landscape Archi-
tecture. School of Environmental Design. Laboratory for Experi-
mental Design. A Planning System for the Coastal Plain of San Diego
County. Pomona, California, 1972.

Callaway, R. J.; Byram, K. V.; and Ditsworth, G. R. Mathematical Model of
the Columbia River from the Pacific Ocean to Bonneville Dam. Part
I-Theory, Program Notes and Programs and Part 2- Input-Output
and initial Verification Procedures. Corvallis, Washington:
Pacific Northwest Water Laboratory, 1971.

Chabreck, R. H. Proceedings: Coastal Marshes and Estuary Management
Symposium. Baton Rouge: Louisiana State University, Division of
Continuing Education, 1972.

Chem Systems, Inc. Structure and Competition Within the Petrochemical
Industry and Economic impact ot 1973-74 Petrochemical Shortage.
NTIS No. PB-254693, March, 1976.

Chen, C. W. and Orlob, G. T. Ecological Simulation for Aquatic Environ-
ments, Final Report. Walnut Creek, California: Water Resources
Engineers, Inc., 1972.

Chen, C. W. and Orlob, G. T. Ecological Simulation for Aquatic Environ-
ments, First Annual Report. Walnut Creek, California: Water
Resources Engineers, Inc., 1971.

Coastal Society. The Present and Future of Coasts. Bethesda, Maryland:
The Coastal Society, 1975.

Council on Environmental Quality. Environmental Impact Statements: An
Analysis of Six Years' Experience by Seventy Federal Agencies.
Washington, D.C.: Council on Environmental Quality, 1976.

Devanney, J. W. The OCS Petroleum Pie. Cambridge: MIT Sea Grant Program,
February 28, 1975.

Englander, Ernie and Feldmann, Jim. Preliminary Report - Petroleum
Development on the U.S. Outer Continental Shelf: Policy Options in
Leasing and Federal-State Relationships- University of Washington,
Program in Social Management of Technology, 1976.

Environmental Consultants. Environmental and Socio-Economic Baseline of
the Gulf of Mexico Coastal Zone and Outer Continental Shelf. 3
vols. Dallas: Environmental Consultants, 1974.

J-19

Feiveson, Harold A. New Use Demands on the Coastal Zone and Offshore Areas
of New Jersey and Delaware: A Regional As ssment ot the Potentia
Ettects of ProposeErOttshore oleum Production, =ee=pwaer Ports
anFRUE-Tear Power Plants. Princeton University Press, 19/4.

Frank, James E. Final Report on the Fiscal Impact Project. Tallahassee:
Florida St-aTe university, 19757

Gabler, L.R. "Population Size as a Determinant of City Expenditures and
Employment - Some Further Evidence". Land Economics, May, 1971.

Garrison, Charles B. "New Industry in Small Towns: The Impact on Local
Government". National Tax Journal, December, 1971.

Gusey, William F. and Maturgo, Z. Petroleum Production and Fish and
Wildlife Resources of the Gulf ot Mexico. Houston: Shelf Oil To.,
19/Z.

Hirsch, W.Z. "Expenditures Implications of Metropolitan Growth and Con-
solidation". Review of Economics and Statistics, August, 1959.

Hirsch, W.Z. "Fiscal Impact of Industrialization on Local Schools". The
Review of Economics and Statistics, May, 1964.

Hirsch, W.Z. "The Supply of Urban Public Services". Issues in Urban
Economics. Edited by Harvey S. Perloff and Lowdon Wingo-,-=r.
Ta-Tri-more: The Johns Hopkins Press, 1968.

Hoover, Edgar M. Introduction to Regional Economics. 2nd ed. New York,
N.Y.: Alfred A. Kno-pr, Inc., 1975.

Jet Propulsion Laboratory. Program Definition for the Development of
Geothermal Energy. Vol. 1: back@round and Propram Definition
Summary; 75`1. 11: Program Detinition Development Rationale an
@ro r am Descriptions; Vol. III: Appendices. Pasadena:
California InstitMe-F-rechnology, 1975.

Johnson, Fred. "A Progmatic Methodology for Measuring Fiscal Impacts of
Industrial Location". The Review of Regional Studies, Vol. 4,
Supplement.
Jones, Lonnie L. , et al . Imeact of Commercial Shrimp Landings on the
Econou of Texas and Coastal Kegions. Uollege Station, lexas:
7-exaS A & M university. Department ot Agricultural Economics, 1974.
(Sea Grant Doc. #TAMU-SG-75-204.)

Kash, Don E.; Irvin L. White, et al. North Sea Oil and Gas: Implications
for Future United States DevLlopment. Norman: -7niversity of
Oklahoma Press, 19/77

J - 20

Kilpatrick, Joseph E. The Role of North Carolina in Re@ulating Offshore
Petroleum Development. Chapel Hill: versity ot North Carolina,
1975. (Sea Grant Doc. #UNC-SG-75-09.)

Lai, N.W., et al. A Biblio5raphy of Offshore Pipeline Literature. College
Station, lexas: lexas A & M University, Depar-Em-e-nT of Civil
Engineering, 1973. (Sea Grant Doc. #TAMU-SG-74-206.)

Lohse, Alan, et al. International Inventory and Forecast of Offshore
Petroleum and Mineral Activity. Galveston: G u I f U n i v Fr-s-i"t-l"e-7
ResearcF Consortium, 1973.

Mallon, Lawrence G. Offshore Oil Drilling and Onshore Impact: The
Legal /Insti tuti onal Regulatory Framework. University of Miami, Sea
go-
Grant institutional Program, Keport FY 75-5. 1974.

Marine Technology Society. Committee on Ocean Economic Potential:
Assessin@ Technology for Marine Resource Development. Washington,
U.U.: National Oceanic and Atmospheric Ministration, 1914.

Metcalf and Eddy, Inc.; University of Florida; and Water Resources
Engineers, Inc. Storm Water Management Model. 4 vols. EPA Report
No. 11023DOC. WSTT'ington, U.C.: (iovernme-nT-Printing Office, 1971.

Miernyk, William H. The Elements of Input-Output Analysis. New York:
Random House, 1-967-

Miloy, John and Copp, Anthony E. Economic Impact Analysis of Texas Marine
Resources and Industries. College Station, Texas: re-x-a s- 7W
University Sea GranE-7r-ogram, 1970.
Miloy, John and Phillips, Christian. Primary Economic ImRact of the Gulf
Intracoastal Waterway in Texas. Uol lege 5tation, lexas: lexag A&M
University, industrial Economics Research Division, 1974. (Sea
Grant Doc. #TAMU-SG-74-211.)

Mitchell, Edward J., ed. The Question of Offshore Oil. Washington, D.C.:
The American Enterprise Institute, Natio-n-a=nergy Project, 1976.

Murfee, G. W.; Masch, F. D.; and Fruh, E. G. Final@Report on Estuarine
Modeling. Austin, 1974.

Offshore. Petroleum Publishing Co., Tulsa, Oklahoma. Various Issues
cited, including: April, 1973; September, 1973; December, 1974;
February, 1975; and February, 1976.

Oil and Gas Journal. Petroleum Publishing Co., Tulsa, Oklahoma, various
issues cif-eT, including: July, 1974; January 5, 1976; February 2,
1976; March 29, 1976; October 4, 1976; October 11, 1976; November 8,
1976; November 29, 1976; and December 6, 1976.

J - 21

Owen, H.J.; Grimsrud, G. Paul; and Finnemore, E. John. "Evaluation of
Water Quality Models: A Management Guide for Planners." U. S.
Environmental Protection Agency, 1975.

Phillips, Christian. Indirect Economic Effect from Gulf Intracoastal
Waterway Commerce in Texas. Uollege Station, texas: lexas A&R
niversity, industri-a-T-Z-conomics Research Division, 1974. (Sea
Grant Doc. #TAMU-SG-74-218.)

Pritchard, D. W. "Estuarine Circulation Patterns." Proceedings of
American Society of Civil Engineers. Vol. 81, No. 77. 1955.

Pritchard, D. W. Estuarine Hydrology. New York: Academic Press, 1956.

Rapp, Gerald R.; Franch, David M.; and Miloy, John. Economic Development
Study of the Texas Coastal Zone. College Station, texas: texas UR
Un-1v--e_rs_1-ty_9 Industrial Economi-cs Research Division, 1972. (Sea
Grant Doc. #TAMU-SG-72-212.)
Resources for the Future. Toward Resolviu Problems in Outer Continental
Shelf Technology. Wash i ngtoh,, U. Lo. Kesources Tor the Future,
1974.

Rogers, William B. et al. Petroleum Exploration Offshore From New York.
Albany: University of the State of New York, 19/3.

Scott, Claudia Devita. Forecasting Local Government Spending. Washington,
D.C.: The Urban institute, 1972.

Scott, Stanley and Feder, Edward L. Factors Associated With Variations in
Municipal Expenditure Levels. Berkeley: Bureau ot 1,5511c Mini-
ration, University of California, 1957.

Shaffer, Ron and Tweeten, Luther. "Measuring Net Economic Changes from
Rural Industrial Development: Oklahoma". Land Economics, August,
1974.

Shields, Mark A. "Social Impact Studies: An Expository Analysis."
Environment and Behavior. Vol. 7. No. 3. New York: Sage Publi-
cations, Inc., @eptemFe_r. 1975. pp. 265-284.

Snyder and Heathcote, Inc. Conference on Offshore Oil. Vol. 1:
Reporter's Transcript of Proceedin@s re: Conterence on Offshore
'a I I , I hurSday, March LOS Ange I es: Snyder and HeathcotF.-
Inc., 19/5.

Sorenson, J. C. A Framework for Identification and Control of Resource
Degredation and Conflict in t5e MultipT Use of the Coastal To-ne.
Berkeley: Uepartment of Landscape Arcnitecture,, University of
California, 1971.

J - 22

Sorenson, Jens and Demers, Marie. Coastal Zone Bibliography: Citations to
Documents on Planning,, Resd-urces management and impact Asse7sment.
La Jol la, California: University of California, InstitM--of
Marine Resources, 1973. (Sea Grant Pub. #8.)

Stenehjem, Erik J. Regional Studies Program. Argonne National Laboratory.
Forecasting the ocal Economic Impact-s-of Energy Resource Develop-
ment: @ Methodolo@ical Approach. Springfield,, Vi.rginia: National
lechnical Information bervicF, U.S. Department of Commerce,
December, 1975.

Summers, Gene F., et al. Industrial Invasion of Non-Metropolitan America:
A Quarter Century of Experience. Madison, Wisconsin: U07777`y7o
Wisconsin, Department of Rurar Sociology, 1974.

Systems Control, Inc.; George S. Nolte and Associates; and Snohomish
County Planning Department. Urban Systems Engineerin@ Demon-
stration Project, Final Report. Vol. II - Methodology. EverFe,
Washington',-=.

Technical Papers From School of Offshore Operations. 3 vols. 1975-76.

Texas. General Land Office. Coastal Management Program. Working Papers
IV, Volume II, Appendices. Austin, 1976.

Texas. Office of the Governor. An Introductory Guide to the Use of the
Texas Input-Output Model for businessmen and Development urqani-
zations, by Herbert W. Grubb. (Draft) Austin, un ed.

Texas. Office of the Governor. Water Resources Planning: Analytic
Techniques and Polic4 ImpliEations From a State viewQoint-,-7y
Herbert W. Grubb, mi [ton L. Ho I I Oway, and Jean U. Wi I I i ams.
Austin, undated.

Texas. Office of the Governor. Energy Advisory Council. An Economic
Analysis of Declining Petroleum Supplies in Texas: Income, Employ-
ment,, lax and Production Lttects as Measured by Input-UutpuF -and
Supply-Demand Simulation Models, by Milton C. Holloway, Herbe--r=.
Grubb, and W. Larry Grossman. -Austin, 1975.
Texas. Office of the Governor. Energy Advisory Council. Ener@y Develop-
ment and Land Use in Texas, by William F. MacFarland. Project NO.
E/S-1. Austin, 197r-

Texas. Office of the Governor. Energy Advisory Council. Energy Supply
and Demand in Texas for the Period 1950-1973, by Herbert W. brubb
and Milton Holloway. Project No. b/1)-l.-IMstin, 1974.

Texas. Office of the Governor. Energy Advisory Council. Existing Energy
Law and Regulatory Practice in Texas, by Tom Edwards, et al-
"Project No. L/K-i. Austin, 1914.

J - 23

Texas. Office of the Governor. Energy Advisory Council. Impact on Air
Quality of Alternate Strategies for the Production, Distribution
and Utilization of Energy in Texas 1975-2000, by Bill Stew
Project No. E/S-2. Austin, 1975.

Texas. Office of the Governor. Energy Advisory Council. Impact on Texas
Water Quality and Resources of Alternate Strategies for Production,
Distribution, and Utilization ot Energy in Texas in the Period 1974-
2000, by Gerard A. Rohlich. Project No. E/S-3. Austin, 1975.

Texas. Office of the Governor. Energy Advisory Council. Importing Fuels
and Petrochemical Raw Materials for Texas, by Sadler Bridges.
Project No. S/D-7. Austin, 1975

Texas. Office of the Governor. Energy Advisory Council. Legal and
Regulatory Policy Aspects of Energy Allocation, by Diane Wood.
Project No. L/R-4. Austin, 1974.

Texas. Office of the Governor. Energy Advisory Council. Legal Aspects of
State-Owned Oil and Gas Energy Resources, by Dan S. Boyd. Project
No. L/R-5. Austin, 1974.

Texas. Office of the Governor. Energy Advisory Council. Natural Gas
Decontrol Study. Report No. 76-03-01. Austin, 1976.

Texas. Office of the Governor. Energy Advisory Council. Sociological
Dimensions of the Energy Crisis, by David Gottlieb. Project No.
L/S-5. Austin, 1974.

Texas. Office of the Governor. Energy Advisory Council. State/Federal
Regulation of Natural Gas, by Mark Lee. Project No. L/R-7. Austin,
1974.

Texas. Office of the Governor. Energy Advisory Council. Tax and Other
Legal Incentives to the Increased Production of Energy Resources,
by Michael T. Johnson and Tom Edwards. Project No. L/R-6. Austin,
1975.

Texas. Office of the Governor. Energy Advisory Council. Texas Energy
Scenarios, by R. D. Finch and Harriet Hahn. Project No. Special
Project F. Austin, 1975.

Texas. Office of the Governor. Energy Advisory Council. Texas Natural
Gas Tax Structure Alternatives: Implications and Impacts. Report
No. /6-04-01. Austin, 1976.

Texas. Office of the Governor. Energy Advisory Council. U.S. Energy
Development: Four Scenarios, by Frank Maslan and Theodore J.
Gordon. Project No. Special Project E. Austin, 1974.

J - 24

Texas. Office of the Governor. Office of Informatiom Services. The
Economic Impact on the Lower Rio Grande Re5ional Economy f-rom
Production of the Proposed Federal Offshore Lease Utt the South
lexas Coast, by Herbert W. Grubb. Austin, 1975.

Texas. Office of the Governor. by John S. Perrin. "Output Multipliers in
Input-Output Analysis." Austin, Texas: Office of the Governor,
1972.

Texas. Parks and Wildlife Dept. Evaluation of Effects of Various Coastal
Construction Methods. Austin: Fexas Parks and Wildlife Dept.,
T977-

Texas. University of Texas at Austin. Bureau of Economic Geology.
Evaluation of Sanitary Landfill Sites. Austin, Texas: University
of lexas, 1972.

Texas. The University of Texas at Austin. Hydraulic Engineering
Laboratory. "A Numerical Model for the Simulation of Tidal Hydro-
dynamics in Shallow Irregular Estuaries," by F. D. Masch, et al.
Technical Report HYD 12-6901. Austin: The University of Texas,
1969.

Texas. The University of Texas at Austin. Hydraulic Engineering
Laboratory. "A Short Term Conservative Transport Model for Shallow
Estuaries," by F. D. Masch, M. Warayanan, and R. J. Brandes.
Technical Report HYD 12-7104. Austin: The University of Texas,
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Texas. The University of Texas at Austin. Hydraulic Engineering
Laboratory. "A Slowly Varying Conservative Transport Model for
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12-7102. Austin: The University of Texas, 1971.

Texas. The University of Texas at Austin. Hydraulic Engineering
Laboratory. "Influence of Tidal Inlets and Related Phenomena in
Estuaries," by V.J. Shankar and F.D. Masch. Technical Report HYD
16-7001. Austin: The University of Texas, 1970.

Texas. The University of Texas at Austin. Hydraulic Engineering
Laboratory. "Tidal Hydrodynamic Simulation in Shallow Estuaries,"
by F. D. Masch and R. J. Brandes. Technical Report HYD 12-7102.
Austin: The University of Texas, 1971.

Texas. Water Development Board. Analog - Model Studies of Groundwater
Hydrology in the Houston District, lexas. Austin, Texas: Water
Development Board, 1975.

Texas. Water Development Board. Analytical Techniques for Planning
Complex Water Resources Systems. Report 183. AusFi`n,_=.

J - 25

Texas. Water Development Board. Groundwater Simulation Program, Program
Documentation and User's Manual. Austin, 1975.
Texas. Water Development Board. Optimal Capacity Expansion Model for
Surface Water Resources Systems. Austin, 1975.

Texas. Water Development Board. Water Supply Allocation Model. Austin,
1975.

The Coastal Society. Proceedings of First Annual Conference. Bethesda,
Maryland: The Coastal Society, 1975.

Thompson, James G.; Blevins, Audie Jr.; Ellis, Carl. A Social Impact
Assessment of the Proposed Laramie River Station in Platte County,
Wyoming. Laramie, Wyoming: Department of Sociology, University of
Wyoming, December, 1975.

Tracor, Inc. Estuarine Modeling - An Assessment. Washington, D.C.:
Government Printing Office, 1971.

Tracor, Inc. Report on Mathematical Modeling Investigations of the Clear
Creek Basin. 1973.

Tracor, Inc. User's Manual for the Galveston Bay Project BOD/DO Models.
1974.

Tracor, Inc. User's Manual for the Nitrogen Model of the Galveston Bay
System. 1973.

Tracor, Inc. User's Manual for the Salinity Model of the Galveston Bay
System. 1976.

Tracor, Inc. User's Manual for the Temperature Model of Thermal Discharges
Into S Shallow Estuaries. 1973.

U. S. Congress. Office of Technology Assessment. An Analysis of the
Feasibility of Separation Exploration from Production of 0il and
Gas on the Outer Continental Shelf. 94th Cong., 1st Sess.,
1975.

U. S. Congress. Senate. Committee on Commerce. An Analysis of the
Department of Interior's Proposed Acceleration of Development of
Oil and Gas on the Outer Continental Shelf. 94th Cong., 1st. Sess.,
1975.

U.S. Congress, Senate. Committee on Commerce. The Coastal Imperative:
Developing a National Perspective For Coastal Decision making.
93rd Cong., 2nd Sess., 1974.

U.S. Congress. Senate. Committee on Interior and Insular Affairs.
National Crude Oil Refinery Development Act. Hearings before the
Committee on Interior and Insular Affairs, Senate, on S.2743, 93rd
Cong., 2nd Sess., 1974.

J - 26

U. S. Congress. Senate. Committee on Interior and Insular Affairs.
National Independent RefinerX Development Act of 1975. Hearin s
betore the Committee on Interior.and Insular Attairs=,en
Cong., 1st Sess., 1975.

U. S. Congress. Senate. Committee on Interior and Insular Affairs. Small
Refineries Exemption Act of 1975. Hearings before the Commitfe-eon
7nterior and Insular Affairs, 'Sen-a =e, on S.861, 94th Cong., 1st
Sess., 1975.

U. S. Department of the Army. Corps of Engineers. Institute for Water
Resources. Institutional Implications of U. S. Deepwater Port
Development for Crude U11 Imports, June, 19/3.

U. S. Department of the Army. Corps of Engineers. Institute for Water
Resources. U. S. Deepwater Port Study Conclusions, August, 1972.

Vol. I: Summary and Conclusion.
Vol. II: Community Studies and Projections.
Vol. III: Physical Coast and Port Characteristics, and
Selected Deepwater Port Alternatives.
Vol. IV: The Environmental and Ecological Aspects of
Deepwater Ports.
Vol. V: Transport of Bulk Commodities and Benefit-Cost
Relationships.

U. S. Department of the Army. Corps of Engineers. Lower Mississippi
Valley Division Report on Gulf Coast Deepwater Port Facilities:
Texas, Louisian@, Mississippi, Alabama, and Rorida. June-171=

Appendix A - "Congressional Resolutions."
Appendix B - "Environmental Guide for the U.S. Gulf Coast."
Appendix C - "Area Economic Study."
Appendix D - "Gulf Coast Port Inventory."
Appendix E - "Transportation and Cost Analysis."
Appendix F - "Environmental Assessment."
Appendix G - "Economic and Social Impact Analysis."
Appendix H - "Public Involvement."

U. S. Department of Commerce. National Oceanic and Atmospheric Admini-
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U. S. Department of Commerce. National Science Foundation. Program Plan
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J - 27

U. S. Department of Interior. Bureau of Land Management. Draft Environ-
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U. S. Department of Interior. Bureau of Land Management. Economic Study
of the Possible Impacts of a Potential Baltimore Canyon Sale.
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U. S. Department of Interior. Bureau of Land Management. Proposed OCS
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January, 1977.

U. S. Department of Interior. Bureau of Land Management. Revised
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U. S. Department of Interior. Bureau of Land Management and Geological
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U. S. Department of Interior. Bureau of Mines. Hazards of LNG Spillage in
Marine Transportation. Prepared for the U.S. Department of
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U. S. Department of Interior. Bureau of Mines. Hazards of Spillage of LNG
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U. S. Department of Interior. Bureau of Mines. Natural Gas Production and
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U. S. Department of Interior. Bureau of Mines. Offshore Petroleum
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U. S. Department of Interior. Bureau of Mines. Offshore Petroleum
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J - 28

U. S. Department of the Interior. Bureau of Mines. Impact of Petroleum
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U. S. Department of Interior. Bureau of Reclamation. Palmetto Bend
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U. S. Department of Interior. Geological Survey. Mineral Resource
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U..S. Department of Interior. Geological Survey. Conservation Division.
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U. S. Department of Interior. Geological Survey. Outer Continental Shelf
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U. S. Department of Interior. Geological Survey. Potential Mineral
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U. S. Department of Interior. National Park Service. Environmental Impact
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U. S. Department of Interior. Regulations Pertainin@ to Mineral Leasing,
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U. S. Department of Interior. The Role of Petroleum and Natural Gas From
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U. S. Energy Research and Development Agency. Manuin@ the Social and
Economic Impacts of Energy Developments . Washington, D.C.:
1976-.

J - 29

U. S. Federal Energy Administration. National Energy Outlook: Executive
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U. S. Federal Energy Administration. Project Independence Report.
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U. S. Federal Energy Administration. Report to Congress on Petrochemicals,
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U. S. Federal Energy Administration. Office of Economic Impact Analysis.
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1974. Wa gton, D.C.: l-ederal Energy AaMinistration, 19/5
U. S. Federal Power Commission. National Gas Su@ply and Demand, 1971 -
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U. S. National Petroleum Council. Committee on Factors Affecting U. S.
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U. S. National Petroleum Council. Committee on Factors Affecting U. S.
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U. S. National Petroleum Council. Committee on Petroleum Resources. Law
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U. S. National Petroleum Council. Committee on Ocean Petroleum Resources.
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U. S. National Petroleum Council. Committee on Petroleum Storage Capacity.
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U. S. National Power Commission. U. S. Energy Outlook, A Reeort of the
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Urban Pathfinders, Inc. Brown and Root Impact Study. Baltimore: Urban
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Virginia. Office of the Governor. Institute of Marine Sciences. Virginia
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J - 30

Wallace, W. E. Annual Report: Outer Continental Shelf Oil and Gas
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Walzer, Norman. "Economies of Scale and Municipal Police Services: The
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Warner, Maurice L. and Preston, Edward H. A Review of Environmental Impact
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Water Resources Engineers, Inc. A Water Quality Model of the Sacramento -
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Whitehorn, Norman C. Economic Analysis of the Petrochemical Industry in
Texas. College Station, lexas: 1exaS A&M University, Industrial
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Wolfq C.P. editor. Social Impact Assessment. Milwaukee: Environmental
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Wright, Arthur L. and Mathews, Warren T. Economic Development and Factors
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J - 31

GROUP II: SOCIO-ECONOMIC-DEMOGRAPHIC-INFRASTRUCTURAL

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Adams, Richard N. Energy & Structure. Austin, Tx. : University of Texas,
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Banton, Michael. editor. The Social Anthropology of Complex Societies.
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Bauer, Raymond A. editor. Social Indicators. Cambridge, Mass.: MIT
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Bernard, H. Russell; Pelto, Pertti J. editors. Technology and Social
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Bickert, Carl von E.; et. al. The Residents of Sweetwater County, WXoming.
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Black, C.E. The Dynamics of- Modernization. New York: Harper and Row,
1967. -

Blalock, H.M. Jr. editor. Measurement in the Social Sciences. Theories
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Bogdan, Robert and Taylor, Steven J. Introduction to Qualitative Research
Methods. New York: John Wiley and Sons, 19/5.

Bridges, Sadler. Importing Fuels and Petrochemical Raw Materials for
Texas. Austin, lexas: Governor's Energy Advisory Uoun-E-17,-
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Brim, John A. and Spain, David H. Research Design in Anthropoloav
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Brownsville, City of. Brownsville Urban Transportation Study 1970-1990.
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Brownsville Navigation District. Freight Traffic, 1975. Brownsville,
Texas,1975.

J - 32

Brownsville Navigation District. General Information on the Facilities
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Buchanan, Sidney G. "Texas Navigation Districts and Regional Planning in
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Campbel I , F. S. , ed. Port Dues, Charges and Accommodation. London:
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Carnes, Sam and Friesema, Paul . Urbanization and the Northern Great
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Central Power and Light Company. "Community Profile Audits." Corpus
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Classen, N. The Status of Public Health in the Texas Coastal Region.
Austin: Interagency Natural Resources Council, Uivi'Mion of
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Colson, Elizabeth. Tradition and Contract: The Problem of Social Order.
Chicago: Aldine Publishing CO., 19/4.

Cram, I.H., ed. Future Petroleum Provinces of the United States-Their
Geology and Potential: Western Gult Basin. 151sa: American
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Dalton, George M. Anthropological Research: The Structure'of Inquiry.
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Dalton, George M. editor. Economic Development and Social Change. New
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Port System. College Station, -re-xas. 1exaS A&M univers--ify-,
Department of Finance, March, 1974. (Sea Grant Doc. #TAMU-SG-74-
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J - 33

Gans, Herbert J. The Urban Villagers. New York: The Free Press of
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Goals for Corpus Christi. Choices Facing Corpus Christi. Corpus Christi,
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Gonzales, Nancie L. "The Sociology of a Dam." Human Organization.
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Howard, Weil, Labouisse, Friedrichs, Inc. Marine Transportation Industry.
New Orleans: Howard, Weil, Labouisse, Irrieariclis, Inc., August,
1976.

Ingram, B. 1. Economic Inventory of Recreation and Tourism Within the
Texas Coastal Zone liege Station: lexas A&M University, 19

International City Management Association. The Municipal Year Book.
Washington, 1976.

International Petroleum Encyclopedia, 1975. Tulsa: Petroleum Publishing
Co., 19/5 and 1976.

Kaplan, David and Manners, Robert A. Culture Theory. Englewood Cliffs,
N.J.: Prentice-Hall, 1972.

Lockwood, Andrews, and Newman, Inc. and Turner, Collie, and Braden, Inc.
Master Development Plan for the Port of Port Arthur. October, 1969.

Manners, Robert A. and Kaplan, David. Theory in Anthropology. New York:
Aldine-Athertone, 1968.

Massachusetts Institute of Technology. Department of Ocean Engineering.
Primar.y Physical Impacts of Offshore Petroleum Developments.
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Murray, Roscoe H.; Mobil Oil Corporation. Self -Sufficiency in United
States Refinin@ Capacity bX 1985. Remarks be the Mid-year
We-eting of the interstate 011 comFact Commission. Vail, Colorado,
June 30 -July 3,1974.

Naroll, Raoul and Cohen, Ronald. editor. A Handbook of Method in Cultural
Anthropologj. New York: Columbia University Press, 197U.

Nueces County Navigation Commission. Port of Corpus Christi Port Book.
July, 1973.

Offshore Rig Data Service. Offshore Rig Newsletter. P. 0. Box 19247,
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J - 34

Offshore Rig Data Service. The Offshore Rig Location Report. Houston,
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Ogburn, William F. On Culture and Social Change. Chicago: University of
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Olson, Mancur and Landsberg, Hans H. editor. The No-Growth Society. New
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Parson, Talcott. Societies. Englewood Cliffs, N.J.: Prentice-Hall,
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Pelto, Pertti J. Anthropolo@ical Research: The Structure of Inquiry. New
York: Harper & Row, 19/U.

Petroleum Extension Service. University.of Texas at Austin. A Primer of
Oilwell Drilling. Austin, Texas, 1970.

Petroleum Industry Yellow Pages: Gulf Coast Region 1976. P. 0. Box 25143,
Houston, Tex_as-*_WF`7co Atlas Co., 1976.

Poggie, John J. and Lynch, Robert. editor. Rethinking Modernization.
Westport, Conn.: Greenwood Press, 1974.

Pollnac, Richard B.; Gersuny, Carl; Poggie, John J. Jr. "Economic Gratifi-
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Port of Houston Authority. 1974 Annual Report. 1975.

Rapp, Gerald R.; French, David M.; and Miloy, John. Economic Development
Study of the Texas Coastal Zone. College Station, lexas: texas A&M
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Sahlins, Marshall D.; Service, Elman R. editors. Evolution and Culture.
Ann Arbor, Mich.: University of Michigan Press, 1966.

Schwirian, Kent P. editor. Contemporary Topics in Urban Sociology.
Morristown, New Jersey: Te-neral Learning Press, 177T-.

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Standard and Poor's. Oil - Gas Drilling and Services: Basic Analysis.
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Standard and Poor's Industr=yurveys, Section j, December 9, 19/6.

J - 35

Standard and Poor's. Oil: Basic Analxsis. Standard and Poor's Industry
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Steward, Julian. Editor. Contemporary Change in Traditional Societies.
Vol. 1 Introduction and African Iribes Urbana I]].: University of
Illinois Press, 1967.

Steward, Julian. Theory of Culture Change. Urbana, Ill.: University of
Illinois Pr:'e-ss, 1955.

Suttles, Gerald. The Social Construction of Communities. Chicago:
University of Chicago Press, 19/2.

Texas Aeronautics Commission. Texas Airport Directory. Austin, 1976.

Texas Commission on Law Enforcement Officer Standards and Education. Law
Enforcement Agencies of Texas: A Survey. Austin, 1973.

Texas. Comptroller of Public Accounts. "Annual Report 1972-1974," Austin,
Texas.

Texas. Comptroller of Public Accounts. 1975 Annual Financial Report. 2
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Texas. Department of Agriculture. Texas County Statistics., 1971-1974.

Texas. Department of Health Resources. 1975 Medical Facilities Plan.
Austin, 1975.

Texas. Education Agency. Annual Statistical Report Parts I & 11., 1970-
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Texas. Education Agency. School District Atlas. Austin, 1975.

Texas. Education Agency. 1975-76 Texas School Directory. Austin, 1975.

Texas. Employment Commission. "Total Employment and Wages Paid by County
by Industry 1972-1974.11 Unpublished data recorded on computer
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Texas. General Land Office. Coastal Management Program. The Coastal
Economy: An Economic Report. October, 1975.

Texas. Health Data Institute. Selected Demographic and Health Care
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Texas. Industrial Commission. "General Community Profiles." Austin:
Texas Industrial Commission, 1976. (Computer printouts, referenced
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J - 36

Texas. Industrial Commission. Texas Re2ional Market Projections, 1950-
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Texas Municipal League. Handbook for Mayors and Councilmen in General Law
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Texas Municipal League. Texas City Officials. Austin: Texas Municipal
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Texas Municipal League. "Texas Municipal Taxation and Debt 1975-1976."
Austin: Texas Municipal League, 1976.

Texas Municipal League. Water and Sewer Service in Texas Cities. Austin:
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Texas. Office of the Governor. Division of Planning Coordination.
Regional Councils in Texas: A Status Report and Directory, 1975.
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Texas. Office of the Governor. Governor's Budget Office. "State Agency
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1974.

Texas. Office of the Governor. Office of Information Services. Prelim-
inary Poeulation Projections for Texas Counties. Austin,-Te-xas,
7pril, 1974.-

Texas. Office of the Governor. Office of Information Services. Summary:
Data Presentation Capabilities for Health-Census Data - lhe lexas
Lconomy. Austin, Texas, April, 19/2.

Texas. Office of the Governor. Office of Information Services. Summary:
Selected Demographic Characteristics From Census Data-FourtT_7o_unT._
Austin, Texas, August, 19/2.

Texas. Parks and Wildlife Department. Outdoor Recreation in the Rural
Areas of Texas. Part III: Regions 19-3/. Austin, lexas : TPW9_1
1974. 1

Texas. Parks and Wildlife Department. Outdoor Recreation in the Urban
Areas of Texas. 4 vols. Austin: IND, 1977.-

Texas. Railroad Commission. Annual Report of the Oil and Gas Division.
Austin, Texas: Railroad-73mmission, 1975.

Texas. Railroad Commission. Annual Report of the Oil and Gas Division.
Austin, Texas: Railroad-76'mmission, 19/b.

Texas. Railroad Commission, Oil and Gas Division. Inactive Oil and Gas
Fields. Austin, Texas: Railroad Commission, 19/5.

J - 37

Texas. Railroad Commission. Monthly Refinery Reports. January, 1976.

Texas. Railroad Commission. Oil and Gas Annual Production by Active
Fields, 1974. Austin, Texas, 19/5.

Texas Research League. Bench Marks for 1976-77 School District Budgets in
Texas. Austin: Texas Researcfi League, 1976.

Texas Transportation Institute. Texas Airport System Plan. Phase III:
Summary Report. College "S =alon, Texas: Texas Transportation
Institute in cooperation with the Texas Aeronautics Commission,
1976.

Texas. University of Texas at Austin. Bureau of Business Research. Texas
Resources and Industries. Austin: University of Texas, 1975.

Texas. University of Texas at Austin. Bureau of Business Research. Texas
Resources and Industries 1976 Supplement. Austin: Universit-y-oT
Texas, 1977.

Texas. University of Texas at Austin. Center for Energy Studies.
Proceedings of the Second Geo@ ressured Geothermal Energy Con-
T-erence. Vol. 5-- Legal, Institutional, and Environmental, 19/6.

Texas. Water Development Board. "Economic Projections for Texas
Counties." Austin, Texas: Water Development Board, March, 1974.

Texas. Water Development Board. "Employment Projections for Texas
Counties." Austin, Texas: Water Development Board, March 1974.

Texas. Water Development Board. "Projections of Median Family Income by
Major-Minor City." Austin, Texas: Water Development Board, May,
1974.

Texas. Water Development Board. "Texas Water Development Board Population
Projections." Austin, Texas: Water Development Board, February,
1975.

Texas. Water Quality Board. Wastewater Effluent Report. (Computer
Printout). Austin, Texas:-Mal-er Quality board, T9767

U. S. Central Intelligence Agency. Intelligence Handbook: Export Refining
Centers of the World. wasmington, 0777-e-n =ral intelligence
Agency, June, 1975.

U. S. Congress. Senate. Committee on Interior and Insular Affairs. Oil
Refinery Capacity. Hearings before the Committee on Interior and
Tn"sular AtTlars, Senal-e, 93rd Congress, Ist Sess., 1973.

U. S. Congress. Senate. Committee on the Judiciary. The Petroleum
Industry. Hearings before a subcommittee of the Committee on the
Judiciar , Senate, on S.2387 and Related Bills, 94th Congress, 1st
Sess., 1976, pt. 3.

J - 38

U. S. Department of the Army. Corps of Engineers. Waterborne Commerce of
the United States. Washington, D.C.: Corps of Engineers, 190-1
1970, 197-7-an-T79-74 editions.

U. S. Department of Commerce. Bureau of the Census. Census of Agri-
culture, 1974. Washington, D.C.: Government P-77-ing Office,

U. S. Department of Commerce. Bureau of the Census. Census of Govern-
ments, 1972. Washington, D.C.: Government Prin ing Office, 19/4.

U. S. Department of Commerce. Bureau of Census. Census of Manufacturers,
1972. Washington, D.C.: Government Printing Uttice, 19/4.

U. S. Department of Commerce. Bureau of the Census. Census of Mineral
Industries. Washington, D.C., 1972.

U. S. Department of Commerce. Bureau of the Census. Census of Population,
1970. Washington, D.C.: Government Printing Office, I

U. S. Department of Commerce. Bureau of the Census. Census of Population,
1970 - General Social and Economic Characteristics. "as ington,
D.C.: Government Printing Office, 1972.

U. S. Department of Commerce. Bureau of the Census. Census of Retail
Trade, 1972. Washington, D.C.: Government Printing Office, 1974.

U. S. Department of Commerce. Bureau of the Census. Census of Selected
Services, 1972. Washington, D.C.: Governmenf Printing-TT'=ce,
19/4.

U. S. Department of Commerce. Bureau of the Census. Census of Wholesale
Trade, 1972. Washington, D.C.: Government Printing Offic-e,-T97T.-

U. S. Department of Commerce. Bureau of the Census. County and City Data
Book. Washington, D.C.: Government Printing OTT-ice, 1972.

U. S. Department of Commerce. Bureau of the Census. County Business
Patterns, 1972. Washington, D.C.: Government Printing 0fri-ce,
T973.

U. S. Department of Commerce. Bureau of the Census. "Current Population
Reports," P-25 Reports, 1970-1975. Washington, D.C.: Government
Printing Office.

U. S. Department of Commerce. Bureau of Economic Analysis. "Personal
Income by Major Source, 1969-1973." Unpublished data recorded on
computer tape. Washington, D.C.

U. S. Department of Commerce. Bureau of Economic Analysis. Survey of
Current Business. Washington, -D.C.: Government Printing Uftice,
Apri 1, 1977-

J - 39

U. S. Department of Commerce. Texas Landin2s 1974 Annual Summary. Current
Fisheries Statistics No. 6723. wasnington, 0777@overnment
Printing Office, 1975.-

U. S. Department of Interior. Bureau of Mines. Crude Petroleum, Petroleum
Products and Natural Gas Liquids. Mineral industry STrveys.
Washington, D.C.: Department o-f=n erior, For Various Issues 1973-
1976.

U. S. Department of Interior. Bureau of Mines. Minerals Yearbook., 1972
and 1973 editions.

U. S. Department of Interior. Bureau of Mines. Petroleum Refineries in
the United States and Puerto Rico as of January 1, 1976.
Washington, D.C.: Department of Interior.

U. S. Department of Interior. Bureau of Mines. United States Energy
ThrouV the Year 2000. (revised.) Washington, D.C.: Dep-a-M-ent ot
Interior, December, 1975.

U. S. Federal Energy Administration. Trends in Refinery Capacity, by E. L.
Peer and F. V. Marsik. Washington, D.C.,-Te-c-emre_r, 19/5.

U. S. Federal Energy Administration. Energy Resource Development. U. S.
Petroleum Refining Capacity. Washington, D.C.: Federal Energy
7Mministration, March 7T=,5.

U. S. National Petroleum Council. Committee on Emergency Preparedness.
Availability of Materials, Manpower, and E2uipment for the Explor-
ation, Uri I I ing anU Production ot U! I - 1974-197b. - Washington,
U.C.: NPU, 19/4.

U. S. Office of Economic Opportunity. Federal Outlays in Texas - Fiscal
Year 1975. Washington, D.C., 1977. -

U. S. President. Council of Economic Advisors. Economic Report of the
President. Washington, D.C.: Government Printing Uttl77,77-n-uary,
19777.-

Valentive, Charles A. Culture & Poverty. Chicago: University of Chicago
Press, 1968.

Vetter, Larry and Miloy, John. Economic Analysis of the Matagorda Bay
RujM. College Station, lexas: lexas A&M University, Industr=
rEonomics Research Division, 1973.

Wallace, Anthony F.C. Culture and Personality. New York: Random House,
1970. 2nd edition.

White, Leslie. Science of Culture. New York: Farrar, Straus, and Co.,
1949.

J - 40

Whitehorn, Norman C. Economic Analysis of the Petrochemical Industry in
Texas. College Station, Ix.: Industrial Economics Research
U'lvision, Texas A&M University, May, 1973.

Wilson, Godfrey and Monica. The Analysis of Social Change. Cambridge,
Mass.: Cambridge University Press, 195b.

J - 41

GROUP II: NATURAL RESOURCES

B. L. Nelson and Associates, Inc. Comprehensive Plan For Water, Sewer and
Storm Drainage in the Lower Rio Grande Val ley. Dal las: B.717e-Ts-o-n
ana Associates, Inc., 1971.
Barnes, V.E., project coordinator. Geolo2ic Atlas of Texas. Austin:
University of Texas, Bureau ot Economic GeologT.- (Ongoing
project.)

Bernard, H.A.; Major, C.F.; and Parrott, B. S. "The Galveston Barrier
Island and Environs: A Model for Predicting Reservoir Occurrence
and Trends." Transactions of the Gulf Coast Association of Geo-
logical Societies, Vol. 9, pp. Z21-224.; 1959.

Bernard, H.A. and Leblanc, R.J. The Quaternary of the United States.
"Resume" of the Quaternary logy of the Northwestern Gul
Mexico Province." New Jersey: Princeton University Press, 1965.

Berryhill, H. Jr., and Casby, S. Sediment Characteristics of the Inner
Shelf and Environmental Geolo2ical Map, Port Aransas, lexas-r--Tr-e-
TT
liminary Results. 5 Open File Keport 75-718.

Briggs, A.K. Archeological Resources in the Texas Coastal Lowland and
Littoral. Austin: lexas Water Uevelopment board, 19/1.

Bright, T.J. and Rezar, R., project coordinators. A Biological and
Geological Reconnaissance of Selected Topographic Features on 7-e
lexas Continental sn : A Final Reeort to the U.S. uepartmen=o
the interior Bureau ot Land Management. Col lege station: T-ex-as--W
University, Resear oundation anti Department of Oceanography,
1976.

British Petroleum Company, Ltd. BP Statistical Review of the World Oil
Industry 1975. London: British Petroleum Company Limite-d-,-ETM-
Brown, L. F., Jr., project coordinator. Environmental Geologic Atlas of
the Texas Coastal Zone. Austin: -7-ni"v'ersity of lexas, bureau--OT
Economic Geology. 7n-going project.)

Brown, L. F. Jr. , et al. "Natural Hazards of the Texas Coastal Zone."
Special Atlas. Austin: University of Texas, Bureau of Economic
Geology, 1974.

Brownstein, Arthur M. U.S. Petrochemicals. Tulsa, Ok: The Petroleum
Publishing Co., 1972.
Chittenden, Mark E., Jr. and McEachern, John D. Composition, Ecology, and
Dynamics of Demersal Fish Communities on the Northwestern Gulr-57
Mexico, with a Similar Syno"sis For the Entire Gult. L; o- r re 'ge
P
Station, Texas: IMS A & M University, Uepartment of Wildlife and
Fisheries Sciences, 1976. (Sea Grant Doc. #TAMU-SG-76-208.)

J - 42

F I awn, P. T. and Fisher, B. "Land-use Patterns in the Texas Coastal Zone."
In The Coastal Resources Mana@ement Programs of Texas, J. T. Goodwin
and-7-7-19oseley, eds. Austin: Office of the Go7-ernor, 1970.

Flawn, P. T.; Turk, L. J.; and Leach, G. H. Geological Considerations in
Disposal of Solid Municipal Wastes in lexas. bureau of Economic
Geology Circular /U-Z. Austin, 19/u.

Groppe and Long, Inc. Texas/Louisiana Petrochemicals. Prepared for
Petrochemical Energy Uroup, June, 1975.

Gulf Fishery Center of Galveston, Environmental Studies of the South Texas
Outer Continental Shelf 19/5. Vol. 1: Plankton and F-is-Fe-ries.
Washington, U.-C.: U.S. -Department of Commerce, National T=eanic
and-Atmospheric Administration, May, 1976.

Gulf Fishery Center of Galveston. Environmental Studies of the South Texas
Outer Continental Shelf 1975. Vol. 11: Physical Uceano2raphy,
Washington, D.C.: U.S. Department of Comme-F-c-e-,"Irational Oceanic
and Atmospheric Administration, May, 1976.

Hedgpeth, Joel W. "An Introduction to the Zoogeography of the Northwestern
Gulf of Mexico With Reference to the Invertebrate Fauna." In
Proceedings of the Institute of Marine Sciences. Vol. 3. Austin:
'University ot lexas, 1953-.

Holliday, B. "Matagorda Bay Circulation." In Resource Evaluation Studies
on the Matagorda BaX Area, Texas. College Station: I e_7777W
University', 19/3. (sea Grant Doc. #IAMU-SG-74-204.)

Kier, R.S., et al. Resource Capability Units II: Land Resources of the
Coastal Bend 5 lexas. Austin: Uommission Research on Water
Pesources, 19/4.

McGowen, J. H. and Brewton, J. L. Historical Changes and Related Coastal
Processes, Matagorda Bay Area, lexas. bureau of Economic Geology
"Special Keport. Austin, T97.

McGowen, J. H.; Groat, G.; Brown, L. F.; Fisher, W. L.; and Scott, A. J.
Effects of Hurricane Celia - A Focus on Environmental Geologic
Problems ot the Texas Coastal Lone. Bureau ot Economic Geology
Ueologic Circular /0-3. Austin, 1970.

McKann, M. Land Ownership Patterns. Austin: Coastal Resources Management
Program, 19/0.

Methodology to Evaluate Alternative Coastal Zone Management Policies:
Application in the Texas coasTal Lone. Austin: University ot
lexas, 19/6.

J - 43

Morton, R.A., et al . Geological Aspects of Barrier Island Development-
Mustang and North Padre Islands. (Unpublished report for NSF-
RANN.)

Oklahoma. University of Oklahoma. by the U. S. Geological Survey.
(computer printout.) OCS Lease Sale Data File - Gulf Coast.
University of Oklahoma Oil Services Intormation Genter, 1976.

Pace Company Consultants and Engineers, Inc. Petrochemicals in Texas -
1972. Prepared for Subcommittee of the Petrochemical Energy Group,
anuary 30, 1974.

Powell, L. D. and Woodbury, H. 0. "Possible Future Petroleum Potential of
Pleistocene, Western Gulf Basin." Memoir 15. Tulsa, Oklahoma:
American Association of Petroleum Geologists,-1971.

Research and Planning Consultants, Inc. Natural Resources, Socioeconomic
and Demographic Inventory of the Texas Coastal Areas. Austin,Texas:
RPC, Inc., 976

Rice Center for Community Design and Research. Environmental Analysis for
Development Planning- Chambers County, Texas. Vols. 1, 1
(Appendices), 2,3, and 5. Houston, 1974-1975.
Appendices, ~q2, 3, and 5. Ho ~quston, 1974-1975.

Rice Center for Community Design and Research. Texas Gulf Coast Program.
Research Report No. 1. Houston: Rice University, 1976.

Sherman, J. S. and Malina, J. F., Jr. "Water Needs and Residual Manage-
ment." Establishment of Operational Guidelines for Texas Coastal
Zone Management. Austin, Texas University of Texas, Bureau of
Economic Geology, 1974.

Shinn, A. D. "Possible Future Petroleum Potential of Upper Miocene and
Pliocene, Western Gulf Basin." Memoir 15. Tulsa, Oklahoma:
American Association of Petroleum Geologists, 1971.

Sneath, Peter H. A. and Sokal, Robert R. Numerical Taxonomy. San
Francisco: W.H. Freeman and Co., 1973.

Southeast Texas Regional Planning Commission. A Regonal land-Use
Plan for the South East Texas Region. Mederland, Texs, 1972.
Southeast Texas Regional Planning Commission. Parks, Open Space and
Recreational Plan For the South East Texas Region: An Initial
Element. Beaumont, Texas, 1972.

Suter, H. A. The Wildlife Resources of Coastal Texas. In The Coastal
Resources Management Programs of Texas Interi Report. Austin,
1971.

J - 44

Texas. Board of Water Engineers. Groundwater Resources of Victoria and
Calhoun Counties, Texas. Bulletin b202. Austin, 1962.

Texas. Coastal Management Program. Existing Data. Austin: Coastal
Management Program, 1974.

Texas. Coastal Management Program. Hearing Draft - Coastal Mana2ement
Program. Austin: Coastal Mana5ement Program, 19/6.
Texas. Coastal Management Program. Manuement of Bays and Estuaries: A
Conceptual Report - Phase 1. Austin: Uoastal Manag-e-m-e-n=rogram,
Mz.

Texas. Coastal Management Program. Resources of the Texas Coastal Region.
Austin: Coastal Management Program, 1775-.

Texas. Parks and Wildlife Department. Outdoor Recreation Plan. Austin:
TPWD, 1974.

Texas. Parks and Wildlife Department. Resources of the Texas Coastal
Zone. Austin, Texas: TPWD, 1976.

Texas. Parks and Wildlife Department. A Regional Environmental Atlas of
the Houston-Galveston Region. Austin:

Texas. Texas A & M University. Environmental Engineering Division. Waste
Mana2ement in the Texas Coastal Zone. College Station, Texas: Tex-as
A & M University, 1973.

Texas. Texas A & M University Research Foundation and Department of
Oceanography. A Biological and Geological Reconnaissance of
Selected Topo@raphicai Features on the lexas Continental-7 Re.
'New Orleans: U. S. Department of Interior, Bureau ot Land Wa-nage-
ment, Outer Continental Shelf Office, 1976.

Texas. Texas A & M University Water Resources Institute. Agricultural
Resources Related to Water Develoement in Texas. CollM station,
Texas: Texas A & K iversity, 1968.

Texas. University of Texas at Austin. Bureau of Economic Geology.
Environmental Geologic Atlas of the Texas Coastal Zone. Austin,
Texas: UnT'versity ot lexas, 19/3.

Texas. Water Development Board. Annotated Bibliography of Texas Water
Resources Reports of the Texas water Development Board and
Geological Survey Through August Texas Water Devero-pment
Board Report 199. Austin: TWDB, 1976.

Texas. Water Development Board. Compilation of Results of Aquifer Tests
in Texas, by B. N. Myers. Austin: TWUB, 19/3.

J - 45

Texas. Water Development.Board. Develoant of Groundwater Resources in
the Orange Count4 Area, Texas and Louisiana 1963-19/1. 1WUB Rep
76. Austin: 100b, T971.

Texas. Water Development Board. Groundwater Resources of Aransas County,
Texas. TWDB Report 124. Austin: TWUB, 19/U.

Texas. Water Development Board. Groundwater Resources of Brazoria County,
Texas. TWDB Report 163. Austin: IWO, 19/3.

Texas. Water Development Board. Groundwater Resources of Chambers and
Jefferson Counties, Texas. IWUB RLPURF 133. Austin: TWO,
19/1.

Texas. Water Development Board. Groundwater Resources of Jackson County.
TWDB Report 1. Austin: TWUB, 1969.

Texas. Water Development Board. Groundwater Resources of Matagorda
County, Texas. TWDB Report 91. Austin: NO, 19/7.

Texas. Water Development Board. Inventories of Irrigation in Texas 1958,
1964, 1969, 1974. TWDB Report 19 . Austin: MR.

Texas. Water Development Board. 1968 Texas Water Plan. Austin: TWDB.

Texas Water Development Board. A New Concept: Water For Preservation of
Bays and Estuaries. TWUB Keport U. Austin: IWUB, 1967.

Texas. Water Quality Board. A Policy for Effluent Standards for Domestic
Wastewater Treatment Plants (AS Revised). Austin: TWOB, 19/5.

Texas. Water Quality Board. Galveston Bay Project Summary Report.
Austin: TWQB, 1975.

Texas. Water Rights Commission and Attorney General. Lower Rio Grande
Valley Water Documents. Austin, Texas: Water Rights Commission,
7une, 19/1.

Tipsword, H. L., Fowler, W. A., Jr., and Sorrell, B. J. "Possible Future
Petroleum Potential of Lower Miocene-Oligocene, Western Gulf
Basin." Memoir 15. Tulsa, Oklahoma: American Association of
Petroleum Te-675'gis s, 1971.

U. S. Army Corps of Engineers. Reports on Hurricanes: Beulah - 1968, Fern
- 1971, Celia - 1972. Galveston: U.S. Corps of Engineers.

U. S. Bureau of Sport Fisheries and Wildlife. An Ecological Study Approach
to Wildlife Area Interpretive Planning: Aransas National wilall-re-
Retuge, lexas, 19/Z.

J - 46

U. S. Department of Agriculture. Comprehensive Study and Plan of Develop-
ment - Lower Rio Grande =a ey, lexas. lemple, lexas:
Conservation bervice, 19b9.

U. S. Department of Agriculture. Soil Survey - Jefferson County, Texas.
Soil Conservation Service Series 1960 No. 21. Washingto--n-,=.:
Government Printing Office, 1965.

U. S. Department of Agriculture. Soil Survey - Nueces County, Texas. Soil
Conservation Service Series 196U No. Zb. Washington, UT overn-
ment Printing Office, 1965.

U. S. Department of Agriculture. Soil Conservation Service. Type IV
Cooperative River Basin Studies. Fort Worth, Texas: __ 0=1
Conservation Service, 19/2.

U. S. Department of Agriculture. Forest Service. National Forest Land-
scape Management. 2 vols. Agriculture Hand6ook 4/8. WashingtoR,
TI.G., 19/b.

U. S. Department of Commerce. National Oceanic and Atmospheric Admini-
stration. Cooperative Gulf of Mexico Estuarine Inventory and Study
- Texas: Area Description, by Kichard A. Diener. NUAA lechn-773
Keport NMFb Circular-7=. Seattle: NOAA.

U. S. Department of Interior. Fish and Wildlife Service. An Assessment of
Estuarine and Nearshore Marine Environments, by the Virginia Insti-
tute ot Marine @)cience. UbUI. 19/b.

U. S. Department of Interior. Geological Survey. (computer printout.)
Platform Inspection SZstem. Washington, D.C.: U. S. Geological
7;urvey, Mruary 29, 19/b.

Wilhelm, 0. and Ewing, M. Geology and History of the Gulf of Mexico.
Geological Society Of America bulletin, V. 83.9 19/Z.

Williamson, J. D. M. Transactions. "Gulf Coast Genozoic History." Gulf
Coast Association of GeoT-0gical Societies. vol. 9, 1959.

J - 47

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