HomeMy WebLinkAboutAPA294...
·.
on the
SOCIAL,2CO OMIC, AND CULTUR
. of
N~ URAL RESOURCE DEVELO
Alaska Pacific University
Anchorage
August 25, 26, 27, 1982
L IMPACTS
Edited by Sally Y arie, M.Sc.
Department of Conferences and Institutes
University of Alaska, Fairbanks
1983
SPONSORS:
Alaska Council on Science and Technology
Alaska Department of Community and Regional Affairs
Alaska Department of Transportation and Public Facilities
Alaska Office of the Governor, Division of Policy Development and Planning
Alaska Power Authority
Office of the Federal Inspector, Alaska Natural Gas Transportation System
US Department of the Interior, Minerals Managements Service,
Social Economic Studies Program, Alaska OCS Region
US Department of Agriculture, Forest Service, Alaska Region
Proceedings
of the
Alaska Symposium
on the
Social, Economic, and Cultural Impacts
of
Natural Resource Development
(Alaska Pacific University, Anchorage: August 25-27, 1982)
Edited by Sally Y arie, M.Sc.
Department of Conferences and Institutes
University of Alaska, Fairbanks
1983
This project has been funded at least in part with Federal funds from the Office of
the Federal Inspector/ ANGTS under contract number OFI-82-0003. The content of
this publication does not necessarily reflect the views or policies of the Office of the
Federal Inspector, nor does mention of trade names, commercial products, or
organizations imply endorsement by the·u.s Government.
ARLIS
Alaska Resource!!-Library & Information Services
Libra7 Building, Suite 111__,
321 Providence Drive
AnchOrage, AK 99508-4614
I.
II.
III.
IV.
Foreword
Sheila Helgath
Keynote Addresses
Introduction
Ron Inouye
Social and Cultural Impact Issues
John Schaeffer
Contents
Economic and Political Impact Issues in Alaska
I
2
George W. Rogers 5
Theoretical Developments in Socioeconomic Impact Assessment
William R. Freudenburg 8
An International Perspective on Resource Development and Impact Mitigation
Geoffrey Larminie 19
Demographic and Economic Modeling and Analysis
Introduction
Thomas C. Warren 25
Economic-Demographic Assessment Models: Adaptation and Validation
Steve H. Murdock, et a!. 26
Adjusting to the Socioeconomic Impacts of Energy Development in North Dakota
Thor Hertsgaard and Larry Leistritz 46
Socioeconomic Studies Program and Approach
Thomas C. Warren 60
Economic and Demographic Modeling: Alaska OCS Social and Economic Studies Program
Kevin R. Banks · 65
Commercial Fishing Analysis Studies: Alaska OCS Social and Economic Studies Program
Karen J. Gibson 74
Modeling the Economic Impact of OCS Petroleum Development in Rural Alaska
Lee Huskey and Gunnar Knapp 77
Facility Siting and Public Participation
Introduction
Ron Inouye 90
Siting Energy F~cilities: Past Experiences and a Look to the Furure
John M. Halstead· 91
Isolated Facility Siting and Impact Model
Peter D. Cook and Charles F. Cortese 102
Socioeconomic Issues in Siting Major Developments
Cynthia B. Flynn 119
Public Participation in National Resource Management
Robert E. Black 124
:a Public Participation on Complex Projects with a High Level of Conflict a: Nancy L. Blunck 131
Public Participation Along Alaska's" Coast: Reaching Out to the Villages
Michael I. Jeffery 135
Family, Social and Cultural Concerns
Introduction
Marsha Bennett 145
Family Well Being, Family Violence, and Rapid.Community Growth:
An Ecological Perspective 146
Roy T. Bowles
Health and Huma!'l Services Planning in Impacted Communities
Judith A. Davenport 153
Research on the Impact of Resource Development on Women
Katie Hurley 158
The Socioeconomic Impacts of Resource Development on the Elderly
Terry L. Haynes 160
Identifying Social Effects in Forestry Decisionmaking Lessons from the Past and Prospects for
the Future
Robert M. Muth 167
Summary of SESP Sociocultural Studies
Charles Smythe · 180
Local Socioeconomic Studies
Jack R. Heesch 184
Anchorage Impacts: SESP Evaluation
Marsha Bennett 189
Primary Social Field Research iD Socioeconomic Monitoring
Steve McNabb 194
Protecting Community and Family Networks and Cultural Values: An Indigenous View
Phil T. Penatac 214
Social Pollution: Impact Mitigation and Compensation Schemes and the Indian Interest
Roger Justus and JoAnne Simonetta 216
Ethnographic Program Development: A Case Study in Values, Resources and Decisionmaking
Robert Laidlaw 22 7
V. Mitigation
Introduction
Ron Inouye 231 i
Observations and Comments on the Roles of FederaL State and toea! Governments
in Socioeconomic Impact Mitgation
John S. Gilmore 232
Industry Initiatives in Impact Mitigation
William C. Metz 239
Common Socioeconomic Program Elements in Four Large Construction Projects:
Implications for Alaskan Community Strategies
Sheila Helgath 253
Is A Legal Basis for Impact Mitigation Necessary?
Nancy J. Owens 264
Human Impacts of Large Scale Development Projects: The Process and Legal Basis for Mitgation
Janice Cole et al. · 2 7 4
Contributors
Participants
290
292
SIA Symposium Proceedings
FOREWORD
Sheila Helgath
Office of the Federal Inspector
Social, economic and cultural impact assessment identifies the human impacts resulting from natural
resource development. During the summer of 1981, it became apparent to social scientists working in
several State and Federal resources agencies in Alaska that no statewide focus on SIA issues had
occurred in this or any other state, yet each of the social scientists was aware of Alaska and national SIA
literature and research. These social scientists decided to convene a symposium to inform and guide
those Alaskans interested in SIA.
The social scientists listed the following objectives for a symposium:
I. Presentation of conceptual frameworks, theoretical· developments, analytical techniques, and
methodologies for conducting socioeconomic impact assessment by academic and agency pro-
fessionals, both from within Alaska and elsewhere
2. Discussion of potential modification of conceptual frameworks and analytical tools to tailor
their application to the variety of resource use decisions within Alaska
3. Presentation and discussion of various strategies for mitigating negative socioeconomic impacts
and enhancing postive socioeconomic impacts, including a discussion of service delivery plan-
ning, infrastructure planning, and institutional development and monitoring
4. Development of an informal professional network which is so important if social scientists and
planners conducting socioeconomic impact assessment are to avoid the trial an,d error "reinven-
tion of the wheel "
5. Identification and discussion of mutual problems and issues encountered by agency planners,.
analysts, and prog:. managers in conducting socioeconomic impact assessment in Alaska.
To achieve these objectives, a technical steering committee (TSC) of social scientists from the spon-
soring agencies was formed. The TSC contracted with the Department of Conferences and Institutes of
the University of Alaska, Fairbanks, to arrange the Symposium and selected Ron Inouye to be the coor-
dinator. The Symposium was held at Alaska Pacific University in Anchorage on August 25, 26, and 27,
1982 with over 250 attendees.
Were the objectives of the Symposium accomplished? Yes and no. Those who attended the Sym-
posium did not come away with the definitive social impact theory nor did they find answers to all
their questions and concerns. However, the objectives and the conference did reflect the complexity
and variability of those issues. Each theme of the conference, from facility siting to protecting cultural
values, to mitigation responsibility may deserve a future, separate three-day conference and serious
discussion by policymakers, planners, and the public. The emphasis on conceptual frameworks and
analytical techniques of objectives one and two recognized the need for social scientists to provide
policymakers with the ability to make decisions on resource development and an understanding of the
consequences of those decisions. The final day was devoted to objective three, mitigation strategies
appropriate to Alaska with representation of the major actors in social impact-the local communities,
state and Federal governments, and industry. Objectives four and five recognized the many Alaskan
SIA practitioners who reside in communities ranging from Barrow to Ketchikan, and from Tok to
Dutch Harbor, and in the largest Alaskan cities. Without the development of a cohesive practitioner's
network to share information, ideas and solutions it is easy for individuals to be overwhelmed by the
problems resulting from resource development.
The purpose of these proceedings is to summarize and document the Symposium. The proceedings
are not intended to be an inclusive textbook on how to conduct social impact assessment, but rather to
reflect the current SIA thinking and research. The proceedings contain selected papers presented during
the Symposium and excludes papers which have been previously published.
Many people deserve credit for the success of the Symposium, particularly Technical Steering Com-
mittee members Marsha BenDett, Janice Cole, Gary Hennigh, Joe Mehrkens, Bob Muth, and Tom
Warren. John Hickey and Ron Inouye of the UAF Department of Conferences and Institutes provided
organizational assistance. Thanks are extended to Ester Wunniclse and Senator Ted Stevens for their
remarks to the Symposium, to those who presented papers, and to those who attended the Symposium.
The overall message of the Symposium was this: Alaskans can maximize the benefits of resource
development and minimize its negative consequences through systematic analysis of their communities,
the development of legal mechanisms and public policy, and by learning from the efforts of others who
have already tackled the human impact problems of resource development. The depth and variety of
human and information resources shared during the "Alaska Symposium on the Social, Economic, and
Cultural Impacts of Natural Resource Development" should be useful to Alaskans during the next
decade of resource development.
c:::Se.ction {/; !J(e.ynote. c::lfdd'te.:UE.~
Introduction
Ron Inouye
The addresses in this section were presented during the "Alaska Symposium on the Social, Economic,
and Cultural Impacts of Natural Resource Development." The papers derive from prepared texts or
. were rendered into these forms following audio tape transcription and editing of the original remarks.
The speakers were selected for diversity and the distinctive views and ideas each could present. Time
and financial restrictions limited the number of addresses which could be prepared for inclusion in this
section. As in the selection of papers in the following chapters, previously presented or published infor-
mation was not included.
Schaeffer discusses the human impacts of resource development and change in Northwest Alaska.
From his experiences with socioeconomic studies and researchers, he urges a greater reliance on tradi-
tional cultural, family, and human values to help people cope with changes.
Rogers presents an important perspective of socioeconomics in Alaska history and chides the
Symposium organizers for not recognizing the early and yet continuing Alaskan socioeconomic
research of the past 40 years.
Freudenburg builds the case for social and economic impact assessment. He discusses the develop-
ment of theoretical frameworks to better understand events, which eventually lead to predictability.
Larminie discusses industry's efforts in oil exploration and production on the North Slope and the
Shetland Islands. He cites the well defined work of scientists and engineers in understanding
environmental and engineering impacts, but questions the notion of social impacts and the social
scientist's role in that assessment.
I
Social and Cultural Impact Issues
John Schaeffer
It's a pleasure to be here to speak to you; I'm really not sure what you're here for or what I'm here to
speak about but I'll try. Basically, it's just been a few years that we've known anything about socio-
economic impact. I don't know who dreamed up the phrase but it isn't very old. I asked one of our
elders what it was and he said, ''Years ago they put us Eskimo people in the category of American
Indians in some form or other, but now they have a new category of socio-economic impact and that's
where we fit." What little I know of socio-economic impact I don't thinkhe's too_far off. Those of you
who are professionals in this field know it's everything nobody wants to take care of jammed into one
special category. I guess it's fortunate for us because we've been part of its development.
Unlike most of you, I'm involved on both sides and the first thing reporters ask me is, "Is there a con-
flict in what you do?" Of course there is a conflict. On the one hand I'm in there with a bulldozer trying
to rip and rape the land and, on the other hand, I try to protect the culture that is thousands and
thousands of years old and a way of life that is· important to us and that we want to maintain. It's not an
easy job but I think if I can leave anything with you it is that none of it is really important-absolutely
none of it. It's my feeling that the work you do and the way you do it is wrong. It is wrong only because
it doesn't work very welL nofthat what you do isn't good for people. I include other professionals who
also work with people in that same category. One example of how good we are at this is our medical
profession in the United States. As a profession, doctors have made a mint on dealing with and treating
symptoms. Yet we look at doctors as some of our best people; we pay them the most, we build big
institutions for them to work in yet they really don't solve problems. Most of you, I think, in your
disciplines do the same thing: you .deal with symptoms.
For the last fifteen years I've been in charge of the development of a group of people in Northwest
Alaska, specifically a group of Inupiat people who are essentially shareholders of the corporation I run.
Because it is a native corporation, and a separate, distinct, older cultural group, we've had to worry
about things other than making money for our shareholders and corporate growth. We've had to worry
about everything else in our peoples' lives. Some of you may have worked with us or we've gone to
you, for assistance, We look at the problems we've had and we've gone to professionals and said,
"We've got some problems, define them for us, and give us a solution." My job is to assist people in get-
ting funding whether it comes from my corporation, the legislature or federal agencies. We provided
the funding for professionals and para-professionals to go out and work on the problem. We did this for
ten years. Then we made an assessment of how effective our work was and found we were failing. We
went back to the professionals and asked them again, "What's the problem?" and they gave the same
old answers. By then my eyes and ears started to open up and what I heard from the professionals was a
justification of their jobs. So we went back to the only people we h'!-d left, our elders, and they said, "It's
about time you started to listen to_ us, we've been.telling you for several years now what the problem
is" and they were right. I went back through some tapes of previous conferences we had with our elders
and they were telling us the same thing: that in dealing with people you can't look on the surface. You
have to look internally, ·and although we had trouble defining what they meant we called it a person's
spirit. Our elders told us that what made us strong spiritually and physically was one's beliefs and
human values. These ideas about beliefs and human values helped us in identifying the problem. Unfor-
tunately, the American economy is a very easy one to understand if you really try. There aren't too
2
many hardships in America. It's easy to not do anything, or at least not do anything that is good for
your soul. It's easy to sit in front of a television set and not communicate with your neighbor. It's easy to
pay a professional who specializes in a certain area to go and try to solve the problem, which unfor·
tunately is usually not solvable.
Because the solutions are very difficult, and we are really only dealing with the symptoms, our work
seems doomed to fail. That is, if the people are no't spiritually strong the impact is going to be negative
or devastating, or something in·between. There is not a darn thing that you can do to really mitigate the
impact. The only solution is to strengthen the peoples' spirit and that is not an easy thing to do. It takes a
lifetime of lean1ing and you can't learn it in school. The only place you can learn the kind of values that
strengthen your spirit is in a family setting or some substitute for a family setting, and in the communi-
ty. There may be ways of doing this, and there probably are communities and people who are trying to
find these kinds of values. Everyday you see articles by prominent people, maybe not so prominent
ones, like me, who talk about the problems they have. The causes are the same in that people are weak
spiritually. If there are no solutions to the problems, such as setting up programs that would motivate
people to want to improve their situation by learning and living a better set of human values than most
of us live by today, then one way to mitigate impact is to avoid the people. But if the people are already
strong and if they have a strong value system in place, I don't think any kind of development is going to
bother them at all and they'll be strong enough to withstand the change. If they're already weak, all
you're going to do is make them weaker. Unfortunately, it is impossible to not develop some of these
resources. The rest of the country needs them, at least that's what we're told.
It may be easier to help people individually rather than in large groups. The reason programs like
Alcoholics Anonymous works is that someone who really understands works directly with the person
who has the problem. There is both a personal feeling and commitment that goes into the work and
many times that fails when the professional and client are separated. What I've been talking about is
that in order to learn and appreciate basic human values you have to be committed and the only place
you usually find that is in an extended family. We're having problems in our small villages primarily
because we modernized the village. For instance, we built new homes that relocated the grandparents in
one end of town and their kids scattered all over town, and in order for them to communicate,
everyone had to get telephones. They just didn't get together anymore and, in fact, we ended up really
breaking down the whole social structure of the village. Our whole system in this country is directed
toward the nuclear family.
In Alaska, we have essentially the same problems as anywhere else in the United States or any other
industrial country. Every small community or village in Alaska has been impacted by the United States
economy and western technology at least to some degree. If nothing else, people's values have been
significantly changed. The primary impact of natural resource development in this state will occur in
these rural areas and a lot of the people living in these areas are native -Indian, Aleut, Eskimo -and the
difference in the impact on natives vs. non-natives is the amount of time, we as natives, have had to
adjust to the change. You people (non-natives) had almost 2000 years; we missed both the Agricultural
and Industrial Ages. We're going from harpoons to computers and skipping everything in-between.
We're doing it in a very short time period and the impact of the changes are devastating to us, especially
from a spiritual perspective.
In ~xamining the issue of resource development and its impact on the native people of Alaska, let's
look at the Prudhoe Bay oilfield as an impact situation. Basically, except for the construction phase,
which produced a fairly significant impact, the Prudhoe project, with a little planning, didn't have to
produce the negative impact that it did. For example, there are other developments we as a native cor-
poration have and want to try. For the past two years we have been working to develop mineral rights
(i.e. lead, zinc, and silver) in the NANA region and have run into several conflicts. We wanted to
develop mineral rights in the middle of our hunting grounds and had a very difficult time. I wouldn't
make the decision for my corporation but insisted it be made by the shareholders; I adopted the
negative approach but unfortunat~ly our people needed the ·jobs and the income and so they said to go
ahead with it. We've tried to mitigate some of the impact, but it's taken months of hard work to
develop the agreements with the mineral company. Essentially, the.re are instances where we can shut
down the mine because of negative environmental or human impacts. No company wants to throw a
half billion dollars into a project and have some Stone Age Eskimo be able to shut the project down. I
can understand that feeling and we're trying to work out some compromise in these instances.
3
Our company provides 500 to 700 jobs in the state of Alaska but only about 125 or 130 are held by
natives. The big problem now, though, is that our people want the jobs but will not always hold onto
them. Again, the main difficulty is that our people do not have a value system strong enough to make
the necessary adjustment to industrial-type jobs. The mining company we are working with
understands the problems and is working closely with us to find solutions. We have initiated flexible
work schedules to allow the people to maintain the subsistence lifestyles to which they are accustomed
and although this somewhat minimizes the problem it doesn't resolve it. If we are going to take advan-
tage of both the country we live in and the economy, we need to change our value systems. There is a
lot of work to be done in the area of developing individual and community spirit before any type of
impact should be forced on rural Alaskans.
I like some of the attempts that are being made in the cities; the neighborhood organizations that
have been evolving are a good first attempt although they are a little superficial in what they are trying
to accomplish. At least it is a beginning in terms of developing an extended family approach in their
neighborhoods. The long term solutions to some of our problems here in Alaska lie in working with
people at both the community and individual level. .
We've got to realize that most of us put blinders on when looking at our total environment. The
human element in relation to our total environment is very important. Almost anything can work for
people if that's what they want.
I noticed you have in the schedule a session called Public Participation. This is a very important idea;
sometimes you don't even have to do the right thing, as long as people are behind it, even if it's wrong,
they'll make it work. So if you can't solve the problems by building the people up spiritually, then you
can fool them. You can make them accept the development, make them want to have it and want to
participate. Perhaps then the changes and the stress won't be quite so bad. If you can't do the right thing
and make the long-term changes that are necessary for people to accept wide-scale developments, then
you must face them and make them accept things anyway.
I hope the rest of your conference will deal with the real issues; these are the ones that impact people.
So when you are dealing with your area of expertise, or someone else's, please remember that it's not
statistics.or a piece of paper we are dealing with; it is people that are being impacted by development
and by your efforts to mitigate some of the impact.
4
Economic and Political Impact Issues in Alaska
George W. Rogers
Looking at the title of my assigned topic, we appear to have two ways to define the terms used in the
title. Looking first at the two key words, according to. my dictionary, 'impact' is a striking together or a
collision communicating force while an 'issue' is an outcome pr result. We can then assign the adjec-
tives, 'economic' and 'political' to either or both words and come up with a predictable number of com-
binations. For example, a book I wrote in 1962 had as its subtitle 11ze Economic Consequences of Stutehood.
According to the Preface, this book is concerned with the implications of this essentially political event
for economic growth based upon natural resources utilization. The impact, 'communicating force' in
this case was political and there were a host of, 'issues' or, 'consequences' such as the increase in local
political and economic self-determination, a relocation of control over natural resources from the
Federal to a regional level, and the shifting of the political control and management of economic
changes. In my book, I had chosen to focus on economic issues or consequences as they were more
precisely labeled and, more specifically, those associated with the utilization of Alaska's natural
resources. In effect, this is simply a reversal or standing on its head of the title of this symposium.
What followed in Alaska revealed an important time dimension to any analysis of impacts. The
"issues" were not necessarily automatically realized. The natural resources related economic issues or
consequences of this political impact initially were relatively insignificant until combined with the
economic impact of the Prudhoe discoveries and construction of the trans-Alaska pipeline. Then they
were realized with a vengeance. There was a large employment impact (or was that an issue?), but this
was confined primarily to the few years of pipeline construction. The largest and longest lasting conse-
quence of this natural resource development was the overwhelming of the State treasury with a flood
of petroleum dollars. T-hrough the political process, this was diverted into several tributary flows: one
creating more jobs in the State bureaucracy along with new and/or expanded State programs; another
into a clutch. of subsidized loans, local government grants, and other forms of more direct income
distributions; another launching large public works or infra-structure projects; and finally a flow into a
savings account for the future.
To get some idea of what would have happened to Alaska if this petroleum bonanza had occurred in
the political environment of Territorial status rather than statehood, we have only to review the history
of the Kennicott-Bonanza mine between 1911 and 1932. In his first address to the Legislature after
becoming governor in 1939, Ernest Gruening eloquently presented this even as a means of launching
his drive to enact a territorial income tax and eventually achieve statehood. While outside interests
extracted milions of tons of ore and dollars ih profits from this major copper lode, they paid not one
penny in local taxes and in the process of following unregulated high-grading practices had, in the
interest of maximum short-run gains, destroyed the opportunity of greater long-term yields from the
resource.
In the end, the people of Alaska' were left, in Gruening's words, with some giant holes in the.ground,
an abandoned railroad right-of-way and two ghost towns. (Actually, Cordova survived by converting
itself from a rail terminus to a fishing port, but McCarthy became a true ghost town). The costs in
human misery and individual private economic loss were external to the corporation and of no real con-
sequence. The spectre of the copper boom-bust and similar cycles which punctuate Alaska's economic
history still haunt us today, but thanks to the political institutions of a State of the Union and.the power
5
to tax such developments, Alaskans have the ability today to at least prepare some mitigation for the
time when the oil stops flowing.
Examining the same type of occurrence, the Prudhoe and pipeline developments, another chain of
political reactions were set in motion which for Native Alaskans were as important as statehood was for
all Alaskans. In combination with the earlier proposals of the Atomic Energy Commission to convert
the Arctic into a nuclear testing grounds (under the euphemisms of Project Chariot and Plowshares) and
the Corps of Engineers to convert the entire Yukon Flats into the largest man-made lake in the world
(under the guise of hydro-electric power development), these petroleum development proposals united
the Native people in the mid-1960s into a formidable political force. The issue or outcome of this ·
impact was the enactment by the Congress of the Alaska Native Lands Claims Act of 1971.
However, there were additional complications associated with this economic impact (or rather this
impact originating from primarily economic sources). Politically powerful national conservationist and
environmentalist forces were also operating in Alaska and they immediately took steps to insure that
nothing was done before all possible safeguards were taken regarding constructing of the line and port,
and that while Alaska's lands were in the process of being divided up and parcelled out to State and
private groups, there be some setting aside of lands to preserve wilderness and other unique intangible
values in the National interest. Thanks not only to their efforts but their political clout, these interests
were able to get the petroleum industry to design and construct a safe pipeline and the Congress to tack ·
onto the Native lands legislation provisions for the creation of new reserves of public lands in the
National interest.
There were many other impacts and issues associated with the Prudhoe event, but John Schaeffer will
be going into some of these next. The point to be made here is that the Alaskan experience
demonstrated that all of the relevant forces, impacts and issues are impossibly complex and their inter-
relationships difficult to recognize. As technicians, we must never lose sight of the nature of the reality
with which we are working and remind ourselves that of necessity we are carrying out our technical
work in terms of heroic simplifications. The layman's suspicions of the Ivory Tower have some basis in
experience. A good example is the theory and practice of limited entry, to cite something close to my
workshop. ·
There is one other matter I wish to comment on while on this soap box. Actually, it links the
organization and topic of this symposium directly into the caution I have just expressed. Shortly after
accepting the invitation to participate in this symposium on natural resource development impacts, I
was sent a copy of the prospectus by the Interagency Committee of-Social Scientists organizing this
Symposium. The introduction made sense to me, but when I came to the first sentence at the top of the
second page under, 'Need For a Symposium' I was brought up short. It read: "Socioeconomic impact
assessment is a relatively new interdisciplinary field -less than 10 years old." The section went on to
explain that recently there had developed a "network of professionals engaged in social impact
analysis." Unfortunately, "Only a few Alaska social scientists have been involved in these networks"
and the purpose of this symposium was to "help fill the gap."
Those of you who know me will understand why this section received my attention. It was as though
I were an eighteenth century Native Alaskan being told by Vitus Bering that he had just discovered
Alaska. My second reaction, however, was that what the writers of this statement really meant to say
was that this field was new to them, not the rest of us who have been working in it for the past several
decades, and that they would like to introduce us to their own new network of professionals. After a
second reading of the prospectus it appeared that what the organizers of the symposium were primarily
concerned with was a technical application of social science disciplines in serving the legal requirements
of a specific piece of legislation, the 1969 Environmental Policy Act. This is .a legitimate reason for hav-
ing this symposium, but we must focus on broader issues if we are to avoid becoming trapped into a
legally defined version of reality.
For those of us who have been in this business before the enactment of the National Environmental
Policy .Act of 1969, our assessme~ts and analyses were concerned with the "effects" of natural resource
development in a real world consisting of a complex of living systems -biologicaL ecologicaL
economic, politicaL and social. Each of these systems have definable boundaries and purposes, but all
interact with each other and are susceptible to change in differing degrees by the events which make up
the process of development. It may sound inconsequential to discuss differences between, 'impacts' and
'effects' but from reading too many environmental impact statements (and too many isn't all that many)
6
I have found the term, 'impact' seems to bring with it a mind set which is predisposed to view the· real
world in mechanistic terms and the assessment process as the filling in of a predetermined set of data
into a standardized format. This may meet the letter of the law, but what is lost is a concept of the real
world as a complex of living systems.
It is not my intention, howE;!ver, to push this too far and create a straw man which I can easily-knock
over for my own ego satisfaction. The organizers do go on to say, "in addition to legal requirements,
however, policy-makers, planners and the general public are showing greater interest in the
socioeconomic impacts which follow from natural resource developments ... so that they may mitigate
the adverse effects and enhance the possitive ones." To serve this recognized greater interest. howeve·r,
we must depart from the bounds set by legal requirements and keep in constant touch with the bloom·
ing, buzzing confusion of the real world and its problems. In my more than four decades of practice I
have found it all too easy to become seduced by the elegance of my little intellectual constructs of reali-
ty to the detriment of the ends I sought to serve.
Despite these warnings, I look forward in the course of this session to becoming better acquainted
. with your various networks and I hope to introduce you to my own. We are all attempting to deal with
an impossibly complex task, but a critically important one.
7
Theoretical Developments in Social and Economic Impact Assessment*
William R. Freudenburg
This paper has three main purposes, and it seems only fair that I should give you some advance warn-
ing of what they are. The first is to provide an overview of theoretical developments in social and
economic impact assessments. That's the topic I'm supposed to cover, so you're probably expecting
something along those lines anyway. The second purpose is to de-mystify theory a bit at the outset. and
to let you in on the closely guarded secret that it actually has quite a bit to do with what happens out in
the real world. The third purpose is to include some very tentative thoughts on social and economic
impact assessments, as well as some others that have already been more carefully developed.
The tentative thoughts are included for two main reasons. One is that theoretical development is an
ongoing process, and the tentative thoughts are a sampling from some of the most recent of.the ongoing
developments. The other reason is that the people at this conference have an extraordinarily wide range
of perspectives; those p~rspectives could be particularly helpful in turning some of the tentative
thoughts into a clearer understanding of the issues at hand.
The De-Mystification of Theory
If anthropologists from another planet were to visit a series of these conferences, chances are they
would notice an unusual ritual that took place whenever an academic started to talk about theoretical
development. In the vast majority of cases, the speaker's tone of voice would become more serious, and
the words would become unintelligible. The people in the audience, meanwhile, would also show a
predictable pattern of behavior. About half of them would develop a glazed look in their eyes, while at
the same time trying to maintain an expression on their faces a'> if Something Important were being said.
The other half of the audience would soon be seen to be pursuing even~ore important activities, such
as playing tic-tac-toe, or writing a letter to a mother-in-law. \ ·
If our extra-terrestrial anthropologists were to write up a report on these observations, they would
probably conclude that the whole ordeal was part of some bizarre ritual--one that had no visible connec-
tions to any other activity, including the theme of the conference.
Proposing that the pattern is a common one, however, does not necessarily imply that it is a useful
one. As far as I can telL in fact, it really only accomplishes two things. One is to buy a small amount of
academic respectability for a conference, since many people (presumably including the speakers) really
do fend to believe that Something Important is being said, even if they're not quite sure what it is. The
other is to reinforce the stereotype that academics are hopelessly out of touch with the real world.
Alternative approaches are possible, however, if we understand the real importance of theory. While
whole conferences have been devoted to topics such as the precise definition of theory, and legiti-
mately so, the basic nature and purpose of theory can be summarized fairly concisely. In fact, I'm about
to argue that theory is not something that_ people try to develop because they want to avoid having
anything to do with the real world. It's not just a game that's meant to let people know how many
obscure words a theorist can toss around. To give you a simple o.ne-sentence definition, a theory is a
*This is Scientific Paper Number b39 I, Reswrch Project 0478, Agricultural Resmrch Cmter, Washilrg/onState University. Portions of this drap/er
are drawrr from 11 ptrper prepared for the Plmary Session on "Social Impact Assessmml 71reory: Process vs. Prediction," at tire First brier·
wrtional c;onfererrce on Social Impact Assessmmt, Vmrwuver, B.C., October 1982.
8
s>-:sten:atic w~y of trying to make sense out of what;s going on in some part of the world. It's not a way
or trymg to tgnore events. in short. but a way of trying to tie them together in a way that we can
understand and even predict.
Within this perspective. it's even possible to state the difference between a good theory and one
that's not as good. The better theories are not the ones that are most impractical. vague. or jargon·
ridden: they're not the ones that take longest to describe. Better theories are the ones that are the most
accurate and useful.
Accurate theories. as common sense would tell you, are the ones that have a good fit with reality. A
theory cannot be very useful unless it is accurate, at least under the rules I'm using here: but usefulness
also includes other considerations. The more useful theory is one that ties together information better
than some other approach does--more clearly. for example. or in a way that is simpler, or helps us make
better predictions.
If I'm getting my point across, you should be thinking by now that what I'm describing sounds a lot
like plain old-fashioned common sense. It is a lot like common sense, and in fact most of us have little
theories that we try out every day of our lives. The main differe':lce between scientific theory and folk
wisdom is that scientific theory is more systematic. Because it is more systematic, however, it is also
more powerful.
This point deserves emphasis. You don't need to be a meteorologist to know when it's raining. and
you don't need to be a doctor to know when you feel really terrible: yet there is a difference between
science and common sense. The difference becomes particularly important when you try to explain
why it's raining. or why you feel so bad. and to do so in a way that allows some prediction of what will
happen next. The value of the theory will be shown by the two criteria I've already mentioned--
accuracy and usefulness. Medical theories are what allow the doctor to know the difference between
influenza, appendicitis, ulcers, and so on, and therefore to predict (accurately and usefully) what type of
treatment is most likely to make you feel better. The point is not that systematic theories are always
right while common sense is always wrong. It is instead that a good theory-a systematic attempt to
make sense of some of the facts of the world, and one that is both useful and accurate-will greatly
improve our odds.
Theory in Social Impact Assessment
Having said all that. what can we now say about theoretical development in social impact assessment
(SlA)1 A good place to start would be by giving a brief description of what SIA is all about.
The basic task of SIA can be described in fairly simple ·terms. At issue is the fact that some new
development has been proposed, and that some community or area is likely to be affected by that pro·
ject. The job of the SIA practitioner is to assess. or to try to measure in advance. the impacts the project
is likely to create in that particular setting. The impacts. in a nutshell. are the differences between what
would happen with the project and what would have happened otherwise.
Figure 1 provides a simplified picture to correspond with this simple explanation: it shows impacts as
resulting from the effects of the given pro~ect. working through a particular community setting. Other
people have drawn far more complicated pictures than this one: particularly important considerations
are feedback loops, indicating th~.t a community can have an eff~t on the proposed project (perhaps
changing it in such a way that the impacts will be lessened. and the fact that outside forces are likely to
have led to the project. and to be acting on the community at the same time (see especially the Cortese
and Jones [19791 model. as modified by Weber and Howell [19821). For our present purposes, however.
the simple model is sufficient.
PROJECT SETTING
("Community")
Figure 1. Simplified Model of Social Impacts
9
IMPACTS
Even the simplest model indicates that the impacts depend in part on the nature of the project, and in
part on the nature of the setting. And social impact assessments can be prepared for an incredible varie-
ty of projects and settings, ranging from pipelines in rural Alaska to public housing in New York City.
Researchers have already assessed the impacts of highways and high-voltage lines, mines and military
bases, dams and dumps, nuclear facilities and national parks--as well as a broad range of other
developments. Moreover, when we look at the kinds of impacts that have been considered, the com-
plexities are multiplied considerably. They include impacts on individuals and institutions, families and
friendships, politics and prejudices, sewers and social systems, and so on; and they can take place in set-
tings that range from the local through the regional to the national and international levels.
So what kinds of theories do we have for making sense of all these assessments? Some people seem to
believe that we ought to be developing one theory to cover the entire range of social impact
assessments. My own view, however, is that with such an incredible range of variation, trying to come
up with one theory to cover them all would be premature at the very least. .
As far as I can telL there are really only three main approaches (none of them really deserve to be
called theories) that we could even try to use to cover the whole area of social impact assessment. Since
none of them seem extremely promising, I will deal with each of them only briefly.
(1) The "growth is good" approach. The first approach, to describe it simply, starts from the
assumption that economic growth is generally beneficial--a form of progress. Since social impact
assessments are often associated with projects that will lead to economic development, this line of
reasoning leads to the prediction that the projects will generally have favorable consequences.
(2) The "exploitation is bad" approach. The second approach is as simple as the first one, but it
leads to opposite conclusions. This approach starts from the assumption that corporations are heartless,
if not eviL and are more concerned about corporate profits than about what their projects do to local
people or to the physical environment. Since development projects tend to have been proposed by such
corporations, the exploitation approach would predict that the projects' impacts would often or general-
ly be bad. .
(3) The "it depends" approach. The third approach is less simple-minded than either of the first two,
but it is also less simple. Just as you don't need to be a weatherman to know when it's raining outside,
you don't really need to be a social scientist to know that projects can sometimes have good effects and
sometimes have bad ones, depending on the characteristics of the project, the setting, and a variety of
other factors. If that's all you know, however, it won't do you much good; your predictions about the
future could still be all wet. It's precisely at this point that systematic theory--or theories--start to
become more important.
In my view that we're not likely to find any single theory to make sense out of the full range of SIA
situations, it may be that I'm being too pessimistic. It may be that someone is currently on the verge of
coming up with a grand theory that will lead to a coherence in SIA, just as Newton's Laws helped
systematize a great deal of thought about the physical universe. That's possible, but I don't see it as
being likely in the near future. Most of the global SIA theory efforts I've seen so far have been more
akin to efforts to re-invent the wheel.
· A more fruitful approach, I believe, is to try to build on the foundation already provided by the vast
body of existing work in the social sciences. The new situations· and needs we face in SIA may lead us to
~dd to or to modify the theories already available from elsewhere, and in fad, I have sometimes
attempted to do just that myself (see e.g., Freudenburg, 1980, 1982). We also need to have a very clear
understanding of the ways in which social impact assessment differs from other kind of social science
endeavors--a point that will be elaborated in the next section of this paper. The basic task of SIA,
however, is to provide accurate and useful projections about what the future will look like under given
situations, and the ability to make accurate projections is widely accepted as a distinguishing
characteristic of any science. In our efforts to improve SIA projections, it would be foolish to ignore the
many useful theories already in existence. What we need instead are intelligent and systematic efforts
to build on that foundation in a way that meets our own particular purposes.
The Nature of Social Impact Assessment .
If that's so, one of the first things we need is a very clear picture of just what our particular purposes
are. To put it into other terms, what we need is a second kind of theory of SIA--not a grand theory, for
10
predicting all potential social impacts, but what some of my academic colleagues would call a
"metatheory." We need a logical examination of what it is we do in SIA, and why it is we do it.
To the extent to which SIA is seen as being part of environmental impact statements, the
requirements for social impact assessments are outlined in environmental laws and regulations--
particularly the National Environmental Policy Act of 1969, or NEPA, and the Council on Environ-
mental Quality's regulations for implementing the act. The regulations state that impact assessments
... must insure that environmental information is available to public officials and citizens
before decisions are made and before actions are taken. The information must be of high
quality. Accurate scientific analysis, expert agency comments, and public scrutiny are essen-
tial to implementing [the law]. Most important, [the assessments] must concentrate on the
issues that are truly significant to the action in question, rather than amassing needless detail
(U. S. Council on Environmental Quality, 1978:2).
Under these regulations, the goal of an impact assessment is to provide the most accurate possible
projection of the significant impacts that are likely to take place under a given set of circumstances.
That sounds straightforward enough, and it also sounds like the kind of situation where the sciences
provide the kind of expertise that is necessary.
If you look at social assessments that have actually been made part of environmental impact
statements, however, you will generally find a product that differs quite substantially from what the
regulations describe. The problems are numerous (for a detailed discussion, see ·Freudenburg and
Keating, 1982), but one difference particularly deserves our attention.
The relevant environmental laws and regulations, such as the one just cited, call for SIAs to assess
significant social impacts (i.e., the social changes that are likely to occur because of a decision, or the
ways in which people are likely to be affected). Most SIAs, however, focus less on what will happen
than on what people are likely to think about it.
The difference may seem subtle at first, perhaps because there tends to be a relationship between the
two. Yet impacts and attitudes are actually qu.ite different from one another. It is one thing to go
through an earthquake; it is quite another to be asked (beforehand or afterward) what you think about
going through an earthquake. Odds are, if you were to go around Anchorage and ask today, many peo-
ple will tell you that in some ways the devastating Alaska earthquake of 1964 may have been good for
the community in the long run (because it helped people pull together for common goals, for example,
led to newer and more sturdy construction, and so on). That really doesn't change the fact that the
earthquake was a very expensive and destructive one. Most projects tend ro be far less destructive for
local communities than was the Anchorage earthquake, of course; the point to keep in mind is simply
that social impacts created by a project can be very different from people's attitudes toward the project.
In some of the thoughts I've shared with strictly professional audiences, I've argued in print that a
social impact assessment ought to focus primarily or even exclusively on social impacts. In practice,
however, the attitudes and the impacts are very much interrelated; people's attitudes can have a good
deal of influence on the impacts that are created, and the expected (or experienced) impacts can
obviously have a great deal to do with people's attitudes toward a project. Moreover, it is an in-
escapable fact that social impact assessments are meant to provide input-for political decision-making. In
practice, if the SIA practitioner is listened to at all, she/he is generally asked (directly or indirectly) about
attitudes, because political decision-makers tend to be concerned about the political feasibility or
political cost of a given decision. For these and other reasons, the most reasonable approach would be to
acknowledge that social impact assessment generally faces two tasks: one is to assess the likely reactions
to the project, and the other is to assess the project's likely impacts (for further discussions of the inter-
relationships between attitudes and impacts; see Carley, 1981; Carley and Derrow, 1980; Cramer, et al.,
1980; Freudenburg and Keating, 1982). With this discussion as a background, however, it's time to get a
bit more specific. What kinds of sbcial science expertise are likely to offer what kinds of help?
It is possible to speak of the social sciences as an undifferentiated whole, and it is also possible to
divide that expertise into -nearly an infinite number of categories. For the purposes of this discussion,
perhaps the best mix between specificity and simplicity would be a relatively straightforward three-
way division. Environmental law calls for impact statements to assess impacts upon the human environ-
ment; I'm about to suggest we'll find it useful to think in terms of three interrelated types of human
11
environments--the economic/demographic environment, the social/cultural environment, and the
physical environment itself. Changes in any one of these environments can have direct consequences
for human well-being, and can also be the source Qf favorable or unfavorable attitudes. ·
Figure 2 illustrates the typology I am suggesting here; it indicates that in each of the three types of
human environments, it is possible to assess both the impacts created and people's attitudes toward
those impacts. The figure is also intended to draw our attention to some of the most important omis-
sions of SIAs produced to date. The demographic and economic impacts--the population changes and
economic changes likely to be created by a proposed development, indicated in the top left cell of
Figure 2--are usually discussed in reasonably thorough detail. The changes in the social and cultural
environments, however, and the social consequences of changes in the physical environments, are
generally discussed largely as matters of taste or esthetics (see discussion in Freudenburg and Keating,
1982). The middle and bottom cells in the left column of Figure 2, in other words, have frequently been
ignored in p<,1st work, although the right-hand cells in each of the bottom two rows are considered a bit
more frequently.
Demographic/
Economic
Social/
Cultural
Biophysical
IMPACTS
(often overlooked)
(often overlooked)
ATTITUDES/
"ESTHETICS"
Figure 2. The Major Categories of Social Impact Topics
12
---~--~--~~~--~--~-~ ~~~~-----~-~~---------
One of the ways in which social impacts in Alaska have been important for social impact assessments
in the lower 48 states, in fact, is by helping to point out that these important categories have generally
been overlooked in the past. Alaska native cultures are often so different from the Anglo cultures of the
lower 48 states as to make it unavoidably clear that-changes in social organization or cultural patterns
constitute changes in the human environment that are deserving of attention in their own right. Similar·
ly, if an oil spill interferes with subsistence fishing, or if pipeline construction disrupts game migration
during a key hunting season, these are physical environmental changes that have a human significance
in their own right--and not merely as matters of taste, preference, or esthetics. Figure 3 provides further
examples of the kinds of questions to be asked in each of the three categories of impacts and of
attitudes.
Demographic/
Economic
Social!
Cultural
Biophysical
IMPACTS
*How many new people will there
be?
*Do we need to expand services?
*What will happen to unemployment
rates?
*Will stress be placed on families?
*Will traditional religious practices be
disrupted or prevented?
*Will there be increases in delin-
quency, alcoholism, suicide, etc.?
*Will subsistence hunting be dis-
rupted?
*Will the projects' resource use or
environmental impacts preclude
other developments in the future?
*Will opportunities for solitude
decline?
ATTITUDES/
"ESTHETICS"
*Do present citizens want/mind
growth?
*Will local government officials (and
citizens) be willing to do more plan·
ning, zoning, etc.?
*Will young people want to stay in a
larger community?
*Will locals feel the character of the
town has been lost?.
*Will newcomers like old-timers life-
styles?
*Will the esthetic qualities of the
environment decline?
*How much would people be
bothered if air pollution lowers
visibility?
*Will people mind if opportunities
for solitude decline?
Figure 3. Examples of questions to be asked about different categories of impacts and attitudes
13
------~---~--------~---~-~----
Figures 2 and 3 suggest that, in thinking about the impacts of major developments in Alaska, it would
be useful to think about all three categories of impacts--economic/demographic impacts, social/cultural
impacts, and direct physical environmental impacts--and that it would also be useful to think about the
implications these impacts would have for human beings, whether or not the impacts are politically
important or esthetically pleasing. These figures do not suggest, however, how to decide whether or
not those impacts are likely to be significant. Accordingly, it is to the question of significance that I
would like to tum next. I will deal only with the significance of actual impacts, however, it may be that
the significance of esthetic considerations can best be dealt with by persons other than social scientists.
The purpose of NEP A, as the act itself tells us, includes the protection of environmental quality, and
the improvement of "the health and welfare of man." Similarly, to the extent to which social scientists
have dealt with the question of the significance of impacts, trying to separate important social impacts
from negligible ones, they have tended to employ the concept of well-being (Freudenburg, 1982;
Finsterbusch, 1980; Branch, et al., 1982). Well-being can be thought of as an overall or global measure
of human "health and welfare," and it is often referred to as quality of life. Thus, while the question of
significance is a complicated one, it may still be possible to suggest a rule of thumb: Significant impacts,
perhaps, are those that have measurable consequences for human or social well-being, or for people's
ability to function.
That's easy enough to say, but it requires a few extra words.to explain. First, there could be some
question about limiting the suggestion to measurable consequences; some authors would argue (e.g.
Gold, 1982) that some of the most important aspects of human life have never been intelligently
counted or quantified. Some of those authors might also warn us against falling into the simple-minded
trap ofassuming that if it can't be counted, it doesn't count. While we do need to avoid such simplistic
assumptions, we also need to recognize that a previous inability to quantify certain phenomena may
sometimes indicate a need to try harder, rather than proving that the phenomena are not quantifiable.
In the case of overall well-being, moreover, a number of researchers have had reasonably good suc-
cess at quantifying people's own perceptions of their life quality--and through the "subjective" approach
(see e.g., CampbelL eta!., 1976; Andrews and Withey, 1976)"as well as through the so-called "objective
indicators" approach. Impacts on well-being could also be measured through a number of more creative
approaches (cf. Webb, et al., 1966).
Saying that the consequences of an impact or change should ultimately be measurable, however,
does not necessarily mean than an engineer or water quality expert will know how to do the measuring.
Nor does it mean that the impact can be measured with whatever data already happen to be available.
The available data have usually been kept for purposes of social bookkeeping, not for the measurement
of well-being, even if the data do all deal with people. Saying that the bookkeeping data somehow
ought to measure well-being--simply because all the measures have something to do with people--is
about like saying a gasoline gauge ought to tell a driver how much air is ·in the tires, simply because
both of those measures have something to do with automobiles. The efforts to measure effects need to
be made by persons who know what they are doing, who have the tools they need for the task, and
who know enough about existing social science theories and findings to know where to look, and to be
able to make creative adaptions in response to unusual situations. "It's not enough to try to make a
mechanical application of some formula in Alaska, for example, simply because it seemed to come up
with some sort of useful findings down in Alabama. .
Questions might also arise about the suggestion that the changes in overall well-being merely be
measurable, and not large. The reason here is that--at least when we are dealing with statistically reliable
cross-sections of the population, and using the measures that are currently available to us--it sometimes
takes a very significant change in people's life situations before any change is visible in their assessments
of their overall life quality. For example, one of the most comprehensive surveys of life quality ever
done in the United States found that, on a seven-point scale, persons with incomes between
$12,000-17,000 rated themselves qs being only about a quarter of a point better. off, on average, than
persons with incomes between $7,000-10,000 (CampbelL et al., 1976:45-57). Roughly a doubling of
. income, in other words, was associated with a difference of less than one-twentieth of the overall range
of the scale. Most people would probably classify an impact as being "significant" well before it had as
much influence on well-being as having an income doubled or cut in half.
The NEP A regulations also suggest several other criteria for identifying significant consequences. An
impact would be significant if its effects were measurable immediately, in the long term, and/or in some
14
mid-range time frame. Impacts which are significant for some identifiable segment of the population--be
they poor, young, old, non-white, government officials, unemployed persons, women, or any other
identifiable portion of the population--would also be worthy of SIA attention. And finally, since social
impact assessments are by definition done before projects take place, rather than afterward, it would be
important to allow a prospective component in measurability--the likelihood, in other words, that an
impact could have measurable consequences for well-being or human functioning. Such consequences
could have been documented for similar projects in the past, for example, or they could be predictable
·through explicit and systematic logic that a significant portion of experts in relevant field(s) would agree
to be worthy of consideration.
In summary: the field of social impact assessment is so broad and varied that we are not likely to see
the emergence of a grand theory of SIA at any point in the near future. It is simply not reasonable to
expect that any single theory will soon be able to provide accurate and useful projections of the social
impacts likely to be created by all conceivable projects. This paper has focused instead on a different
kind of SIA theory--systematic thinking about the nature and purpose of SIA, or what would more for-
mally be called a metatheory of SIA.
I have argued that SIA calls for modifications of traditional social science approaches, not for a totally
new set of activities. Social science expertise is important not just for methodological reasons, but
because it provides a familiarity with findings from a broad range of other situations, and a familiarity
with the theories that have been put forward to make sense of those findings. The special nature of SIA
work does require some adaptations in social-science-as-usual, however, as well as an ability to think
and write clearly. The legal and situational requirements for SIA seem to call for attention to three inter-
related sets of impacts on the human environment--economic/demographic impacts, social!cultural
impacts, and biophysical environmental impacts. In each of these three areas, moreover, a projeCt's
impacts can have a human significance that is not simply a matter of opinion or of esthetics.
Concluding Remarks
As indicated at the outset, this paper cannot be claimed to provide the definitive word on theoretical
development in social impact assessment. It is intended rather to be a fair representation of the current
state of the field, and to provide a basis for some discussion.
One objection that might be raised to this paper is that I seem to be calling for a higher level of exper-
tise in the social sciences than many of the relevant agency personnel currently possess. This criticism
may be reasonably accurate--but even if it is, it misses an important point.
I'm always amazed by the fact that people who are rational in other respects can actually lose a larger
kind of common sense when it comes to dealing with human behavior. They wouldn't hire a biologist
to analyze geology, or a nuclear physicist to study oil spills--even though there is physical science
involved in all of those fields. Yet the very same people will often turn around and hire a civil engineer
to "study" social impacts.
Most of us would find it inconceivable for a group of sociologists and psychologists to get together
and decide on the technical details of building complicated projects such as the Alaska gas pipeline. A
project of that magnitude requires a particular set of professional skills, and special kinds of professional
expertise. The greatest psychoanalysts in the world--unless they had the relevant kinds of engineers and
physical scientists to help--couldn't get the pipeline designed and built. It has only been in recent years,
however, that we have begun to realize that limitations on specialization operate in more than one
direction--that civil engineers are not sociologists, for example, and that physicists are not necessarily
knowledgeable about psychology.
When I discussed an earlier version of this paper with an administrator, he objected that I was being
unrealistic, and that the agency people who were "going to do the assessments anyway" simply didn't
have the level of social science expertise I was advocating. My response was that--by the letter of the
law, by the spirit of the law, or by ,simple old-fashioned common sense--I was being as realistic as possi-
ble. If I had a broken arm, I continued, I would want to have it set by a doctor, not a carpenter, even if
the only people standing around me at the time were carpenters, and even though the carpenters and I
might be able to splint something together if no doctors were available. Social scientists are available,
however, and given the current unemployment rate in the social sciences, it is often possible to find
people who not only have the relevant expertise, but who are willing to work at bargain-basement
rates.
15
The reasonableness of these two points of view--the administrator's and my ownr-is something that
you will obviously need to decide for yourself. In all likelihood, you'll find that it's necessary to make
your decisions on a case-by-case basis. But it is possible to suggest a criterion to use in making those
case-by-case decisions, and that criterion brings us back to questions about the role of theory in social
impact assessment.
There can be little doubt that there are certain kinds of SIA situations that require the expertise of a
professional social scientist, while there are others where almost any intelligent person could be trained
to come up with answers that were almost as good--although there is likely to be a bit of disagreement
about some situations that are between the end points. One of the key features of this continuum, I
think, has to do with what is known about the situation (where "known" refers to relevant information
that has been made understandable through appropriate theories). As any number of writers have
pointed out (see e.g., Kaplan, 1964; Stinchcombe, 1968), it is this combination of information and
theory that makes it possible for the high school student of today to solve mathematical problems that
would have baffled Sir Isaac Newton himself. Even highly complicated problems, in other words, can
be dealt with in a relatively routine manner if we can come to understand them well enough.
Before that can happen, however, we need both information and intelligence--both a body of rele-
vant evidence or data, in other words, and a way of making sense of those findings through appropriate
theories.
Ironically, one of the reasons that present-day projects sometimes require such a high level of social
science expertise for proper assessments is the fact that, although we have had over a decade's worth of
expertise with environmental impact statements, we have done very little to accumulate the kinds of
evidence that could allow project-by-project impact assessments· to l:Je done on a more routinized basis.
What is called for here is essentially the same kind of data accumulation that already takes place
regularly in other fields. Most of us would find it inconceivable for an engineer to be asked to build a
bridge without having some basic information--documentation on the tensile strength of a certain kind
of steeL for example, or measurements of the load-bearing capacity of the soil where the bridge is to be
located. It would also be inconceivable for us to ask engineers to design bridges without ever checking
back to find out whether or not their bridges actually stood up.
Yet something very much like this has been happening with many of the project-specific social
impact assessments that have been done to date. Impact researchers are essentially asked to go into a
given situation and to come up with an educated best guess about the types of impacts that are likely to
be created by a proposed development. They generally have little more to go on than the accumulated
best guesses of those who have gone on before. If they ask to do studies to develop the kinds of infor-
mation they need--or even so that the actual impacts can be documented for the benefit of future
assessments--they are often told that such studies are "impracticaL" and that they need to do the best
they can with available data.
Such constraints on research can often be rational in the case of any single project; the project
manager, after alL has an interest in keeping overall project costs down. The net result in the long run,
however, has been distinctly irrational for all parties involved. The available data often have as little
relevance to the questions that need to be asked as the available information about the average price of·
a gallon of gasoline has to do with the number of barrels of oil likely to be found in a given-off-shore oil
lease.Both kinds of social data have something to do with people, just as both kinds of oil data have
something to do with petroleum, but that's often just about as far as the similarity goes. Nor is an effort ·
to build a grand theory of social impact assessment much good in a vacuum. A theory is a way of mak-
ing sense of data--it is not a substitute for data that a researcher needs but does not have.
As an example of this problem, we need look no further than the Trans-Alaska Pipeline System. It
was one of the largest construction projects in the history of humanity, as well as being a major com-,
ponent of our national energy picture. In addition, although it was not necessarily planned that way, it
was one of the largest social experiments in history. But because so little of the relevant research was
done, we have very little way of ·knowing whether or not the experiment succeeded, nor of learning
lessons that could be useful in dealing with other major projects in the future.
Estimates vary, but it appears.that the overall cost of that pipeline was about $10 billion. The total
cost of all research done on the actual social impacts created by that pipeline would be even harder to·
estimate, but my own impression is that the total cost could not have been much over $200,000. Even if
the actual research cost five times that much--a million dollars--it would have amounted to one-
16
hundredth of a single percent of the total cost of the pipeline. For an additional amount of money that
would have been so small as to disappear as rounding error in estimating the overall pipeline cost--
provided that the funding would have been made available when and where it wa:s needed--we would
have been able to develop a far more thorough documentation of the social impacts that actually did
and did not result from the construction of that pipeline. ·
We have now lost that opportunity. The major developments that Alaska may face in the near future
will offer others. It will be interesting to see whether the new opportunities are taken or missed.
17
References
Andrews, Frank M.; and Withey, Stephen B. Social Indicators of Well-Being: Americans' Perceptions of Life
Quality. New York: Plenum, 1976.
Branch, Kristi; Thompson, James; Creighton, James; and Hooper, Douglas A. Guide to Social Assessment:
BLM Social Effects Project. Billings, MT: Mountain West Research, 1982.
CampbelL Angus; Converse, Philip E.; and Rogers, Willard L. The Quality of American Life: Perceptions,
Evaluations, and Satisfactions. New York: Russell Sage, 1976.
Carley, Michael J. "Numbers or Participation: Politics and Methodology in Social Impact Assessment."
Unpublished paper. Vancouver, B.C., Canada: Cornerstone Planning Group, Ltd., 1981.
Carley, Michael J.; and Derrow, Ellan Odiorne. Social Impact Assessment: A Cross-Disciplinary Guide to the
Literature. London: Policy Studies Institute, 1980.
Cortese, Charles F.; and Jones, Bernie. "Energy Boomtowns: A Social Impact Model and Annotated
Bibliography." Pp. 101-163. In Sociopolitical Effects of Energy Use and Policy: Supporting Paper 5, Study of
Nuclear and Alternative Energy Systems, Charles T. Unseld, Denton E. Morrison, David L. Sills and Charles
P. Wolf (eds.). Washington, D.C.: National Academy of Sciences, 1979.
Cramer, James C.; Dietz, Thomas; and Johnston, Robert A. "Social Impact Assessment of Regional
Plans: A Review of Methods and Issues and a Recommended Process." Policy Sciences 12:61-82.
Finsterbusch, Kurt. Understanding Social Impacts: Assessing the Effects of Public Projects. Beverly Hills: Sage,
1980.
Freudenburg, William R. "The Density of Acquaintanceship: Social Structure and Social Impacts in a
Rocky Mountain Energy Boomtown." Paper presented at the Annual Meetings of the American
Sociological Association, August, 1980, New York.
Freudenburg, William R. "Succession and Success: A New Look at an Old Concept." Paper presented at
the Annual Meetings of the American Sociological Association, September, 1982, San Francisco.
Freudenburg, William R.; and Keating, Kenneth M. "Increasing the Impact of Sociology pn Social
Impact Assessment: Toward Ending the Inattention." The Ame~can Sociologist 17:71-80.
Freudenburg, William R.; and Keating, Kenneth M. "Problems, Predictions and Politics: Applying
Sociology to Social Impact Assessment." Unpublished manuscript. Pullman, WA: Department of
Rural Sociology, 1982.
Gold, Raymond, L. "Commentary." Pacific Sociological Review 25, 3:349-356.
Kaplan, Abraham. The Conduct of Inquiry: Methodology for Behavioral Science. San Francisco: Chandler,
1964. '
Stinchcombe, Arthur L. Constructing Social Theories. New York: Harcourt, Brace and World, 1968.
United States Council on Environmental Quality. Regulations for Implementing the Procedural Provisions of the
National Environmental Policy Act: Reprint 43 FR 55978-56007, 40 CFR Parts 1500-1508. Washington,
D.C.: U. S. Government Printing Office, 1978.
Webb, Eugene J.; Campbell, Donald T.; Schwartz, Richard D.; and Sechrest, Lee. Unobtrusive Measures:
Nonreactive Research in the Social Sciences. Chicago: Rand McNally, 1966.
Weber, Bruce A.; and HowelL Robert E. (eds.). Coping with Growth in Rural Communities. Boulder, CO:
Westview, 1982. ·
18
An International Perspective on Resource Development and Impact Mitigation
Geoffrey Larminie
I'm always very happy to come back to Alaska. And it's a sobering thought, which occurred to me
yesterday and got me reminded about it again just now. It's been 20 years since I first came to Alaska,
and about this time in 1962 I had just come back from the end of a field survey, after being out for four
months. In those days nobody ever thought of offering anyone field break. We went out for four
months and we stayed out for four months. None of this business of a week on and a week off or com·
ing in after two weeks for three weeks of R and R; and one has to ask oneself whether this is better. I
think a great deal of what I will be saying to you will be attempting to force people to ask questions as
to the objectivity of the judgments that we make once we stray into the field of social impact. '"
In reading the symposium schedule, I noticed the objectives of the symposium and they included the
presentation of conceptual frameworks, theoretical developments and things like analytical techniques
and methodologies for conducting socio-economic impact assessments. Of course I'm not, as you might
have gathered from my biography, a sociologist. As a neophyte observing this interesting phenomena,
one thing that did strike me in my innocence was that so far I hadn't seen any reference to historical
studies. I'll return to this point, but for now I'll leave it with you to fester in the back of your minds
while I'm talking.
In this field it's not very difficult to point out problems, either real or imagined, but is much more dif-
ficult to find solutions and to be confident that they are solutions; because until you have sufficient time
and a reasonable historical perspective, almost by definition you are not going to know whether you've
got it right or not. I think this is a very sobering thought in any area involved with the social aspect of
man's activities. All my formal experience has been with environmental impact analysis, and, as you
might have gathered by now, I have to confess that I'm suspicious of social imj)act analysis. This
perhaps, is a consequence of a traditional scientific education which has left me with a somewhat jaun-
diced view of sociologists, particularly since it is not uncommon for the discipline to attract a dispropor·
tionate number of trendy left wingers. Now having laid down my prejudices and biases you can at least
identify my position in all this. My status here is, I believe, more of a catalyst; and like all good catalysts
one should participate in the reaction without getting involved with the details.
Today I want to talk about the general structure first by looking at environmental impact analysis
and then social impact analysis. When I'm talking about environmental impact analysis my focus will be
the actual practices and principles we developed in various parts of the world. I look at social impact
analysis as something new that appeared over the horizon and can be identified with an established
system of procedures.
In discussing environmental impact, I'm going to take most of my examples from the North Sea by
looking at both the offshore and onshore impact of off shore activities. Forty Field was discovered the
year after Prudhoe, but had less problems with legislation, Native Claims and a variety of other things;
it was actually on stream three years before Prudhoe. It was, in many respects, a completely new
environment 100 miles off shore in 500 feet of water, at depths greater than any oil field had ever been
developed. In addition, it was a large volume oil field which required very large amounts of pipeline to
bring it on shore. I suppose, in a sense, we were fortunate; in fact, it is one of those curious accidents
about North Sea development, with regard to my own company as well as others, in that really an
astonishing stroke of luck no m,ajor oil field which has been discovered in the North Sea has happened
19
to coincide with a fishing ground. So, up to this point, there has never been a conflict of interest in
deciding between oil and fisheries. ·
Having discovered the oiL decided on a mode of development, and designed the whole system one
starts on the program of impact assessment. The critical thing here Is a good design in that modifications
that are introduced at the design stage cost less and are more effective than those introduced at
advanced stages. Management of the construction program is more efficient and so one must determine
what to do in order to minimize or mitigate ari.y possible impact. This involves, in the case of an off-
shore operation, a great deal of baseline work because, in actuality, nobody knows a great deal about
the sea bed a 100 miles offshore in 500 feet of water. It's not something you go around investigating, as
a routine matter. You, therefore, have to carry out a number of studies and surveys and, in so doing,
you also find you have very little data on the physical oceanography. For example, you're not clear
about the heights or lengths of the waves or you don't know a great deal about storm conditions, wind
driven wave conditions or the boundary layer. You also find that you're very short on paleontological
and meterological information. All of these factors, of course, are extremely relevant because they
determine the sort of stresses the structure will have to ·stand up to and the safety and integrity of the
structure is essential if you're going to protect the environment. At a very early stage, then, you
become highly conscious of the inadequacy of your data; even much of the wave data is highly subjec-
tive because, until you actually start drilling in those depths, you don't have a fixed station. It is impossi-
ble to actually make observations of the movements of water, or observations on wave lengths. Ships
make them, but when you're going like that on the wave the result is obviously going to be somewhat
subjective because you're not measuring the same way as you are on a precisely fixed structure. It
follows then that onceyou have got a fixed structure you begin to build a data base; In terms of limita-
tions, you also find you know very little about composition of the sea water, which is something you
need to know quite a lot about particularly if you want to use the water to inject into the reservoir to
maintain reservoir pressure. Otherwise it can bungle the whole thing up and everything will grind to a
halt. And so on it goes--the litany of things one doesn't know and must find out. One certainly knows
virtually nothing about benthic organisms; the. benthic eco~systems are the animals that live on, in,
under and about the sea bed--trundle across it, bore holes in it, jump up and down on it, swim around
adjacent to it. You therefore begin on the data collection phase with a whole series of baseline studies.
However you must understand·that it's not whole eco-system studies carried out enthusiastically under,
shall we say, prodding from interested parties who've always wanted to find out about eco-systems, but
couldn't find the sucker to pay for it. The critical thing is to identify exactly what you are doing and
what data you need to enable you to a) understand the performance of what you have set up and
b) monitor it by telling you whether your design conditions were adequate, unduly erroneous, or insuf-
ficient.
The first thing you have to do after you have designed the system, carried out the baseline studies,
acquired the data, and fed that back into the design is to find out about the physical oceanography. You
must be confident that this 20,000 ton, 600 foot tall dahlia can stand up to the stresses being hammered
by seas; because, in a sense, that is almost what you've got--a large flower with a very heavy object on
top and a thin stalk. The platform, although you are not aware of it, has in fact a dynamic response to all
th~ marine forces that impinge on it.
We then set up a monitoring program using biological techniques, and physical and analytical
chemistry to monitor the environment during construction: And so you set up a whole series of stations
·on the seabed where you collect samples. We have mathematical programs for modeling the base
Atlantic eco-system; we have geochemical studies on the water column; and we carry out geochemical
studies on the ground sediments to determine the percentage of existing hydrocarbons. From this data,
you establish base levels. We continue with the monitoring program during operation and with Forty,
for example, we have some five or six years of monitoring data in operation. This allows us, then, to
determine that there has been no change; in other words there are no cumulation of hydrocarbons.
There is no evidence of increases' of levels of hydrocarbons either in the water column or in the water
sediments. Now the function of the monitoring program is to detect change and I would ask you to
remember that. Frequently people talk about detecting damage--these are emotional words and they
involve a value judgment. -change is something you can identify and, logically you must, whether you
are engaged in strict physical environment impact analysis or social impact analysis. Having identified
change you then have to determine direction; for by definition change is neither favorable nor
20
unfavorable--it is mutual and the direction in which it is going is what you then have to determine. If
the change is unfavorable you then have to decide what actions you must take to change the direction
and to improve the situation and what remedial measures you have to apply to the system in order to
bring it back to normal. There is far too much loose talk about things like damage in systems. What peo-
ple actually mean are the detection of change, the identification of its direction, the determination of
remedial measures, and the implementation of these remedial measures. I think these are very simple
concepts but they are absolutely fundamental to any consideration. This is why I am starting from, if
you like, the physical and biological sciences and moving through to the other disciplines.
The next stage in this process is to do an audit. We've completed an audit of Forty but have just
started auditing some of our North Sea operations. We've virtually completed an audit of the Shetland
terminal operation because that is, in fact, designed rather like a financial audit. You've designed the
program, predicted effects, constructed the installation, and operated the installation; you then have to
close the loop.and ask yourself "Is the system in operation performing as predicted?" "Did we in fact get
the right environmental perimeters?" "Were they too strict?" "Were they insufficiently strict?" "Has the
system, in fact, not performed as predicted?" "What requirements may be necessary to upgrade it to the
level of performance that was predicted?" You'd be surprised but this actually is a surprisingly low cost
activity, if it is designed logically and carried out methodically. It.'s far less costly than rushing around
collecting vast quantities of data and failing to digest them, which I regret to say is the feature of this
sort of program that some government departments (in some countries) lay on industry and everybody
else. The sheer ecstasy of data acquisition appears to be the end objective. And analysis and utilization
of data and integration of sets of data get lost because budgets don't allow for adequate processing of
the data. I think this comes back to rather poor planning and inaccurate identification of wh~t is
required in the first place. ·~
Now when you come to onshore there are all sorts of problems such as: identifying landfill for a
pipeline; where to bring a subsea pipeline ashore; how to minimize the impact of the pipeline; what
remedial measures to acquire; what restoration has to be undertaken once you've installed the line; and
what sort of supervision is required during operation. This is basically the sort of thing that I assume
you're all familiar with having lived alongside the Transalaska pipeline for a year or two. That pipeline
is designed to monitor the operation; once reinstatement has taken place of the disturbed ground, it's
really largely a matter of patrolling. Though certain things, as you know, can never be reinstated after a
pipeline; for example, you can never reinstate the trees over a pipeline.
In considering on shore facility sizing, you then get into a rather interesting area and Shetland is a
good example of a society or a community that took the law into its own hands and decided it was
going to look after its own destiny. This is probably something that is easier to do on an island than
anywhere else and remote isolated communities are in a sense strictly analogous with islands. The
Shetlanders decided they needed some sort of legislative act in order to control their affairs--of course
oil and gas have not been traditionally a part of local governments in the UK. So they managed to get
an act through Parliament that gave them really unique powers for a local council. It's rather entertain-
ing, you see, because when you look at the act, their advisors were well-versed in Louisiana and Texas
gas law. And what the Shetlanders obtained essentially puts them in an analogous position in relation to
central governments in England, and to States in relation to the Federal government. Having
accomplished this, they had unique powers to control the development of oil 'in Shetland. The first
thing they did was to bring in planning consultants and give them the mandate to identify a common
user terminal site. The reason they did this was because they could already see there were at least 34
companies that either had oil or prospects of oil east of Shetland. They had horrible thoughts about the
proliferation of installations, and everybody arriving on their doorstep looking for terminals. So, essen-
tially they found the grassiest spot they could--it was of no aesthetic distinction--and said that's where
we'll build a terminal. Next they identified an overland route from the shore and designated it a com-
mon pipeline route, with all pipelines coming into Shetland moving into the common user terminal,
which gave them a common user export facility. Their only choice left was the way the pipeline should
be built from the oil fields at sea. Now this was a very sensible arrangement: it stopped land specula-
tion; it stopped the proliferation of installations; it set down industry codes including negotiating
arrangements for common user facility; and it identified the company that was going to be the construc-
tor and operator of the terminal. Overall, it has been a highly successful exercise.
In carrying through this process in Shetland, we set up an advisory group at the design and construe-
21
tion stages of the terminal. This group has been composed of the technical representatives of the com·
panies involved, as well as representatives from local interest groups including: Natural Environment
and Research CounciL the Countryside Commission, the Native Conservation Council and represen-
tatives from other local interest groups in Shetland. Representatives from all of these groups got
together and they were sort of 'watchdogs' on the design perimeters and construction of the Sollenberg
terminal. Once the terminal was completed, these representatives evolved into an organization called
"SOTEAG" (Sollenberg Oil Terminal Environmental Advisory Group), whose job was to police the
performance of the terminal once in operation, producing once again, a whole string of monitoring pro-
grams. The monitoring program in Shetland is run by a committee, which is, in turn, a subcommittee of
the Environmental Advisory Group. It might sound strange, here, but the Department of Agriculture
and Fisheries of Scotland are running one program while the National Environmental Research Council
and several universities and research institutes are running other programs. This is a completely com·
bined operation making use of the best laboratories and the best available scientists. It's an interesting
mixture of industry, government, and academia and something which I commend. I do not believe that
we ever are going to get anywhere as long as we have these suspicions, confrontations and separations
that result from refusing to involve government, industry and academia in common causes.
Nbw so much for the practical aspects of environmental impact analysis and oil and gas projects in
the North Sea. I'd like to take a look at social impact analysis. For those of you I haven't told, I apologize
for what's going to happen next. I promise I haven't told this story in Alaska for at least 10 years. But
those of you who were juniors in a local high school when I made a graduation address some 13 years
ago, I apologize if you heard it on that occasion. This chap was driving along a country road in
Gloucester in England and we have these astonishing roads which are 1.2 cars wide with hedges that are
about 10 feet high. And the roads are never straight for more than a 100 yards at a time and they nor-
mally have a right angle bend at the end of that section. Anyway, this chap was driving along on an
appalling night; rain was coming down in buckets and he could hardly see in front of him. The wind-
shield wipers could barely keep pace with the thing, and he faintly became conscious of a flickering
coming the other way. And he thought through the driving rain and lightening that this was probably
someone trying to attract his attention by flashing their lights and so he slowed down. Sure enough it
was a car coming the other way, and he pulled right over and squeezed past. The other car was still
flickering its lights, so he realized that he did want to speak to him. So he rolled down his window, got
deluged with rain and as the other car passed an extremely pretty woman put her head out the window
and yelled "PIG". He rolled up the window, drenched, and brooding on women's inhumanity to man
and the deplorable spread of women's liberation, he drove around the corner straight into an enormous
pig. Now when you begin to think about this, you'll realize that quite a lot depends on your point of
view.
Turning to social impact analysis, which I do believe is something that we do have to think very
carefully about, we have to ask ourselves: "What sort of baseline data do we have compared to a
biological or physical survey?" "How good is our demographic data?" "What do we know about
movements of population and population changes?" "What do we know about the actual activities of
the community?" "How good is our data?" "What sort of land utilization service do we have?" "Can we·
identify changes in land use?" "What sort of data do we have on growths or declines of setflements?" In
other words, "What are the magnitudes between the natural fluctuations in animal populations?" "Has .
there been an attraction to an urban center from a rural hinterland?" "Has there been an urban find?"
"Has there been a change in activity that has resulted in an inland movement?" "Has fishing given way
to agriculture or a combination of fisheries and agriculture?" "What do we know about the history of
subsistence hunting?" "What do you know about communication?" "What sort of data do we have on
communication?" And that's the best example I can give you. We all, in Alaska, know the importance
of the aircraft. We've all heard the stories and probably read the yams of the old bush pilots: the Sig
Wiens, the Bob Reeves, and all these legendary characters. But, actually, who has written a serious
economic historical study of the 'significance of the aircraft in the development and sustenance of
remote communities in Alaska? Something that has facts and figures and that can tell you the number of
flights, the number of flying days, the weights of freight carried, the number of people moved, or the
number of mercy rescue missions flown to evacuate people to hospitals? This is the stuff of proper
objective decision-making, not that we all know that the aircraft is important and you leave it to a com-
mercial operator and he's not going to fly unless there is money in it. And, of course, we then get into
22
areas like-what do we know about economic geography; of traditional activity; and a detailed and sym-
pathetic understanding and knowledge of all cultures. And having the knowledge of them, how do we
make value judgments? How do we monitor social impact and social change? I submit that it is an
extremely difficult task to do on an objective basis.
I would point out, of course, that I am guilty, perhaps, of making an artificial distinction because any
form of environmental impact analysis, such as I've been talking about must include the impact of man's
activities because man is a part of an eco-system. It's a fallacy lots of people fall into: thinking of them
and us when looking at an eco-system--it's out there and I'm not part of it. But it's impossible to find a
pristine eco-system, which is untouched by the hand of man in some way. (I defy any one to do it.) It's
also ridiculous to think of an eco-system only in terms of the geological and topographical framework
with the chemical, physical and biological components of the system as though it was somehow apart
from man. We are a part of it and, of course, it's ridiculous to also think that in biological terms, and I'm
using anatomical in a physiological sense, that man is the most generalized mammal. It's a rather sober-
ing thought and now that this most generalized mammal has turned his mind to social impact analysis, I
confess I'm a little bit worried because of some of his less pleasant traits (e.g., arrogance, conceit and pre-
judice) which could be set loose to do untold damage. I think we have to consider very carefully our
role in all of this because when you think about the concept of social impact analysis man may be well
intentioned; I frankly consider that we are all pretty blundering in our efforts to do good. We do have a
fairly dangerous potential to assume god-like powers in our efforts to determine, or even worse, to dic-
tate the future of societies or communities. I find this capacity to interfere or dictate the future pro-
foundly disturbing, and I feel that the whole exercise has a flavor of 19th century missionary fervor:
"We know what's best for you chaps and now we are going to tell you; we are going to set you up in
such a fashion that you do it and find out 10 years later that we were right." These are harsh w6'rds,
perhaps, but my particular purpose is to jolt all of us, myself included, into thinking very carefully
about what we are doing and why. And if, having decided there is a social impact, is it deemed
beneficial to the recipients to introduce change? Who's qualified to make such judgment and carry out
the remedial action? You get a whiff of 1984 with Big Brother watching? Perhaps it's extreme, I'm not
sure. But one has to accept that with change, education is also required. Who's going to educate whom?
And I believe that one of the things that's required is less, for want of a better word, I'll call it
evangelism, for social impact analysis. I think there has to be very careful observation of the successes
and failures, which may someday provide workable guidelines for a future generation. And this will
evolve through knowledge, and that means a lot of historical and economic research is an urgent
requirement; through a lot of understanding and debate and discussion the results will eventually be
accomplished. But I submit that it will never do if the results come from confrontation or polarization, ·
nor by superimposition of solutions by well intentioned legislators (and of course if the lawyers get
loose we are all doomed).. The final remark that I will leave for your consideration is-that whether in a
democracy, or wherever, once you've identified the social impact, you can never actually impose a
solution. Thank you very much.
23
~e.ctlon {/{/: f]:)e.mog'taphlc and Economic dfA.ode.LLng and cffnaly~u
Introduction
Thomas C. Warren
This chapter contains a series of six papers describing formal economic modeling approaches to
assessing economic change. These papers, and others of comparable topical interest, were presented at a
symposium workshop of the same title.
The reader is encouraged to review the full chapter text. Not included in these proceedings and
perhaps most important would have been a synopsis of the workshop discussions of the papers.
Two of the more important workshop themes were the need to both verify and use as an initial data
base primary field data, and the need to better integrate data and analysis of the "bottom up" and "top
down" approaches in assessing economic change.
Notably, Steve McNabb's presentation, "Primary Social Field Research in Socioeconomic Monitor-
ing" (in Chapter IlL Cultural, Social, and Family Concerns) pointed out the need to assess the quality of the
data base through primary field research and use of these data in formal economic modeling. This fre-
quently requires an interdisciplinary team approach via integrating appropriate components of the
structure "top down" and insightful "bottom up" approaches to both data gathering and analysis. ·
The following papers should be read in light of these themes, paying particular attention to the East
Texas adaption strategies described in Murdock, et al. of a North Dakota economic-demographic model
assessing the socioeconomic impacts of energy development described by Hertsgaard and Leistritz.
Warren outlines the Alaska Outer Continental Shelf (OCS) Socioeconomic Studies Program (SESP)
which predicts and evaluates OCS petroleum development upon the physicaL social, and economic
environments at locaL regionaL and state levels. Banks presents the economic and demographic models
of the SESP; Gibson analyzes potential commercial fishing industry changes due to OCS oil and gas
exploration and development. Huskey and Knapp discuss modeling problems in the OCS economic
impact projections for smalL remote, rural communities.
25
Economic-Demographic Assessment Models:
Adaptation and Validation
Steve H. Murdock, F. Larry Leistritz, Banoo Parpia, Sean-~hong Hwang and Rita R. Hamm
Computerized economic-demographic impact projection models have become increasingly popular
as a means for completing: (a) environmental impact assessments; (b) a public facility planning
preceding; (c) during a major resource development, analyses of the implications of alternative
administrative or legislative policies; (d) and for examining the alternative conceptual and empirical
premises t1nderlying theories of economic development (Ford, 1976; Cluett eta!., 1977; Hertsgaard et
a!., 1978; Mountain West Research, 1978; Murdock eta!., 1979; Stenehjem, 1978; Denver Research
Institute, 1979). Given such widespread use, and the wide range of outputs, flexibility, quick response
times and user accessibility of such models, it seems likely that their use will continue to increase rapid-
ly (Murdock and Leistritz, 1979; Leistritz and Murdock, 1981).
At the same time, as the number of examinations of the uses, forms and impacts of such modeling
systems increases (Murdock and Leistritz, 1980; Leistrirz et a!., 1979; Ascher, 1978; Hoos, 1972;
Greenberger eta!., 1976), it becomes increasingly evident that such systems can be extremely expen-
sive, can fail to achieve their intended purposes and have, in most cases, received insufficient validation.
It is also apparent that the adaptability of such models to settings other than the areas for which they
were originally designed has received relatively little attention. The questions surrounding model
adaptability and model validation, however, are particularly crucial ones for several reasons. Model
developments have become increasingly expensive and increasingly difficult to justify to sponsoring
agencies. As the number of models has increased and as familiarity with them has led to more realistic
assessments of their weaknesses as well as their strengths, there is increasing administrative pressure for
professionals to pursue less expensive model adaptation efforts and, in many cases, funding levels
simply prevent anything but an adaptation effort. The number of model adaptations, then, seems likely
to increase.
In addition, because the development of complex models requires efforts that often combine profes-
sionals from diverse disciplines and are often performed under severe time limitations and with limited
resources, many conceptual and methodological compromises are required in initial development
efforts. Adaptation efforts thus provide an opportunity to expand and refine a model's structure and
capabilities that is seldom possible in an initial model-development effort. In many regards, in fact, a
model adaptation effort provides a means to pursue the crescive and replicative principles basic to
science. Given the number of already existing models, such adaptations may be more important in
determining what are the most and least effective mo-deling techniques, and hence in improving model-
ing methodologies, than additional new modeling efforts. Both pragmatically and analytically, then,
model adaptation efforts may be informative and increasingly necessary.
Model validation is also extremely important in determining the utility and the relative strengths and
weaknesses of such modeling efforts. Analyses of the validity of such models must be performed to
evaluate their accuracy, relative to alternative methodological techniques, for various levels of analyses
and forms of model use, and to determine those conditions under which models are likely to be most
and least accurate. Until such validation analyses are completed, the pursuit of more complex (and
expensive) modeling efforts will remain an activity rooted as much in faith in specific methodologies,
academic aesthetics, and the desire for quantitative estimates for addressing administrative and technical
26
EIS (Environmental Impact Statement) and other requirements, as in scientific knowledge of the validity
and reliability of such models. Analyses of the validity of such models is thus absolutely critical for
techincal modelers and policy makers who desire to use such models.
The purpose of this paper is thus to address two critical issues related to economic-demographic
models: that is, how readily adaptable are economic-demographic models and how accurately do they
project changes in· key socioeconomic factors. Specifically, we describe one model adaptation
effort-the adaptation of the Texas Assessment Modeling System (TAMS) from the North Dakota
Regional Environmental Assessment Program's (REAP) economic-demographic models (RED I and RED
II) and examine the accuracy of the TAMS and RED II models for predicting 1970 to 1980 population
changes for 106 counties and 553 places in two very economically, demographically and socioculturally
different states (North Dakota and Texas).
Our intent in describing the adaptation effect is to identify those factors that should be evaluated
before an attempt to adapt a complex computerized model is made and thus to provide a realistic
appraisal of the advantages and disadvantages entailed in a model adaptation effort. Although our
_experiences are based on only one adaptation effort with one model and may thus be only partially
applicable to other geographical areas or types of models, we believe, that, given the small number of
adaptation efforts completed to date, an examination of even one case study is informative and
beneficial. By examining the accuracy of these models in projecting population, we present the results
of one of the first attempts to examine the validity of such models and to determine the conditions
under which such models are most and least accurate. We also examine how accurate such models are
relative to alternative project procedures. Although the validation analysis is, as with the adaptation
discussion, limited to an examination of only two such models and to an assessment of the accuracy,of
only one of the parameters (population) of the many (e.g., income, employment, public service
requirements, fiscal impacts, etc.) that should be examined and to that parameter for only one period of
time (1980), we believe the analysis may provide valuable insights concerning such models for social
scientists and policy makers involved in socioeconomic impact assessments.
This paper is organized into three sections. The first section describes the model adaptation effort and
delineates factors that should be considered in an adaptation effort. The second section examines the
accuracy of the TAMS and RED systems in projecting 1980 populations in North Dakota and Texas
counties and cities given 1970 data inputs. The accuracy is assessed for areas of different sizes and for
areas undergoing different rates of change. Finally, in the conclusion, some generalizations about the
use of socioeconomic impact projection systems are presented.
The TAMS Adaptation Effort
The adaptation of the RED (or REAP) models to the Texas environment began in September of 1978.
An operational form of the TAMS model was in place by September of 1979. The adaptat.ion effort
required an extensive time frame that was roughly 50 percent as long as that in the REAP model
development efforts. The relatively long adaptation period resulted, in large part from tne fact that the
REAP effort was initiated with a fully operational input/output model already in place while, in the
TAMS system, the development of the 1!0 component of the model required extensive development.
Although it is difficult to fully account for all costs associated with the adaptation because many were
absorbed as part of the operational costs of other ongoing projects, we estimate that the adaptation
effort involved costs in the range of $80,000, roughly one-third the cost of the two REAP modeling
efforts. Thus, the time and cost savings were extensive.
The actual adaptation effort, however, involved a number of crucial considerations at each step in the
adaptation process. These considerations are described below in terms of the dimensions of:
I) Computer System Compatibility
2) Model Structure
3) Date· Acquisition
4) Model Implementation
5) Model Validation
27
Computer System Compatibility
The computerization of assessment models is, of course, the key to their attractiveness and their utili-
ty. The specifics of such computerization, however, may be problematic in an adaptation effort and
should be carefully considered prior to the initiation of an adaptation effort. They should, in fact, be as
carefully considered in the choice of a model for adaptation as its conceptual or computational bases.
In the TAMS adaptation effort the major evaluations made prior to the selection of the model for
adaptation were done in terms of the economic and demographic structures of the model and its range
of outputs. We assessed the availability of the model's computer code language, APL, at our computer
facility but because no computer analysts with expertise in APL were initially included in the model
adaptation team, we failed to consider this factor in sufficient detail. As a result, we encountered dif-
ficulties and extensive time delays due to computer language and work space difficulties.
APL, the initials serving as an abbreviation for A Programming Language, was developed by IBM
and is a very efficient language for completing iterative calculations (such as those in the TAMS model).
However, as a result of numerous syntax revisions and attempts to a,dapt APL for use with widely dif-
ferent hardware and operating systems, several versions of APL (APL+, VSAPL, APLSV, and others)
have been developed that are largely incompatible. After an initial copy of the language code was pro-
vided by the North Dakota REAP program, we learned that the version of APL at their facility was
VSAPL, and was not compatible with our APLSV. In addition, when we obtained yet a second version
from the REAP program's time-sharing group, we found that the APL+ language used in this version of
the model was also incompatible with our version of APL. Because of both the languages and operating
systems differences we were forced to manually input the model code into our system and convert in-
compatible symbols between our version of APL and the REAP version. These processes caused
roughly a two month delay in the project.
Other difficulties were encountered because of the limitations of our own computer facility and the
differences in the development environment in North Dakota and that at the Texas A&M computer
facility. Because of the availability of large computer storage capacity in the North Dakota develop-
. ment effort, many model functions in the REAP model were allowed to consume as much as 'SOOK. Our
data processing center limited us to a workspace of '64K. Nearly three months of negotiation and
restructuring of the model were required to allow the model to run at a new core limit of 96K.
In adapting a complex computerized modeL then, careful consideration must be given to computer
compatibility in specific and detailed terms. Although we eventually obtained personnel with excellent
expertise in APL, we would have avoided several time delays had we obtained such expertise during
the evaluation phase of the project.
Model Structure
In the adaptation of the model's structure, the most important consideration should be the extent of
congruence between the structure of the model and the local environment to which the model is to be
adapted. The evaluation of such congruence was central in the consideration of each major model com-
ponent.
In the economic module, for example, it was clear that the 13-sector input/output model used in
North Dakota was not sufficiently detailed for the Texas environment and required expansion. An
evaluation of the level of detail necessary to properly characterjze the East Texas economy was thus
necessary. This resulted in the regionalization of a 27-sector model. This evaluation also suggested the
desirability of creating two new sectors, a lignite-fired electric generating sector and an imported coal-
fired electric generating sector. This latter alteration was deemed necessary to more effectively capture
subsequent rounds of expenditures and to reduce the burden of obtaining information on the location
of expenditures for each project added to the model.
The adaptation of the demographic module provided relatively few difficulties because the model
had been structured for detailed inputs and outputs for use in North Dakota. Only one limitation was
encountered. The Texas environment made the use of "special population" procedures much more
desirable than in North Dakota because of the number of ethnically diverse, retirement and recreational
areas in Texas. An evaluation of the ramifications of such a change indicated that the additional com-
puter core requirements necessary to store the data required to implement such procedures (such as age-
sex data for 7 5 single year age groups for a 25 year period for each sex for each area for each special
population) could not be accommodated at our computer center. We were forced to compromise our
28
desires to the limitations of the available computer system.
The interface module has received relatively little alteration in its adaptation to Texas, but its con-
gruence to the Texas environment remains an area of some concern. We had originally intended to
replace the data on worker characteristics that are used to estimate population from data on number of
in-migrating or out-migrating workers in the model with data collected from the Texas environment.
Although the data we have collected on the Texas environment to date indicates that the use of the
North Dakota data has resulted in few errors, the lack of Texas data to more fully validate the con-
gruence of worker characteristics in the two settings remains problematic.
The allocation module involves concerns similar to those for the interface procedure. That is, no
extensive changes have been made in the computational procedures, although we deem it essential that
data on worker commuting patterns in Texas be obtained to evaluate the assumptions underlying this
module. One structural change that was required, however, serves to demonstrate how subtly dif-
ferences in the development and adaptation contexts may affect model results and how carefully such
potential differences must be examined.
The allocation of baseline employment in the·REAP model employs a function that provides employ-
ment to communities on the basis of each community's projected share of regional employment. These
shares, in turn, were derived by using population as a proxy for employment because no data on
employment at the community level were available. This procedure alloca~es two types of employ-
ment, agricultural and nonagricultural. Because North Dakota is very ruraL the agricultural emphasis
was desirable, and it was possible simply to sum populations for all cities in a region and obtain shares
to be used in allocating regional nonagricultural employment. We could then determine the sum of the
residuals derived by taking the difference between a county's population and the sum of city popula-
tions for the county to approximate the shares to be used in estimating agricultural employment in each
county.
In Texas, however, there is a very significant proportion of employed persons in many counties that
are not agricultural employees and are not located in existing incorporated communities. In addition,
total agricultural employment is relatively small in any given region. These differences between the
Texas and North Dakota environments led to an important computational error. An example will
demonstrate the problem.
Given a county of 15,000 people with one community of 1,000 people and a regional population of
100,000, regional agricultural employment of 3,000 and nonagricultural employment of 30,000, the
RED procedure first determines the county's share of regional nonagricultural employment. This would
be 1 percent (1,000 of 100,000). It then computes the county's share of agricultural employment (14
percent or 14,000 of 100,000). The result is an estimate of total county employment of 300
nonagricultural workers (I percent of 30,000) and 420 agricultural workers (14 percent of 3,000), a total
of 720 employees for a county of 15,000 people. This procedure led to computational difficulties for
East Texas where commuting to large urban centers is prevalent and the proportion of workers living in
rural areas that are employed in nonagricultural jobs is large. The necessity of changing this procedure
in the model was not obvious until our first data on total employment by county were produced. We
subsequently developed a county residual share function to better account for rural nonagricultural
employment.
In the service module we have made no basic changes, although this is largely due to the fact that
national estimators are used in this module. The module is likely to be altered with further develop-
ment of the model.
The fiscal module received the most extensive alterations primarily because tax structures are quite
different in the two areas. For example, Texas has no severance tax or state income tax while North
Dakota has both. Although the basic structure of the North Dakota version of this module was usefuL
the reprogramming involved in the adaptation was extensive. In generaL the adaptation of fiscal com-
ponents of such models is likely to be much less beneficial than that of other model components.
In general, then, numerous alterations in several model components were required due to differences
in the Texas and North Dakota environments and several others are likely to be required as our data
bases accumulate. There is little doubt, however, that the REAP model structure expedited the TAMS
adaptation effort. The REAP computer code saved hours of original programming, and its conceptual ·
approach gave us a base to work from and a base for comparing possible alternative approaches.
_Although the time involved in o!-lr adaptation effort was extensive, the development period for our
29
effort was markedly decreased because of the availability of the REAP code. Furthermore, our effort
was able to build several linkages and refinements because we had the REAP structure as a comparative
base.
Data Acquisition
The difficulty of obtaining the necessary data· to adapt a modeL such as the REAP modeL to a dif-
ferent environment varies greatly depending on the type of data item required. Acquisition of
demographic data provides few difficulties because of its centralized source (the U.S. Census), and much
of the fiscal data is also available from secondary sources, though local level data may be less accessible
but desirable. Economic data are more difficult to obtain, especially for a relatively complex economy.
If a state 1!0 model had not been available for aggregation and regionalization, we would have been
forced to make major alterations in the economic model and to have more carefully evaluated the
feasibility of the adaptation effort. The major area of difficulty, however, was in terms of the data on
Texas workers and power plant expenditures. We have"simply been unable to obtain much of the
necessary information. Those of us who had been' involved in the North Dakota effort where this infor-
mation was available have come to appreciate the very special relationship that exists between univer-
sities, private enterprise and state agencies in North Dakota.
In evaluating the feasibility of an adaptation effort, careful consideration should be given to the ques-
tion of data availability and the implication of failing to obtain specific data items. If the model is data
intensive, and one is quite sure that data values in the initial model will not accurately reflect conditions
in the area to which the data is to be adapted, and such data is unlikely to be available, then a less inten-
sive modeling scheme should be examined. On the other hand, if data are unavailable for adapting the
model but values in the base model appear applicable to the adaptation area, then an adaptation effort
may, in fact, allow you to obtain an applicable model that you would not otherwise have been able to
develop from your own data sources. Before an adaptation effort is initiated, then, it is essential to
evaluate the importance and potential availability. of all data items and the model's capability to over-
come such limitations.
Model Implementation
By model implementation, we refer to those activities involved in the computerization of the concep-
tual structure of a model. Although such considerations are clearly dependent on system compatibility,
the factors referred to under model implementation relate to the processes rather than to the structural
characteristics of establishing a computerized modeling system.
In implementing an adapted version· of a modeL several considerations must be taken into account.
Foremost among these is simple the necessity to become fully acquainted with model computational
procedures and the exact interactions between model components. The level of familiarity referred to is
not just an overall familiarity with what the model is doing conceptually but exactly how it computes
each model step and how each step relates to every other. This, in other words, is the same level of
familiarity that would have been obtained in programming the original model. Although this may seem
obvious, it is quite tempting, given the existing computer code, to avoid learning the specific computa-
tional procedures used in the model assuming that the model must certainly take "that" into accour.tt.
Whether the model code for an item aggregates subunit totals to get larger area totals or allocates from
a larger area to subunits, or whether units are in hundreds, thousands, and so on may seem like burden-
some "details" to know, but they are vitally important details, particularly when necessary alterations in
the model code must be made.
In many cases, in fact, the highly interactive nature of such models may place extensive demands on
the computer analyst. The ramifications of each change in model code must be traced throughout the
model. If a concise and powerful' computer language, such as APL, is used this tracing is especially
important. If this is not done, it will inevitably result in difficulties at some other phase of the modeling
project.
30
The major point is that computer expertise is as essential in an adaptation effort as it is in the initial
development of a model. Illusions, whether self-imposed or structurally imposed, that less sophisticated
computer expertise will be necessary because it is an adaptation rather than an initial development
effort, are just that, illusions. .
Having been involved in both a development and an adaptation effort, we would assert that the type
of expertise necessary to alter an existing model code and to trace the ramifications of such alterations
throughout the model may be at least as extensive as that necessary to write the original code.
Model Validation
Efforts to validate a complex economic-demographic model are difficult under any circumstances.
With an adapted model the process is, in some ways, actually made more difficult. The difficulties arise
because of the need to take differences in the development and the adaptation contexts into account.
Again, an example may demonstrate the type of difficulties that may be encountered.
In the adaptation of the fiscal model, we were extremely careful to insure that the changes
implemented were carefully traced to all other parts of the modeL but several initial results showed pat-
terns of fiscal surpluses unlike any that had been found in model results for lhe Northern Plains.
Although these results were subsequently found to result from a very .subtle error in a report printing
routine, there were also several factors that argued for the possible accuracy of the results. Although
fiscal balances were more likely to be positive than we had anticipated, they showed the differences
between jurisdictions that we had anticipated. They were most positive for the jurisdictions with direct
taxation authority over the facility and very marginal for other areas. In addition, because of the large
number of communities in East Texas, project-related workers tend to be distributed to a large number
of communities such that individual communities seldom receive the type of "boomtown" growth
often experienced in the Northern Plains. Finally, the Texas taxation system is such that the plant facili-
ty is taxable in Texas while it is not in North Dakota, and local city sales taxes and other similar taxes
that exist in Texas, but not in North Dakota, seemed likely to be offsetting many negative fiscal
impacts. After our experience with the allocation problem, noted above, we were quite aware of the
potential effects of differences in contexts, and perhaps too ready to attribute differences in results that
were actually due to model code errors to differences in contexts. The presence of an alternative to
admitting one's own errors becomes tempting when errors are difficult to locate.
On the other hand, the fact that the results of an existing model are available for comparison may
lead to the discovery of errors that might not otherwise have been detected. It was the fact that our
fiscal results differed from those from the REAP model that, in fact, kept us searching for the errors in
our model's structure. In validating an adapted model, we would maintain that the results from the
original model should thus be taken as the guiding force in evaluating an adapted model's results unless
deviations from the original model have been validated computationally as well as conceptually.
General Considerations in Model Adaptations
Although it is unwise to generalize from a sample size of one, in this section, we wish simply to point
out some retrospective general considerations that we believe should be included in the design of a
model adaptation effort. In so doing, we have tried to separate our unique experiences from what we
believe are general considerations and discuss only those likely to be applicable to other settings. It is
perhaps necessary to point out, however, that such a process is likely to be only partially successful
because of the difficulty encountered in separating the general and the specific and because model
developers tend to find it difficult to develop objectivity concerning their own products.
One essential consideration is that entailed in the preliminary process of evaluating a model for possi-
ble adaptation. Although all of the difficulties that will be encountered in an adaptation effort can never
be fully anticipated, in many cases preliminary evaluations are completed too hurriedly and less
systematically than desirable. The desire to "get started" may prevent the careful assessment that is
necessary. It is particularly important in this initial evaluation not only to evaluate the probability that a
given parameter can be estimated or a given data item obtained, but as noted above; the implications of
failing to obtain such items or being unable to estimate a given ·parameter must be considered as well.
One significant missing data item or inappropriate procedure may be sufficient cause for reappraising
the use of a given model. In nearly all cases the time spent in evaluating a model will not be wasted. If
the model is chosen for adaptation, the effort expended in evaluating data sources and alternative
estimation techniques is likely to expedite the adaptation effort once it is initiated.
31
Central to the evaluation effort and to the adaptation effort itself is the use of a truly interdisciplinary
team representing all of the skills necessary for completion of the project. In the case of a model with
the capabilities of the REAP or TAMS models this entails a computer systems analyst (not just a pro-
grammer), an economist, a demographer, a public service analyst, and a fiscal impact analyst. Although
more than one of these areas of expertise may be represented by a single team member, it is unlikely
that all of such a model's components can be adequately evaluated and adapted by persons from a single
discipline. Although an economist or a demographer may be capable of doing many different types of
analysis, it is a mistake to think that either can do the tasks of the other or that either can substitute his
skills for those of the systems analyst. Finally, it is important from the standpoint of social dynamics
that these persons interact as openly and as equitably as possible. Each discipline's point of view must be
forcefully presented and integrated with the perspectives of other disciplines. This is best expedited by
open discussion.
Model adaptations, however, also require a more structured organization than many standard
academic efforts. In fact, the standard principles and procedures of good administration are especially
important in such an effort. Although the open discussion referred to above is essentiaL there must be a
management structure such that final decisions are made and acted upon. In a modeling effort, com-
promises between the ideal conceptual design, the most efficient computer system's design or the most
desirable economic, demographic or other estimation procedure must be made, and in some cases these
compromises cannot be made on a consensual basis. In addition, general administrative procedures such
as establishing fixed schedules for the completion of certain tasks and procedures for coordinating
diverse modeling tasks are essential.
It is also essential not to oversell an adaptation effort to sponsoring agencies. In most cases, the cost
differential between an adapted and an initial model development will be a strong point but the time
frame differences between an adaptation and a development effort may not be substantial and this
should be made apparent to potential sponsoring agencies. Unfulfilled expectations inevitably lead to
sponsor dissatisfaction. -
It is also important that the administrative structure supporting an effort include those from whom
data are required and who shall likely use the modeling product. Whereas the REAP development
effort included an advisory group from state agencies and industry, in Texas simply the large number of
similar efforts in the state and the size of the state prohibited such an arrangement and the model adap-
tation effort was largely an academicians effort. Although the North Dakota advisory group system
placed a greater communication burden on the development team, it also provided essential guidance
and access to needed data items. Such advisory groups thus seem desirable whenever a policy-oriented
modeling development or adaptation is to be undertaken.
We would also suggest that an adaptation effort involve, whenever possible, someone from the
initial development team or that access to the initial developers be achieved in some manner. Even the
most thoroughly documented models will contain procedures for which available descriptions are
ambiguous. The time savings involved by having access to the person who originally designed the con-
ceptual and systems structure of such a model are extensive, and the number of errors avoided is likely
to be substantial. ·
Finally, we suggest that an adaptation effort is unlikely to succeed if the level of enthusiasm in an
adaptation effort is less than that in an initial development effort. Such efforts do require a different
type of creativity than that required in an initial development effort, but not less dedication. More per-
sistence and less innovation are demanded of the modelers in adapting a model. It is unlikely, then, that
an adaptation effort can be completed by a staff that simply adds the adaptation effort to its existing
duties. In sum, such an effort must be seen as a major one, be managed as such and involve persons with
a major commitment to the effort.
In looking back at our adaptation effort, we can enumerate a large number of factors both positive
and negative that expedited and impeded the adaptation process. Perhaps the most important to note
however, is that the effort has been successful. The TAMS system is functional and being used by local
agencies for impact planning purposes. It is unlikely thafthe financial resources necessary for the initial
development of such an elaborate and complex model could have been obtained from a Texas modeL
and we believe that the State of Texas has· a more complete planning model than it would have
obtained by other means, because we were able to adapt the REAP model.
32
An Assessment of Model Validity
In this ·section, we examine the accuracy of the RED and TAMS models for projecting 1980 popula-
tions in North Dakota and Texas counties and cities. Before examining these projections and their
accuracy, however, it is essential to understand the general state of knowledge related to small area
estimates and projections. This knowledge is essential because any assessment of the validity of a
methodological technique requires a relative as well as an absolute evaluation of accuracy. It is impor-
tant to know not only how accurately a small area projection technique projects variables of inter-est,
but also how accurate one might expect it to be given the state of the art in small area projections and
how it compares to other available methodologies commonly used for small-area projections.
The completion of population estimates and projections and the evaluation of the accuracy of
estimates and particularly population projections represent extremely difficult tasks. Although an ever-
increasing body of literature describes alternative methodological approaches to population projection
(Morrison, 1971; Pittenger, 1976; Irwin, 1977; Greenburg, 1978; Pittenger, 1980) and estimation
(National Center for Health Statistics, 1968; 1977; Erickson, 1974; 1975; Fay and Herriot, 1979;
Gonzalez and Hoza, 1978; National Institute of Drug Abuse, 1979; Lee and Goldsmith, 1982), the
accuracy of even short-term estimates remains such that many demographic scholars recommend that
estimates for small areas (with populations of less than 5,000 to 10,000) should not be made (National
Academy of Sciences, 1980). The history of population projection~ is even less encouraging and clearly
suggests that population projections for small areas are particularly subject to large errors (Ascher, 1978)
and should thus be avoided.
In addition, as the recent National Academy of Science Committee on Small Area Estimates has
noted (National Academy of Sciences, 1980) such estimates can be evaluated on a variety of criteria
(low average error, low average relative error, few extreme relative errors, absence of bias for
subgroups, etc.), but accuracy in terms of one criteria will not insure accuracy in terms of other criteria
(i.e., a set of estimates with a low mean absolute percentage error may be unacceptable from the stand-
point of the number of areas with exceptionally high estimation errors). Even when a set of criteria for
the evaluation of such estimates or projections has been agreed upon, difficulty may be encountered in
determining a basis for the evaluation. Most estimates have been evaluated, either against infrequently
occurring special censuses (Zitter and Cavanaugh, 1980; National Academy of Sciences, 1980) or
against the most recently available census (Zitter et al., 1968; U.S. Bureau of the Census, 1973). As a
result, systematic comparisons of estimates can only be made on an infrequent basis.
Evaluations of population projections are even more difficult to complete because of their future
emphases. Evaluations of projections thus occur infrequently and are usually limited to either an evalua-
tion of several projections relative to one another (Bjornstad et al., 1975) or of evaluations for ten-year
periods between the two most recent decennial census (Isserman, 1977).
The results of evaluations of estimates and projections are seldom encouraging for the user of small
area data. Thus, although Zitter a.nd Cavanaugh (1980) note errors for state estimates of less than 2 per-·
cent and average absolute errors for counties of 5 percent or less, they also note mean absolute percent-
age errors of over 23 percent for places under 500 population and errors of over 26 percent for places
that had grown or declined by more than ten percent in the past 4 to 6 years. Isserman (1977) in an
evaluation of 8 small area projection techniques found mean percentage errors of over 10 percent for all
methods and errors of over 25 percent for even the most accurate methods for the most rapidly grow-
ing and smallest townships. In addition, an evaluation of the most recent U.S. Census Bureau projec-
tions in comparison to 1980 census counts indicates errors of over 5 percent for at least 8 states.*
In light of these factors, a number of recent discussions of projection modeling and simulation tech-
niques (Ascher, 1978; Alonso, 1968; Boster and Martin, 1972; Fromm et al., 1975; House and McLeod,
1977; Murdock and Leistritz, 1980; Pindyck and Rubinfeld, 1976; Sanderson, 1978) suggest that projec-
tion methodologies should be viewed as having multiple objectives. Given the constraints on their
accuracy (as noted above) these authors suggest that projections should be used to sensitize data users to
the implications of alternative policy decisions and that projections should be evaluated on the range of
factors for which projections are provided (i.e., their overall utility to the user) as well as on their
accuracy. New population projection techniques that are as accurate as prevailing techniques and pro-
vide additional advantages should thus be further evaluated to assess their relative degree of integration
with other informational components (i.e., economic, social and other dimensions) and in terms of their
information utility). New projection methods that are as accurate as present procedures and, in
*john Long 11nd Signe Wetrogtln. 198 I. persont1/ communimlion.
33
addition, integrate demographic with other dimensions should thus be carefully considered for poten-
tial use. .
In sum it is essential in examining the validation analyses presented below to realize that the project
of small area populations is an area fraught with difficulties and one in which extensive methodological
refinement is critical. Impact projections which involve the completion of projections under conditions
(e.g., in small and rapidly growing areas) that are even more difficult than those that prevail in the com-
pletion of standard projections may thus be expected to reflect, and must be evaluated in terms of, the
o.verall state of the art of small area projections.
Evaluation Procedures
In order to assess the relative accuracy of the models' projections, 1970 economic and demographic
inputs were used to project 1980 populations for counties and cities included in the TAMS and RED
models for Texas and North Dakota. These models were run in a baseline mode using total fertility
rates of 2.l births per female to be cqmparable with the rates underlying alternative projections. The
accuracy of these projections was then evaluated on the basis of measures of error commonly used in
evaluating estimates and projections (Zitter and Cavanaugh, 1980; National Academy of Science, 1980;
Isserman, 1977) and in comparison to the most widely used alternative projections for North Dakota ·
(Murdock and Ostenson, 1976) and Texas (Texas Water Development Board, 1976). The criteria used
in these evaluations include low average error (mean percent error or MPE), low relative error (mean
absolute percentage error or MAPE), the number of extreme errors, as well as variations in errors by
size of place and rate of population growth. Finally, because the most widely used error measure
(MAPE) does not adequately weight percentage error differences by size of place but rather computa-
tionally gives equal weight to all places regardless of size, the mean percent absolute difference
(MPAD) measure, which corrects for this problem, is also reported (Cavanaugh, 1980).
The 106 counties and 553 cities to which the RED and TAMS models have been adapted and for
which results are evaluated represent widely different contexts that promise to provide an excellent
evaluation of the models' accuracy under widely varying conditions. The 53 counties in North Dakota
represent some of the most sparsely settled areas in the nation. The 318 incorporated places in North
Dakota are generally small (256 had less than 1,000 population in 1970) with only 3 places-Bismarck/
Mandan, Fargo and Grand Forks-with populations over 50,000. Although North Dakota grew by 5.6
percent from 1970-1980, this was largely due to growth in only a small number of counties. In fact, of
the state's 53 counties, 36 experienced population declines from 1970 to 1980. North Dakota is thus a
state with a relatively small population, declining populations in many counties and a large number of
small incorporated places. On the other hand, the 53 county area in East Texas covered by the TAMS
model (Murdock, et al., 1979) is the most rapidly growing region in one of the most rapidly growing
states in the nation. All 53 counties included in the TAMS model experienced growth from 1970 to
1980. The median rate of growth from 1970 to 19~0 for places in the area was over 17 percent, the
mean rate of growth was over 48 percent (Murdock et al., 1981), and the area's 235 places include
numerous relatively large places, including one place (San Antonio) with a population of nearly one
million. In contrast to North Dakota, then, the Texas area is a rapidly growing area with numerous
relatively large places. The contrast and variation in these areas thus reflect the key factors (size and
growth rate) likely to affect the accuracy of projections, and the examination of the models' results for
these areas should provide a good evaluation of the models' accuracy.
Tables I through 5 provide comparisons of 1980 TAMS and RED population projections to 1980
census counts for counties and cities. Overall differences between TAMS, RED and census values are
shown in Table I. The range of errors for counties and cities are shown in Table 2, and the mean per-
cent error (MPE), mean absolute percent error (MAPE) ·and mean percentage absolute difference
(MPAD) for county and city projections are shown by the size of the county's or city's population in
1970 in Table 3, and by percent population change 1970 to 1980 in Table 4. Table 5 provides-mean per-
cent error and mean percent absolute difference measures for places that were overestimated and
underestimated by the TAMS and RED models. Tables 6 through 10 present comparisons of the
accuracy of the TAMS and RED projections for counties to those for the most widely used alternative
projection systems (alternative projections for places were not available). In addition, comparisons of
projections for TAMS, RED and alternative projection systems for counties grouped by the same
34
qualifiers as those used in Tables I through 5 (population size in 1970, percent 1970 to 1980 population
change) are presented.
The data in Table I and 2 suggest that the TAMS and RED models performed moderately well in
projection 1980 population, particularly for North Dakota counties where the mean percent absolute
difference was only 6 percent. The data in these tables also point out the importance of using rriultiple
measures of accuracy. Thus, in Table I for North Dakota counties, the mean percentage error was -2l.4
percent. the mean absolute percentage error was over 33 percent. while the mean percent absolute dif-
ference was 13.3 percent. Multiple measures should clearly be used in assessing the accuracy of model
projections.
The data in Table 2 provide an indication of the distribution of errors in TAMS and RED projections.
The data in this table indicate that over 65-percent of the projections for counties were within 10 per-
cent of the actual 1980 census counts, but only 28 percent of the projections for places were within 10
percent. For both Texas and North Dakota, county projections were generally more accurate than those
for places. The projections for counties and places in both states, however, showed a bipolar distribu-
tion with the populations for a relatively large number of counties and cities being projected very
accuratefy (within IO percent), but with a nearly equally large percentage being projected quite
inaccurately (over 25 percent error). The rcsa!ts are particularly disappointing for North Dakota places,
where projections for nearly 50 percent of the counties differed from 1980 census values by over 30
percent. However, this result is largely due to the acknowledged difficulty entailed in projecting
populations in very small places and the preponderance of such places in North Dakota.
Tables 3, 4 and 5 examine the accuracy of TAMS and RED model projections in terms of the
variability of the accuracy of such projections for units of various geographical sizes (Table 3), rates of
population growth (Table 4), and in terms of the models' tendencies to underestimate or overestimate
the I980 populations of counties and places (Table 5). In generaL the data in Tables 3 and 4 suggest that
the accuracy of the models' projections follow the expected pattern (National Academy of Science,
1980) in that projections for larger areas and more stable areas tend to be more accurate than those for
smaller and rapidly growing or declining areas. An examination of the data in Table 5 indicates that
although the models tend to overestimate county populations, they tend to underestimate the popula-
tions of places. This is the result of quite different patterns in the two states. Thus, although the model
was nearly equally likely to overestimate or underestimate county and place populations in Texas, it
showed a marked tendency to overestimte county populations and underestimate place populations in
North Dakota. The tendency for bias was more evident in North Dakota because of the underestima-
tion of populations for very small counties and places and the preponderance of such places in North
Dakota.
Overall the data in Tables I through 5 suggest that the TAMS and RED models provided moderately
accurate projections of I980 populations in North Dakota and Texas counties and cities. It is evident,
however, that their accuracy was substantially less for places than for counties, particularly for the
smallest size places. In generaL the data in these tables suggest that such models may be generally
usefuL if cautiously applied, but their use for projecting the populations of the very smallest areas may
be questionable.
An equally important factor in evaluating models' accuracy, of course, is how accurate their projec-
tions are relative to those for alternative projection systems. T abies 6 through IO examine this dimen-
sion by comparing the accuracy of the TAMS and RED county population projections to those for the
alternative projection system in each state that received the most extensive use by state and local
entities during the 1970s.
An examination of the data in Table 6 suggests that the TAMS and RED projections are neither
substantially less nor more accurate than the alternative projections. In fact, the level of accuracy of the
TAMS and RED and alternative models are nearly identical. The data in Table 7, however, suggest that
the TAMS and RED model's projections are more accurate than the alternative projection models in
that the number of counties and.places projected within 10 percent of the I980 census values is larger
for the models than for the alternative projection systems. In addition, the data in T abies 8 and 9 suggest
that the TAMS and RED models are less affected (i.e., less biased) by population size (Table 8) and no
more affected by varying levels of population growth (Table 9) than the alternative models. Finally, the
data in Table 10 suggest that the TAMS and RED models were nearly equally likely to underestimate
and overestimate I98I populations as the alternative models (though in the opposite directions). The
35
--------~--~~~---~--
data in T abies 6 through 10 thus suggest that the RED and TAMS models are generally as accurate as
alternative population projection models and perhaps somewhat less affected (biased) by population
size.
In sum the validation analyses presented here suggests that, at least for· population projections, com-
puterized economic-demographic assessment models appear to provide projections that are moderately
accurate and stable. They display similar limitations to other systems in projecting population changes
for small and rapidly changing areas but they are at least as accurate and perhaps less biased than alter-
native systems. These results thus suggest general utility and validity for these economic-demographic
projection systems.
Conclusions
The determination of the need for, the development of, and the initial use and validation of com-
puterized economic-demographic assessment models is clearly a formidable undertaking and the work
performed by Hertsgaard et al. (1978) and others clearly suggests the likely magnitude and complexity
of such efforts. The value of such modeling efforts is increased to the extent that they are applicable to
other settings and to the extent that they provide, through the provision of timely and accurate infor-
mation, useful inputs to the decision making process. This paper has attempted to address such issues by
examining the adaptability and validity of one such modeling system.
In generaL the results in this paper suggest that such modeling systems are adaptable and produce
moderately accurate projections. Any adaptation effort will require a substantial commitment of
resources and the validity of the model developed may be expected to be comparable, but limited in
similar ways to, other projection systems. These conditions and limitations thus suggest that the key to
the feasibility and desirability of developing or adapting such models should continue to be the needs
of the user. If timeliness, flexibility, and ease of use in evaluating alternative development scenarios are
desired, then the results of the efforts reported here suggest that an economic-demographic modeling
development or adaptation effort may be justified. If on the other hand, a single assessment is to be
completed for a single project, then, such systems do not appear to be sufficiently superior in technical
accuracy to alternative, less complex, projection systems, to merit the effort necessary to develop or
adapt them.
The development, adaptation, and validation of economic-demographic assessment models is a
developing, but yet severely limited, art. Additional adaptation experience and substantially more com-
plex validation efforts than presented here must be completed before the potential and limitations of
such -models can be adequately assessed. The experience to date, however, suggests that the develop-
ment and refinement of such models should be pursued, but only with full knowledge of the limitations
of such models, adequate awareness of the level of effort and factors essential to the successful comple-
tion of a modeling effort, and with realistic expectations about the likely utility and validity of such
models' projections. ·
36
Table 1. TAMS and RED 1980 Population Projections and 1980 Census Counts
for North Dakota and Texas Counties and Places
1980 Census 1980 TAMS and RED Mean Mean Absolute Mean Percent
Area N Population Projections % Error '?u Error Absolute Oifference --
All Counties 106 3,760,455 3,695,539 1.6 11.0 10.6
All Places 553 2,689,975 2,726,423 -11.7 27.9 14.5
Texas Counties 53 3,108,235 3,006,286 -3.7 13.8 11.4
N. Dakota Counties 53 652,220 689,253 6.9 8.1 6.4
Texas Places 235 2,253,965 2,281,302 1.3 20.3 14.8
N. Dakota Places 318 436,010 455,121 -21.4 33.5 13.3
Table 2. Percentage Differences Between 1980 TAMS and RED Projections and
1980 Census Counts for Counties and Places
All Counties All Places TX Counties ND Counties TX Places ND Places
(N= 106) (N=553) (N=53) (N=53) (N=235) (N=318)
Range of Error No. % No. 'J!, No. % No. % No. 'i'h No. 'Y,J
0-5.0 39 36.8 80 14.5 16 30.2 23 43.4 41 17.4 39 12.3
5.1-10.0 30 28.3 75 13.6 8 15.1 22 41.5 43 18.3 32 10.1
10.1-15.0 13 12.2 57 10.3 9 17.0 4 7.5 25 10.6 32 10.1
15.1-20.0 7 6.6 56 10.1 6 11.3 I 1.9 37 15.7 19 6.0
20.1-25.0 3 2.8 35 6.3 3 5.6 0 0 19 8.1 16 5.0
25.1-30.0 5 4.7 42 7.6 4 7.6 I 1.9 18 7.7 24 7.5
30.1 + 9 8.5 208 37.6 7 13.2 2 3.8 52 22.1 156 49.0
,_',,,
Table 4. Mean Percent Error (MPE), Mean Absolute Percent Error (MAPEl and Mean Percent Absolute Difference
(MPAD) Between 1980 TAMS and RED Projections and 1980 Census Counts by Percent Population Change 1970-80.
Percent Population All Counties All Places Texas Counties
Change, I 970-80 N MPE MAPEMPAD N MPE MAPEMPAD N M(JE MAPEMPAD
--10.1 19 9.8 ll.l 13.6 Ill -25.7 38.3 25.1 2 29.8 29.8 26.9
-10.0-0 18 8.5 9.5 7.5 96 -8.2 26.8 23.2 0 NA NA NA
0.1-10.0 18 !A 9.7 7.7 91 -7.6 25.3 14.2 7 -3.6 14.7 12.9
10.1-20.0 15 185 10.8 7.4 92 1.6 26.2 10.8 13 1.6 11.9 7.4
20.1-30.0 12 -1.4 12.6 16.8 61 -7.3 17.8 12.3 9 -3.8 14.8 22.1
30.1-40.0 12 -4.0 7.3 5.2 26 -12.8 21.5 12.0 11 -4.9 7.4 5.2
~ 40.1-50.0 4 -3.9 13.5 11.6 22 -14.3 20.4 10.8 4 -3.9 13.5 ll.o
\() 50.1+ 8 -17.5 18.9 25.5 54 -24.6 33.4 31.8 7 -20.8 20.8 26.1
N.D. Counties Texas Places N.D. Places
N MPE MAPEMPAD N MPE MAPEMPAD N MPE MAPEMPAD
17 7.5 9.0 9.0 7 35.3 43.0 21.4 104 -28.6 38.0 26.7
18 8.5 9.5 7.5 24 22.2 25.2 30.1 72 -18.3 27.3 17.0
•II 4.6 6.5 5.2 35 9.6 22.0 20.7 56 -18.3 27.4 13.3
2 3.4 3.4 3.6 53 10.4 15.5 10.2 39 -10.3 40.7 11.7
3 5.9 5.9 6.1 42 -1.0 12.6 12.7 19 -21.1 29.1 0.7
I 5.7 5.7 5.7 18 -10.5 13.6 11.8 8 -18.7 39.3 lo.6
0 NA NA NA 17 -7.1 15.1 10.6 5 -38.6 38.6 27.6
I 5.9 5.9 5.9 39 -25.7 31.9 33.5 15 -21.8 37.4 20.3
Table 5. Number, Percent, Mean Percent Error and Mean Percent Absolute Difference for
Counties and Places with 1980 TAMS and RED Projections Above and Below 1980 Census Counts.
Number
Percent
Mean Percent
Error
Mean Percent
Absolute
Difference
All Counties All Places TX Counties ND Counties TX Places
Above Below Above Below Above Below Above Below Above Below
72 34 198 355 26 27 46 7 124 Ill
67.9 32.1 35.8 64.2 49 5] 86.8 13.2 52.8 47.2
9.3 -14.6 22.6 -30.9 10.3 -17.2 8.7 -4.6 40.5 -20.1
7.0 16.8 13.7 15.7 7.2 17.1. 6.4 5.3 14.1 15.7
Table 6. TAMS and RED Model1980 Population Projections and Alternative Projections
Compared to 1980 Census Counts for Counties.
ND Places
Above Below
74 244
23.3 76.7
26.1 -35.8
12.0 15.7
TAMS and RED Projections Alternative Projections
1980 1980TAMS 1980 Mean Mean Mean% Mean Mean MeJn%
Census and RED Alternative •x, Absolute Absolute •r,, Absolute Absolute
Area N Counts Projections Projections Error % Error Difference Error % Error Dificrence
All Counties 106 3,700,455 3,695,539 3,633,037 1.6 11.00. 10.6 -3.5 11.6 10.5
Texas Counties 53 3,108,235 2,726.423 2,989,900 ·3.7 13.8 11.4 -10.1 U.4 I Ll.S
North Dakota Counties 53 652,220 689,253 643,137 6.9 8.1 6.4 3.1 9.8 lOA
""' ......
Table 7. Percentage Difference Between 1980 Census Counts and
TAMS, RED, and Alternative 1980 Projections.
TAMS and Alternative TAMS Alternative RED Alternative
RED All All TX TX NO ND
Counties Counties Counties Counties Counties Counties
Range of Error No. % No. 'ilo No. % No. % No. % No. %
0-5.0 39 36.8 23 21.7 16 30.2 7 13.2 23 43.4 16 30.2
5.1-10.0 30 28.3 25 23.6 8 15.1 9 17.0 22 41.5 16 30.2
10.1-15.0 13 12.2 29 27.3 9 17.0 18 34.0 4 7.5 l1 20.8
15.1-20.0 7 6.6 18 17.0 6 11.3 l1 20.7 1 1.9 7 13.2
20.1-25.0 3 2.8 6 5.6 3 5.6 5 9.4 0 0.0 I 1.9
25.1-30.0 5 4.7 2 1.9 4 7.6 2 3.8 l 1.9 0 0
30.1+ 9 8.5 3 2.8 7 13.2 1 1.9 2 3.8 2 3.7
Table 8. Mean Percent Error (MPE), Mean Absolute Percent Error (MAPE) and Mean Percent Absolute Difference
(MPAD) for TAMS, RED and Alternative 1980 Projections by Population Size of Area in 1970.
TAMS and RED Alternative TAMS
Population Size All Counties All Counties TX Counties
1970 N MPE MAPEMPAD N MPE MAPEMPAD N MPE MAPEMPAD
2,500 or less 3 2.0 4.5 4.3 3 22.0 25.1 19.2 0 NA NA NA
2,500· 10,000 48 3.5 11.2 10.9 48 0.3 10.1 11.1 13 -6.9 18.0 16.1
10,000· 25,000 34 2.9 10.3 9.3 34 ·10.3 11.2 11.6 23 0.5 10.9 11.4
25,501-100,00 17 ·4.7 11.7 11.4 17 ·7.9 14.4 14.3 13 -7.5 14.1 13.9
100,000+ 4 ·4.8 16.0 10.1 4 3.7 9.4 7.6 4 -4.8 16.0 10.1
Alternative RED Alternative
TX Counties ND Counties ND Counties
N MPE MAPEMPAD N MPE MAPEMPAD N MPE MAPEMPAD
0 NA NA NA 3 2.0 4.5 4.3 3 22.0 25.1 19.2
1.3 ·9.5 14.0 14.7 35 7.4 8.6 7.8 35 4.4 8.7 8.9
23 ·12.7 12.9 12.7 II 7.7 8.9 7.9 II ·5.1 7.8 8.7
13 -10.4 14.9 14.9 4 4.2 4.2 4.4 4 0.1 13.0 12.5
4 3.7 9.4 7.6 0 NA NA NA 0 NA NA NA
Table 9. Mean Percent Error (MPE), Mean Absolute Percent Error (MAPEl and Mean Percent Absolute Difference
(MPAD) for TAMS, RED and Alternative 1980 Projections by Percent Population Change 1970.80.
TAMS and RED Alternative TAMS
Percent Population All Counties All Counties Texas Counties
Change, 1970-80 N MPE MAPEMPAD N MPE MAPEMPAD N MPE MAPEMPAO
. ·10.1 19 9.8 I 1.2 13.6 19 14.4 14.4 13.4 2 28.8 29.8 26.9
·10.0· 0 18 8.5 9.5 7.5 18 3.5 4.6 7.6 0 NA NA NA
0.1· 10.0 18 1.4 9.7 7.7 18 -3.7 8.2 8.5 7 -3.6 14.7 12.9
10.1-20.0 15 1.8 10.8 7.4 15 -8.4 9.5 6.7 13 1.6 11.9 7.4
20.1-30.0 12 -1.4 12.6 16.8 12 -9.7 13.9 15.6 9 -3.8 14.8 22.1
30.1-40.0 12 -4.0 7.3 5.2 12 -7258 17.5 14.5 II -4.9 7.4 5.2
40.1-50.0 4 -3.9 13.5 11.6 4 -7.6 11.9 8.5 4 -3.9 13.5 ll.b
""' 50.1+ N 8 -17.5 18.9 25.5 8 -19.3 19.3 19.1 7 -20.8 20.8 2b.l
Alternative RED Alternative
Texas Counties North Dakota Counties North Dakota Counties
N MPE MAPEMPAD N MPE MAPEMPAD N MPE MAPEMPAO
2 22.3 22.3 21.1 17 7.5 9.0 9.0 17 13.5 13.5 10.8
0 NA NA NA 18 8.5 9.5 7.5 18 3.5 4.6 7.b
7 -8.3 8.3 8.5 II 4.6 b.5 5.2 II -1.0 8.1 8.5
13 -7.8 9.0 6.5 2 3.4 3.4 3.6 2 -12.5 12.5 U.8
9 -8.7 14.2 17.7 3 5.9 5.9 6.1 3 -12.9 12.9 11.3
II -17.7 17.7 14.3 5.7 5.7 5.7 I -16.1 lb. I Ia. I
4 ·-7.6 11.9 8.5 0 NA NA NA NA NA NA
-16.9 16.9 18.6 5.9 5.9 5.9 -36.2 3o.2 3o.2
Table 10. Number, Percent, Mean Percent Error and Mean Percent Absolute Difference for •.
TAMS, RED and Alternative Projections Above and Below 1980 Census Counts.
TAMS and Alternative TAMS Alternative RED Alternative
RED All All TX TX NO NO
·Counties Counties Counties Counties Counties Counties
..,. Above Below Above Below Above Below Above Below Above Below Above Below
v..
Number 72 34 40 66 26 27 7 46 46 7 33 20
Percent 67.9 32.1 37.7 62.3 49 51 13.2 86.8 86.8 13.2 62.3 37.7
Mean Percent
Error 9.3 -14.6 10.7 -12.i 10.3 -17.2 12.2 -13.5 8.7 -4.6 10.4 -8.8
Mean Percent
Absolute
Difference 7.0 16.8 '8.6 11.7 7.2 17.1 8.3 11.9 6.4 5.3 10.1 10.6
~------------------------
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45
Historical Setting
Adjusting to the Socioeconomic Impacts
of Energy Development in North Dakota
Thor A. Hertsgaard and F. Larry Leistritz
Agriculture has always been the principal component of the economic base in North Dakota. Grain
crops, which-are produced all across the state, are the major source of farm income, with specialty crops
(such as sugarbeets and potatoes) accounting for significant farm income in eastern North Dakota.
Livestock production (principally cow-calf operations) is concentrated in the southwestern third of the
state.
The number of farms in the state decreased substantially due to farm consolidation in the fifties and
sixties. The decrease has continued since then but at a much lower rate. There are now about 38,000
farms in the state. The decline in farm numbers and farm population contributed to a decline in the
number of firms and employment in small towns serving rural areas. Declining populations of farms
and small towns resulted in a decrease in the state's population from 632,446 in 1960 to 617,792 in
1970 but its population increased to 652,717 in 1980. Energy resource development (coal and oil) was a
major factor in the population increase between 1970 and 1980.
Discovery of oil and natural gas in western North Dakota in 1951 resulted in a flurry of exploration
activity in subsequent years. Williston (whose population increased from 7,378 in 1950 to 11,866 in
1960) served as the center for those operations. Exploration activity declined in the sixties and
Williston's 1970 population decreased to 11,280. The energy crisis in the early seventies, together with
the discovery of additional oil and gas reserves at deeper levels in the Williston Basin, led to a massive
increase in petroleum exploration and extraction activities. Williston's 1980 population increased to
13,336; Dickinson's population increased from 12,405 in 1970 to 15,924 in 1980; and other com-
munities in western North Dakota also had large increases in their population in that period.
North Dakota has an estimated 350 billion tons of lignite (of which 35 billion tons are presently con-
sidered to be recoverable) in the Fort Union formation.1 This coal has been mined, both from
underground and surface mines, since the tum of the century. Coal mining decreased until the early six-
ties and no underground mining has occurred since the mid-twenties. The Btu content of North Dakota
lignite averages 6,000-7,200 Btu per ton (compared to about 8,000-10,000 Btu for Montana-Wyoming
coal), so it is not economically feasible to ship the lignite very far from the mine site.
Although there had previously been lignite-fired thermal-electric generating plants in the state, large-
scale generating plants began to be constructed in the state in the sixties. Basin Electric Power
Cooperative began construction of a 212 megawatt (MW) plant at Stanton in 1963. The next year
United Power Association (UPA) began construction of a 172 MW plant, also at Stanton. In 1967
Minnkota Power Cooperative began construction of a 235 MW plant at Center. Basin Electric began
construction in 1971 of a 440 MW addition to their Stanton plant and Square Butte Power Cooperative
began construction of a 440 MW plant near Center in 1973. UPA and Cooperative Power Association
(CPA) began construction of the first 550 MW unit of a plant near Underwood in 1975 and began the
second 550 MW unit the next year. A five-firm consortium began construction of a 410 MW plant near
'11ze source of thi~ estimate is Douglas W. Stolle, Director of Publir Afplirs, North Amcrium Coal Corpomtio11, Bismarck, Nortlz Dakota.
46
Beulah in 1977. Basin Electric began constructing the first 438 MW unit of the Antelope Valley plant
near Beulah in 1978 and a second such unit in 1980. All of these plants have a construction period of
three tc;> four years.
In 1980 American Natural Resources and Associates began construction of a plant to convert lignite
to pipeline quality gas. This plant, the first such plant in North America, will be operational in 1984 and
will produce 137.5 million cubic feet of gas per day. A second unit (also 137.5 million cubic feet per
day) is in the planning stage.
In 1965 the Department of Agricultural Economics at North Dakota State University collected
primary data from a sample of firms, households, and units of local government in southwestern North
Dakota that provided information on their expenditure patterns. These data were used to compute
input-output technical coefficients and interdependence coefficients. Input-output technical coefficients
indicate the amount of inputs that a given economic sector (type of business) must purchase from each
other sector per dollar of output by that sector. Input-output interdependence coefficients indicate the
total requirements (direct requirements as measured by the technical coefficients plus indirect re-
quirements that occur as a result of the multiplier effect associated with the spending and respending of
a fraction of the income of firms in the local economy) for inputs from each sector per dollar of output
for final demand by a given sector. The interdependence coefficients are frequently referred to as gross
receipts multipliers because they indicate the number of times a dollar received by a particular sector
"turns over" or is respent before it leaves the area economy. These multipliers vary by economic sector
but range from about 1.5 to 4.5. In generaL the higher the fraction of locally purchased inputs of a sec-
tor, the greater is its multiplier.
The data that were collected and analyzed in 1965 were intended to be used primarily for the pur-
pose of estimating the economic impacts of irrigation development associated with the Garrison Diver-
sion Project of the Missouri River. As it turned out, the irrigation component of the project has pro-
ceeded far behind the original schedule and may never be completed as originally planned. However,
the results have been used to evaluate the economic impacts of many other kinds of developments over
the years, especially energy resource development.
The energy crisis associated with the mid-East petroleum embargo in 1973 gave rise to prospects for a
"crash program" of energy resource development in North Dakota. In 1973 Michigan-Wisconsin
Pipeline Company applied for water permits for 22 substitute natural gas (SNG) plants to convert North
Dakota lignite to pipeline quality gas. Natural Gas Pipeline Company (a subsidiary of People's Gas
Company of Chicago) also applied for water permits for four SNG plants and El Paso Natural Gas was
considering construction of multiple SNG plants. During that same time frame, there were a number of
mine-mouth lignite-fired thermal-electric generating plants for which construction schedules were
announced.
The direct and indirect employment and associated population resulting from the construction and
operation of these plants could have resulted in several hundred thousand people moving to the areas
where the plants would be located; this would have been a several fold increase in the population of
those areas. The possibility of this kind of population increase, together with widespread reports of the
socio-economic impact problems in such areas as Gillette and Rock Springs, Wyoming caused con-
sidera:ble concern in North Dakota regarding the problems that might emerge in the state.
In 1973 the Department of Agricultural Economics became involved in the Northern Great Plains
Resources Program (NGPRP). This program was a cooperative effort among states of the Northern
Great Plains and a number of federal agencies that evaluated the nation's future needs for energy, alter-
native scenarios for energy resource development in the Northern Plains States, and the impacts on the
area of these kinds of development. .
Battelle Memorial Institute, based in Columbus, Ohio, had proposed a regional environmental assess-
ment model for the Powder River Basin in Wyoming. A similar computerized information storage,
retrievaL and analysis system was proposed to the North Dakota Legislative Council in 1974.2 The
Legislative council accepted the concept proposed by Battelle-Columbus for a North Dakota Regional
1The North Dakota Legislative Assembly C011Ve11es only in odd-111mzbmd years amlthw {or only bcJ days. The Legislative Council is a grozw of" I 5
legislators lhtllmeels periodict~//y during the interim betwem sessi011s. 71zere tlre tllso slmulilzg commillees tlllti special commillees of the Legislative G11m-
cil that meet 01ze or more limes ill betwem legislative sessi011s.
47
Environmental Assessment Prqgram (NO-REAP), but not the proposal presented for a contract for
B~tt~lle-Col.umbus to implement the program. Instead. the 1975 Legislative Assembly appropriated $2
mtll!on to tmplement the program as a new agency within the framework of the North Dakota
Legislative Council. The 1977 Legislative Assembly again appropriated.$2 million for NO-REAP for the
next biennium but the bill to appropriate funds to continue REAP beyond June 30, 1979 was vetoed by
the governor. · .
During its four-year life. NO-REAP contracted with a number of entities to assemble baseline data
(prior to development projects) and project-related data (associated with development). to store these
data in a readily accessible manner. and to develop analyses systems to provide information across a
broad range of subject matter areas. One such effort was a cooperative undertaking for the construction
of an economic-demographic-fiscal impact projection model for evaluating alternative energy resource
development scenarios in North Dakota. Development of the conceptual framework was a cooperative
undertaking of the Department of Agricultural Economics and the Department of Sociology and
Anthropology at North Dakota State University and the Department of Economics and the Department
of Socioiogy at the University of North Dakota. Arthur D. Little, Inc. of Cambridge, Massachusetts was·
engaged to computerize the model.
The REAP Economic-Demographic Model I (REA-I) was developed during the period March I976
to November I976. It is a user-interactive computer model that was used extensively in the period
January I977 to March I979 by the North Dakota Legislature and Legislative CounciL state and federal
agencies, local units of government, and private users to assist in impact evaluation.
During I976 through I978, a project funded by REAP collected economic and demographic data for
monitoring the socioeconomic impacts of energy resource development in the state. A field survey
team was assembled to collect primary data that would be useful for monitoring socioeconomic changes
in energy development areas as they occurred. A part of this effort involved collection of additional
economic input-output data for the sectors contained in RED-I, as well as for four energy sectors not in-
cluded in RED-I.
REAP funded the development of an expanded economic-demographic-fiscal impact model (RED-2)
during the period May I977 to August I978. This model included the entire state (rather than only the
IS-county energy development area of RED-I) and permitted the evaluation of the impacts of projects
other than energy resource development projects.
The North Dakota REAP E-D models have been adapted for use in other states. The Texas Assess-
ment Model System (TAMS) was developed as an adaptation of RED-2 from September I978 to July
I979 and has been used extensively since then in Texas. RED-2 was adapted to uses in Wisconsin in the
period September I979 to July I980. Work on RED-2 enhancement took place at North Dakota State
University from November I979 to February I982 and the model that evolved from that work has
been called the North Dakota Economic-Development Assessment Model (NEDAM). NEDAM has
been adapted by North Dakota State University during the period August I98I to February I982 for
use in Montana by the U.S. Bureau of Land Management (BLM) to evaluate the economic·
demographic-fiscal impacts of energy resource development in Montana.
Other related work at North Dakota State University included the collection and analysis of data on
coal project construction and operating work force characteristics (including housing) in I97 4 (such
work is currently in progress for oil project workers). In 1976 population projections to the year 2000
for North Dakota and its regions were developed at North Dakota State University. These projections
have been r~cently revised by using the updated NEDAM model. North Dakota State University has
also, for several biennia, been asked by the North Dakota Legislative Council to provide biennial tax
revenue estimates for personal and corporate income taxes and the sales and use tax.
Institutional Setting in North Dakota
The North Dakota Legislature has taken a number of steps to mitigate the impacts of energy resource
development in the state. These include the passage of statutes governing the reclamation of mined
land, the siting of energy conversion and transmission facilities and the distribution of coal severance
tax funds to counties, cities, and school districts in coal producing areas to mitigate the adverse impacts
of development in those areas.
48
Reclamation Statutes in North Dakota3
The first surface mining reclamation act in North Dakota took effect January I, I970 although efforts
to pass such legislation had begun as early as I965. The first act was very primitive, but it was a begin-
ning. Another act was passed by the I973 Legislative Assembly and it provided for the return of mined
land to "approximate original contour," as well as the salvage qf the preexisting topsoil up to two feet.
There were minor changes made to these laws by the 1975 and the I977 Legislative Assemblies.
The Federal Surface Mine Control and Reclamation Act, signed by President Carter on August 3,
I977, provided for federal control of mine land reclamation. in those states that did not develop new
programs or modify existing ones so as to meet the provisions of federal reclamation statutes. That act
also provided for 50 percent cost sharing by the federal government of the state's costs of administering
the regulatory program.
The I979 North Dakota Legislative Assembly enacted a new reclamation law that took effect July I,
I979 and conforms in all important respects to the federal act. It provided environmental protection of
the land, including soil, topography, wildlife and habitat, and archeological sites. It has comprehensive
inspection, enforcement, and penalty provisions. The North Dakota program received federal condi-
tional approval on December IS, I980 and it is expected that all deficiencies will have been removed
by the end of I982, except for one change that will require legislative approval in I983. Changes in the
North Dakota regulations since I979 have followed those in the federal regulations.
Siting Statutes in North Dakota4
The I973 North Dakota Legislative Assembly passed a study resolution to address the need for the
regulation of the siting of transmission facilities. The I975 Legislative Assembly enacted the "Energy
Conversion and Transmision Facility Siting Act" which took effect when signed by the Governor on
April 9, I975. Its statement of policy is as follows:
"The legislative assembly finds that the construction of energy conversion facilities and transmission
facilities affects the environment and the welfare of the citizens of this state. Therefore, it is necessary
to ensure that the location, construction, and operation of energy conversion facilities and transmis-
sion facilities will produce minimal adverse effects on the environment and upon the welfare of the
citizens of this state by providing that no energy conversion facility or transmission facility shall be
located, constructed, and operated within this state without a certificate of site compatibility or a
route permit acquired pursuant to this chapter. The legislative assembly hereby declares it to be the
policy of this state to site energy conversion facilities and to route transmission facilities in an orderly
manner compatible with environmental preservation and the efficient use of resources. In accordance
with this policy, sites and routes shall be chosen which minimize-adverse human and environmental
impact while ensuring continuing system reliability and integrity and ensuring that energy needs are
met and fulfilled in an orderly and timely fashion." ·
The North Dakota Public Service Commission conducted a series of hearings throughout North
Dakota in I975 to inventory the state and to identify areas of exclusion and avoidance for energy
facilities. Firms requesting permits were required to present information for alternative sites and routes.
Changes enacted in I977 required the applicant to provide information for the proposed site or cor-
ridor and to indicate that alternative sites or corridors were considered and also allowed for the waiver
of some of the procedures for small projects.
'T1ze 11Hthors are i11debted to Dr. &i E11glertlz, Director of the Redamatioll Divisioll, North Dakota Publh· Servia Commissioll; a111l Jay Burillgrud,
Assistallt Director, North Dakota Legislative Cozmcil. for providillg mudz of the illformatioll ill this seiH011.
4 T1ze authors ,,;.e indebted to Wallace Owm, Chief E11gi11eer of the Public Utility a111l Siti11g Oivisioll, North Dakota Public Service Commissioll: Rsty
Walto11. Commerce Coullsel of the North Dakota Public Service Commissio11: a111l jay Burillgrud, Assistallt Diredor. North Dakot.t Legislative
Cowzdl. for providi11g llllteh of the ill{ormatioll ill this secthm.
49
Energy Development Impact Mitigation in North Dakota5
The coal severance tax, the coal conversion tax, and the oil and gas production tax all are levied "in
lieu of' property taxes on production. This sets North Dakota apart from Montana and Wyoming, for
instance, where the state taxes are in addition to property taxes levied by local subdivisions on coal and
oil companies.
The 1975 Legislative Assembly passed an act that levied a coal severance tax of 50 cents per ton plus
one additional cent for each three-point rise in the wholesale price index. The act also created the North
Dakota Coal Development Impact Office, with the director to be appointed by the governor.
Table I indicates the distribution of revenues from the coal severance tax, by year of the legislative
assembly.
Table I: Distribution ~f coal revenues by year of legislative assembly
1975 1977
Coal Impact Office
Special Trust Fund
Coal Producing County General Fund
Cities in Coal Producing County
School Districts in Coal Producing County
State General Fund
35%
30
5
30
lOO'?'o
35%
15
8
6
6
30
100%
Under the 1975 act the trust fund was placed under the State Board of University and School lands to
be held and managed by it. In 1977 the legislature created the loan program. The loans are issued by the
Land Board and administered by the Land Department. The loan requests for specific impact-related
projects must by law, receive a recommendation of approval or disapproval from the Director of the
Impact Office before the Land Board takes action.
The 1975 Legislative Session also established a "coal conversion tax" on coal-fired power plants and
other coal conversion facilities. The tax rate for power plants is 0.25 mills per kilowatt hour of electrici-
ty produced. This tax is in lieu of all ad valorem property taxes on the plants, except for taxes on the
land on which they are located. The revenues are divided between state and local governments with the
state general fund receiving 65 percent and local governments In the county where the plant is located
receiving 35 percent. The coal conversion tax is levied at 2.5 percent of gross receipts or 10 cents for
every 1,000 cubic feet produced (whichever is greater) for coal gasification plants at 2.5 percenf of gross
receipts for other coal conversion facilities. The oil and gas production tax is levied at 5 percent of the
gross value of production at the well head.
The coal severance tax returns 70 percent of the revenue in one form or another to the local subdivi-
sions, as follows: ·
20% -Direct Payment
35 -Grants
15 -Loans
70%
The coal conversion tax returns 35 percent to the producing subdivisions and the oil and gas production
tax returns about 25 percent to the producing subdivisions.
The 1977 Legislative Assembly changed the distribution formula for the coal severance tax funds and
also changed the tax rate to 65 cents per ton base rate plus one cent for each one-point rise in the
wholesale price index. ·
The 1979 session again changed the tax rate to a base rate of 85 cents plus one cent per four-point in·
crease in the wholesale price index. It also provided for the director to be appointed by the State Land
5 T1re authors are i11debted to james Luptak, Deputy Director, North Dakota E11ergy Develo11111fllt lmpad Office; awl jay Burilrgrud, Assislmr/ Direc·
tor, North Dakota Legislative Cou11cil, for providi11g 11111ch of the i11{ormatimr i11 this sedimr.
50
Board. The director was authorized to set guidelines, subject to Land Board approval, for awarding of
grants and loans, and appeals of his decisions were to be heard by the Land Board. Also in I979 the act
was changed to allow counties that did not produce coal but which were within IS miles of a tipple to
share in formula funds. County general fund share for those counties is based on the assessed valuation
of land within a IS-mile radius. School districts and cities also share in the fund, based on the number of
school age children and the population within IS miles of the tipple.
The I979 Legislative Assembly also put a constitutional amendment on the I980 election ballot to
preserve coal trust funds in perpetuity as well as to allow the Land Board to approve recommendations
of the director regarding loans of trust funds to subdivisions that qualify. This amendment was
approved by the voters.
The I98I assembly changed the name of the office to Energy Development Impact Office and
appropriated $IO million for the following biennium ·with which the office could distribute grant funds
to political subdivisions adversely impacted by oil resource development activities.
Aid to political subdivisions (in the form of grants and loans) in North Dakota (unlike some other
states) for impact mitigation comes from severance taxes on the coal rather than on substantial reliance
on grants and loans directly from the energy resource firms.
Description of the North Dakota E-D Model
The original North Dakota REAP Economic-Demographic Model (RED-I) was designed to provide
economic-demographic-fiscal impact projections for alternative combinations of energy resource
development projects in a IS-county area in southwestern North Dakota. The projection was the
2S-year period I976-2000. ·
RED-2 provided such projections for the entire state and for both energy and other types of develop-
ment projects. The North Dakota Economic-Demographic Assessment Model (NEDAM) framework
contains enhancements that were made on the RED-2 model.
This section of the paper will provide a brief description of the essential elements of the NEDAM
st"ructure although, unless otherwise indicated, this description applies to RED-I and RED-2 as well. The
description will be from a conceptual perspective, rather than from a computational algorithm perspec-
tive.
The model consists of five principal modules: the economic module, the demographic module, the
interface module, the residential choice module, and the fiscal impact module. Each of these modules
will be described in the subsections that follow. The coneptual relationships among components are
presented in Figure I.
The Economic Module
A major component of the economic module is the set of input-output interdependence coefficients
(or gross receipts multipliers). Each coefficient in this table indicates the amount of output that must be
produced by the row sector per dollar of output for final demand by the column sector.
In essence, this component of the model applies the interdependence coefficients (multipliers) to the
number of dollars that are injected into the region's economy (either by the preexisting baseline sectors
or by the site-specific development projects) to provide estimates of the number of dollars of gross
business volume generated in each sector as a result of those economic activities. These gross business
volumes for each sector are then translated to estimated employments in each sector by means of pro-
ductivity coefficients (gross business volume per worker) in each sector. The result is a set of estimates
of baseline employment and project-related (construction, energy operating, nonenergy operating, and
indirect) employment in the region.
The state of North Dakota is divided into eight planning regions. The model contains a set of baseline
final demand vectors (dollar value of projected exports from the region by the livesto~k, crops, mining,
and manufacturing sectors plus projected tourism receipts of the retail trade and business and personal
services sectors, as well as projected outlays of the federal government for contract construction and for
federal payrolls) for each year in the 2S-year projection period. (In the case of the RED-I modeL there is
only one set of baseline final demand vectors, which is for the IS-county area in southwestern North
Dakota for which the model was designed. The RED-2 and NEDAM versions contain a set of baseline
final demand vectors for each of the state's eight planning regions.)
51
ECONOMIC BASE (EXPORTS)
l INITIAL AGE-SEX DISTRIBUTION
~
INPUT-OUTPUT COHORT-SURVIVAL
MODULE (E) . MODULE (D)
~ . . ~
"GROSS BUSINESS VOLUMES, BY SECTOR POPULATION, BY AGE AND SEX
EMPLOYMENT, BY SECTOR LABOR FORCE, BY AGE AND SEX
~I E-D INTERFACE I~
!
NET MIGRATION, BY AGE AND SEX
~
RESIDENTIAL ALLOCATION
MODULE
~
LOCATION OF POPULATION
~
SERVICE REQUIREMENTS
MODULE
~
REQUIREMENTS ·FOR
SELECTED PUBLIC SERVICES
~
FISCAL
IMPACT MODULE
!
PUBLIC REVENUES
PUBLIC COSTS
NET FISCAL BALANCE
Figure 1. Data and Output Flows of NEDAM Model
1 ne model also contains a set of final demand vectors for each development project for which im-
pacts are to be evaluated. The final demand vector for each project that is stored in the model includes
annual direct expenditures to the local contract construction and retail trade sectors and payroll
expenditures to local employees of the firm that is the development project. It also contains the annual
direct construction and operating employment for the project.
The economic module provides estimates of the regional business activity (gross business volume· of
all business sectors) and personal income associated with the region's baseline finat demand vectors; the
project related (for all site-specific development projects considered in that particular scenario) business
activity and personal income; and the total (sum of baseline and project related) business activity, per-
sonal income, and per capita personal income in the region (population estimates for computing per
capita personal income are obtained from another module of the model). The economic module also
52
computes the change from the last year shown (both absolute and percentage) in business activity, per-
sonal income, and per capita income.
Another output produced by the economic module is annual baseline (nonagricultural and
agricultural) employment and project related (construction, energy operating, nonenergy operating,
and indirect) employment, as well as total employment and the change (from the last year shown) in
employment (both absolute and percentage). These employment estimates are computed at the
regional, county, and municipal level.
The Demographic Module
The demographic module is basically a cohort-survival model. NEDAM has a file stored for each
county in the state that is the age/gender distribution for each 5-year cohort for the year 1980 (There are
15 age cohorts: 0-4 years of age, 5-9, ... , 65-69, and 70 years of age and older. However, internal com-
putations within the model are for single year age cohorts for all ages except those 75 years and older,
which is a single cohort). The model ages each person one year each year, computes a given fraction of
each cohorf that die each year, computes the number of children born to women of childbearing age
(15-44 years of age) each year, and allows a given fraction of people 65 years of age or older to migrate
in or out of the county. (Contrary to the conventional cohort-survival model, migration of people less
than 65 years of age is anendogenous variable that is computed in the interface module, to be described
later.) The cohort-survival model thus calculates a new age/gender distribution for each county for each
year of the projection period.
The module contains a set of age/gender-specific labor pool membership rates (similar to labor force
participation rates) for each category (baseline, construction, energy operating, nonenergy operating,
and indirect) of employment. These rates are applied to each year's age/gender distribution in the coun-
ty to yield the number of available workers, by category of employment, in each county.
The Interface Module
The interface module subtracts the number of required workers (computed in the economic module)
associated with baseline and project related economic activity from the number of available workers
(computed in the demographic module). If the percentage difference is less than some limit, the model
estimates the number of in-migrating workers and their dependents to keep the percentage at the lower
limit. Conversely, if the percentage difference exceeds some upper limit, the model estimates the
number of out-migrating workers and their dependents to keep the percentage difference at the upper
limit. The user may select the upper and lower limits (called maximum and minimum values of the
"unallocated labor pool"). The percentage difference between required workers and available workers
is free to vary between the two limits before migration is triggered.
There is a given sequence in which the respective jobs (baseline, construction, energy operating,
nonenergy operating, and indirect) are filled. The labor pool membership rates (the counterpart oflabor
force participation rates) in the demographic module determine the fraction of each age/gender cohort
for each worker type (indigenous or baseline, construction, energy operating, nonenergy operating, and
indirect) that can fill each type job (baseline, construction, energy operating, nonenergy operating, and
indirect). However, the workers and their dependents are assumed to retain the characteristics of their
original worker category (even though the workers or their dependents fill a job in some other job type)
throughout the projection period. In other words, data for the indigenous (or baseline), construction,
and each other worker type population are stored separately and retain such characteristics as average
family size typical for the worker type population.
The model requires that a certain fraction of both construction workers and operating workers must
be members of that worker type population. This is due to the fact that a certain fraction of these jobs
requires skills that are highly techhical and cannot be_ filled by workers from some other worker type
population. In other words, before any development projects begin, there are only baseline jobs and
baseline (or indigenous) workers. When construction on a project begins, a c~rtain fraction of the con-
struction workers must in-migrate (together with their dependents) so there are now two worker type
populations in the area (indigenous and construction). The remainder of the construction jobs can be
filled from the indigenous population until the unallocated labor pool reaches its lower limit, at which
53
time additional construction workers (and their dependents) must in-migrate to fill the remaining jobs.
When operation of the plant commences, a certain fraction of the operating jobs must be filled by in-
migrating operating workers. The remainder are filled by workers from the indigenous population and
then the construction population. If additional operating workers are required, further in-migration of
operating workers and dependents occurs. A similar procedure exists for indirect workers except no
fraction 9f indirect job.s must be filled by in-migrants. The sequence in which indirect jobs are filled is
from the indigenous (or baseline) population, energy operating population, nonenergy operating
population, construction population, and (if required) from in-mi"grating indirect workers population.
For all but a few of the least rural counties in North Dakota, the projection of baseline economic
activity only (no development projects) implies persistent out-migration of population (mostly young
people). This has been the situation in the state in recent decades and it would likely continue because
of increased productivity of workers associated with the adoption of improved technology (especially
in agriculture). For a county having no economic activity associated with development projects (so that
out-migration would result), the model would assume out-migration of baseline population (having the
characteristics of historic out-migrants) in equal percentage amounts from all municipalities in the coun-
ty, as well as from the farm population.
When in-migration is estimated by the model (as for filling jobs associated with development projects
in an area), the workers and their dependents are assigned to one of the municipalities within a 100-mile
radius of the project site. The municipality to which this population is assigned is computed in the
residential choice module described in the following section.
The Residential Choice Module
A form of the widely used gravity model can allow for the estimate of settlement patterns of in-
migrating workers and their dependents among the muncipalities that are within 100 miles of the plant
site. The standard form of the gravity model is:
pi
G---1 a
Dij
where: Gi is the gravity coefficient that is computed for municipality L
Pi is the population of municipality i,
Djj is the distance between municipality i and plant site j, and
a is the power to which distance is raised.
The value of the power to which distance is raised may be selected by the user. The greater this
·power, the greater will be the value of the denominator of the fraction and the lower the computed
value of the gravity coefficient. The distance exponent is 1.5 for construction workers, 2.5 for both
types of operating workers, and 1.6 for indirect workers. These values are based on analysis of
empirical data for these types of workers and the values imply that construction workers will commute
the greatest distances and operating workers the least distances. If the user wishes to test other values,
the model affords that capability.
In RED-2 and NED AM, the population of municipality i (the numerator on the right-hand side of the
equation) is replaced by the sum of the baseline, construction, energy operating, nonenergy operating,
and indirect workers that lived in municipality i in the preceding year (except for construction workers,
which is for the second preceding year). The model also multiplies the right-hand side of the equation
by a coefficient that is known as the "community attractiveness index." The value of this coefficient is
1.0 unless the user selects some other value. For example, if the user selects a value of 2.0 as the index
for a certain community (because for some reason it is believed to be twice as attractive as other cities of
that size and distance), that municipality will have a gravity coefficient twice the value it would other-
wise have. Muncipalities within 100 miles of the plant ~ite will ?: assigned in-migr~ti_ng ~orkers and
their dependents in proportion to the value of the gravity coefficient for each mumcipaltty.
54
The Fiscal Impact Module
The purpose of the fiscal impact module is to estimate tax revenues, governmental costs, and net
fiscal balance (tax revenues minus governmental costs) at the state, county, municipaL and school
district level for each year of the projection period. The tax revenues and governmental costs that are
estimated are those attributable to the in-migrating populations associated with the set of development
projects selected by the user.
The model contains algorithms for estimating the following state revenues: sales and use tax, personal
income tax, corporate income tax, federal coal royalties, highway tax, cigarette-tobacco-liquor-beer tax,
equalization tax, coal conversion tax, and severance tax (both general fund and impact fund). Estimates
of expenditures (or transfers) by state government include: education transfers, property tax replace-
ment, highway fund, cigarette and tobacco tax, coal conversion tax, severance tax, highway operation,
highway construction, and general government functions.
Estimates are made of the following-county revenues: property tax, federal revenue sharing, highway
fund, conversion tax, and severance tax. County government cost estimates are made for law enforce-
ment, social services, and "other" government functions. .
Receipts of municipalities are estimated for property tax, federal revenue sharing, users' fees, special
assessments, highway fund, cigarette and tobacco tax, and coal conversion and severance tax. Expendi-
ture items include costs for streets, police and fire protection, general city government, and debt ser-
vice.
Revenue items estimated for school districts are property tax, education transfer funds, and coal
severance and conversion taxes. Estimates are made of costs of debt service and operating expenses.
Other Modules of the Model
Algorithms within the model permit the computation and reporting of additional details other than
those previously described in the sections for the five pri.ncipal modules of the model. These include a
criminal justice module and a social services module. The criminal justice module provides annual
estimates at the county level of the number of offenses (total as well as juvenile, violent, property, and
"all others") and the number of officers and vehicles required. The social services module provides
annual estimates of the number of physician visits, persons hospitalized, patient days, doctors required,
and hospital beds required, by county.
Other reports that are available from the model include an impact housing report, by type (single
family housing, apartment, mobile home, and "other"), by county and municipality; a school enroll-
ment report, by county and school district; regional reports on employment, by industry and year; and
components of population change (birth, death, and migration, by type of worker category) at the
county level.
User Options
The user has a number of alternatives that may be selected in the use of the economic module, the
demographic module, and the fiscal impact module, which must be run in that order. The user can run
any number of years up to the year 2005. The user will be asked to indicate whether the run is for
baseline only and, if not, which projects are to be included. The user can change the location and the
starting date of any of the projects. The user may also select the value of the distance powers and com-
munity attractiveness index for the gravity equation. The user will also be asked to specify the regions
or counties for which the computations are to be performed.
Once the economic module has been run, the demographic module can be run and the user will be
allowed to select the regions or counties to be included and to change values for birthrates, unallocated
labor pool percentages, family size, county level participation rates (male and/or female), percent of city
workers who can work on farms, and percent of rural workers who can work in cities.
After the economic module and the demographic module have been completed, the user may run
the fiscal impact module. Any years and areas for which the economic module and demographic
module were run may be run with the fiscal impact module. The user may choose the years and areas to
be run and may select the rate of inflation to assume and (as appropriate) rates for the sales and use tax,
coal electricity conversion tax, coal conversion tax, and severance tax. The rate of inflation is relevant
because all estimates of dollar values in the projectio_n period (such as gross business volumes and per-
55
sana! incomes) in the model are in terms of constant dollars ( I980 prices). In the fiscal module, some
~osts of political subdivisions (such as salaries of employees) are subject to inflation while others (such as
l~terest ~nd principle payments on bonded indebtedness) are not. Those values that are subject to infla-
tion dunng the projection period are discounted by the inflation rate to convert them to constant dollar
equivalents.
Once the modules have been run. the user can select the years for which results are to be printed as
well as the geographic level of detail desired. .
Use of the Model
During the period I977-1979, more than 50 different entities used the RED-I model for various
aspects of planning and policy development. User groups included state legislative committees. state
agencies, local governments. federal agencies. and private development firms. Beginning early in I982
an enhanced. statewide version of the model (known as NEDAM) was made available for general use.
The NEDAM version has been utilized by the U.S. Bureau of Land Management (as the basis for EIS
preparation), by the State of North Dakota (to develop population projections for all counties in the
state to the year 2000), and by a variety of community-based organizations and private firms. Of the
many policy and planning applications of the modeL the following three utilizations are discussed: I) in
evaluating alternative state energy resource taxation and impact finance programs, 2) as a guide in the
distribution of grants and loans to growth impacted areas, and 3) as an aid to local governments in
public facility planning.
Use in Tax Policy Development
During the period I975-I979, taxation of North Dakota's growing lignite coal industry was one of
the state's most hotly debated public issues. The two polar positions with respect to coal taxes can be
simplified as: a) the coal industry should be taxed no differently than any other industry except to com-
pensate for specific and extraordinary costs associated with its activities and b) because the coal industry
involves a "one-time harvest" of a natural resource and because the environmental costs associated with
its development may be very great a correspondingly high tax should be levied on this industry.
Naturally "position a" was attractive to those who favored development and feared the depressing
effects of a high tax while "position b" found great favor with groups that would prefer little or no
development of the state's coal resources.
The state established its first coal severance tax in I975. As mentioned earlier, 40 percent of the
severance tax revenues were made available to local governments affected by the development pro·
jects. Initial analyses of the implications of this tax, however, indicated that these revenues generally
would be inadequate to meet the needs of affected local jurisdictions. As a result of these analyses and,
taken together with a very high level of public interest in coal development issues, the severance tax
assumed a prominent position on the agenda of the 1977 Legislative Session.
The Senate Finance and Taxation Committee attempted to develop a severance tax rate and distribu-
tion formula which would provide fiscal resources adequate to meet the needs of jurisdictions affected
by coal development. The criterion of adequacy was generally interpreted to mean that: I) the
severance tax revenues returned to local jurisdictions should be sufficient to cover additional
development-related costs, after considering the effect of other development-related revenues and
2) grant or loan funds available to these jurisdictions must be sufficient to supplement local bonding
such that local governments could meet the front·end capital costs associated with necessary new
facilities. Because major increases in coal production and conversion activities were expected to occur
during the period I977-I985, the attention of legislative leaders was focused on this period and projec-
tions of the costs and revenues of affected jurisdictions under different taxation and distribution for·
mulas were deemed essential.
The RED-I model became the principal framework for analyzing the implications of various tax rates
and distribution formulas during the I977 Legislative Session. Early in the session, projections from the
model were used extensively by a lobbying group representing the coal development counties to
impress upon legislators the seriousness of potential local fiscal problems. It is also likely that the in·
volvement of key policymakers in the model development process and their exposure to the initial
56
analyses of the I975 tax law increased their awareness of the local fiscal implications of ~apid develop·
ment. During the session Oanuary-April I977), REAP personnel worked closely with the staff and
members of the Senate Finance and Taxation Committee and with individual legislators in evaluating
alternative taxation/distribution programs. The principal use of the RED-"r projections by the committee
was to evaluate the local government implications of each alternative in terms of the adequacy criterion
discussed above. These evaluations led to adjustments in the distribution formula originally proposed.
Other legislators who adhered to "tax position a," however, also used the governmental cost projec-
tions from the model in floor debate to support their position that the present tax was adequate to cover
the costs associated with development and hence that no major increase in the tax could be justified.
Legislators whose beliefs were more aligned with "position b" challenged this conclusion and charged
that the model was inadequate because it did not incorporate the costs associated with environmental
degradation, social disruption, and loss of a natural resource. The REAP staff agreed that such costs
were not included, but pointed out that the model had not been designed to address the issue of
optimum tax rate or to perform a comprehensive cost/benefit analysis of coal development and that its
structure was appropriate for assessing the implications of alternative tax formulas for local govern·
ments (one of the purposes for which it was intended).
The resulting legislation had the effect of making 70 percent of the severance tax proceeds available ·
to local governments. When the effects of both the tax rate and distribution formula changes are con·
sidered, the fiscal resources available to local governments (per ton of coal mined) more than doubled.
Subsequent analyses suggest that this tax formula is reasonably adequate to meet local government
needs.
The coal severance tax was again a major issue in the I979 Legislative Session. By this time the level
of sophistication regarding computer models and their uses had increased somewhat and champions of
both taxation philosophies made use of projections from the RED-I model in bolstering their cases. Each
group developed substantially different assumptions concerning the construction schedule of a major
coal gasification complex and the availability of federal matching funds for highway construction.
Depending on the assumptions used, coal development was projected to result in a fiscal deficit for state
and local governments combined of $30 million during the period 1979-1983 or, alternatively, a surplus
of $20 million over the same period. The substantial differences between these two projections con·
fused some legislators and led them to question both the credibility of the model and the value of its
parent organization. In the end, the I979 Legislative Session made only modest adjustments in the coal
severance tax.6 The distributional features of the I977legislation were retained intact except for a pro·
vision to allow some distribution of revenues to counties whose borders are within 15 miles of a mine
tipple.
In retrospect, then, the RED-I model was useful in defining the implications of alternative taxation
proposals for local jurisdictions and was a substantial aid in evaluating alternative proposals relative to
the criterion of providing adequate fiscal resources to local governments. It had little effect, however, in
resolving the deeper philosphical differences between the two taxation positions.
Use in Impact Assistance Administration
The severance tax/impact assistance program developed by the State of North Dakota relied heavily
on grants to local governments. The effective administration of this grant program, then, was critical to
the overall success of the effort. The legislation provided considerable flexibility for the administrator
as grants could be made to any local political subdivision which "demonstrates actual or anticipated
extra-ordinary expenditures caused by coal development and the growth incident thereto." The Coal
Impact Office made substantial use of the RED-I model during the period I977-1979. Projected
changes in population and school enrollments were utilized in conjunction with information on
capacities of existing infrastructure in assessing the need for various proposed facilities. Grants for new
public facilities were often made a year or more before actual population growth created a need for
expanded capacity. Many observers feel that the ability of the Coal Impact Office to anticipate such
•Tize base mle for the lax was established a/ $0.85 per loll tlS of july I, I979 with 1111 ilzflalimzadjus/meul vf $0.0 I for each four I'Villl illcrcasc ill/he
Wholesale Price l11dex. Tizis legislaliollac/wzlly resulted illll sliglzt decrease ill/he effcrtive ltLt mle as ill(laliolltldjuslmenls over the I977·I979 l'eriod
had resulted itlllftLr: mle exaedillg $0.90 per lotl by mid·I979.
57
needs and provide funding in a timely manner enabled these communities to cope with the problems of
rapid growth much more effectively than has been the case in many other areas.
The simulation model was particularly useful as an administrative tool because it allowed rapid
responses to changes in the development outlook. During the period 1977-1979, three major power
plant construction projects were underway in Mercer and McLean counties of North Dakota. These
projects experienced frequent changes in construction schedules and labor requirements. The model
allowed state and local decision makers to obtain updated impact projections soon after a change in
schedule was announced. Further, initial evaluations of the model's reliability indicate a high degree of
correspondence between predicted and actual changes in key socio-economic indicators.
Use in Local Facility Planning
A number of counties, cities, and school districts utilized the RED-I model during the period
1977-1979 in developing capital budgets and in various other planning activities. One example is pro-.
vided by the City of Beulah which used the model as an aid in its capital facilities planning. Beulah,
located in Mercer County, had a population of 1,344 in 1970. By early 1977 the prospect of rapid
growth was apparent as construction of a 440 megawatt (MW) electric.generating plant was scheduled
to begin a few miles south of Beulah in late 1977 and construction of an 880 MW plant and a 5.2
million ton per year (MTPY) coal mine was to begin a few miles north of the town in 1978. Further, a
250 million cubic foot per day (MCFD) coal gasification complex was being planned for co~struction a
few miles from Beulah. This facility also would require an additional 9.4 MTPY of coal mining capaci-
ty, but its construction schedule was uncertain.
Beulah officials readily perceived that growth resulting from these developments might require
substantial expansion of a number of the community's facilities and services. The wide range of possible
outcomes, however, made fheir planning task extremely difficult. For example, if only one 440 MW
plant were built, the county could anticipate a peak construction period population influx of about
1,400 and a permanent population increase of about 300. Development of both electric,generating
facilities would likely lead to a construction period growth of about 4,200 and a permanent increase of
about 2,000. If the gasification plant were developed on schedule, the prospective population increases
could be on the order of 9,000 at the peak of construction activity and 7,000 on a permanent basis.
Necessary assumptions regarding the distribution of population growth within the country added to the
uncertainty for local officials.
The potential magnitude of growth was a concern not only with respect to the necessary capacity but
also for the basic design of some facilities. For example, in early 1977 the most immediate concern of
Beulah officials was planning for a new sewage treatment facility. If only a.few hundred new residents
were anticipated, the most cost-effective alternative would have been to add one more cell to the ex-
isting lagoon facility. On the other hand, if population growth were expected to be several thousand,
the most appropriate solution might have been to build a new treatment facility as ri.o more than one
cell could be added to the existing one.
After a preliminary meeting with members of the REAP staff, the Beulah City Commission requested
a series of population projections, incorporating several ~Jternative assumptions regarding the extent
·and timing of development coupled with alternative assumptions concerning Beulah's capture rate for
the in-migrating population. After reviewing these projections and assessing the relative likelihood of
the development scenarios on which they were based, the Commission decided to design the treatment
facility to meet the needs of a population increase of 2,000-3,000 (a level consistent with construction of
the two electric generating plants) but with potential for expansion to meet the needs of up to several
thousand additional residents (in case the gasification complex were developed). It appears in retrospect
that this was a wise decision as both generating plants are being developed and the status of the gasifica-
tion plant was not clarified until ~ugust of 1981.
Summary and Conclusions
North Dakota is a rural state whose economy has been largely based on agriculture. The discovery of
oil in western North Dakota in 1951 resulted in substantial exploration and production activity in the
fifties. There was some lignite coal resource development in the sixties, but the energy crisis of the early
seventies resulted in a significant increase in energy resource development (both coal and petroleum) in
58
western North Dakota. There was considerable concern in the state as to the adverse effects that might
be associated with this development.
The state has reclamation statutes to restore mined land to its ··approximate original contour" and
productivity and siting ·statutes to "minimize adverse human and environmental impact" of energy con·
version and transmission facilities. It has also enacted statutes to provide for energy development im·
pact mitigation.
The 1975 Legislative Assembly funded the North Dakota Regional Environmental Assessment Pro·
gram (NO-REAP) to assemble baseline and project-related data. store these data in a readily accessible
manner. and develop analyses systems to provide information across a broad range of subject matter
areas. One such analysis system was an economic-demographic-fiscal impact simulation model to
evaluate likely impacts of energy (and other) resource development projects.
This model has been widely used in North Dakota and has been adapted to uses in other states.
Although there have been some problems associated with energy resource development in North
Dakota. many believe these problems have not been as serious as in other areas.
59
Introduction
Socioeconomic Studies Program and Approach
Thomas C. Warren
The Alaska Outer Continental Shelf (OCS) Socioeconomic Studies Program (SESP) was created in
1976 by the Department of the Interior, Bureau of Land Management (now the Minerals Management
Service (MMS)) in response to their own and the State of Alaska's -concerns of the effects of OCS
exploration and development on the people of the State. Its purpose is the prediction and evaluation of
Alaska OCS petroleum development upon the physical. social. and economic environments within
Alaska at the State, regional. and local community levels.
As stated in the original study plan" ... (given) the various degrees of subsistence living in the rural
regions of Alaska, the social and economic impact of OCS petroleum development takes on a much
higher significance than in the 'Lower 48'." Populations in the major urban areas of the State (Fairbanks
and Anchorage) and in the "Lower 48" OCS development areas have most of the social and cultural
traditions and characteristics of contemporary Western industrial society. In these areas, development
will impact man's use of the land, the natural physical environment, and alter local economic and social
structures, but those who are subjected to the consequences of these events will at least end up in a still
familiar cultural setting. Under these circumstances, the costs and benefits of the dislocation can be
calculated, for the most part. in common economic and social accounting terms.
The study plan also states "Rural Alaska differs culturally not only from the dominant Western
industrial society, but regions and areas within the state present a wide diversity among themselves ... "
This diversity is rooted deeply in the local physical setting of the communities, the land and natural
resource base, patterns of local use (both commercial exploitation and subsistence) and inherited
cultural traditions. Not only is there lack of uniformity in the cultural and social structures of these
areas, but their paths and their"Stages of evolution differ. "Outer Continental Shelf petroleum develop-
ment poses possible changes in the existing rural communities and their societies. This development
could affect these communities by changes in their current support systems (e.g. use of land and ocean
space, resource use), or by their submergence through an influx of immigrants with different lifestyles
and cultural values. Depending upon the goals of these communities, such change could be considered
as positive or negative. If the nature and magnitude of these possible changes are known in advance,
then these communities may take appropriate action to mitigate unfavorable changes or to enhance
favorable changes. These changes, however, go beyond conventional economic considerations and are
of deeper social and cultural significance. The ultimate objective of this research program is to arrive at
a basis for prediction and evaluation of the changes.:·
Program and Approach
Given the nature of the research task, the study program was, and is, an applied program. Within the
bureaucracy, our goal is the timely provision of social. cultural and economic information to adequately
inform the Secretary of the Interior of the consequences of specific OCS leasing and OCS management
decisions.
Simplistically portrayed. Figure I shows the leasing and lease management (operations) process con-
sists of two major components -the pre-sale phase and the post-sale phase.
60
~ ~
Pre-Sale Post-Sale
Oil and gas operations
Estimate of
M "t . . . •. I . . I ff Socioeconomic/Environmental Effects om onng socioeconomic environmenta e ects
MT . +M Mitigatint Measures I Igatmg easures + • leasing (all considerations) lease Management
------~
Figure 1. Leasing and Operations Process. OCS
In brief, the major pre-and post-sale program components are: estimation of socioeconomid
environmental effects; mitigating measures; leasing and lease management; and monitoring. While the
Socioeconomic Studies Program is not the entity responsible for identifying possible· mitigating
measures, we do contribute information to those who do recommend such measures. Monitoring pro-
vides the information feedback for both pre-sale and post-sale decisions.
The general approach followed in all studies of program impact evaluations is based on a com-
parative analysis of hypothetical changes likely to occur at the State, regional or local level. Although
the impact evaluation process is complex, due to the large number of studies and the need for coordina-
tion among them, generalizations can be made about the process. The evaluation proceeds in six basic
steps:
I) Project OCS petroleum development activities
2) Describe baseline conditions
3. Forecast conditions likely to occur if present and forecasted trends continue and the proposed
sale did not occur
4) Forecast conditions likely to occur if the proposed sale did occur
5) Analyze state and regional level impacts
6) Analyze local level impacts
Projection of OCS petroleum development activities (referred to as "scenarios") constitutes the oil
and gas development hypotheses driving the impact analysis. A scenario is defined as the sequence of
petroleum development events (employment, tiining, location. investment. and technology) in a pro-
posed sale area corresponding to a given level of potentialrecoverable oil and gas resources. Oil and gas
development takes place through private sector investments, which in turn, are influenced by resource
development economics. On this basis, a technology assessment model of OCS development activity is
necessary for the particular lease sale. The analysis attempts to model private sector policy regarding
development of the oil and gas resources.
Based on the estimated distribution and size of potential finds, the following factors affecting the
efficiency of recovery are analyzed: I) probable technologies; 2) economic characteristics (e.g. unit
costs, timing and manpower); 3) environmental constraints. ·
Resource data for the specific lease area is analyzed at three levels: a low estimate corresponding to a
95 percent probability that there is· at least that amount; a high estimate with a 5 percent probability
that there is at least that amount; and a statistical mean. This information is combined with the
petroleum technology assessment. converting likely equipment and locational characteristics for each
6I
scenario to employment, cost, and scheduling characteristics.
One scenario is constructed for the high, low, and mean resource estimates and a fourth is con-
structed assuming that exploration takes place, but that no commercial quantities of oil and/or gas are
found. In order of increasing magnitude of activities, the four scenarios are labeled the exploration, 95
percent, mean, and 5 percent cases, respectively, and each is mutually exclusive of the other. These pro:
vide a range of potential direct employment and equipment characteristics together with the likely loca-
tion of both in the leasP sale area.
We have performed two post-sale monitoring studies of exploration activity, one in the Gulf of
Alaska (safe 39) and one in the Lower Cook Inlet (sale CI). To date, no commercial quantities of
hydrocarbons have been discovered in either area, with only exploration activity occurring. While pre-
sale activities and expectations may generate in:tportant effects, post-sale events have generated no iden-
tifiable significant effects under these circumstances. For this reason, the exploration only case is no
longer analyzed in any detail. Similarly, the 95 percent case is often the same as the exploration only
case, and has been dropped from analysis.
The purpose of baseline investigations are to develop an understanding of baseline conditions and
directions of. change in potentially affected human activities. Of particular interest is the identification
and analysis of:
-Those elements or systems of human activity that are affected by OCS development.
-Current trends within these elements of systems.
-Changes or the susceptibility for change within identified trends.
The scale ofhuma·n activities varies at the State, regionaL and local levels. The types of impacts are
different at each level and consequently, the questions to be answered and the techniques for answering
these questions are necessarily different. At the State leveL the focus is on describing Federal and State
government policies and patterns, interstate and intrastate economic relationships and employment
migration patterns, plus many other factors that influence broad economic and demographic
characteristics. At the regional level, the program focuses on broad economic, social and demographic
characteristics, but only in the social and economic regions which may be directly affected by the par-
ticular lease sale. Population and economic conditions in the other regions of the State are researched,
but are analyzed only from a contextual perspective unless a significant relationship to the directly
affected region is discovered. A separate study of regional transportation systems is conducted because
this activity is likely to have a greater areal distribution than OCS development and, because of this
fact, is more likely to spread potential impacts over a greater geographic area.
The program addresses a different set of problems at the local leveL where oil and gas activities are
most likely to have a physical presence and, thereby, a more direct effect on human activities. Onshore
. oil industry activities tend to locate in or near coastal villages and communities that have some or all of
the needed infrastructure services. A large influx of new people in these small communities could over-
burden available housing and community services and facilities, and in general cause potential social
conflicts. In light of such potential problems, the local level analysis looks at the effects on
socioeconomic characteristics of the communities and at the effects on sociocultural characteristics of
the people likely to be impacted. Within each identified community, the analysis focuses on changes
likely to occur in the following categories: population; the economy, including employment and fiscal
characteristics; housing; governance, and the political climate; land use and land status; community
infrastructure activities, including utilities, community facilities, education, public safety, health, and
social services; and other activities that might be significantly impacted.
The information developed in the technology and baseline assessments, particularly that of baseline
pertaining to existing trends and their susc::eptibility to change, allows the forecasting activities to pro-
ceed. Forecasts seek to develop economic and demographic projections for the year 2010. The primary
focus of the impact analysis and the forecasts is to discover the incremental. effects or changes likely to
be caused by the proposed lease sale, assuming different OCS development scenarios. At the local
level, because of the stage of OCS development in Alaska generally, conditions are changing from a
base that is, in generaL devoid of any prior OCS influences. Thus, at the local leveL straightforward
forecasting techniques will usually account for the incremental effects of the planned site. In some
instances, successive sales are geographically proximate and local level forecasts must take into account
62
the events resulting from a prior sale, if the prior sale affected, or is assumed to affect, the community
under study. This complicates the local forecast because the prior sale is likely to follow any number of
development scenarios. The specific forecasting technique used depends largely on availability of local
data, and the ability of the contractor to accurately substitute knowledgeable assumptions.
At the regional level and, particularly at the State leveL the forecast method must· change. This
change must not only account for the difference in issues at these levels, but also for the cumulative
effect of all prior lease sales, whose collective development activities over the forecasting period form
the context for evaluating the incremental effects of the planned sale. In regional!State level forecasts,
the need to account for the events of prior sales requires a different approach, one in which incremental
changes are derived from the difference between cumulative effects with and without the planned lease
sale. The development of such a forecast requires a replicable process (i.e. a model). The SESP uses the
Man-in-the-Arctic Program (MAP) econometric modeL which has both statewide and regional sub-
models.
The fact that each sale can be characterized by several scenario, or development, cases is an important
consideration in constructing the cumulative cases for analysis. The number of possible combinations of
cases increases exponentially as the studies move from one lease sale to the next. Because of the
hypothetical nature of the scenarios and because the SESP seeks only to bracket the range of significant
impacts, cumulative cases are constructed using a "pure" accumulation of mean lease sale scenarios.
That is, the mean scenario case is used to represent each lease sale being included in the analysis prior to
the subject sale. The weight of analysis of the subject sale is also focused on the mean development
case, assuming all prior sales held at the mean level.
The "base" case component generally represents an extension of existing conditions and known, or
estimated, trends without consideration of any additional future lease sales. At the regional and
statewide level there are several planned and ongoing oil and gas activities, as well as other resource
development activities, which influence the infrastructure characteristics, expenditure patterns, and
migration patterns of the various regions and the State as a whole, thereby affecting the cumulative
forecasts. For the most part, the base case is likely to vary only slightly from one lease sale to the next.
By way of example, assume we are evaluating the Navarin lease sale 83, which is the next proposed
sale after the St. George Basin sale 70. By definition, the evaluation of incremental effects associated
with sale 83 must be derived by a comparison of forecasted conditions with and without the lease sale.
Concentrating first on the incremental effects of the mean scenario case, and using the same manner in
which the components of the cumulative case were defined, the components of the cumuiative mean
case for sale 83 are composed of all prior Alaska OCS leasing. When the component characteristics of
the St. George Basin cumulative mean case are run in the MAP modeL the employment and population
characteristics of scenarios representing each lease sale are collectively integrated and combined over
the forecasting period. The resultant forecasts become the cumulative conditions without the lease sale
being studied. When the component characteristics of the Navarin lease sale mean case are run in the
MAP model, the resultant forecasts become the cumulative mean condition with lease sale being
studied. Comparing the forecasts, the difference represents the incremental changes due to the mean
scenario case developed for the Navarin lease sale. Significant parts of our transportation, local
socioeconomic, commercial fishing, and Anchorage impacts analyses are similarly treated.
Changes resulting from oil and gas development are viewed from both their beneficial and adverse
characteristics in the impact· analysis process. As stated earlier, the analysis compares hypothetical
future conditions that might occur with OCS development to a hypothetical future condition that
might exist if the lease does not take place.
The logic used to explain impacts begins with the description of baseline conditions and proceeds to
describe forecasted conditions without the planned sale. Sequentially, for each scenario, the explanation
continues by describing OCS activities that might occur between each specified horizon year and the
changes that are likely to be brought about as a result of those activities.
Though the basic approach as described has been followed since the inception of SESP, the direction
and emphasis has changed considerably. Our case study program is constituted of first describing the
impact-causing agent, then the existing socio-economic conditions and anticipated changes without
OCS, and, finally, the impacts assessment in the categories previously described, with the emphasis on
methodologies.
By 1980, most OCS leasing regions of the State had been analyzed in this manner at least once. This
63
significant information and methodological base was used in redirecting the program studies now under
way reflect these changes. Generally, these changes recognize the integration of cash and subsistence
economies in rural Alaska; the potential for structural change in both social and economic systems, and
the reflection of a much higher degree of sophistication in the analytical tools employed.
The papers which follow describe the evolution of these studies in their methods, applications, and
findings in the local socioeconomic and sociocultural environments, economic/demographic and fiscal
devel.opments, and commercial fishing industries in the Anchorage area.
64
Economic and Demographic Modeling
Alaska OCS Social and Economic Studies Program
Kevin R. Banks
We have heard that the objective of the Alaska OCS Office's Social and Economic Studies Program
(SESP) is to assess the potential impacts likely to occur as a result of offshore petroleum development.
To this end, the SESP has adopted modeling techniques of the Institute of Social and Economic Research
(ISER) of the University of Alaska. These models form the basis of much of SESP's economic and
demographic analyses, which serve as input to Federal OCS decisions. ISER's work is also at the center
of other related studies conducted by the SESP: work which is intended, in some instances, to improve
our knowledge of model assumptions and inputs and work which utilizes model outputs to analyze the
broader effects of OCS development on infrastructure, transportation, and the society and culture of
the region.
A quantitative evaluation of economic, fiscal, and demographic impacts associated with large scale
offshore operations serves to put issues into focus. Extraneous or miniscule effects can be sorted out and
essential information may be displayed in some clear order or context. Modeling does not foretell the
future, but it can permit the policymaker to test different assumptions about future events and how
these events may be altered by specific policies. If the model is structured well, its users can assign some
degree of confidence to their projections. It is because of this structure that regional modeling is so allur-
ing to resource managers.
The Map Model
The ISER Man-in-the-Arctic Program (MAP) statewide and regional model was selected for the SESP
early on in the program. It was recognized that the circumstances which determine economic change in
Alaska were very different than the lower 48, and that national models (i.e., those that depend upon
data collected nationwide), would be unsuitable to the Alaska situation.1 The Alaskan economy is
marked by tremendous instability and a sparse population living in very remote locations. Linkages
among industries that we would expect to find in the lower 48 are very different or, more likely, non-
existent in Alaska. There is also a fundamental lack of comparable data between what may be available
here and the rest of the country. Because of these differences, several state-specific economic,
demographic, and fiscal models were examined. Some of these depend on national economic relation-
ships; other are specified for only one or two regions of the state. Theoretical approaches were
examined and discarded because they failed to account for the tremendous structural changes associated
with rapid economic growth and contraction. The MAP model was designed specifically to analyze the
impact of OCS development and is largely dependent on Alaskan data sources. More importantly, the
model includes poficy variables which are unique to Alaska, (i.e., transfer payments resulting from the
Alaska Native Claims Settlement Act (ANCSA)), fiscal responses to petroleum development and local
'For a discussion of other economic and demographic models, see Huskey, Lee, William Serow, and Ted Volin, Design of a Population Distribution
Model, Technical Report No. 24, Alaska OCS Socioeconomic Studies Program, june 1979. Also, Regli, Leland D. and Lay fames Gibson,
Socioeconomic Foremsting Methodologies: A "State-of-the-Art" Review, drti{t final report, U.S. Geologiml Survey, May 1982. A succhlcf overview
of the Harris Madel used by other OCS studies programs may be found it1 Kmtalla, fohn V., and Anthony Fisher with Richard E. Rice, Economir
ami Fiscal Impacts of Coal Development Northern Great Plains, Resources far the Future, folm Hopkins University Press, 19 7 8.
65
and state taxation. This gives the model the added power to structure different "futures" for the state
economy which are based on various political decisions.
The MAP Economic Model
The MAP Model is actually a system of sub-models which are interdependent. Each sub-model in
turn is a system of simultaneous equations whose parameters are determined by econometric tech-
niques. The economic model illustrated in Figure 1, is technically a disaggregate economic base model.
The model determines industrial output, and then proceeds sequentially to estimate employment in
each industry, wages and salaries, and real disposable personal income. The level of production for
endogenous (or non-basic) industries is determined as a function of the level of personal income while
basic industries, such as mining, federal government, agricultural-forestry-fisheries, and manufacturing
are exogenous. These industries are said to "drive" the rest of the economy. Output of the construction
industry is a combination of both components. One is dependent on the level of personal income (e.g.,
residential-type construction associated with an expansion of the Alaskan economy), and another which
is directly tied to the building of resource extraction and transportation facilities. After output in each of
the major industrial sectors has been determined, the model then calculates the level of industry
employment. Employment is a function of output in each industry. It is assumed that the derived
demand for labor will determine the level of employment and that the local supply of labor is fixed
(i.e., no change in the labor force participation rate). The supply of labor is brought into equilibrium
with the demand for labor through migration. This, then, is the principal link between the economic
model and the population model discussed below.
Employment in the agriculture-forestry-fisheries industry is determined outside the model. There
does not appear to be any clear cut statistical relationship between output and employment in this
industry because employment in this sector seems to be determined by non-economic factors. The lack
of complete employment data, including proprietors and non-covered employees in the industry,
however, may have also led to the decision to specify agricultural-forestry-fisheries employment
exogenously.' .
Employment in state and local government is determined arithmetically as the ratio of total wages
and salaries in government and the wage rate. Here the economic model is linked to the MAP fiscal
model. Total wages and salaries are part of the State's operating budget which, in turn, is determined by
a variety of rules chosen by the model user.
Industry wage rates are then estimated by the economic model as a function of average U.S. wage
rates in each industry and the cost of living in Alaska. When the demand for labor rises more rapidly
than supply, the model allows for an increase in the wage rate. Labor supply shortages are then assumed
to dissipate and U.S. and Alaska wage rates come into equilibrium. A distinction is made between
"enclave" and "non-enclave" construction wage rates and wage rates which are associated with employ-
ment in large project manufacturing.
Wage and salary earnings are computed next. Personal income is the sum of wage rates times
employment in each industry, plus income earned from other sources including rents, dividends, and
interest which are regarded as some estimated proportion of wage earnings. Transfer payments made
under ANCSA are treated explicitly by the model and are exogenous additions to income based on the
provisions of the Act. Disposable income is estimated by subtracting personal tax and nontax payments
with a distinction made between Native and non-Native incomes. This is then adjusted to account for
the effects of inflation using a relative price index which is a function of the U.S. Consumer Price Index.
The Map Population Model
The MAP demographic model projects population growth using standard cohort-survival techniques.
Population growth results from factors which affect net migration patterns and natural increase, the
excess of birth over deaths. These factors are treated separately in the model and then are combined in
the long run through age-sex distribution of the State's population. The effect of a major migration into
the State would alter the sex-?ge distribution. Since different age-sex groups are characterized by dif-
ferent birth and death rates, changes in their distribution will affect the rate of natural increase. The rela-
'TI1i,; ;cdor i; "'' domill<llnl byti,;hcric• i11 !\{,,,;/.:,, th111 c,;fimlliL',; ,,f tlll/1'111 i11 llgriutlt11rc '"'.! /orc,;/r." do 110/ ,,,{.[ 11111<h to tltc J>n·.!i,/ii'<' I'<'Wcr of the
lllt>drl.
66
EXOGENOUS SECTORS
Forestry
Fisheries
Federal government
Agriculture
Other manufacturing
l
Wage
Rates
Non wage
Income
Personal
Taxes
Consumer
Prices
State and
Local
Government
.. ..
• .-Petroleum
Wages and
Salaries
Personal
Income
Disposable
Personal
Income
Real Disposable
Personal
Income
~·
.... ....-
Figure I. S.tructure of the MAP Economic Model
SUPPORT SYSTEMS
Trade
Finance
Services
Transportation
Communications
Public utilities
1
Source: Kresge, David T., Thomas A. Morehouse, and George W. Rogers, Issues i11 Alaska Dcvelopmmf,
Institute of Social and Economic Research (Seattle: University of Washington Press, 1977).
67
tionship between net migration and natural increase can be seen in Figure 2.
Native and military populations are incorporated in the model separately with the military popula-
tion determined exogenously and native population assumed to grow independently of factors which
control non-native civilian population growth. .
Net migration, as mentioned above in the description of the economic model. is a function of a
change in the level of Alaskan civilian-non-native employment and the lagged value of the
Alaskan-U.S. ratio of real disposable personal income per capita. In a period of rapid expansion in the
Alaskan economy. one would expect unemployment to drop and as the market for labor tightens,
income per capita will rise. This would induce in-migration until unemployment rises again and the
ratio of per capita real disposable personal income between the U.S. and Alaska attains some
equilibrium. Because of this feedback mechanism, the model will. in the long-run, keep population and
economic growth in some reasonable balance. The MAP demographic model operates as a dynamic
simulation model which can replicate fairly complex response patterns of this sort.
The MAP Fiscal Model
The MAP fi~cal model predicts state government revenues in four categories. Petroleum revenues
are exogenously provided from information furnished by the user about production wellhead prices
and facilities. Endogenous revenues are a function of economic activity. Federal transfers are related to
the population and fund earnings are determined by the balances in the general and permanent funds.
The user, then, decides how the State will disperse these revenues and how they may change in the
future. Expenditures may be tied to historical relationships or trends, simple growth rates, or they may
be related to specific growth variables like population or the size of the general revenue.
Local government revenues consist of state and federal local transfers, and endogenously generated
revenues. Expenditures are determined by income and population.
The MAP Regional Model
There is also a MAP economic, demographic, and fiscal model which analyzes impacts at the regional
level. The state· was divided into seven OCS development regions which roughly correspond to the
----~ Age-Sex
Distribution
Economic
Model I I -I
Real per capita
income relative
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
to U.S. ...f--1 ..__ ____ ....
Native
Population
Civilian, non-Native
Population Change
Military
Population
I
I
I
I
I
I
I
I
I
------------~----~
Figure 2. Structure of the MAP Population Model.
Source: Kresge, David T., Op. Cit.
68
boundaries of the native regional corporations. These were later modified to correspond to existing cen-
sus division boundaries. This provided better specificity of impact analysis which would conform to
historical data series for employment and population.
The regional demographic model is controlled by population totals projected for the state. Total
population is allocated to each region using separate regression techniques based on historical
employment-population relationships by region. The economic component estimates employment and
income in the same way as the statewide model illustrating potential shifts in migration patterns. This
serves as input into the regional demographic model in a way analogous to the statewide models.
Improvements to the MAP Model
The MAP model has evolved over time to meet the needs of its users and to accommodate changes in
the economy which could not have been anticipated by the projection of historical trends. The
availability of new data required that stochastic equations be re-estimated and that the model be "re-
initialized" to begin simulation runs in 1980.
More detail has been incorporated into the model to better account for tourism, fisheries, manu-
facturing, and construction. The model has been even more disaggregated to display the effects of
changes in each of these sectors. The service sector, for example, now consists of four components: sup-
port sector, tourism, business services, and native claims. The support and business services sectors are
determined endogenously. Output in tourism is a function of the number of tourists; native claims is a
given. Basic construction now is divided into "enclave" and "non-enClave" construction, the former
characterized by premium wages.
Changes in the fiscal model now permits the user to systematically incorporate political decisions in
the determination of how the state government capital and operating expenditures will grow in the
future. Called the fiscal rule by ISER, budget growth and expenditures are allowed to fluctuate as a
function of changes in population, prices and person incomes or, alternatively, by changes in specific
events which are outside of the private economy. The user can decide what the effects would be if
government policy were set to mitigate the effects of major industrial development. The model even
provides an option that requires state expenditure to be a function of revenues.
The structure of the fiscal model has been changed to reflect differences in the level and composition
of state expenditures and revenues. New government programs and special capital expenditure pro-
grams are incorporated in the model. The model will also track the effect on personal incomes pro-
duced by the Permanent Fund distribution program. The net effect of these changes is to account for
the greater participation of the state government in the economy.
The overall effect of these improvements on the reliability or the consistency of the model's projec-
tions cannot be determined, except by the passage of time. The Model has been run by ISER for at least
nine technical reports and technical memoranda in the last five years, and rarely have the projections
been the same. Figure 3 illustrates the results of these MAP runs. The "base case" for statewide popula-
tion growth for each run is included here to demonstrate how the model may be manipulated and how
it may be affected by assumptions provided by the user. As should be expected, assumptions made
about exogenous employment seem to provide the most important source of variation among the MAP
statewide population projects. All of the projections include an expansion of Prudhoe Bay operations
into the Lisburne and Kuparak Formations and a shutdown of the Upper Cook Inlet operations in 1990.
The construction of the Alcan Gas Pipeline and the Pacific LNG plant are also included in each base case
with variations in only the timing of the projects.
The tr~nds project by the Northern Gulf of Alaska and Kodiak sales assume a growth in OCS
developments in the Beaufort Sea and Lower Cook Inlet, which was to have peaked in 1981. This
dramatic shift in employment (and the resulting in-migration) early in the projection period leads to a
larger population estimate to the year 2000 than with any of the other forecasts. More recent runs of
the model project produced more moderate increases in population. Other construction projects,
notably the Susitna Hydroelectric Dam, Beluga Coal Mine, and a petrochemical facility t.o process State
royalty oiL among others, have been included in these later runs. Completion of all these projects are
scheduled to occur in the 1980's. The Bering/Norton and Lower Cook Inlet developments are similar in
that they show a drop in population growth in 1984-1986 as the economy shifts from rapid constr~ction
industry growth in the late 1970's, and resumes a growth rate which is more normal in the 1980's.
69
600
Population ( lOOO's)
• Beaufort Sea Federai!State Joint Sale
• No. Gulf of Alaska
• Cumulative Western Gulf
a Kodiak
o Bering/Norton
• Lower Cook Inlet
* St. George Basin
• Beaufort Sea
+ No. Aleutian Shelf
Source: s.~e appendix
Figure 3. MAP "Base Case" Population Projections.
70
The Small Community Population Impact Model
The small community population impact model (SCIMP) was developed in order to model OCS
impacts on the census division level.3 At the time, the MAP regional model had not yet been dis-
aggregated beyond the seven regions and the SESP felt that more localized impacts needed to be
addressed. Over time, the SCIMP model has been further adopted to model the impacts on individual
communities as well.
The principal advantage of SCIMP is that it may be run on communities or census divisions for which
little or no historical data exists. The SCIMP is a straight-forward accounting program which calculates
economic and population growth given the interrelationships provided by the user. Unlike the MAP
modeL the user must supply a number of assumptions and initializing values; these parameters are not
implicitly determined by econometric techniques. Since the model is inexpensive to run, in terms of
computer time, the user may conduct repeated sensitivity analysis, testing the effect of slightly altering
his or her assumptions until some "reasonable" projection is formulated.
The SCIMP modeL like the MAP modeL depends on an economic base model. The basic industry
sectors (manufacturing, fishing, state and federal government, mining and special projects construction,
and military) drive the community economy. By creating employment opportunities, the industries
generate new jobs in two supporting sectors, the trade and financial industries. New jobs attract
migrants and in-migration is assumed to occur to clear the local labor market. A cohort-survival
approach is used to project population growth, taking into account the age and sex ratio of the resident
population and that of the in-migrants and their dependents.
The model is highly sensitive to two important parameters: the local labor force participation rate
(LFPR) and the rate that local employment (in the support industries) grows to serve the exogenous
industries. The empirical estimate of these two parameters has been the subject of recent SESP studies.4
It has been shown that actual LFPR in rural Alaska is sensitive to the "discouraged worker" effect and
the seasonality of employment preferences. Growth in employment opportunities will result in higher
rates of unemployment as discouraged workers return to the labor market. As unemployment rises, it is
usually anticipated that out-migration will occur to bring actual LFPR into some equilibrium. The extent
out-migration in rural Alaska is, however, constrained by the social costs imposed on the migrant when
he or she must leave the familiar surroundings of home and culture to work elsewhere is a predominant
factor. But migration does occur on a temporary or seasonal basis which also tends to obscure an
estimate of LFPR for SCIMP modeling. Seasonal employment preferences are related to the importance
given to subsistence activities, and leisure, and the associated opportunity costs of cash employment for
the rural Alaskan.
Evidently the equilibrium LFPR in rural Alaska is subject to change given some exogenous growth in
unemployment opportunities. This growth will surely lead to increased wages, an increase in the cost
and a decline in the productivity of subsistence (over the long run), change in tastes, and an increase in
the marginal utility of income as more goods and services become available (this may be interpreted as
another way of saying that the real wage will increase).5 As these factors influence a growth in labor
force participation as employment grows, a future trend in wage economy participation can be
estimated. The LFPR may grow across census divisions in much the same way as the diffusion of new
technologies -in each case some maximum is reached -and a logistic curve can be used to describe the
diffusion of labor force participation. Analysis of this relationship indicates that the census division
labor force will approach its potentiaL about 75 percent of the population, at a level of 7,400, roughly
the level found in the Kenai census division.
The multiplier which describes the rate that local employment grows to serve the exogenous sector is
made up of two components. There is, first, the employment generated as a response to the growing
demand of the basic sector on the support sector and, second, the employment generated as a result of
rising personal incomes within the region and subsequent demand for goods and services from both sec-
'Hu,;ke)t, Lee, William Serow, a111/ Ted Violi11, 01'· Cit. 11111/ Hu,;ke)t, Lt·e, 11111/ Jim KL'IT, "Small Cm11111111ity f'o1>rtlatioll lml'ad Mmll'i", 1i:dHrinrl
Rq>ort No. 4, Alaska OCS Socioew1romiL· Studies Prognrm, }wre I<JSV. ' ·
'Huske)t, Lee: eta/., Eccmomic 1111d Dwrogrtrl>lric Strudunrl Clumge ill A/11,;ka, Tedmiccrl Rel''"t No. i 3, Al11,k.r OCS Sodommourh Studie> Pro·
gram, ]1111e. 1982.
'Fi>lr, E. P. "Tire Resi'Oir>e of N"'wro11e/a11t Produdimr U11il> to Colltad willr tire Erdumse E«IIWIIl!t" i11 Re)llw/.J,;, L., Asriatlture ill Dtwlol'meut
71reor!'· (Yale. New Hrveu: I<J i 5).
71
tors. This multiplier has been static in past applications of the SCIMP model but in rural Alaska this
assumption does not adequately illustrate the structural change which occurs as the local economy
expands.
More recently, SCIMP has been run for the Aleutian Islands census division as part of an economic
and demographic analysis of the Navarin Basin sale. In this case, the employment multiplier is assumed
to change over time as· the population grows. Again, the Kenai census division is the source of an
estimate of the potential employment multiplier. This assumption is based on the recognition that. as
the ecpnomy grows, there occurs changes in the number and kind of industries and the economy
becomes more complex, more interactive. It is also hoped that the local economy becomes less depend-
ent on outside economies and achieves self-sustaining growth. ISER has just completed work which will
provide better estimates of the effects of structural change on employment and population.6 Their work
is the subject of another paper presented at this Symposium.
An important issue which has also arisen through the Alaska OCS Environmental Impact Analysis
process is the question of precisely who will fill the jobs generated by all of this economic growth. Of
concern here is the "Share of OCS Employment to Alaska Residents" (SEAR), and the "Shares of
Employment to Local Residents" (SELR), which are fundamental to the problems of identifying leakages
in the local and State economy and how important offshore employment will be. The SEAR and SELR
factors are first an assumption made about direct employment characteristics before the MAP or
SCIMP models are run. Interviews with industry officials and the observed patterns of the Upper Cook
Inlet provide a source of SEAR and SELR estimates for each phase in OCS operations.7 The second
aspect of these factors considered is how many Alaskan residents are currently employed who are from
the local region or community. These estimates are also based on the Kenai experience tempered by the
observations of other industrial projects in the Northern Great Plains 8 and the North Sea.9
Unfortunately, the SEAR and SELRfactors are subject to a whole host of estimation problems. There
is no historical situation which will be similar to the OCS actjvity in frontier areas of Alaska. No oil has
been found there. ISER has attempted to refine their estimates but the SEAR and SELR factors will
remain a source of debate. More than any other coefficient in our economic and demographic model-
ing, these define the local socioeconomic impacts which must be mitigated by the local and State
government.
. ·,
•Hw;kcy, Lee, rt a/. OJ'· Cit.
7 /8/0.
"Lristrit:., F. Lam1; Stet'Cil H. Murdock; aud fame; 5. Wrlaud, Clwradcri;tic,; awl Settlwwzt Pattem> of Emrg}I·Rrlatcd OJ'emtiug Worker> iu the
Northmz Grwt .Plaiu;, Fargo, North Dakota: DeJmrhumt of Agricultuml E<tii!OIIlic,;, Nortlz Dakota State Uuh'cr;it)l, October, I <177.
•Lcwi>. T. lVI. awl/. H. lVIcNicoll, North Sw Oilaw/S,otlaud',; E<<lll<llllit Pro,;pctf,;, Lowlou: Groom Hcrou, /•17/i.
72
Appendix: Map Statewide Population Projections-Various Base Cases
Beaufort No. Gulf of Cumulative Kodiak Bering! lower Cook St. George Beaufort No. Aleuti<ln
Federal/State Alaska Western Gulf (Sale ) Norton Inlet Basin Sea She It
Joint Sale. (Sale 55) (Sale 57) (Sale 60) (Sale 70) (Sale 71) (Sale 75)
1977 399,968 410,660 410,660
1978 402,357 406,667 404,436 400,667 404.436
1979 419,124 418,656 402,469 411:1,656 402,374 403,256
191:10 449,203 434,173 405,156 434,173 401,928 407.511 400,500 397,976 402,057
198t. 466,927 455,563 415,106 456,071:1 414,601 419,502 399,946 395,049 415.577
1982 403,191:1 41:16,359 434,151 487.441 445,052 440,274 407,591 402.451 4.B,4.W
191:13 470,099 502,1:102 450,886 504,694 468,325 457.932 421,1:157 417,090 441:1,9J2
191:14 479,525 501.479 453,976 503,1:102 470.451 462,431:1 453,741 441:1,71.~ 464,01:12
191:15 491,934 509,057 456,806 518,372 467,301 465,21:10 41:10,755 488,759 41:19.o54
1986 500,022 523,083 530,903 467.498 409,501 494,946 510,300 521,101
1987 503,990 539,029 551.736 473,81:11 477,136 499,657 516,114 537,11:15
'I 1988 504,373 556,942 5H,044 483,4o9 487,546 502,956 519,502 540,370
""' 1989 501:1,403 575,352 593,590 494,023 491:1,194 509, too 525.41:12 54.\411
1990 512,526 591,51:10 492,853 012,523 503,309 507,570 522,219 534,100 545.olll:l
1991 511:1,104 606,771 626,140 513,399 514.843 583,342 544.443 552,977
1992 522.414 022,335 639,242 523,971:1 521,645 553,102 550,231:1 500,559
1993 528,300 640,355 655,575 534,971:1 529,300 5o7,305 570,210 509,582
1994 533,322 051:1,291:1 672,701 540,142 5.~7.o41 579,1:198 583,372 579,11l}
1995 539,760 677,649 503,81:13 092,017 557,924 54o,63o 593,178 596,1:121:1 589,578
1996 545,167 691:1,406 713,324 571.402 557,134 010.490 613,972 600,638
1997 552,447 719.126 734.418 51:17,159 507,907 629,740 6.B.251:1 611,903
1998 558,855 740.455 . 750,157 604,o98 579,924 041:1,91:11 052,729 023,553
1999 567,344 764,593 71:10,092 023,151 591,o73 060,240 670,029 0.~5.53.~
2000 575,574 789,21:17 581:1,1:120 805,725 044,595 004.521 686,.W4 o90,057 048,5913
Source: Alaska OCS Socioeconomic Studies Program, Technical Report Numbers, TR·I8. TR-34, TR·.~I:I. TR-42, TR-50, TR-57, TR·o2. TR·L'/3.
TR-73, and Technical Memorandum Number 39 (unpublished).
Commercial Fishing Analysis Studies:
Alaska OCS Social and Economic Studies Program
Karen J. Gibson _
Introduction .
Alaska's commercial fishermen harvested 857.2 million pounds of fish and shellfish during 1979. This
harvest had a value to the fishermen of $622.3 million.1 Some of the richest fishing grounds in the
world are located in the Bering Sea while Kodiak•and Dutch Harbor are among the nation's. top com-
mercial fishing ports. These statements provide evidence of the importance of commercial fisheries in
the seas around Alaska. Obviously, the oil andgas lease sales on the outer continental shelf will lead to
interactions between the seafood production industry and the petroleum industry. The objective of the
Socioeconomic Studies Program (SESP) commercial fishing studies is to predict and analyze potential
impacts and changes in the commercial fishing industries due to OCS oil and gas activities. Some areas
we are examining are the fisheries data base, preemption of fishing grounds, loss of or damage to fishing
gear, competition for available labor, and collisions among vessels.
Completed studies in the Gulf of Alaska include lower Cook Inlet (Technical Report 44) and the
Northern and Western Gulf of Alaska (Technical Report 30). Completed Bering Sea studies include
Bering-Norton (Technical Report 51), and the St. George Basin and North Aleutian Shelf (Technical
Report 60). Currently under contract is an analysis of the Navarin Basin and a cumulative Bering Sea
case.
Fisheries Data Base
We are concentrating on data from two sources: The Commercial Fisheries Entry Commission
(CFEC) and the Alaska Department of Fish and Game (ADF&G). The CFEC data show the number of
vessels and number of landings made from each fishing statistical area according to vessel length,
species, and gear type. However, because of confidentiality considerations, total catch by vessel length
is not always directly available from this data source. A considerable number of the data gaps were
filled by using the ADF&G data which listed all the catches made in each statistical area. The remaining
gaps were filled by use of catch per unit effort (CPUE) statistics which vary by vessel size, season, and
area fished.
Competition for Labor
It was assumed that OCS oil activities would tend to compete with commercial fisheries for labor. To
assess the impact to fisheries, a labor transfer probability model was used to compute the number of
fishery-related employees that would likely transfer to OCS oil employment.
The labor transfer model assumes that the major reason for transfers is the size of wage and salary dif-
ferential existing between current and prospective occupations. This means that the employment, earn-
ings, and skills in both fisheries and OCS oil employment must be known or estimated. Skilled!
unskilled labor mix assumptions were based on a petroleum technology assessment undertaken by
another contractor for the Alaska OCS Office. These assumptions, in the form of percentages, were
'Fnmk Orth ,md A;,;odll/e;, lm. Al11;k,, Commerdlll Fi;heries Dim/or)!. Pn'llilred ,,,,.the Oltia of Cmmltn·illl Fi;herie,; Ot•t>clopmm/, Del'''rlmml
of Cmuucrce 1111d Enmomir Dwdt>/'IIICIII, S/11/e of Alll;kll, I <182.
74
applied to the OCS employment figures to obtain the number of job opportunities into which fishery
labor might transfer.
The initial formulation for the job transfer is as follows: The probability of transfer to a higher paying
job was related to the implied salary differential as a percentage of current earnings. It was recognized
that some people are more likely to change jobs than others even when the salary differential offered is
the same. After an examinafion of factors such as seniority and expected job length, a relationship be-
tween age and the tendency to change jobs was established. The transfer probabilities were modified to
reflect the reduced willingness to transfer as one gets older. A distribution was established for current
fishery employment based on Alaska Department of Labor statistics. Findings showed that 50 percent
of the harvesting employment was composed of people less than 30 years old, while for processing
employment it was nearly 69 percent. These percentages were applied to the employment estimates to
obtain employment by age groups. Applying the transfer probabilities to age-and wage-specific
employment estimates resulted in the expected number of people willing to transfer. The actual
transfers, however, would have an upper ceiling dictated by the number of available OCS jobs.
Ocean Space Use
Preemption of Fishing Grounds
Loss of fishing ground has been considered an impact if it results in a reduction of total catch. The
proportional area method is based on the simplistic assumption that the loss in catch is proportional to
the area rendered inaccessible to fishing due to oil and gas installations (OGI). The estimation pro-
cedure, therefore, centers on equating the proportion of fishing area lost to the proportion of catch. The
area lost is estimated and expressed as a proportion of total fishing area. This ratio is multiplied by total
potential catch (or historical catch before the OGI are in place) to estimate potentially lost catch. This
method does not take into consideration increased fishing effort outside the OGI. Therefore, the effect
of preemption may be negligible.
Collision
Two models were used to calculate collision impacts; specifically these models were applied accord-
ing to the travel patterns projected for both OCS and commercial fishing needs. The parallel path
model was used in situations where expedient transit through a given area was deemed to be the major
intent of vessels, while the "free gas" analogy (or random movement model) was applied to situations in
which vessels could be moving in all directions. Combining the results of the two models leads to an
overall estimate of number of collisions.
The parallel path model (originated by the Sperry Piedmont Corporation) assessed the expected
number of collisions in each fishing statistical area by multiplying the conditional probability of a colli-
sion by the estimated number of collision situations (potential collisions). These probabilities are a func-
tion of the following factors:
-Number of vessel trips associated with the waterway
-Length of a specific body of water to be traversed by vessels
-Average velocity of vessels
-Average width of clearance of vessels
-Width of the body of water ·
-Number of encounters per year
-Average number of collisions per year
Historical statistics from the "Proceeding of the Merchant Marine Safety Council" and from the
"Waterborne Commerce of the United States" were used in addition to statistics on vessel traffic
derived from the Strait of Dover in the English Channel and an estimate of the conditions in the Pacific
region of the United States waters. The parallel path model computes only part of the collision impacts,
those associated with expedient travel. The following approach addresses the more random travel
associated with fishing.
The free gas analogy or random movement model was used to apply to encounters between OCS
vessels in transit to and from platforms and rigs, and fishing vessels engaged in fishing activities. The
75
number of collision situations were multiplied by the conditional probability to estimate the expected
number of collisions per year for a specific fishing area. These estimates were based on: I) the total
number of miles logged in a fishing statistical area, using the number of vessels necessary to conduct
fishing in the area and also those transiting the area for OCS purposes, 2) vessel density in the statistical
area using the estimated number of vessels required for harvesting, and the number of OCS vessels
estimated to cross the same area weighted by the time spent annually. Although increased traffic will
result from OCS activities, collision problems are minimized by the large ocean areas involved.
Gear Loss
Fishing gear can be damaged or lost by coming into contact with OCS-related debris or submerged
structures. Submerged structures may include suspended wellheads and pipelines which have not been
buried. When areas around such structures are well known to the fishermen, damage to gear may be
avoided. To estimate the .number of claims projected for fishing gear loss, three factors were con-
sidered. These include:
-Claims per thousand hours per oil and gas installation in the North Sea
-Estimated fishing effort in future OGI affected areas
-Future number of OGI expected in the lease sale area
The experience in the North Sea where oil and gas developments have had some impacts on the
fishing industry was used because both the resources and harvest methods in the North Sea are similar
to those in the St. George Basin in the Bering Sea. A variety of demersal fish species occur in both
regions and the harvest methods to both fisheries are mostly those involving trawl operations.
Although there are some exceptions, enough similarity exists to allow analysis of potential gear loss and
damage. The number of claims per 1,000 hours of fishing effort per OGI in the North Sea was
estimated. Total effort in thousands of hours ·was estimated for the fishing statistical areas in the lease
sale area which are assumed to be future locations of platforms. This was done u~ing estimates of fleet
size, trips per year, days fishing per trip, and hours fishing each day. Potential catch in the same
statistical areas was also estimated. The total number of ·claims per year can then be estimated by
multiplying the claims per thousand hours in the North Sea by the estimated fishing effort in future
OGI-affected areas by the future number of OGI in the lease sale area.
Findings
Some results from SESP commercial fishing studies indicate that the propensity of labor to transfer
from the fishing industry to higher paying OCS jobs will be quite high for certain unskilled labor
categories. However, because the number of jobs available to skills transferable from fisheries is
limited, the impact due to labor competition is minimized.
Similarily, the OCS supply and support vessels will bring in additional traffic leading to increased
chances of vessel collisions. For example, only one collision in 20 years is projected in the St. George
Basin. Based on the experience of fisheries and OCS interactions in the North Sea, a projected 12 claims
per year will be made by fishermen claiming loss of or damage to their fishing gear. Thus far, SESP
studies have shown the impacts to the commercial fishing industry due to the presence of the petroleum
industry will not be significant in terms of competition for available labor, preemption of fishing
grounds, collisions among vessels, and loss of fishing gear.
Certainly not all the questions about the social and economic impacts of the interaction between the
two industries have been answered, or even asked. Earlier studies qualitatively addressed the potential
competition for onshore infrastructure, and port and harbor facilities. This issue is being addressed in
our current research efforts. In addition, more emphasis should be placed on fixed gear (e.g. crab pots,
cod long lines) loss.
The future development and direction of the groundfish potential in the Bering Sea is the focal point
of fisheries development in Alaska. How this resource will be exploited and what direction that
development will take is subject to a wide variety of projections. Further, the role of joint ventures, on-
shore or offshore processing, and marketing potential will be key factors in determining the groundfish
fishery development and warrant study. Future commercial fishing studies undertaken by SESP will
focus on groundfish development and the nearshore interactions between the commercial fishing and
petroleum industries.
76
Modeling the Economic Impact of OCS Petroleum Development in Rural Alaska
Lee Huskey and Gunnar Knapp
Introduction
The location of Alaska Outer Continental Shelf (OCS) petroleum resources assures that the onshore
activity associated with their development will occur near smalL remote, rural communities. The prob-
lem of modeling the impact of OCS development on these communities is complicated by the non·
marginal nature of the change which will occur. The pattern of change that occurs is likely to be
dominated by the size of the exogenous change relative to the size of the community. When the OCS
development is relatively large, as in most potential cases of OCS development in rural Alaska, the pat-
tern of local economic response to exogenous forces may change as the structure of rural ecortomic and
demographic relationships change. This paper addresses the need to take account of the potential for
structural change in modeling economic impact.
Economic impact as used in this paper, is the change from some projected future pattern of growth as
a result of a specific project. The modeling problems addressed in this paper are concerned with the
accuracy of a projection of the economic impact in the sense that we wish to limit the uncertainty
involved in our projections. The accuracy of an impact projection depends on three separate sets of
assumptions: I) assumptions about base case growth or growth without the project; 2) assumptions
about the pattern and scale of the specific project (the scenario); and 3) assumptions about the response
of the local economy and labor force to the project. Modeling addresses this last set of assumptions, but
the results of the modeling effort are significantly influenced by both base case and scenario assump·
tions.
The extent of our concern with accuracy in impact modeling, or more importantly, the resources we
devote to improving the accuracy of a model depends on the uses and timing of the projections. Impact
projections have two basic uses: decision making and planning. The first step in which projections are
used in the process of OCS development is the decision to lease tracts. Projections of impacts are used at
this stage in the process to weigh the benefits of development against the costs. What is needed at this
stage is a feeling of the order of magnitude of the impacts, not an exact projection. Once the decision to
lease is made, projections are needed to plan ways to mitigate the impacts. The need to invest in public
or private infrastructure and services to meet the increased population requires a fairly certain estimate
of the level of future population. Our concern with accuracy is greater in the planning stage.
The point in time the projection is made also influences our concern with accuracy. The farther out in
time the OCS development is planned to occur, the less we should be concerned with the accuracy of
our model. The farther out in time an event will occur, the more likely it is that important parameters
will change, so spending a great deal of resources on modeling will not guarantee the accuracy of pro-
jections. The timing of the projection also influences the information we have about the magnitude and
path of resource development. .
Bender and Juers (1975) call uncertainty about the character of resource development one of the.
major planning problems faced by communities. The less we know about the dimensions of the
development (i.e., how much oiL what the industry plans to do), the less concerned we should be with
the accuracy of our models. If we don't know the parameters of petroleum development, even a perfect
model will not guarantee the accuracy of a projection. In devoting resources to improving the accuracy
77
of our models, we should be most concerned with short-run planning applications. The remainder of
this paper examines the particular problem of structural change, and the necessity of incorporating
structural change in the projection of impacts.
Impact Projection in Rural Alaska
Traditional approaches to describing r~gional economic growth are not appropriate for forecasting
the impact of OCS development in rural Alaska. The traditional approach of economic base theory
makes two essential assumptions about regional growth which differ in subtle but important ways from
the economic growth process in rural Alaska. These assumptions are that the growth of the economy
results from growth in the bask sector and that population growth is determined by economic growth.
The linkages between basic and support sector employment and population are not so direct in rural
Alaska as usually assumed. Nonwork sources of income and the potential for exporting labor also in-
fluence the growth of the economy. These factors, along with the importance of subsistence, limit the
need and the desire to migrate in response to a l~ck of employment.
The development of resources in enclaves, such as Prudhoe Bay, with few links to the focal com-
munities means that basic sector activity can occur with no economic impact on local communities.
These differences must be incorporated in any modeling effort which describes rural Alaska.
A more important problem faced in modeling rural Alaska impact is how to incorporate structural
change into the analysis (i.e., the change in the basic relationships in the economy). For example, in
traditional types of explanations of economic growth, the multiplier describes the relationship between
the basic and support sectors; a change in this multiplier is structural change.
Rural Alaska economies are in fhe transition stage between pure economies and market economies
(Fisk, 1975). Table 1 shows that the subsistence economy is still relatively important in rural Alaska.
This transitional nature and the small size of the cash economy insures that structural change would
occur in response to OCS development. ·
There are three structural relationships which are especially important in determining the impact of
energy development. These are the local. economic response (multiplier), the rate of labor force par-
ticipation, and ~he residency of energy workers. The primary determinant of changes in each of these is
the size of the local economy. As the size of the local economy increases, we expect these relationships
to change. We describe the process of structural change and evidence of the potential for change in each
of these relationships below.
Table 1. Share of Food from Subsistence Economy
Region .Most About Half Some
Alaska 1 30.5 27.7 28.9
Yukon-Porcupinez 27.0 28.0 24.0
North Slope3 30.0 15.a 42.0
Nunam Kitlutsisti 4 29.1 29.6 33.2
1Nathan and Associates, 197 4, l)A-6.
ZJSER, 1978, T5-3.
3ISER, 1981, T5-13.
4 P AL, 1981, TE-l.
Local Economic Response
None
11.6
21.0
13.0
8.2
The response of the local support sector to exogenous increases in economic activity is a major com-
ponent of community economic response. The local support sector consists of that portion of the local
economy which provides goods and services to the community. The relationship between exogenous
changes and the change in the local support sector is usually described by a multiplier. The multiplier
shows the increase ·in local support or endogenous economic activity which occurs in response to
changes in basic or exogenous activity. For marginal changes, this multiplier could be assumed to
remain constant, and past relations could be assumed to describe the response. However, we would not
expect the multiplier to be static in rural Alaska as changes in the multiplier will reflect structural
change.
78
Multipliers have shown COJ!.siderable variation in rural Alaska. In typical impact studies, historical
ratios are used to represent the local economic response to exogenous change. Table 2 illustrates the
problems with this simple approach to estimating multipliers. The simple ratio approach will not pro-
vide an accurate description of the local economic response for two reasons. First. there is a great deal of
variability among years, so that a simple ratio will not accurately describe the response over the projec-
tion period. Second, there is some evidence that these ratios change with growth, and a simple ratio will
not describe growth over time. To accurately project the response of rural Alaska economies to OCS
activity, we need a model which accounts for potential changes in the multiplier.
A more appropriate description of the causes of support sector growth in rural Alaska assumes local
growth is a function of growth in the local market. The market is determined by the income and
number of local residents and purchases made by the local resource enclaves. The relationship between
basic sector growth and the growth of the local support sector is not as direct as traditionally assumed
because· of the possibility of enclaves, which means that basic sector employment growth does not
neces~arily increase the size of the market.
Table 2. Support Secto.r Ratios
(1970-1978)
SSI'/Basic' SSI'/Population .552'/Population
Census Division
Aleutians
Bethel
Bristol Bay
Kobuk
Kuskokwim
Nome
Wade Hampton
Kenai
Kodiak
Seward
High Lo~ High Low High Low High
.237 .062 .255 .106 .078 .032 .042
(-) (-)
.278 .181 1.085 .278 .035 .017 .153
.283 .107 .368 .077 .053 .024 .072
-~48 .165 .508 .251 .056 .027 .072
.518 .182 .281 .171 .078 .020 .043
.461
( +)
(+)
(-)
(+)
(-)
(+)
(+)
(-)
( +)
.165 .996
( +)
( +)
( +)
( +)
( +)
(-)
( +)
( +)
(-)
.344. .060
(-)
( +)
(+)
(+)
(+)
(+)
(+)
(+)
(+)
(+)
.026 .148
.113 .037 .696 .206 .015 .003 .051
.567 .287 .686 .457 .125 .040 .111
.205 .156 .446 .292 .058 .041 .146
.196 .067 .633 .420 .057 .016 .142
'551 includes employment in construction, transportation, communications, and utilities.
2552 includes employment in retail trade, wholesale trade, services, and finance.
(-)
(+)
( +)
( +)
(+)
(+)
(-)
(+)
(+)
(+)
Low
.OZ5
.026
.019
.031
.020
.039
.027
.060
.075
.110
3Basic includes employment in mining, manufacturing, government. agriculture, forestry and fisheries.
(-) Decline in ratio over the period.
( +) Increase in ratio over the period.
The size of the local support sedor is limited by the size of the market with regional income and
population determining the size of the market. As the region grows, we expect more goods to be pro-
duced and more services to be provided in the region. As the markets expand, local producers will be
able to achieve certain economies of scale which will allow them to compete with goods and services
from outside the region which wilL in tum, absorb high transport costs. The scale of the economy in-
fluences the goods and services available in the region, and consequently, the extent of local sector
79
growth for each additional dollar of income.
Table 3 provides evidence of the potential for change in the structure of the local economic response
as the market expands. To investigate the potential for this type of structural change in response to OCS
activity, we examined the change in support sector employment as the size of local markets changed
both over time and across regional economies (see Huskey, et al., 1982). The regressions shown in
Table 3 were run for coastal economies in Alaska and for small rural counties in the rest of the United
States. In both cases, employment grew faster than population, indicating a change in the relationship.
Table 3. Comparison of U.S. and Alaska Support Sector Growth Regression Coefficients
U.S. Alaska'
Sector I Sector 2 Sedor 1 · Sector 2
Constant ·22.470 -16.213 -12.902 -10.298
Population2 1.444 1.413 1.216 1.394
(13.46) (16.18) (9.45) (12.18)
Per Capita Income 1.656 1.155 .919 .500
(5.48) (.4698) (7.29) (4.46)
R2 .779 .825 .623 .666
'Excludes Kenai from the data set. 2 All variables are in natural logs.
Labor Force Participation
The labor force participation observed at any point in time is a function of existing labor market con-
ditions. Because of this, the existing labor force participation rate provides only limited help in predict-
ing how residents will react to changes which affect existing labor market conditions. The existing labor
force participation rate will be less likely to describe future response, the greater the discouraged
worker effect. Discouraged workers are those workers who drop out of the labor force because they
know there are no jobs available. One response to increases in economic activity in rural areas of
Alaska will be the entrance of discouraged workers into the labor force.
Labor force participation plays a key role in determining the full response to OCS-generated oppor-
tunities. The response of the local support sector depends on the increase in incomes of local residents
which, consequently, depends on which residents take OCS jobs. The population growth effect of OCS
development will depend on how many of the jobs are not filled by local residents. The lack of cor·
respondence between actual and desired labor force participation makes the projection of future
economic and population growth less than straightforward. To describe future OCS-induced changes,
we need to understand both how the actual labor force participation rate relates to the desired and how
the desired rate increases.
The actual labor force participation rate is defined to be that share of the population either working
or actively seeking work. This rate is related to but not always the same as the desired rate. The most
important reason for this is the discouraged worker effect. When there are only limited employment
opportunities, people may drop out of the labor force because they know there is no chance of finding
a job. In rural Alaska, the small size of the labor markets makes this information easy to get. This ease of
acquiring labor market information and the poor market conditions make the discouraged worker
effect important in rural Alaska.
The small size of rural labor markets and the limited economic activity in rural Alaska suggests that
the discouraged worker effect would be significant and T abies 4 and 5 indicate this. Table 4 shows the
results of a state survey conducted in the Wade Hampton Census Division. This survey compared those
saying they were unemployment by the conventional definition (looking for work) with those
unemployed by a broader definition which includes those who want work but are n<?t looking. The dif-
ference in these two definitions measures the discouraged worker effect. Table 5 shows the extent of
this effect; the unemployment rate almost doubles under the broad definition, rising from 25 to 49 per-
cent. This means in Wade Hampton, there are almost three times as many potential workers available
than measured by the conventional definition. Ignoring the discouraged worker would, in this case,
80
seriously overstate the need for migrant workers to respond to OCS activity.
The desired rates of participation can also be expected to change over time; as the economy grows,
we would expect the structure of labor force participation to change. Kleinfield's descriptioin of the
rapid increase in female labor force participation in response to the increase in employment oppor-
tunities is one example of this type of structural change (Kleinfield, 1981).
Growth of the local economy may actually increase the desired labor force participation. In rural
Alaska the desired labor force participation rates are higher in the larger, more developed economies of
the regional centers. This type of structural change must also be incorporated into the projections.
Table 4. Desired Participation and Actual Participation
Statewide Percent
Had Job in Previous Y ear 1
Wanted Job, Did Not Have One1
Had Full-Time Job 2
Wanted to Work Full Time 3 (in home village)
Nunam Kitlutsisti 4
Want More Paying Jobs
Yukon-Porcupine5
Had Year-Round Job, 1976
Wanted Year-Round Job
1Nathan and Associates, 1974, T2H-4.
2Nathan and Associates, 1974, T2H-5.
3Nathan and Associates, 1974, T2H-6.
4PAL, 1981, TB-4.
5ISER, 1978, T5-2.
Table 5. Discouraged Worker-Wade Hampton
61.9
15.9
29.4
53.9
87.2
38.0
54.0
Unemployed Unemployment Rate
Conver1tional Definition 282 24.7'1o
(actively loeking for work)
Broad Definition 820 48.8%
(not looking for work)
Source: Alaska Department of Labor, 1981, T8.
The change in desired labor force participation results from three general effects associated with the
growth of the rural economies. These changes can all be explained in a model of labor supply which
describes the trade off between market work, leisure, and nonmarket work (Huskey, eta!., 1982). The
three effects are an increase in real wages, changes in subsistence, and changes in the marginal utility of
income.
Increases in the real wage for. market work results from an increase in average wage of those
employed, a decline in the cost of living, or an increase in the probability of employment. Each of these
will probably result in an increase in the real.wage as. the market increases. Increases in the real wage
will most likely lead to a substitution of market work for nonmarket work and leisure. Changes in the
cost, productivity of time, and the utility of subsistence will also change the desired participation in
market work. As the population in a region grows, the costs of subsistence are likely to increase and the
productivity decrease, which should increase the labor force participation. Finally, as an economy
81
grows, more goods and services will be made available, and costs will be reduced, which will increase
the utility of a dollar of income. As the value of a dollar (in terms of what it can buy) increases,
individuals will participate more in the market economy. In addition, the increased employment oppor·
tunities will allow that proportion of the population which would have migrated to find jobs to stay.
The higher labor force participation rate of this group will increase the average rate.
Residency of Workers
The final relationship of importance to impact analysis is the proportion of the immigrant population
which lives outside of an enclave in the community. Migrants in the community bring families and will
increase the population effect of OCS development. This in tum will increase the secondary economic
response to OCS development.
The residency share of migrants depends primarily on the policies of the oil companies. If they decide
to base operations away from any community, the residency effect will be low. If oil companies pay
trips to some base, such as Anchorage, the residency effect will also be low. Given an oil company
policy, the residency will be higher the larger the economy. Although Alaska has only extreme
examples, such as Prudhoe Bay, the attraction of larger communities has been shown .in other research,
and we would expect a similar pattern. The larger communities offer more amenities and housing for
the migrants, so we would expect more people to migrate in response to OCS development.
Effects of Structural Change on Base Case and Impact Projections for Rural Alaska
In this section, we examine the effects of structural change on base case and OCS impact population
projections for the Aleutian Islands. These provide an indication of the relative importance of structural
change in different modeling circumstances.
The projections were done using a model developed by the Institute of Social and Economic Research
as part of the Alaska OCS Socioeconomic Studies Program, in order to project the impacts of OCS
development on small Alaskan communities or regions. The model is referred to as the Small Com-
munity Impact ModeL or "SCIMP." A detailed description of the model is presented in Knapp (1982).
The SCIMP model is divided into four separate sectors-the baseline sector, the short-term impact
sector, the long-term impact sector, and the secondary impact sector. In each of these sectors, the model
projects separate the major demographic events-births, deaths, and migration-which determine
population change. The sectors are linked through labor supply and demand considerations.
In the baseline sector, the model projects population and employment which would occur in the
absence of industrial development. In the short-term impact sector, the model projects population and
employment changes which would occur in response to short-term impacts. The impacts occur primari-
ly as a result of employment of local labor by the impact industry, and importation of labor to fill jobs
not filled by local labor. Short-term imported labor is implicitly assumed to leave after each year. In the
long-run impact sector, a portion of the import labor is assumed to reside permanently in the commun.i-
ty, resulting in a changing age structure of the impact population. The secondary impact sector projects
seconday employment generated by employment in the short-term and long-run impact sectors, as well
as migration to fill these jobs and jobs left vacant by local residents taking impact industry jobs. Finally,
a summation sector calculates summary outputs of the model.
The primary determinant of population change in the SCIMP ~odel is usually migration, which
occurs in response to changes in employment opportunities. Employment is calculated as the sum of
basic or exogneous employment and endogenous support sector and government sector employment.
Government employment is a function of population. Support sector employment is calculated by
multiplying basic sector employment by a simple multiplier. · ·
To examine the effects of structural change on population projections of the modeL we ran three dif·
ferent sets of projections for the Aleutian Islands, incorporating different assumptions about growth in
the base case (without OCS) and tne size of the employment impacts of OCS. For each of the three
combinations of assumptions, we ran the model twice-once with "structural change" and once
without "structural change." In the case without structural change, the support sector multiplier was
assumed to remain constant at the current ratio of endogenous to exogenous employment; or .26. In the
case with structural change, the multiplier was assumed to follow a logarithmic growth path as popula-
tion grows, as defined by the current multipliers for the Aleutians and for Kenai. This growth path is
given by the equation
82
Multiplier --2.225 + .291 log (population).
Thus. a very simple model of structural change was used, based on very limited cross-sectional
evidence. However. the results serve to illustrate the possible relative importance of structural change
under different modeling circumstances.
Different base case growth paths were projected based on differing assumptions about the growth of
an onshore bottomfish processing industry in the Aleutians. OCS impacts were for a typical Bering Sea
OCS sale. with the greatest impacts occurring during the construction period from 1986-1990. Under
the "low impact population" assumption. only a small share of OCS workers become local residents,
while under the "high impact population," over half of OCS workers become local residents.
The three sets of model projections are presented hi Tables 6-8. In Table 6, a low growth base case
and low impact population are assumed. In this case, there is relatively little effect upon the models'
projections when structural change is allowed for. Base case population projections differ by only one
in the maximum impact year of 1989, while the total projected impact increases by only 32, or five per-
cent.*
In Table 7, a low growth base case and a high impact population are assumed. Here the effects of
allowing for structural change are much more significant. Although there is little change in the base case
projections. when structural change is allowed for, the 1989 impact population increases by 494, or 20
percent.
In Table 8, a high growth base case and a high impact population are assumed. Here, allowing for
structural change results in much higher projections of the base case population. especially in the fin~
years of the projection. In addition, projected peak year (1989) impact population increases by 789, d'r
31 percent.
These three examples illustrate a simple but important point concerning the significance of
population-related structural change when modeling small communities. If little change is expected in
the base case and if the impacts are expected to be smalL then structural change is unlikely to occur to
any great degree, and models which do not account for structural change are likely to provide
reasonable projections.
However, the more that growth can be expected to occur, either in the base case or due to an impact
industry such as OCS, the greater the potential importance of structural change. In effect, the greater
the impact projected by a modeL the greater the chance that the impact will be underestimated unless
the model also takes account of structural change which the impact might bring about.
*T11t SCIMP model slightly mulerstutes the totul impuc/ i11 the s/ruduml ch1111ge cuse, bemuse the multiplier is c:ulLulutcd usi11x lotul (rcsidclll 111111
impuct) populutio11. leu,/illg to '"' overestim<lle o{ structuml dumge i11 the b,lsc c:use.
83
Table 6. Effects of Structural Change on Base Case and Impact Population Projections:
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Low Growth Base Case and Low Impact Population
Base Case Population Projections
Without Structural Change
5125.
5213.
5304.
5481.
5620.
5735.
5804.
5845.
5857.
5949.
6040.
6131.
6222.
6312.
6402.
6491.
6579.
6667.
6814.
7024.
7271.
Impact Population Prpjections
Without Structural Change
0.
0.
2.
4.
8.
21.
173.
395.
491.
592.
420.
33.
22.
23.
23.
24.
24.
25.
26.
26.
26.
84
. With Structural Change
5125.
5213.
5304.
5481.
5620.
5735.
5805.
5846.
5858.
5950.
6041.
6133.
6224.
6314.
6404.
6494.
6587.
6767.
7005.
7286.
7602.
With Structural Change
0.
0.
2.
4.
8.
21.
179.
409.
514.
624.
452.
50.
24.
24.
25.
26.
26.
27.
27.
28.
28.
Table 7. Effects of Structural Change on Base Case and Impact Population Projections:
Y~ar
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Low Growth Base Case and High Impact Population
Base Case Population Projections
Without Structural Change
5125.
5213.
5304.
5481.
5620.
5735.
5804.
5845.
5857.
5949.
6040.
6131.
6222.
6312.
6402.
6491.
6579.
6667.
6814.
7024.
7271.
Impact Population Projections
Without Structural Change
0.
0.
5.
14.
122.
469.
1039.
1720.
2062.
2524.
1906.
683.
651.
645.
645.
645.
646.
647.
645.
638.
629.
85
With Structural Change
5125.
5213.
5304.
5481.
5620.
5735.
5805.
5846.
5846.
5859.
5951.
6135.
6226.
6316.
6407.
6496.
6637.
6846.
7102.
7395.
7720.
With Structural Change
0.
0.
5.
14.
122.
468.
1103.
1915.
2406.
3018.
2393 ..
928.
794.
769.
769.
774.
776.
776.
777.
777.
777.
Table 8. Effects of Structural Change on Base Case and Impact Population Projections:
High Growth Base Case and High Impact Population
Base Case Population Projections
Year Without Structural Change With Structural Change
1980 5125. 5125.
1981 5215. 5215.
1982 5371. 5371.
1983 5649. 5649.
1984 5920. 5920.
1985 6277. 6345.
1986 6844. 7014.
1987 7584. 7932.
1988 8476. 9099.
1989 9656. 10642.
1990 11041. 12524.
1991 12634. 14670.
1992 14445. 17058.
1993 16484. 19901.
1994 18762. 23246.
1995 21292. 27134.
1996 24085. 31611.
1997 27154. 36735.
1998 30512. 42575.
1999 34172. 49183.
2000 38146. 56620.
Impact Population Projections
Year Without Structural Change With Structural Change
1980 0. 0.
1981 0. 0.
1982 6. 6.
I 1983 15. 16.
1984 118. 119.
1985 459. 457.
1986 1024. 1126.
1987 1708. 1991.
1988 2067. 2570.
1989 2529. 3313.
1990 1896. 2698.
1991 615. 1046.
1992 503. 804.
1993 412. 672.
1994 298. 536.
1995 167. 371.
1996 165. 249.
1997 165. 251.
1998 165. 258.
1999 165. 265.
2000 166. 271.
86
Conclusions
The change in the structure of important economic relationships in response to OCS development
must be incorporated into impact models used in rural Alaska. In this paper we have shown that the
potential for structural change exists in rural Alaska arriong three important relations: the local
economic response, the labor force participation, and the residency of immigrants. Each of these rela-
tions both affects and is affected by the growth of the economy. When OCS activity represents a non-
marginal change to the economy, structural change will occur.
We have also shown, using the SCIMP model, the difference in the projected impact which results
from incorporating structural change. The incorporation of structural change in an economic impact
model makes the impact more sensitive to the base case assumptions. If a particular economic relation
depends on the size of the local economy, the size of impact will depend on the level of base case activi-
ty. This means that improving a model's ability to incorporate structural change also entails increased
effort at improving the base case.
Incorporating structural change into an impact model is not a simple task. To date, the growth in rural
Alaska has not been of the type which would indicate a likely pattern of structural change: Research
must focus on cross-sectional analysis of small economies both inside and outside of Alaska.
The incorporation of structural change in an impact model requires a great research effort. Fortunate-
ly, the task can be simplified in some cases. First, when the community is not projected to grow much
or OCS activity is relatively small, the potential for structural change is limited. The relative size of
OCS activity reflects the decision of the oil industry on the isolation of the industrial activity. If OCS
activity occurs in an isolated enclave, the relative effect of development will be small, independent of
actual size of the activity. This makes the industry's approach to development an important research
question.
Secondly, the approach to incorporating structural change should reflect both the use and timing of
the projection. When accuracy is not the prime consideration, sensitivity analysis using different sets of
reasonable parameters may be enough to provide the necessary information. In this case, the important
question for research is: what are the lirnits of potential change? When our information about the
pattern of resource development is specific and accuracy is more important, more research effort is
required. The research questions in this case are: what pattern the structural change will follow, and
what are the determinan~s of the change? Structural change is not linear and the turning points are
important.
87
References
Bender, L. and Juers, L. A Research Perspective on Local Energy Development Impacts, 1975. (Publisher
Unknown)
Fisk, E. "The Response of Nonmonetary Production Units to Contact with the Exchange Economy."
Agriculture in Development Theory, edited by L. Reynolds. New Haven: Yale Press, 1975.
Huskey, L. et al. Economic ,md Demographic Structural Change in AlHska. Anchorage: Alaska OCS Office,
1982.
Kleinfield, I. Different Paths of lnupiat Men and Women in the WHge Economy: The North Slope &perience. Fair·
banks: Institute of Social and Economic Research, University of Alaska, 1981.
Knapp, G. The Small Community Impact Model (SCIMP): Structure, Variable Definitions, and Input Assumptions.
Anchorage: Institute of Social and Economic Research, University of Alaska, 1982.
88
c:Eection. [J [J [/; '3-acdity c8Ltin.g and 9u!J.fic 9atticipation.
Introduction
Ron Inouye
This chapter contains six papers, three each related to facilities siting and public (citizen) participation.
The locating of facilities to extract or process natural resources is a major concern for all involved in
resource development. The economic and social costs and benefits are determined variously as the
authors discuss. The papers review national siting experiences, discuss problems the social scientist faces
in siting studies, and raises issues of siting facilities near isolated communities.
Public (citizen) participation is a method of obtaining and providing information for decision-making.
The authors review the historical development of public participation in national programs and recom-
mend techniques appropriate for Alaska.
Halstead reviews previous national energy facility siting experiences and proposes guidelines for
future attempts. Cook and Cortese present a model for systematically identifying the direct and indirect
· impacts of facilities siting decisions on isolated communities. Flynn reviews siting efforts to protect local
communities, raises problems unresolved by social scientists in that effort, and discusses siting implica-
tions for Alaska.
Black examines citizen participation in National resource management programs and presents a
model for both Outer Continental Shelf leasing and development decisions. Blunck recounts the public
participation program of the Alaska Power Authority. She cites specific examples and makes recom-
mendations based on her experiences with the Susitna Hydro Project. Jeffery summarizes the laws,
regulations, and legal doctrines requiring government agencies to conduct public hearings and
enumerates specific recommendations for effective village citizen participation based on his experiences
in North Slope villages.
90
Siting Energy Facilities: Past Experiences and A Look to the Future
John M. Halstead
Not long ago, developers wishing to site energy facilities had only to go through a process of site
selection, permit application, and land purchasing; there was usually no question as to the final outcome
of the undertaking. In 1969, however, the National Environmental Policy Act (NEPA) changed this
situation by requiring that developers fully evaluate the environmental consequences of their projects.
NEPA's interpretation was later broadened to require that socioeconomic impacts also be considered in
the siting procedure. Waste management disasters like Love Canal (New York)and the growing anti-
nuclear movement aroused public concern and opposition to these types of facilities. Western "boom
towns" like Rock Springs and Gilette, Wyoming, caused many energy-rich communities to wonder
whether the economic stimuli and tax revenue increases resulting from development were worth
experiencing the negative social and economic impacts that accompanied them. In short, the past 15
years have seen a change in both legal requirements and public opinion with regards to facility siting.
The traditional siting process has been called the "decide-announce-defend" model (Ducsik, 1982).
The developer makes a series of technical choices regarding site selection, usually with little or no input
from the public. Once appropriate land has been optioned, a particular site is chosen as "best." The
developer then announces his decision to the public, who may perceive their only recourse at this point
as obstruction and delay; hence the third facet of the procedure, defending the siting decision against
the public and winning project approval (O'Hare et al., 1982). It has become increasingly difficult in the
past decade to site facilities over public opposition (even those regarded as beneficial); Morell and
Magorian (1982) have gone so far as to maintain that it is impossible to site a facility in the face of
widespread opposition, in spite of the procession of legal right. Thus, the traditional process no longer
appears to be an effective mode of facility siting.
This paper examines past experiences in energy facility siting and proposes some rules to follow for
future attempts. The first section examines some case studies of siting attempts, both successful and un-
successful. The second section deals with some of the theoretical aspects a siting process should con-
sider. The third section discusses various permitting processes and siting laws employed by different
states. Finally, the last section proposes some guidelines to facilitate the siting process, including an
examination of several functional developer-community agreements.
Past Experience
Some facilities, such as hazardous waste disposal sites, often pose extremely difficult siting problems
since few people want one in their "backyard." Yet, few would dispute the need for them; and in spite
of a lack of favor from the public, facilities have been successfully sited. Ironically, facilities which
would have increased both local employment and tax revenues in economically depressed areas have
been defeated by local oppositiGln. Siting problems may not end with granting of final construction per-
mits or even completion and operation; projects have been delayed by legal action, civil disobedience,
and even post-completion sabotage.
· What, then, are the secrets of a successful siting approach? What went wrong in siting attempts that
"sh<?uld have" succeeded? This section examines a situation where public opposition led to project
91
cancellation; cases where quasi-legal actions and even "guerrilla warfare" wreaked havoc upon the
operators of unpopular developments; and two cases where facilities generally perceived as noxious
and undesirable were sited with minimal public opposition.
How Not to Site a Facility: The Case of Searsport, Maine
In 1974 Central Maine Power Company (CMP) announced Sears Island in Penobscot Bay as the
preferred site for its 1,200 MWe nuclear power plant. This decision came as a result of efforts by
Searsport town officials to attract industry to the area in hopes of duplicating the successes of the
neighboring town of Wiscasset. Wiscasset, home of the Maine Yankee nuclear plant, had achieved
substantial increases in its tax base resulting from the power plant's location there.
Although the town officials strongly supported the project, problems arose in CMP's dealings with
the public. Inconsistency in information dissemination confused the public as to whether Sears Island
was the preferred site or merely one of several sites. CMP denied that Sears Island was the preferred site
until "publicly embarrassed" inlo doing so (O'Hare et a!., 1982). When this fact was made known, the
local public felt deceived by CMP. ·
In addition, CMP did not make serious efforts to inform state officials of their intentions, and did not
discuss its plans with town officials until after the Sears Island site had been chosen. According to
O'Hare eta!. (1982):
Although CMP played by the rules and violated no regulations, its information policy
created confusion, suspicion, and mistrust-conditions that strongly contributed to subse-
quent opposition and wariness on the part of state officials .... CMP believed it continually
maintained an open policy, but opponents perceived them as deceptive and trusted neither
CMP nor town officials.
Although CMP attempted to rectify these prol5lems, the damage was already done. After several
years delay and an $8 million investment, CMP scrapped its plans for a nuclear power plant on Sears
Island.
Aftermath of "Successful" Siting Actions: Pitfalls of the Legal Approach
The case study of Searsport, Maine documents how failure to identify and address public con-
cerns-in spite of having fulfilled all legal project requirements-ultimately led to the company's
failure to site a proposed power plant. This case is an illustration of what O'Hare eta!. (1982) called the
"Lawyer's Fallacy": viewing the siting process as a series of legal and jurisdictional tests resulting in
granting of permits and eventual project completion. As the authors point out, however, having a legaL
right to proceed is not necessarily equivalent to having the power to build. This fallacy is amply
illustrated in cases such as the Seabrook, New Hampshire and Montague, Massachusetts proposed
nuclear plants, where threats of arrest and imprisonment (often carried out) did not deter opponents
from going to enormous lengths to stop these legal projects (for further discussion, see Rose eta!. (1979)
and Wondolleck (1979).
Failure to win at least a large measure of local public support for a project can result in delays,
increased construction costs, and often cancellation. In some instances, it can lead to demonstrations,
closures, and even sabotage after the facility has been constructed, as ill~strated in the following three
cases.
Wilsonville, Dlinois
In 1976 Earthline, Inc. built and began operating a hazardous waste landfill site near Wilsonville,
Illinois. Local officials and residents were notified in advance of the company's intent, although in
retrospect, it seems that local residents may not have understood the nature of the hazardous waste
involved, and may have expected more local· economic benefits than later materialized. For the first
four months of operation, in spite of some minor problems with odor and traffic, the community was
relatively undisturbed by the project.
92
Then, in April 1977, Wilsonville residents learned that the facility would be receiving PCB con-
taminated soil from Missouri. Opposition to this undertaking grew until the first trucks carrying the
contaminated soil were.greeted by an angry armed mob. This touched off a legal battle which lasted six-
teen months and eventually led to a decision that the facility was not in the public interest, that it would
be closed, and all wastes stored there removed. Although SCA (which succeeded Earthline as manager
of the facility) appealed the decision and requested permission to keep the disposal site open until the
appeal was resolved, the village of Wilsonville dug a trench across the access road to the facility, effec-
tively closing it. The roadwork was officially part of_ culvert repair to control flooding (O'Hare et aL
1982).
Vermont Yankee
The town. of Vernon, Vermont, is the home. of the Vermont Yankee Nuclear Plant, a 540 MWe boil-
ing water reactor which began operation in 1972. Although the plant has been operating for ten years,
recent years have shown a marked increase in anti-nuclear demonstrations at the site. One such civil
disobedience action was staged to protest the refueling of the plant on October 8, 1977. The protesters
bl-ocked the entrance to the plant and were subsequently charged with criminal trespass (Hadden et al.,
1981). As stated by the defense, the purpose of the action was to:" ... prevent workers from gaining
access to the plant, and thus reasonably attempt to stop the flow of radioactive substances into the
environment by preventing its further operation" (Atlantic Reporter, 1979). Similar (though much
larger) actions have taken place at the site of the proposed Seabrook, New Hampshire, nuclear plant
where, in 1977, 1,414 demonstrators were arrested, costing the state $50,000 a day to care for them
(Christenson, 1979; Newsweek, 1977). The rationale expressed for the demonstration was similar to
that at the Vernon Plant. These protests fall under the general beliefs of civil disobedience, which can
be defined as: " ... a deliberate ad of lawbreaking which is both a public.and conscious act of protest
... civil disobedience accepts the general legitimacy of authority but attacks some particular aspect of
authority in order to affect a change" (Vermont Law Review, 1980). These actions illustrated were
staged to protest the health effects of nuclear power; however, civil disobedience could also be used as a
rationale for protesting more conventional developments, such as coal-fired power plants (due to acid
rain, visual disamenities, and noxious odors). This type of opposition might therefore be expected
following the construction of any unpopular or noxious facility.
The CU Project: Farmers vs. Utility Companies
In 1973 two midwest utility cooperatives, Cooperative Power Association (CPA) and United Power
Association (UP A) of Minnesota, announced plans to build a large electricity generating plant in Under-
wood, North Dakota. The project would also entail building a 430 mile long powerline (conducting
800,000 volts) to Minneapolis. The powerline was dubbed' the "CU project."
The utilities apparently felt that they had addressed the public interest sufficiently in choosing the
powerline right-of-way by avoiding woodlands, lakes, urban centers, and highways. The final route
chosen primarily traversed agricultural land. Owners of the land were given what was felt to be
generous compensation.
The farmers were not convinced of the "wisdom of the enterprise, and hence the necessity for their
sacrifice" (Casper·and Wellstone, l98l). Although numerous public hearings and information meetings
were held, the farmers felt they were fighting a battle against the state and utility companies, who they
perceived as insensitive to their needs. Litigation gave way to crowds of angry farmers chasing survey-
ing and construction crews from their land in 1978, and the eventual use of state troopers to maintain
order.
What is especially interesting in this case, is that opposition did not cease once the powerline was in
place. A kind of guerrilla warfare was staged, where mysterious attacks of "bolt weevils" toppled
towers, "insulator disease" shattere~ glass wire insulators, and "wire worms" splayed open conducting
wire. Even with the use of state troopers and high-speed helicopters, the utility was frustrated (Casper
and Wellstone, 1981). Thus it can be seen that even legal right and project completion are not always
sufficient to achieve siting result.
How to Site a Facility: The Experience of Wes-Con
One of the most difficult siting problems, especially in the wake of such management diasters as
93
Love Canal (New York) and the "Valley of the Drums" (Kentucky), is finding a location for a hazardous
waste disposal facility. Numerous towns throughout the country have reacted to the problem by pass-
ing ordinances prohibiting hazardous waste facilities within their borders (Morell and Magarian, 1982;
O'Hare et al., 1982). The prospects of possible environmental and health damages, noxious odors, ·and
unsightly areas seem to far outweigh any anticipated economic benefits. How, l:hen, in 1972 and 1979,
did Wes-Con; Inc. site two hazardous waste disposal facilities with very little public opposition?
Wes-Con's disposal process involved the use of abandoned missile silos in rural Idaho to store wastes.
The first site, 10 miles from Grand View (population 260), Idaho, is two miles from the nearest rancher
and surrounded by Bureau of Land Management grazing lands.
During the time Wes-Con was completing its environmental assessment and applying for a state con-
ditional use permit, the company took the initiative to solicit support from the county commissioners
(although they had no legal leverage over the site) and the local Cattlemen's Association. Once con-
struction began, Wes-Con hired local residents for a management staff, donated salvage materials to
comrnunity groups and citizens, and invited visits to the facility. In addition, the company provided
free disposal of local hazardous wastes (mostly pesticides), provided area ranchers free use of their
heavy equipment, and agreed not to accept any controversial wastes (i.e., nuclear wastes and nerve gas).
Wes-Con's major site management decisions were deferred to state agencies to maintain political sup-
port and public credibility. Finally, the company purchased the first fire truck ever available to local
ranchers and farmers.
Wes-Con's second experience, near the town of Bruneau (20 miles away, population 100), was
located within the same county (Owyhee) as the Grand View site. Again, Wes-Con approached local
officials and organizations for support and offered services and benefits to the community. Local politi-
cians and civic leaders saw the Bruneau facility as an extension of the Grand View site and gave their
approval. After a public hearing for a conditional use permit and subsequent incorporation of improved
operating features into the site, the facility began operating in 1979 with no local opposition (O'Hare et
al., 1982).
Theoretical Considerations in the Siting Process
In recent years, through legislation such as NEP A and a general change in public philosphy regarding
the desirability of many facilities, local opinion has gained substantial leverage in the siting process.
Susskind and O'Hare (1977) have identified four reasons why certain groups are likely to exert pressure
out of proportion to their numbers:
I) The prospective neighbors of a new facility are easy for an organizer to identify. This is in con-
trast to the potential beneficiaries of a facility, who may be dispersed throughout a large area;
2) The members of these opposition groups are known to each other by sight. This discourages
"cheating" (not contributing to the group effort);
3) The neighbors of a facility stand to suffer losses which may place them below their initial welfare
position. Beneficiaries of the facility suffer only the failure to advance beyond their initial
welfare position; and
4) Any feelings of suspicion of government or industry are readily utilized by local opponents to
band together in opposition to the project.
Citizens directly affected by a facility often stand to lose much more than any single beneficiary has
to gain; therefore, the loser is much more likely to actively oppose the facility than the gainer is to
actively support its construction. It is assumed here that the initial decision to site the facility passes the
Hicks-Kaldor test of public policy alternatives; that is, a facility should be sited at a given location if
those who gain from the siting could fully compensate those who lose, and it is the best available site.
The Hicks-Kaldor test is generally regarded as the efficiency criterion of the "new welfare" economics,
whereby the objective ·of social policy is to maximize the value of the output of goods and services
(Freeman, 1979). ·
If a facility passes the Hicks-Kaldor test, but is cancelled due to public opposition, the outcome may
be socially inefficient. This is because: a) it may prove to be impossible to locate a socially desirable pro-
94
major cause of inertia in the policy making process. The second benefit is avoidance of future
"demoralization costs;" that is, even if a project is sited and constructed, lack of public acceptance can
make siting of future facilities more difficult. Fair compensation and open negotiation provide a "good
example" for future facility hosts (see Wes-Con case study described earlier in this paper).
· The following is an example of the successful use of compensation-incentive plans to resolve disputes
in an unusual situation. ·
Case Study: The Grayrocks Dam _
The Grayrocks Dam was originally conceived to be constructed on the North Platte River to provide
cooling water for the Missouri Basin Power Project's (MBPP) Laramie River Plant near Wheatland,
Wyoming. Opponents to the project were mainly divided into three groups: farmers, who worried
about the impact of the dam dn streamflow; state of Nebraska officials, who felt that construction of the
dam would force the state to restrict its water usage; and environmentalists, concerned over damage to
the river habitat of the whooping crane. Informal negotiations between MBPP and the affected groups
yielded no solutions; consequently, the opponents filed a consolidated lawsuit, charging that the pro-
ject's EIS (Environmental Impact Statement) was insufficient.
In this situation, MBPP was losing money through c01l.struction delay. Similarly, conservationists
were uncertain that the court would rule in their favor. Thus, the stage for negotiations and settlement
were set.
MBPP opened negotiations by offering the opposition groups $15 million to purchase water rights to
maintain appropriate streamflow and maintain the whooping crane's habitat. The offer, to MBPP's sur-
prise, was flatly rejected. Nebraska officials were leery of accepting direct payments so as not to "be
perceived as "selling out" water rights for cash, and the environmentalists were not convinced th~t
streamflow levels could be legally maintained through water rights purchase.
MBPP then revised their offer to $7.5 million and guarantees of minimum streamflow for various
seasons. The cash was to be used to purchase additional water rights to artificially maintain the crane
habitat, and wa<; eventually placed in a trust fund for that purpose. Thirty days later, a binding agree-
ment was made.
What makes this case interesting is that strictly cash settlements were unacceptable to the dam's
opponents. Indeed, offers of cash payments may be seen as "bribery" by environmental groups. By
using a program of both in-kind and monetary compensation instead, the dispute was resolved (O'Hare
et al., 1982).
The State and Local Government Roles in Facility Siting
Recognizing the need for orderly growth as well as the need for certain useful (though noxious)
facilities, various permitting processes and siting laws have developed. In the energy-rich regions of the
West and Southwest, these range from the state-wide approach employed by Wyoming (The Industrial
Development Information and Siting Act) to the Colorado process, which leaves permitting
requirements to county-level government (examined here in the Rio Blanco County experience). In the
East, where major problems have been encountered in attempting to site hazardous waste facilities,
several states have passed legislation to facilitate siting (example here is the Massachusetts Hazardous
Waste Facility Siting Act).
The Wyoming Industrial Development Information and Siting Act
In 1975 the Wyoming Legislature enacted the Industrial Development Information and Siting Act
(amended in 1977, 1979, and 1981), requiring all industrial activities with proposed construction c~sts
in excess of $50 million to file for a permit from the Industrial Siting Council. The act assigns respon-
sibility for a broad range of socioeconomic impacts to the Council, as well as the power to refuse (or
grant conditionally) permits for construction. -
In addition to fulfilling environmental requirements, the act requires descriptions of impacts on
scenic resources, land use patterns, economic base, housing, transportation, and any other social or
economic impacts, as well as plans for their mitigation, in the permitting process. The permit applica-
95
jed anywhere, or b) the project may be sited, but at a less than optimal location. It should be noted,
however. that even though these local opponents may cause a socially inefficient outcome, siting the
facility may also lead to inefficiency. If construction of the facility creates externalities-that is. external
costs for which no compensation is made, such as involuntary risk bearing or decline in quality of
life-then the project does not reflect its true social costs.
This provides part of the justification for paying compensation. For our purposes, compensation is
defined as the payment necessary to return the impacted individual or community ~o his initial welfare
level (in other words, to make him as well oH as he was before the facility was built). In effect, compen-
sation serves to correct a failure of the market place, causing the project to reflect its true social costs,
and facilitating the construction of socially desirable projects. It can take the form of:
1) Monetary payments;
2) Conditional compensation (supplied only if particular adverse circumstances occur in the form of
surety bonds, insurance, etc.);
3) In-kind compensation (direct replacement of lost amenities); and
4) Offsetting (recognizing that some adverse impacts of development are virtually impossible to
prevent, but that creation or enhancement of benefits in other areas may offset the negative
effects) (Faas, 1982; O'Hare et a!., 1982; DePape, 1982; Leistritz et al.. 1982).
However, it is possible that even with compensation payments, local opposition may not be
mitigated. In some cases, it may be necessary to make incentive payments to individuals and com-
munities. These payments are different than compensation in that they leave the impacted party better
off than he was before the siting. For practical purposes, an acceptable position occurs when net
benefits for the project are still positive; that is,
TB > TC + C +I
where: TB = total benefits, facility construction;
TC = total costs, facility construction (not including compensation and incentive payments);
C = compensation paid;
I = incentives paid;
From the perspective of traditional microeconomic theory, however, it may be inefficient to use incen-
tive payments, in that marginal benefits are exceeded by marginal costs, a violation of efficiency
criteria.
To elaborate further, this problem can be viewed in three ways. First, the incentive payment may be
viewed merely as compensation for intangibles like risk bearing and decline in quality of life. Second,
incentives could be seen as a "premium" payment for suffering an irreversible loss of land use, lifestyle,
etc. (as in cases of hazardous or nuclear waste storage facilities). Finally, the incentive payment may
serve to correct a market imperfection, just as compensation does. This situation violates standard rules
of pure competition in that it:
1) Implies perfect or near perfect market information on the seller's part;
2) It may be a case of individuals colluding to fix prices; and
3) It implies monopsony or oligopsony in the product market.
Only in the third case are incentive payments truly in excess of standard compensation, and this case
may merely represent the "seller" parlaying his knowledge or situation for economic gain (certainly not
an unusual .situation!). ·,
There are two final benefits which favor compensation and incentive use. First, equity considerations
which implies a more just distributiQn of benefits. This is a difficult concept because of conflicting inter-
pretations of what is meant by equity or fairness. However, there appears to be a general reluctance to
impose large losses on clear and identifiable segments of society (Morell and Magarian, 1982). In fact,
Thurow (1980) has stated that political reluctance to impose clear economic losses on specific groups is a
96
tion is then reviewed by a variety of state agencies, and public hearings on the application are held. The
applicant is responsible for demonstrating that:
"(i) ... the proposed facility will comply wi.th all applicable laws ... ;
(ii) .. .the facility will not pose a threat of serious injury to the environment nor to the social and
economic conditions of inhabitants or expected inhabitants in the expected area; and
(iii) .. .the facility will not substantiallly impair the health, safety, or welfare of the inhabitants."
(State of Wyoming, 1981.)
The Council is required, withiri 60 days, to grant unconditional approvaL grant approval conditioned
upon specified changes in the application, or reject the application.
One problem with the act is that the $50 million limit does not make provisions for control over
multiple small energy development projects, whose cumulative impacts may be severe. The granting of
a permit for the Laramie River Station near WheatlaAd, Wyoming, has also drawn criticism of the Siting
Council due to failure to specify transmission line routing and failure to establish a priori the utility's
responsibility for financing impact alleviation efforts in the permitting process. On the positive side, the
permit for the Laramie River Station required commitments to impact mitigation which the community
could not have obtained from the developer by itself. The Council has also shown a willingness to be
flexible in execution of the permit requirements, which is useful in cases where impacts are not as
severe as was predicted (Susskind and O'Hare, 1977).
Facility Siting in Colorado: One County's Experience
Unlike Wyoming, Colorado's system of siting regulation is centered at the county level. One county
in western Colorado, Rio Blanco, has been the site of substantial energy development. The County's
ordinances give it a high degree of control over development ranging from mobile home siting restric-
tions to County road vehicular restrictions:
One of these ordinances, Impact Regulation, directly affects facility siting. The regulation is:
"designed, enacted, an·d adopted for the purpose of regulating the use of land on basis of the
impact thereof on the County, its communities or surrounding areas, and other matters in
accordance with the County Comprehensive Plan in order to protect and promote the
health, safety, morals, convenience, order, prosperity, and general welfare of the present and
future inhabitants of Rio Blanco County." (Rio Blanco County, 1979.)
These impacts include both "services and activities" generally considered as public services-such as
schools, law enforcement, waste disposal-and "matters" which include air and water quality, housing,
traffic, and area property values. No project may bE approved until the County Planning Commission
has determined that the proposed project will not adversely affect the services, activities, matters, and
Comprehensive Plan Policies within the County.
This system of ordinances was extremely successful in obtaining impact mitigation payments from
Western Fuels, Utah when the company developed the Deserado Mine in Rio Blanco. In an unusual
situation, the plant (with most of the tax revenue) was located in Utah, while much of the worker settle-
ment occurred in Colorado. The agreement reached between the company and the County provided
for payments to local hospitals, fire protection districts, and town and county governments, as well as
other impacted service areas. Provisions were made for revising payments up or down using monitor-
ing reports of project impacts. Finally, payments for and construction of new housing was provided for
in the agreement.
The Deserado Compensation Agreement utilizes both lump sum and annual payments. Flexibility
and adaptability is provided by monitoring systems designed to detect differences between projected
and actual impacts. Although it has been maintained that Rio Blanco's bargaining position in this case
was strong because it did not "need" the project (Metz, 1982), it serves as an example of how county-
level ordinances in Colorado function to affect facility siting.
97
The Massachusetts Hazardous Waste Facility Siting Act
The American Northeast. with its paucity of extractable resources and abundant supplies of labor and
infrastructure, would seem an unlikely place for disputes over facility location. Yet, due to the highly
industrialized nature of the area, the need exists for hazardous waste disposal facilities. Unfortunately,
even though few are philosophically opposed to the idea of toxic waste dumps, fewer still would desire
one in their "backyard." Recognizing this, several states have attempted to legislate a solution to the
problem. In .this section, the Massachusetts Act is examined. .
Enacted in 1980, the act provides for the exercise of eminent domain in siting, environmental restric-
tion and review, and public participation. The act establishes a hazardous waste facility site safety coun-
ciL whose duties include observing conduct and operation of waste sites, awarding technical assistance
grants to cities and towns, reviewing proposals for construction and operation of hazardous waste sites
(and rejecting those found unacceptable), encouraging developer-community negotiation, and
establishing compensation to be paid by the developer to abutting communities.
The final siting agreement specifies terms, conditibns, and provisions under which the facility shall be
constructed, maintained, and operated. Compensation levels for adverse impacts is to be negotiated be-
tween the developer and the impacted communities. Finally, if it is determined that an impasse has been
reached between the developer and the site community, the council may settle the matter through
binding arbitration. In effect, then, the act tries to legally insure that all aspects of site selection, par-
ticipation, compensation, and negotiation are addressed before the state is forced to use its power of
eminent domain. The ad also makes any town or city permit which was not required before the bill
was passed unnecessary for the developer to obtain.
Facility Siting: Some Practical Considerations
'Today, industry cannot indulge in the luxury of siting its facilities or developing natural
resources in areas where there is no risk of community rejection. Such areas probably are
nonexiste!'lt. In every situation, there is some threshold of impacts or perceived impacts at
which the siting of a facility will be seriously questioned or opposed" (Luke, 1980).
As Ron Luke has stated, developers no longer have the autonomy they once enjoyed in the siting
process. This section deals with some ideas to improve the efficiency and equity of the siting process.
The case studies of unsuccessful siting attempts presented in this chapter display some similar
attributes. ·one prevailing theme is that the lack of effective public involvement can and has led to
disastrous results. Public opposition through legal means can lead to project cancellation, either through
court rulings or by causing delays so costly that the project loses its economic feasibility.
Through negotiations with local groups, developers can identify concerns regarding the facility's con-
struction, and set up a compensation process. By identifying concerns early"and addressing as many im-
pacts as possible before construction begins (such as safety measures or visual improvements), the risk
of public opposition can be substantially lessened.
Obviously, not all disputes over compensable impacts can be settled through developer-community
interaCtion. The need exists for a binding arbitration procedure to resolve impasses. This is provided by
the state in the Massachusetts' Hazardous Waste Facility Siting Act. In addition, several Canadian com-
panies have initiated arbitration practices. Ontario Hydro uses an arbitration board, comprised of
members appointed by both lhe developer and the community, to resolve disputes over impacts of its
Darlington nuclear generating station. The agreements also provide a trust fund to pay for impacts
(BariL 1981). The Northern Flood Agreement in Manitoba provides a sole arbitrator mutually accept-
able to all parties involved. In addition, the agreement also establishes compensation of four acres for
each acre of Indian land taken fpr the Northern Flood Dam Project (Northern Flood, 1977). By
establishing an arbitration procedure, the community is assured of the developer's intention that the
facility bears its full costs, and also that there is a mechanism in place to resolve any grieyances arising
after the facility is constructed.
Of course, a profit-maximizing developer may attempt to either avoid making compensation
payments or to minimize compensation paid. Conversely, overly zealous attempts at compensa-
tion-especially monetary-may be greeted withcharges of bribery. O'Hare et al. (1982) have iden-
98
tified eight dispute characteristics which may create ideal conditions for compensation:
1) Few parties to the dispute;
2) The opponents are geographically defin·ed. This is especially important in that the opposition
corresponds with some local governmental jurisdiction, yielding an entity with which to
negotiate;
3) Opponents well organized;
4) Mutually acceptable outcomes exist;
5) Impacts are clearly traceable to the project;
6) Recreation of the status quo is possible;
7) The parties involved are capable of offering a binding agreement. For example, some
environmental groups are unable to assure agreement or compliance of their members; and
8 Absence of initial hostility. The way in which a developer approaches the· community will
strongly influence local acceptance of the proposed project.
In the case of a particularly disagreeable facility, incentives or rewards may be necessary to lessen
· opposition. Carnes et al. (1982) have identified some questions/criteria to judge the applicability of
these payments (note: incentives are not necessarily monetary). They are:
I) What is absolutely necessary? Preconditions for introduction and use of incentives include:
safeguards for health and safety; control-authority arrangements; and negotiations among
affected parties. Absence of these conditions may result in siting failure due to withdrawal of
key local support or local demand for extreme levels of compensation and assurance;
2) Will it work? Objectives of an incentive include certainty, constancy, adequacy, and ease of
administration;
3) Can it be understood? The community must be aware of and understand the incentive; it also
must be relevant to their concerns. Failure to meet these criteria can result in failure of the incen-
tive and possibly credibility damage due to bribery charges; and
4) What are the consequences? This concerns distributional effects, effects of the program on local
consensus, and hopefully resolution of some of the adverse consequences of the facility.
If compensation or incentive payments seem worthwhile after these considerations, O'Hare et al.
(1982) have suggested some "advice to developers" in implementation:
1) Recognize that while the project may be good for the area as a whole, it is likely to make at least
a few individuals or groups genuinely worse off. Distributional effects of the project should be
closely scrutinized;
2) Find out who losses if your facility is constructed and why. Understanding of how people view
the project is essential, along with the realization that perceptions change over. time;.
3) Be sensitive to people's fears. Perceived dangers often effect the S?me responses as real ones;
4) Think creatively about ways to make people whole; that is, to leave them as well off after the
facility is built as they were before. Prevent anticipated damages from occurring, and develop
methods to correct upavoidable damages. Also be prepared to negotiate compensation levels;
5) Be sensitive to the fact that your actions to initiate negotiation of compensation agreements may
offend opponents. Try to introduce compensation indirectly, so as not to look as if "buying off"
local concerns;
6) Focus on bargaining rather than gift giving. Concentrate on what each party has to offer the
other;
7) Presume mistrust. Industry .and government are often viewed with suspicion in these situations;
avoid actions that may be construed as deceptive or threatening;
8) Be forthcoming with information. As seen in the Searsport case study, misinformation produces
mistrust;
9) Recognize that if oppo:1ents do not know much about your project, they are likely to assume the
worst. "Ignorance often leads to fear and extreme bargaining positions." Funding a locally spon-
sored study of the project's effects is often a good idea; ·
99
10) Suggest ways to resolve future disputes. Arbitration procedures detailed earlier. in this paper can
be useful here;
ll) Be up front with your offer. Keep interactions with community and opponents in the open; and
12) Try not to appear intransigent. There is a high return to soliciting comments from the com-
munity.
Conclusions
This paper has attempted to present some of the difficulties involved in siting energy facilities, both
in an historical and theoretical context. Although many of the cases examined relate to nuclear or
hazardous waste facilities, the siting problems encountered can be viewed as extreme examples of the
problems which might be expected in the siting of any energy facility. Through an analysis of past suc-
cesses and failures, and careful attention to changin~ public opinions with regards to development, it is
felt that a more efficient siting process can be designed.
This paper makes two principal assumptions: first. that the traditional siting process has outlived its
usefulness; and second, that a substantial amount of local opposition can stymie a siting attempt,
regardless of legal rights or perceived need for the project. With this in mind, it is suggested that
through early and effective local involvement in the siting process (as well as ongoing participation in
management decision, if possible), and an impact lessening/compensation and incentive program the
possibility of successful siting can be greatly enhanced. Although state siting laws and regulations can
accomplish much of this, the developer and the community must accept a share of the burden of the
siting process.
100
References
Atlulltic Rcp<'rtcr. State vs. Warshow. Vol. 410. 1979.
BariL R. G. "Community Impact Agreements and Monitoring." Paper presented at Second International
Forum on the Human Side of Energy, 17·19 August, 1982 in Edmonton. Alberta, Canada.
Carnes. S. E.; Copenhaver, E. 0.; Reed,].; Soderstrom. E.; Sorenson,].; Peele, E.; and Bjornstad, D. huCil-
ti~·c~ 1111d the SiliHS of Rudi<'lltti~·c W11.-te F~tcililic~ .. Energy Division-Health and Safety Research Division,
· Oak Ridge National Laboratories. 1981.
Casper, Barry. and Wellstone. Paul. Powcrli11c: The Fir~t Bttltlc of Amcrittt:, E11crs!' W11r. Amherst: University
of Massachusetts Press, 1981.
Christenson, Steven. "Analysis of Public Intervention in the Siting Process in France and the United
States." jounzt1/ of llltm!llfiowtl Lt1w uwl Polity, 8:362.
DePape, Denis. Personal communication. Winnipeg, Manitoba: Interindustry Consulting Economists,
Ltd. 1981.
Ducsik, Dennis. ElcdriLif)l PllllllliiiS tllll{ the E1winmmwt. Cambridge: Ballinger Press, in press.
Freeman, A. Myrick Ill. The Bmcfib of Em>irollllll'lltallmproPCI/ll'llt: Tlwwyttlld Prt1dicc. Baltimore, Maryland:
Resources for the Future, Johns Hopkins Press, 1979.
Hadden, Susan; Chiles, James; Anaejinou, Paul; and Cerny, Karl. Hislz Level Nudwr Waste Disposal: !11/or-.
Jllttfioll Er_dttmgc awl Cmzflid Resolutimz. Austin: Texas Energy and Natural Resources Advisory CounciL
1981.
Leistritz, F. Larry; Halstead, John M.; Chase, Robert A.; and Murdock, Steve H. Sodommvmic lmptid
Mtlllti.'(CIIICilt: Progn1111 Dcsis11 tmd lmplcmclltatimz Cmsidmllimzs. Fargo: North Dakota State University,
1982.
Luke, Ronald. "Managing Community Acceptance of Major Industrial Projects." Cot1stal Zmu Mtiwtge-
IIICilt }oumtil 7:271-296.
Massachusetts, State of. Massachusetts Hazardous Waste Facility Siting Act, 1981.
Metz, William. Personal communication. New York: Brookhaven National Laboratories, 1982.
MorelL David, and Magarian, Christopher. Siting Haz11rdous Waste Facilities: Public Opposition 1md the Myth
of Preemption. Cambridge, Massachusetts: Ballinger Press, 1982.
Newsweek. May 23, 1977.
O'Hare, Michael; Bacow, Lawrence; and Rose, Judah. Facility Siting 1md Public Opposition. New York: Von
Nostrand-Reinhold, in press.
Rio Blanco County, Colorado. Ordinances. 1979.
Rose, Judah; Weinstein, Alan; and Wondolleck, Julia. Nuclear Energy Facilities and Public Conflict: Three Gl5e
Studies. Cambridge: MIT Energy Impacts Project, 1979.
Susskind, Lawrence and O'Hare, Michael. Managing the Social and Economic Imp11cts of Energy Development.
C~mbridge: MIT Energy Impacts Project, 1977.
Thurow, Lester. The Zero-Sum Society: Distribution and the Possibilities for Economic Change. New York: Basic
Books, Inc., 1980.
Vermont Law Review. Note: "Anti-nuclear Demonstrations and the Necessity Defense." 5:104-105.
Wondolleck, Julia. The Mont11gue Nuclear Power Pl,mt: Negotiation, Information, and Intervention. Cambridge:
Energy Impacts Project, 1979.
Wyoming, State of. Wyoming Industrial Development Information and Siting Act, 1981.
101
Isolated Facility Siting and Impact Model
Peter D. Cook and Charles F. Cortese
This paper summarizes the results of an applied research project carried out for the Minerals Manage·
ment Service, Alaska Outer Continental Shelf Office (MMS/OCS). The resulting model (IFSIM) was
designed to assist·MMStOCS planners in examining the industry-community decision process for on·
shore facilities, and the resulting direct and indirect impacts. The model simulates decisions on siting,
employment, sharing of community utilities and services, and policies toward housing and access of
workers to the community. Twelve categories of direct impacts are classed according to level .of inter·
action between industry and community, and then linked to 135 types of potential indirect impacts of a
sociaL cultural, or economic nature.
Objectives of the Model
The objectives of IFSIM are to:
I) Determine the most likely decisions on siting and community resource sharing by OCS industry.
2) Relate these decisions to their probable direct social and economic impacts.
3) Link direct impacts systematically to all potentially important social, cultural, and economic
indirect impacts.
4) Provide a rapid means of testing the impacts of alternative decisions.
5) Provide a means of identifying the most critical areas for mitigation or enhancement measures.
The three key terms used above are defined as follows:
• OCS Industry -the combination of oil companies and supporting contractors which carry out
OCS oil and gas exploration, development and production.
• Community -the land area and population within or immediately adjacent to the boundaries of
a village, town or city.
• Impact - a significant change in the economic, social or cultural organization of a community.
The model was designed for use with the offshore oil and gas industry in Alaska, and its interaction
with smaller bi-cultural communities which are physically remote from the major economic centers of
the State. In principal it is applicable to any export-oriented industry and any community that is in an
isolated area near the potential sites.
Structure of the Model
In its simpliest form IFSIM is divided into three basic elements as shown in Figure I. The first element
simulates the decision process conceming the scale and location of the facility, the sharing of communi·
ty resources (labor force, utilities and services) and the related level of in-migration as a result of the
industry's existence. Each potential site is analyzed in the light of industry requirements and preferences
as well as community resources and attitudes. The resulting decisions are identified as the probable out·
come of a negotiation process between industry and community representatives:
102
The second element determines the direct impacts of these decisions in two categories (described in
Table I) and for three levels of interaction between the industry and the local community. Finally, the
third element specifies the potentially important indirect impacts that are expected to be associated with
the type and scale of each direct impact identified before.
IFSIM has been designed to systematically identify the full range of potential impacts and distinguish
the general level of impact, where this was judged possible, from a synthesis of past research in Alaska,
the western U.S., Canada and Scotland. It is oriented to a community-level analysis that can be adapted
to site specific differences and differences in community characteristlcs. This level of detail requires cer-
tain specific community data, but not extensive primary research (although additional primary research
is needed to verify the working hypotheses in the model). .
The model has been generalized to cover (I) all three OCS phases (exploration, development and
production), (2) the possible level of oil and gas discoveries and related industry requirements, and
(3) the wide range of characteristics exhibited by Alaskan communities. This level of generality is
highly useful for policy analysis but leads to some uncertainty about specific decisions and micro-level
impacts which can be addressed at later stages if detailed impact analysis is required.
This uncertainty, as well as other uncertainties in the outcomes of the negotiations, can be handled
by using the model in a sensitivity analysis form. To do this, alternative assumptions can be made for
specific decision points or impact determination points in the modeL and the effects of these assump-
tions traced through to their direct and indirect impacts. If no important differences are identified, the
assumptions can be left in their original form with no loss of accuracy, even if the actual outcome is not
the same. If there are important differences, the critical assumption can be prepared for more careful
examination or additional data collection performance. ·
Determine the
Likely Location
of Development.
Determine the
Use of Local
Resources.
Determine the Relative Levels
of Interaction Between
Determine the
Level of
In-migration.
Community Residents and Industry
!
Determine the Sociocultural Impacts
Associated with Each of the
Above Levels of Interaction.
Figure I. The basic elements of the impact forecasting model.
Analytic Procedures
(!)
Industry-
Community
Decisions
(2)
Direct
Impacts
(3)
Indirect
Impacts
Some of the critical assumptions and decision points in the model are brought out in the more
detailed flow diagram in Figure 2. Essential site features in this case are runway length and port depth.
Other important aspects are land availability, community attitudes toward development, and whether
the potential site is road-connected to town or not.
Use of local resources, labor and in-migration are determined in the analysis with the aid of a com-
puterized econometric model called SCIMP.1 This model simulates the local labor market, secondary
economic effects and the attractiveness of local jobs to outside workers, on a yearly basis. The IFSIM
analysis then identifies the maximum impact for each phase of oil and gas activity in order to specify
the direct impacts in these categories in Table I.
The levels of impact are determiFied by a set of decision rules that relate to size of the facility relative
to the community, the phase of activity, and the attitudes of the community and industry toward land,
labor, shared use of community utilities and services, and access to the community by camp workers.
These decision rules are actually working hypotheses based on a synthesis of past research findings
adapted to Alaskan communities. Examples of these are given in Table 2.
'Small commrmily impacl m0del developed by lire l11slilule of Eco11omir Reswrcir of lire U11iuersily of Alaska.
103
Table 1. Direct Impacts of OCS Development
Level of
Interaction Local Economy Local Labor Force Land Use Patterns Transportation ~acilitie~
I) Industry uses few 2) Little use of local 3) Few ·(and use 4) lncrea~ed use of some
local suppliers and labor relative to the conflicts or all transportation
contractors local work force facilities but no serious
t: congestion 0
13
"' ...
Q)
$]
cu
E 'l '2·· ' ~
I) Industry uses some 2) Moderate use of local 3) Some land use 4) One to three transport<~lion
local suppliers and labor relative to the conflicts facilities are congested due
t: contractors local work force to shared use .Q
tl
"' ...
Q)
~'E t:O-
~ Q) -:u ...
Q) -c
0
~
I) Industry uses many 2) Significant use of local 3) Many land use 4) All transportation b<.:ilities
local suppliers and labor relative to the conflicts congested due to shared
t: contractors local work force .Q use
tl
~
Q)
0]
~E
:I
E
')(
"' ~
Table I. Direct Impacts of OCS Development
Level of Public Utilities Community Services
; Interaction (Water, Telephone, Power, Se~er (Police, Fire, and Medical) LocaltReHional Tax Base Presem:e of Newcomers
5) Increased use of some or 6) Increased use of some 7) No increase in community ':I) Low inmiwation of new
all community utilities but or all services but none tax base residents
none or over capacity are over capacity 8) Little increase in potential I 0) Little use of community
c::: tax base outside community services by employees 0 :a living in camps
~ I I) Little use of bars aml.stores CIJ ~] by employees livinH
"iij in camps
E 12) Little use of local hunting '2 and fishing areas by ~
' newcomers
5) Two or three community p) One or two services are 7) Some increase in community ':1) Moderate inmigration of
utilities are at or over at ore over capacity due tax base new residents
c::: capacity due to sharing o sharing 8) Some increase in potential 10) Moderate use of comnHmit~
0 tax base outside community services by employees living :a ro in camps ...
CIJ 12) Moderate use of locJI ~£: co-hunting and fishinH Jl"l'JS ~~ by newcomers ~
CIJ -a
0
~
5) Four or five community 6) Three services are at or 7) Significant increase in ':I) Significant inmigrJtion of
utilities are at or over over capacity due community tax base new residents
c::: capacity due to sharing to sharing 8) Significant increase in 10) SiHnificant use of 0
t potential tax base community services by ro ... outside community employees livinH in cJrnps cu
~1: I I) SiHnificant use of bJrs Jnd u-
~E stores by employees
:I livinH in camps E ·x 12) SiHnificant use of locJI ro hunting and fishing JreJs ~
by newcomers
INPUTS
DETERMINE
UKELY
LOCATION
DETERMINE
USE OF LOCAL
RESOURCfS
DETERMINE
IMMIGRATION
DETERMINE
DIRECT
IMPACTS
DETERMINE
INDIRECT
IMPACTS
Assume facilities
will be physically
isolated from
communities
No
Verifv existence
of essential Site
_ teatures m or
near the community
l
Asssess
Community
Land
Availability
l
If the site is
suitable. will the
community allow
development in or
near town
Determine existence
of essential site
features at a site
connected or
connectable by a
road to the
community
For the appropriate
site · Determine
level of in·
miwation.
1
Determine likely
Direct Impacts.
l
Determine likely
Indirect Impacts
Yes
SCIMP
Yes Assume the on·
shore facilities
will be located
in or near town
Assume the
facilities will
be located at a
road-connected site
Figure 2. Basic Procedures of Impact Analysis for a Particular Phase and Level of Find
106
Table 2. Examples of Decision Rules for Direct Impacts
1. In-migration Impact
low
moderate
significant
less than 15% increase in local non-camp population
15-50 '?'o increase in local non-camp population
over 50% increase in local non-camp population
2. Community Services Impacts
few
some
many
less than 15% increase in local non-camp population
15-25% increase in local non-camp population
over 25% increase in local non-camp population
3. Use of Local Hunting and Fishing Areas by Newcomers
low
moderate
high
less than 3 % increase in population
3-5 % increase in population
over 5 % increase in population
4. Employment Impact
low
moderate
high
5. Tax Base Impact
little or no
some
significant
less than 3 '1o additional employed of previous number of local employees
3-10% additional employed of previous number of local employees
greater than 10% additional employed of previous number of local employees
exploration phase facilities
development phase facilities
production phase facilities
6. Land Use Impacts
few
some
many
land in uncongested area with little competition .
land with some competition, congestion, or important for subsistence hunting or
fishing in production phase
land with competing users and congested, or important for hunting and fishing in
development phase
These hypotheses are, of course, subject to refinement as more research on impacts is carried out in
Alaska. Many of these decision rules appear in a simple form, but represent a complicated sequence of
analysis.
Once the set of direct impacts are determined for a given site, by level of interaction, in each of the
12 impact categories, then the potential indirect impacts can be specified. A set of 135 indirect impacts
were selected as potentially important for OCS industry activity in Alaska. These cover three broad
categories:
1) Social Impacts including:
• changes in size, composition and distribution of population.
• changes in the organization and functions of health care, schools.-churches, public safety,
housing and local business.
• changes in the administration of local government.
107
2) Cultural Impacts, including:
• changes in subsistence activities.
• changes in social organization.
• changes in perceptions of quality of life.
• changes in communication between individuals or groups.
3) Economic Impacts, including:
• changes in employment and income.
• changes in the structure of the local economy.
• changes in the real estate market.
• changes in government tax base.
These indirect impacts are listed in Table 3 in more detail.
Based on a second set o_f working hypotheses, each direct impact type and level Vo~as linked to a set of
indirect impacts. In some cases a level of indirect impact was specified, where a link was noted in the
research literature. In many cases only a more general association was specified and the level was left
indeterminate. Examples of these linkages are listed in Table 4.
These explicit linkages between direct and indirect impacts appear to be unique in the field of applied
social impact research.
Nome Case Study
As part of the research project, the model was applied to Nome. Three types of sites were con-
sidered: (I) an in-town site, (2) a site on Cape Nome connected by road to the town and (3) a site on a
gravel island or barge based offshore of Nome.
Only a partial service base can be expected at Nome for the exploration phase, as the present harbor
depth is not sufficient for rig tender boats. The airport runway, on the other hand, is more than ade-
quate, so that an air support base is likely for the exploration phase.
Cape Nome was deeper water than the City of Nome, but a dock and a road to the airport would
have to be built. This is more probable if oil is discovered and the development phase oil terminal is
located on Cape Nome.
The gravel island or barge base would have most supplies shipped by barge directly to the site, not
passing through Nome. Still there would be some impact on Nome, due to limited support activities in
town and use of the airport as a staging area.
Nome, as a community, was found to have a pro-development attitude which favored maximum use
of town services and utilities and in-town housing where available. The present labor force is somewhat
limited in skills appropriate for OCS industries (except construction.), but many individuals ·in other
skilled jobs now, could be attracted to higher salaries in the OCS industry. Community utilities are
dose to capacity now, but other services can easily expand.
Table 5 shows the expected impacts of the three sites on Nome during the exploration phase. The
Cape Nome site effects are very similar to those of an in-town site, since an open access policy is
expected to encourage use of the town by camp workers and some in-town housing.
It should be noted that the number of indirect impacts expected from even a low level of in-migration
and camp worker access would be the preponderant set of impacts. Th,is has major implications for
community and industry policy makers, as these effects can be seen as positive or negative (probably a
combination) by local residents. In Nome the positive effects appear to be seen as greater than the
negative effects, but this perception can be different for other communities.
Table 6 shows the impact by phase of OCS activity (exploration, development, production) for one
of the sites: Cape Nome. Exploration activity can be seen as a relatively low level of activity with most·
ly outside workers, and little use of local services. The development phase involves major construction
activities, as long as it lasts (5-7 years), and provides the most opportunities for local employment and
businesses. The production phase is more long term (15-20 years or more) but at a lower level of activi-
ty. Some of these differences do not show up in Table 6, since they are differences in level of impact
rather than the number of impact expected.
108
Table 3. Potentially Significant Indirect Impacts of Isolated Facility Development
I. SOCIAL IMPACTS
A. Population
I) Change in population composition (age, sex, rae)
2) People relocate due to dissatisfaction with community
3) Reduce outmigration of local people to urban areas
4) Population decreases following construction and production phases
B. Local Government
l) Administration
a) Annexation or creation of new types (e.g., boroughs)
b) Increase in turnover of officials and public employees
c) Increase in newcomers involved in government
d) Change in expectation of government performance
e) More planning and impact studies needed
f) Time and personnel required to govern increas.es
g) Public participation increases
h) New services demanded
i) New facilities required
j) Legal work increases
k) Increase in perception of political powerlessness by some community members
l) Increase political power of land-owning Village and Native Corporations
m) Disputes between pro-and anti-development factions increase
n) Decrease in kinship-based authority
o) Overcapacity of services following peak activity
2) Fiscal Resources
a) More opportunity for shared investment
b) Increase in tax revenues
c) Increase in expenditures prior to revenue increaase
d) Increase in debt financing and bonding of public infrastructure
e) Fiscal resources reduced after production phase when tax base decreases
f) High facility maintenance expenditures following peak activity
C. Health Care
1) More medical personnel needed
2) Medical personnel turnover increases
3) Change in orientation from self-care to professional care
4) Limited facilities are burdened
5) New facilities and t~chnology available
6) Change in structure of health care delivery system
7) Increase in medical emergency transportation demand
8) Increase in potential for industry support of community
9) Mental health needs increase
(Table 3 Continued)
109
Table 3 Continued
D. Schools
I) School enrollment exceeds capacity
2) More teachers and rooms needed
3) Teacher turnover higher anq more stress
4) Change in curriculum requested by newcomers
5) Administrative and planning demands increase
6) Conflicts increase between students
7) More dropouts due to jobs
8) More adult education provided
E. Churches
I) Congregations increase and build more churches
2) New denominations appear
3) New social service functions appear
4) More prosletyzing occurs
5) Increase in conflicts within congregations
F. Public Safety
I) Change in crimes against property and person
2) Change in rate of alcohol and drug abuse
3) Change in rate of family disturbance and child behavior p>roblems
4) Increase in concern about safety
5) Increase in racial and cultural tensions
6) Strain on courts and police
7) Rise in traffic accidents
8) Rise in violence and alcoholism during recession periods
G. Housing
I) Increase in competition for housing
2) Increase in prevalence of substandard dwellings
3) Increase in number of high quality dwellings
4) Increase in households living in over-crowded conditions as workforce increases
5) Rapid increase in housing costs as local workforce increases
H. Local Business
1) Change in way of doing business
2) Change in role of business leaders
3) Change in shopping patterns
(Table 3 continued)
IIO
Table 3 Continued
II. CULTURAL IMPACTS
A. Subsistence (Non-Market) Economy
1) Decrease in dependence on subsistence resources for new full-time employees
2) Increased concern about protection of subsistence resources and lifestyles
3) Increase in importance of women in wage earner activities
4) Increased access to subsistence technology due to wage income
5) Decrease in amount of resources shared among village members
6) Increased competition with sport hunters and fishermen for subsistence resources
7) less flexibility in timing of subsistence activities due to wage employment restrictions
8) Change in ways of managing cash income
9) Change in working groups for· hunting, fishing, trapping
10) Decrease in subsistence skills passed &etween generations
B. Social Organizations
1) Decreased dependence on kinship alliances and associations
2) Non-kin common interest associations increase
3) Decrease in perception of community as cohesive society
4) Change in observance of festivals, rituals and customs
5) Increase pride in cultural heritage
6) Decrease in role of kinship groups in settling disputes
7) Decrease in informal social interaction
8) Increase in formal community functions (e.g., school board meetings)
9) Increased conflicts of individual values vs. group values
10) Decrease in _importance of elderly in family leadership
11) Decrease in traditional male roles and authority
12) Increase in authority of women in decisions
13) Change in wealth redistribution patterns
14) Decrease in number of extended-family households
15) Increase in number of single-family households
16) Increase in number of female heads of households
17) Increase in income and mobility of women
18) Increase in rate of outmarriages
C. Perception of Quality of life
1) Decrease in satisfaction with community due to over-burdened facilities and services
2) Increase in satisfaction with community due to new or expanded facilities, services and stores
3) Increase in perception of economic disparity
4) Increase in personal mobility
5) Decrease in community cohesion
6) Newcomer dissatisfaction with local stores and services
7) Increased perception of community as impersonal
8) Expectation of new wealth by local people
9) Change in satisfaction with visual appearance of community
10) "Increase in perceived pace· of live in community
(Table 3 Continued)
111
---------~----------
Table 3 Continued
D. Communication
l) Decreased usage of indigenous languages
2) Increased contact with outside world
3) Television, books and magazines become more common
III. ECONOMIC IMPACTS
A. Employment
1) Change in local labor force participation
2) Increase in job competition with newcomers
3) Skill levels of local labor increase
4) Increase in employment in services, construction, and transportation
5) Increase in local government employment
6) Local firms and government face competition for limited labor supply
7) Local firms and government experience increased employee turnover
8) Skills in traditional industries, such as fishing and subsistence, decline
9) Number of temporarily unemployed workers increases due to arrival of job seekers
B. Income
1) Increased dependence on cash income
2) Increase in income differentials
3) Increase in community income
4) Increase in local inflation rate
5) Decrease in real value of fixed incomes
6) Increased income leakage to regional centers
C. Structure and Function of Local Economy
1) Businesses expand in anticipation of increased demand
2) New businesses are established
3) Increase in goods and services available
4) Increased business operating costs (rent and labor)
5) Cost-Price squeeze in existing primary industries such as fishing
6) New and expanded industries become dependent on oil revenue
7) Local economic recessions occur following peak periods
8) Increased demand for services, construction and transportation
9) Increased demand for Native crafts due to more outsiders
10) Relative decrease in importance of existing primary industries (such as fishing)
11) Increase in new businesses purchased by outsiders
D. Real Estate
1) Property values increase
2) Land speculation increases,
3) Increase in land purchased by outside investors
4) Increase in property tax rate as public facilities expand
5) Decrease in property tax rate as base increases
112
Table ·4. Selected Linkages Between Direct and Indirect Impacts
(I) Potential Indirect Impacts Due to "Moderate Use of Local Labor Force" (B-2)
Reduced out-migration of local people to urban areas
Mental health needs increase
Teacher turnover higher and more stress
More dropouts due to jobs
Increase in rate of alcohol and drug abuse
Increase in rate of family disturbances and child behavior problems
Rise in violence and alcoholism during recession periods
Increase in number of high quality dwellings
Increase in households living in over-crowded conditions as workforce increases
Change in shopping patterns
Decrease in dependence on subsistence resources for some new full-time employees
Large increase in importance of women in wage earner activities
Increased access to subsistence technology due to wage income
Changes (increases and decreases) in amount of resources shared among some
village members
Less flexibility in timing of subsistence activities due to wage employment restrictions
Change in ways of managing cash income
Change in working groups for hunting, fishing, and trapping
Decrease in subsistence skills passed between generations
Changes (increases and decreases) in dependence of kinship alliances and association for
some individuals
Change in observance of festivals, rituals, and customs
Decrease in ~nformal social interaction
Increased conflict of individual values vs. group values
Decrease in importance of elderly in family leadership
Decrease in traditional male roles and authority
Increase in authority of women in decisions
Change in wealth redistribution patterns
Decrease in number of extended-family households
Increase in number of single-family households
Increase in number of female heads of households
Increase in income and mobility of women
Increase in rate of outmarriages
Increase in perception of economic disparity
Increase in personal mobility
Decrease in community cohesion
Increased perception of community as impersonal
Increase in perceived pace of life in community
Decreased usage of indigenous languages
Increased contact with outside world
Increase in local labor force participation
Increase in job competition ~ith newcomers
Skill levels of local labor force increase
Increase in employment in services, construction and transportation
Local firms and government face competition for limited labor supply
Local firms and government experience increased employee turnover
(Table 4 Continued)
113
Category
I-A-3
I-C-9
I-D-3
I-D-7
I-F-2
I-F-3
I-F-8
I-G-3
I-G-4
I-H-3
II-A-I
II-A-3
II-A-4
II-A-5
II-A-7
II-A-8
II-A-9
II-A-10
II-B-I
II-B-4
II-B-7
II-B-9
II-B-IO
II-B-11
II-B-12
II-B-I3
II-B-I4
II-B-I5
II-B-I6
II-B-I7
II-B-I8
II-C-3
II-C-4
II-C-5
II-C-7
II-C-10
II-D-I
II-D-2
III-A-I
III-A-2
III-A-3
III-A-4
III-A-6
III-A-7
Table 4 Continued
Skills in traditional industries, such as fishing and subsistence, decline
Increased dependence on cash income
Increase in income differentials
Increase in community income
Increase in local inflation rate
Decrease in real value of fixed incomes
Increased income leakage to regional centers
Increased business costs (rent and labor)
Cost-price squeeze in existing primary industries (such as fishing)
New and expanded industries become dependent on oil revenue
Local economic recessions occur following peak periods
Relative decrease in importance of existing primary industries (such as fishing)
Increase in new businesses purchased by outsiders
Category
III-A-8
III-B-1
III-B-2
III-B-3
III-B-4
III-B-5
III-B-6
III-C-4
III-C-5
III-C-6
III-C-7
III-C-10
III-C-ll
(2) Potential Indirect Impacts Due to "Moderate Increase in Use of Bars and Stores by Employees
Living in Camps" (B-ll)
Mental health needs increase
Change in crimes against property and person
Change in rate of alcohol and drug abuse
Change in rate of family disturbance and child behavior problems
Increase in concern about safety
Increase in racial and cultural tensions
Strain on courts and police
Rise in traffic accidents
Newcomer dissatisfactions with local stores and services
Increased pe.rception of community as impersonal
Expectation of new wealth of local people
Increase in perceived pace of life in community
Television, books and magazines become more common
Increase in employment in services, construction and transportation
Increase in community income
Increase in local inflation rate
Decrease in real value of fixed incomes
Businesses expand in anticipation of increased demand
New businesses are established
Increase in goods and services available
New and expanded industries become dependent on oil revenue
Local economic recessions occur following peak periods
Relative decrease in importance of existing primary industries (such as fishing)
Increase in new businesses purchased by outsiders
Property values increase
Land speculation increases
Increase in land purchased by outside investors
(Table 4 Continued)
114
Category
I-C-9
1-F-1
1-F-2
I-F-3
1-F-4
1-F-5
1-F-6
I-F-7
II-C-6
11-C-7
II-C-8
II-C-10
II-D-3
III-A-4
III-B-3
III-B-4
III-B-5
III-C-1
III-C-2
III-C-3
III-C-6
III-C-7
III-C-10
III-C-ll
III-D-1
III-D-2
III-D-3
Table 4 Continued
(3) Potential Indirect Impacts Due to "Low In-migration of New Residents" (A-9)
Possible annexation or creation of new types of government (e.g., boroughs)
Small increase in turnover of officials and public employees
Small increase in newcomers involved in government
Change in expectation of government performance
More planning and impact studies needed
Slight public participation increases
Some new services requested
Mental health needs increase slightly
Administrative and planning demands increase slightly
Minimal conflict increases between students
A few social service functions appears
Small increase in crimes against property and person
Small· increase in rate of alcohol and drug abuse
Small increase in rate of family disturbance and child behavior problems
Small increase in concern about safety
Small rise in traffic accidents
Small increase in competition for housing
Small increase in prevalence of substandard dwellings
Small increase in number of high quality dwellings
Small increase in households and size of family units living in over-crowded conditions
as workforce increases
Rapid increase in housing costs as local workforce increases
Some decreased dependence on kinship alliances and associations
Non-kin common interest associations increase
Decrease in perception of community as a cohesive society
Increased pride in cultural heritage ·
Decrease in role of kinship groups in settling disputes
Increase in formal community functions (e.g., school board meetings)
Increased conflict of individual values vs. group values
Some decrease in importance of elderly in family leadership
Increase in perception of economic disparity
Decrease in community cohesion
Newcomer dissatisfaction with local stores
Increased perception of community as impersonal
Change in satisfaction with visual appearance of community
Increase in perceived pace of life in community
Television, books and magazines become more common
Local firms and government experience some increased employee turnover
Number of temporarily unemployed workers increases slightly due to arrival of job
seekers
Some businesses expand in anticipation of increased demand
A few new businesses are established
Small increase in goods and services available
Small increase in business operating costs (rent and labor)
Slight cost-price squeeze in existing primary industries (such as fishing)
Property values increase
Land speculation increases
Small increase in land purchased by outside investors
115
Category
1-Bl-a
1-BI-b
I-B 1-c
I-BI-d
1-Bl-e
I-BI-g
1-Bl-h
I-C-9
I-D-5
1-D-6
I-E-3
1-F-1
I-F-2
I-F-3
1-F-4
I-F-7
I-G-1
I-G-2
I-G-3
I-G-4
I-G-5
II-B-1
II-B-2
II-B-3
II-B-5
II-B-6
II-B-8
II-B-9
II-B-10
II-C-3
II-C-5
II-C-6
II-C-7
II-C-10
II-D-2
II-D-3
III-A-7
III-B-2
III-C-1
III-C-2
III-C-3
III-C-4
III-C-5
III-D-1
III-D-2
III-D-3
Table 5. Nome Case Study Exploration Phase Impacts
' ' )
Direct Impact Type In-Town Base Cape Nome Base* Barge B.1se
Use of local suppliers Few ( 9) Few ( 9) None ( 0)
Use of local labor force Little ( 14) Little ( 14) Little ( 14)
Land use conflicts Many ( 11) Some (II) Some (I I)
Congestion of transportation facilities Little ( 5) Little ( 5) Little ( 5)
Use of community utilities at capacity High· (12) High (12) None ( 0)
Use of community services at capacity None ( 6) None ( 6) None ( 6)
Community tax base increase Small ( 1) --(--) --( --)
Regional (non-community) tax base increase --(--) Small ( 2) Small ( 2)
In-migration of new residents Low (48) Low (48) Low (4tl)
Camp workers use of services Moderate (27) Moderate (27) Low ( 9)
Camp workers use of bars and stores Moderate (27) Moderate (27) Low ( 12)
Newcomer use of hunting and fishing areas Little ( 6) Little ( 6) Little ( b)
*lntown mix of housing ) Nuer of indirect impacts
Table 6. Cape Nome Site Impacts by Phase of Oil and Gas Activity
Direct Impact Type Exploration* Development Production
Use of local suppliers Few ( 9) Many (15) Some (14)
Use of local labor force Little (14) Significant (57) Moderate (57)
Land use conflicts Some (11) Many ( ll) Many (II)
Congestion of transportation facilities Little ( 5) Little ( 5) Little ( 5)
Use of community utilities at capacity High (12) High (12) High ( 12)
Use of community services at capacity None ( 6) None ( 6) None ( b)
Community tax base increase --(--) --(--) --( --)
Regional (non-community) tax base increase Small ( 2) Some ( 4) Significant ( 5)
In-migration of new residents Low . (48) Low (48) Low ( 4tl)
Camp workers use of services Moderate (27) Significant (31) Significant 01)
Camp workers use of bars and stores Moderate (27) Significant (28) Significant (2tl)
Newcomer use of hunting and fishing areas Little ( 6) Significant ( 6) Significant ( b)
*In-town mix of housing ( ) Number of indirect impacts
Conclusions.
The Isolated Facility Siting and Impact Model (IFSIM) appears to be an extremely useful method of
systematically identifying the direct and indirect impacts of facility siting decisions on relatively
isolated communities. These impacts can be treated as potential impacts which vary somewhat with
site-specific and industry specific factors and can be controlled to some extent by local policies or
agreements between industry and community.
The most important impact categories relate to local employment, to access of workers to the com-
munity and to in-migration as a result of the project. Only in some very traditionaL non-business-
oriented communities, can the impacts, both positive and negative, be kept to a min-imum. In other
types of communities there will necessarily be spillover effects that will have some impact on the com-
munity, through local businesses trying to at~ract customers and outsiders looking for jobs or housing.
In Alaska and other places the oil industry has shown a willingness to adapt to local community
requirements (e.g., ARCO in Yakutat and Dome in Tuktoyuktuk), especially where there is local
leverage in the form of contractual agreements with the industry. These impacts have been successfully
controlled from the community standpoint during the exploration phase. The much larger development
phase, if oil is discovered, is another order of magnitude in activity, and therefore much harder to con-
trol. ·
All projects seem to have desirable and undesirable aspects, but indirect effects of OCS facilities will
probably dominate in the long run with the presence of newcomers and new activities being a source of
change in the community. The nature of this change can be shifted through negotiation between com-
munity and industry leaders, to channel it in ways that are beneficial to both, and to control the
negative side effects, once these effects are known in advance from a systematic model such as IFSIM.
The development of this model represents a challenge to three parties at this conference. First, the set
of working hypothese which form the links between siting decisions and direct impacts and between
direct and indirect impacts, are a challenge to the impact research community. Research to refine and
validate these hypotheses is needed and a theoretical base developed to explain these linkages in a social
ecology framework. .
Second, the use of the model by MMS is a challenge to systematically analyze a wide variety of
potential impacts and identify those involved that are the most important for the attention and concern
of the industry and communities involved.
Finally, the challenge is for local communities to identify those areas where they have potential con-
trol over their future, and the most effective means of cooperation by community and industry to
achieve the desirable aspects of future development.
117
References
Baldwin, Pamela K.; and Malcolm, F. Onshore Planning for: Offshore Oil: Lessons from Scotland. Washington,
D.C.: Conservation Foundation, 1975.
Chance, Norman A. "Culture Change and Integration: An Eskimo Example". American Anthropologist
62:1028-1044.
Clemente, Frank. "What Industry Really Means to a Small Town," Farm Economics (April). (Volume
and Page Numbers Unavailable -Ed.)
Cortese, Charles F. "Rapid Growth and Social Change in Western Communities," Social Impact Assessment
40/41:7-11.
Cortese, Charles F. "Social Impact Assessment and Community Participation: Issues in the Long-Range
Efforts of Energy Management in Boom Towns," Energy Issues in Colorado's Future. Golden, CO:
Colorado Energy Research Institute, 1980.
Davenport, Judith A. and Davenport III, Joseph (eds.) Boom Towns and Human Seruices. Laramie, WY:
University of Wyoming, 1979.
Dornbusch, David M. and Company. Management of OCS-Related Industrial Development, A Guide for Alaskan
Coastal Communities. Alaska Department of Community and Regional Affairs, Division of Community
Planning, 1976.
Flynn, Cynthia. "Science and Speculation in Social Impact Assessment," Social Impact Assessment
11/12:5-14.
Freudenburg, William R. "People in the Impact Zone: The Human and Social Consequences of Energy
Boomtown Growth in Four Western Colorado Communities." Ph.D. dissertation, Yale University,
1979.
Kruse, John; Kleinfeld, Judith; and Travis, Robert. Energy Development and the North Slope Inupiat: Quantitative
Analysis of Social and Economic Change. Fairbanks, Alaska: University of Alaska, Institute of Social and
Economic Research, 1980.
Kupfer, George; and Hobart, Charles W. "Impact of Oil Exploration in an Inuit Community." Arctic
Anthropology 15:58-67. .
Louis Berger & Associates, Inc. Forecasting Enclave Development Alternatives and Their Related Impacts on Alaskan
Coastal Communities as a Result of OCS Development. Anchorage, Alaska: U.S. Department of Interior,
Minerals Management Service, Alaska OCS Office, 1982.
Mountain West Research. The Construction Worker Profile. Washington, D.C.: Old West Regional
Commission, 1975.
Murdock, Steve H. and Leistritz, F. Larry. Energy Development in the Western United States: Impact on Rural
Area5. New York: Praegar Publishers, 1979.
Reckard, Holly. Case Study of Copper Center, Alaska. Anchorage, Alaska: Alaska OCS Office, BLM, SESP
Technical Report #7, 1_978.
118
Socioeconomic Issues in Siting Major Developments
Cynthia B. Flynn
Siting a major development has become much more complex during the last ten years, and increas-
ingly so during the last five years. Projects whose construction costs are over $50,000,000 are
encountering increased scrutiny and, in some cases, resistance from local citizens and government
officials. This paper covers the history of siting efforts in the U.S., modem approaches to siting which
protect the local communities, examples of cases where these techniques have been used and ignored,
problems that remain unresolved by modem social science techniques, and the implications of this
discussion for Alaska. The issues raised in this paper may apply to smaller developments in varying
degrees, but are most easily described using the larger projects as examples.
The Influence of Project Characteristics on Siting
It must be recognized at the outset that the siting issues will vary according to the nature of the pro-
posed project. In some cases, the developer has no choice of site; the ore body or hydroelectric site or
soil field has a specific location, and the developer has little choice as to where his project will be
located if he chooses to proceed. Control of site development may be limited to managing the order in
which development takes place; one example is when large timber resources are developed.
In other cases, several sites may qualify from a technical standpoint. Power plants, recreational
developments, and manufacturing projects are examples. With linear projects, such as transmission
lines, pip~lines and highways, multiple routes from point A to point Bare usually possible. Where there
is a choice of sites or routes, somewhat different social and economic considerations come into play in
the siting process.
Historical Considerations
As social scientists, we are aware of the importance of socialization, attitudes and values, traditional
patterns of interaction and subcultural norms on observed behavior. Therefore, it is useful to consider
the training and experience of the corporate managers who have responsibility for important siting
deci~!ons. Usually, these are men who are at least 45 years of age, have 20 years' industrial experience,
and hold a middle management position. An engineering background is common. Their counterparts in
government agencies may be somewhat younger.
In the early 1960's, when those now responsible for siting were gaining their first experiences within
the industry, the siting process was quite different than today. It was typical for local communities to
uncritically favor major development. The employment and tax benefits were recognized and, as often
as not, eagerly sought by local communities. Disadvantages were generally unrecognized, ignored or
downplayed. In very few cases was any attempt made to measure project-related effects in a systematic
w~. •
In the political climate of those earlier days, technical and economic feasibility issues were critical
determinants of where a project would be sited. Among the technical considerations were soil quality,
geological substrate conditions, water supply, quality of the ore body in the case of mining, and labor
availability. Examples of economic considerations included the most economical way to construct and
operate the facility and still meet engineering standards; net present value analysis of the opportunity
costs of the investment; and analysis of the projected return on investments.
119
--~~---------------
It was not uncommon for several potential sites to be purchased covertly until these analyses could
be completed, as a means of keeping the land purchase portion of the investment costs low. These are
still very important considerations for project development. The developer must invest in a technically
and economically feasible project from his own point of view, and this fact must not be undervalued by
social scientists.
However, during the late 1960's and early 1970's, other considerations were added to the siting pro-
cess. The U.S. Army Corps of Engineers was one of the leaders in Benefit/Cost analysis. This technique
added the consideration of indirect costs and benefits, to the evaluation of economic feasibility. The
evaluation norm was that economic benefits had to exceed economic costs in order for the project to be
viable.
The passage of the National Environmental Policy Act (NEP A) at the end of 1.969 created the require-
ment of an Environmental Impact Statement (EIS) for major developments which used federal funds or
required federal permits. Prior to 1975, the emphasis of EIS's was clearly on the natural environment.
Wildlife protection, air quality, noise, and water quality standards were developed and used as
guidelines for EIS preparation. The restrictions implied by these standards made, in effect, some poten-
tial sites unusable. All of the early NEPA court cases centered around natural science, engineering and
other technical issues, or around the procedural adequacy of preparing or processing the EIS.
By the mid-1970's, there was increasing recognition of the importance of social and economic con-
siderations in the siting process and the EIS process. This was due in part to the improved technical abili-
ty of socioeconomic researchers and to the increasing involvement of local citizens in the project
decision-making processes. This citizen involvement increased the level of political sophistication of
local groups as well as their levels of technical understanding. The expertise of both social scientists and
citizens continues to improve and has become a critical factor in the success of siting efforts.
In the 1980's, we are seeing the beginnings of the integration of these changes into the management
philosophies of leading corporations. Those who wish to be, and to be seen as, good corporate citizens
are starting to recognize that the attitudes towards development that worked in the early 1960's are not
appropriate for the 1980's. "Project proponents may reminisce about how things were in the old days
but such recollections cannot stand in the way of dealing with the current realities of community in-
volvement in development planning.
Our firm is seeing more demand for real mitigation planning, integration of social and economic con-
siderations into the siting process, and a desire for scientifically defensible socioeconomic monitoring
programs. Similar demands are apparent from the regulatory agencies. Although there appears to be
pressure to relax other environmental constraints on development, our experience is that the demand
by all parties for socioeconomic information continues to grow.
Choosing Among Alternative Sites
The optimal site for any proposed development rarely exists as any site has one or more undesirable
characteristics. When considering multiple sites on multiple criteria, it is, of course, impossible to
simultaneously maximize on all variables. Therefore, the siting of a major development has always
been a compromise among competing considerations.
Historically, certain sites were eliminated because the required "compromises" on certain variables
were impossible or economically infeasible. Other sites were judged as less desirable because the
engineering and construction efforts required to overcome the site limitations added signific~tly to the
total ·cost.
What is new for the 1980's is that socioeconomic variables are finally starting to be considered along
with the more traditional variables when a site is being considered. In some cases, socioeconomic "com-
promises" are necessary in order to overcome site characteristics. In others, such "compromises" are pro-
hibitively expensive or impossible. Exactly what can be done early in the planning process to identify
sites which are conducive to devE:;lopment from a socioeconomic point of view is a key question.
Since social systems are reactive in a way·that geological systems are not, the developer or govern-
ment agency has special problems in doing the socioeconomic analysis of sites prior to the announce-
ment of a project. Yet, a "publicly announced" feasibility analysis is-sometimes necessary, particularly
in the private sector. We are still a free enterprise economic system; and have so far resisted central
government control of development plans. Whenever there is competition among developers and the
potenti~l for keeping costs down, there will be pressure not to publicize development ideas in their
120
early stages of development. .
Therefore, non-reactive techniques have been developed which give a crude ranking of the various
sites being considered. These techniques have less realiability when used alone than when combined
with reactive techniques, but they can still be quite useful.
The first step in evaluating the socioeconomic feasibility of a potential site is to conduct a social pro-
file of the local area. The profile answers the basic questions, "Who lives around here?" and "What is
the social structure like and how is it changing?" Of course, in Alaska, many potential development
sites are virtually uninhabited, so in some cases these questions may be moot.
But when the development will be in close proximity to a community or when a community's
residents will be significantly impacted by employment on the project, these questions need to be
answered. More specifically, if the community can be divided into more than one social group, then for
each group, we should be able to answer the questions:
(I) How large is the group?
(2) What are its demographic characteristics?
(3) How does its members earn their living?
(4) Do its members live primarily in one part of the community?
(5) Are its members primarily renters or owners? Are they transient?
(6) How cohesive is the group?
(7) What are their attitudes and values, regarding both the environment and development-related
Issues? ---
(8) How·· do its members relate to each other socially, politically and economically? How are
immigrants integrated into the group, if at all?.
Once each group is profiled, the last question can be answered again for inter-group interaction, that
is, "How have the groups historically related to each other socially, politically and economically?" Non-
reactive ways to estimate the answers are usually only available in communities larger than 1,000, since
the very presence of a researcher will be noticed. StilL much can be gained by perusal of old
newspapers, census records and other statistical data, planning reports, a history of the community, or
other documents that can be found in a local library. Sometimes it is possible to discreetly interview
persons who are used to keeping confidential information, such as clergymen, doctors, and attorneys.
The second step in evaluating the socioeconomic feasibility of a proposed site is to conduct a pro forma
socioeconomic assessment for each site. The identical project will have different effects in different
locations because the project conditions differ.
The assessment should work through what each of the sites will be like over a time span equal to the
useful life of the project. Although this exercise should be carried out for all the variables included in an
EIS, we are focussing here on the socioeconomic variables, which would include, at a minimum: the
economic base including rates of employment and unemployment and income data; demographic
characteristics, including in-or out-migration rates; housing availability including quality and type;
other facilities and services; fiscal base; and social structure. When these projections are repeated, in
turn, assuming that the project will be sited at each of the locations, it is possible to derive an estimate of
the project-related impacts for each of the sites.
The third step is to estimate the mitigation possibilities and their costs. If the project has been
announced, thi:m it is possible to use public participation techniques to enlist the aid of the public in
designing mitigation plans. In some cases, the citizens will have useful suggestions as to how the project
might be re-designed to lessen the adverse socioeconomic impacts or enhance the positive impacts. This
may take the form of changes in engineering, timing, or even location. Even if the project has not been
announced, often the exercise described in step two elicits problem areas and suggests mitigation
possibilities.
It is usually true that many social impacts cannot be mitigated unless there is a monitoring program to
trace effects. For instance, given the uncertainty of the timing of construction on large projects, there
may be large negative impacts which were unanticipated at the EIS stage. The cost of maintaining a
monitoring program over the life of the project needs to be included in the mitigation cost estimates.
The cost estimates will vary by site depending on both the local infrastructure and social structures.
Fourth, historical and value differences among the sites must be evaluated in the context of their
implications for the ease of siting the project in that area. These historical and value factors are
sometimes reflected in state laws and policies, but even within one state, there are significant dif-
ferences. For instance, permits are generally much easier to obtain in the Southern states than in the
121
Western states. Recently. ·a permitting process for two industrial sitings on shorelines required three
months in Louisiana (including all Federal permits) and an estimated minimum of two years in
Washington. Such differences are not atypical. Within Washington state, it may be possible to site a
nuclear power plant in the Tri-Cities area (Hanford Reservation), but it is unlikely that one could be
sited anywhere else in the state at this time.
Furthermore, developers and regulatory agencies should recognize early that some projects simply
cannot be sited in a particular location at all. Given the values of the local people, the legal tools they
have available, and their experience in stopping other large developments, the siting is, for all practical
purposes, impossible, no matter what the technical merits of the site. A trained social scientist can iden-
tify these sites, and if this information is available early enough in the planning process, all parties can
save considerable time and money.
Once steps 1-4 are completed, the sites can be ranked according to socioeconomic criteria (step 5).
Some sites will be eliminated out of hand because the siting is impossible. Others will be ranked low
because the mitigation costs are high ancl!or there are significant unmitigatible socioeconomic impacts.
Although it is not common to find a site which appears optimal from a social scientist's point of view,
some sites will appear more attractive.
The sixth step is to combine the socioeconomic evaluation with the evaluations using other criteria so
that an optimal site can be chosen. Taking into account all the mitigation required for all types of
impacts, and all the indirect costs and benefits, a benefit/cost analysis for this site can be made.
Some projects do not make it beyond this stage. When the preliminary data have been gathered and
the preliminary analyses are completed, there is a decision made not to proceed. Hopefully, this deci-
sion is made before all parties invest in the preparation of EIS documents. However, if socioeconomic
considerations are not included in the preliminary analyses, there is a serious risk that the project will
run into insurmountable obstacles during the EIS process.
Siting Issues at a Single Location
If the project must be sited in a specific place, as is the case with mining, for example, many of the
same considerations apply. The analysis includes preparation of a social profile, a pro fonntl
socioeconomic impact assessment, an analysis of mitigation possibilities and their costs, and an evalua-
tion of the historical and value issues that will influence the permitting process (steps 1-4). Finally, a
benefit/cost analysis of the site, taking both the socioeconomic and all other impacts into account, is
made. These factors lead directly to the "go, no-go" decision for the project.
We have had experience both with corporations and regulatory agencies who did their
socioeconomic "homework" and those who did not. In every case where the project was eventually
stopped, the warning signs were quite clear long before the parties stopped spending time and money
on the attempt. This is expensive from the point of view of the developer and a waste of the taxpayers'
money.
Additional Problems
Many of the problems that have actually occurred with siting in the past can be identified and
mitigated using current social science ~nowledge. However, it is important to point out the gaps in our
knowledge as well.
First is the "not in my backyard" syndrome. This comes up in two somewhat different circumstances,
one of which is more amenable to mitigation than the other. In the first, the "backyard" resident can
concede that he benefits directly from the project. One example is a power plant in the service area of
his utility. If citizens can agree that the power is needed, then they can sometimes agree on a site they
can tolerate. .
In another version of this syndrome, the benefits to the local citizens are remote at best. The primary
beneficiaries are not those who bear the primary costs. This problem is particularly troublesome to
citizens who live near resources of national importance. An example we have dealt with is one of the
few remaining sites on the west coast which is suitable for a deep water port. All recent proposals for its
use would benefit the U.S. balance of trade, and· local officials recognize that the site is a national
resource, but the primary benefits would not accrue to those who will bear the costs. One proposal for
a major development at the site has already been killed, and a second is in trouble. It is not clear how
this type of problem can be resolved.
122
Second is the "irrational fears" syndrome. It is not uncommon in the early stages of discussion about a
proposed project for the .local citizens to be concerned about issues which are not problems from a
technical standpoint. Sometimes these fears.can be alleviated by education, a trip to a community with
a similar facility, or other public participation techniques. In other cases, the citizens are firm in their
beliefs and will fight to stop the project.
There are at least three reasons for this problem that we have identified. The first comes from a lack
of understanding about the real nature of the project. The second is an aversion to assuming any risk at
all, regardless of the benefits. The third is the human inclination to displace concerns from one area to
another; concern and opposition to a proposed project becomes a way to express feelings or emotions
about other conditions in their lives that they can't articulate directly.
Implications for Alaska
The discussion so far has centered on siting issues that have been raised in the lower 48, and the solu-
tions that have been used there. At the present time, Alaska is faced with a set of circumstances which
make these types of issues particularly cogent. For most of the state, the population density is very low;
about half .of the state's population resides in greater Anchorage, and the population in the rest of the
state is very sparse. In addition, Alaska has a tremendous supply of natural resources, many of which
have national importance that affect our position in world affairs. Lastly, Alaska has few state controls
that provide socioeconomic protection for its citizens. Many states now have their own State
Environmental Policy Acts and/or a specific agency whose sole responsibility is to control major
development (e.g. Maryland Power Siting Authority, Washington Energy Facilities Site Evaluation
Council, Wyoming Industrial Siting Administration). The controls that Alaska has are fragmented and
not based on the best available scientific methodologies.
The resources located in Alaska are large, but not infinite. Thus, they must be developed wisely, and
with a careful consideration "Of the benefits that Alaskans might realize. State policy, and the legal
mechanisms to enforce this policy, should recognize the concerns of Alaskans, and protect their
interests along with those of other interested parties.
Th·ere are several steps that we would recommend to effect these results. First, regulatory agencies in
Alaska can begin immediately to do their own siting analyses, as described above. The credibility of a
state agency is enhanced considerably if it speaks knowledgeably and scientifically about the
socioeconomic impacts of various alternatives.
Second, work with developers to define plans that will benefit Alaskans-be clear about your
"terms". If the agency is able to suggest an acceptable alternative to a proposal, it is more likely to be
able to influence the project design so that it benefits Alaskans. Also, this approach is cost efficient from
the point of view of the developer, in that his permits and licenses will be expedited.
Third, the state should enact legislation that is flexible, but which retains authority over development
in Alaska for Alaska. The cessation of all resource development in Alaska would obviously have
tremendous negative effects on Alaska's economy. Still, Alaskans must keep control of their own vital
interests; in·the future, responsible development of Alaska's resources will promote the well-being of all
Alaskans.
123
-----;:--------------------------~---~----------------···----
Public Participation in National Resource Management
Robert E. Black
Citizen participation (CP) in government programs is not new. We can pinpoint the modern era of
CP in the early 1950's, with the advent of urban renewal programs sponsored by the Department of
Housing and Urban Development (HUD). Since that time, citizen participation in public sector pro-
grams has been scrutinized by scholars interested in understanding and perfecting the decision making
process in government programs. The demand for citizen participation in this process is now viewed as
a part of a much larger and comprehensive "grass roots" movement generally labeled consumerism. The
logic behind this social revolution rests on the assumption that consumers of goods and services, pro-
vided by both public and private producers, should have something to say about the who, what, where,
and how much of production. Considering the fact that oursocial system is based on a Constitution
which specifies government by, for, and of the people, it is not surprising that such an attitude should
prevail.
The position taken in this paper is entirely supportive of taxpayer citizens p[aying a direct role in
expenditure clecisions made in their behalf by elected and appointed officials at all levels of govern-
ment. A corollary point of view defends direct citizen involvement in analyzing and planning for the
secondary and tertiary effects of those primary decisions. That is, in actions necessary to mitigate the
adverse consequences of decision making. Suggesting that citizen participation is ideologically desirable
and even theoretically possible is a long way from the reality of planning for outer continental shelf
(OCS) lease sales and eventual oil and gas development. Two objectives will be pursued here:
1) to examine the costs and benefits of citizen participation in feder!ll programs which preceded the
Amendments to the OCS Lands Act of 1978; and
2) to suggest a CP model for both leasing and development decisions on the outer continental shelf
and adjacent coastal regions.
The Record
Although citizen participation was formalized in the Housing Act of 1949, it did not come into its
own until the Community Action Program (CAP) and the Model Cities Program (MAP) of the 1960's.
Both programs were part of the war on poverty directed primarily at inner city populations. The objec-
tives of these programs sought to improve both the social and physical quality of life of these popula-
tions, and each included substantial citizen participation strategies for total program involvement. In
retrospect there appeared to be three strategies pursued: I) membership of the target population on
planning, decision-policy making b9ards and committees; 2) employment of the population in projects
generated by the program; and 3) as an end in itself affirming the democratic ideal and eliminating
alienation, destructiveness, and withdrawal (2). The development of public participation processes and
structures in association with urban poverty programs does not lessen their usefulness to our needs in
OCS planning and programming. The nature of citizen participation in public programs appears to re-
main constant regardless of the programmatic substance. The costs, benefits, risks and values of CP
seems to be essentially the same from one program to the next (2, 3, 4, 6).
124
If we accept for a moment that citizen participation in public programs has value and is worthy of
pursuit, it i.s important to define more fully the term "public or citizen participation", to examine the
barriers to citizen participation (which to some degree will expose the costs), and finally to review the
areas in which citizen involvement in the decision process is valuable.
Citizen participation eludes precise definition. Founded in bias and opinion, a scientific approach is
extraordinarily difficult. If one concludes, as this writer does, that CP is, by nature, good and desirable,
then most outcomes will demonstrate a modicum of value; conversely, if one is predisposed to be
critical of the process, it is not at all difficult to substantiate such doubts. For those who advocate CP, it
becomes participatory democracy in which the dignity and worth of the individual is reaffirmed. Those
critics who emphasize the more negative and problematic features of citizen participation are much
more comfortable with a definition which includes notions of apathy, lack of access to traditional
sources of power, and immobilization of government authority (2, 8). Whatever the perspective, one
ingredient seems to be shared by all. The notion of redistribution of power as a goal of CP is generally
accepted. Proponents agree that a countervailing force is necessary to protect public programs from
institutional self-interest. protect the rights of the citizen and restore their self-confidence. The other
side views such power in the hands of the inexperienced community as counterproductive and even
dangerous if such participation leads to extremism (9). What citizen participation should be was best ex-
pressed by Gerda Lewis as long ago as 1959. In a review of CP in urban renewal projects she expressed
the view that citizen participation consists of stimulating dissatisfaction with what is, demonstrating
what can be, and providing opportunities to do something about both (6). Until something more objec-
tive comes along, this definition will serve us well. No discussion of CP definitions would be complete
without reference to the legal framework for cifizenparticipation. The urban renewal and poverty pro-
grams of earlier days established a legal framework for CP in program implementation in the 1970-1990
time frame. Not all or even most federal programs have CP elements. In addition to HUD and HEW,
· regulatory agencies which have developed significant public participation programs are the
Environmental Protection Agency, Corps of Engineers, and National Oceanic and Atmospheric
Administration. Not all legislation implemented by even these agencies contain titles necessitating
public participation. In fact some, which claim a participation element are by most standards token
efforts at the real thing. Seeping, as specified in the National Environmental Policy Act, is a case in
point. Confusion about what is and what is not legitimate citizen participation may be diminished by
reference to Sherry Arnstein's typology in Figure I. The key to understanding this typology is
Arnstein's acknowledgement that citizen participation is .a categorical term for citizen power, not total
nor absolute but sufficient to share in decisions which allocate tax resources, determine policies, goals
and objectives, participate in program planning, and monitor/evafuate project implementation. Given
your knowledge of the seeping process, where would you place it on the ladder?
In the 20 years that CP has been more or less institutionalized in one or more federal agencies, it has
not been a smashing success from the national perspective. Certainly, one can point to local successes
which have provided communities with results far better than would have been expected from the
usual way of doing business.
A review of. the literature and work done by a number of evaluation groups indicates the following
problem areas with CP:
I) low priority given to CP in federal legislation,
2) in laws which have CP elements:
a) clear responsibility for implementing or monitoring CP is absent,
· b) insufficient funds have not allowed full public participation,
3) disinterest or hostile attitudes exist among officials toward CP,
4) programs so complicated that participation in them requires technical competence, time commit-
ment, and expense, .
5) because of rapid deadlines and bureaucratic inefficiency, citizens are not given sufficient time to
review,
·6) agency program personnel, untrained in management of CP process, do not know what to do
with citizen groups,
7) apathy of unaffiliated public in specific programs is misread as lack of citizen interest in participa-
tion,
8) lack of media interest.
125
8
7
6
5
4
3
2
I
CITIZEN CONTROL
DELEGATED POWER
PARTNERSHIP
PLACATION
CONSULTATION
INFORI\1ING
THERAPY
MANIPULATION
-
...
-=
--.
=
r+
-
DEGREES
OF
CITIZEN POWER
DEGREES
OF
TOKENISM
NON-PARTICIPATION
Figure I. Eight Rungs on the Ladder of Citizen Participation
By Sherry R. Arnstein
"Citizen participation does not mean the illusion of participation, the semblance of involvement, the
opportunity tq speak without being heard, the receipt of token benefits, or the enjoyment of stop-gap
palliative measures" (9). It does mean redistribution of decision making power without usurping legally
designated authority, the provision of adequate resources in order to make responsible decisions, and
most importantly, a recognition that the citizen taxpayer or consumer does have the right to participate.
If such an approach is taken, there are four steps in the decision process in which citizen participation is
valuable (3):
I) Problem identification. ~sessment of technology impacts is at best difficult. The intimate
knowledge of problems in a particular area is best known by the residents. The structure or form
that a community should adopt for the future must be decided locally.
2) Evaluation of Alternatives. Cost-benefit Analysis on the aggregate level abuses the rights of
individuals at the point of program implementation. Citizens can identify unacceptable options,
and in so doing, reduce conflict and lost time in litigation and environmental impact preparation.
126
3) ~eview of Draft Recommendations. This is the last opportunity to "buy" into the process. The
final report becomes a report shared by the public and the public servant and official recognition
becomes a function of the public support given the recommendation.
4) Project Implementation. Citizens who have worked on the program have a vested interest in
seeing their work carried to completion. Project success depends on local acceptance, favorable
ordinances, and a vision of what changes will occur.
OCS Development and Public Participation
Citizen participation in the OCS program occurs as a result of requirements mandated not only in tl-.e
OCS Lands Act (as amended) but in other federal legislation affecting OCS development. The other
pieces of legislation involved are the National Environmental Policy Act (NEPA) and indirectly, the
Coastal Zone Management Act of 1972. Primary citizen imput focuses on "scoping" the issues to be
addressed in the environmental impact statement (EIS) and participating in a public hearing on the com-
pleted EIS. Legal action by citizen groups (often in conjunction with state governments) is effective,
although not considered by most official decision makers to be a desirable course of action. Finally, as
state and local agencies become involved in the process, opportunities for public participation increases.
By any measure, citizen involvement cannot be rated very high on Arnstein's ladder-perhaps only to
the "Consultation" rung. The recognition has grown, and this symposium is witness to the fact, that a
national energy development policy that fails to take state and local sensibilities into account is not
viable. I suggest that consideration be given to a form of public participation which views OCS policy
development and implementation as a partnership. This means that p-ower is in fact redistributed
through negotiation between citizens and powerholders. Such sharing in practical terms means joint
planning and decision making through such structures as policy boards, planning committees, and con-
flict management mechanisms. Such partnership requires citizen accountability, financial resources to
pay for staff and information transfer, and an organizational structure which will permit genuine
bargaining.
It is not my intent to duplicate an existing structure for citizen input into the OCS decision process, or
substitute a mechanism for a workable process already in place. In fact, the Department of Interior
(DOI) has, in its wisdom, established an OCS Advisory Board consisting of three elements: 1) Policy
Committee, 2) Scientific Committee, and 3) Regional Technical Working Group (RTWG). It is the
RTWG that is of interest here as the Policy and Scientific Committees are national in scope. As a
participant-observer of the OCS Advisory Board for the past several years, it is my opinion that none of
its constituent parts fills the definition of citizen participation as described above. The operation of the
RTWG, as portrayed in DOl policy papers, appears to have the potential for building an acceptable CP
structure and process at the regional and state levels (10). I am less enthusiastic about its ability to
facilitate input from the most important local or community level. Further study, beyond the purpose
of this paper, will be required to make such a determination.
The decision process as outlined in Figure 2 indicates two major phases for decision making in OCS
development. As you can see, there are nine decision points in the pre-lease sale phase and five in the
post-lease sale phase. For public participation to be effective (assuming a partnership is arranged), input
at decision points critical to the public is paramount. I have selected two such points in the pre-sale
phase and two in the post-sale phase. These four decision points represent direct input from an organ-
ized CP structure to influence the three major OCS program activities administered by the DOL These
are: 1) the leasing process, 2) the environm~ntal studies program, and 3) transportation planning. The
term "transportation planning" is interpreted in its broadest sense, i.e. not only to plan for an oil and gas
transport network but also to arrange land use patterns and site energy related on-shore facilities com-
patible with local growth policies.
. A generalized organizational struCture is also suggested in Figure 2. State Technical Working Groups
(STWG), made up of members of community impact planning committees and appropriate state agency
representatives, would coordinate the grass roots efforts of the local Citizen Planning Committees
(CPC). Staffing, technical assistance, and the development of an information system necessary to sup-
port the local activities are important elements which need detailed investigation. I would expect the
various regional OCS offices would play a large role in this support activity. With proper staff training,
127
**
TENTATIVE
SCHEDULE
!
CALL FOR
NOMINATIONS
TENTATIVETRACT ------
SELECTION --------r \ STATE I I I TECHNICAL I
---"1 WORKING I
: I GROUPS I
"I --,---·
I DRAFT SID & PRELIMINARY NOTICE OF SALE I I I
.-..._~ __ ._.
I I COMMUNITY I
**
l I I PLANNING I
I I COMMITTEES I I -------
1
I FINAL SID I
~
FINAL TRACT---------'
SELECTION
I NOTICE OF SALE I
! I SALE -LEASES ISSUED I
--~-----l----Pre-Sale
....
**
EXPLORATION PLAN &
DRILLING PERMIT APPROVAL
TRANSPORTATION MGMT.
PLAN APPROVAL
Post-Sale
r--sTwG-1
-------r---L--~--~
I I I
DEVELOPMENT & PRODUCTION I I
PLAN EVALUATION & APPROVAL~-----____ L __
PIPELINE PERMIT
ISSUANCE
LEASE TERMINATION
OR EXPIRATION
I CPC I , _____ _.
Figure 2. Steps in the decision-making process in OCS development.
128
one such relationship might look like the organizational chart in Figure 3. The viability of the existing
RTWG is at this time uncertain. The usefulness of the RTWG varies greatly among the four OCS
offices. My recommendation would be to merge the regionar group into new state groups, thereby
eliminating a layer in the structure and allowing the state and local participants closers interaction with
the OCS office.
STATE OPERATIONS --TECHNICAL OCS MANAGER AND
WORKING GROUP MGNT SERViCES
I I
SOCIOECONOMIC ENVIRONMENTAL ENVIRONMENTAL
.STUDIES ASSESSMENT STUDIES
I
-CITIZEN PARTICIPATION
COORDINATOR
I
~ ~ ~ . .
Figure 3. State Citizen Participation Organization.
Conclusion
The citizen court suit is not a desirable form of citizen participation. It is costly, time consuming and
probably not in the best interests of a national energy policy. Consumers of federal policy deserve more
from their representatives than an adversary relationship. This paper has attempted to make that point
and recommend a basic recipe for CP in the OCS oil and gas program. Detailed ingredients such as
determining who particip"ates and how, the nature of power sharing, staffing and supporting the par-
ticipants, conflict management mechanisms, and many more must be thought through, discussed and
negotiated. All agree that citizen participation is not easy and involved are many risks and additional
costs. It is the contention of this paper that participation by citizens in public programs, like the OCS
activity, is in the best interest of policy implementation. It develops a sense of citizen control over their
.destiny (being one's own master) which leads to a conscious acceptance of government actions taken in
their behalf.
129
References
Arnstein, Sherry R. "A Ladder of Citizen Participation." journal of the American lnsfifzde of Plunners
35:216·224. .
Cahn, Edgar S. and Passett, Barry A. (eds). Citizen Participation: Effecting Community Change. New York:
Praeger Publishers, 1971. .
Frances. Sharon F. Public Participation in Water Pollution Control Programs ill tlze New Engla11d States. Boston:
New England Natural Resources.Center, 1976.
Kayna.r. Edward and Howards, Irvin.g. Attitudes, Values, and Perceptions in Water Resource Decision-Making
Within 11 Metropolitan Area. Amherst: University of Massachusetts, 1973.
Kornhauser, William. Politics of Mass Society. Glencoe: Free Press, 1959.
Lewis, Gerda. "Citizen Participation in Renewal Surveyed," Journal of Housing 16:15•29.
Marris, Peter and Rein, Martin. Dilemnas of Social Reform. New York: Atherton Press, 1967.
Mumphrey, A. J., Seley, ]. E., and Wolpert, ]. A Decision Model for l.oCtlting Controversial Facilities.
Philadelphia: University of Pennsylvania, 1971. .
Spiegal, Hans (ed). Citizen Participation in Urban Development. Washington, D.C.: NTL Institute for Applied
Behavioral Sciences, 1968.
Department of Interior-Bureau of Land Management. Intergovernmental Planning Program for OCS Oil and
Gas Leasing, Transportation and Related Facilities. Washington, D.C.: Superintendent of Documents, 1979.
130
Introduction
Public Participation on Complex Projects with
a High Level of Conflict
Nancy L. Blunck
Successful public participation must be a function of top level management. At the Alaska Power
Authority we have a clear policy on the Susitna hydroelectric project in that: (I) there will be public
participation; (2) Alaska Power Authority will pay for it; and (3) we will use the information we collect
in making decisions regarding the project.
I was hired to conduct an aggressive public particpation project on Susitna; although the Executive
Director of the Power Authority sometimes became anxious over the process, he was and continues to
remain very supportive and very committed to what we're doing with public participation.
· Gear Planning Process
Successful public participation is not done in a vacuum, but is tied to a clear, well-defined planning
process. In fact, I believe the reason public participation most often fails is the lack of both a clear plan-
ning process and clear decision-making points. There are several elements basic to any planning process:
identifying the problem; creating alternative solutions; evaluating those solutions; deciding on one solu-
tion; and implementing that solution.
In order to insure success in the planning stages, anyone who conducts a public participation process
must first determine the steps and timing of the planning process, the points in the process at which
public input is most useful and welcomed, and who actually has the final authority to make decisions.
After I obtain this information, I use it for my own planning and also give it to the public so they know
when to be involved and on which particular issues their input is most necessary.
Initial Assessment of Level of Public Participation Needed on Susitna
Susitna was a highly charged situation and had a history of conflict. In addition, large, centralized pro-
jects run somewhat counter to the strong independence of a number of Alaskans. Since we knew in'the
beginning we would have lots of conflicts, we also knew that people needed lots of opportunities to get
together and talk through the problems. Hence, we utilized a number of aids as follows:
#I. With large, complicated, area-wide or regional issues like Susitna, we found we needed seven or
eight methods for public participation, not just one or two. ·
#2. I have a list of I5 questions I have used over the years. At the beginning of the Susitna Project, I
went through it and answered each question with a yes or no. It took about I5 minutes to do, and I used
it as a barometer to indicate the level of public participation needed.
In analyzing my response to these questions, every yes answer pointed to the need for public par-
ticipation and every no answer pointed to the need for public information. On Susitnq., I had about I5
yeses. Consequently, the budget for Susitna public participation was sizeable with a total budget over a
period of 2Yz years of $4IO,OOO. This is approximately I% of the total budget for the Susitna feasibili-
ty study an<:{ included three full-time staff members.
13I
Practical Aids for Getting Started .
We started over 2 1/z years ago by looking at past and present attitudes of the various public(s) on
Susitna and identified three steps in the process:
1. Identification of the previous points of agreement. There were several:
(a) more power was needed and hydro was, in general. a good idea
(b) decreasing our reliance on nonrenewable resources was good
(c) Alaska had lots of hydro potential
(d) coal was less acceptable given other numerous energy resources available in Alaska
(e) nuclear was out of the question
2. Identification of previous points of disagreement, such as:
(a) how much power was needed
(b) when it was needed
(c) whether Susitna hydro power was "too big" and several smaller hydro plants might be better
(d) whether Susitna would stimulate energy intensive industry like aluminum smelting
3. Examination of the kinds of conflicts that might be generated because ~f the project. Generally there
are two kinds of conflict that may exist on any project: the first is a fear, mistrust, or feeling of
powerlessness on the part of one or more publics and the second is an honest difference of opinion or
values.
One must work to resolve the first kind of conflict before one can begin to discuss and face the
honest differences of opinion or value. If you don't, gamesmanship develops, and parties begin to
second guess each other in order to "get one up" on the other side. On Susitna, we had some level of
mistrust by the public in knowing whether an objective study would be done, whether alternatives to a
large hydro plant would really not be considered, whether Susitna wasn't already a foregone conclu-
sion, and whether the information I would be producing would be objective because, aftet all. I worked
for the Power Authority. We had to work to resolve this issue of mistrust first before we could get
anywhere with discussions about tradeoffs or compromises.
Paths of Communication
One of the first steps we had to take was to determine who constituted the "interested public(s). In
the case of the Susitna project, as in most projects, there were a number of publics: local residents living
near the project; taxpayers around the state who might end up paying for part of it; those directly
benefiting from the project-mostly those residents living in Anchorage and Fairbanks; the utility com-
panies; state and federal agencies involved in review and permitting; elected officials and leaders;
Native landowners in and near the project; and over 45 special interest groups.
We developed an internal policy within the Power Authority to divide up the various publics. I dealt
with groups and organizations, communities and the general public. The Project Engineer (at least
initially) dealt with the utilities and agencies. We found this didn't work very well and have since hired
an Environmental Coordinator to work with the agencies. The Native organizations hired their own
staff liaison to look out for their interests and to keep them informed and involved.
An important principle of communication when dealing with various publics is that you can't com-
municate with everyone in the same way. For example, with groups like the Alaska Center for the
Environment and the Northern Environmental Center, we needed to provide them with a high level of
technical information; on the other hand, the general public doesn't care so much about detail, but
tendsto ask broader-based questions. At each step of the way we kept asking ourselves questions
regarding who we should communicate with and what we actually wanted out of the communication.
There were also several geographical considerations. The Susitna project area of influence included
66% of the people in Alaska and there were some special problems with physical access. Communities
were spread over 400 miles; they were connected by road but distances were so great we often flew,
which is more costly. At the same time, weather can be bad and at the last minute you drive
anyway-in essence, we double planned in terms of getting to meetings. In addition, some people
potentially affected by the Susitna project lived along the Alaska Railroad, 30 miles from any roads.
132
They had to flag down the train to catch a ride to the nearest town for a meeting. This sometimes meant
staying a week in town before they could catch the next train back because the train only runs once a
week in winter. Meetings had to be scheduled to accommodate train schedules.
There were also some cultural considerations. There were patterns of work that people had th~t we
needed to be aware of and plan for such as commercial fishing in summer. One small community that
could be impacted by Susitna is the support center for mountain climbers around the world wanting to
climb Denali; a large part of the livelihood of this community is earned from May thrpugh July. They
don't even have time to talk to you during that period unless it's about climbing. Our responsibility in
both cases was to be sure we weren't trying to get public input during those times.
Practical Aids and Public Participation Methods Used in Working with the Pub),ic
There are a number of practical aids I used in working with the public on this project. Some of these
include:
-keep asking questions of the public (e.g. what are your concerns, what is important to you) and of
yourself .(e.g. what exactly am I hearing the public say and are their comments based on reality and
correct information?)
-take project planners and engineers out to see, hear and feel the consequences of their decisions and
to let the public hear directly from those making the decisions
-let people know when they've had an impact on the agency's thinking
-let people know the consequences of not being involved
-create options/alternatives with the help of the public
Some of the public participation techniques we used were standard and some were not. Among the
techniques were small and large group meetings, workshops, newsletters, word of mouth, surveys and
interviews, personal letters and ph.one calls, radio messages and public hearings. Our primary method
of disseminating information to the public was a series of five newsletters. Each newsletter had its own
theme and 30,000 copies were printed and mailed. The issues covered topics as varied as seismicity
findings on Susitna and environmental impacts on fish and wildlife to the fifth issue on the impacts of
the project and people.
Guidelines Useful in Working with Consulting Firms on Contract to the Alaska Power Authority
Most of the work at the Power Authority is done on contract as we are mainly a staff of managers. I
use the following guidelines in working with consulting firms:
1. In working with consultants, my main job is to assist them in articulating the answers to the follow-
ing two questions:
a. What do we need from the public in order for us to move on this phase of the project?
b. What do we think the public needs from us in order to tell us what they think?
At first glance, these questions may seem simple. They are two very difficult questions to answer but
we must answer them in order to have a meaningful dialogue.
2. Help the firm interpret what the public is saying. After alL citizen input can be sloppy and is not as
precise as. the information generated by engineers.
3. Suggest ways the engineers can use the information coming from the public.
4. Remind the consulting firm when a question before them is not an engineering question, but one
from another discipline and is better answered by another consultant.
My Role and Responsibilities with My Own Management at the Power Authority
At major decision points, my role with my executive director, and the Board of Directors, is to lay
out the following:
-h~re's what various publics think and feel ;~ ·
-based on what we've heard to date, here are the decisions that would best reflect the public
preferences expressed
133
----~--~----·-··---------~~--~~--~~------------
-here are those who will agree and those who disagree and their reasons
-basically, here is the overall sense of the kind of reaction you will get from the various options
I have the responsibility to record and document the entire public participation process and to show
management ways of responding and using public input as well as advising them of the consequences of
ignoring the public. Finally, my role is to advise management when a situation arises that seems to say
we shoulq stop, back up for a moment, and reexamine other alternatives that have been discarded.
Conclusions
In concluding, here's the direction we're going in the future ... the goals for Susitna Phase II, Public
Participation. There are six of them, as follows:
Goal 1: to inform on the engineering design work in Phase II
Goal 2: to provide public participation during the environmental phase, including impact assessment
and mitigation planning of both the human and physical environment
Goal 3: to ensure that additional data is collected and an objective monitoring system is established to
further define Susitna-related impacts on local communities as opposed to impacts caused by large
growth that is already expected to occur in these communities
Goal 4: to resolve differences between Susitna-related impacts identified by Power Authority contrac-
tors and those perceived by agencies or local communities
Goal 5: to participate with other agencies to reduce Susitna-related impacts in local communities;
inherent in this goal is the expenditure of state money to mitigate impacts in local communities
Goal 6: to minimize the time between occurrence of a Susitna-related impact in a community and action
to mitigate the impact
· We look forward to accomplishing these goals, building on what we've accomplished so far. Phase II
starts in January, 1983 and will likely run for a period of two to four years.
134
Introduction
Public Participation Along Alaska's Coast:
Reaching Out to the Villages
· Michael I. Jeffery
---~~~----~---~~~-
One .of the elders of Barrow, a community on Alaska's North Slope where I have worked as an
attorney for the last five and a half years, was telling me his father's dream one day. He said his father
had dreamed of seeing fires all along the coast of the Beaufort Sea. He did not know when it would hap·
pen, but his father had dreamed that same dream many times. This elder, Horace Ahsogeak, tells me
that when his fatherhad dreams-many times, the dreams wouldnearly always come true. · ·
I was very moved by this dream of Mr. Ahsogeak's father. The reading that I have done while
representing village councils concerned about the pace of offshore oil exploration and development in
the Beaufort Sea provided me with the information that burning is one effective way of at least begin·
ning to deal with a major oil spill in the Arctic waters and ice. Also, I have read how many oil blowouts
are often accompanied by platform fires, as the gases spewing out with the oil get ignited. Was the
dream of Horace Ahsogeak's father a· grim warning that we would all see such spills and that we would
have to live with the impact they would have?
It is very difficult for an elder like Mr. Ahsogeak to bring his dreams, and his tremendous knowledge
of the sea ice, the environment and the wildlife of the Arctic Ocean to the attention of government
decision-makers.1 He cannot speak English welL he cannot read a complicated government impact
assessment, and he feels most uncomfortable at a public meeting during which he might be asked to
give his opinions to a group of white strangers at the front of the room.
Yet Mr. Ahsogeak is a skilled subsistence hunter and fisherman, a whaling captain, and he is a person
whose lifelong diet has included large amounts of fresh food from the lands and the waters of the North
Slope. He is one of the first who would be directly affected by a major Arctic Ocean oil spill and he has
told me of his deep fears about a big oil spill in the ocean. His health would suffer terribly if the wildlife
were killed by the oil. He knows the wildlife, the ice, and the winds. He has deep knowledge to share,
and he has the right to be listended to.
The problems of listening effectively to these experts on the environment of the Arctic become
especially acute when they live out in the remote villages. The villages may be located several hundred
miles from a regional center. Significant travel expenses and other seemingly difficult arrangements are
necessary to gather such information from villages along the coast of Alaska, and to inform their
residents about the natural resource projects in their area.
· As demands for "streamlining" are heard more and more from the federal decision-makers, and
demands for "permit reform" are heard more and more from industry representatives in the Alaskan
capita!, it ~eems _more and more unlikely ~hat the village people will be heard in the future.
Tire opinions apmsed in this article are the author~' and should not be taken as the Official position of the Alaska Legt~l Services Corporrztion or t~ny
person or orgt~niz.alion represented by the Alaska Legal Services Corporation.
-. . .
'h" 11 dismssion of tlze mrrml problems of Norllz Slt'l't residmts in dealing witlz outside govemmml institutions, see WORL. R. ~~ R .. LONNER.
T. BEAUFORT SEA SOCIOCULTURAL SYSTEMS UPDATE AND ANALYSIS (Bureau d Lmd Mrmw.:rrrwrl Tcdmi.-rd Mwwnm·
dum BHi 1).i, t\ltap 1~81) 111 +3·1-1-L•. See also, DaM. Oil: Tirr E<ki11w lrrrlrllfl Stulwrml. Andwrrrge Duilp News, ]rme I 2. I <182. (We
Alaskrms i'vlrl'(rz::im), 111 HB. 11 rrwrlrrrll's arlidr brirrgirrg outtlzcse issues.
135
----------------------
Does this have to be the end result? Or can we build on the experience of North Slope villages over
the last few years in dealing with the many proposals for oil exploration and development in their area
to develop a model for effectively getting information about natural resources projects and their im-
pacts to the village people, and to hear their opinions about the projects?
This paper is based on the assumption that government decision-makers and their staffs are seriously
interested in obtaining this vital information from village people. It also assumes that the information
will actually be used in the decision-making process with some prospects that it could help to modify
decisions being made. Without this possibility of responsiveness, the public participation effort
becomes nothing more than a cynical effort by some to "check off" duties imposed by laws that may be
changed in the future.
There are solid legal requirements that government agencies considering projects of many different
types must give public notice, and must allow public hearings to gather information to make the agency
decision. An Appendix is attached to this paper where a summary of such laws, regulations and legal
doctrines is given. The laws discussed there are only some of the major legal foundations for the
legitimate expectation of rural people that their government agencies will undertake the commitment
of time, energy and money that is necessary to reach the village people and hear what they have to say.
Decision-makers and agency representatives faced with the prospect of holding public meetings in
such locations are faced with a dilemna. These residents need to be heard. They have unique expertise
about the area and the wildlife, and they are the most directly threatened by the environmental and
social problems that may flow from the projects; yet the villages exist in a radically different context for
the government decision-making process than the urban centers where the government officials live
and work.
Some Suggestions for Reaching Out to the Villages
I have been fortunate over the last five and a half years to have had the opportunity to travel a great
deal to the remote villages of the North Slope of Alaska. Many of these trips over the past four years
have been to assist in preparations for various kinds of public hearings and public meetings organized
by federaL state, North Slope Borough, or industry representatives. I have seen the way in which these
meetings have impacted the village people, and the ways in which the people have responded to the
different kinds of meeting that were held.
I have come away from this experience with a deep admiration for the patience and insight of the
village people. I also firmly believe that these public hearings and meetings must be preserved in the
face of increasing pressures for "streamlining" and "permit reform" that would go a long way toward
eliminating them.
The following are some basic suggestions that may help to ensure that the efforts to determine the
opinions of the village residents are productive as well as cost-efficient. The extrep:~es of ignoring the
village people, or of constantly making trips out to ask their opinions, must both be avoided. I believe
that consideration of the information contained in this section will insure more effective public par-
ticipation by the village people, without overwhelming them with an excessive number of public hear-
ings that would take away too much of the precious time available for subsistence hunting and fishing.1
Most of these ideas have been used by one agency or another but they oftentimes stop using them. In
any case, there has never been an occasion when all of them have been used on the Arctic Slope of
Alaska.
I. Before concrete analysis of a project begins, preliminary meetings modeled on the current federal
"scoping meeting" for Environmental Impact Statement preparation should be held. They provide a
useful forum for local people to find out about future government plans for their area. Local meetings
should be held in all the affected villages, or at least in certain centrally located communities to which a
cluster of other villages could send representatives. Translation of the materials and testimony at the
meeting is important. ·
2T7re tremmdous variel!l of till/ural resources developmmlartivilies that the peo1de of the North Slo1•e of Alaska are lravi11g lo deal with sinwlla11eousl!1
is staggeri11g. Two rece11t publicatio11s sunut11irize the situatio11: jACKSON, ].B. AND PRETZ. B.C. OUTER CONTINENTAL SHELF AND
ONSHORE OIL AND GAS ACTIVITIES IN THE ARCTIC: A SUMMARY REPORT. OCTOBER. I<J81 (UPDATE I. MAY
1982) (U.S. Geologiml Surve11 01•m File Rq•orl 1:12·19) at ('·32: ami. NORTH SLOPE BOROUGH. NORTH SLOPE BOROUGH
COASTAL MANAGEMENT PROGRAM. ([11terim Report May 1<11.12) at 2·22 to 2-47.
136
2. These meetings-could be followed up by distribution of television, radio, and/or written sum-
maries of the planned activities. Comments and information given at the meeting could be used as the
basis for such programs. The NPR-A program staff of the Bureau of Land Management's Alaska State
Office produced an effective series of bilingual video-taped discussions of the plans for oil exploration
in the National Petroleum Reserve-Alaska. These half-hour programs included both government maps
and information, which were translated into Inupiaq, the local language of the native people. They also
included native hu-nters discussing the issues that they felt were important in considering these govern-
ment plans. Th~ tapes were shown on the statewide satellite television project, and reached all of the
villages affected by the proposals.
3. When an informational document such as the Environmental Impact Statement, for federal
activities, or the Social Economic and Environmental Analysis, for State of Alaska activities, is ready,
strong efforts must be made to ensure that the document reaches affected communities promptly. It is
not adequate to simply drop them in the mail from Anchorage or Juneau. A box of heavy books may
take one to two weeks to reach some of the villages from the big cities. Instead, air freight or, if possi-
ble, a personal trip to the· villages should be used. When the Draft EIS for the Joint Federal-State
Beaufort Sea Lease sale was distributed in early 1979, staff members from the Alaska OCS Office
brought many copies of the document to each of the villages involved, and held informal meetings to
answer questions about the EIS and the lease sale decision-making process. The time frame for
commenting on such documents is already so compressed that it is disastrous to have an extra week or
ten days of that time eliminated by mail delays. A minimum of ten copies of the complete environ-
mental assessment document should be available in each village affected by the project. Village council
members, teachers, and other interested persons would all be able to have a copy (many of these in-
dividuals do in fact take the time to review the entire document).
4. I believe that the draft stage of the document is also the time to produce a pamphlet that sum-
marizes the major information and issues of the larger document. This pamphlet could be distributed in
much greater quantity than the bulky and expensive complete document, and the shorter document
could also be fully _translated. The U.S. Army Corps of Engineers, Alaska District, distinguished itself
by producing such a pamphlet when it issued the final EIS for the massive Prudhoe Bay Waterflood Pro-
ject.3 The final EIS was three volumes; it was summarized in a 27 page booklet, including maps and
helpful graphics. All materials in the summary were translated into Inupiaq. It was significant and
helpful to have this document available along with the final EiS. But effective public comment on the
draft EIS would have been immeasurably enhanced if such a document had been available in draft form
along with the draft EIS. All the basic information that most village people would need for commenting
on the project was contained in this publication, while the full EIS was necessary for the agency, scien-
tific, and legal reviews that the project must undergo.
5. Effective public notice must be given for the public hearings which are scheduled. For rural Alaska,
radio advertisements must be used to supplement signs and flyers. Newspaper ads (even if placed in the
regionaL native-oriented newspapers) have limited effectiveness to bring information to remote village
people. The agency setting up the hearing should coordinate these efforts with the village counciL and
the basic information including date, time, and excact location should be on the posters and flyers sup-
plied by the agencies. It cannot be assumed that busy, and volunteer, mayors and village council
members will set up the meeting, advertise it around the village and make signs.
6. Close coordination with village council members should be made about the timing of the meeting.
An agency's schedule may suggest a certain day-but that day may also be the time of a weekly church
s~rvice (often held on both Sunday and Wednesday nights), or a weekly movie, bingo or sport activity
night. As a practical matter, meetings scheduled on these days simply will not have significant village
participation. Some villages have simply required that those agencies wishing to have meetings in the
village must schedule them at the same time as the village council meeting. That night is already
reserved for these kinds of discussions, and people will be present and ready to listen. In addition, the
needs in Alaska for subsistence hunting and fishing must be respected. Public hearings in Barrow for the
1979 Beaufort Sea Lease Sale were postponed until early June so that the whaling season would be over
'U.S. ARMY CORPS OF ENGINEERS, ALASKA DISTRICT, PRUDHOE BAY-Ml SAVAAKSRAQ MAQIPKA/NIQ
TAGIUM/K NUNAMUN, MAQPIGAALIAQ AQULLIQ UQAUS/GIVLUGIT ALLANNUQTAUNIAQTUAT SAVAAM
/GLIGNINAN/ (71!e Prudhoe Bay Waterf/ood Project, A Summary of the Final Environmwtal Impact Statemmt), 1980.
137
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before the hearings. In other parts of Alaska, such respect should be shown toward caribou hunting,
fishing, and similar activities.
7. The hearing panel should bring with it any summaries or other brief descriptions of the project so
tha.t people at the hearing can review them while the hearing is going on. In this way, people who have
not had a chance to review the materials in advance can still make meaningful comments.
8. During the hearing itself, it is vitally important to have a translator present. Experience shows that
it is not sufficient to simply have a bilingual person sitting in the room and have people "ask questions if
you don't understand". In fact, the people that will have the most questions will also feel the most un-
comfortable about speaking up about them. Successful hearings in North Slope villages with a substan-
tial number of people who have trouble speaking English are the hearings in which there is full transla-
tion right from the start. That way, everyone in the room has a general idea of what is going on. It is
frustrating to everyone when some of the comments, whether in English or Inupiaq, are simply made
without translation, so that an important number of people in the room simply lose touch with the in-
formation being passed in the hearing.
9. Whenever possible, especially in regional centers like Barrow, live radio and/or television broad-
cast of the hearing should be arranged on the local station. Elders or working people who may not be
able to attend the meeting can share in it. People out hunting or fishing for food for their families may
also be listening. All the listeners will be benefiting from the translation that is provided during the
hearing. Several hearings in Barrow, including the one on the Beaufort Sea Lease Sale in 1979, included
important testimony provided by people who had been informed about the hearing and what it was all
about from the radio broadcast that was going on. They came in from the hunting area at Point Barrow
to offer their testimony.
10. The hearing should continue as long as necessary to gather all the comments of the people. Many
village residents are reluctant to speak out at the beginning of the hearing. There may be long silences
during the hearing which are actually a time of reflection, or a time for review and quiet discussion of
materials that may be available at the hearing. People outside the hearing may be coming in late, as they
hear the radio broadcast, and they are concerned enough to interrupt their other activities to share what
they have to say. Then, later on, the hearing opens up with many very valuable comments.
11. An informal atmosphere helps make people feel comfortable in stating their points of view. If the
hearing panel comes into the village wearing urban clothing, or uniforms of some kind, it makes it more
difficult for the communication to flow among the people that are present.
12. Where possible, the decision-makers or at least senior staff representatives should attend the hear-
ings. It is impressive, for example, that some officials of the Alaska Department of Natural Resources
charged with major decision-making authority have made the effort to attend the village hearings con-
cerning proposed OCS leasing. Unfortunately, this effort by Alaskan officials is very much the excep-
tion. There is a great amount of frustration among people at hearings when they realize that the people
at the front of the room are not the decision-makers. The environmental impact statement preparation
staff may listen carefully, but the power of the hearing is not felt beyond them. The actual decision-
makers see only a summary of the issues raised at the hearing. Hours of testimony may only change a
sentence or two in the issue analysis, and the deep feelings expressed are usually lost in the process. Yet
these feelings and opinions should be an important part of the government decision in a democratic
system.
13. After the hearing is over and the agency people have left the village, people in the village can
often be heard to say that the government will not be paying any attention to what they have said. One
way to help people understand how the information is used is to have the people leading the hearing
carefully explain the next steps in the decision-making process before they close the hearing.
14. A continuing issue on the North Slope has been how the official transcript of the public hearing
will reflect the translated portions of the hearing. Assuming an agency has arranged for translation, the
tendency has generally been to use the English transcript of the translation of the Inupiaq language
testimony at the hearing as the official text for the record.
This system is not fait to the person giv.ing the testimony, nor to the translator doing his or her best to
convey the information promptly and accurately between two very different languages and cultures.
Translation at the meeting is critically important and a proper translation of the Inupiaq language
testimony must be made from the tapes. In Barrow, as well as in other rural centers in Alaska, there are
skilled translators available through regional governments or school districts. These translators are fully
138
trained and capable of producing accurate, readable English texts of the native-language testimony.
The Alaska OCS Office contracted with such individuals to produce the final text of the transcripts
of the three North Slope hearings on the 1979 Beaufort Sea lease sale. This effort was well worth the
cost as the transcripts had more integrity as a real expression of the feelings and knowledge of the peo-
ple. From the point of view of the decision-maker, the more complete transcript means that the effort
and expense of holding the hearing have been fully utilized to bring out the precious, oral information
provided by the elders. 4
15. The final step in the process is to let the village know what response has been made to their com-
ments. The practice of publishing written comments and responding issue-by-issue to the written and
oral comments in the final impact assessment documents is a necessary and useful practice. But rural
people will often not know where to look in the documents and how to understand the responses. A
short cover letter sent to the village council and to people who sent in written comments from the
village, along with several copies of the final impact assessment documents could point out the pages, if
any, where the comments from that particular village have been individually addresssed. If the village's
comments were not directly mentioned, at least a short cover letter pointing out where the response
section of the document is, and how to use it, would be an important way to show to the village people
the way government agencies have listened to what they had to say. In many cases, of course, the
impact assessment document has been changed to reflect the comments given during the hearing and
people would like to know that kind of information.
16. A final comment is appropriate. Some government agencies dealing with North Slope com-
munities have suggested that oil industry representatives should meet with the village people to work
out their differences. Sometimes an oil company will simply tell the agency that it has met several times
with village people and are thus aware of the concerns of the village. These concerns may even be sum-
marized by the industry spokesperson, together with the company's response. A suggestion will then
be made to the effect that public hearing by the agency is unnecessary.
At a time of budget difficulties, it is easy to see how tempting it would be for government agencies to
simply accept this information without scheduling its own public meeting. The dangers of this course of
action are clear. Village participation at an industry-sponsored meeting may well have been light. In
addition, the comments made by the village people will have been based on information and promises
made by the very people who are expecting to reap major corporate profits from the proposed explora-
tion and development activities. It is difficult enough for the people involved with the government-
sponsored impact assessment process to be objective about projects from which the government
expects to reap enormous tax and royalty benefits. To abdicate the conduct of the public meetings to
the corporate project's proponents would be even more devastating to the credibility of the public com-
ment process.
Conclusion
Some readers of the above thoughts about the public hearing process in rural Alaska may be con-
cerned at the expense that may be necessary to make the process really effective. But if the gathering of
public information and comment is to be more than just going through the motions, increasing atten-
tion by government agencies m1,1st be directed at ways to make sure the village people are actually
being heard.
There is an increasing danger that the people of the villages will have the feeling these hearings are a
waste of their time. They cannot see the impact their comments sometimes have when there is no
reporting back to them by the government agencies. They do see that most of the projects go ahead as
originally scheduled, even if there has been intense opposition expressed to the project by local
residents.
But the hearings can be meaningful, if they are properly arranged and scheduled in a sensible way.
Several projects proposed along Alaska's coast have been significantly postponed or cancelled after the
public comment process was complete. The knowledge of people who have decades of personal
experience and the experience of the centuries in surviving in Arctic Alaska is critically important for
•L. SHAPIRO AND METZLER, R., HISTORICAL REFERENCES TO ICE CONDITIONS ALONG THE BEAUFORT SEA
COAST OF ALASKA ( 1979). This scimtifh reJ>ort published by tire Ccoplrysica/ l11stitute of tire U11iversily of Alaska, Fairba11ks, is based 011 tire
testimo11ies of eight bwpiat elders. It ack11owledges tire value to tire scimtitic co11zmmzity oF tire k11owledge oF tire elders about tire ice.
139
ensuring that the decisions will strike the proper balanc;e between the natural resource needs and the
survival needs of people of our state and nation. Effective hearings will bring greater mutual
understanding between government agencies, local people and industry. This understanding will help
avoid wasteful and ill-advised natural resources projects and needless litigation; and, most important, it
will avoid needless human suffering from the oil, spills that threaten to bring the fires burning along the
Beaufort Sea coast.
140
APPENDIX
Some legal foundations for village public hearings
A variety of laws. regulations, and legal doctrines require that government agencies give public
notice and hold public hearings before making significant decisions about natural resources develop-
ment. Several recent legal articles and publications have discussed such laws in the context of Outer
Continental Shelf development. LA
Federal statutes. The basic federal statute that requires public participation during the decision-
making process concerning natural resources exploration and development_ activities is the National
Environmental Policy Act of 1969, 42 U.S.C. § 4321 et. seq. The regulations implementing this law are
published under the authority of the Council on Environmental Quality at 40 C.F.R. §§ 1500-1508
(1980). A "seeping meeting" is held in the affected area prior to preparation of the Environment Impact
StatemenUn order to ascertain the major issues about the activity, 40 C.F.R. § § 1501.7. Following
publication of the Draft Environment Impact Statement, public hearings are required, usually within 45
days.2 ,A· This information is then used in preparation of the Final Environmental Impact Statement about
the project. A comparison between the "streamlined" procedures of the current administration and the
procedures used previously is contained in the introduction to the recently issued final Supplement to
the final Environmental Impact Statement on the federal government's proposed five-year OCS leasing
schedule.3A This revised lease sale schedule and the "stream-lining" procedures are currently being
challenged in federal court.4A
In addition, the Coastal Zone Management Act of 1972, as amended, 16 U.S.C. §§ 1451-1464, con·
tains requirements that there be an opportunity for public participation in the decision as to whether a
project is consistent with a state's coastal zone management program. Regulations implementing the law
are found at IS C.F.R. §§ 930 et. seq. (1980).
If oil exploration activities are allowed to go ahead, permits must still be obtained from federal (and
state) agencies having jurisdiction over the proposed activities. In particular, the Federal Water Pollu-
tion Control and Prevention Act, 33 U.S.C. §§ 1251-1367, includes the requirement that the U.S. Army
Corps of Engineers consider any discharge of dredged or fill materials within the navigable waters of
the United States (see Section 404 of the Act). Section 10 of the River and Harbor Act of 1899 contains
similar requirements. Public notice must be issued, 33 C.F.R. § 209.120(iX1)(ii) and (j)(1), and it must in·
elude reference to the independent water quality certification to be issued by the state water quality
agency, 33 C.R.F. § 209.120(j)(1)(v). Public hearings may be requested from either the Corps of
Engineers or the state water quality agency (the Alaska Department of Environmental Conservation)
pursuant to these public notices. The general obligations of the National Environmental Policy Act of
1969 specifically apply to the Corps of Engineers permitting process, pursuant to regulations contained
at 33 C.F.R. § 209.120(1).
State statutes: The Alaska Constitution contains the basic requirement that
No disposals or leases of state lands, or interests therein, ~hall be made w~thout prior public
notice and other safeguards of the public interest as may be prescribed by law.
(Nate: Citation> in this p11J>ercan{onn to tire {omrused by tire lrgal comnumil!'· tiS setout intire COLUMBIA LAW REVIEW. THE HARVARD
LAW REVIEW ASSOCIATION, THE UNIVERSITY OF PENNSYLVANIA LAW REVIEW. AND THE YALE LAW jOURNAL.
A UNIFORlvtSYSTEM OF CITATION (/Jtlr ed .. I<.J8/).
IAGendler, Offshore Oil Power Pl11ys: Maximizi11g St11te iltJ>Ut brio Federal Resoum Decisimr M11ki11g, 12 NAT. RESOURCES LAW 34i
( J':ii':i). Verges.:_:, McClmdo11. ilwpiat Eskimos, Bowlre11d Wlwb, tmd.Oil: Competi11_..: Fedeml ilrteres/s i11/lre Bwufill't Sea, I v UCLA-ALASKA
L. REV. I (I ':i8v). jones, Tire Leg11l Framework for E11er,'(!t DeveloJnlleul 011 tire Outer Gmtillcllllll Shelf, I v UCLA-ALASKA L. REV. J.j.J
(.1 98 1). Goldberg, Ot{slwre Lmse S11/es-Are E~~tlmtgmd Species I1rre11teued? 10 UCLA-ALASKA L. REV. I i5 (I 981 ). P. CASEY. LEGAL
MANDATES AND FEDERAL RESPONSIBILITIES. (Burwu of Ltmd Mwwgmrmt Al11sk11 OCS Office Tedmh11/ P111•er #4. 198/).
2ABUREAU OF LAND MANAGEMENT. U.S. DEPARTMENT OF THE INTERIOR, FINAL SUPPLEMENT TO THE FINAL
ENVIRONMENTAL IMPACT STATEMENT. PROPOSED FIVE-YEAR OCS OIL '" GAS LEASE SALE SC/-fEDULE. .
jANUARY 1982·DECEMBER JY8o, at 21 (/98/).
JA/d. 11t 1 i·22.
.j.ACa/ifomill v. W1111. No. 815oYY (Ytlr. Cir. August 12. I <J8Z).
141
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Alaska Const., Art. VIII, § 10. An important state law implementing this provision is the requirement
that communities near proposed projects be given notice of the projects as soon as practicable, but no
less than 30 days before the proposed action. A.S. § 38.05.305(a)(2) (Supp. 1981). If the community
chooses to hold a hearing about the proposed action, the Commissioner of Natural Resources or his
delegate must attend, A.S. § 38.05.305(a)(4) (Supp. 1981). Similar notice and hearing requirements must
be met prior to the required finding by the Department of Natural Resources that a disposal of an
interest in state land is in the "best interests" of the people of the State of Alaska, see A.S. § § 38.05.345
and 38.05 .. 346 (Supp. 1981). For major state actions, the Agency Advisory Committee on Leasing
prepares a Social Economic and Environmental Analysis of the activity, as provided in Alaska
Administrative Order 52, signed by Governor Jay Hammond on January 24, 1979.
The Alaska· Department of Environmental Conservation must issue public notices regarding water
quality certification requests for development projects, and it may hold public hearings on these
requests. These regulations are to be found at 15 A.A. C. § § 15.050 and 15.060 (1978).
Finally, as Coastal Zone Management programs are developed around the coastal areas of Alaska, the
local districts are required to have public meetings to consider the local district programs. 6 A.A.C. §
85.100, 6 A.A.C. § 85.130 (1981).
Statutes relating to protection of subsistence hunting activities. As recognition of the critical role
of subsistence hunting and fishing activities in the lives of Alaska's coastal residents has grown, the laws
have been giving increasing protection to them. The federal Alaska National Interest Lands Conserva-
tion Act, 16 U.S.C. § § 1301 et. seq. (1980), at Title VIII, contains specific provisions dealing with protec-
tion of subsistence activities: "[N]onwasteful subsistence uses of fish and wildlife and other renewable
resources shall be thepriotity consumptive uses of such resources on the public lands of Alaska .... ", 16
U.S.C. § 3112 (1980). Such provisions provide a clear directive that these subsistence activities must be
protected.
This Act requires special notices and "a hearing in the vicinity of the area involved" by the federal
agency, when the head of that agency determines that a proposed activity, "would significantly restrict
subsistence uses", 16 U.S.C. § 1320 (1980). .
Alaska law also contains special provisions relating to protection of subsistence hunting, at A.S. § §
16.05.255(b) and 16.05.257(c). Public hearings are required before such protective regulations can be
adopted, "with at least one of the hearings being held in close proximity to the area potentially
affected", A.S. § 16.05.257(c)(1) (Supp. 1981).
A trust responsibility. In addition to the specific laws cited above, federal agencies concerned with
native people are required to exercise a careful trust responsibility of the needs of these people. The
dimensions of this trust responsibility in the context of Alaska Natives and in natural resources decision-
making has received a great deal of discussion recently.5A
Although the exact boundaries of this trust duty are still unclear, and under current litigation,6A it is
at least clear that federal agencies whose actions may hurt native hunting activities protected by native
exemptions to federal laws like the Endangered Species Act, 16 U.S.C. § 1539(e) (1976), and the Marine
Mammal Protection Act of 1972, 16 U.S.C. § 1371(b) (1976), must honor this trust responsibility.7A
This concern gives an additional mandate for holding public meetings in native population areas
affected by natural resources decisions.
The state statutes protecting subsistence hunting activities for rural residents of all races also require
special consideration of the affects of natural resources projects on such activities. The Alaska Supreme
Court recently affirmed the specific requirement by a superior court judge that the Alaska Department
of Natural Resources make specific, detailed findings on the "effect of [Beaufort Sea OCS]leasing on
sAo. GASE, THE SPECIAL RELATIONSHIP OF ALASKA NATIVES TO THE FEDERAL GOVERNMENT (/978). Comment,
Tire Effects of lncrmsed Tribal awl Stale Autonomy 011 tire Special Re/aticmslril' Betwwr Al,,;ka NH/ives ami Fedeml Govenwwr/, IV UCLA·
ALASKA L. REV. 183 (/98/).
vASee tire differing opinions in tire lower ami appe//ate court in North Slope Borough v. Andrus, 48L' F. Supp. 32£1 (D.O. C. I<J7<J) a111l 48v F.
Supp. 332 (D.D.C. I 979), aff'd in par/ a111l rev'd in par/, £142 F.2d 5M (D.C. Cir. I 98V). lmporltml issues regarding the trust rcsponsibilil!l a111l
b~~tpiaq title to the offshore area of tire Arctic Owm are wrrwtly wuler tire judicial nmsidemlion fa/lowing tire July I, 1982, wur/ !rearing in lnupiHI
Commwrity of tire Arctic Slope v. U11ited Stales of Amerim, No. A81-V I 9 (0. Alaska flled jmu111ry I v, I 981 ).
7 A North Sloi'C Borough v. A11drus, supri1.
142
the subsistence culture of the Inupiat Eskimo people".8A This concern should also encourage state agen-
cies to hold local public meetings when these issues must be considered.
A review of these legal authorities shows the importance of the knowledge of effectively holding
public hearings in the remote villages of Alaska. The time, energy and expense involved for everyone
involved in these hearings make it essential that the information from the hearings be obtained and
accurately preserved.
8 AHmmnvud v. Nvrtlr 5/ol'f Borough, No. 5550 •. slip. VI'· 11/ 21 (Alaska, Mtl!l 7, I L/82).
143
Intro4uction
Marsha Bennett
This chapter contains a number of innovative approaches to cultural. social and family impact assess-
ment which broaden the perspective of SIA in Alaska. The collection includes papers on family impact
assessment and human services planning. Two additional papers discuss SIA as it relates to two sub-
populations of Alaska: the elderly and women. BLM, Forest Service and Minerals Management Service
program approaches to sociocultural and socioeconomic information are treated. A paper suggesting a
multi-method approach to socioeconomic monitoring itself warns against the aggregation of social data
when ·taken out of its community-level context. Finally, a paper reports on the negative effects of
resource deveiopment on indigenous people in Canada and another paper disputes Alaskan SIA conclu-
sions as they pertain to Alaska's indigenous people.
Roy Bowles' paper draws on his extensive experience and other published works on energy impacted
small communities in Canada and the American West. He places family violence and other family
disfunctioning within a broader ecological framework. He also calls on policy-makers and SIA profes-
sionals to r~cognize the negative social consequences which often attend resource development and to
plan for these effects in conjunction with resource development planning.
Judith Davenports' paper summarizes the experience of several Rocky Mountain states with human
services planning in response to energy development impacts and offers some much needed tools for
Alaska social services delivery and planning. Katie Hurley calls for more studies of women and
womens' issues in Alaska, while Terry Haynes reviews impacts on the elderly in small communities in
Alaska's interior region a!1d compares these changes with impacts on the elderly reported in other SIA
research.
Muth describes a number of methodologies used by Forest Service Scientists in Alaska which
undoubtedly have wider applicability .. Chuck Smythe's discussion of the Sociocultural Studies compo-
nent of Minerals Management Service's Socioeconomic Studies Program provides an overview of the
major findings and methods used in this important Alaska Studies program.
Steve McNabb's paper describes some of the findings of the Socioeconomic Studies Program's Social
Indicator Project concerning the generation of socially meaningful socioeconomic measures, based on
field work in the NANA and APIA regions. Data which are meaningful at the community level may
lose their meaning when aggregated, he notes. He argues for a multi-method approach in rural Alaska
which combines the strengths of several different methodologies.
The Committee of Alaskans for Indigenous Survival (CA!S) reminds us that indigenous people may
not see the world in the same light as that portrayed by the social scientists who study them. This point
is stated somewhat differently by Justus and Simonetta who report heavy social and cultural costs from
oil sands projects in Northeast Alberta on local Indian peoples and relatively little attempt to prevent
these high costs by industry on government. Finally, Bob Laidlow describes a BLM approach to cultural
resource planning in California which holds promise for Alaska resource managers.
145
----------~----~---~ -~--~----------
Family Well-Being, Family Violence and Rapid Community Growth:
An Ecological Perspective
Roy T. Bowles
It is significant that, in a three day conference on "Social, Economic and Cultural Impacts," this is the
only session explicitly devoted to social behaviors. It is also significant that the subtitle for this session
includes a rather conventional shopping basket o·f social problems or social pathologies: ~rime, alcohol
and drug abuse, domestic violence, and mental illness. This suggests that when we think of social
impacts we may think only of a few negative and highly visible outcomes. I want to use my time to
develop a perspective which will be helpful in understanding these social problems, which are matters
of serious concern, but that will also bring additional issues into view. I will focus most directly on
domestic violence but I think that the perspective I present can be applied to other issues.
Many observers suggest that there are high levels of social problems or social pathologies, including
high rates of domestic violence, in rapidly growing resource based communities. I will not review
statistics but will turn to the task of developing a framework which can be useful in understanding how
forces set in motion by large-scale natural resource development can create work experiences and com-
munity patterns which impinge on the quality of family life. This framework will focus on patterns
within families and the way they are shaped by forces outside of families.
To understand family violence we need to look beyond specific cases of inflicted injury and focus
more generally on family processes and family well-being. In popular discussions, family violence
seems most often to refer to physical injuries which family members inflict on each other. It includes
physical violence against wives by husbands, against husbands by wives, against children by parents,
and against the elderly by family care-givers. The word "battering" is often used in a way that connotes
major and perhaps life threatening injuries. A broader conception of domestic violence, which focuses
on the harm family members experience as a result of any physical expression of aggression or because
they are not adequately protected and cared for in the family, is becoming increasingly common in pro-
fessional discussions. Much research on and clinical treatment of child abuse considers abuse and
neglect together as resulting in similar risk and arising from similar causes. A primary concern is focused
on children at risk of harm resulting from injuries inflicted by parents or accidentally incurred because
parents do not provide reasonable protection from hazards, and on children who experience illness
because parents do not provide adequate care.
If our task is to understand the ways in which work and community patterns associated with natural
resource development may give rise to family violence, even this perspectiye may be too narrow.
Severe family violence is only the tip of an iceberg. If rates of family violence are high in a particular
community it is very probable that there are high rates of additional negative family dynamics and we
can expect many other social problems also to be common. Family violence is only one form of social
pathology. _ ··
It is important to direct specific attention to domestic violence because it has often been considered a
private family matter. We must, however, not get stuck on the specific manifestations of "battering". I
think that the concepts of family well-being and quality of family life can provide a useful framework
with which to expand our perspective.
One often hears protests that the terms 'quality of family life' and 'family well-being' are too vague
146
and idealistic to guide understanding or policy but I do not agree. We know enough about the dif-
·ference between positive family functioning and family pathology to formulate better social policy and
to more effectively deliver services. For certain research purposes clearer conceptualization is necessary.
We should not, however, delay action because 'quality of family life' and 'family well-being' are
somewhat vague terms.
I would like to develop an analogy. In considering the issue of TV repair, Freidman and Wildavsky
have expanded on Cl formulation first advanced by the philosopher Charlie Brown. " The good life is a
TV set that works' or at least one that is repaired promptly and at reasonable cost. The bad life is a
television set that keeps breaking down despite substantial payments for repair work" (1979:329).
At some risk of oversimplification we can distinguish between family pathologies or low levels of
family well-being and constructive family functioning or high levels of family well-being. If a family
maintains social relationships which provide satisfaction and support for members, if it organizes
resources available in the community to meet the needs of members, if it provides emotional reinforce-
ment that encourages personal competence and a positive sense of self, and if it maintains a positive
ambience as a collectivity we can speak of a high level of family well-be.ing. Like the TV set that works,
such a family may draw little attention. If a family is characterized by social relationships which
generate frustration and strain, if it is unable to mobilize resources to meet needs of the family and its
members, if it generates a negative sense of self and feelings of incompetence, and if the collective
ambience is one of hostility, frustration or discouragement we can speak of low levels of family well-
being. In such families clear pathologies such as violence or neglect occur with greater frequency than
they do in families characterized by high levels of well-being. As with TV sets, most families will
occasionally fail to function properly. If adjustments can be made fairly quickly, such disruptions need
not be considered serious in the long term. ,
When a TV set breaks down it is often useful to call a reliable repairman but a solution more support-
ive of Charlie Brown's good life would be the design of more reliable TV sets. When a particular family
experiences a crisis, such as interpersonal violence, intervention which protects members and provides
support for changes in family patterns is certainly helpful. A more significant long term contribution to
family well-being can be achieved by modifying those social conditions which generate stresses that
make it more difficult for families to function well.
Most conventional domestic violence programs attempt to provide family members with skills and
orientations which permit them to more adequately deal with the stresses which they experience.
Psychotherapy aims to develop insight leading to modification of behavior. Parental counseling and
education programs assume that learning new ideas, for example, as well as obtaining a more adequate
understanding of child development and more realistic expectations of children, will lead parents to
treat their children more appropriately. Homemaker programs and social support programs identify
stresses w:hich exist within a household and provide resources to help alleviate such stresses. I do not
minimize the potential contribution of such programs because families inevitably experience some
stress, and capacity to cope with stress is important in avoiding violence and improving well-being.
None of the approaches mentioned, however, pose fundamental questions about the origin of stress in
families.
Differing hypotheses are advanced to explain domestic violence and other social pathologies in rapid-
ly growing communities. The 'recruitment' hypothesis asserts that individuals who are somewhat
maladjusted and prone to deviance or pathology migrate in disproportionate numbers to rapidly grow-
ing communities. The alternative hypothesis, which Freudenberg (1982) has called the "significant
social change" hypothesis, asserts that changes in the community context create conditions of daily life
which are stressful for individuals and families, and that these stresses produce adjustment problems,
deviant behavior, and pathology. The recruitment hypothesis sees the causes of maladjustment as
existing inside of individuals either as personality problems or as learned cultural patterns. It directs pro-
grams and policy toward individu~ tre?-tment or more selective recruitment. The significant social
change hypothesis, while not ignoring individual differences in adjustment and coping strategy, sees the
difficult living conditions and the disruptions produced by rapid community growth as a major cause of
pathologies such as family violence. It directs policy and programs in part to helping people adjust to
the difficulties of the situation in which they live. In part, it directs attention to identifying stresses
generated by the situation and changing the responsible aspects of the situations, although this approach
is less frequently emphasized than I think it should be. The perspective I will present is based on this
147
significant social change hypothesis.
My own basic conclusion is that risk of family violence in a particular family, or the rate of family
violence in generaL is increased by the stresses of disruptive demands placed on families by the work
and community contexts in which people carry out their daily lives and lives as families. This is not to
say that community and work somehow automatically produce family violence. Because of personality
cl-}aracteristics and learned styles of interaction, some individuals are more likely than others to express
their frustrations in violence against family members. In every community there are some cases of child
abuse and spouse abuse. If the propensity to family violence among members of a particular communi-
ty is relatively high because of cultural or personality factors, disruptions and strains in community pat-
terns and work can make it even higher. If propensity to violence is low, stresses originating in work
and community can cause it to increase.
This discussion leads us to the question: how do community patterns and work demands create
strains or difficulties for family life and how do these strains or difficulties contribute to domestic
violence or other parhologies? This question can best be approached by an ecological perspective which
sees the family as a concrete setting or context of daily life which is closely connected to other settings
-such as work and school -in which family members participate within the community.
Bronfenbrenner has developed such a perspective in The Ecology of Humun Development (1979) and
Garbarino has further demonstrated its utility in Children and Families in the Social Ent,ironment (1982). In its
most general form ecological analysis focuses on the activities of organisms in an environment and iden-
tifies consequen€:es of the environment for the patterns of activities and traces linkages between local
environments and larger systems. Bronfenbrenner and Garbarino are specifically concerned with child
development. They locate the child in the setting of the family and explore ways in which the family is
connected to other concrete settings and to more general forces in the social environment. The work of
Bronfenbrenner and Garbarino is, at one leveL a very useful way of.systematizing observations about
the impact of social context on family processes. A summary of the points which I find most helpful for
this purpose is presented here.
A family is a setting or a "microsystem" in which a concrete group of people live together
part of their daily lives.
There are other settings which are concrete contexts for the continuing experiences of
family members, including the work place of a parent, the school which the children attend,
the clinic where medical services are obtained, the church or other associations where family
members participate separately or together.
Each setting can be described and analyzed in terms of activities in which people engage,
relationships between people, and social roles which organize the activities of different par-
ticipants and the relationship between participants.
There are connections between different settings and occur when activities or roles in that
setting influence or constrain activities, roles or relationships within the family.
There is a "macrosystem" in the society or sub-culture which establishes blueprints for
each type of microsystem or concrete setting, including t;he nature of the relationships be-
tween settings. Bronfenbrenner and Garbarino emphasize cultural and ideological defini-··
tions. I would add emphasis on structural consequences of the economy, technological pat-
terns, and decisions made in centers of power.
The ecological analysis of a particular family consists of a description of the concrete fami-
ly setting (members, activities, relationships and roles), a description of other concrete set-
tings in which family members participate, a description of the interdependent patterns be-
tween the family and other settings, a description of broader forces in the society or com-
munity and an interpretation of how they shape patterns within the family, other settings,
and links between settings. -,
The analysis of a family setting involves·the examination of links to other settings. That is, it involves
identifying other settings in which family members individually or collectively participate and the con-
sequences which activities, relationships and roles have for activities, relationships and roles inside the
family. A few examples will clarify the nature of this analysis.
148
The family setting is linked to one or more work settings by the employment of family members.
The schedule of work influences the_schedule of family life because the hours that a parent is at work
cannot be used for family work and activities. The home is used for the regeneration of labor power,
that is for the rest and nourishment required to work another day. As is most obvious in the case of shift
workers whose children must be silent during different hours of different weeks, the cycle of work and
rest imposes a schedule on the family. The family setting receives a worker in the condition that the
workplace turns him out. If the worker ends his day exhausted, alienated, frustrated and unsure of his
worth, then the family receives a participant who may be edgy, easily threatened, limited-in capacity to
be nurturant, and less controlled in responses to events which occur in the family.
Relationships between school and family are usually phrased in terms of the influence of family pat-
terns on school performance, but the relationship is reciprocal. The schedule of the school setting con-
strains the schedule of the family in that coordination and effort are required to prepare a child for
departure to school and to receive a child home. If the school is a threatening or insecure environment
children will bring home anxieties which will affect family dynamics.
The family setting depends on services and resources delivered in other settings in the community.
The conditions under which these other settings will" deliver goods and services shapes activities and
experiences in the family. If, for example, a medical team visits a comrrwnity for only one afternoon a
week, parents whose children need medical attention must organize their schedules so that they are
available at that time. The set of retail outlets available, their stock of merchandise, and the general
mode of relating to customers structures the settings in which families meet their needs for consumer
goods.
In addition to being linked to several formally organized settings such as work and schooL most
families are linked through informal association to the settings of other families. A kinship network, a
neighborhood network of social support, or a network of recreational association can each be concep-
tualized as a set of family settings which are linked to each other through interaction. For many families,
the quality of family life or the level of family well-being depends substantially on being linked to other
families in a way that provides satisfying associations, mutual aid, and socio-emotional support.
Bronfenbrenner states "the. ecological environment is conceived topologically as a nested arrangement of
concentric structures, each contained within the next," "like a set of Russian dolls" (1979:22, 8). This
perspective is very consistent with my own work on communities where I conceptualize a community
as a concrete small scale context in which human beings carry out the activities of their daily life but
which is shaped in important ways by forces operating in the larger society and the world economy
(Bowles, 1981, Bowles, 1982). In my Little Communities and Big Industries: Studies in the Social Impact of Cana-
ditm Resource Extraction (1982), for example, I argue that patterns of life in many small Canadian com-
munities are shaped fundamentally by general patterns in the resource industries on which they are
based. These industry wide patterns are, in turn, shaped by the world wide politicaL economic and
technological patterns which shape demand for the resources in questions.
My previous work on social impact assessment, like the work of many others, emphasize the ways in
which communities are impacted by development and presents the· community as the context of
individual experience. We can further expand our understanding of the social and behavioral impact of
natural resource development by analyzing families as ecological settings which are 'nested' or located
in communities and as settings within which individuals carry out much of their daily lives.
While the family is only one of several settings in which individuals participate, it should be an
important focus of attempts to understand well-being because it is so central in the life experience of
people and because it is the context in which so many other forces come together. As Lillian Rubin
observes in her study of working class family settings, it i~ in families that "the stresses and strains of
everyday life are played out -that children are born and brought to adulthood; that women and men
love and hate; that major interpersonal and intrapersonal conflicts are generated and stilled; and that
men, women, and children struggle with demands from the changing world outside their doors"
(1976:5). A family exists and lives 'out its daily life in the context of a particular community. While
families do travel and do move between communities, and at ai:ly point in time the experiences which a
particular family has are bounded by the community in w~ich it lives. The opportunities available in
the community are those from which most families will choose most of their experiences. The resources
available in the community are those which a family must use to meet most of their requirements. Most
·of the other individuals and families with which a family and its members maintain face-to-face associa-
149
tion on a regular basis will be found in the same community. Especially in small and remote com-
munities of Alaska and Canada, the community is clearly the social environment within which families
are located.
It is now time to address the characteristics of rapidly growing resource-based communities and to
analyze such communities as the ecological contexts in which families live. The material presented may
not be descriptively accurate for certain Alaskan communities, but the general framework advanced
should be applicable in different types of communities.
Each family typically occupies and operates a household that serves as a "base camp" from which
members· depart for other activities, to which they return for rest and nourishment and where they
organize much of the equipment and supplies they use. Organizing a household involves finding a
dwelling and procuring the goods and services necessary for regular operation. In small and rapidly
growing communities the housing stock is often limited and retail trade outlets are not well enough
established to meet household needs on a predictable basis. While a bungalow and a shopping plaza are
necessary for family well-being, the uncertainty which many families experience in establishing and
operating households, and the time and energy which they must spend in doing so are important
sources of stress in rapidly growing communities.
Work settings in expanding resource industries frequently impose demands on and create
experiences which have consequences for family well-being. The urgency of construction and of pro-
duction start-up may result in long and irregular hours of work. Work may be remote from residence
and require extended periods of absence from home. Working conditions may generate tension and
fatigue. While pay is high during many periods, frequent moves and cyclical patterns of employment
leave many families with limited and fluctuating resources. The boom and bust pattern of resource in-
dustries can create a sense of insecurity which affects outlook even during good times. The "long arm of
the job" reaches into families everywhere and the conditions of work described here are characteristic
of some jobs in all parts of the society. I believe, however, families which live in resource communities
are particularly likely to experience stress because of the time constraints which work imposes on fami-
ly members and because of the psychological experiences generated in the workplace.
Features of service delivery in rapidly growing communities frequently make it difficult for families
to meet their needs. There is rarely enough front-end funding to establish services before population
growth occurs. As a result, in early stages of development there may be inadequate space and staff for
schools, limited and irregular medical care, and few social and psychological services. As the need for
services runs ahead of the supply, difficulties are exacerbated by overload on staff. Some families may
be unable to get services they need immediately. Others may experience anxiety for fear that they will
need services and be unable to obtain them. In short, rapidly growing resource communities may fre-
quently be environments which do not adequately provide for needs which families ordinarily meet
through formally provided services.
Each family usually maintains some network of association with other families, whether these
associations are based on kinship, neighboring, friendship or common membership in associations such
as churches. Many families in resource communities will have recently moved and left developed net-
works behind. While some associations can develop quickly and new neighbors can be helpfuL exten-
sive and enduring supportive affiliations emerge only over a longer period of time. Because of the
characteristics of a rapidly growing community there are likely to be a relatively large number of
families which are not well supported by local social networks.
In summary, the community is the environment within which family settings are located. The family
is impacted in large part through its connection to other settings. Rapidly growing resource com-
munities are often environments within which it is more difficult to meet the needs present in family
settings and which introduce more stressors into family settings. Because of this, we can expect levels of
family well-being to be, in general, somewhat lower in rapidly growing resource communities than
they are in certain other types of,communities.
I was asked to address the problem of family violence and I should now return and address that topic
at a more immediate and practical level. In any incident of child abuse or spouse abuse there is some vic-
tim who suffers harm. It is best to consider any single incident of family violence as part of an ongoing
dynamic, and hence, to conclude that unless there are changes the victim and other family members are
at risk forfurther abuse. Hence, there is an urgent and continuing need for personnel who have the
ISO
responsibility of intervening in cases of family violence and for programs which improve identification,
reporting, and treatment. It is helpful in the short term to identify children who are at risk of abuse and
to provide services which protect them. It is helpful in the short run to help families learn how to cope
with the stresses placed on them by the environment in which they live. Such programs and activities
by themselves, however, are not enough. They are like continuing to repair a TV set which, because of
the way it is designed, continues to break down. A fundamental approach to the issue of family ·
violence needs to start with basic conditions which generate stress.
· Earlier in this paper I characterized family violence as the tip of the iceberg, that is, as something
highly visible which rests on a less visible but equally important structure. The submerged part of the
iceberg is made up of low levels of family well-being. If family patterns are such that needs are not met
and that family members are frustrated, discouraged and threatened then family well-being is low.
Compared to families where needs are met and there is a positive ambience, we can expect higher rates
of violence and other pathologies. An effective approach to family violence involves understanding the
whole iceberg.
In this paper I have developed an ecological perspective which locates the family as a setting in the
context of practical limitations and objective stresses imposed by the community environment. I have
probably overstated the impact of external constraints and understated the importance of internal
dynamics and cultural values. I have done this for the purpose of clearly communicating two points
which should be prominent in every study of the social impact of natural resource development. First,
one of the costs of resource development as it is usually executed is low levels of family well-being and
the associated social problems. Second, low levels of family well-being can be attributed in part to iden-
tified patterns in work settings and community settings which result from the high priority put on
economic costs and the low priority put on social costs. ··•••
These points form the basis of a policy position. Family violence, other forms of family pathology,
and low levels of family well-being should be explicitly recognized as among the true costs of develop-
ment. Effort should be devoted to formulating development strategies which reduce these costs.
151
References
Bowles. Roy T. Little Communities and Big Industries: Studies in the Social Impact of Canadian Resource Extraction.
Toronto: Butterworths, 1982.
Bowles. Roy T. Social Impact Assessment in Small Communities. Toronto: Butterworths, 1981.
Bronfenbrenner. Urie. The Ecology of Human Development: Experiments by Nature and Design. Cambridge:
Harvard University Press. 1979.
Freudenburg, William R.; Bacigalupi, Linda M., and Landoll·Young, Cheryl. "Mental health conse·
quences of rapid community growth: a report from the longitudinal study of boomtown mental
health impacts." ]oumal of Health and Human Resources Administration, Vol. 4, No . .3:.3.34-.35.3.
Friedman, LeeS. and Wildavasky, Aaron. "Improving the quality of life: television repair." Technology
In Societu. Vol. 1:.329-.3.38.
Garbarin~. James. Children and Families in the Social Environment. New York: Aldine Publishing
Company. 1982.
Rubin, Lillian Breslow. Worlds of Pain. New York: Basic Books, Inc., 1976.
152
Health and Human Services Planning in Impacted Communities
Judith A. Davenport
Planning for health and human services in rural energy boom towns has been difficult. as with plan·
ning in general, for some of the following reasons:
(I) Conservative attitudes toward human services;
(2) Planning is viewed in a negative sense;
(3) Lack of planning skills relative to human services. Traditionally educated planners are not
trained in planning for human services;
(4) Resistance by communities because they may feel that the development. and therefore the plan·
ning, has been forced upon them;
~5) A "business as usual" attitude. The regular delivery system and infrastructure can handle any
problems which might occur; and
(6) Historically. planning has taken longer in rural communities.
Although health and other human services assessment and planning have to be viewed in detail and
in the context of individuality of communities, there are some generalizations concerning human ser·
vices which seem evident. Assessing human services needs appear to be extremely difficult for some
communities. Through the years of government involvement with human services. communities have
been assured certain services and the need to assess their effiCiency and effectiveness has not really been
required for program existence. Since the population of these communities has not fluctuated to any
great extent, the "business as usual" stance seems appropriate for most service providers and human ser·
vices planners.
Another problem expressed by communities centers around the usefulness of the Social Impact
Assessment (SIA) itself. Although these SIA documents provide good data on demographics, human
services planners have to translate the information into something usable for specific program planning
for prevention and mitigation. For example, knowing that the possibility for increased strains on the
mental health system may occur does not alert the program director about possible ways to tackle the
problems. Not being more precise about calculating the numbers qf workers and their dependents who
will be coming into the community is another source of concern. Companies and state planning
authorities have educated guesses and ways of calculating approximate figures with specific informa·
tion which has been received by the potential employees, but many times these are either over· or
under-estimated.
One of the first things communities who have been successful in dealing with impacts have stated is
that they have to define their own minimum standard of quality of life. Certain questions of communi·
ty citizens have to be asked: What are the values the community cherishes? Will the community
tolerate child abuse, but not drunk driving? What are the community priorities? To develop the answers
to these questions, communities must involve.as many individuals and groups as possible. One of the
problems communities face in gathering input in decision-making is that they fail to find adequate ways
to get the citizenry involved, or that they may ch9ose to not involve certain people in the decision·
making process. The one person or group who has been deliberately left out may be the one who can
cause the demise of a particular project or plan.
153
One of the best ways of obtaining community involvement in assessment and planning is the com·
munity forum.' Most planners of forums take into consideration the need to plan these meetings at
times when people can attend, such as after regular working hours and not in conflict with other com·
munity events. However. less publicized maneuvers such as recruiting volunteers to provide transporta-
tion to the elderly and others without means, providing accessible surroundings, and baby-sitting ser-
vices must be considered. One frequently used reason for both spouses not attending meetings is the
fact that someone has to stay home with the kids.
Simplified questionnaires are one means of establishing priorities for all types of planning. People in
impacted communities feel like they are studied to death anyway, so prudence in the amount of time
required to complete a questionnaire is imperative.
Using local service providers and community officials as key informants can provide planners with a
perspective which the general citizenry does not have. The lay-person may not really know the
incidence of child abuse, alcoholism, or truancy. What is perceived as a problem by the citizenry,
because of sensational press or rumor, may in fact be a limited problem. However, the community as a
whole may be inclined to put more fi~ancing into certain perceived problem areas than in areas
documented as being a definite problem. A meeting of the minds during a forum, after a community
survey or other forms of assessment, may be helpful in educating the citizens, as well as the providers,
as to what the citizens want to focus on in their community.
Another area of assessment centers around the community's usual way of coping with problems. For
example, is there a process of problem resolution or are programs just started because money is
available and it is felt that by pumping more money into the traditional program areas the problem can
be mitigated?
From my experience, a well-developed human services plan should include, but not be limited to, the
following suggestions:
(1) Educate the citizens as much as possible and use them as resources for planning. Each community
must define its own minimum standard of quality of life and learn how to conduct needs
assessments which could help them define this standard.
(2) Planners in rural booming communities should be sensitive to rural institutions and values
because they have evolved to fit their time and place. For many community residents, they
represent a positive alternative to urban values.
· (3) Human services planners should be patient and flexible. A more visible plan will be developed if
total involvement from all those concerned is sought. Planners should not be so wedded to any
one plan that they cannot give it up when it's appropriateness is no longer apparent. Various
scenarios need to be developed before one is found that really works for a community. Planning
for more than two years may be fruitless, as factors can change rapidly causing totally new plans
to be required.
(4) Close cooperation and coordination between communities, state government and federal
government is a definite necessity: Communities need to involve all segments of public and
private organizations in information-gathering and in decision-making. Many impacted com·
munities have been hampered by state agency rules and regulations which do not fit their
burgeoning needs. Some states, like Wyoming, have adopted a plan whereby money for human
services at the state level is filtered to local "Human Services Boards" for allocation of local
funds. .
(5) Task forces should be set up in each community with defined responsibilities for addressing
specific issues. No one person is an expert in all areas and division of labor is important when
there are limited resources. People should be held to time frames and assignments.
(6) Communities may need outside help in planning and implementing plans and programs. The use
of consultants or experts with similar experiences can be extremely valuable. It is important,
however, to use consultants who take into account the community's values and perspectives. It is
easy for consulting firms to develop models for management of human services which tend to
'For 11 more detailed oliswssio11 of <orulurtillg et•aluatiorz omd perfim11i11g 11wls assessmmts i11 b(I(Jm tow11s sec, {or example, Olso11, .judith K .. "Needs
Asscs;mwtawl Program Et•aluatiorz i11 lmpafted Cmmumities," 1111d Hawki11s. Midwcl R .. "Dy11ami< Needs Asscs;mmt: A11 Er.mwlc ... /11 11re
Boom Tow11: Problems 1111d Promises i11thc E11crgy Vortex. edited by ]oscplr Dat•mJ•ortawl judith A. Davcrwort. Lmmrie. W!wmi11g: U11iversit!' ,,f
W)1omi11g Dq~<rrhllmt vf Soria/ Work, I "1/31).
154
avoid the personal choices, values and particular needs of rural Western communities. The tools
for planning in rural areas need to reflect rurality, rather than urban tools narrowed down to
scope for rural needs. Sometimes communities are reluctant to use the technical expertise of state
and regional offices. These people do have something to offer as long as communities realize
they are the owners of the community plans and are responsible for how the plans are
developed. Communities should not close themselves in a shell and feel that other people who
have experienced :imilar problems in other areas of the country cannot provide them with infor·
mation and planning skills which would be valuable and would save them time in the long run ..
(7) Whatever plans are developed need to focus on prevention as much as possible. Planning mitiga-
tion strategies is a lot easier because treatment strategies are what most of us in the human ser-
vices are trained to provide. Questions need to be asked concerning how much the community is
willing to finance prevention as well as treatment. It is common for people to laud prevention
strategies but taxpayers and industry appear to be more willing to pay for treatment services; this
is partly because providers cannot furnish them with significant statistics on the cost-
effectiveness of prevention. Communities can seek out this type of information from various
resources and may want to contact university faculty for assistance.
When developing prevention or mitigation strategies it is important to try to ensure the con-
tinued existence of informal systems in the community (such as the family and church). This can
be difficult ~hen more formal systems are developed to meet emerging needs.
(8) A complete inventory of current programs and services and how these can be enhanced and
enriched before developing-a new service is essential. New and more innovative forms of ser-
vice delivery may have to be implemented. Traditional forms. of service may not meet the
challenges of an expanding and diverse population. Models for ideal services delivery could;,be
developed such as floating positions from state agencies which permit positions to be filled in
certain locales only when needed. Plans need to be flexible and the different scenarios which
have been developed as well as the plan chosen will have to be constantly monitored.
(9) Human services providers and their clients have to become more political in drawing attention to
their needs. They have to learn how better to sell their programs and services to the general
public and potential funding sources. In addition, they need to become more precise in
evaluating human services. In becoming more politicaL non-human services people need to be
used in planning and advocacy roles for obtaining facilities and services. The charge of vested
interest is less likely to be heard when non-human services leaders in the community are
spokespersons for human services.
(IO)The nature and extent of problems necessitate an increase in in-service training and continuing
education. For example, one area of expressed need appears to be that of stress management on
the job. Other possible training areas would include innovative approaches to service delivery
and materials responding to new needs and problems identified by the community. In-service
training and continuing education could be provided in a variety of stimulating and creative
ways.2
( ll)Coordination and cooperation among local agencies is essential. Formal coordination councils
may need to be established where none exist. Multifunctional centers can prove to be effective
and efficient in· providing human services.
(12)Stresses in the community are bound to occur and the community will not be able to prevent or
even mitigate all of them. From my experiences, once communities internalize this fact, the stress
level for planners seems to go down.
(13)Money does not solve all of the problems. Without sufficient planning tools and sensitive plan-
ners, the money allocated will not be spent wisely.
Research in the area of health and health care planning in boom towns has been scant and the
literature does not provide us with a s[obal perspective of the problems as much as we would like. The
following comments and views have been generated from the literature, my involvement with health
personnel and planners in eleven sta!es in th~ West, and with government agencies at the locaL state ,
. 'See, for example, Davmport, Joseph a111l Daveuport, Judith A .. "Simzdatio1r-C.mriug for Boom Towu Hzmwu Senrire Workers." p,,,,cr pre~mted at
the Sixth Natioual /ustitutc ou Soria/ Work iu Rural Areas, july. I <JIJ I atSI. Helma /~la111l, South Caroliwz, a111l Otwmport. fo~ql/rawl Daumporl,
judith It "Gmlimzi11g E.,/uralioJl ill Au Age of U11rcrtailll!f: Meeliug Hzm1•111 Senria~ Nwl~ i11 lnwartcd Commzmilie~." Paper I'TNilled allhe
Sweutlr Naliowd l11slitute 011 Soria/ Wo1-k ill Rural Arws, ]ul)t, I <.J/32, Dubuque. Iowa.
155
a.nd regional levels. More research needs to _be conducted, however, to give us a clearer picture of the
· -common threads in the health field in order for us-to provide more adequate health planning. ·
Health issues in the typical booming community appear to be in three main categories (excluding
health issues related to hazardous matedals): (I) health problems associated with stress; (2) health prob-
lems related to utilization of services, which include lack of adequate personnel and facilities; and
(3) planning problems as they relate to health.
The first category addresses stress as a key factor in major mental health problems and their ~elated
somatic problems. It is important to emphasize that stress is not just a problem effecting newcomers.
The Holmes and Rahe "Social Readjustment Rating Scale" was used at the Northern Wyoming Mental
Health Center to study the stress and mental health-related consequences of energy-related impact on
the newcomers and oldtimers in their catchment area. The results of the study indicate there were
moderate to high stress levels in the community generated not only by the amount of change in
people's lives, but also from the needs and frustrations produced by deficits in community services, the
demands of adjusting to life in a new community, family needs, plus a variety of other stressors stem-
ming from a boom town situation.
"When the people in an impacted community display high levels of stress in their lives, a predictable
increase in health problems is likely to develop. Such problems/illnesses will manifest" themselves
through job-related deficits like absenteeism and high accident rates, and in terms of increased demands
for medical and mental health services. Those inflated needs for medical and mental health care can
threaten to overwhelm or overburden the already stretched services training to keep up with the
demands of rapid population growth."J
The problems in this category take our discussion into the next category involving utilization of ser-
vices and lack of adequate personnel and facilities. These small rural areas, in generaL have not acquired
the more specialized health professionals and services enjoyed by more urban communities. Long-time
resident physicians in many of these communities are approaching the age of retirement and are want-
ing to slow down their practice. For example, the average age of doctors in Wyoming is ten years above
the national average. There is, of course, a lack of specialists in these communities as there are in other
rural areas of the country. Attracting new physicians to boom towns can be difficult for the following
reasons: (I) the high interest rates to build clinics or offices; (2) housing shortages; (3) lack of support ser-
vices ·for patient referrals; (4) unattractiveness of community to spouses; (5) recruitment efforts which
come too late; (6) younger doctors want more time for leisure than a boom town might allow; (7) long
distances to well-equipped medical centers, specialists, and colleagues; and (8) it may be difficult to
recruit physicians to an area which has a "boom/bust" cycle built in. The doctor may have patients dur-
ing the boom but does the long·range outlook provide for continuation of the needs?
Some communities provide physician services from other communities. This practice can fill a void
but can also be inconvenient and even dangerous due to hazardous weather conditions in the Rocky
Mountain West. Physician Assistants have been used to provide medical services in some of these com-
munities and physicians services have been sought through the Health Services Corps .. However, some
of the corpsmen have visited these bOoming communities and have rejected them as places to live.
Health personnel such as nurses, pharmacists, health educators, and other health specialists are also
scarce. These professionals may be as hard to recruit as the doctors. The wage scale for nurses ·is
extremely low for the superinflationary impacted communities. One pharmacist in a boom town in
Wyoming dosed down his pharmacy and retired early rather than be subjected to calls at all hours of
the night to fill prescriptions. Public health specialists who inspect public buildings are inundated due to
increased day-care facilities, restaurants, schools, and sewer systems. They also have to be involved
with the health hazard investigations relating to the environmental impact statements coming from the
energy indu~try. . .
Utilization patterns are another issue relevant to this category. As indicated previously, there have
been a large number of elderly in these 'communities prior to impact. With the influx of younger
workers and their families, there are changes in patient load toward cases involving family planning,
venereal disease, pediatrics and obstetrics. Many physicians express a concern that patients are visiting I 1 . I
'Weis;:, Robert. "Stress 111111 Mmt11/ Health in tl Boom Town." Boom Towns 11111/ Hum1111 Servias. edited by joseph Dt~vmport. Ill tmd Judith Dt~vm
porl. ~ltl::{e 3!:1. Ltramie, W!IOIJ!illg: Uuiversily of Wyomiug Oqltlrtmmt of St•Lial w,,k. I !:17!:1.
156
them with social and mental problems because there is a tremendous waiting list at the mental health
centers.
Emergency rooms at hospitals will be used more frequently because ·people do not want to wait
several hours to see a doctor in his office or clinic. They cannot afford to stay away that long from their
high paying jobs and can afford the extra cost of the emergency room. Also, many physicians have
been forced to limit their new patients and newcomers have to resort to emergency room services.
Most companies provide some type of medical services for small industrial accidents on site. but health
personnel report increases in numbers of cases. related to industrial accidents, as well as accidents
especially related to increased alcohol intake.
Hospitals are ill equipped to accommodate the new patient loads. Certain types of services have to be
expanded such as the obstetrics wards and newborn nurseries. One North Dakota physician stated that
it is routine for his hospital to place women in labor in the hospital corridors. Ambulance services are
usually inadequate in number of vehicles and up-dated equipment. Certain difficult cases still have to be
transported over long distances to other health centers. A problem related to the administration of
hospitals concerns bill collections; due to the transient nature of the population, many health care bills
go unpaid. In general, health utilization is crisis-oriented with less time and emphasis being placed on
prevention strategies.
Another important dilemna centers around who is responsible for planning and/or financing the new
services needed in a given area. Is the financing to be the role of government. industry, or both? If it is
maintained that i~ should be government's role, which government? There has also been a tendency to
use urban planning tools for rural planning but many health planning models do not fit rural impacted
communities.
The preceding categories of problems appear to be overwhelming to many boom town residents.
However, the following are some suggestions as to how communities could better prepare for and
mitigate health-related problems. Communities may want to: · ..
(I) Develop task forces on health to assign tasks and monitor progress.
(2) Develop flexible, innovative programs, especially geared toward prevention and health educa-
tion, including the promotion of self-care. The use of natural helping systems and voluntary
organizations should be explored in this effort.
(3) Use more physician assistants and nurse practitioners, taking into account the biases and
obstacles in doing this.
(4) Start recruting physicians early in their residencies. The recruitment of Westerners or rurally-
oriented people should be encouraged because they are familiar with the lifestyles and environ-
ment.
(5) Provide more support services such as social and mental health services for physicians and other
health providers.
(6) Encourage hospitals to rent space to physicians to establish their practices.
(7) Adjust salaries of health and human services personnel in the public sector to accommodate
superinflationary economy and to help reduce the "burnout syndrome."
(8) Provide adequate respite time and continuing education for those involved in health care.
(9) Work toward national health policy revisions which would benefit rural and impacted com-
munities.
(IO)Work with industry to promote a campaign for better health services utilization and encourage
companies to take a more active role in providing health services or in providing funding for
such services. Governments could give extra tax incentives to companies for providing direct
funding for such services.
(II)Use extension services to provide health training.
It is important to remember that there are no pat solutions to these problems. However, with the
attitude of developing solutions which fi.t individual community needs and solutions which are
equitable, more of a manageable plan can be obtained.
We are now better able to deal with the negative aspects of growth due to the recognition and sen-
sitivity to proposed problems by energy company officials, governmental entities, planners, and the
general citizenry. We have learned from the boom towns of the past and present. Managed and con-
trolled growth is. the key to more positive impacts.
157
Research on the Impact of Resource Development on Women
Katie Hurley
There are two primary categories of research which I would like to discuss today. One is field work,
involving researchers who interview people and explore their perceptions, ideas, values and opinions
about a particular topic. The other is the area of baseline data, involving the collection and compilation
of enough basic information about a particular item to enable researchers and others to analyze the
effects of things on the particular item under consideration, for instance, the effect of resource develop-
ment on women.
In Alaska there has only been one major effort to compile and analyze baseline data specific to
women. In 1977, in response to a specific mandate from the Alaska State Legislature, Dorothy Jones et.
al authored A Prelimintzry ~tudy: The Status of Women in Alashz. The initial cost estimate of the study was
$200,000 but it was funded at a much reduced level of $25,000. As so often happens with projects that
are related specifically to women there was a great deal of volunteer effort that went into producing
this report and it has been used extensively in the ensuing years for research, planning and advocacy
efforts. Despite the fact that it was "preliminary" it has never been updated or expanded beyond the
original areas of education, employment. mental and physical health and the justice system. There has
never been a thorough needs assessment of native and minority women in the state, nor has there been
any comprehensive effort to explore women's economic status in Alaska. There is an urgent need for
this information in a time of such rapid change and extensive development. The Commission on the
Status of Women has advocated long and hard for the legislature to appropriate sufficient funds to
maintain such information, but has until now been unsuccessful in convincing either the administration
or the legislature of this need. We have found the area of employment opportunity to be one of the
hardest hit by the lack of current data on women. Companies such as Northwest Alaska Pipeline Com-
pany are able, in the absence of such data, to secure approval for affirmative action goals which are
totally inadequate, "goals" which are so low as to ensure unqualified success in reaching them with no
effort at all. Perhaps the only real benefit which the delay in pipeline construction may provide is ample
time and opportunity for Northwest Pipeline and any other interested company to either conduct the
necessary studies on their own or to profit from the Census data available in 1983 which wilL for the
first time, include women in the occupational categories from which they have been excluded for so
long. {In the 1970 census women were included in only 26 of the 42 jobs groups which were analyzed
in published reports.) The only other effort to compile baseline data on women was a joint effort spon-
sored by the Commission on the Status of Women and the Alaska Department of Labor. "Women in
Alaska's Labor Force" was produced in May, 1980. It did not collect any new data. It merely took what
was already there (but inaccessible) and made it available to planners and other interested parties.
Unfortunately, the Labor Department has never picked up on this as a regular project, so there is no
available update on this material nor is there any plan to produce one.
With regard to the area of field work or primary research, I decided to explore this in preparation for
today's discussion and so I did some research of my own. Of course, I am not a researcher in the
technical sense of the word, but as director of the Commission I am definitely a user of information and
need to be able to find facts and figures that relate to the status of women. What I found was not ter-
ribly encouraging. When I asked for studies done specifically on the effect of resource development on
158
women I was given one or two references which might be helpful. One of the references was a
newspaper article which ran in an Anchorage newspaper several years ago!! Not what you might con-
sider serious research. While I have the impression that had I been looking for research on the impact of
development on wildlife, on the environment or on the economy I would have found volumes of data,
the material on people, specifically on women, was sorely lacking. I understand that the Bureau of Land
Management has been conducting needs assessments of communities where development is planned or
occurring, and of course many of the issues addressed in such studies will include some women's con-
cerns. Exploring the impact of development on such areas as family structure, family roles, and cultural
continuity, will include some women and their concerns and needs. Research done on the Fairbanks
experience or on Seward's response to oil development such as that conducted by ISER (Institute of
Social and Economic Research) and others does in some instances address the specific concerns and
situations of some of the women involved. But here, as well as in the earlier topic I discussed, I believe
the lack of baseline information or specific studies reflects a basic attitude toward women which
shouldn't be surprising as it permeates the predominant society in which we all developed. Women are
not yet considered or treated by research efforts as they should be. That is, their status~who they are,
what their needs and concerr:ts are, what impact will do to their lives and to their work-is not yet ac-
corded a serious enough place in the questions posed by researchers, planners and policy makers.
Certainly this is changing. At the ~ommission we consider ourselves one small part of a very large
and unstoppable effort to secure for women, arid for people in generaL their proper place in policy deci-
sions. This is one reason I am so pleased to be talking to you all today about this very issue. I would like
to offer you the challenge of beginning to make this kind of information available to the policy makers
on a regular basis. I hope some of you may be responsible for seeing that in all needs assessments,
women are treated as a singular and important reference point from which research questions are
posed. I hope you will join with us in our effort to persuade the administration and the legislature that
we need studies on the economic and employment status of women in Alaska so that affirmative action
programs will have some real meaning. This year the Commission will be contracting for the first phase
of a baseline data proj~ct on the status of Native women in Alaska and we hope to secure legislative
approval to continue that project next year as well. We believe that there is a great need for such infor-
mation in Alaska and hope that you, the professionals in the field, will use your influence to see that the
viewpoint of and impact on women is seriously addressed in the studies and projects on which you help
pose the research questions.
159
Introduction
The Socioeconomic Impacts of Resource Development on the Elderly
Terry L. Haynes
Elderly residents of energy boomtowns and other communities affecteq by resource development
comprise one group about which little has been documented in the social impact assessment literature.
The available information is in many cases speculative, inconclusive and even contradictory, but it does
suggest that·older persons ordinarily have little to gain and much to lose in a boom economy. This
paper outlines some specific problems experienced by the elderly in areas where large-scale develop-
ment has taken place or is scheduled to occur, both in and outside of Alaska. On the basis of this slim
data base and my own field studies in Alaska's Upper Tanana region, I will propose several general
strategies for mitigating socioeconomic impacts on elder Alaskans, which may result from resource
development activities in the 1980s.
Papers by Larson (1980) and Davenport and Davenport (1980) concisely describe the impacts of
energy development on the elderly in western boomtowns and do not differ markedly in content from
this presentation. With the addition of data from socioeconomic studies conducted in Alaska during the
Trans-Alaska Pipeline (TAPS) era, however, this overview brings the issues closer to home and perhaps
in a context more meaningful to an Alaskan audience. Furthermore, impact mitigation strategies in
Alaska must be particularly sensitive to factors which, collectively, may be less critical in other states
(e.g., the absence of local government in some small communities, ethnic and cultural diversity, and an
inadequate service infrastructure in much of rural Alaska).
In this presentation I am defining boomtowns as those communities that experience rapid, short-term
economic and population growth resulting from a major construction project or natural resource
development. Examples include construction of hydroelectric power plants in the Southwest, oil shale
development in Colorado and open-pit mining in Montana. The problems confronting elderly residents
in boomtowns vary from place to place but usually include a variety of economic, social and human ser-
vices impacts.
Economic Impacts
High rates of ·inflation accompany large-scale projects in nearly every case documented in the
literature. The basic economic principle of supply and demand accounts for this: boom communities
characteristically have sufficient goods and services, in most cases, to meet the needs of the existing
population. An influx of newcomers, many of whom will be earning high wages on the development
project, compete with local residents for available goods and services. Merchants may raise prices in
their eagerness to capitalize on this economic windfall. Retired persons and other consumers with fixed
incomes are the first to feel the pinch, since their limited purchasing power is further eroded when
prices of essential goods and services rise. Two-thirds of the senior citizens surveyed in one Colorado
boomtown, for example, cited inflation as one of the their most serious problems (Larson 1980:35):
Housing shortages are common in boomtowns, and newcomers can afford to pay higher rent than
local residents (e.g., Primack 1980:8-9). Senior citizens often own their homes and as a group may not
be so directly affected as are other residents. But the economic boom may result in higher property
taxes to generate income for municipal services, and the cost of home maintenance is likely to rise
160
(Davenport and Davenport 1980:30). The problems don't stop here. In r~sponse to a housing shortage
in one small town in Georgia, near the site of a nuclear power plant construction project, older
homeowners rented rooms to young construction workers as a means of supplementing their incomes.
As expected, conflicts often arose when the young renters-whose interests and values differed from
those of their landlords-disregarded their rental agreements and. were asked to leave (Fennell
1977:410).
A five-year study conducted in Illinois compared the economic status of older persons in two rural
communities. One town was experiencing a major construction project, while the second, though
similar to the first, was not affected by development. The study found that: (1) elderly residents in the
industrializing community had the smallest increases in dollar income of any age group in either com-
munity during the five"year period; and (2) retired persons and older persons with jobs in the
industrializing community had substantially lower raises in dollar income and percentage increase than
did their counterparts in the control community. In this instance, industrial development resulted in a
decline in the economic status of older community residents. The study did not assess ways in which
the development might have had other kinds of positive or negative effects on the elderly (Clemente
and Summers 1973).
The elderly'who operate businesses or have other jobs in boom communities face problems com-
parable with those confronting retirees, as a boomtown impact study in Colorado indicates:
Those who own .or manage businesses may lose customers or even have to close their
businesses because they cannot compete with the mass-volume chain stores and more
modem shops that are opened, or because they cannot adjust their style of business to the -
demands of the new population. As employees, the elderly may not be able to compete with
younger, more skilled migrants, and older public officials, police officers, etc., are often
replaced with younger persons who have had work experience in larger towns (Moen et aL
1981:77).
Social Impacts
As bad as the economic impacts may be, older boomtown residents are often more concerned with
social impacts resulting from population growth and a faster pace of life. A larger population brings
more traffic and probably more noise, crime and violence-all of which pose obvious problems to the
community at large and especially to the elderly (see Primack 1980:10; Moen et aL 1981:79). The elder-
ly may become more isolated and find their usual network of informal resources disrupted or destroyed
(Brown 1977:5), as community residents who otherwise would visit and aid them become intensely
involved in the economic boom and adopt new values consistent with the boom economy (Bates
1978:6). The situation in one Montana boomtown illustrates the problem well:
Over the years the community had evolved very effective and satisfying ways of ensuring
that the elderly members were looked after or contacted frequently, were made to feel that
others in the community cared about them, were helped to develop meaningful roles for
themselves well beyond the point where they really felt they could make substantial con-
tributions to community life .... As members of the community became more and more
busy with their occupations and businesses and as more and more people worked and
worked longer, the informal life-support systems of the aged began to break down. The
general stress of this situation began to lead the younger people, who had helped to make the
life-support system for the elderly work, to tum inward on themselves and on their
immediate families, and to concern themselves primarily with the impacts of change on their
own individual and familial ways of life. In effect, this change led to a kind of abandonment
of the elderly, not by conscious design but because there were more and more reasons and
excuses (attributable to the faster pace of life being created) for not being able to participate
in the· informal life-support system for the elderly. As a result, the elderly tended to be
neglected as well as to be squeezed financially. This state of affairs b~gan to prey on the
consCiences of a number of people in the area. The breakdown in the informal life-support
system of the elderly was attributed to the immigration of the construction workers and
other newcomers (Gold 1979:121).
161
Human Services
The pressures imposed on human services in boomtowns compound the other problems with which
older persons must contend. The inadequacy of health and ?Ocial services in many rural communities,
especially in the areas of geriatric medicine and counseling, lessens their ability to cope with a rapidly
expanding population (Davenport and Davenport 1980:31). Available services frequently are
redirected to younger, transient and short-term residents (Larson 1980:36), rather than consider the
special circumstances of the elderly.
Another important consideration is the reluctance of some older persons to seek assistance for their
needs from formal helping programs and agencies. Many older rural Americans, for example, have con-
servative values and resist action that might threaten their independence or increase their reliance on
government or "give-away programs". Consequently, a move to establish subsidized housing for the
elderly in one Colorado boomtown failed because no one would admit to needing financial assistance,
although most elders knew someone who met the eligibility requirements (Moen et al. 1981:78).
Elderly Alaskans and the TAPS Experience
Studies of Alaskan communities directly impacted in the mid-1970s by TAPS construction identify a
range of difficulties that confronted older persons living along the pipeline corridor. In Fairbanks, for
example, the major problems identified in one senior citizen survey included inflation, housing,
transportation, medical care, safety and security. Although these affected persons of all ages, several
reasons were given for their having had a greater impact on the elderly: (1) The elderly generally had
lower and often fixed incomes, which did not keep pace with pipeline-related inflation; (2) life styles,
poor health, and the absence of public transportation prevented many senior citizens from playing
active roles in public hearings and policymaking directed to their concerns; (3) limitations of age, health,
and income collectively restricted the range of alternatives available to senior citizens for coping with
imp.ad problems; and (4) although an adequate number of agencies and programs. directed at meeting
the needs of older people were operating, at least during the latter stages of the impact period, they
were poorly coordinated and lacked effective referral systems (Dixon 1975 and 1978).
Another study focused on the Native (Athabaskan Indian) population in Copper Center during the
TAPS project and devoted some attention to the elderly (Reckard 1979). Some changes occurring in
that community were partially a consequence of the Alaska Native Claims Settlement Ad of 1971 but
became more pronounced during pipeline construction. For example, the influence of elder leaders
reportedly waned when younger and better educated Natives took charge of managing village corpora-
tions and other economic affairs. Before the TAPS era, elderly Natives were among the few village
residents with stable incomes, which afforded them a certain amount of social status, prestige and
authority. During TAPS construction, however, many younger persons earned high salaries and were
less reliant on elder kin for assistance (Reckard 1979:206). Not only were the elderly left out of this
pipeline prosperity, according to one report, but they also had a more difficult time finding transporta-
tion and assistance with shopping, paying bills and maint-aining their homes (cited in Reckard
1979:180).
A physician and long-time resident of Glennallen, another TAPS corridor community, reported these
and other problems as major concerns among older persons throughout the Copper River valley.• He
noted a direct relationship between pipeline inflation and a decline in the standard of living among
some senior citizens; other residents witnessed breakdowns in their traditionally strong family net-
works when younger members obtained pipeline employment. Increases in alcohol-related prob-
lems-including auto accidents, domestic violence and neglect-affected both white and Native elders,
as did longer waiting periods in stores and at the hospital. On the other hand, some older persons
secured jobs on the TAPS project and derived tangible economic benefits that helped to offset the infla-
tion felt throughout the region.
Senior citizens in Delta Junction, with whom I talked in 1981 about TAPS impacts, complained main-
ly about problems that affected all local residents: dusty conditions created by increased traffic on un-
paved roads; hazardous driving conditions on narrow and poorly maintained roads; inadequate
telephone service; long waiting lines in the bank, post office and stores; and inflated prices for goods
and services. Minor conflicts arose between some local residents and newcomers whose life styles
'Dr. fames Pim11eo 1981: J'Cr,;onal nmmumiwliort.
162
differed from those of longtime Delta Junction residents. As in the Copper River valley, some older per-
sons worked on the TAPS project; and most owned their homes and thus were not seriously affected by
the housing shortage.
The only published information available to me regarding the TAPS impact in Valdez is derived
from a general socioeconomic study. It does not focus specifically on the elderly but concludes that
only short-term problems occurred there, because Valdez had: (1) a "relatively elaborate service and
institutional infrastructure" prior to the impact period;. (2) a positive community attitude toward the
TAPS project; and (3) the availability of state impact funds to bolster service and staffing needs (Baring-
Gold and Bennett 1975). Long-time older residents of Valdez may disagree with this assessment, given
the intensity and duration of impacts in that community.
Elders in the North Slope Borough probably have experienced more continuous change since oil was
first discovered at Prudhoe Bay than their peers elsewhere in Alaska. A recent report prepared for the
Alaska ·ocs Socioeconomic Studies Program describes the dilemna confronting Eskimo elders in
periods of rapid sociocultural change: to a~apt violates certain traditional values, but to reject change
outright lessens their ability to manage it and to perpetuate important traditions to the younger genera-
tions. The power of elders on the North Slope-as was the case in Copper Center-declines in the new
institutional world, which often is not flexible enough to incorporate their concerns. Their power now
appears to be restricted to that associated with being the repositories of cultural traditions and values.
This OCS study also noted the potentially greater vulnerability of middle-aged Eskimos to loss and con-
flict in the course of rapid change, for they participate more actively in two very different worlds but fit
poorly in each (Worl, WorLand Lonner 1981:80-84).
Opposing Viewpoints
Thus far I have painted a rather gloomy picture of what confronts many older persons living in
boomtowns and other communities impacted by resource development. The actual situation obviously
· varies a great deal: some elders may contend with many problems, while others are hardly affected at
all and may actually thrive during the boom period. Some western energy boomtown researchers even
suggest that the elderly may experience fewer problems than other age cohorts as they are more
capable of dealing with changes occurring in their communities.
One sociologist finds the actual evidence insufficient to support claims that the elderly are among the
most negatively affected of all groups in boom communities. Based on his field research, he cites three
factors that offset declines in the economic well-being of older boomtown residents: (1) Some older per-
sons are "set in their ways" and thus have a source of internalized continuity in their lives at a time
when many external changes are taking place; (2) the elderly he knew were well buffered-that is, they
were surrounded by a number of good friends and were not isol~ted; and (3) many elders recognized
the importance of growth to· their communities-it meant they would not become ghost towns and that
jobs would be created for younger residents (Freudenburg 1982:161-162).
A second sociologist and her colleagues concur with this assessment. They found many elderly
residents in two Colorado boomtowns acknowledging the importance of growth despite the attendant
problems, for these reasons: (1) The elderly are accustomed to change and have experienced changes
during their lives that young people cannot imagine; (2) they have endured severe poverty, having
lived through the Great Depression; (3) development raised the standard of living in the community
and created jobs that might reduce the outmigration of younger family members; and (4) some elders
capitalized on the boom by selling land to developers for a good price (Moen et al. 1981:80-81).
Although I cannot agree entirely with these assessments, a very important point is made: we must be ·
careful not to overlook the strengths of older persons .and assume that all changes occurring during an
economic boom will be bad or affect them adversely. Perhaps the worst strategy is attempting to in-
sulate elders from all changes and increasing their dependence upon agencies and human services pro-
grams. On the other hand, to ignore the fact that problems will occur and not be easily dealt with by
vuln.erable older persons is an equally faulty stance. Social impact assessment researchers must assess
both the positive and negative consequences of resource development on older community residents
and not"o_versimplify the situation on the basis of very general field inquiries with community leaders
or a handful of active and affluent senior citizens.
163
Recommendations
Steps can be taken to minimize the number and severity of problems likely to confront elderly
Alaskans in boom communities in the 1980s. These recommendations, and those presented by Larson
(1980) and Davenport and Davenport (1980), can form the basis of socioeconomic mitigation programs
in a variety of settings. Although my ideas are based primarily on research conducted in the Upper
Tanana region and described in a study completed for the State Pipeline Coordinator's Office (Haynes
1981), they are general enough to have applicability to other regions and types of resource develop-
ment. They are not listed in order of importance.
(1) One resolution supported overwhelmingly by Alaskan senior citizens attending the 1981 White
House Conference on Aging in Anchorage addressed the importance of research directed to the
impacts of resource development on older Alaskans, and the subsequent identification of impact
mitigation strategies. Support for such studies can be sought from state agencies engaged in
socioeconomic planning activities, Native corporations, and other local entities.
(2) The Older Alaskans Commission (OAC), which has administrative responsibility for many
senior citizens' programs in Alaska, must acknowledge the special circumstances facing aging ser-
vices providers in boom communities. OAC policy might be amended to make provisions for
impact funding to such programs, if necessary, to ensure the presence of a formal support net-
work for the vulnerable elderly. .
(3) The state and local communities must insist that the developer provide timely and detailed pro-
ject information, so that sufficient lead time is available for planning new arid expanding existing
services. Developments may not voluntarily do so; unless they anticipate having a long-term
relationship with the community or communities to be impacted (as will be the case with the
U.S. Borax mining operation near Ketchikan).
(4} Senior citizens should be represented on community and regional planning and advisory boards
created in response to resource development. Their input is especially crucial for, but often
absent from, environmental impact statements and social impact assessments. Impact mitigation
planning is most effective wheri based on the active involvement of the elderly, and not only by
younger persons with good intentions but whose ideas are not based on documented needs or
concerns.
(5) A skills inventory should be completed which identifies the talents and employment interests of
older persons who are interested in jobs that will be available during the boom. Older workers
should not be discriminated against simply on the basis of age.
(6) Public safety and crime prevention measures must be implemented to take into account the
special needs and concerns of older residents. For example, an awareness program could be
developed by public safety officials working in conjunction with aging program personnel and
senior citizens themselves.
(7) A specified percentage of any tax or royalty revenues derived from the development can be ear-
marked for human services programs and especially those serving the elderly. In cases where
communities lack formal governments or are part of the Unorganized Borough, funds can be
allocated accordit1.g to a formula recommended by local planning boards. The elderly and other
persons who otherwise derive ·few direct benefits from the socioeconomic boom should be
among the primary beneficiaries of such revenues.
(8} An Impact Information Center (IIC), which has responsibility for monitoring development
activities and implementing corrective measures, should be established in the regional center in
the area being impacted. IIC staff should be particularly sensitive and responsive to problems
brought to their attention by senior citizens. The IIC can take the lead in impact mitigation by
coordinating efforts between the developer, the state, and human services providers.
(9) Coordination of aging services with other human services programs must be a high priority in
impacted communities. The idea is not to ignore or to undermine existing informal helping net-
works, but to ensure that afternatives are in place for those whose well-being may hinge upon
their having access to formal services. Aging program staff can perform useful functions by
scheduling appointments for elders at· times when waiting time is minimized, for example, and
by expanding transportation services to facilitate access to community services and businesses at
other then peak utilization hours.
164
. These are. of course, very general recommendations and must be tailored to specific geographic con-
texts and development situations. A senior citizen from Fairbanks recently reminded me of the impor-
tance of developing specific mitigation measures which are based on documented needs and not merely
those areas in which impacts are projected. One example was pointed out at this conference by John
Gilmore. An agreement established between a developer and an energy-impacted community in
western Colorado stipulates that elderly residents are tq be prot-ected from rlsing housing costs beyond
those attributable to normal inflation. The success of this strategy, of course, will depend upon the
establishment of appropriate and effective monitoring procedures.
The elderly are important resources in their communities and are too often ignored in the course of
large-scale development. Contrary to the misguided assumptions of some planners and developers,
long-time community residents are not likely to move away unless given no choice. Instead, they
should be encouraged to participate actively in the boom community and fill leadership roles that may
become available when younger residents are preoccupied with economic endeavors.
165
References
Baring-Gold, Michael and Bennett, Marsha. Social Impact of the Trans-Alaska Pipeline Construction in
Valdez, Alaska. Testimony prepared for the Mackenzie Valley Pipeline Inquiry, 1975. Anchorage:
State of Alaska, Office of Coastal Management.
Bates, V. Edward. "The Impact of Energy Boom-Town Growth on Rural Areas." Social Casework
59:73-82. .
Brown, Bertram. The Impact of New Boomtowns: The Lessons of Gillette and the Powder River Basin. New
Dimensions in Mental Health, Report from the Director, National Institute of Mental Health,
Washington, DC. 1977.
Clemente, Frank and Summers, Gene F. "Industrial Development and the Elderly: A Longitudinal
Analysis." journal of Gerontology 28:479-483.
Davenport. Joseph, ill and Davenport, Judith W. "Boom Towns and the Aged: Problems and Promises
in Cowboy Country." In Energy and Aging: A Symposium. Pp. 28-38. Western Gerontological Society,
ed. Washington, D.C.: Office of Human Development Services, U.S. Department of Health and
Human Services, 1980.
Dixon, Mim H. Senior Citizens: The Effects of Pipeline Construction on Older Persons Living in Fairbanks. Fair-
banks: Impact Information Center, Special Report, June 25, 1975.
______________ What Happened to Fairb~nks? The Effects of the Trans-Alaska Oil Pipeline
on the Community of Fairbanks, Alaska. Social Impact Assessment Series, No. 1, Edited by C. P. Wolf.
Boulder, CO: Westview Press, 1978.
FennelL Valerie. "Age Relations and Rapid Change in a Small Town." Gerontologist 17(5):405-411.
Freudenburg, William R. "The Impacts of Rapid Growth on the Social and Personal Well-Being of Local
Community Residents." In Coping with Rapid Growth in Rural Communities, edited by Bruce A. Weber
and Robert E. Howell, pp. 137-170. Boulder, CO: Westview Press, 1982.
Gold, Raymond. "On Local Controls of Western Energy Development." Social Science journal
16(2):121-127.
Haynes, Terry L. Old Alaskans and a New Pipeline: A Needs Assessment and Guide to Impact Planning in Upper
Tanana Corridor Communities. Draft copy of a report prepared for the State Pipeline Coordinator's
Office. Fairbanks, Alaska, 1981.
Larson, Sharon S. "The Elderly: Victims of the Energy Venture." In The Boom Town: Problems and Promises
in the Energy Vortex, edited by Joseph Davenport ill and Judith W. Davenport, pp. 33-42. Laramie:
University of Wyoming, Department of Social Work, Wyoming Human Services Project, 1980. _
Moen, Elizabeth; Boulding, Elise; Lillydahl, Jane; and Palm, Risa. Women and the Social Costs of Economic
Development: Two Colorado Case Studies. Boulder, CO: Westview Press, 1981.
Primack, Phil. "Energy and the Elderly: The Other Side of the Coin." Aging 303-304 (Jan.-Feb.):S-11.
Reckard, Holly. A Case Study of Copper Center, Alaska .. Alaska OCS Socioeconomic Studies Program,
Technical Report No. 7, 1979.
Worl, Robert; Worl, Rosita; and Lonner, Thomas. Beaufort Sea Sociocultural Systems Update Analysis.
Alaska OCS Socioeconomic Studies Program, Technical Report No. 64, 1981.
166
Introduction
Identifying Social Effects in Forestry Dedsionmaking
Lessons From the Past and Prospects for the Future
Robert M. Muth
Social factors are an increasingly important consideration in the allocation and management of the
Nation's natural resources. Decisionmakers, as well as the public, are demanding information regarding
the effects on people that result from natural resource decisions. Social impact assessment attempts to
provide information on social values, social concerns, and social effects for use in the decisionmaking
process. Nearly all resource management agencies are improving their technical capabilities to conduct
social impact assessment. This paper will discuss the experience of one resource management agency,
the Alaska Region of the U.S. Forest Service, in social assessment efforts. But first, a little background is
necessary on the social and political context within which management decisions on Alaskan National
Forests take place.
The Forest Service presence in Alaska goes back to 1907 when the Nation's two largest National
Forests were established. The Tongass National Forest is comprised of approximately 16,954,000 acres
and covers the majority of Southeast Alaska's panhandle. The Chugach National Forest consists of
about 5,940,000 acres and encompasses Southcentral Alaska's Prince William Sound and the eastern
third of the Kenai Peninsula.
The National Forests in Alaska are characterized by a multitude of natural resource management
opportunities. On the T ongass National Forest in Southeast Alaska, recent legislation has mandated that
4.5 billion board feet of timber be offered for sale every decade. Misty Fiords and Admiralty Island
National Monuments contain some of the most spectacular scenery and provide some of the best
remote recreational experiences of any area in the United States. The abundant fisheries resource pro·
vides employment opportunities as well as a variety of quality recreational pursuits. One of the largest
molybdenum mines in the United States, a few miles from the city of Ketchikan, is expected to begin a
70-year operation within five years. At full capacity it is expected to produce 60,000 tons of ore per day
which will supply approximately 18 percent of the world's molybdenum demand. In addition, Alaskan
National Forests contain significant deposits of copper, nickel, iron, gold, and silver; and petroleum ex-
ploration and development is occurring in offshore tracts adjacent to the National Forests. National
Forest V{atersheds provide water for power generation and other industrial and municipal uses. Tourism
is increasing in Alaska where many people from foreign countries and the "lower 48" visit Alaska's Na-
tional Forests to view moose, brown bears, bald eagles, and glacial icefields from small floatplanes,
cruise ships, and ferry boats. Finally, National Forests in Alaska contain 5.4 million acres of
Congressionally-designated wilderness areas.
As might be expected, this highly, diversified natural environment provides for a wide range of
cultural variation and lifestyle differentiation. Tlingit, Haida, and Tsimshian Indians inhabit a number of
communities in Southeast Alaska, while Alaskan Eskimos and Athabascan Indians live in villages and
communities in Southcentral Alaska, some of which are in close proximity to the Chugach National
The author wishes lo <~cknowledgt the valuable rroiew comments provided by Dr. Rober/ G. Let, University of W<15hinglon, St<!llle, Washing/on: Dr.
Roger Grrk, U.S. Forts/ Service, Sfllllle, W<15hinglon: 1md Mr. K11ye Metmlf und Ms. Helen GIS/illo, U.S. Forest Servia, }une11u, Alt!Sktl.
167
Forest. After enduring decades of public policy aimed at assimilating them into the dominant culture,
many Alaskan Natives are advocating a revival of their cultural heritage. This renewal is manifesting
itself through such things as teaching Native culture (e.g., languages and dancing in public schools for all
ages, Indian law, legends, and history), the desire to protect cultural sites such as burial grounds and
petroglyphs, and a continued reliance on hunting and fishing for subsistence purposes.
In addition to Native communities, Alaskan National Forests provide employment and recreational
opportunities to people engaging in a wide range of lifestyles from the relatively cosmopolitan urban
settings of Anchorage and Juneau (the State capital), to the solitary existence of individual ~rappers and
prospectors living in the Alaskan bush. In between are communities heavily dependent on logging and
the manufacturing of forest products, fishing communities, and small subsistence settlements, each with
relatively distinctive community identities and lifestyle orientations.
It is perhaps inevitable that such a multiplicity of opportunities would result in conflicting demands in
that demands reflect social values. Demands for wilderness; for forest product-related employment; for
commercial, sport, and subsistence use of fisheries; and demands for other goods and services provided
by the natural environment all reflect a variety of social·value systems. ·
As pressure for development increased, conflict over the allocation and use of natural resources in
Alaska intensified. As late as the early 1970's, over 97 percent of the land area in the State was .still
owned by the Federal government. The people of Alaska began agitating more actively for the Federal
government to: 1) identify areas of land "to be retained in protective status, 2) identify areas of land to be
opened up for development, and 3) accelerate the conveyance of land to the State and to Native groups
as directed by the Statehood Act and the Alaska Native Claims Settlement Act.
Since the National Forests contain resources of National, regional, and local significance, conflict over
the allocation and management of the National Forest land was especially intense. This conflict was
most evident in Forest Service planning efforts as well as in the Congressional deliberations taking place
concurrently in Washingotn, D.C. As competing demands become more acute, it became necessary to
develop and implement methods to identify more comprehensively and more precisely the social
values held by National, regional, and local publics. To achieve this within such a complex diversity of
cultures, lifestyles, conflicting social values, and resource management opportunities, social analysts in
the Forest Service planning process must draw on a variety of social science methodological tools and
analytical techniques. To gather and provide information to resource managers and the public concern·
ing the social effects of natural resource decisions, the Forest Service has drawn on data and expertise
from State agencies, the University of Alaska, private companies, Native corporations, and other
Federal agencies. The remainder of this paper will discuss, compare, and contrast selected social impact
assessment tools· and techniques used in the Forest Service's land management planning process in
Alaska.
Social.Impact Assessment in Multiple-Use Planning on Alaska's National Forests
The National Environmental Policy Act requires that Federal agencies assess the social effects of
resource management activities significantly affecting the environment. The Alaska Region of the
Forest Service implemented these requirements by means of regional direction provided first in the
Southeast Alaska Area Guide (USDA Forest Service, 1977) and, most recently, in our Regional Plan
(USDA Forest Service, 1982). Specifically, regional direction requires that planning efforts in the Alaska
Region conform to the following policies:
(1) Identify and display economic and social impacts of programs and/or management alternatives in
environmental analyses where significant changes in outputs between alternatives are con-
sidered. Give particular emphasis to industries which are dependent on National Forest program
outputs such as timber, fisheries, and tourism.
. .
(2) Forest Service activities will' be coordinated with local communities in the following manner:
a. The plans and concerns of local communities, as represented by their governing bodies and
the public involvement process, will be incorporated in alternatives developed at all Forest
Service planning levels.
168
b. Community preferences will represent an integral factor in Forest Service decisions where
communities and residents may be significantly affected.
c. Alternatives developed during the planning process must reflect community needs and
preferences as expressed through the public involvement process prior to starting the
environmental impact statement procedure. Examples of community needs might include
areas required for recreation or subsistence activities, aesthetic considerations, lifestyle
options, ·transportation system options, and community growth goals.
To conform with the foregoing regional direction, the Land Management Planning Group has under-
taken a variety of social impact assessment projects to improve information for decisionmaking. In so
doing, the Forest Service has drawn on methodological tools, analytical techniques, and outside exper-
tise from a number of social science disciplines, most notably sociology, anthropology, and psychology.
If one lesson has emerged from our social impact assessment experience in Alaska, it is that no one
discipline qm provide the complete picture. This is also consistent with the contents of a number of
recent textbooks and other publications (Finsterbusch, 1980; Bowles, 1981; Haussmann, n.d.; Finster-
busch and Wolf, 1977) in the field of social impact assessment which address the methodological and
analytical contributions of many disciplines. ·
Politics is the process of allocating scarce resources between competing values. As such, the political
nature of issues being decided in the Alaska Region made it necessary for social assessment efforts to
focus on tools and techniques which elicit and identify social values for use in decisonmaking. The.
guiding principle of recent social assessment activities has been to try to insure that all salient value
perspectives are identified and represented in the planning process. We have met with uneven success
in achieving these objectives but we have learned valuable lessons in the process which relate to doing a
better job.
With this in mind, I would like to tum to the specific tools and techniques which we in the Alaska
Region have found helpful for accomplishing social impact assessment in a variety of planning efforts.
All of the methods we have used possess strengths and weaknesses regarding the quality (e.g., precision
and reliability) of information they provide, 'their suitability for implementation within the context of
Alaska's unique physical and sociocultural environment, and their compatibility with Administrative
constraints, such as time, costs, and personnel.
Social Surveys
Social surveys are a standard data collection device which, if properly conducted, yield information
generalizable to an entire population from information obtained from respondents picked at random.
To get a more comprehensive understanding of the relationship between the natural environment
and residents' quality of life, a number of State and Federal agencies cooperatively funded the Alaska
Public Survey in 1979. During the survey, 2,888 randomly-selected Alaska householders responded to
a one-hour long, structured interview concerning their recreation use (e.g., travel patterns, favorite and
most-frequently visited sites, activity preferences, and recreation satisfactions), their motives and
satisfactions with living in their communities, their reliance on subsistence food-gathering activities,
their attitudes about Forest Service policy issues and management activities, and their socio-
demographic background characteristics (Clark, Johnson, and Field, 1981).
The analysis of data from the Alaska Public Survey has resulted thus far in two major reports (Alves,
n.d.; Clark and Johnson, 1981) which summarize the Survey's findings from Southeast and Southcentral
Alaska. Information obtained to date has been used. in site-specific planning efforts (e.g., Admiralty
Island National Monument planning process and Chugach National Forest Land Management Plan), as
well as more programmatic plarming processes (such as the Regional Plan).
Social surveys are important tools for conducting social impact assessment, but in addition to their
advantages they also have a number of limitations. In terms of their effectiveness in providing high
quality information, social surveys are perhaps the best techniques that we have used, depending on in-
formation needs. A well-designed, carefully-constructed survey instrpment Cilil be administered to any
societal level (community, region, National). In addition, it is one of the few techniques (because of the
random selection of respondents) which taps the attitudes and values of unorganized constituents who
don't write letters or attend public meetings. Finally, although survey instruments are usualy highly
169
structured, they can be refined through pilot tests to probe for information being sought by decision-
makers. ·
Unfortunately, the structure of social surveys often limit their usefulness. Problems we encountered
in administering the Alaska Public Survey involved both sociocultural factors and administrative fac-
tors. Alaskans are often employed in seasonal jobs, such as fishing, logging, mining, tourism, or con-
struction. Fishermen are often at sea for weeks at a time and they often have to depart within a few
hours' notice of an opening in the season. Loggers and construction workers will often take extended
winter vacations (or, when the market is depressed and unemployment is high, extended summer vaca-
tions). Miners are often situated in remote, inaccessible field locations. The seasonality of labor and the
transient nature of a large part of the labor force wreak havoc with sampling frames, often requiring
their frequent modification. Respondents living in randomly-selected households may not be home
when an interviewer calls on them.
Cultural factors also detract from the effectiveness of structured social surveys as a data collection
instrument. Language barriers, distrust of non-Native interviewers, and a reluctance to divulge informa-
tion concerning such things as productive hunting and fishing sites, archaeological artifacts, or sub-
sistence activitie.s, often inhibit the use of structured surveys in Native communities.
In even their most routine application, social surveys are technically complex, expensive, and time-
consuming. They require highly-trained researchers and statistical analysts. In addition, they must
withstand a lab.orynthine agency and OMB approval process. Their application is further complicated
by unique sociocultural factors which must be taken into account when employing these methods in
Alaska.
With all their limitations, however, social surveys remain the most reliable method to acquire com-
prehensive, in-depth information on social values and_public attitudes.
Ethnographic and Key Informant Interviews
Ethnographic and key informant interviews are usually associated with anthropological field work
and individual community studies. They are useful for identifying a broad array ·of information,
including social values. Usually characterized by less structured interview ·schedules, these methods
yield important information for use in the planning process (Spradley, 1979; Tate, Bohemeier, and
Bohlen, n.d.).
In order to provide information in support of the T ongass National Forest Land Management Plan,
the Forest Service contracted with the University of Alaska's Institute for Social and Economic Research
to conduct interviews in representative communities in Southeast Alaska. Completed during 1978, this
project was designed to identify major social issues and community preferences through non-structured
interviews with formal and informal opinion leaders in Native and non-Native communities. Interviews
were conducted in ten communities with populations ranging from under 100 to approximately 20,000.
These communities were Craig, Game Creek, Haines, Hoonah, Juneau, Kake, Ketchikan, Kupreanof,
Petersburg, and Tenakee Springs. In addition, case studies of greater depth took place in the com-
munities of Haines, which had recently suffered a sawmill closure; Tenakee Springs, a small, quiet town
facing large-scale timber harvesting nearby; and Ketchikan, the community most likely to be affected
by a large molybdenum mining development.
Interviews were conducted with a variety of people, most of whom held formal roles within their
communities. Most prominent were city and State officials and other political leaders, representatives
of formal (often interest group) organizations, and heads of Native corporations and private businesses.
The number of people interviewed in each community ranged from 5 each in Tenakee Springs and
Kake to 17 in Juneau.
Although no consensus emerged on the optimal land allocation or best management practices for the
T ongass National Forest, the interviews evidenced widespread agreement concerning key issues which
respondents desired to see addressed by the final forest management plan. The chief concerns of those
interviewed revolved around four major topic areas: I) the need to achieve a balanced output of
resources from the Tongass National Forest, 2) the need to provide more recreation facilities, 3) the
importance of Forest Service programs for economic diversification and comm1,1.nity stability, and 4) the
importance of protecting fish and wildlife habitat in Forest Service management activities. (Institute for
Social and Economic Research, n.d.) In addition,. a wide variety of community-specific values were iden-
tified.
170
Like the more structured survey methods, ethnographic and key informant interviews are not
without their problems. Although they provide extremely useful information, they are fairly
sophisticated methodological tools requiring qighly-trained expertise. .
The major assumption behind these techniques is that ~y interviewing selected individuals in posi-
tions of formal and informal power, it is possible to identify the value positions held by broader
segments of the community which the individual actors represent. In order for this method to provide
valid results, however, care must be taken to· insure that the views articulated by individual actors
represent more than their personal views or the views of small elites of which they are members. This
problem can usually be mitigated by interviewing a variety of power actors in a community, thus
increasing the likelihood that all major value positions are surfaced.
A major limitation of these techniques in both Native and non-Native communities is the difficulty in
identifying informal leaders who may possess far more knowledge and wield far greater power than
individuals occupying formal roles. This problem may be largely overcome if time is available to
employ some combination of the four most reliable methods-positional, reputational, decision-
making, and social participation~for identifying community leaders. However, this process can be
extremely time-consuming and expensive.
Another problem emerges primarily in Native communities. Distrust of outsiders is firmly grounded
in historical experience; among those not the least distrusted are anthropologists and archaeologists.
Thus, a major disadvantage of ethnographic interviewing in Native communities can be the time
involved building trust and communication channels with members of these communities, regardless of
whether they are power actors or not. One solution that appears to have worked reasonably well in the
past is to hire an individual living in the community to serve as a contact, or liaison, between communi-
ty residents and agency personnel. (This, of course, also has its own set of advantages and disadvan-
tages.)
Perhaps the most significant barrier to conducting ethnographic and key informant interviews is the
relative scarcity of skilled expertise. To get reliable information using these methods requires sensitive,
highly-trained individuals. Professionals skilled at employing these methods are often not available,
especially on the short-term contractual basis necessary for timely input into agency planning processes.
In summary, there are some formidable barriers to conducting ethnographic and key informant inter·
views in Alaskan communities, not the least of which are the time and money involved, and the
patience required in communicating the results to natural resource professionals. But in terms of an in-
depth, qualitative understanding of community dynamics and· social values, these techniques have the
potential to produce the most valuable information. For its part . the Forest Service has hired
archaeological and anthropological expertise, both as part of its permanent staff and on contract. But to
date their principal responsibilities involve the identification and management of historic and cultural
sites. Perhaps the model that presages the future is the Bureau of Land Management's Socioeconomic
Studies Program in Anchorage. This staff unit is composed of social scientists, including ethnographers
and anthropologists, who have responsibility for conducting social impact assessments related to
petroleum exploration and development on the outer-continental shelf of Alaska. (For examples of
reports produced by the Socioeconomic Studies Program, see Bennet, et al., 1979; Reckard, 1979;
Alaska Consultants, Inc., 1979.)
Public Involvement in Land Management Planning
The National Environmental Policy Act and the National Forest Management Act require intensive
public involvement as part of land management planning. A major source of information concerning
community preferences and public values is developed through the formal public involvement process.
As it relates to planning and decisionmaking, the NEPA-mandated public involvement process can be
briefly characterized as follows: I) a need for a specific agency action is perceived (for example, to pro-
vide a plan for off-road vehicle users, to conduct a timber sale, to recommend wilderness classification
for a certain area, or to build a fish hatchery); 1) "seeping" sessions are held with the public and other
government agencies to identify public issues and concerns about the project; 3) a draft environmemtal
impact statement containing a proposed action is developed and distributed for public review and com-
ment; and 4) a final environmental statement is produced and released containing the approved action
(developed in response to public review). Public participation activities employed in this process have
two major objectives: first, to provide environmental, economic, and social information to the public
171
regarding the alternative actions, and second, to solicit public views and opinions regarding the alter~
native actions. Information thus provided helps decisionmakers determine a final course of action
which is both socially acceptable and politically defensible.
A number of critics have raised serious questions about this process (for specific critiques of Forest
Service programs, see Fairfax, 1975; Twight, 1975; and Ostheimer, 1977). For example, citizen par-
ticipation activities conducted in conjunction with this process often miss unorganized publics who may
feel unrepresented if their high-salience issues and values are ignored. In addition, interest group
representatives have been known to appeal to their members to flood the agency with postcards, form
letters, and petitions, when they get the (sometimes justified) impression that public involvement
activities are little more than vote-counting exercises.
In spite of these and other problems, public involvement efforts have brought a broader and more
inclusive spectrum of social values into the decisionmaking process.
Generally, public involvement activities utilized during this process emphasized workshops, public
meetings, and requests for written review comments of draft environmental statements. Problems
emerged in the early daY,s of public involvement concerning how to use information provided by the
public (Hendee, et al., 1973). Line officers and resource staff specialists argued that the lack of systematic
procedures for analyzing, summarizing, and displaying public involvement information hampered its
. utility in decisionmaking. ·
In response to this problem, Forest Service researchers applied content analysis techniques to public
involvement data. They developed and, through numerous applications, refined this process for use in
public input analysis. This process, named Codinvolve, uses content analysis to identify relevant infor-
mation contained in public input and to summarize and code it on edge-punch cards. (Stankey, 1972;
Hendee, Clark, and Stankey, 1974; Clark, Stankey, and Hendee, 1974).
Used primarily with written information (e.g., meeting transcripts, letters, petitions, and reports),
Codinvolve is a systematic process which uses a codebook, trained coders, and a system of reliability
checks to minimize subjectivity and interpretation, Codinvolve attempts to summarize the opinions
people hold on particular issues as well as the reason they offer to support their opinions. Consideration
of the reasons why people hold certain values is what takes public involvement out of the vote-
counting realm and provides the opportunity for exercising professional judgment. Codinvolve has
been used on a number of planning efforts by the Forest Service in Alaska and has most recently
yielded valuable information in the Tongass and Chugach National Forest planning processes (USDA
Forest Service, 1979b; 1980a).
But as with the analytical techniques previously described, Codinvolve also has certain advantages
and disadvantages. (For important discussions of the pros and cons of the Codinvolve system, see Fair-
fax, 1974; Clark and Stankey, 1976; Ostheimer, 1977; USDA Forest Service, 1980b.) Among its major
strengths is that it is systematic. When carefully applied, it objectively produces information that is
reliable (replicable), visible, and traceable-important attributes given the often highly-politicized
nature of the decisions being made. Although the information it provides is less comprehensive, Codin-
volve analysis is less costly, less time-consuming, and requires less specialized expertise than structured
interviews or ethnographidkey informant interviews.
Codinvolve is not public involvement. It is an analytical tool which analyzes, summarizes, and
displays information for decisionmaking. Problems in its applkation arise more often through
misunderstanding than from technical inadequacies of the system itself. Codinvolve has been
misperceived in the past as somehow providing ultimate answers. Correctly perceived it provides
another set of technical data which receives consideration in the decisionmaking process along with
environmental, economic, and other social data.
In implementing the Codinvolve system, it is important to keep Ostheimer's observations in mind:
.... Codinvolve has been substituted for more important aspects of public involvement,
perhaps because they are more difficult to master. Codinvolve may delude Forest Service
personnel into thinking they have carried out effective public involvement merely because
they have used a sophisticated evaluation tool. Codinvolve instructions warn that the pro-
cedures are not simple, so this "difficulty" encourages an illusion of "really working at"
public involvement. It is far more important for the Forest Service tq know its constituency
and keep high-salience publics up-to-date on Forest Service actions as an ongoing process.
(Ostheimer, 1977, p. 19.)
172
Our experience in the Alaska Region suggests that when kept in perspective and conscientiously
applied, Codinvolve can provide very usefuL although limited, information for decisionmaking. In an
article drawing on their experience in over 30 studies using Codinvolve, Clark and Stankey concluded:
We are encouraged by the success of this venture on several accounts. Effective analysis of
public input does seem to have. made a difference in the many applications of Codinvolve
completed to date. (Clark and Stankey, 1976, P. 235.)
Numerous authors have discussed the contributions that public involvement can offer in social
impact assessment (for two articles specifically addressing forestry, see Holden, n.d.; Quint and Caplan,
forthcoming). But one problem we have encountered in achieving the full integration of public involve·
ment and social impact assessment is methodological and may require further research.
As noted above, public involvement is an important source of social data. For example, public
involvement information can be used as an indicator of the salience of various issues. It can also reveal
the geographic distribution of public concern as well as the extent to which issues are addressed by for·
mal groups as opposed to unorganized constituencies.
But problems have been encountered in using citizen participation as a social aata collection tool
because public comments are frequently too general or simply lack relevance to the planning issues
being addressed. Other times, people's perceptions of social impacts and other social concerns may re·
main unarticulated altogether. What is needed is a method whereby public involvement activities are
restructured so they can be used to identify and make more specific underlying values and interests,
and to surface them for consideration in the decisionmaking process.
T ow.u-d this end, the Forest Service in Alaska has contracted with a forest sociologist at the Universi·
ty of Washington, Dr. Robert G. Lee, to develop procedures for using public involvement more effec-
tively as a social data collection instrument.
As natural resource agencies are increasingly constrained by administrative restrictions on the use of
social surveys, social analysts may have to rely more and more on public involvement as a major source
of social data. Our experience in Forest Service planning efforts in Alaska suggests that if certain prob-
lems can be overcome, public involvement holds much promise for decisionmakers in terms of enhanc· ·
ing their understanding of the social environment.
Panels of Experts
One technique that has been useful in planning processes where time and money are of the essence is
to convene a panel of experts. Most recently, panels of experts have provided judgments of anticipated
social impacts during the RARE II effort in 1978-79, and the 1980 RPA process.' In both cases the social
impact assessment began with the development of a social data collection package put together by
social scientists from inside the Forest Service and from outside consulting firms. Then, panels of
experts (consisting of local line officers, natural resource professionals familiar with the affected com·
munities, and a Forest Service social scientist and economist) used the social data and their knowledge
of the communities and the planning alternatives to identify potential social impacts. Finally, a sum-
mary of the experts' estimates were included in both the draft EIS for RARE II and RP A.
During the public comment period of the environmental impact assessment processes, reviewers of
the documents were encouraged to validate, modify, or correct the analyses arrived at by the panel of
experts and to provide their own perceptions of social impacts. In both instances, feedback during the
public review process was helpful in more clearly identifying social impacts-both positive and
negative-and in selecting the preferred alternatives.
This technique has a number of advantages which lend themselves to use in agency planning pro·
'RARE II is <ln acronym for tire Forest Service's second Ro,llifess Area Review and Evaluation. T1ris was a Nationwide invwtory am/ analysis of'
Natiomd Forest roadless awlS which resulted in recommendations for wilderness classifinrtion. trotrwildenress rises, or. in some instmrces, further plmr·
ning. A recommend,rtion was m11de for e11clr of tire nmrly 3,000 roadless <lre<lS studied. ·
RP A refers to tire Assessment 1111d Program tire Forest Service must prepare periodicially in response to direr/ion contuined in tire Forest mrd
&mgelmrd Renewable Resources Planning Act (Resources Planning Act. or RPA, for slror/). Botlr tire RARE II <IIIII RPA Program Enviromnmtal
lmpllcl Stateme~~ts were broad progrmmrurtic documfllls containing a number of differfllt 11ltenwtives. In botlr cases. it was tire social effects of those alter·
natives which were wwlyz.ed by panels of experts in the Alasbr Region.
173
cesses. First of alL it is the least time-consuming and least expensive method of those we have
employed. Second, it provides a diversity of viewpoints in situations where it may be impossible for
one person to know all the facts; in addition to the data that are provided to the experts for evaluation,
they each bring their own knowledge of and experience with the social environment to bear on the
deliberations. Finally, this technique has the notable attribute of flexibility. A panel of experts can
respond relatively quickly to modifications in alternative~ as they are refined through successive itera-
tions by planning them.
Two important lessons were learned by Forest Service planners in the instances where panels of
experts were used to identify the social impacts of alternatives. The first was that expert judgment is not
a substitute for, but is a supplement to, more rigorous social analysis. They can be very helpful but
should not be relied upon as the only social assessment method. For certain exercises such as identifying
research needs or developing future scenarios, a panel of experts may be the best method available and
relying on it alone may be entirely justified. Often because of the short time frames involved, informa-
tion provided by panels of experts is not as rigorous and definitive as data provided more directly by
other methods. ·
Secondly, panels of experts function most efficiently when they are operating under certain rules
governing their behavior. Delphi methods and nominal group techniques are fairly sophisticated tools
which provide systematic procedures for behavior in small groups (Delbecq, et ul., 1975). Among other
things, these procedures minimize the extent to which the personaL rather than the professional, values
of experts influence the group's evaluations. These methods are designed to maximize the productive
efficiency of panels of experts and should be employed whenever expert panels are used in the social
assessment process.
Future Direction of Social Impact Assessment
Citizens of the United States are becoming increasingly concerned about the allocation and manage-
ment of public sector natural resources. More and more, this concern is resulting in active involvement
as people organize themselves to influence natural resource decisions.z For whatever reason, whether it
is the jobs provided by the timber industry or whether it is the solitude provided by wilderness recrea-
tion experiences, the lifestyles of millions of people are affected by decisions regarding public lands. In
an effort to be more responsive to social effects resulting from its decisions, the Forest Service is con-
tinuing to institutionalize programs in various Regions for the professional conduct of social impact
assessment. (See, for example, USDA Forest Service, n.d.; Holden, 1980; Bowen, et ul., 1979; and
Tremaine, 1981.) In addition, national direction in the form of a handbook for integrating social impact
assessment in National Forest planning is being developed under the auspices of the Program Leader for
Social Impact Assessment in the Washington, D.C., office.
We need to be constantly striving to improve our capabilities for identifying and tracking the existing
and emerging social values of all our publics. But now that mechanisms focusing on the identification of
social values are being institutionalized, we feel it is important to move toward a more corpprehensive
approach to social impact assessment. In the Alaska Region a program responding to National and
Regional direction in social impact assessment has been approved for development and implementation
(Muth, 1981). This program focuses on the development of a data base, assessment methodologies, and
procedural guidance. Specifically, the approach being developed for use on Alaska's National Forests
includes the following program elements:
A. Socioeconomic profiles of communities within close proximity to Alaska's National Forests. It is
the intent to move away from traditional socioeconomic overviews (Logsdon, et ul., n.d.; Rogers
ar)d Hart, 1978), which are likely to be static and quickly outdated, and towards a more com-
'For example. the Forest Service RARE II effort in I 978 gmemted siwble public commmt. N<ttioizwide, "tot<tl of 2b4, 9V3 itzdividual inputs were
received in response to the dmft EIS. 71zey represmted the signatures of 359.4I4 people. (Sometimes more thmz om person," husb11nd <fll<l wife, for
ex11mple. sigmd one letter.) Gmtmsting this with the p11blic respmzse to the RARE I dm{t EIS itz I 97 3 itzdic11tes greatly lzeightmed public interest in
N11tionlll Forest land dassifimtion issues. 71ze RARE I dmft EIS <lt/rllcted ''total of b,/J.l.3 individu11l inputs sigmd by 15,bV7 people. Moreover,
while the proportion of personal/etters to form-type responses W<lS over sevm lo mze itz RARE I. nearly lwo·llrinls of the RARE II inp11/ WllS fonn·l)!pe
response. 71ws. organized units of society such as mviromnm/al interest groups 111111 induslry llssocilllions evidmwi IIlllCh greater involvemml in RARE
II th11n in RARE 1. For further diswssimz. see USDA Fares/ Service. I 979<1.
174
prehensive, computerized data base which can be kept current and easily accessed by planning
teams. Community profile information will include population statistics (such as age and sex
pyramids, ·racial composition, etc.); kinds of municipal services provided by a community;
availability and types of transportation and communication facilities; educational institutions;
health services; recreational opportunities; quality and availability of housing; occupational skills
in the community; unemployment rates; and so on. These profiles will provide immediately
available, current information for use in planning and decisionmaking.
B. Sociocultural maps. When interacting with interdisciplinary teams composed largely of resource
professionals, it is often helpful to provide graphic displays in order to illustrate complex rela-
tionships between the social and natural resource environments. For this reason, sets of
sociocultural maps will be developed which display the following information: location of com-
munities; recreation use patterns; archaeologicaL culturaL and historic sites; permanent facilities,
such as dams, mills, airfields, recreation developments, and transportation routes; land owner-
ship patterns; and resource use and development areas (timber harvests, mines, anchorages, etc.).
C. Scalogram analysis of community institutional structure. An emerging body of theoretical and
applied social research suggests that certain structural properties (especially institutional com-
plexity) of social systems exert important influences on the direction and magnitude of com-
munity development and growth (Young and Young, 1973). We will be pilot testing a process
(which combines macrosocial accounting with Guttman scaling) in an attempt to validate these
hypotheses empirically using Alaskan communities as case studies. We hope to identify relation-
ships between community social structure and quality of life. The implications of these studies
are that natural resource decisions affecting the structure of a particular social system (independ-
ent variable) may result in unintended consequences (both positive and negative) on the quality
of life (dependent variable). This work is currently in the exploratory phase but completion is
anticipated by the end of 1982.
D. Staff papers on Native cultural values and on lifestyle differentiation. A staff paper will be
developed which identifies and summarizes traditional Native cultural values with specific
reference to those values most likely affected by natural resource decisions. Information of this
type will increase the sensitivity of resource planners and managers to native cultures.
Knowledge of these cultural values will eliminate cultural conflicts which unnecessarily arise out
of employee ignorance of how those values are affected by forest management activities.
Although the professional social science literature is far from conclusive, preliminary work
suggests that "lifestyles" can be characterized in terms of a combination of consumption patterns
and attitudes. A second staff paper, drawing on this literature, will explore the feasibility of
developing "Alaska lifestyle categories." If such categories can be developed, they may prove
useful in determining the extent to which people engaged in various lifestyles are affected by
Forest Service management activities.
E. Procedural guidelines. Regional supplements to national manuals and· handbooks will be
developed to provide additional direction to field units in conducting social impact assessment.
They will be tailored to account for the unique social, cultural, political, and environmental con-
ditions of Alaska.
F. Social analysis training sessions. Training packages will be developed and instituted which will
contain information for local line officers, planners, and resource specialists. Training packages
will include: 1) exposure to social assessment requirements contained in National and Regional
direction, 2) overview explanations of social assessment concepts, methods, and analytical
techniques, including the kinds of information they provide and their relevance to decision-
making, and 3) a summary presentation of information contained in the social data base. An ex-
plicit objective would be to sensitize line and staff personnel to the importance of considering
social values in decisionmaking.
175
In summary, social impact assessment is maturing as a field of social scientific study. But as recent
criticisms (Wilkenson, et a/., 1980; Meidinger and Schnaiberg, 1980; Peterson and GemmelL 1977) point
out. there is considerable room for improvement.
Currently there is a need for a critical reassessment of the assumptions, theory, and broad
methodological approach to conducting social impact assessment. Methodological and analytical tools
are often poorly situated to the tasks at hand. It may be timely for the profession in general to shift from
a methods-centered approach to a problem-centered approach. The state-of-the-art of social impact
assessment resembles a body of methodology in search of an integrating conceptual framework. It may
prove worthwhile to refocus research efforts away from the development of more sophisticated
methodological and analytical tools and toward the theoretical underpinnings of social impact assess-
ment. Understanding why and how social change occurs will be immensely helpful for practitioners in
interpreting and incorporating social assessment information into decisionmaking.
Important breakthroughs in theoretical and applied research will only be achieved by adhering to
standards of professionalism and scientific rigor. While the research community continues to advance
the state-of-the-art. of social impact assessment. practitioners must be committed to keeping abreast of
professional developments.
The social impact assessment program in Forest Service planning efforts will continue to draw on
these developments. But. we also recognize that a complete picture of social reality is often impossible
to attain and that sometimes the best we can do is triangulate on the truth. We remain committed to
drawing on a variety of social science disciplinary perspectives in this endeavor. We plan to integrate
information provided through social analysis with information provided by the Alaska Region's on·
going economic impact assessment effort (Mehrkens, 1981a; 1981b) and a well-designed, well-executed
public involvement program in order to increase our understanding of social effects resulting from
natural resources management decisions.
Greater involvement in social impact assessment by natural resource management agencies is needed
in order to understand the impacts of allocation and management decisions on people. This understand-
ing is necessary to mitigate negative impacts and enhance positiv~ ones. As Shannon (1981) has suc-
cinctly observed, "Good social impact analyses are crucial to socially responsible and politically
supportable resource decisions."
176
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Wilkenson, Kenneth P.; Thompson, James G.; Reynolds Jr., Robert R.; and Ostresh, Larry. "Social
disruption and rapid community growth: an examination of the "boom-town" hypothesis." Paper
presented to the annual meeting of the Rural Sociological Society, August, 1980 in Ithaca, New York.
Young, Frank W.; and Young, Ruth C. Comparative Studies of Community Growth. Rural Sociological Society
Monograph #2, Morgantown, West Virginia: ·West Virginia University, 1973.
r.
179
Summary of SESP Sociocultural Studies
Charles W. Smythe
The purpose of the SESP (Socioeconomic Studies Program) Sociocultural Systems Analysis is to col·
led and analyze information suitable for assessing the effects of potential OCS (Outer Continental
Shelf) oil and gas development on Alaskan coastal communities. Until recently, such analyses were
comprised of a compilation of available baseline data and the projection of the effects of hypothetical
development scenarios on critical issues and trends identified in the baseline. At present, sociocultural
studies focus more on field data collection· and impact assessment in crucial areas which are not
predetermined by hypothetical scenarios. Additional special studies address particular topics significant
to impact identification or collect baseline data which fill critical information gaps in the available
sources. The scope, methods, major findings and applications of these studies will be discussed below.
-With the exception of a few small towns and regional centers, Alaskan coastal communities are ruraL
geographically isolated villages with 100 to 500 residents. Normally, villages are 80-95% native and are
comprised of social groups which were, historically, more widely dispersed in the local environment.
Subsistence hunting, fishing and gathering of resources in the surrounding ecological zones is the basis
of the economy and the focus of the cultural traditions in these communities. Each village is located in
proximity to a characteristic set of resource concentrations from which food and other items are
acquired. Villages vary with respect to the set of resources on which they depend, as well as in their
cultural traditions, but they are similar in one important respect which distinguishes them from the
more urban areas in Alaska: there is a high degree of cultural integration between the economic, social,
and political components of society.
In traditional Alaskan native society, social relationships and economic exchange are integrated into
one undifferentiated system. Every social relationship has an economic component and every economic
exchange takes place in a social context. Interpersonal interaction is organized and regulated by the kin·
ship system and associated cultural rules of distribution and exchange of subsistence products and labor.
The cultural principles and values that regulate subsistence production and consumption are internally
coherent and cohesive. As the externally-based monetary economy has grown in the state, adjustments
have been made in the rural s1,1bsistence-based economy. The adoption of more efficient technology
(rifles, snowmachines, aluminum boats and outboard motors); and new job opportunities, bring about
changes in local economic systems. New cultural and social patterns develop as new economic activities
are joined with old rules and traditions. Some areas of Alaska have undergone more rapid changes due
to special circumstances. In the Alaska Peninsula region, for example, local fishing economies have
changed substantially since the institution of limited entry. On the North Slope, the Borough govern·
ment has altered village economics through major programs (such as CIP) funded by tax revenues
derived from Prudhoe Bay.
In most regions there is a larger town which serves as an administrative center for the villages in the
region. State and federal agencies often have offices in these towns, and they provide links to the state·
wide transportation system. Regional centers have a greater. ethnic diversity and a more mixed
economy than is found in the smaller villages. Nevertheless, traditional, economic, social and cultural
organization exists among the native populations of these towns much as it does in the villages. Rural
communities do not exist in isol?tion from each other; there are economic and social network linkages
180
among village populations and between villages and the regional centers and beyond. These networks .
have undergone changes as the monetary economy has grown and as rural residents have adopted new
administrative roles in formal organizations within the region.
The purpose of baseline sociocultural studies is to describe past and existing conditions and trends of
change in cultural systems within communities or regions. The scope of these studies does not include
every aspect of historical and contemporary cultural organization but is limited to those patterns and
issues that are expected to influence future conditions and responses to change derived from potential
OCS development. The focus of the research is on the compilation and analysis of data from available
sources. Since most of the available sources of cultural information are historicaL the limitation of
available data is a signficant constraint in describing conditions. To compensate for this problem, the
attempt was made to locate investigators who had conducted recent sociocultural research in the study
communities. In this way, baseline studies often include the results of the most recent research and
capitalize on the investigators' knowledge of contemporary issues.
The common methodological approach among the different sociocultural studies is that culture is
comprised as a system of inter-related and interacting elements. Using this approach, investigators
described the major system components (kinship and social organization, politics, technology,
economics, religion, values and ideology). Depending up-on the quality of the data and d~pth of
analysis, researchers specified the inter-relationships among the cultural variables. The virtue of this
approach is that, theoretically, it is possible to describe the system as it functions in the present and to
analyze the ramifications of trends of change in certain components on other system elements and the
system as a whole. Another property of this approach is the ability to incorporate variable rates of
change into the analysis and to assess the effects of rapid culture change on cultural systems.
Several theoretical orientations were utilized by different investigators in baseline studies. These
orientations specified the direction of causality in the interactions between the major system com-
ponents or sub-systems (sociaL structuraL ideological and techno-economic). The most common
approach was cultural ecology, in which the dominant factor influencing cultural patterns ·is
socioeconomic and techno-economic adaptation to the environment, which in tum is a major condition-
ing factor on the cultural system as a whole. This approach was felt to be relevant because the primary
cultural characteristic of rural Alaskan communities. is their subsistence orientation, and because
investigators viewed the potential interaction between OCS activities and the subsistence regimes as
very likely. Another theoretical approach used by several researchers did not specify dominant
variables prior to the study but derived such variables from empirical findings and significant issues
identified in the data collection phase. One other approach emphasized the ideological connections be-
tween cultural variables and advanced the concept of "structured change" which combined an analysis
of historical trends with that of ideological structure. This approach was an attempt to go beyond the
theoretical orientations to culture contact and change (acculturation and modernization) utilized by
earlier investigators.
In their applications, the theoretical approaches were valuable in indicating significant types of
variables and their inter-relationships. However, the identification of specific mechanisms and relation·
ships among the elements in the descriptions of cultural systems as a whole was less successful. This
problem was partly a result of the broad scope of these studies, in which researchers were asked to iden·
tify all issues and trends of change in cultural systems subject to OCS impacts. Most investigators were
able to identify some specific mechanisms and linkages in their areas of specialization, but frequently
were not able to expand their level of detail to the cultural system as a whole. This problem was in part
due to the limitations in the available data discussed above.
Investigators were usually most successful when their studies were community-specific or limited to
about five communities in a region. Substantial problems of scope were encountered when a region of
twenty to thirty communities was studied. Anthropological approaches work best in smaller
environments when boundaries between internal and external systems can be explicitly delimited. In
larger regions with many communities, such boundaries are not well-defined and often shift according
to context, creating theoretical problems for a functional analysis. Large gaps in available data, are more
significant in the application of these approaches in larger regions.
Following the description of past and existing issues· and trends of change in sociocultural systems,
impact assessments are performed to project these conditions forward in time with and wifhout OCS
development. The general procedure for this impact assessment is to formulate methods and assump-
181
tions about variables, their inter-relationships and rates of change by means of which the analyses
would proceed. The initial forecast is a 20-year projection of expected conditions if no OCS activity
were to occur. This is followed by an impact analysis of the effects of three OCS development scenarios
on this forecast. The scenarios consist of statewide and regional population and employment figures
based on hypothetical low, medium and high levels of OCS technological development activities at.
likely locations, all of which are determined by other SESP studies.
The theoretical approach to impact ·assessment is a continuation of the concept of culture derived in
the baseline as a system of integrated elements, impacts on which both singly and in combination will
be analyzed to develop an assessment of effects on the system as a whole. The major methodological
approach is that each scenario will introduce changes in the system, and comparison of conditions
following the impact event with conditions immediately preceding it will provide a measure of the
impact. Figure I below represents this approach:
Condition A Event Condition B
The difference between condition A and condition B reveals the effect of the impacting event. In this
case, condition A is derived in the non-OCS forecast.
The application of this approach was useful for identifying types of significant impacts on cultural
sub-systems. If the investigator had substantial research experience in the study area prior to the study,
the analysis was more detailed in certain areas of expertise than analyses which were derived solely
from the available data. However, the general weakness of most impact analyses is the inability to trace
the ramifications of particular impacts throughout the system as a whole. Directions of causality among
system elements and relative weights that each element contributes to the system are not explicit. If the
relationships among the variables and the weightings of specific variables were more formalized, it
would be possible to analyze the effects of different assumptions and levels of OCS impacts. In Alaskan
study areas, however, the level of detail in the available sociocultural information severely limits the
quality and depth of analyses in the different cultural sub-systems.
The major findings of these studies are very similar at a general leveL with predictable differences
due to economic and cultural differences among regions and sub-regions. The principal areas of impact
and change include:
I) effects on the local resource base, with consequences for the economy and culture;
2) effects on the local economy, including increased rates of change, inflation, and pressures on the
adjustment between subsistence-based and monetary economies;
The large-scale influx of boomers and OCS workers into the state will bring a series of impacts on
local communities. As the population composition changes in rural areas or regional centers, significant
inter-ethnic problems and burdens of adjustment would occur. Such population shifts would alter the
predominance (and preservation) of Native social structures in regional centers or, in primarily non·
Native towns, the predominance of customary and highly valued small town relationships. Increase in
sport hunting and fishing would put additional pressures on ·subsistence resources and use areas. Such
competition for resources would encourage the formation of special interest groups to limit or eradicate
the subsistence priority in rural communities. Sudden population increases will exceed the capacities of
human service delivery systems.
The reader should bear in mind that the major findings summarized here amount to a very generaL
almost a canned approach, to sociocultural impact assessment. There are important regional and sub-
regional cultural differences throughout rural Alaska that must be included in the application of this
approach. I have emphasized here the social and cultural aspects related to the economic system and
have advocated inclusion and development of these elements in the studies during my tenure in SESP.
The evolution and changes in sociocultural approach in SESP have been influenced by these concerns.
I82
The sociocultural baseline studies have been extremely broad in scope and were expected to encom-
pass all issues and effects on local communities and regional centers excluding infrastructure and human
service demands in the regional towns. Level of detail and analytical focus was sacrificed for broad
coverage which, in later studies, included very large geographical regions as well. To such problems is
added the limitations in available data discussed earlier. Specific changes in approach have been
adopted to improve analytical capabilities. Since the economic sub-system is a critical area of impact,
with lack of a clear separation between socioeconomic and sociocultural systems, recent studies are
designed to focus explicitly on socioeconomics and the linkages to cultural elements. Local
socioeconomic systems studies have been re-defined to examine effects on regional economic processes
and inter-linkages between local populations and to include specific cultural elements which are deter-
mining factors in such systems. Two recent special studies in the Yukon Delta and the Alaska Peninsula
have investigated the socioeconomic systems and linkages to social and cultural elements in particularly
unique subregions with a high dependence on salmon fishing.
In addition to a greater definition of and a focus on major impact issues in regional studies, more
special studies have been designed and implemented which have focused on key areas of impact. The
following topics are the subject of recent or on-going study: effects on subsistence systems, social
institutions and culture due to disturbances in resource harvesting; effects on local, sub-regional
socioeconomics (baseline studies in the Yukon Delta and Alaska Peninsula mentioned previously);
description of the role and function of cash and employment in subsistence-based economies; and
analysis of two communities, Nuiqsut and Unalaska, subject to unique and particular impacts prior to
OCS development effects. In all of these studies, and to a lesser extent in the regional impact studies,
substantial fieldwork is encouraged to build upon and expand the existing data base in these are~s,
thereby avoiding problems deriving from the limitations of available data. ,
A contributing factor in the development of some special studies has been the issue of the agency
need for a regional approach, yet a high degree of cultural and geographic diversity among com-
munities in the larger regions, which leads to problems of representativeness among communities in the
region under study. In some special studies, sub-regions were identified which were comprised of com-
munities of socioeconomic and cultural similarity and geographic proximity. In the regional studies, the
proposed resolution of this problem was a community cluster approach. Such analysis would proceed
by identifying clusters of communities with cultural similarities, social ties, and geographical proximity,
and then choose communities within such clusters with a specified degree of representativeness on
which to build the regional analysis. Unfortunately, this approach has not been tested at this time.
Within the sociocultural area, the need for information which is not available in the existing data base
will continue. Without a more adequate understanding of existing social and cultural elements, it is not
possible to estimate magnitudes of change and effects of OCS developments. For example, the model of
sociocultural impact assessment described above pre-supposes a very traditional type of social and
cultural organization. In reality, economic, social and ideological structures are different today, but the
existing data in most baseline studies is insufficient to describe the new forms, their ramifications on
other system elements, and their geographic distribution, thereby making the task of impact assessment
of new OCS developments on rural populations very problematic and, in practice, very generalized.
Change has not occurred at the same rate and with the same focus in different regions, and the diversity
of economic, social and cultural characteristics of Alaskan populations is significant. I am suggesting that
our studies need to develop more adequate primary information on existing social and cultural condi-
tions which is capable of describing the diversity among populations within OCS regions and which has
a focus on dynamic economic, social and ideological structures in the context of changing cultural
adaptations.
183
Introduction
Local Socioeconomic Studies
Jack R. Heesch
The purpose of this paper is to attempt to succinctly summarize the purpose, role, uses, and changes
which the local socioeconomic studies have either served or experienced since the inception of the
Socioeconomic Studies Program (SESP). The paper will not give the specific findings of the
socioeconomic studies which have been conducted over the past six years, although some details may
be provided for purposes of clarifying identified trends offindings which have influenced policy direc·
tion.
The local socioeconomic study has focused on existing and future demographic and economic condi-
tions. Particular items of interest have included composition and seasonality of employment/unemploy-
ment. skill and income levels, sector characteristics of the local economy, and composition and trends of
the population. The socioeconomic study also has included an analysis of land use patterns, the com-
position of housing, land status including current development constraints, land availability, and com-
munity facilities and services.
Until the most recent granting of socioeconomic studies contracts in the spring· of 1982,
socioeconomic studies have tended to focus on the regional center, or sub-regional center(s), most likely
to be directly impacted by the activities associated with OCS (Outer Continental Shelf) oil and gas
exploration, development. and production. Given the unique isolation of the vast majority of Alaska's
coastal communities, coupled with the notion that industry would, for practical reasons, choose to
locate its operations relatively close to, or in, communities with existing infrastructure which could be
utilized by industry, the major regional centers and, in some cases, sub-regional centers, have been
selected for study.
Occasionally, communities which did not have these characteristics, but which were considered as
possibly vulnerable, were studied. This is particularly true in the case of the joint Federal/State Beaufort
Sea sale (sale BF) where the communities of Wainwright, Nuiqsut. and Kaktovik were studied, although
none are considered regional or sub-regional centers, and were probably also never considered likely
candidates by industry.
The political organization of the sale area/study region often dictated the scope of the socioeconomic
study. Most of the regional and sub-regional centers throughout the state are incorporated com-
munities, i.e., first or second class cities, or home rule municipalities. In some cases, the study region
also encompasses an organized borough government. In those cases, the socioeconomic study has
examined the fiscal effects of the proposed action on chat governmental entity.
Socioeconomic studies have provided input into sfx environmental impact statements, either draft or
finaL to date (i.e., sales BF, 55, 46, 60, 57 and 70). The use of the study results in the statements has been
varied, although utilized to some degree in each.
The likelihood of OCS-related impacts generally defines the degree of discussion of the subject com-
munity. The more likely im'pacts are, the greater the degree of discussion in the impact statement.
These discussions generally included a synopsis of the baseline conditions identified in the study, the
forecast of the non-OCS, or base, case and a discussion of the potential impacts.
184
Methods
The local socioeconomic study process has ·been generally organized to include a description and
analysis of the baseline, or existing, conditions of the subject community. This description includes a
historical analysis which provides a context for understanding the current conditions· and also provides a
basis for determining continuing trends.
The next phase entails the development of a detailed set of assumptions, methodologies and stand-
ards to be used in projecting and evaluating future changes in the varfous socioeconomic systems. These
are developed for the non-OCS case, and, where different. the OCS impacts case.
Finally, the forecasting and analysis is conducted by applying the developed assumptions,
metf:todologies and assumptions, in c:ombination with the anticipated development scenarios. These
impacts cases are comparative to the non-OCS case and generally focus only on those areas where
negative effects are likely.
In conducting the studies, researchers have been directed to identify, locate, and obtain data and
other information on the relationship between OCS development in the proposed sale area and
socioeconomic characteristics of the subject community. The purpos·e has been to establish an
understanding of current and future socioeconomic conditions and the experiences, attitudes, plans, and
actions of the subject communities. Specifically. the studies have focused on the following:
1. Population composition consisting of historical trends (within a realistic time frame), current
populations and population growth prospects at the community level. Where annexations or
other unique changes in populations occur, these have been noted and explained to the extent
possible. Also, where possible, characteristics of the population including age by cohorts and sex,
racial composition, migration trends (where identifiable), education levels, and family size and
composition have been included. '
2. The economy. including composition of employment, unemployment. seasonality of employ·
ment, recent trends and changes in the economy, occupational skills. income levels and a brief
sector analysis of the current influences of oil and gas. government. the fishing industry, tourism,
and the Alaska Native Claims Settlement Act (ANCSA). ·
3. General land use patterns and existing or proposed land use and CZM (Coastal Zone Manage-
ment) plans.
4. The composition of housing, including housing supply and the number of homes, trailers, or
apartments. To the extent possible, information on the condition and use of housing, particularly
vacancy characteristics, together with the demand for housing and its effect on infrastructure
should also be sought.
5. Development constraints including topography, land availability, and land status with particular
focus on the consequences of state and federal iand selections under ANCSA.
6. Community facilities and services with particular focus on the present use and capacity of these
subsystems to respond to changes. These facilities and services include:
A. Public Safety
B. Health and social services
C. Education
D. Recreation and tourism
E. Utilities including:
1. Water
2. Sewerage collection and disposal
3. Electric pow~r
4. Solid waste disposal
5. Communications
7. Fiscal characteristics including capital improvements and annual revenue expenditures.
Based upon this research and analysis, and taking into account the developed methodologies, stand-
ards, and assumptions, the future conditions of the socioeconomic systems in the absence of OCS
activity is projected and analyzed. This analysis of change has included the documentation of the
significant factors affecting change and the reasons w~y change occurs.
185
Impacts Analysis
For each petroleum development scenario for the sale area, the various socioeconomic systems of the
subject community are projected and analyzed. These projections and analyses of conditions with OCS
are developed using the assumptions and methods previously developed. Significant factors affecting
change are documented and reasons why changes may occur are cited. The potential impacts on the
subject community's various socioeconomic systems resulting from each petroleum development
scenario are identified and described in detail. The sequence of events forecasted for each of the
scenarios is compared with existing ·conditions as well as conditions expected to result without the
planned lease sale. These analyses included an assessment of the probable direct and indirect causes and
effects of both beneficial and adverse impacts arising. from potential OCS development.
Geographic Study Areas
Local socioeconomic studies have been conducted for the Joint Federal/State Beaufort Sea (sale BF),
Eastern Gulf of Alaska (sale 55), Western Gulf of Alaska-Kodiak (sale 46), Lower Cook Inlet-Shelikof
Straits (sale 60), Norton Sound (sale 57), and St. George Basin (sale 70). Communities which have been .
studied include: Barrow, Wainwright. Kaktovik, and Nuiqsut in addition to the North Slope Borough
(sale BF); Yakutat and Cordova (sale 55); Seward and Kodiak (sale 46); Homer, Kenai/Nikiski, Soldotna
and the Kenai Peninsula Borough in general (sale 60); St. PauL Cold Bay, and Unalaska/Dutch Harbor
(sale 70). Baselines have also been conducted for both Bethel and Dillingham.
Findings
OveralL the effects of OCS oil and gas development on the local socioeconomic systems have been
generally quite limited. The possible exception is Nome, in the Norton Basin (sale 57).
Local socioeconomic effects have been tied to increased population growth within the study com-
munity and the community's ability to absorb that growth. In generaL population growth has not been
great and, for the most part, with the exception of Nome, this growth has not been beyond the capacity
of the community to absorb. Indeed, the residents of the communities may have different opinions, but
the study results have almost uniformly indicated that the rate of population growth in the com-
munities has not been greatly accelerated.
This slightly accelerated growth is a result of essentially three causes. The first is direct OCS employ-
ment resulting in in-migration to the community. Second is in-migration related to secondary employ-
ment as the result of resident direct OCS employment and the increased economic activity associated
with OCS development. Finally, and to a much lesser degree, job seeking in-migrants to the subject
community &om the surrounding region did somewhat contribute to the accelerated growth pattern. In
most every case studied, the base case, or non-OCS forecast, has had a higher population growth rate
and concurrent socioeconomic systems demands, than has the OCS case forecast.
Specific impacts have been more or less limited to several areas of concern. These have included: l<!-nd
use and land use planning; housing and related utilities; public protection, including police and fire; and
local government revenues and expenditures.
Many of Alaska's coastal communities have limited useable land for expansion. Most of the land
within the jurisdiction of the local government is either being utilized, is unable to be developed, or
would be too expensive to develop. Land beyond the jurisdiction of the local government. but
nonetheless adjacent to the community are, in most cases, beyond the authority of any planning body.
Growth in these areas is uncontrolled, although it obviously has direct impact on the adjacent subject
community. .
By and large, surplus housing does not exist in the Alaskan coastal communities which have been
studied. In fact, much of the existing housing being currently utilized in these communities is con-
sidered substandard. Overcrowding exists in many of the communities.
Public services to these existing housing units is also problematic. While water services generally
exist to almost all housing units, sewer service frequently does not. Frequently, the existing water and
sewer systems are strained to capacity and have little room to accommodate additional growth.
186
Fire and police protection are often at minimal levels. In many cases, fire services are provided by a
volunteer force. Often, fire fighting equipment is inadequate in that the units are either insufficient or
outdated. These problems are compounded as the water systems are not capable of sustaining minimum
flows for fire fighting severe blazes or fires in large structures. Also, fire fighting capability does not
extend beyond the boundaries of the local community, leaving those populated areas just beyond the
local jurisdiction without protection. Police protection is generally at minimal levels. In some cases,
there is no local police protection and existing police services are provided by the Alaska State
Troopers. Where local polic;:e services are provided within the local jurisdiction, the population just
beyond that jurisdiction causes additional strain on the local services.
Increased pressures to provide services causes increased fiscal pressures on the local governments.
While the expenditures of local government are assumed to remain constant on a per capita basis,
revenues do not increase proportionately. While revenue sharing funds do increase on a per capita
basis, the tax bases of the communities do not expand in that same ratio, leaving the community with a
shortage of funds. Exceptions are the cases of organized boroughs which are able to take advantage of
the increased tax base provided by industrial facilities.
The local socioeconomic studies, while being both important and usefuL have been somewhat
limited. While focusing on the socioeconomic aspects of the regional centers, i.e., the demographic
characteristics, the economy, and the community's infrastructure, these studies have generally ignored
the cultural aspects of the community and the relationship of the community to the balance of the
region. Additionally, the sociocultural studies which have been regional in nature, have generally
glossed over the socioeconomic characteristics of the region and have ignored any regional economic
considerations. ..
The limitations of these studies have made it difficult to conduct any regional analyses in that :we
have not been able to determine the regional effect of impacts on the regional centers. There has been
no way to determine the extent of any "rippling effect" regional center changes might produce. We
have also been unable to determine what effects the increased economic activity within the region,
related to OCS activity, might have. We have also been unable to predict the economic effects on a
mixed subsistence/cash economy.
To begin to rectify these shortcomings, the local socioeconomic study has been exp<~.nded to a
local/regional socioeconomic study, which has also incorporated many of the aspects of the
sociocultural studies.
These latest series of studies have been expanded to include an examination of, at least, the follow-
ing:
Employment activities and interrelationships within the region. This shall include a detailed
accounting of employment. self-employment. and/or non-wage income, governmental transfer
programs, and other sources of income such as Native Corporation payments.
Economic activities within the region including the production and transfer of goods and the pro-
vision of services requiring regional interaction.
Relationships between (1) the need for cash to pay for subsistence participation fueL electricity,
and maintenance of housing and village faci!ities; (2) the availability and seasonality of wage
labor employment or other cash sources; and (3) the scheduling of subsistence harvesting and
ability to utilize subsistence resources given the need for cash in the village.
Subsistence activities and patterns including an accounting of subsistence production by season,
estimates of cash income to support the necessary technology, seasonality, forms of individual
and/or household production and sharing of harvest products, interrelationships with comm~r
cial harvest and manufacturing pursuits, and other sources of subsistence resources.
Social organization and integration dynamics unique and particular to the study region or where
differences exist to subregions, including patterns of kinship, inter-marriage, factionalism, social
relations in harvest and distribution of renewable resources, and participation in regional plan-
ning, regulatory, corporate and governmental activities.
187
Migration patterns of residents ~ncluding temporary relocations. but within and beyond the
region resulting &om subsistence pursuits, employment opportunities, kinship, and any other
reasons for such migration.
This approach·is currently being utilized in two study regions: the North Slope Borough, related to
sale 87, Diapir Field; and Norton Sound, related to sale 100, Norton Basin. While the results of this
work are forthcoming, initial activities and findings are encouraging in that this approach will provide
much needed information to the Alaska OCS Office.
188
Introduction
Anchorage Impacts: .
SESP Evaluation
Marsha Bennett
As the transportation and distribution center of Alaska, Anchorage is Alaska's fastest growing and
largest city. Although not the oldest settlement in Alaska, Anchorage's topography and other locational
advantanges have encouraged a series of booms, beginning in 1914 when the original city took shape as
a tent city for construction of the Alaska Railroad. With the buildup of the military and the Port of
Anchorage in the 1940's and 1950's, and the discovery of oil in the 1960's, Anchorage became the
regional headquarters of the oil industry and with it, the central hub of the growing oil economy. Bank-
ing, finance and insurance sectors of the economy have also prospered, as have Universities, professions
and retail and wholesale trade. Along with this dynamic growth, boom town problems of alcohol and
drug abuse, domestic violence, and violent crimes have encouraged growth in services and programs to
combat these problems, but continue to give Anchorage a "frontier" image and ambience.
Housing and infrastructure growth have followed a boom pattern, with periods of shortage and scar-
city followed by spurts of growth. These growth characteristics have given the city both a dynamic,
energetic character and a somewhat patchy, haphazard urban design, as speculative, boom-dominated
decisionmaking has often been substituted for a more rational planning process.
Recognizing the importance of Anchorage as the transportation and distribution hub and "oil capital"
of Alaska, SESP has, from the outset, built in an Anchorage Impacts component to its systemic studies
program. Starting with Technical Report 12, "Anchorage Socioeconomic and Physical Baseline", and
Technical Report 13, "Beaufort Sea Impacts on Anchorage", the demographic, economic, physical,
governmental and organizational structures of Anchorage have been described and updated, together
with impact· projections for the Beaufort, Gulf of Alaska, Lower Cook Inlet, and St. George Basin lease
sale areas (Technical Report 13, 48 and 61 respectively).
Utilizing MAP (Man-in-the-Arctic Program) model projections, forecasts of likely growth under
varying scenarios of OCS impacts have been projected and compared with non-OCS cases, with par-
ticular emphasis on potential growth in demand for educationaL public safety, recreationaL health and
social services personnel and/or facilities, housing and utilities. These yearly updates have provided the
Anchorage planning and business community with one set of benchmarks for schooL housing, and
other physical planning, particularly in light of the paucity of data and targeted or specialized nature of
most Anchorage overviews. Within SESP, Anchorage baseline and impacts volumes have provided an
urban contrast and a methodology for addressing OCS impacts within an urban context, which ~om
pliments impact assessments completed for coastal communities and regions of Alaska, particularly in
the area of socioeconomic assessment.
Methods
Beginning with Technical Report 12, Anchorage baseline ~md yearly updates have been completed
by the same firm, Policy Analysis, Inc., headed by Dr. Richard Ender of the University of Alaska,
Anchorage. Utilizing University-sponsored survey data, Census and Department of Labor statistics and
other State, Federal and Municipal data sources, Policy Analysts has described the demographic and
189
/
economic composition and growth patterns of Anchorage, portrayed changing attitudes toward growth
and services, and documented government revenues and expenditures, health and social services,
educational facilities and services, police and State Trooper services, fire protection, leisure and recrea-
tion patterns, land use, utilities and transportation in Anchorage. Where national standards for govern-
mental services are available or appropriate, Anchorage services are compared. For the most part,
however, Anchorage governmental structure and services, population and economy, are described and
updated within the local context. For example, Technical Report 12 forecast the following general
trends in 1978:
Increasing diversity of service demands;
Increasing extension of urban services to less populated areas of. the Anchorage bowl;
Increasing demand for major capital expenditures for facilities usually found in large urban
centers; and
Increasing incidence of public safety, social services, transportation, health and other service
problems generally endemic to large urban areas.
A matrix of non-OCS and Mean OCS projected impacts on Anchorage infrastructure for the most
part shows low to moderate growth with mildly stimulating economic effects (Technical Reports 48 and
61). See attached Tables 1, 2 and 3 &om Technical Reports 13, 48 Volume II, and 61 for additional
details.
Table 1: Non-OCS Case
Cumulative Ratio of Service Requirements to Populations
1980 1985 1990 1995 2000
194.636 234,393 254,910 283,070 322,608
Education: Primary/Secondary · Number of Manpower/Facilities 1.557 1.875 2,039 2.265 2,581
Public Postsecondary · Number of Credits 63,011 85,790 101.324 122.290 147,106
Public Safety: Police -Manpower 356 387 430 490
State Troopers -Manpower 29 35 38 42 48
Fire · Manpower 286 345 375 416 47.4
Leisure: Play Lots 77 93 101 113 129
Neighborhood Parks 19 23 25 28 32
Softball Diamonds 65 78 84 94 107
Basketball Courts 389 468 509 566 645
Swimming Pools 19 23 25 28 32
Skating Rinks 6 7 8 9. 10
Community Centers 8 9 10 11 12
Utilities: Water· (Millions of Gallons per Day) 39.5 47.6 51.7 57.5 65.5
Sewer · (Millions of Gallons per Day,
Wastewater Generated) 31.5 38.0 41.3 45.9 52.3
Electricity
Telephone
Solid Waste
Housing: Units 65,297 78,635 85,518 95,145 108,230
Health: Bed Needs 376 453 493 547 624
Primary Care Physicians 243 292 318 353 403
Social Services: Day Care Space 2,919 3,515 3,823 4.246 4.839
Unemployment Claimants 12,651 15,235 16,569 18,399 20,969
Low Income Housing Units 3.017 3,633 3,951 4.396 5,000
Transportation
Financial Capacity and Capital Requirements
Source: Technical Report Number 13, Beaufort Sea Anchorage Impacts Analysis.
190
Education:
Public Safety:
Leisure:
Utilities:
Housing:
Health:
Social Services:
Transportation
Table 2: Moderate Base Case-5% Scenario
Cumulative Ratio of Service Requirements to Impact Projections
1980 1985
0 457
Primary!Secondary -Number of Manpower/Facilities .3
Public Postsecondary -Number of Credits 173
Police -Manpower. 0.8
State Troopers -Manpower 0.0
Fire -Manpower 0.7
Play Lots 0
Neighborhood Parks 0
Softball Diamonds 0
Basketball Courts 0
Swimming Pools 0
Skating Rinks 0
Community Centers a
Water-(Million Gallons Per Day) 0.1
Sewer -(Million Gallons Per Day, 0.1
Electricity -(Megawatts) 1.6
Telephone 1.5
Solid Waste-(Tons Per Day) 1.5
Units ISO
Bed Needs I
Primary Care Physicians I
Day Care Space 8
Unemployment Rates (cumulative) 8.2
Low Income Housing Units II
Financial Capacity and Capital Requirements
1990 1995
3.404 4.735
25 .34
1,377 2.051
6.1 8.5
0 . .3 p.s
5.5 7.o
1 2
0 0
I 2
1 2
0 0
0 0
0 0
0.5 0.7
0.4 0.6
14.6 24.1
1.3.0 20.5
1.3.0 20.5
1,128 1,607
7 10
4 6
61 85
7.2 7.6
86 122
Source: Technical Report Number 48, Volume 2, Gulf of Alaska and Lower Cook Inlet Anchorage Impact Analysis.
191
2000
5.8.31
42
2.729
10.4
0.6
9.4
2
I
2
2
0
0
0
0.9
0.7
.35.6
28.5
28.5
1,980
12
7
105
7.7
ISO
Table 3: Mean Scenario
Cumulative Ratio of Service Requirements to Mean Scenario Projections
1980 1985 1990 1995 2000
0 71<-1 9,184 7,3b2 8,034
Education: Primary!Secondary ·Number of Teachers 0 .12 1$3 00 72
Number of Classrooms 0 9 62 50 53
Postsecondary · Number of Credits 0 590 4,807 4,250 4,950
Public Safety: Law Enforcement Manpower 0 3 19 15 lo
Fire & Rescue Operations 0 1 12 10 11
Paramedics 0 0 2 2 2
Leisure: Play Lots 0 1 3 3 3
Neighborhood Parks 0 0 1 I 0
Softball Diamonds 0 1 3 2 3
Basketball Courts 0 1 4 3 4
Swimming Pools 0 0 1 0 I
Skating Rinks 0 0 2 1 2
Community Centers 0 0 1 0 I
Utilities: Water· (Million Gallons Per Day) 0 0.2 1.4 L2 1.3
Sewer · (Million Gallons Per Day, 0 0.2 1.2 0.9 l.O
Electricity
Telephone 0 663 4.409 3,533 3,856
Solid Waste · (Tons Per Day) 0 3 823 18 21
Housing: Units 0 503 3,418 2,747 3,010
Health: Bed Needs 0 3 18 14 16
Primary Care Physicians 0 2 ll 10 10
Social Services: Day Care Space 0 25 162 130 142
Unemployment Rates (cumulative) . 3.5 7.4 7.4 7.2
Low Income Housing Units 0 36 249 199 219
Transportation
Financial Capacity and Capital Requirements ·
General Government ( 1980 millions of dollors) 0 l.O 8.0 7.1 8.4
Education ( 1980 millions of dollars) 0 .9 0.8 5.9 6.8
Source: Technical Report Number 61, St. George Basin Anchorage Impacts Analysis.
192
Change of Approach
The current Anchorage baseline update and impact assessment for the Diapir Field, lease sale 87 area,
is being conducted by Kevin Waring Associates, with a Draft Final Report due February 28, 1983. The
updated baseline will be self-contained rather than an addendum to previous baseline documents, and
an additional section of the report will deal with growth management capacity of the community of
Anchorage for both public and private sectors. The methods, standards, and assumptions to be used will
be similar to those used by Policy Analysts, Ltd., particularly in use and analysis of data and in applica-
tions of standards for measuring infrastructure impact. Additional effort will be addressed to qualitative
thresholds of significant impact, and to institutional and financial capacity of the community to respond
to growth demands (i.e., growth management).
Unanswered Questions
A sociocultural analysis of Anchorage as a social community, as an urban design, and as an organiza-
tion of neighborhoods with distinct histories, sub-cultures and populations has never been undertaken
under SESP auspices, nor, in fad, by any other funding source. Similarly, the growth of Native
organizations and populations in response to the Alaska Native Claims Settlement Act has only
minimally been covered in past Anchorage studies. Anchorage baseline updates and impact assessments
also, for the most part, consider the Anchorage metropolitan area home. These workers and their
families are little understood by social and economic analysts, in part because their residency is counted
away from their place of work. School enrollments, housing demands, government service demands,
and certain interrelated social characteristics which attend boom-town growth, and are associated with
long working hours and regularized absence from families and children, are masked by our inability to
identify and selectively study these workers and their families. Hopefully, future studies will address
some, or alL of these issues.
193
Primary Social Field Research in Socioeconomic Monitoring
Steve McNabb
In this paper I plan to discuss some characteristics of strategies for the identification and diagnosis of
socioeconomic events and impacts relevant to OCS monitoring. I am going to skirt the issue of OCS
impacts per se in favor of a more discursive treatment of socioeconomic events in a larger perspective,
not in order to avoid OCS issues for any special reason, but because the data I wish to describe pertain
to far more general conditions; nonetheless these conditions, the data that reveal them, and the methods
used for assessing them are directly relevant to OCS monitoring. Furthermore, I plan to use this discus-
sion to make a 'pitch' for a certain kind of monitoring research, a form of research that is critical in the
Alaskan case. I will begin with a general discussion of some basic and general characteristics of scientific
measures of socioeconomic conditions and changes in those conditions; this dicussion will situate the
perspective I will advocate in the larger scheme of things, so that the position I advocate later makes
sense.
When I speak of basic characteristics of socioeconomic measures, I mean that there ~e basic "tests"
which socioeconomic meas1:1res should pass in order to be considered worthwhile measures of the
events or conditions to which they refer. And when I speak of socioeconomic measures, I am not refer-
ring to tools that may be used for forecasting or projecting likely future conditions based on past or cur-
rent ones. Rather, I am speaking, rather loosely actually, of types, orders, or collections of social data
that can be used to identify and diagnose socioeconomic events. Identification for my purposes refers to
what anthropologists typically term "provenience": the what where and when of a given condition. By
diagnosis I do not intend a meaning any more technical than the empirical implications and portent of a
condition.
Incidentally, I am using the term socioeconomic measure in lieu of what may seem the more
appropriate "social indicator", because these measures I will discuss, especially as they are used to
account for. assess, or otherwise identify various dimensions of empirical primary data, have not been
validated at several points in time, as is the standard scientific requirement for social indicators, nor am I
sure just what socioeconomic variables cluster around these measures; that is, I am not sure what range
of conditions they may measure, and measure welL if at all. They are speculative indicators, or perhaps
more properly, hypothetical and provisional indicators of broad socioeconomic conditions.
Be that as it may, there are several tests that any such socioeconomic measures should pass in order to
count for good measures. Some of these are as follows:
These measures should have a formal as well as an empirical grounding in that they should reflect
real conditions, and should thus be factual. They should match real conditions as they are measurep and
experienced along some standard dimension. By formal grounding, I am referring to the grounding in
logic and a body of theory that lends itself to inteFpretation and understanding. For instance, increases
or decreases in barometric pressure are meaningful to weather prediction because there is a body of
climatological theory that links barometric pressure to real weather conditions; thus both empirical
observations and a logical framework for interpretation are embodied in these data and the uses to
which the data are put. Formal properties are those principles of structuraL processuaL logicaL analogic
and digitaL and other properties and relations that represent a context within which empirical events
can ~e explained and understood. For socioeconomic events, then, the empirical dimension refers to
194
actual observations, while the formal dimension refers to that larger interpretative framework within
which empirical events are couched, contextualized, and explained. Thus employment and unemploy-
ment rates are empirical observations, but make no sense unless they can be integrated within a larger
perspective relevant to economic theory. To return to the barometric pressure example, barometric
pressure may be a systematic empirical event, but unless we know what increases or decreases in this
pressure mean in the larger picture (i.e. within a theory of weather), there is little reason to measure it.
The same is true of rates of employment and unemployment.
Especially relevant to OCS and related impacts and monitoring of these impacts is the power to
distinguish on the part of socioeconomic measures. These measures should be sensitive enotigh to
distinguish between generic types of events of which OCS or similar development events are only one
type or one representative; between events or impacts that are clearly non-OCS or non-development in
origin, and those that clearly are OCS or development in origin; and, ideally, should be able to
distinguish between the underlying conditions under which these events are promoted, inhibited, or
maintained, be they OCS related or not. This power to distinguish, naturally, takes on different forms
in proportion to the administrative priorities of agencies charged with addressing different issues; in
some cases, strategies need to distinguish between only natural and human interventions, between
events of internal and external origin, and so on. In any case, the sensitivity of the measure for
distinguishing between events is nearly always a critical element underlying the development of a
monitoring strategy.
The measure should also be reliable and valid, or at least should strike a balance between the two pro-
perties. The two measures are not necessarily coterminous, and in fact seldom match. For instance, a
highly valid model may encompass many facts and many variables, but may exhibit such a high margin
number of air conditioning units, the number of cable TV hookups, or the number of 4 wheel drive
vehicles in rural communities may well measure something reliably every time, and may distinguish
between certain conditions quite well, but the something that is measured under given conditions may
be trivial compared with the other elements that need to be measured.
The measure should also be reliable and valid, or at least should strike a balance between the two pro-
perties. The two measures are not necessarily coterminus, and in fact seldom match. For instance, a
highly valid model may encompass many facts and many variables, but may exhibit such a high margin
of error that projections based on the model are seldom on target; the model is valid, but unreliable. On
the other hand, a model may be very reliable, in that comparable values and comparable assumptions
produce comparable results every time, but may account for very little; such a model is reliable but not
valid.
I feel I may have already strayed too far afield, for in fact I am not going to address all of these
characteristics, those of reliability and validity, distinctiveness, non-triviality, and so on. But I do intend
to address real and tangible concerns relevant to OCS and other .monitoring, and so feel that at least a ·
minimal overview of the key common denominators of good strategies should be addressed. There are
other key denominators that should be mentioned before moving on, since the concern here is for
strategies that are in fact tangible, realistic, useful, and sound. These are as follows:
Monitoring strategies must meet three other basic requirements if they are to be useful; they must be
scientifically sound, administratively feasible, and financially economical. There are many other
requirements that could be mentioned here, but these are primary and embrace, at least in part, most of
the others.
In brief, the approach should be scientifically sound. It should be replicable, it should be grounded in
formal as well as empirical principles, it should be valid, and it should be reliable. In addition, it should
be administratively feasible; the approach should not be so arcane or intangible that it cannot be carried
out by another monitoring team and evaluated using current standards. In fact, this requirement sounds
much like another common requirement for scientific acceptance. Finally, the approach must be
economical. Many potential scientific schemes for monitoring research are prohibitively expensive, and
it is unlikely that many of these methods will be adopted for bureaucratic use. It is possible that some
methods will be administratively feasible while uneconomical, while others will be infeasible but
economical, although it is much more likely. that the former rather than the latter will be more com-
mon. All of these concerns underlie the development and adoption of a monitoring strategy by a
governmental entity.
This discussion leads directly to the position I wish to advocate, for it is clear that a government-
195
sponsored monitoring strategy, as has been the case with social indicators and other monitoring in the
past, will necessarily need readily available, secondary, aggregate data from archival and agency
sources. These data, because they are so readily available, provide the key to feasible and economical
methods; but are they scientifically sound, and in the long run, even economic and feasible?
The pitch I want to make is as follows: primary, that is to say on-site, long term, intensive field
research is a necessary and central component of monitoring work that should be done in any Alaskan
situation; it is a form of research that is critical to any and all understandings of how local populations
adapt to change, respond to stress, and accommodate to institutional transformation and shift. The
necessary role of this primary research will be clearly stated and demonstrated in this paper; the relation
of this sort of research to the secondary, aggregate data will be explained; and the final and crucial
integration of the secondary, and the primary, personaL ethnographic data will be illustrated. But first I
wish to speak to the secondary data we would otherwise prefer to use in monitoring research.
The first chart I will introduce is a time series of employment in the Kobuk region, ranging from
Januarf 1975 to December 1979, a five year time series of 60 observations (Figure I). You will note that
there is an employment peak in recorded, covered employment during the summer of 1976. In Figure
2, you will see that there is a complementary peak in unemployment during the same period, summer
1976. Similar employment and unemployment peaks occur elsewhere in the data record. This is a very
curious observation, of course, that peaks in employment match peaks in unemployment. Many factors
could account for this odd situation, including employment inmigration, recording lags in either the
employment or unemployment time series, and many other reasons, including various recording
artifacts or administrative changes that could have affected the time series. In this case, it is likely that
the seasonal movement of people out of the search for employment during the winter, combined with
other effects, produces the complementary peaks. Nonetheless, it is clear that time series with a large
sample population, that should otherwise be considered valid and reliable data sets, are troublesome;
the trend tendencies are counterintuitive, and we cannot really be sure what these data sets mean, how
they were collected, and what erratic recording problems are hidden in them.
Perhaps we can look farther afield for socioeconomic data that can cast some light on current trends
and conditions in the Kobuk area. The next chart (Figure 3) illustrates non-accidental violence as
recorded by health officials in the Kobuk area; here we see a sharp drop after the third quarter of 1979
yet the Kotzebue area crime totals (which should not show a necessary correlation, but a presumed one
with the health violence totals), shown in Figure 4, bear little if any relation with the previous figures.
The health violence trend line accounts for over 50% of the variance in that distribution, whereas the
crime trend accounts for less than 2 % .
The Kotzebue youth and family s~rvices, social services case load is displayed in FigureS; Kotzebue
accounts for fully half of the population of this region. We see here a trend line that accounts for over
50% of the variance in the overall distribution. Yet, if we move less than 60 miles away to a nearby
village, Selawik, we find the distribution displayed in Figure 6 for the same period, for the same social
service cases. Although the trend may seem similar in terms of peaks and valleys, this trend line
accounts for less than one half of one percent of the variance in the Selawik distribution. What this
means is that, even though we may identify trends that seem consistent and cohesive in the major hub
towns, such as Kotzebue, these same trends, that nonetheless account for half the regional population
cannot account for the individual villages within the region. These large scale, major, large sample data
do not seem to provide adequate data for any single community in the region to which they refer,
except perhaps the major hub communities.
Let us now look at some empirical data for a small village of about 280 people within this larger
Kobuk region. It is here that I will begin making my pitch for the primary, field-oriented research
approach, an~ will begin it by displaying the sort of first-hand, empirical data that can be obtained at
this level. Figure 7 displays a fishing record of a sample of seven families in Kiana during the summer of
1975. Fishing activities are charted against other community activities that may be politicaL ceremoniaL
or economical in type or origin; no assertion is made regarding the cause and effect of any activities or
their consequences. That is, although various community activities are charted agq.inst lo~ered fishing
levels, I do not intend this fact to state that the given activity caused lesser fishing levels, or that lesser
fishing levels caused the given activity; they simply co-occurred. Examination of the first fishing record
shows that a whole mosaic of community activities was carried on in conjunction with subsistence
activities. Examination of Figure 8, however, shows a different story at the end of the summer. The
196
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··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+··+
0 (I MONTH 0) 59
V~ IV~
Figure 1. Kobuk Employment, 1975-79
Source: Alaska Department of Labor
197
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0 (1 MONTH 0) 59
li~ 1V~
Figure 2. Kobuk Unemploymerit, 1975-79
Source: Alaska Department of Labor
198
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-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+ o (1 MONTH o) 35
Figure 3. Non-Accidental Violence in Kobuk Area, 1979-80
Source: Indian Health Service and Patient Care Information System.
Note: Least squares trend line accounts for 52.38% variance.
199
17.00+
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··+··+··+··+··+-·+··+--+--+--+--+--+-·+··+-·+··+-·+--+--+-·+··+··+-·+--+--+ o (I MONTH 0) 23
Figure 4. Health Violence in Kotzebue Area, 1979-80
Source: Department of Public Safety and Kotzebue Police Department.
Note: Least squares trend accounts for 1.3 % variance 1980·1981 (24 months). ·
200
c
A s
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o (1 MONTH 0) 54
Figure S. Kotzebue Youth and Family Service Case load, 1977-81
Source: Division of Health and Social Services and Division of Family Services, Kotzebue 1977-1981
(SS months).
Note: .Least squares trend line accounts for 53.52% variance.
201
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0 (1 MONTH 0) 52
Figure 6. Selawik Youth and Family Services Case Load, 1977-81
Source: Division of Health and Social Services and Division of Youth and Family Services, Selawik.
Note: Least squares trend line accounts for 0.39% variance.
202
fishing record during this summer was poor by comparison, and by the end of the summer residents
were leaving Kiana in order to secure jobs or other activities in Kotzebue, Fairbanks, and other loca-
tions. This is clearly apparent at the end of the fishing record. (Refer to Table 1 for an explanation of the
community events that coincided with the given fishing results, shown in Figures 7 and 8.)
You will recall that the aggregate employment and unemployment data showed no such indication
of any data ripple during this period that would substantiate such a primary data finding (i.e. that of a
subsistence, and thus economic impact). Are there other aggregate data sources that would bear this
primary, field-based observation out, or not?
The primary, field based record showed, if we can interpret it correctly, local uncertainty and agita-
tion late in the summer. Let us examine other data, secondary aggregate data, to see if these findings are
born out. Third quarter average wages in Kiana show a drop compared with other, previous years
(Figure 9). This obvious and dramatic decline would seem to be good corroborative evidence of the
economic impact demonstrated in the primary ethnographic data; third quarter wages are shown here,
of course, because it is the third quarter that embraces the late-August impact indicated in the primary
data. But average wages in a small rural community in Alaska can hardly be taken to be data with which
generalizations can be developed; it is unlikely that more than two dozen residents were employed in
this period, a very small number to say the least. Nonetheless, these data complement the primary find-
ings while the larger sample of regional employment and unemployment data does not.
Table I. Kiana Summer Calendars, 1975 and 1976
These calendars are keyed to the Kiana Fishing Record charts. The capital letters and vertical broken
lines on the charts refer to other community activities and conditions that occurred during the summer
fishing season. These other events are charted against the time line on the chart in order to show how all
of these summer activities intersect and influence one another. The broken lines represent activities of
longer duration. ·
1975
(A): rain, high water.
(B): barge arrives; people begin preparing nets and racks.
(C): many people leave to visit Noorvik 4th of July celebrations; 4th of July celebrations in Kiana.
(D): KOTZ radio reports first salmon in Kotzebue.
(E): 38 adults leave for fire-fighting (two crews).
(F): boating accident, lower Kobuk River.
(G): funeral in Noorvik; many Kiana families attend.
(H): BLM fire-fighting checks arrive; brief partying.
(I): another fire-fighting call; 38 adults (two crews) depart.
(J): heavy rain.
(K): berry-picking starts. .
(L): BLM fire-fighting call for one more crew; 19 depart.
1976
(A): vacation Bible school parties.
(B): weather rainy, high water.
(C): planning begins for 4th of July festivities and Bicentennial celebration, hosted in Kiana t~is
year.
(D): fourth of July, bicentennial festivities.
(E): BLM fire-fighting call for two crews (38 persons); PHS sewer work with local employment
begins.
(F): Quarterly Friends Church Meetings begin in Kotzebue, Kiana participants depart.
(G): local frustration due to bad fishing harvest; some local people leave for Kotzebue and
Fairbanks to look for jobs; sporadic drinking sprees erupt.
(H): complaints by residents about local bickering, feuds, and factions increase.
203
#FISH
0 N ...... (J1 0
0 0 0 0 0 0 0 0 0
ATE
June 20
22 • {A)
24 (8)
26
28
30
July 1 (C)
3
5
7
9 (E) (0)
11
13
15
17
19
21
23 .... !-······· (F) 25 ...
27 ~~·· (G) .......
29 ~
August 1 ***
3 ·¥··········
.,
•••••••••••• (H) (3000)
5
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204
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206
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210
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211
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Source: Department of Labor.
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212
Total employment in Kiana (Figure 10) also shows a conspicuous decline for 1976; although the same
criticisms of the data (that is, a very small total N) can be leveled, it is clear that here too we find cor-
roboration of the primary data observations that are not born out by the large sample, significant.
statistically valid data sets.
Figure 11 shows Kiana mean subsistence salmon (chum) catch, 1971-80, and Figure 12 shows the total
catch for the same period. These Figures clearly corroborate the primary findings, but nonetheless con-
tain the same shortcomings of the other locaL small sample data illustrated above; they represent far too
few people to be representative of generalizations worthwhile for serious impact findings, at least in-
sofar as these findings must be statistically valid. A paradox is beginning to take shape: the primary data
that represent clear and unequivocal observational findings are only born out by secondary data that
are statistically irrelevant. while the statistically relevant (i.e. large sample, regional aggregate data) data
do not correlate with the phenomenologicaL ethnographic, longitudinal primary data. And now we can
compare these data, again, with aggregate data for the entire Kobuk region. Looking at Figure 13, we
see that the total dollar value of commercial catches of chum salmon reached a low in 1976. Here, in
contrast to the region-wide aggregate data displayed earlier, we see that in fact some regional data do
have a connection with localized, village-level conditions. Nonetheless, when we move on to FederaL
State and local government payrolls for the entire region (which as a whole, accounts for about 80% of
the regions economic activity), we see that these larger aggregate data account for no part of the
localized impact or effect we have documented for Kiana, one of many small villages in the larger
Kobuk region (See Figures 14 and 15).
What this means is, that by triangulation (the use of many data sources in many different connec-
tions) we can cast some real light on ongoing economic processes and certainly on economic distress, in
isolated rural villages. This is the point of all the discussion above, and is certainly the point of this
paper. Not only do we need secondary and aggregate sources of data in order to identify and diagnose
real socioeconomic conditions in rural Alaska, but we need primary field research to give other, second-
ary, aggregate data research a direction, and in fact a meaning, in connection with monitoring and
general research in rural Alaska. These secondary data we have discussed would exist in a vacuum,
would be tangible but nonetheless meaningless, without the solid grounding that primary research pro-
vides. Let me reiterate the meaning of this paper.
The stronger, more substantial, aggregate data with a larger sample size, data less vulnerable to bias,
can be compared to the primary data, but in fact this comparison yields nothing cohesive; the data are
self-contradictory, do not complement one-another, and do not match. On the other hand, the primary
data match the weaker, shorter time series point by point; they are consistent, complementary, and
cohesive. Yet taken singly, or even in combination, these other data sets are not significant; the ripples
and slumps in the trends are not great enough, are not representative of enough observations, to be con-
vincing in a statistical sense. They remain little ripples in the data. Yet they are in fad consistent, and it
is the systematic variations that match the primary data reported here. We are faced with a paradox; we
can link up substantial primary data with strong aggregate data with which they do not correspond, or
we can link up the primary data with weaker aggregate data that cannot be defended statistically.
In conclusion, I must first say that the connections I have posited between these data are the sheerest
speculation; they are hypotheses. I do not have a way of securely and defensively associating the
primary, personal data with the secondary data to which I have referred them. The aggregate data are,
by themselves, vacant and uninformative, at least for the most part. I believe that the primary·data pro·
vide the mechanism and the key for explaining many of the variations in the secondary data, and in
turn, provide the major key, for explaining how communities and families respond to changes, accom·
modate to these changes, and in general make their way through life. The point of this paper is to show
that primary data are in fact primary in the explanation of how people respond, and how these primary
data can be used with, and in fact can explain, the meaning of the social indicators and larger aggregate
data we use to as,sess and measure social responses.
213
Protecting Community and Family Networks
and Cultural Values: An Indigenous View
Phil T. Penatac
Introduction: Koniag Masks and Hunting Songs
May we tell you a short Koniag Story: "A man once was unsuccessful as a hunter even though he
observed the food tabus like other hunters so he made a general appeal for supernatural aid. In a dream
one night he saw masks as if they were alive and heard songs sung by an unknown man. Thereafter the
man sang the songs and became a great hunter. When others wished to know what his secret was, he
taught them the songs and made the masks as he had seen them. And this was the beginning of these
two things."
How abundant the wealth of knowledge lodged in this story! Physical acts of singing and making
masks appear so easy and simple. Yet these physical acts illuminate the very wisdom which gave them
birth. That deep understanding of life is gently carried from one generation to the next on the wings of
the story.
There are many lessons in this tale. We choose to focus here on man's relationship to nature; we feel
that such a story has great relevance for man's socio-economic condition.
Conventional SIA Approaches
The following detail the type of approaches that have typically been used in assessing social impact:
A. It has become customary for SIA's to be done by academically accepted professionals.
B. Although the field of SIA research is young, it is seen increasingly as an integral part of resource
use decision making.
C. The mitigation of developmental socio-economic impacts, while maximizing resource develop-
ment, is the primary focus of SIA studies.
D. SIA studies purport to utilize the most advanced social-scientific conceptual framework (theories)
existing in the Western world.
E. Western theories and developer demands define what are to be considered "impact problems".
F. The method rationale may be summarized as: the performance of an objective social-scientific
description and analysis of the social and economic cost and benefits of a development project. This
information is for the use of development decision makers.
. An Indigenous View
My perspective, as a native, lends itself to a different set of assumptions and approaches, as outlined
below:
A. It has become a modern superstitious belief that SIA's be done by so-called professionals. These
SIA's are authorized, either directly or indirectly, by transnational corporations as they operate through
governments. For the SIA so-called professionals, the overwhelming seductive motivation is fees for
services rendered, especially if this includes up-front money.
B. The majority of SIA writers do not live in rural Alaska where natural resource impacts are occur-
214
ring.
C. Their ingrown world-view is primitively limited. Thus, they talk endlessly among themselves con-
gratulating each other for each new variant of their pet theories. Because their minds are so preoccupied
with self-congratulation, when they do speak with people whose ancestors have lived with the land for
millenia they do not hear.
D. The only natives they really listen to are the elite natives who have been thoroughly brain-washed
to think exactly like they do. This assures the social scientists that they will not hear anything contrary
to what they think. This communication control is great comfort to alien social scientists.
E. It's an rl priori assumption that professionalism only exists for those educated and trained by the
colonizers. People who know how to live in harmony with the land and whose ancestors did so for
thousands of years are by colonized standards ignorant about man's relationship to the land.
F. SIA's are exercises in futility; they are low-priority addendas to development decisions.'
G. SIA's are written so as not to conflict with conventional theories of economic development.
H. It is by sheer luck not by contrivance, of course, that SIA's consistently discover that development
benefits always outweigh costs. SIA writers understand completely the old slogan, "It's best not to bite
the hand thar feeds you".
I. The very fact that SIA's are separate from Environmental Impact Statements indicates the
fragmented perception of the non-native world in which man is separated from the land. Their concept
of community is a stunted version of reality consonant with their low stage of evolutionary develop-
ment. The indigenous view of the world community had progressed much farther than this thousands
of years ago. Following the view of our ancestors, we have learned to view the community as a com-
prehensive whole, whose members include: plants, animals, soiL air, water, cosmos, spirits and man.
Consequently, each and every member of the community must be treated equally. Developmental
studies must have as their goal the maximization of protection of the community, and minimization of
man-made developments. Therefore, because of their limited concept of community, SIA's and sym-
posiums such as these are a waste of time, talents, energies and money.
]. We should have symposiums that deal directly with natural resource developers with ample time
for critique by the non-professional people who bear the social costs of their development decisions.
Conclusions
There will be a whole range of rationales given in opposition to our concept of community. We pro-
pose a new criteria for judging the impacts of development as follows:
A. That the concept of community be broadened.
B. That any man-made development rigidly adhere to a standard of equality for all members of the
community.
C. That the human members of the community begin to see the gross limitations in the viewpoints
expressed by the current non-native development decision makers and the elite so-called native leaders.
If should be instructive for modern social scientists that when the native hunter in the story was faced
with dire human hungers, instead of changing the environment to meet his needs, he himself changed.
The hunter depends upon supernatural aid for subsistence hunting. He relies on nature to provide him a
livelihood. Technological exploitation of nature's resources doesn't seem to fit this native. He even
experienced hunger, after "he observed the food tabus." Rather than transforming nature, this hunter
calls on the spirits who tell him to change his act_. The duty of man is not to change nature, but to adapt
himself to nature. So the hunter taught the people how to make the masks and sing the songs and this is
the_beginning of these two things.
-See NmtQI Yaw Dat>is, A/a,;ka OCS Sodoet"vrwmi<" Studies Progntm: Hi,;torit"al lwliuttor,; o/ Native A/a,;ka Culture Cluurgc. Tcdmiurl Rq•ort
Number 15 (A11dromge, A/a,;ka: Buremt o/ La11d Marwgeme11t a11d A/a,;ka Outer Cmrti11mtal Sltcl( I •J7 8).
215
Introduction
Social Pollution:
Impact Mitigation and Compensation Schemes and the Indian Interest
Roger Justus and JoAnne Simonetta
Recent studies have shown that natural resource and energy development on or near Indian reserve
communities have not resulted in significant local Indian participation in project related opportunities.
Moreover, such development has resulted in severe sociaL culturaL politicaL economic and ecological
costs which the local Indian community must bear. This is particularly true in north-east Alberta for
Indian communities closest to oil sands mining projects. The projected benefits and opportunities
proved to be illusory or short-lived. The measures for enhancing local participation in project related
benefits were uneven and unsuccessful from the communities' points of view.
This paper will briefly review predominant myths of resource development compared with actual
experiences of Indian communities in the Athabasca Oil Sands area near Fort McMurray in north-east
Alberta, Canada. It will focus particularly on the social impacts of measures to ensure significant Indian
participation in project benefits. The history of mitigation and compensation intents, measures and out-
comes will be examined as to the absence of real benefits accruing to the local Indian population and for
the very significant and long-term social consequences of mitigation, management and compensation
schemes themselves for lo~al Indian community life.
It is the central thesis of this paper that any attempt to design a compensation or mitigation program
in which the local and most directly affected Indian people have not designed the policies, programs,
measures and mechanisms to identify and effectively deal with project related impacts will ultimately
result in what we call "social pollution". "Social pollution" refers to the incremental deterioration of the
social fabric of the community, Indian values, the Indian economy, organization and the overall ability
of the community to manage itself which tend to occur when non-Indian strategies, measures and
mechanisms for dealing with mega-projects and their impacts are imposed on them. Examples of this
phenomena will be discussed in the light of preliminary findings of on-going impact research into the
effectiveness and consequences of traditional mitigation and compensation schemes. Cures for "social
pollution" in this context will be suggested.
Brief History Overview of Athabasca Oil Sands Development and Fort McKay
The Fort McKay settlement lies some 65 kilometers north of Fort McMurray, Alberta on the west
bank of the Athabasca River. It is situateq in the geometric centre of all existing and proposed oil sands
development in north-eastern Alberta. Virtually the entire community consists of native people, either
Treaty Indian, non-status Indian or Metis. The Indian economy of Fort McKay is a mixed economy
which relies heavily on natural resource harvesting through the traditional activities of trapping, hunt-
ing, fishing and gathering supplemented by cash income from wage labor. In spite of major resource
development in the area there is a strong reluctance by the people of Fort McKay to abandon the tradi-
tional resource harvesting activities for their sociaL cultural and economic values.
Prior to l963 the community remained isolated from industrial development impacts. It was only
with the approval of the Great Canadian Oil Sands (GCOS) mining project in l963 that the hunting and
trapping territories of the Fort McKay people were opened up to penetration and destruction. At that
216
time there were no public regulatory hearings, there was little knowledge or consideration of
environmental consequences and no concern for socio-economic and community impacts for the local
Indian communities.
The attempts to understand, respect and deal with Indian impacts and particularly the Indian
economy were conspicuous by their absence in the case of GCOS. Participation enhancement measures
were not considered as the predominant thinking during that period expected the employment, train-
ing, and contracting benefits to trickle down to the local populations including, of course. the Indians of
the area. Research and hindsight has shown how disastrous this has been for the Fort McKay Indians.
One of their prime camping areas for hunting, fishing, .trapping and gathering has now become the site
of the mine without compensation to the Fort McKay people. This part of their hunting and trapping
territory was opened up to outsiders whose sport hunting penetrated far beyond the 7,500 acres of the
mine lease itself into the heart of the McKay territory. T raplines were lost by expropriation, sometimes
even without monetary compensation.
Impacts on the environment and human impacts for the Indian community of Fort McKay are seen
by the people there as disastrous. On one hand, there has been serious environmental degradation,
damages and loss to the Indian economy of the Fort McKay people. Additionally, in terms of employ-
ment and training, Indians were the last to be hired and the first to be fired. Jobs were short-term, inter-
mitten labor jobs at the lowest skill and pay levels. A few individuals found employment but as a com-
munity the Fort McKay Indians and their interests were ignored.
While the people of Fort McKay were trying to cope with the impacts of the GCOS plant the
Syncrude consortium project was approved in 1973. The Syncrude project was approximately ten times
larger than the GCOS project and was even closer to the community. The competition for Fort McKay
traditional lands and resources; the losses and damages to the Indian economy and the associated com-
munity impacts which began with GCOS were continued and accelerated by the Syncrude project.··
By this time, public regulatory hearings were required under the Alberta Energy Resources Conser-
vation Board; however, once again, measures to protect and enhance the Indian economy of the Fort
McKay Indians were ignored. In fact, there was no attempt to identify project impacts on Indians or on
Indian communities and at the time of approval there were no special compensation or mitigation plans
for Indians in place. However, what is different in this project is that an attempt was made to enhance
Indian participation through the Syncrude Agreement, signed after project approval by Syncrude, the
Department of Indian Affairs and the Indian Association of Alberta (See Figure 1).
Following the beginning of Syncrude construction there was further exploration by most of the
major multi-national and national oil companies, the development of pilot projects and another major
project, the Alsands project, was given approval. The Alsands approval in 1979 followed a public hear-
ing process in which Fort McKay intervened for the first time.
A report written by the authors in 1979 for the Cold Lake Band and the Department of Indian Affairs
outlined the impacts of resource development on the community of Fort McKay. The following general
conclusion was reached:
Our findings lead us to conclude that there have been serious disruptions in the social
fabric of the Indian communities in the Athabasca oil sands area which tend to be most
severe for those communities closest to the plant facilities. The construction and operation of
such facilities and the associated influx of "outsiders" seeking employment placed severe con-
straints on the ability of the Indian communities to prevent, change or even cope with the
range and severity of impacts on their lands, resources and community life. The changes in
the biophysical and human environments of these communities and their attendant costs
have been significant, adverse and not fully understood.
OveralL the Indian communities in the A:thabasca tar sands regions have become or are
destined to become the net losers in the resource development of the region. Attempts to
identify, avoid, ameliorate or mitigate significant socio-economic and environmental impacts
of these major resource developments have been, from the communities' points of view,
uneven and unsuccessful. (p. 129).
The main conclusion to be derived from the experience of the Athabasca Tribal Council
communities .... is that in order to derive any lasting benefits from the proposed project the
community must deal from a position of strength. A strong and dedicated leadership is
required. Infrastructure, social services and related programs must be in place prior to any
217
~"'":"/' t. / ' . .
i'" .. -.--....
Figure I. Relationship of Suncor, Syncrude, Amoco and the proposed Alsands Oil Sands to the Fort
McKay Band and Community.
218
development and the Indian Bands must maintain full control over their lives, lands and
resources. (p. 130).
In the following pages we will look at selected examples of compensation and mitigation schemes
which were developed to deal with the impacts of resource development and the social pollution which
resulted.
Syncrude Agreement, Company Policy and Practice
As already stated, the Syncrude Agreement was an agreement made between Syncrude, the Depart·
ment of Indian Affairs and the Indian Association of Alberta. The agreement represents the first signifi-
cant attempt to deal with the Indian interest, albeit after the project was approved and well into con·
struction. This agreement talked only of training, employment and business opportunities, and for
various reasons discussed in more detail in the authors' 1979 report, this was termed a failure for the
local Indians. The company's priority of meeting the construction schedule rather than training Indians,
as well as the 11eed for relocation of Fort McKay Indians to take advantage of such an agreement, were
major problems. In fact, some individual Fort McKay Indians sought and obtained employment but this
is not true of the group/community as a whole. Those who obtained employment did so by paying a
great social cost. Because there is no transportation system into Fort McKay those who sought employ-
ment with Syncrude (or GCOS) were forced to move into Fort McMurray and had to disrupt their fami-
ly, community ties and support network. The jobs obtained were, on the whole, short-term labor jobs
but often long-term enough to take a hunter/trapper off his trapline (long enough for Alberta Fish and
Wildlife to re-allocate that trapline to non-locals and non-Indians). When the Fort McKay Indian left the
job or was fired he was left without the traditional means of support or wage support. A previously,
(prior to 1963) largely self-sufficient community was thrown into significantly more dependence on the
"outside" and the result was individual and community confusion.
The community has experienced problems with alcohoL violence, family disruptions and other social
problems it had never experienced before 1963 resulting in problems that would appear to hav~ their
origins in the serious undermining of the traditional culture and values of the community. This under·
mining has come about by forcing people out of the Indian land-based economy contingent on coopera-
tion and sharing and into the individualistically oriented wage economy through:
I. the loss of lands to massive open pit mining, and
2. compensation and mitigation schemes which did not even attempt to protect the Indian
economy or Treaty rights of the people.
When we talk about social pollution in the context of north-east Alberta we are talking about the
strategy of moulding Indians to the industrial economy. Examples of this trend include:
I. . Company policies which encourage moving out of the home community to take advantage of
training, housing or transportation.
2. Wage employment with no provision for time off for hunting and trapping which leads to lost
registered trapping areas, bush foods and increased family and community dependence on the
"outside".
3. Business contracting opportunities which failed to materialize and had negligible localized
benefits or stability of operation.
4. Recent rotational programs of flying in Indian workers from communities and which measure
their success by the number of Indian workers and their families who subsequently relocate to
the city of Fort McMurray.
5. Holding the major recruitment drives for employment during the fall season which conflicts
directly with the preparation time for the trapping season and disrupts the annual harvesting
cycle. ·
It is impossible to place a price on the destruction of a culture or a community. Yet, if left unchecked,
this is the social pollution that results from externally designed compensation and mitigation programs.
Fort McKay is now attempting to reverse the tide of the past 20 years.
In summary, besides removing 60 square kilometers from the use of the Fort McKay Indians in the
heart of their territory and adjacent to their main settlement and hunting camp and displacing numerous
traplines within what has become the Syncrude lease area, the social pollution effect serves to under-
mine the Indian interest in more diffuse and yet disastrous ways. While support for the Indian economy
219
was largely ignored in decision-making regarding project approval or in subsequent decision-making by
consortium or government resource/wildlife management agencies, the strategy for promoting Indian
participation in resource development through training, employment, and business contracting found
favor and resulted in the signing of the Syncrude Agreement. This attempt to manage project impacts
focused on policies, programs and mechanisms for maximizing employment, training and business
opportunities for Indians. In doing so it was hoped that the net balance of project impacts would be
positive for the region and for the province as a whole. However, the outcome of this approach. was
that only minimal benefits accrued to local Indian communities and in the case of Fort McKay, the
localized social, cultural, political, economic and ecological consequences and costs were severe and
much greater than the marginal and short-term benefits of a few jobs. Perhaps the major weakness of
the Syncrude Agreement approach to impact mitigation, management and compensation was that
specific measures to protect and reinforce the Indian economy and dependence on the land were entire-
ly overlooked and went unsupported as resource development proceeded. By focusing only on
employment, training and business opportunities maximization without understanding exactly what is
"out there" and hence what the project would be impacting on and by ignoring impacts on the Indian
economy, the attempts at impact mitigation/compensation/monitoring were seriously deficient and
badly formulated.
Alberta Oil Sands Environmental Research Program
The Alberta Oil Sands Environmental Research Program (AOSERP), established by agreement be-
tween the Governments of Alberta and Canada in February 1975, is a 10 year program designed to
direct and coordinate research projects concerned with the environmental effects of development of the
Athabasca Oil Sands in Alberta. It has to date, spent in excess of $17 million in its four components:
land, water, air and human systems.
A major intent of this research was to compile a baseline data base for the four systems which might
serve as a basis for monitoring impacts of oil sands development, and to make recommendations to
government. As such, the program results constitutes both information and advice.
The results of the research so far may be generalized into two statements. There have been no detect-
able environmental changes in the oil sands area. Any changes that might have taken place cannot be
said to constitute a problem.
While the fad that industrial scale oil sands mining projects began in the early 1960s and the research
began in 1975 has presented some obvious problems, a far more fundamental criticism may be levelled
against this effort to monitor oil sands impacts and (hopefully) keep them within manageable bounds.
That is, despite evidence that the Indian people of the area have continuously used and occupied this
area for thousands of years and are intimately familiar with the land, animals and ecology of the area,
their observations and concerns were never solicited in seeping the scientific research on the environ-
ment. Further, the Fort Mc.Kay people who live in closest proximity to the projects and whose Jndian
economy depends on resource harvesting were the logical people to consult in the initial seeping of
research. When the Athabasca River, the primary source of drinking water since time immemorial
became so polluted that people could not even wash their clothes in it without breaking out in skin
rashes, the assertion that there have been no detectable environmental changes in the area is bizarre.
The hunters have detailed knowledge of the changes in plants and animals, the water and the air.
Requests for information on the results of AOSERP research from Fort McKay in terms of answering
the question "Is it safe to drink the snow melt water?" were met instead with a presentation on the struc-
ture and function of the research program by an Alberta Environment AOSERP representative that
visited the community.
In short; participant observation in living with the Indian people of Fort McKay has shown a total
lack of fit between the Indian observations and experiences of environmental impacts since the coming
of the oil sands plants and the apparent belief by governments and industry that everything is fine in
the Athabasca Oil Sands _area.
In summary, this attempt to understand and manage the bio-physical and human environmental
impacts of oil sands development was an attempt to deal with a situation where a major oil sands plant
was given a permit to construct and operate without a full identification of the implications for either
the non-Indian or the Indian interest or any adequate means for avoiding them, or dealing with them as
they arose.
220
It was only after the second major project, the Syncrude project, was two full years into construction
that the AOSERP research was started. It may be viewed as an example of social pollution in that the
only information about Indians ever gathered was limited to Native employment patterns and job
related issues. It has totally ignored the economy of the Indians in the area and what effect oil sands
development may have had in that regard. Perhaps the most frightening omission of the program is that
not one cent has been spent on research into the implications of oil sands projects for human health and
safety in the area.
Alberta Fish and Wildlife Trappers Compensation Review Board and Plan
This program represents a belated attempt to deal with some of the impacts on trapping by oil and
gas development which, in the greater Fort McMurray area and within the Fort McKay hunting and
trapping territory, have been disastrous. The program was set up to serve the needs of trappers in par-
ticular and is basically a program of general application. The program was established in 1980 but was
not sl:arted until i981 using oil company contributions which vary from 50¢ to $1.00 per lease per acre
as a fund from which to pay claims. A seven person board, on wli.ich the Indian/Native interest is clear-
ly underrepresented, reviews and provides recommendations on claims for damages and losses after an
individual trapper and an oil or seismic company have reached an impass in negotiating a settlement.
The Trappers Compensation Review Board's Plan represents an example of social pollution in that:
I. It fails entirely to recognize or respect the 'community' character of Indian trapping in the area;
2. It individualizes the problems of Indian trappers and trapping and systematically undervalues the
importance of the trapline for the Indian trappers, their families and their community as a whole;
and,
3. It does not take into account the rights of the Treaty Indians to freely hunt and trap as guaranteed
under Treaty #8.
The Board's "rules of the game" are based on the provincial government's registered trapline system
which was designed on the notion of individual right, embodied in a "senior holder" of a trapline while
"junior holders" must depend on the registered "senior holder" for information about developments
affecting the line, negotiations for compensation for losses and damages with oil companies or the
Board, and for sharing of any compensation that is awarded. This imposed system of stratification of
trapper's status and rights under provincial regulations lies in direct conflict with the Indian systems
relating to the hunting and trapping aspects of their economy. Without going into detail here about the
differences and sources ()f conflict, suffice it to say that the Indian system of land and resource use are
based on the natural productivity of the land and its animal populations and the social system of the
harvesters. Further, the Fort McKay community has a self-administered traditional system of land use in
which areas are recognized as hunting and trapping territories of particular family groups. The
registered trapline system introduced by the provincial government and administered by Alberta Fish
and Wildlife Division has played havoc with the Indian system.
The Indian trapper, trapping in his usual territory, has historically had no advance warning that his
trapping would be disrupted and equipment destroyed and has usually received little or no compensa-
tion. The Trappers.~ompensation Review Board expects a trapper, who often does not speak English,
to successfully identify which company is responsible and negotiate a settlement of damages with the
multi-national or its agent. This situation appears ludicrous given the imbalance of resources, informa-
tion and bargaining power of a single trapper in such a situation and yet "socially conscious" resource
development companies have resisted attempts at direct group negotiations where the Indian Band
Council and Administration are supporting community trappers. The logical but unfortunate result of
this is to effectively channel compensation claims of Indian trappers towards the Trappers Compensa-
tion Board, an institution which has almost nothing in common with Indian systems of resource
management and problem resolution and which has an environment for c' ;cision-making where the col-
lective rights of the Indians under Treaty #8 are not considered in evaluating losses and damages.
While the Trappers Compensation Review Board and Plan are a comparatively recent attempt to deal
with the negative impacts of major resource development, their relevance and effectiveness in pro-
viding remedies for damages to the trapping aspect of the Indian economy for the Fort McKay Indians is
negligible. By limiting compensation to cash value of fur in the marketplace and by failing to consider
compensation in kind, for example, replacement or addition of lands to trapping areas damaged by oil
221
and gas development, the Board perpetuates the idealogy that the right and proper response to
encroachment of traditional hunting and trapping territories of a group of Indians is for them to "move
over". The model of trapping that lies at the basis of the provincial system of registered trapping areas is
that of the individual non-Indian trapper. The non-Indian trapper's pattern of intensive harvesting of fur
from a trapline, from which the government receives revenue through fur taxes, makes the Fish and
Wildlife Department more disposed to consider the interests of non-Indian trappers, even when these
conflict with Indian hunting/trapping territories which have existed as such for hundreds of years.
Pressure has reportedly been exerted on Indian trappers to trap a certain species more intensively than
the trapper believes to be in the interest of survival of that species. Such resistance has led to conflicts
between Indian trappers and the Fish and Wildlife officers who effectively control the allocation of
registered trapping areas, changes to their boundaries and whether trapping will be officially allowed to
continue there or not by declaring an area "vacant".
In summary, the Trappers Compensation Review Board's Plan represents a policy decision which,
while purporting to address long-standing grievances between trappers in predominantly Indian areas
such as north-eastern Nberta, actually compounds the problems by using a model and mechanisms
based on non-Indian notions of trapping, trapping rights and justice or compensation. Rather than deal-
ing with the backlog of justice due to the local Indians in resource development impact areas, pursuing
such a model will likely serve to further undermine the Indian hunting and trapping territories and the
authority of the Indian communities to manage their economy and their ability to provide for their
long-term survival or the achievement of a workable system for co-existence with resource develop-
ment projects in their areas.
The Alsands Project and the "Alsands Agreement"
The Nsands project, a massive $13 billion oil sands mining project approximately 20 miles from Fort
McKay, was approved by the Alberta Energy Conservation Board (ERCB) in the fall of 1979. While
actual construction of the project has not gone ahead due to disagreements between the consortium, its
members and the provincial and federal governments taxes, royalties and actual profit margins, it is
useful to look at points of comparison and difference in the light of previous experience in dealing with
Indian impacts and particularly the social pollution effect of impact mitigation/management or compen-
sation schemes.
Once again, the project represented the loss of a large portion of prime hunting, trapping, fishing and
gathering territory for the Fort McKay people and their Indian economy. Again, no measures to rein-
force or protect the Indian economy were made a condition of project approval. Compensation
payments of cash on a one-time basis were reached with individual trappers in the site area. Without
exception, the failure by Nsands to provide additional trapping lands for those to be affected (as was
promised) represents grossly inadequate compensation of the Indian interest. In fact, not one of the trap-.
pers considers financial compensation to be adequate for the loss of a way of life.
Once again, government and industry failed to adequately identify Indian impacts and to take steps
to protect the Indian economy. Rather, the strategy that was pursued was to foster Indian participation
in resource development through employment, training and business contracting. More recently, equi-
ty participation in the project has been pursued with little success.
The "Nsands Agreement", a draft agreement negotiated between the Alsands consortium, the
government of Nberta and the government of Canada to cover the non-fiscal aspects of the project was
prepared without the benefit of consultation or input of the local Indian people, particularly the Fort
McKay people who are the closest existing human settlement to the proposed project. A basic principle
of responsible development planning was violated. Once again, the people to be most directly affected
by a project were not involved in the setting out of what it was that needed to be mitigated, compen-
sated and/or monitored. Again, the ·measures directed at Indians were limited to employment, training
and business contracting opportunities. The precision of wording in the "Agreement" with respect to
these aspects was even more general in intent and substance than the Syncrude Agreement and as such
represented a step backwards in addressing the true nature of localized impacts for the affected Indian
communities.
As with the Syncrude Agreement, local Indians would be left out of direct involvement in the design
and implementation of impact management measures and mechanisms. Further, the Agreement seemed
to indicate that the Federal government would give up its authority to protect Indian rights. The Agree-
222
ment was silent on measures to protect the hunting, trapping, fishing and gathering rights of the Indians
guaranteed under Treaty #8. The development of any monitoring requirements would be left to the
Federal and Provincial governments.
On the question of infrastructure planning, the Agreement would ignore the Department of Indian
Affairs' averred policy of Indians doing their own community planning and would make planning
effectively the prerogative of the Federal and provincial governments. The Agreement also appeared to
endorse a system of land tenure which, in the past. has meant division of communally held federal and
provincial crown land into individual parcels of land upon which taxes must be paid and which could be
subject to sale and alienation. Further, the land would be organized under provincial control placing the
land and the people into municipal structures. This was seen as a clear attempt to destroy Indian govern·
ment and the authority of Chiefs and Councils. This system of land tenure has been rejected by the Fort
McKay people. As such, it represents a model which is the antithesis of the people-land relationship
which underlies Indian hunting societies and, therefore, constitutes another form of social pollution.
Rather than treating the local Indian communities as governing authorities, the role of local Indian
governments would be relegated to providing information, largely under circumstances determined by
the provincial and federal governments and with no effective control of the design or implementation
of measures to deal with impact problem areas involving Indian rights, infrastructure, business develop·
ment. employment development. social support services or the environment. Operational procedures
for implementing the Agreement would be left outside of the Agreement to be worked out at a later
date. However, the role of the local Indian communities and the. need for timing and access to the
negotiating table would be determined by the Federal and provincial governments. Further, the
development of a management information system to provide a basis for cooperation and conflict
resolution would be done between the two governments, leaving out the affected Indian communities.
In summary, the "Alsands Agreement", in relation to the non-fiscal aspects of the Alsands projecton
Treaty 8lands, was viewed by the Fort McKay Indians as an abrogation of Treaty rights and a breach of
trust on the part of the federal government. The Agreement was seen by the Indians as representing the
implementation of the "White Paper" of 1969 which essentially proposed the termination of Indian
rights, their special land base and relationship with the federal government. and outstanding land claims
and grievances while passing responsibility for Indians over to the provincial governments. Indian
governments would not even be consulted in relation to commitments sought from Alsands, they were
only to receive "communications". Indian control over social support services would be reduced to con·
sideration of the need for local involvement.
The effects of the project on Treaty 8 Indian lands would have been substantial: removal of 18,000
hectares of land from Treaty 8, loss of this land for the production of the renewable resource base of the
Indian economy, pollution of Treaty lands beyond the lease boundaries affecting the human, and other
animal populations as well as the land, air and waters. At the signing of the Treaty, Indians were
promised that they would be as free to hunt. trap and fish after they signed the Treaty as they were
before. The proposed Alsands Agreement provided no protection for these Treaty rights. Instead, the
Agreement appeared to further the social pollution effect by endorsing the limitation of Indian rights
and, once again, encouraging the total embracement of the wage economy by the.local Indian people.
Conclusions and Implications
While technology and project requirements differ in pipelines and .oil sands mining and! or injection
projects, there may be significant points of comparison to be made between north-east Alberta and
Alaska. The Indian/Native communities, for example, in both areas differ from non-indigenous in the
area in their human ecology, cultural values and community life. In both areas there is significant
involvement in the Indian/indigenous land-based economy. The unique history of the communities
involved will be important in determining what the outcomes of a proposed development will be and
serve to orient the design and implementation of impact mitigation and compensation schemes.
However, while particular aspects of impacts may differ between north-east Alberta cases and Alaska,
there are recurring categories of impacts which tend to occur to nearby Indian communities from large·
scale natural resource development or the construction of large engineering works. Given this recurring
nature of "Indian" or indigenous impacts and the evaluation of strategies, measures and mechanisms
which have been used to enhance participation in project impacts, we submit that the Alberta
experience will be highly relevant at least at the level of principle. For example, the approach to impact
223
mitigation/compensation taken, the strategies involved, their effectiveness viz-a-vis local Indian/Native
communities will help clarify the often overly optimistic assumptions regarding localized benefits and
costs for those communities in situations where there has been:
1. little or no consideration given to impact mitigation/management and Indian/Native concerns;
and,
2. well-intentioned efforts at mitigation/management regarding Indian/Native concerns generally,
but without effective design and/or control of the measures and mechanisms by local
Indian/Native communities.
Further, what is included or excluoed from the project or area development mitigation and compen-
sation schemes as they affect Indians/Natives is critical to the long-term survival of the local
Indian/Native communities. The north-east Alberta research reveals that the lack of knowledge of the
Indian economy and the relative absence of measures to protect and enhance it through project mitiga-
tion/management arrangements and regulatory hearings has been a serious oversight. In summing up
what is known about the relative distribution of benefits and burdens of oil sands development in
north-east Alberta from the viewpoint of the experience of Indian communities in the immediate area,
and particularly that of Fort McKay we observe that:
1. The identification of "Indian" impacts as a basis for project planning and as a basis for the design
and implementation of impact avoidance, mitigation, management and compensation and par-
ticularly regarding the Indian economy was inadequate and irrelevant to the serious considera-
tion of the Indian interest.
2. Analysis of the original intents and actual outcomes of such innovative participation enhance-
ment tools as the "Syncrude Agreement" shows that it had little or no beneficial effect on the
local Indian communities, particularly for the Fort McKay Indians in terms of employment, train-
ing or business contracting. ·
3. Consideration of the history and effectiveness of schemes to minimize negative impacts and
enhance positive benefits for Indian communities from nearby natural resource/energy develop-
ment projects have not focused on the critical issue of the degree to which the local Indian com-
munities and their ways of living and economy would be affected by the project(s) nor the ways
in which the mitigation efforts themselves have contributed to social pollution effects and costs
for local Indians at Fort McKay.
4. Impact mitigation, management and compensation schemes were more than just too little, too
late; they have in fact served to undermin~ Indian involvem~nt in and dependence on the land-
based Indian economy which centres on hunting, trapping, fishing and gathering.
5. Any attempt to design a compensation or mitigation program in which local and most directly
affected Indian people have not designed the policies, programs, measures and mechanisms to
identify and effectively deal with project related impacts will ultimately result in what may be
called social pollution.
There is a disturbing trend in the field of impact assessment and particularly the specialty field tha"t is
being called "impact management". This movement seems to be a response to a call by governments
and industry to streamline regulatory approvals and speed up approvals which are too often based on
inferior project plans, design and understandings of impacts and specific means of dealing with them.
Such a view often says that impact assessments done in a comprehensive way are costly and difficult to
carry out, particularly in cross-cultural situations, given the availability and quality of published data.
Hence difficult impacts to understand or quantify, often referred to as the "intangible", and their con-
sideration should be deferred until after the project has received preliminary approval based solely on
justification of "need" in supply and demand terms. The human or social impacts are thus seen as
secondary or tertiary in importance after "need" and "economic and technical feasibility" of the project.
By dealing with the supposedly straightforward more readily quantifiable impacts of physical
infrastructure, and leaving the "softer" human services, social programming considerations and human
impacts until a point in time when construction commences, project approvals could be granted in
stages. This is tantamount to granting approval based on only partial information about impacts and
costs.
224
Such an approach calls for "managing impacts" after the project has been approved, often through the
setting up of monitoring systems and ongoing public participation using citizens or community
advisory committees which are totally divorced from the governing authority of the community to
work out the details of such arrangements as the project moves ahead. This kind of thinking basically
holds that rather than try to understand what effec.ts the project itself (and in conjunction with other
projects) will have on the bio-physical and human environments in a more comprehensive and serious
way than has been done before and to make specific mitigation/management responsibilities a condi-
tion of the permit. it is simply good enough to hope that any unforeseen consequences will be minor
and show up in the monitoring and be speedily rectified by someone. The briefest look at the history of
megaprojects would indicate that this "leave it till later" approach is unwise. The experience of oil sands
projects in north-east Alberta indicates that such an approach would institutionalize the grave errors
that have been committed there with respect to impact identification, avoidance, mitigation, manage-
ment and compensation measures. In addition, such an "impact management" approach coupled with
staged approvals would perpetuate the problems which now exist in that the measures which are put in
place for mitigation, monitoring, management and compensation can be as severe in their social pollu-
tion effect in the case of Indian communities as the direct bio-physical impacts themselves. Under such
an arrangement the impacts of the impact management schemes themselves are not subject to scrutiny,
nor are they considered together with project impacts as a totality which must be dealt with in a serious
way before any approvals are granted.
In conclusion, it is our experience that errors with grave consequences for the continued survival of
Indian communities are committed if there is not full and accurate identification of Indian impacts, as
well as a knowledge of and respect for Indian systems and community life. Culturally sensitive develop-
ment planning and decision-making make these pre-requisites. Impact mitigation, management and
compensation schemes that are based on ignorance or simple lack of concern for the well-being and
continued survival of nearby Indian communities in the project area are clearly not in the public
interest.
225
References
Agreement Between Her Majesty the Queen In Right of Canada, Syncrude Canada Ltd., and the Indian
Association of Alberta, July 3, 1976.
Alberta Energy and Natural Resources. Memoranda Regarding 'Trapper Compensation Review Plan"
and "Guidelines for Claim Submissions", 12 August 1981. Government of Alberta, Edmonton.
Brody, Hugh. A1trps mrd Dreams. Vancouver, B.C.: Douglas and Mcintyre, 1981.
Fort McMurray Today. "Canstar, Natives Feud", May 6, 1982.
Jorgensen, J.G. eta!: Nati7Je Ameri(tms a11d E11ergy Developmwt. Cambridge: Anthropology Resource Center,
1978.
Justus, R. and Simonetta, J. "Oil Sands, Indians and SIA in Northern Alberta" In lwliwr 5/A: Tire Social
Impact Assessmmt of Rapid Resource Developmwt 011 Native Peoples. Edited by C. Geisler, D. Usner, R. Green
and P. West. Ann Arbor: Natural Resources Sociology Monograph Series. School of Natural
Resources, University of Michigan, 1982.
Justus·Simonetta Development Consultants Limited. Maior Resoum Impact Evaluatio11. Prepared for the
Cold Lake Band and the Indian and Inuit Affairs Program, Ottawa, 1979.
226
Ethnographic Program Development:
A Case Study in Values, Resources and Decision Making
Robert Laidlow
The relationship among anthropologists, archaeologists and Native Peoples is rapidly evolving in
many parts of North America. One factor which seems to be affecting this change is the increasing
body of law which addresses traditionally anthropological issues. Religion, cultural and social dynamics,
contemporary ethnic populations and antiquities left by their forebearers, have all become the subject
of Federal and various State Statutes. It is this statutory guidance which directs the administration of
public lands and resources by Federal agencies. Due to the pervasive role of Federal agencies in resource
management in much of the Southwest, Indian-white relations are effectively reduced to Indian-U.S.
Government relations for many issues. This presentation will briefly consider how one Federal agency,
the Bureau of Land Management (BLM), addresses Native cultural issues as one aspect of Cultural
Resource Management (CRM) program in California.
The cultural resource management guidelines for the Bureau of Land Management (8100) define
cultural resources generically; that is, in a fashion which includes both material and sociocultural com-
ponents. Particular attention to sociocultural values has been recently directed by the American Indian
Religious Freedom Act of 1978 (92 Stat. 1996). The specific implications of this statute for the CRM
programs of the Bureau, are outlined in a "Memorandum of Understanding on California Policy for
Cultural Resource Management and California Policy for Native American Concerns."
Within the context of existing policy and statute, a number of problems arise due to the inherent dif-
ferences between material archaeological values and the cultural and religious concerns of Native com-
munities. I would like to briefly explore this distinction as it has affected the development of
ethnographic inventory techniques and policy in Bureau programs.
Ethnographic inventory, unlike archaeological inventory, seeks not to identify things but to accurate-
ly profile values and the cultural setting in which they occur. The value of archaeological materials to
the archaeologist resides not in the physical resources themselves, but rather in the potential which
these hold for answering significant research questions. These research questions and the theoretical
context in which they occur constitute the technical world view of the professional archaeologist. The
values of cultural resources for the archaeologist are largely assigned values. These assignments are
dynamic and subject to change as the prevailing theories, methodologies and analytic constructs of the
discipline change.
Native American traditional cultures also incorporate a world view through which the relative value
and significance of features of the natural and cultural environment are assigned. Just as the theoretical
world view of the archaeologist embodies basic epistemological tenets; so too can the epistemological
structure of a Native culture be revealed through the study and analysis of a system of sociocultural
values. One must study not only what is culturally and religiously significant to a culture group, but
why it is significant. In evaluating sociocultural values the researcher is dealing with a non-empirical
phenomena whose assigned value is most frequently derived from a cultural context other than his or
her own. A significant step is thus added to the research paradigm. Whereas, an epistemological context
in the study of empirical phenomena is inherent in the research design, the description of a cultural
group's epistemological system becomes the first step of analysis in ethnographic inquiry. Put quite
227
simply, if you do not know how the system works, what the rules are, and how they are applied in
everyday life, you lack the basic tools for the accurate description of a cultural group.
The criteria for determining the significance (within a specific operational frame of reference) and
sensitivity for which sociocultural resources are managed should be derived from the cultural group
being studied. In a study area such as California, many of the basic epistemological principals of Native
cultures are quite similar. If the researcher understands the basis of these similarities and their regional
distribution it can greatly facilitate the identification of sensitive sociocultural values. Within large
culture areas (containing numerous specific culture groups) the researcher gains an advantage in
anticipating relevant materials for inclusion in the interview protocol, identifying significant site types
and even the potential for developing regional predicative models of site sensitivity. At later stages in
the analysis the same understanding will allow the researcher to efficiently and effectively identify
management strategies for the protection, and in some cases the mitigation, of impacts to this resource
base. In conjunction with many Native American traditionalists and cultural specialists the Bureau has
attempted to identify culturally significant and sensitive resource values. Recognizing the prescriptions
which are often associated with religion and ritual among many California Native American groups we
have also attempted to provide appropriate procedural guidelines pertaining to the collection, verifica-
tion and distribution of these data.
The most pervasive conc~rn of the Native communities in dealing with Federal agencies is that
specific sociocultural site data be restricted from public disclosure. Although protection of informant
data is not specifically covered under any statute, it is the opinion of the Bureau of Land Management
that primary data gathered in the inventory process for planning or project purposes may be withheld
from Freedom of Information Act requests. Policy under the Bureau's Cultural Resource program is that
raw field inventory data are considered privileged and will be released only in circumstances where it is
in the best interest of the informants or the resources to do so.
Given these protections, ethnographic overviews designed to identify contemporary Native
American use and traditional cultural significance of Bureau lands and resources have been conducted
for many areas of the State. Specific inventories are also initiated in association with individual project
actions. Consultation is undertaken with those California Indians recognized by the local Indian com-
munity as knowledgeable about traditional heritage values, or a particular aspect of the community's
heritage and cultural legacy including tribal elders, traditionalists, folklorists, and practitioners of Native
crafts, the healing arts, and religious ceremonies. To insure the accuracy of information collected
through these contacts, the primary field data are, whenever possible, submitted for verification to the
Native American consultant(s).
Consultation with Native Americans and the collection of basic ethnographic data is a significant
initial step in addressing the potential effects of agency actions on Native communities. The social scien-
tists in a Federal agency can play a valuable role in evaluating sociocultural data and its implications for
resource management and decision making. If this task is performed effectively, relevant and culturally
appropriate strategies may be developed to reduce adverse effects upon the Native population(s) within
a project study area. Effectively addressing these issues also provides significant benefits for the agency
in the form of reduced project delays, shorter time frames and fewer legal appeals.
Attempts to satisfy agency needs and address the concerns of Native communities have in some cases
been far from successful. Many social science studies prepared for Federal agencies have not been
prepared with attention to the process of resource management and project development (e.g. contrac-
tor does not understand federal responsibility). The result is, in many cases, an anthropological analysis
which is either irrelevant to the specific management needs at hand or insufficiently articulated with
methodologies inconsistent with current administration policy. Many of these problems have been
effectively addressed by adding anthropologists to the professional staffs of resource management agen-
cies. Although this is a rare occurrence, truly relevant and responsive solutions to problems which arise
in dealing with Native communities must be accomplished within the laws and policies which define a
Federal land manager's decision making prerogatives. Within the BLM the data collected in field inven-
tory is summarized by the specialist and the major issues are outlined. The relationships between these
issues and ·potential actions by the agency are then prepared for review and incorporation into
environmental analysis documentation. Impacts to Native communities and resources of traditional,
cultural and religious significance are thus included as an aspect of our multiple-use mandate. If mitiga-
tion options have been identified in consultation with the subject community, these are also considered
228
in the environmental review process. In many cases we have successfully resolved issues involving sub-
sistence activities, collection of crafts materials and religious and ritually significant sites.
In summary. we have developed a system which can be responsive and demonstrably has reduced
project delays, response-time, and other cost factors for Bureau actions which affect the California
Native American community. We have experienced fewer and less severe problems in addressing these
issues than most other Federal and State resource management agencies with jurisdiction in California.
By developing and maintaining a high level of awareness at both the staff and management levels, we
can continue to be "effective and responsive.
229
~ecti.on C'V: d(!(iti.ga.tion
Introduction
Ron Inouye
The five papers on the mitigation of the negative effects of resource development are drawn from
theoretical and actual situations. The authors examine the mitigation efforts initiated by various levels
of government-local, regionaL state, and national. The role of Montana state government in mitiga-
tion is comprehensively treated and is interesting to relate to the papers discussing Alaska resource
development and state government's potential role in mitigation. Mitigation efforts of industry are
diverse and creative when presented and analyzed comprehensively.
Based on research in about 20 of the lower 48 states, Gilmore discusses the roles of federal, state, and
local governments in socioeconomic impact mitigation. Metz reviews examples of industry initiated
impact mitigation in categories including: transportation; housing; education; public utilities; health;
public safety and recreation; and company-community interation. Helgath identifies common elements
from successful mitigation programs of four major national construction projects and suggests a strategy
for an Alaskan socioeconomic impact model. Owens provides background on the development and
operation of Montana's mitigation efforts. Cole reviews the human impacts of large scale resource
developments to identify planning processes and legal authorities to maximize benefits and mitigate
negative impacts to local Alaskan residents.
231
Observations and Comments on the Roles of Federal, State, and Local Governments
in Socioeconomic Impact Mitigation
John S. Gilmore
First. let me specify an assumption: that socioeconomic impact mitigation is not needed for every
major construction project.
Sometimes there are few, if any, discernible socioeconomic problems from large projects. This paper
addresses those projects which may be susceptible to significant-socioeconomic impacts and where
mitigation may be or is clearly important. My colleagues and I have observed that such projects are
usually characterized by remoteness from good-sized towns and from large, skilled construction work
forces. They are often being built in regions of very low population density, and they are apt to be pro-
jects of a large scale. They may be built in or near communities whose culture is not accustomed to or
compatible with large-scale projects and sudden industrialization and the type of labor force it may be
necessary to import to achieve completion of the projects.
There is one limitation: this paper is based on research in about 20 of the lower 48 states with the
• primary settings in the Rocky Mountain or Appalachian regions. I'm not trying to relate it to Alaska as
it is now although Alaska will not stay exactly as it is at present. It may evolve, even quickly evolve,
toward some of the governmental characteristics of the fast-changing, resource-rich states in the lower
48.
Mitigation Defined
Mitigation is defined here as the equitable and timely distribution of the benefits. and avoidance
aRd/or amelioration of negative socioeconomic effects of industrial activities or projects. These are the
positive and negative impacts, respectively.
Equitable and Timely Distribution of Benefits
The major categories of the potential benefits include new jobs, additional personal income. addi-
tional tax base, greater diversity of opportunities and of culture in the community (for those who con-
sider this beneficial), and, usually, eventual improvement in public and private facilities and services.
These categories can be considered potential beneficial socioeconomic effects. The potential is greater if
the benefits are timely.
If many new jobs are available, they may require bringing in outsiders and their families in order to
fill skill requirements before there is an additional tax base in the affected jurisdiction to generate public
revenues for public services. If this occurs. then, neither the newcomers nor the old-timers may be ade-
quately served by local government.
Even where there is a local labor pool and job preference agreements can be enforced (e.g .. projects
on land governed by tribal councils or similar organizations), extensive training may be necessary and
may require substantial effort by both appropriate levels of government and the innovators of the
industrial activity or project. ·
If there is greater personal income before there are more and better facilities and services (both public
and private. but particularly housing), prices may be driven up and inflation affect those who are not
enjoying the higher personal incomes. For instance. Rio Blanco County. Colorado. has required
232
Western Fuels to protect senior citizens from housing cost increases attributable to that coal company's
opening of its Deserado Mine.
The potential for the benefits may not be fully realized, then, if the community and the project are
not prepared to help make these effects-all of which represent change-beneficial. Furthermore,
equitable distribution is no more inevitable than timeliness. To achieve equity, the beneficiaries of the
positive impacts should be largely the same groups and the same people bearing the negative impacts.
This is a considerable challenge to impact management. One approach to both issues is prepayment of
certain taxes; Colorado has authorized prepayment of local ad valorem taxes on real property and pro-
duction, and of state mineral severance taxes returnable to affected communities.
Potential Negative Effects
The positive or beneficial effects, which may even be windfalls for some communities or jurisdic-
tions, are usually accepted quietly. The negative effects, on the other hand, are potentially damaging to
both the project and the community. They can generate concern and disruption and they certainly
challenge business-as-usual management on the part of both government and the project sponsor. These
are the problems which can be counted upon to be well-publicized and which bring substantial social
and political pressures for mitigation.
We have found three generic categories of negative impacts in the problem-type boom communities
involved in our research. These are:
• Market failures-where existing private sector mechanisms for furnishing goods and services
don't work. <•
• Shortfalls in government facilities and services-where local and possibly state governments find
themselves unable to meet their responsibilities of providing for the public health, safety, and
welfare of a fast-growing and changing population.
• Social and political disruption-where the normal mechanisms for accommodating population
growth are unable to function under extraordinary stress.
These situations, which may exist singly but more often exist in some combination of all three, may
well be aggravated by either some type of uncertainty or failure on the part of external institutions or
systems which usually help support the community.
These are described in somewhat more detail in Exhibit I. These are the sorts of problems which, in
Exhibit I. Generic Categories of Negative Effects or Impacts
• Market Facilities-Where sudden increases in local demand for labor, housing, commercial
capital, and public capital are not met by existing market mechanisms at any acceptable price
because of risk premiums in pricing or nonexistent supply. -
• Shortfalls in Government Facilities and Services-Where local (and possibly state) governments
lack fiscal resources, expertise, and experience in providing the services and facilities needed to
accommodate a growing population, or where governments are unwilling or unable to make the
investments necessary to provide them.
• Social (and Political) Disruption-Where existing relationships and systems break down because
of stresses from growth and from conflict between the existing population and the newcomers.
Complicated By:
• Uncertainty-Resulting from problems with technology, markets, management of mega-projects,
project sponsor's cash flow, labor. weather, regulation, suppliers, or lack of credible information
on project employment levels and schedules.
• Inadequacies. and Br!!akdowns in Exogenous Institutions of Systems-Examples are response
failures in secondary mortgage markets, governmental impact assistance programs, state-furnished
transportation systems, state school assistance programs.
Source: Denver Research Institute
233
---·-· ·-·-~------·----~----
the lower -!8 states, have been found in the Gillettes, the Rock Springs, the Grants, the Evanstons, and
the Colstrips-the notorious problem boom towns. These have led to political backlash against both the
firms sponsoring the projects and against incumbent elected officials. They have led to productivity
failures and to project overruns in terms of time and money. These are the challenges to impact
management or impact mitigation.
Some Major Issues of Socioeconomic Impact Mitigation
Three of the major issues concerning mitigation are:
• What are the roles in socioeconomic impact mitigation of the various levels of government?
• What is the role of the firm sponsoring the project or, in more complex cases, the firms sponsor-
ing a number of projects in impact mitigation?
• Should a large-scale project go ahead (a) if mitigation costs to the project are so great that they
would make the project economically infeasible or (b) if extensive mitigation is needed but is for
some reason impossible?
The latter two issues are being addressed by other symposium participants or panels. The remainder
of this paper will discuss the first issue raised above; that of the roles of various levels of government in
socioeconomic impact mitigation.
Roles of Levels of Government
The discussion will be based on several criteria, leading to generalizations comparing roles and
capabilities and on my subjective comments (see Exhibit II). The criteria are:
• Responsibilities
• Authority to mitigate or require mitigation
• Limitations observed in at least some cases
• Examples of strengths and weaknesses
FederaL state, and local government mitigation roles will be compared by these criteria. The com-
ments on state governments are to some extent applicable to Indian tribes as court decisions continue to
expand the taxing and regulatory authority of tribal organizations; however, there is so much variation
among the tribal governments that it is less useful to generalize about them than generalizing about the
admittedly differing state and local governments.
The federal government. Some degree of the federal government's responsibilities may result from
its actions which trigger socioeconomic impacts. These include making resources available on federal
lands, issuing permits for activities on federal lands or in other fields of regulation such as nuclear power
plants, or in legislating changes in the siting factors relevant to the location of industrial activity (e.g.,
the Clean Air Act). The federal government may also bring about socioeconomic impacts as a result of
the location and construction of its own facilities, such as many of the schemes for deploying the pro-
posed MX missile system.
The federal government's authority to become at least peripherally involved in impact mitigation
comes mostly from the National Environmental Policy Act of 1969 and its requirement for
environmental impact statements (EISs), including discussions of socioeconomic impacts. Certain
governmental regulatory processes are, in fact, based on information carried in the environmental
impact statements, including regulatory actions by the Nuclear Regulatory Commission, the old Federal
Power Commission and its successor agencies, and various agencies in the Department of Interior. The
authority to participate in mitigation activities was granted federal agencies under the Coastal Zone
Management Act, Section 601 of the Power Plant and Industrial Fuel Use Act of 1978, and in the sup-
porting legislation authorizing and appropriating funds for such specialized projects as deployment of
the Trident weapons system.
There are several limitations, practically speaking, on all of these authorities. In most cases, the lead
agencies preparing EISs do not require mitigation of any impacts off the site of the activity they are
acting on. The Office of Surface Mining attempted to impose socioeconomic impact mitigation stipula-
234
Exhibit II. Criteria and Comparisons of Federal, State, and Local Government Roles and Capabilties for Socioeconomic Impact Mitigation
Federal
Government
Responsibilities
Take many triggering
actions, requiring
mitigation.
State Public health, safety,
Government and welfare.
Local
Government
Establish structure of
state and local govern·
ment.
Transfer federal and
state funds.
Deliver many health,
safety, and welfare
services.
Source: Denver Resource Institute
Authority to Mitigate
or Require Mitigation
NEP A, in some cases.
Special programs.
Limitations Observed in
At Le.ast Some Cases
Little or no moeny in
special programs and
little authority under
NEPA.
Examples of Strengths
and Weaknesses
General mitigation pro·
grams have inadequate
political constituency.
Limited responsiveness.
Poor EISs.
Author's Subjective
Comment
Most resources, least
responsiveness (some·
times least comprc·
hension).
Police power and broad May have inflexible con· Legislatures often Best balance of authori·
ty, responsiveness, and
resources.
taxing authority. stitutional inhibitions. responsive, but not
anticipatory.
May have siting, impact Face reduced federal
assistance programs. funds.
Police power and tax
authority to extent
delegated by state.
Often have retention
problems with good
senior staff.
Often understaffed,
able to handle only
routine matters.
Have access to varied
taxes and some land
royalties.
Needs help from both
feds and locals.
Most responsiveness,
least resources.
Volatility and unpredict· Most urgent and impor·
ability can make diffi· tant role is cooperating
culties for project and in mitigation planning.
other private investors. implementation. and
Substantial role in land
use control, in most
cases.
Sometimes uncooperative monitoring.
with other jurisdictions. Close to local concerns.
Neglect nonfiscal
problems.
Municipalities bear
public costs but can't
capture project taxes.
tions on the Rojo Caballo Mine in Wyoming, but this effort was blocked. by the Department of Interior.
Other federal permitting agencies have generally been hesitant to take this authority very far.
Both the Coastal Zone Management Act capital grants mitigation program and the Section oO 1 pro-
gram have largely come to a halt as a result of federal decisions to neither budget nor appropriate funds
for their continuation. (A very partial substitute would be action by either executive or legislative
branches assuring current deductibility from corporate income tax of industrial costs of mitigation.) The
mitigation efforts for the Trident deployment in Kitsap County, Washington, were largely limited to
money for bricks and mortar and made no provision for the costs of operating and maintaining the new
facilities. Some local people found this decidedly inappropriate as delay followed delay in the deploy-
ment.
My subjective view of the strengths and weaknesses of federal impact mitigation measures includes
the following comments. The majority of the members of Congress are not from nor are they represent-
ing communities which consider themselves vulnerable to negative socioeconomic impacts from
industrialization. It is hard to assume that they will provide for anything but selective impact
assistance/mitigation programs, such as those connected with weapons systems deployment or very
large federally related projects.
So far, such federal programs have generally been based on forecasts and future-oriented
assessments, and in socioeconomic matters these are usually inadequate. Also, EISs could be useful in
impact mitigation, but they rarely address socioeconomic impact mitigation needs with accuracy nor
attempt to place responsibilities for mitigating them. This could, of course, be improved if the EIS
described longer term mitigation programs and were made more responsive to the monitoring of
changes in projects and thus to changes from impacts originally anticipated. However, it is doubtful that
a statement prepared by a federal agency can afford, politically, to specify the nature of many
socioeconomic problems and the jurisdictional responsibility for dealing with them. There is little
justification, though, for ElSs parroting boom town conventional wisdom (or conventional mythology)
rather than doing careful analysis and forecasting.
Finally, some of the federal assistance programs have been, at best, erratic in their application. The
Coastal Zone Management Program mitigation may have been successful in some states (Alaska is
usually offered as an example), but others have found it to be a bureaucratic nightmare, and the 60 l
program has been largely oriented to certain types of bricks and mortar construction without necessari-
lv being responsive to local needs (e.g., for indoor recreation facilities in cold climates).
My personaL and admittedly subjective comments on federal government mitigation roles, are that
environmental impact statements could be made more effective in analyzing baseline conditions and in
specifying the likelihood of various types of negative impacts. They could also be greatly improved if
they dealt with net impacts, allowing for mitigation efforts included in the proposed action by the pro-
ject sponsor rather than producing what are often "worst case" analyses, even though they may not be
specified as such. And, quite importantly, most of the statements I have read recently fail to adequately
handle the beneficial effects.
Another potential federal role is in dealing with a newly developing problem: the difficulty in
explaining to foreign firms and investors the need for money to be spent by a firm on mitigating
socioeconomic impacts. Federal government spokesmen may enjoy credibility with foreign investors
whether or not they have it with state and local government people in this field of socioeconomic
impact mitigation.
My summary comment on the federal government's role is that it is the level of government with the
most resources but with the least responsiveness to local needs and occasionally the least comprehen-
sion of the local situation. However, it is the only entity with the resources to provide the mitigation
assistance necessary on very large-scale projects justified by and clearly identified with the national
interest.
State government. The primary responsibility of state government is to provide for the public
health, safety, and welfare, and some of this function (including some of the police power) is delegated
to local governments. Some states have legislated roles for themselves in the siting and permit~ing of
various projects and industrial activities and in providing socioeconomic impact assistance programs.
The states also are responsible for implementing some federal programs.
The states have authority to levy many types of taxes, and some parts of their taxing authority are
236
also delegated to local government. The states transfer both federal and state funds to local govern-
ment. They retain the authority and furnish the financing for most highway construction and
maintenance, courts. corrections, and other services. Some states have their own environmental policy
acts and a variety of types of land use authority which they usually share with local governments.
Some states are limited in what they can do to carry out their responsibilities with constitutional
inhibitions on incurring debt or transferring state funds to local government (Utah, for instance). Many
states have imposed spending limits on themselves and all presently face the decline or loss of federal
funds which they have counted on in recent years. The quality of expertise available in state govern-
ment varies. Many of the states find it easy to recruit bright young public administrators and planners,
but it is often difficult for them to keep experienced public managers because of rigid personnel systems
and salary ceilings.
Many of the states, through their legislatures, are responsive to new problems, although this is usual-
ly more in a reactive mode than in an anticipatory one. Exceptions occur if an announced future project
is frightening enough (e.g., the request by a utility for enough State of North Dakota water to supply 20
coal gasification plants prompted a burst of siting and taxing legislation). Legislators can be counted
upon to respond quickly if enough of their constituencies seek help. They are in a position to legislate
taxes where these are politically acceptable and they often have access to royalties from their own or
federal lands. Under the reserved rights concept, many states probably do not take advantage of their
versatility to deal with problems.
The states probably have the best balance of authority and responsibility and resources to deal with
socioeconomic impacts. However, they need cooperation from both federal and local government as
well as from the sponsors of the impacting projects to be able to carry out effective mitigation. Som~ ex-
perimental state institutions are currently seeking to achieve this cooperation voluntarily rather than
through the police power (e.g., the Utah Process, the Colorado Joint Review Process).
Local government. Counties, townships, cities, special districts, and towns have many of the respon-
sibilities f9r public health and safety and some welfare activities delegated to them, plus education,
streets and roads, and other locally used public facilities and services.
Local governments have some authority delegated them by the states under the police power and
often limited taxing power (i.e., Wisconsin local jurisdictions are limited in capturing ad valorem tax
windfalls from certain large facilities), although this varies greatly from state to state. Local govern-
ments usually administer land use controls, sometimes in concert with the states and sometimes with
considerable delegation of authority to the local entity, and this authority may provide for some
industrial permitting and socioeconomic mitigation stipulations by the local governments.
Many local governments, particularly in small communities, are understaffed and self-limited to
handling routine matters. Elected officials may have great concentrations of available authority, e.g.,
county commissioners in some states may have executive, legislative, and quasi-judicial authority.
However, a change in the makeup of such a small group as a board of county commissioners makes the
standards and precedents which they set volatile and subject to change. Local governmental entities are
often uncooperative with other jurisdictions, and it is particularly unusual for one to share its tax
revenues with another. This presents a particular problem for a municipality which houses the people
involved in construction and operation of a new industrial activity, but which doesn't have any ability
to capture ad valorem or excise tax revenues collectible from that facility or activity.
The strengths and weaknesses of local government begin with the fact that local government is usual-
ly closest to socioeconomic problems but is apt to have the least resources for anticipating, understand-
ing, and solving these problems. The volatility and unpredictability of local government actions in the
absence of state or federal standards or requirements may make it difficult for incoming industry or any
other private investors to carry out their roles effectively. Local elected officials are apt to concentrate
only on negative fiscal impacts which affect their budgeting and may or may not seek help from various
constituencies in identifying and dealing with other types of negative impacts.
Subjectively speaking, local governments will be most responsive (often reacting after the fact) to
socioeconomic problems, but usually have the least resources with which to deal with them. An urgent
role for local government is to participate and cooperate with the other parties-at-interest in mitigation
planning, implementation, and monitoring.
237
Summary and Conclusions
I have raised three of the major issues concerning socioeconomic mitigation:
• What are the roles of various levels of government in socioeconomic mitigation?
• What is the role of the firm or, in more complex cases, the firms sponsoring projects in a given
region?
• Should a project go ahead if prospective socioeconomic mitigation costs to the firm apparently
make that project economically infeasible or if adequate mitigatio~ is impossible?
This paper has dealt only with the first. the roles of the three levels of government.
The federal government during the Nixon, Ford, Carter, and Reagan administrations has not been
very responsive or dependable in socioeconomic impact mitigation. Probably the simplest fix that could
come by executive branch action would be more useful socioeconomic sections in EISs, but this mere
compliance with existing law would require staff additions which are presumably limited by the present
budgetary situation.
Local government certainly must participate and cooperate in socioeconomic impact mitigation
efforts, but it's a dangerous gamble for both the incoming project(s) and the communities themselves if
local governments have a lead role which gives them too much responsibility without adequate authori-
ty, standards, and resources. ·
The states appear to have the best balance of authority, responsibility, responsiveness, and resources.
The states, however, must be able to count on assistance from both federal and local government, as
well as from industry, if we are to see socioeconomic mitigation adequately protecting both com-
munities and industrialization efforts in communities which are susceptible to significant impacts.'
*Excerpted from john S. Gilmore, "Socioeconomic lmplicJtion~ of ChJnging Energy Conditions," /\,si'"''" 1:.!/1'/S'' f-,,".·'' , \11
llli'i/,,li"""l ~rllliuoll of the Conference BoJrd. Denver. ColorJdo. MJrch I/!.. I cl/!.1.
**Exhibits V. VI. Jnd VII Jre bJsed on JohnS. Gilmore. DeJn C. Coddington, Jnd others. ~.,,i,•n•'"""'i' lli!Jillih ,,, l',•i<'rr 1'/.mi-.
Report .:EPRI EA-2228. PJio Alto. CaliforniJ: Electric Power Re~eJrch Institute. I clt\2.
238
Industry Initiatives in Impact Mitigation
William C. Metz
The mitigation of socioeconomic impacts, potential and actuaL in local areas hosting the develop·
ment and operation phases of a natural resource extraction and/or conversion facility is an inexact
science. Conflicting opinions abound among companies, communities, consultants, experts, and state
and federal government officials regarding level and type of responsibility, strategy, and effort
appropriate for each new resource development. Mitigation is maturing; as more examples of mitiga·
tion efforts and their sl.lccess/failure, cost. workforce effects, and project implications come to light,
then a data base for analysis on mitigation efforts can be supported. Continued emphasis must be given
to the fact that mitigation needs are different for each locale due to project and area uniqueness.
Attempting to determine the proper mix and optimum effort with regard to mitigation on the basis
of a cost/benefit formula is haphazard at best: Industry can estimate the cost of each 1% of turnover and
absenteeism (on a $1 billion project where labor accounts for 40'7<, of a project's cost it means a $1
million loss), each day of delay for a project (over $1 million a day for a multi-billion project, including
interest. contract extension penalties, and inflation), each episode of vandalism or labor strife, each per-
cent loss of productivity or incident of management error, as well as the benefit for each reduction in
percent or incident in the aforementioned. Equating the value to a project of. for example, a mancamp,
transportation program, or school upgrade with either single or double rooms, used or new buses, or a
new athletic field or whole new $2 million school building, respectively, with all the variations, is diffi.
cult at best.
As local, regional. state, and federal governments have become more aware of industry-wide mitiga-
tion efforts, industry fears that at each succeeding new development they will be confronted with shop·
ping lists gleaned from efforts with other projects · "we" want one ladder truck, one ambulance, one
elementary schooL one community center, five playgrounds, a new road, two road resurfacings, a new
sewage treatment facility, a new water tank, and housing for the elderly. A second fear is that
company-sponsored mancamp, recreational vehicle (RV), and mobile home (MH) facilities and parks
will become expected mitigation efforts by both workers and communities at every project. Mitigation
should not be considered a windfall of free gifts or a chance to have community facilities fixed or
upgraded at a company's expense. It should be considered as a joint company/community/state effort to
fulfill impact area needs, to enhance an area's quality of life, to be an asset in workforce recruitment and
productivity, to relieve an impact area from undue physical and fiscal burden as a consequence of
workforce and sometimes secondary immigration, to be a good neighbor, and to secure necessary per-
mits. Companies and communities need to work together in good faith, give adequate consideration to
each party's limitations, desires, and financial capabilities, and negotiate a compromise of everyone's
needs and concerns.
In order to achieve the most efficient and effective mitigation, careful review of local and state laws
and ordinances regarding the collection and distribution of lease payments, royalties, severance taxes,
fee permits, special use and service charges, and sales taxes is necessary. Adequate and timely disburse·
ment is essentiaL as well as the innovative use of tax pre-payments, housing mortgage bonds,
changeable debt and bonding limits, industrial loans with delayed repayments, and revised revenue
assistance formulas. Permitting changes are necessary so that permits are not granted solely by states or
239
the host political jurisdiction. but in concert with the impact area. States need to enact enabling legisla-
tion allowing an impact area to be involved in permits and assessments of mitigation needs. Local com-
munities are often in need of state or industry supplied technical assistance, ombudsmen. and grants-
men to prepare for change through adjustments in ordinances and growth plans and to have suffi-
cient time and knowledge to apply for state and federal money.
A new facet to industry involvement in mitigation is taking place during these present "bust" times in
the uranium. copper. silver, zinc. iron ore. molybdenum, and oil shale industries. While many com-
munities· have boomed and busted throughout American history with industries offering little
assistance. this time around industries which enticed workers to relocate to remote locations during the
"boom" are assessing their level of responsibility to those workers during the "bust" in these one-
industry communities. This "bust" period is also changing industry and worker attitudes toward reloca-
tion inducements and will shape mitigation efforts during future developments of natural resources.
Some states (Colorado, Wyoming, Montana, North Dakota, and New Mexico) have established perma-
nent trust funds to aid communities and the state after natural resource depletion; others have or are
considering plant/mine closure legislation (similar to Maine's requiring six months notice prior to
closure), payment of severance pay, and donation of assistance funds for the impacted communities.
The following is a panoply of mitigative efforts which have been or are being undertaken by natural
resource companies. Examples of mitigative efforts have been culled from ·periodicals (e.g., Shale Cotm-
try •• Coal Age. and E11gi11eeri11g News-Rewrd), newspapers (e.g., High Cmmtry News, New York Times, De1wer
Post, Daily Smti11el, and ldalto Falls Post-Register), industry publications (e.g., ArcoSpark, Conoco, Exxon
USA, and Coronado Generating Station), industry reports (e.g., Intermountain Power Project
Socioeconomic Impact Mitigation Plan, Bonanza Power Plant Project Socio-Economic Impact Monitor·
ing Report #1, and Tennessee Valley Authority Socioeconomic Monitoring and Mitigation Reports),
state reports (e.g., Wyoming Industrial Siting Council Agreements and State of Colorado, Division of
Impact Assistance, Assembled Materials), federal documents (e.g., Environmental Impact Statements
and DOE, BLM, and USGS reports), literature (e.g., articles, books. proceedings, and speeches), and a
personal and professional network of locaL state, and industry contacts. The mitigation efforts
described herein are not all inclusive and a few efforts have been halted or postponed as their sponsor·
ing companies have closed, slowed, or postponed their respective resource development projects. Each
mitigation effort is the result of a particular set of circumstances (site accessibility, labor availability,
area accommodation, permit requirements, company experience, project timeframe, and com·
munity/impact area attitudes and fiscal conditions). Some mitigation actions may work for one com·
pany's development area and not at another's; some companies may not even try certain mitigation
actions. The following is a review of seven types of mitigation efforts: I) transportation; 2) housing; 3)
education; 4) public utilities; 5) health, public safety, and recreation; 6) miscellaneous; and 7) company-
community interaction. ·
Transportation. In an April l98l survey of United States energy projects which this author under-
took. twenty-four energy companies were found to be involved with or in the serious planning stages
for worker transportation programs at forty-two energy project sites (power plants, coal and uranium
mines, and oil shale facilities) (Metz, 1982). Other natural resource companies also are involved in
transportation (Denver Research Institute, 1978 and 1979). Companies use buses, vans, and bus/van
combinations; almost half of the companies in the author's survey offer free transportation to workers,
the majority of the companies sought nominal fares to complete cost recovery. The company·
sponsored transportation programs purport to conserve energy, reduce area traffic, aid hiring and
expand the available number of potential. workers. ensure competitiveness with nearby projects,
encourage punctuality. reduce absenteeism and turnover, improve a worker's safety and productivity.
· address union and employee demands, solve parking problems, improve employee morale. serve as a
negotiated worker benefit and as a corporate philanthropic gesture, meet state/local permitting con·
cerns. mitigate community resistance to a project. and be cost effective.
The very first decision which a company must make at a project site regarding the initiation of a
worker transportation program is whether the company needs to become involved. Long commuting
distances and/or times combined with poor quality access roads. as at Rocky Mountain Energy's (RME)
Wyoming Bear Creek Mine. weather discomforts. such as the hot summer temperatures at the Arizona
Public Service (APS) Palo Verde site, fogs and black ice, around the Washington Water Power Creston
240
site, inclement winter weather, in the Colorado West Slope area, traffic hazards, such as wild deer and
antelope, make the need apparent. Physical site inability or company unwillingness ($500 for each tem-
porary parking space and $100 annual maintenance) to provide adequate parking can create a need.
Influencing worker relocation to or from community (to Wright and Gillette, away from Douglas,
Wyoming) can be achieved through a transportation program. Programs can be initiated as a recruit-
ment tool or to counter area company-sponsored programs as are prevalent in the Rock Springs-Green
River and Gillette areas of Wyoming and the Colorado West Slope. Some state vehicle liability and
insurance laws curtail employee ridesharing efforts, causing industry to provide remedies. Almost two
dozen energy and NE companies have corporate ridesharing programs and due to the corporate policy
of fostering ridesharing they quickly spread to rural resource developments. Employee problems (late
arrivals, travel strain, injury, and commuting costs) have, on occasion, been considered of sufficient
magnitude to warrant a program. Unions and worker organizations have also become more aware of
this benefit and are bargaining for it. A need for a transportation program, though, can be diminished at
any point in time as a consequence of company-caused efforts or independent events, such as changes
involving state or local vehicle or insurance regulations, housing accommodations, community
infrastructure, construction schedules, labor availability, federal or state grant or loan funding, private
enterprise initiative, per diem payments, or community mitigation efforts.
If the need dictates a worker transportation program, then four factors pertaining to the mode of
transport need to be analyzed-vehicle type, size, interior, and cost. Vans are flexible, able to collect
small clusters of workers living in widely dispersed locations, while buses operate best when transport-
ing a large number of workers long distances. Vans come in 12 to IS-seat capacities, buses can seat 18 to
56. Vehicle interiors range from lean to deluxe (air-conditioning, stereos, cloth seats, reading lights,'ad-
justable backs, carpeting, panelling, and restrooms). Costs range from $9,000 to $14,000 for a new van
and $35,000 to $140,000 for new buses, with used and leased vehicles as possibilities. ·
When determining the mode of transportation, parallel consideration must be given to six operating
factors: 1) operator -should these jobs be handled in-house or partially or wholly contracted out?;
2) responsibilities -do the workers, drivers, contractors, or project management make decisions on
pickup locations, p9ssenger assignments, parking, rules: and routes?; 3) worker schedules -can ad-
justments be made among shifts and workers?; 4) rules -do the company, passengers, or contractors
create and enforce them?; 5) maintenance-should this be handled at the site by company or contractor,
off-site on employee's time, or by contractor?; and 6) drivers -are they professionals, project
employees, or company employees hired by a contractor?.
Companies have varying attitudes toward the expense of transporting workers as well as expecta-
tions of cost recoupment. The 1981 per mile cost of a van program from company experience was
estimated to range from a low of around $0.35/mile to a high of possible $0.60/per mile; for 600 riders
using 75 vans (5 spares) averaging 73 miles per day an annual cost range of $500,000 to $850,000 is
probable. Per mile 1981 bus costs were estimated to range from a low $1.30 to an approximate high of
$2.50; for 600 workers using 15 buses (2 spares) averaging 73 miles per day an annual cost of $500,000
to $2,250,000 is probable. Multiple trips per day by each vehicle could reduce costs (Metz, 1981).
Industries have also become involved in other aspects of transportation including road construction
and maintenance, traffic congestion, and airports. Some impacted communities have applied for state or
federal funds to either fully or jointly fund many transportation network improvements.
In supporting concern over new roads and improving existing roads, resource companies have made
both monetary and labor and materials contribution. Intermountain Power Agency (IPA) has funded a
$46,000 traffic study of Millard County, Utah. Rio Blanco Oil Shale (RBOSC) has contributed $300,000
for the study and design of a new Colorado county road. Union, Multi-Minerals, Colony, RBOSC
Cathedral Bluffs, and Gulf Minerals have been involved in new by-passes for the communities of San
Mateo, New Mexico, Parachute, Colorado, and Rifle, Colorado. Western Fuels Utah has agreed to $2.4
million to connect the isolated town of Scotia, Utah, with communities to the west. Deseret Generation
and Transmission (DG&T) is reimbursing Uintah County, Utah, for new road construction. Utah Fuel
prepaid sales and use tax of $7 million to have the State of Utah construct a 13.5 mile highway. Texas-
gulf and Western Fuels have committed $1 and $1.6 million, respectively, to developing_ mine access
roads in New Mexico and Colorado. In improving and maintaining existing roadways, companies such
as Washington Public Supply System (WPPSS) have made payments to a dozen Washington com-
munities near two nuclear sites totalling $20 million and Colowyo matched state funds to improve
241
three Colorado West Slope bridges. R~OSC and Multi-Mineral paid for Rio Blanco County's
(Colorado) Piceance Road repairs, North Antelope Coal is to widen and improve nine miles of Camp-
bell County, Wyoming, road, Anaconda and Colowyo have graveled roads near their mine sites in
New Mexico and Colorado, respectively, IPA will be paying for improvements to Millard Country's
Bruck-Wellman Road, Kerr-McGee has provided materials for bridge and cattle guard construction in
New Mexico, and several other companies have helped in similar efforts, as well as the provision land-
filL engineering services and surveys.
In order to reduce traffic congestion resulting from worker ingress and egress at a site, companies
have sponsored numerous traffic control studies. Companies have proposed staggering the arrival and
departure times of various segments of their workforces, as well as readjusting their entire project's shift
schedules on a seasonal or year-round basis so as not to compound area recreational, industrial, other
resource project, special event, or commercial traffic. Other decongestion efforts involve installing new
traffic lights, special routing of access roads, designating specific local roads off-limits to workers, hiring
traffic policemen, and suggesting alternate routes to workers. Resource companies have also been
assisting some communities which straddle railroad tracks and are effectively cut in two during the
passage of mile-long trains as was the case in Gillette where Burlington Northern, State of Wyoming,
Campbell County, and City of Gillette all contributed one-quarter of the cost of an overpass.
Natural resource companies, especially those situated in remote locations, are becoming more
involved with airports. IP A assisted Millard County both in applying for funds from the Airport Users
Trust Fund, administered by the Federal Aviation Administration, and by contributing $42,000 itself to
the County airport studies. Missouri Basin Power Project (MBPP) contributed to the cost of improving
the Wheatland, Wyoming, airport through a $50,000 grant. Portland General Electric (PGE) agreed to
front-end Arlington, Oregon, airport improvements in exchange for a 25-year waiver of landing fees.
Western Nuclear and other companies in isolated locations sometimes put in their own airstrips or
helicopter pads.
One entirely unique company involvement in worker transportation would have been Colony's pro-
posed $10 million gondola system to carry workers I .2 miles and 1800 feet in elevation to the oil shale
work site on the Colorado West Slope.
Housing. Housing initiatives by industries during the past decade have met with success and failure.
Some of the praise/blame can be attributed to company management and staff decisions and non-
decisions, consultants, regulator inputs, economic exigencies, field implementation, and a combination
of initiative and experience, or the lack thereof. Before committing itself to a housing initiative, a com-
pany should review the following eight decision points: 1) housing functions -is the housing to supple-
ment, stimulate, or create area housing and is the need temporary, permanent, or transitional?; 2) hous-
ing users -are inhabitants to be single workers, workers and their families, general public or special
population segment, or a mix of project and non-project families?; 3) housing type and quantity needs
-need to determine number of units, types (bachelor, MH, RV, single-family, and multi-family), and
ratio, transitional capability, permanency, and whether of an adequate, marginaL or showplace quality?;
4) monetary expectations -is a profit, breakeven, or a loss expected and is the involvement to be bal-
anced against project worker, schedule, or profit benefits?; 5) role of industry -how visible and how in-
volved in the stimulation or supply of housing and worker financing should a company be?; 6) housing
unit location-is the housing to be a separate entity, an expansion or extension of a community, within
or outside corporate limits, or facility adjacent?; 7) responsibilities after housing is completed -at what
point will a company divest itself of any obligations to the housing or its control?; and 8) amenities and
community sharing -to what extent will a company develop housing and community quality of life
amenities, co-fund community facilities and infrastructure, or share its housing project amenities with a
community?.
Industry housing ventures can be separated into two types of initiatives: first, direct supply of hous-
ing units and second, stimulation of housing units utilizing indirect techniques. The direct supply of
housing offers the greater range of initiatives and control over timing, location, type, quality, and cost
of housing, but increases the responsibility.
Recent housing supply initiatives by natural resource extraction and conversion industries can be
divided into four major categories: 1) new towns and rebuilt existing towns; 2) temporary housing;
3) permanent subdivision development; and 4) housing assortments.
1) New towns and rebuilt existing towns -during the past decade five large new towns have either
242
been initiated or planned by resource companies: Atlantic Richfield's (ARCO) Wright, Wyoming;
Plateau Resource's Ticaboo. Utah: Southern California Edison's Kaiparowits, Utah; Island Creeks'
Buchanshire. Virginia; and Colony's Battlement Mesa, Colorado. A private developer is building Spring
Creek near NERCO's Montana coal mine. Western Energy bought and rebuilt the town of Colstrip,
Montana. The plans for these new towns and rebuilt existing towns differ from the "company towns"
of the past iri terms of ownership, quality, resident consideration, and style. They are all contemporary
masterplanned. quality communities designed in a deliberate, highly flexible style of separate residen-
tial sections surrounded by open space (green belts and "pocket parks"). Variable housing and growth
rates are taken into consideration, as well as environmental harmony (Metz, 1977).
The present generation of new town development differs from the housing efforts of the uranium
industry in the 1950s and 1960s, a strategic necessity for the isolated mines. Two towns, Western
Nuclear's Jeffrey City and Pathfinder Mine's Shirley Basin, and two villages situated at Federal-
American Partner's (FAP) and Pathfinder's Gas Hills mines, Wyoming, and two villages at Anaconda's
mine and mill near Grants, New Mexico, are unincorporated, company subsidized, and company-
owned housing efforts. The two Gas Hills' villages have recently been demolished and similar plans are
in the offing for Anaconda's. There are still numerous examples of company towns, built during the late
1800s and early 1900s, which are in operation today (Allen, 1966).
2) Temporary housing -Temporary housing is needed during construction both to attract and retain
quality workers and lessen community impacts. Industry provisions of temporary housing is due to: the
increased cost of mortgage money which means more commuting by construction workers due to an
inability to buy and sell homes readily; skilled workers are more selective in choosing projects with
quality housing and recreation facilities; workers, on the average, are better educated and less tolerant
of disagreeable conditions; proven reduction in absenteeism and turnover; community resistance'can
sometimes be defused by easing the effects of worker relocation in an area. Temporary housing also
reduces the number of secondary workers and accompanying families. In short, it can be extremely cost
effective. Of course, an involvement in temporary housing need not be made if worker relocation is
balanced among several communities, a worker transportation program is initiated, successful private
housing ventures properly timed, and other local recruitment, training programs, and schedule adjust-
ment efforts attempted (Metz, 198[).
Temporary housing can be divided into three categories: single-worker or mancamp; recreational
vehicle (RV) park; and mobile home (MH) park. Often RV parks are built in conjunction with a man-
camp or MH park. Variations in quality and operation can be attributed to location, terrain, weather,
project management attitudes, level of labor competition, facility management, and community
pressure.
Temporary single-worker housing or mancamps are generally modular in construction and appear
evenly split with regard to location, at a project site or adjacent to a local community. Approximately a
dozen mancamps are in operation at the present time. Mancamps vary with regard to layout, unit
exterior and interior quality, housekeeping services, food selections, accommodations (number of
workers per room, room site, bathroom facilities, and furnishings), recreational choices, and land-
scaping. It has been noted that the better the camp housing, recreation, and services, the lower the
incidences of vandalism and rowdyism, worker turnover, and worker/management confrontation.
APS, having had numerous worker problems at a low quality mancamp at its Cholla plant construction
site, is committing around $7 million to its "man-hotel" at the new Palo Verde site. Union Oil's deluxe
mancamp was built to compete with other planned Colorado West Slope oil shale mancamps. Average
mancamps cost between $10,000 and $14,000 per worker, the more elaborate mancamps costing up to
$18,000 a worker. Workers usually pay a smalL heavily subsidized weekly room and board fee which
ultimately could be dropped as competition for workers increases (Metz, 1981).
Recreational Vehicle parks have been becoming more attractive and better planned as an increasing
number of families accompany workers to project sites. Vehicle pads and roads are being paved, all
utilities placed underground, and parks landscaped. Recreation, shower, bathroom, and laundry
facilities are included; the level of amenities is the major cost factor -$3,000 to $4,500 per pad. RV
parks are often built adjacent to mancamps or temporarily placed in MH parks. The vehicle mix at RV
parks is leaning more toward the large travel homes than the truck or camper trailer (Metz, 1981).
Mobile Homes are a necessary housing unit at most remote construction sites. They provide cheap,
temporary housing for construction worker families. Worker or project-owned MHs are usually placed
243
in one of three locations: combination RVIMH parks; private MH parks; or project-developed MH
parks. Each park can be planned to fulfill the short-term needs of the construdion boom phase and then
be dismantled or allowed to remain as a permanent MH park for long-term area housing needs or have
its infrastructure used for permanent housing. The vast majority of MH parks are permanent subdivi-
sion developments. ..
3) Permanent subdivision development-Dozens of natural resource companies have been involved
in the development or planning of permanent subdivisions. A majority of the subdivisions have been
located within community corporate limits. sometimes as far away as 25 miles from the associated
energy facility, These subdivisions vary in housing type and can accomrnqdate from a dozen families to
several thousand residents. They can be created to contain only employees and their families, possibly
some service personnel or public employees, or a mixture of employees and nonemployees. In a few
rare instances. as at ARCO's Killarney subdivision in Gillette. no company employee might choose to
live in the housing. Company ownership can be maintained for long periods or phased-out quickly and
the quality of life can vary. There are essentially three categories of subdivisions: 1) a MH park; 2) a
MH park that is adaptable to single-family development; and 3) a single family and/or multi-family
development.
MH parks are being built by resource companies such as Peabody Coal. Pacific Power and Light
(PP&L), MAX. Utah International (UII), Pathfinder, Allied, AMOCO. Salt River Project, Occidental Oil
Shale (Oxy), Eastern Associated Coal, Cyprus, Chevron, Kerr-McGee. and Virginia Electric Power
(VEP) for three reasons: 1) the flexibility which a park offers in rapid development. expansion, and con-
traction; 2) because workers can finance MHs easier than single-family residences; and 3) the ability of a
MH park to accommodate RVs temporarily. MHs are the first housing investment of many young
miners and construction workers. They offer an easy mode of housing relocation for continually mov-
ing construction workers. In many rapid growth areas where labor and material shortages are common
in the housing sector, they supply a necessary initial housing response. Park quality can vary dramatical-
ly depending upon layout. road paving, spacing, and presence of concrete pads. sidewalks. street lights.
recreational areas, dust and dirt. and convenants (e.g., trailer skirts. no animals. no litter, or no external
structures), and pad costs range from $7,500 to $12,000 each. One problem has been the buildup of
expectations among the first residents of a park about the ultimate quality of the proposed park with
eventual disappointment due to unfulfilled company promises caused by project or community
changes. In a few cases, companies have overreacted too positively to resident amenity demands. but
the risk of overbuilding is usually a lesser evil than that of underbuilding park amenities. Often trailer
pad rental fees are subsidized, sometimes services and utilities are not charged to the renters (Metz.
1979).
Adjustable MH parks which are convertible into single-family home developments have been con-
structed by Colorado-Ute in Colorado and MBPP in Wyoming, one each. Both subdivisions accom·
modated approximately 500 mobile homes, costing $5 and $8 million, respectively, and will be con·
verted to 250 single-family home lots. A temporary zoning variance was secured for the Colorado park
and variance extension was provided by the City of Craig, at its own request. due to a continued need
for the MH park. This transitional form of housing accommodation was done in recognition of the large
housing need of peak construction years which was followed by a lessened demand for MH parks and a
greater demand for more permanent housing.
Natural resource companies have actively sponsored close to two dozen new single-family and/or
multi-family subdivisions during the past decade. Energy Development. Pathfinder PP&L. Union,
Eastern, Cyprus, Oxy. Texasgulf. Western Fuels. Allied, Anaconda, Kemmerer, FMC RME, IPA, Ideal
Basics, Upland Industries, SUNDECO, ARCO, Carter, UII, Cordero, DG&T, Island Creek, Mid-
Continent. and PGE have at a minimum purchased the land, planned the subdivision, performed the
engineering, and had the infrastructure (i.e., water and sewer lines, electric and telephone lines, and
streets) installed prior to a controlled lot sale or unit construction by the company. Western Fuels and
IP A are becoming involved with "in-filling" in Rangely and Delta, Utah, companies purchase lots scat-
tered within communities and construct single-and multi-family housing units on those lots. Resource
companies have been entering into single-family and multi-family housing because of a recognized
need and each has a different expectation with respect to their investment recoupment. Companies
differ in their opinions of employee/non-employee purchasers/renters of this housing. The Wyoming
Industrial Siting Council is now requiring more than just the construction of single-family housing as a
244
mitigation measure; it is also requesting a plan detailing how a respective company will assist its
employees in acquiring that housing. The acquisition of housing by employees had been receivir.g
increased company attention for the past several years as interest rates have risen and local banks have
refused to enter the mortgage area to any large degree (Metz, in press).
For success in any subdivision development. companies must be careful to select a style acceptable to
prospective inhabitants. Special consideration .must be given to the access, landscaping, storage space,
builder/owner relationship, surrounding land use, matching the purchase price to employee salary
levels and fiscal attitude, and developing fiscal incentive. Most companies prefer not to become long-
term landlords of rental properties because they have no corporate interest in housing, little experience
unless through an existing housing subsidiary, and recognize the daily aggravation of housing manage-
ment.
-l) Assortment -Instead of subdivisions of just single-and multi-family manufactured or stick-built
permanent housing some companies have created "assorted" subdivisions containing several of the
following: RV spaces, MH pads, single-family, multi-family, and bachelor quarters. Most of the tem-
porary housing is slowly phased into the more permanent housing, though some space is set aside for
continued MH and/or RV use. Phillips, Gulf, ARCO, Basin Electric, IPA. Chevron, and FMC with their
assorted housing developments face the problems of internal spacing, unit mix, separation, and flexi-
bility of new towns, as well as the added concern of meshing the subdivision, sometimes larger than the
adjacent community, into that community. Texasgulf. Allied,.Union, and Oxy have taken the tack of
developing separate subdivisions in their impact areas for MH and RV units and permanent single-
/multi-family housing. In the large assorted subdivisions determinations have to be made regarding the
independence of the subdivision and the degree of county/community facility use.
Many companies prefer to stimulate the private sector to build new housing in a project area rather
than to undertake the housing expansion effort themselves directly. Stimulation efforts can include:
land gifts or subsidized land sale, rental or purchase guarantees, providing collateral or the cosigning of
a developer's mortgage, granting housing subsidies, providing technical assistance, helping to arrange
for sewer and water lines to a developer's boundary, offering land acquisition assistance, the actual
development of a subdivision's infrastructure prior to lot sale, placing money in a local bank for use as a
mortgage stimulus, and devising a method by which employees can secure low interest or forgiveness
down payment loans or company-sponsored mortgages or mortgage differentials. The ability to
stimulate housing depends upon the capabilities of the local builders and entrepreneurs, willingness of
industry to forfeit a large measure of controL and a capacity to arrange terms acceptable to cor-
porate/project management. Western Fuels contributed $522,000 to Rangely, Colorado, so that 107
acres of BLM land would be purchased and annexed for housing and commercial development;
Western Fuels bought 40 acres for its 288-unit housing development and 1.5 acres for office space.
Union assisted Parachute, IPA assisted Delta, Gulf assisted Grants, and Anaconda assisted Tonopah,
Nevada, in annexing their housing sites. .
Examples of stimulation are numerous. For instance, Beth-Elkhorn Coal conveyed 606 acres of Ken-
tucky land valued at approximately $160,000 to a non-profit home building corporation for $2,000,
while Eastover Mining in West Virginia donated a former coal company town and land to a non-profit
group for housing development. Carter has purchased and agreed to allow Gillette to annex 240 acres
when it is needed for housing. PP&L has joined with several other area resource companies to cover the
costs of providing sewer and water system connections to developer's boundaries. Tennessee Valley
Authority (TV A) has both had its staff assist several private MH park developers design their parks and
given a grant to Hartsville, Tennessee, to provide an access road and sewer/water connection to the
boundaries of several developers. Westmoreland Coal provided a $100,000 interest-free loan to cover
site engineering costs. Phillips, Anaconda, TV A. DG& T, Salt River Project, APS, and others have
guaranteed a certain percent occupancy for a fixed number of years at area MH parks to stimulate their
development. Oxy signed master leases with Rifle apartment developers to generate additional apart-
ment construction. W.R. Grace provided collateral at a lo_cal bank for a local developer's 492-unit hous-
ing project in Craig, Colorado. RME guaranteed the purchase of 45-single family homes in Hanna,
Wyoming, allowing the developer to schedule work and purchase in bulk, with company employees
being given ·a 5 'It• discount on their purchase. Kerr-McGee made a down payment loan of $5,000 to
employees purchasing homes only in the new town of Wright, Wyoming, plus a gift of $1,500 at clos-
ing and an additional $1,000 for the first and second years, followed by proceeds with a seven year
245
forgiveness loan contingent upon ·continued employment. In order to boost housing construction dur-
ing these periods of high interest rates and construction financing shortages, ARCO has purchased 14
new homes and financed 19 to be built in Wright for resale or rental to employees. Seven coal com-
panies and the United Mine Workers formed the non-profit Coalfield Housing Corporation in 197o to
identify and obtain suitable housing development sites in West Virginia and to attract private
developersilenders to create the housing. Numerous companies have made monetary or service con-
tributions to improve community infrastructures, particularly sewer and water systems to allow or
stimulate development (Metz, 1977). ·
Companies have devised many methods to. assist their workers in financing area housing and usually · .
it is focused on that company's specific housing development. Energy Development sold several of its
houses in Hanna under a rent/purchase option whereby once enough rent had been paid to Energy
De:velopment to equal a 5 '}I> mortgage downpayment it was transferred to a local bank with the mort-
gage applications. Ideal Basics carried employee, especially those with no or poor credit ratings, mort-
gages for two years to provide assurance to a local bank of the owner's fiscal reliability. Pathfinder
absorbs a percentage of the lot and house price as an incentive to its employees to relocate to its single-
family home subdivision in Wyoming. Basin Electric developed a special mortgage fund whereby the
utility purchases employee mortgages as investments. Some companies are considering mortgage dif-
ferential assumptions, while others shy away from any employee house financing schemes due to col-
lection payment problems, especially after employee terminations (Metz, in press).
Education. Resource companies, when locating in rural areas, become involved in education facilities
and programs essentially for six reasons: I) a revenue lag time delays new school financing; 2) debt or
bonding limit of a rural community is insufficient; 3) existence of a jurisdiction-tax revenue mismatch;
4) necessary for recruitment; 5) part of a permit requirement; and 6) shows commitment by the com-
pany to the community's well-being. In some instances, public relations can enter into the picture.
There are many companies which feel that their tax payments are sufficient to compensate for the
influx of school-age children and it is up to the state to remedy jurisdiction-tax revenue mismatches or
allow tax pre-payment.
Assistance in mitigating school system impacts and upgrading a system has taken the form of land
donation, in lieu of tax payments, prepaid taxes, gifts of buildings and equipment, monetary contribu-
tions, offers of labor and materiaL scholarships, employment programs, donations of educational
materiaL and infrastructure/service assistance. While some assistance is the result of leveraging by, for
instance, the Wyoming Industrial Siting CounciL most is the result of a company's initiative or response
to a community's recognized need.
As land is a common gift to school districts, often sites are located in planned subdivisions so as to
enhance a company's subdivision and make the donation process easier. Colorado-Ute in Craig, ARCO
in Wright, PP&L in Rock Springs, Colony in Battle!]1ent Mesa Western Energy in Colstrip, Phillips in
Thoreau, Pathfinder in Shirley Basin, Gulf in Grants, MBPP in Wheatland, and AMAX and Carter in
Gillette, for example, have donated land. A few resource companies, for instance, Texasgulf in Rock
Springs and Tucson Electric in Springerville, Arizona, have actually given school buildings. Others, for
instance, Colony, Amoco, Western Fuels, DG& T, lP A. and Union, gave front-end financing, some as a
pre-payment of taxes. Many companies have contributed modular classrooms, unused office trailers,
and additional funds to expand or refurbish existing school facilities and to supplement teacher salaries.
MBPP assisted in new school construction by guaranteeing $5 million in tax-exempt bonds for a non-
profit organization, which then leases the school facilities to the Platte County School District No. I in
Wyoming.
A variety of companies have agreed to formulas which result in funding project-related school-age
children. TV A has provided $1.4 million in mitigation payments based on the number of children of
construction worker movers into the Hartsville area. VEPCO agreed to pay the costs of construction
worker school children in two surrounding counties which do not receive project tax revenue. Puget
Power and Light had agreed to make monthly payments on a per child operation and maintenance cost
times a L5 secondary impact child factor to area schools. WPPSS agreed to a complicated formula of
"pupil year" construction and operation and maintenance funding. Western Fuels has agreed to cover
the costs of any school children above a negotiated baseline number.
Beyond such terms as free water to a Wyoming baseline school by Amax and the donation of school
athletic fields in Hanna, Wyoming, companies provide funding for scholarships, special college degree
246
programs. information programs. and student employment. RME was to donate title to a coal reserve to
~Vestern Wyoming College for a mine training program. Several oil shale companies are providing
tunds. instructors. salvage equipment. and grantsmenship to establish or upgrade technical and
engineering programs at Western Colorado schools.
Of course. there is always the negative example of the Green River School District building a school
on land donated by a company in its subdivision only to find that the subdivision then was not built.
Public Utilities. A key growth inhibitor and major point of contention Juring a rapid growth period
are inadequate community sewer and water systems. incl~,;~ding insufficient well/treatment facility
capacity. trunk line size. and Jistributionrcollection lines. Usually assistance in upgrading and expanding
these systems is a consequence of involvement in the supply/stimulation of area housing. Almost all
temporary housing developments and some permanent developments. have their own independent
systems. While companies can sometimes rightly claim that tax revenues should pay for system
upgrading and expansion. often a lag in revenue. jurisdiction-tax revenue mismatch. or debt limits
means systems cannot accommodate growth.
ResolJrce companies have made numerous mitigation contributions to impact area communities.
Western Fuels has agreed to commit $3,375.000 to improve R.mgely sewer and water facilities.
Colorado·Ute gave$") 15.000 to the City of Craig in order to receive permission for its Shadow Moun-
tain Village. Union prepaid Parachute $o00,000 in sewer and water tap fees and Colony prepaid
$l00,000. Part of Cyprus' $to million mitigation effort in Challis. Idaho. involved a sewage treatment
plant and new sewer/water distribution lines. DG& T prepaid one Utah water district $50,000 for future
water connections and made grants of $1,340.o00 to fpur area sewer and water districts based on a for-
mula of project-related personnel distribution and current facility construction costs. Upland Industries
enlarged the Green River water system and installed a temporary sewage treatment plant (to be
replaced by municipal facilities later) at a cost of $750.000 to initiate a housing development. FMC in-
vested $1o"),000 irt Lyman. Wyoming's sewer and water systems, to compensate for the mismatch with
regard to project taxes and employee location. IPA has given over $1 million to four communities to
study and upgrade water systems, as well as $1.5 million to upgrade sewage systems in two com-
munities. Kemmerer Coal and PP&L plus several other companies are paying half of the Town of
Kemmerer's, Wyoming, share of an improved system. TVA has provided funds to Hartsville and
Carthege, Tennessee, while PGE advanced money to impact communities in Oregon with no pay back
obligation and prepaid some communities for future hookups. WPPSS has signed numerous construc-
tion impact agreements with State of Washington communities for over $1.5 million. MBPP guaranteed
a $3 million loan for Wheatland system improvements.
Some company contributions have been earm.:1rked for speci.:1l projects. PGE contributed $5,000 to
have a waterline laid to .:1 school bound.uy in Boardm.:1n, Oregon. UII gave $toO,OOO to Craig for a
water tank, as well as a no-interest construction loan. MBPP contributed $7,000 to a Wheatland water
well. while PP&L spent several hundred thousand on exploratory well development for municipal
wells; reimbursement by the City of Gillette is contingent upon success. North Antelope Coal has pro·
vided Gillette with a $150.000 system design gr.:1nt and NERCO has provided Douglas with .:1 $uo.ooo
system design grant. Phillips gave l.md to Thoreau tor a water tower. as well as funds for its construc-
tion. Phillips also makes payments tor the cost differential between pre-project small distribution pipe
and present pipe size now needed due to demand from the housing development. Several companies in
the Gillette area covered the costs of extending sewer and water lines to the boundaries of properties
which were later sold to developers.
Company contributions have also taken the route of assistance/donations of technical expertise,
equipment. or facilities. Anaconda and Gulf donated engineering expertise to Grants with regard to the
sewage system. Gulf drilled a water well for San Mateo. Kaiser and U.S. Steel presently supply water to
East Carbon and Sunnyside. Utah. from their nine reservoirs. Valley Kamp has loaned its pumps and
pipes to the community of Scoefield.
On occasion public utility system mitig.:1tion c.:1n be in .:1nticipation of problems. TV A paid three-
qu.:lrter million dollars for new water wells and .:1 w.:1ter pipeline for Crown Point. New Mexico because
of possible d.Jm.:lge to the present system by_sever.:1l companies proposed Jrea uranium mine'j.
Health, Public Safety, and Recreation. Public health. -safety (police and fire protection), and recrea-
tion are three areas where companies contribute and employees volunteer frequenl:ly to improve area
services and facilities. Improvement is essential to obtaining and maintaining an area quality of life.
247
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While mine and plant sites are generally self-sufficient in guards, fire apparatus, trained fire and
emergency crews, nursing staffs, and ambulances companies rely on area hospitals for special care and
emergency treatment and community fire and police service to protect its workers and their families
off-site. Mental health and recreation are achieving greater recognition today by companies.
Companies either on their own or through area industrial organizations (e.g., Southwest Wyoming
Industrial Association (SWIA), Wyo-Mont Industrial Association, and Overthust Belt Association) have
committed themselves to doctor and nurse recruitment (advertising, visitation costs, moving expenses,
and guaranteed banknotes for use by doctors in setting up practices) and sponsorship of emergency
medical training; clinic construction (e.g., PGE, FMC Allied, U.S. SteeL Kaiser-, and Montana Power),
leasing ($1/year by Salt River Project), and equipping (e.g., Kaiser, Montana Power, and PGE); hospital
support. expansion and upgrading, including new equipment, on a one-time (Western Fuels-$876,000
to the Rangely Hospital District; WPPSS to Prasser Hospital-$57,100; VEP to a Bact County Hospital;
and IPA to the West Millard Hospital District) and annual basis; gifts of ambulances (e.g., Allied, IP A,
and Arch Mineral); emergency radio communications (FAP); mental/human services/alcohol/drug pro-
grams (MBPP donated $250,000 to Wheatland and companies through the Gillette Chamber of Com-
merce Industrial Committee support area efforts) and a medical evacuation helicopter in Grand Junc-
tion, Colorado, supported by seven mining companies. In a few instances, companies give manpower
and equipment, such as when SUNEDCO wired a hospital's emergency generator and constructed
housing for it and Kerr-McGee donated nine days of heavy equipment operation to remove rocks from
a hospital site.
Occasionally public health efforts by companies have expanded into peripheral areas as when Kerr-
McGee gave land and Anaconda gave $30,000 for a new nursing home in Grants. Or, when United
Nuclear and Gulf Minerals gave $30,000 to a Grants senior citizen's home.
Companies are usually quite willing to assist in the provision of fire protection for the remote com-
munities in which their workers reside and workers are often volunteer firemen. FAP, United Nuclear,
DG&T, Cyprus, Carter Mining, Western Energy, ARCO, WPPSS, TVA, and Salt River Project have
contributed an assortment of new and used fire trucks, equipment, and fire stations. Gulf has run train-
ing programs for the San Mateo Fire Department. Western Fuels gave a lump sum of $120,000 to the
Rangely Fire District. Increased fire protection lowers insurance rates for a whole community.
Company opinion is divided on providing funds and equipment to police departments. The Camp-
bell County Sheriff's Department and City of Gillette Police Department have policies of not accepting
gifts or contributions from mining and energy companies because it could compromise the departments
if a strike or project management/employee friction developed. Yet, there are many instances of com-
pany assistance to police departments and the officers themselves. WPPSS, TV A, and VEP make mitiga-
tion payments to area police departments. Union and Colony approved, and RBOC was in the process
of approving, impact payments to police departments. Union's payments to Parachute include $9,000
for a police car and equipment, and $43,000 annually for three years for two police officers, as well as
payments for Garfield County deputy cars and officers. Cyprus bought several new police cars for the
town of Challis. Kaiser gave a car to the Sunnyside Police Department. DG& Tis supplying grant funds
to Vernal and Uintah County, Utah, to assist iri equipment and personnel expansion costs. IPA is giving
financial assistance for a new public safety complex, deputies, equipment, and training in Millard as
well as $50 a month to a sheriff's deputy assigned to a remote mine site MH park. IPA has also con-
tributed to equipment and substation needs of State Highway Patrol and County Sheriff Departments.
Recreational needs of host communities and company-involved housing projects are· a favorite for
resource company contribution-monetary, equipment, and labor and materials. Utilities are well-
known for the swimming, boating, educationaL and wildlife facilities, passive and active, at power
plant sites. Some mining companies are also including recreation in their reclamation plans. Mostly,
resource companies are becoming known for their tens of millions of dollars in recreation centers, com-
munity centers, swimming pools, tennis courts, libraries, playgrounds, target ranges, jogging trails, bicy-
cle paths, golf courses, baseball fields, horseshoe pits, shuffle board courts, open areas, "tot" lots, and
large sodded parks which are built to accompany new towns, large subdivisions, and temporary hous-
ing facilities. Recreational facilities at temporary housing developments are often turned over to a com-
munity when the housing'i~ no longer needed for project workers.
Resource companies have also become involved with a variety of recreation initiatives which are
non-housing development related. Western Fuels is paying $820,400 to the Rangely Recreation District.
248
DG& T has made grants worth one-quarter million dollars to Uintah County and Vernal for the con-
struction of additional recreation facilities and for salaries. IPA is contributing part of the three-quarter
million dollar cost for new parks in Millard County and Delta City. Three utilities -TV A. PGE, and
WPPSS -are supporting playgrounds and parks in their respective impact area communities. Gulf
Minerals and United Nuclear have given city parks to Grants (one was eight acres). Ballfields were con-
structed in Gillette by Carter and in Grants by a resource company subcontractor using company earth·
moving equipment. Kaiser and Kemmerer gave golf courses to Sunnyside and Kemmerer and Ull gave
in-kind through use of its equipment to improve a golf course in Craig. ARCO underwrote an
equestrian program in Gillette. Almost all resource companies have given in money, equipment. and
employee time to little leagues, softball teams, community rodeos and scouts. Community and area
libraries are also recipients of company contributions by WPPSS and Western Fuels.
Miscellaneous. Resource companies assist communities in a variety of ways beyond those mentioned
in the above categories. Some of these imaginative mitigation efforts can be tried almost universally, as
with assistance for planners, grantsmen; workforce training, monitoring studies, and fiscal practices
while others are unique to a project impact area.
Companies have been assisting local communities in the development of masterplans, ordinances,
and codes to manage growth and to secure state and federal funds to alleviate impacts. Planners have
been funded by single companies (MBPP, Montana Power, ARCO, Western Fuels, and PGE) and com-
pany associations (Wyoming Mining Association) and loaned by companies (RBOSC IP A. and TV A);
planning studies have been funded by companies for communities, counties, and impact areas (Oxy
-$260,000, RBOSC-$333,000, Colowyo-$70,000, RME-$75,000, IPA-$85,000, WPPSS-$58,000,
and Northeast Utilities -$40,000). In order to secure maximum state and federal funding specialized
grantsmen have been hired by Gillette, Moffat County, Colorado, Millard County, and Franklin Coun-
ty, Washington through funding by the Gillette Chamber of Commerce Industrial Group, Colowyo,
IPA. and WPPSS, respectively. Monitoring growth and change is essentic.l in rapidly growing com-
munities, especially for those communities impacted by several projects. Companies (MBPP, North
Antelope CoaL Antelope CoaL Carter and Mobil) recently proposing large resource developments in
Wyoming are required to monitor socioeconomic change. Resource companies in Colorado have to
monitor employee residence location in keeping with the severance tax disbursement formulas. Other
companies (Pennsylvania Power and Light. Western Fuels, DG& T, IPA.Basin Electric, Salt River Pro-
ject, TV A. Otter TaiL Commonwealth Edison, Kansas City Power and Light, and Duke Power) monitor
change for their own knowledge or as a function of company-community agreements (VEP and
WPPSS) for impact payments.
Resource companies recognize the benefit of utilizing as much local labor as possible to reduce area
immigration. Some companies offer special training programs for local residents, as well as to American
Indians when a project is located near or on reservations.
Resource companies and state siting commissions have become more involved in local fiscal matters
as the need for maximizing local revenues has become apparent. Local banks in impact areas are now
becoming the location of corporate checking accounts, certificates of deposit, and project payrolls.
Companies and many contractors and subcontractors are utilizing tax transfer techniques to maximize
local receipt of sales and use taxes. Equipment suppliers and maintenance firms are being pressured to
open local offices. Corporate offices are being situated locally as in the case of NERCO's Spring Creek
Mine in Montana. The $2 million corporate office was located in Sheridan, Wyoming, where the
employees had chosen to reside to bring tax revenue to that community.
Only in a few instances have companies subsidized local administrative costs attributable to a project
(IPA-Millard County, Delta City, Hinkley, Oak City, LynndyL and Teamington, Utah, <;md Western
Fuels-Rio Blanco County and Rangely). Companies have helped with a variety ofadministrative costs:
Carter is to fund a $20,000 feasibility study on converting a school for Gillette city offices; TV A has
funded local planning commissions; Empire Energy gave Craig a payroll machine; and IP A and ARCO
have contributed to administrative office facilities. Numerous companies have donated secretariaL
photocopying, and printing assistance. ·
Assorted unique mitigation efforts have also been proposed and performed. Land for churches has
been given by ARCO in Wright, Gulf in Grants, Phillips in Thoreau, Western Energy in Colstrip, and
Colony in Battlement Mesa ( LO lots). Mine water from Kaiser's Sunnyside Mine is used by the Sunny-
249
--------------~--------
side to irrigate local parks. Braztah relocated, at no expense to the homeowner, 72 h~uses from its
Castlegate, Utah, property to a new subdivision with a lot and basement provided. Fort Union Coal has
offered two tons of coal free to each Gillette resident aged 62 or older. Antelope Coal is to subsidize
Douglas day centers $2 per day for each employee utilizing the facilities. Cyprus gave Challis a
bulldozer for their landfill. Plateau allows the Ticaboo TV antennae to be hooked up to its transformer.
Big earth-moving equipment from the Rawhide and Caballo occasionally helps with snow removal
when blizzards strike Gillette. Carter corrected a drainage problem near a Gillette elementary school to
eliminate a hazardous water hole. Monterey has offered water from a lake on its property to Carlin-
ville, Illinois in case the community's reservoir is depleted. There are numerous other examples which
could be cited.
Company-Community Interactions. An increasing number of resource companies are putting more
emphasis on company-community interaction. This is partly due to the passage of the National
Environmental Policy Act of 1969 and the increasing state and Federal permits and agency reviews.
But. companies have also recognized the benefits of a prepared community and mitigated impacts.
Interactions are not to be considered the solution to all problems and the manner of interaction varies
with each pair of participants or group of participants (Cluett, 1979).
The process of interaction is still not an established art. There are varying levels of personnel inter-
action (community leaders, citizens, state and local government officials and company executives,
representatives, and employees), intensity (occasional meetings, newsletters, regular meetings, and a
local representative), and styles (presentations, negotiations, and adversarial proceedings). Many com-
panies are placing project representatives in planned site areas to collect local input and disseminate pro-
ject information, as well as ad as a liaison and conduit of concern and questions. Timing of the inter-
active process is important and must be initiated in the formative stages of the project. Respect for the
needs and concerns of each party is also essential.
Solitary projects, for example Anaconda's Molybdenum Mine in Tonopah, Cyprus Mines'
Molybdenum Mine in Challis, MBPP's Laramie River Station in Wheatland, VEP's Pumped Storage
Project in Bath County, Virginia, and Intermountain Power Agency's Intermountain Power Project in
Delta, have taken great strides in interaction. The result is general public support from area residents
and mitigation efforts that are reasonable and considered successful to project and community partici-
pants.
Where multiple projects are impacting areas, for instance, Gillette, Evanston, Rock Springs-Green
River, Grants, Bismarck, North Dakota, and the Colorado West Slope, voluntary industry organiza-
tions, some with community participants, have been formed. Five energy companies in 1977 organized
the Inter-Industry Technical Assistance T earn (IT AT) to monitor socioeconomic change and provide
Mercer County, North Dakota, citizens and public officials with technical assistance. In Sweetwater
County, Wyoming, 12 major companies involved in coaL electrical generation, and trona mining
formed the Southwest Wyoming Industrial Association (SWIA) to provide employment information,
limited legal, engineering and management services to area communities, and help in front-end financ-
ing. Three big oil firms organized the Overthrust Industrial Association to coordinate aid to com-
munities impacted by energy development in the Evanston area. A Wyo-Mont Industrial Association
was formed in Sheridan to collect, assemble, and disseminate information on energy developments in
Sheridan County, Wyoming, and Big Horn County, Montana. There is always the concern among
these area company organizations over a potential perception of company collaboration to the detri-
ment of the public or a government anti-trust initiative. But, company organizations can be a valuable
asset to an impact area and provide mitigation efforts beyond that which is normally initiated.
Conclusions
Natural resource companies are committing large amounts of capital to a wide range of new extrac-
tion and conversion projects. The fiscal consequences to a company of any schedule delays or
workforce problems are mounting, and companies are recognizing that it is in their best interests to
invest time and capital in enhancing beneficial and mitigating adverse socioeconomic impacts.
Mitigating the adverse impacts receives the most attention by companies, communities, consultants,
experts, and state and federal governments. Mitigation is the focus of conflicting opinions regarding
250
responsibility. strategy. and effort. There are no hard. fast. or tried and true rules for company invole-
ment in mitigation efforts. Each mitigation effort must be tailored Jnd negotiJted to match the unique
chJracteristics of individual projects Jnd circumstJnce~ of specific locJies.
Companies must assume financial responsibility for the temporary impJds arid areJ needs created by
their projects. They must J!so offer financial and technical Js~istance to impJct areJs. not ju~t the host
political jurisdiction. when locJl. stJte. federal. and special fund ~ources of revenue or technicJ!
Jssi~tJnce are not Jvai!Jble or insufficient. But. local. stJte. Jnd federJ! governments must Jlso recognize
their responsibilities and make Jdjustments in tax jurisdiction boundaries and dbbursement formu!Js so
that impacted areas are properly defined and receive an adequate share of lease, royalty, severance tax.
permit fee, special use and service charges, and sales tax payments. Laws need to allow innovative uses
of tax pre-payments. housing mortgage bonds, changeable debt and bounding limits, industrial loans
with delayed prepayment. and revised revenue assistance formulas. Enabling legislation is required in
most states to allow impact areas to negotiate the mitigation efforts.
Each impact drea's characteristics, capacities. attitudes, legal framework. and needs have to be inven-
toried and evaluated with respect to one or more project's potential impacts before assumptions of
responsibility can be determined. Where legJI adjustments Jre necf'ssary by local. state, and federal
governments to assist in mitigation, these should be done promptly. Mit!gation negotiations should be
carried out between companies and impact area communities ir: good faith. with adequate considera-
tion given to each party's limitations, desires, and financial capJbilities, and as a compromise. Mitiga-
tion efforts need to be flexible and dynamic to reflect actual change as revealed in monitoring studies.
In some instances, little or no mitigation is necessary by a company.
Because of recent "bust" times in many resource development communities, mitigation strategy .ind
effort will undergo some modifications. Local. state, and comp.1ny responsibilities, fiduciary Jnd fiscJl.
are being reviewed and new "boom" areJ mitigJtion eff.orts will reflect todJy's concerns. Company
involvement in impact area mitigation will surely increase Js a result. as well Js an involvement in an
impact area safety netting in case of "bust."
251
References
Allen. James B. The C>nip,III.'' -~;,,eli i11 the A111criuiii ~Vc~t. Norman: University of Oklahoma Press, I cJoo.
Cluett. Christopher. et al. "Individual and Community Response to Energy Facility Siting: A Review of
the· Literature." Seattle: Battelle Human Affairs Center. 1979.
Denver Research Institute. "Employee Busing Investigation," prepared for AMAX, Inc., August 11,
1978.
Denver Research Institute. "Industry Contributions to Community Development in Resource Develop-
ment Communities," prepared for AMAX, Inc., March, 1979.
Metz. William C. "Construction Workforce Management: Worker Transportation and Temporary
Housing Techniques." sponsored by the Western Rural Development Center, Oregon State Univer-
sity, Corvallis, Oregon, September 1981.
Metz. William C. "Energy Industry Involvement in Employee Transportation," 'fi·,m~porfatioll (.2wtrtcrl)t,
36:563-584.
Metz. William C. "Residential Aspects of Coal Development." Paper read at Annual American Institute
of Planners Conference. October 1977, at Kansas City. Missouri.
Metz. William C. "Socioeconomic Impact Management in the Western Energy Industry," In Protccdii!S~
of the l11~titutc of bwirmmiL'IIhtl Stima~. Seattle, Washington: Institute of Environmental Sciences, 1979.
Metz. William C. "The United States Energy Industry's Involvement in Housing," bll'IX!f''"" Mi11cntk in
press.
252
Common Socioeconomic Program Elements in Four Large Construction Projects:
Introduction
Implications for Alaskan Community Strategies
Sheila F. Helgath
The socioeconomic impact programs of four construction projects were examined for applicability to
the development of a socioeconomic program for the Alaska Natural Gas Transportation System. The
projects were the Trident Submarine Base construction in Washington, the Washington Public Power
Supply System, the Northern Tier Oil Pipeline and the Western Fuels Deserado Mine in Colorado. It
was found that these projects contain common elements, described below, that contribute to successful
mitigation strategies. It should be stressed that comparison of these projects to Alaskan projects may not
provide a completely accurate picture of the development process of a mitigation program. The
socioeconomic efforts in these projects are most valuable as conceptual frameworks for developing
local Alaskan community strategies. Though the impacts may be quite similar in a coal fired electrical
utility, a military base. and/or a pipeline the legal mandates under which projects are developed, the
funding sources (i.e.. private vs. public). and the duration of the impacts may dictate different
responses. Other factors which influence the projected need for an impact mitigation program and its
cost include the initial size of the existing community, the population growth rate. the public manage-
ment abilities of the community. the type of development. and attitudes toward growth (Sanderson.
1977). All of these factors have to be considered in the local communities strategy for controlling
negative impacts and enhancing positive impacts.
The four projects selected were of a size equivalent to Alaskan resource development projects. The
Northern Tier Oil pipeline was selected as an example of a contemporary, privately funded pipeline
similar to ANGTS. The Washington Public Power Supply Nuclear Plants No.3 and No.5 were selected
for examination because they demonstrated the effect of the Washington Energy Facility Siting
requirements approach to solving local community socioeconomic problems. The Trident Submarine
base construction in Bangor, Washington, is an example of a Federally funded project and the resulting
direct Federal involvement in socioeconomic mitigation. The Western Fuels Agreement in Colorado is
being recognized as a prototype of future energy resource developments in the western United States.
Rio Blanco County and the State of Colorado have effective facility siting and permitting processes.
The characteristics of the four projects, communities, and laws under which the socioeconomic pro-
grams were developed are described in Table I, A Comparison of Large Energy and Construction Pro-
ject Cost, Social and Economic Costs. and Substantive Areas Covered by Contractors and/or Federal
Government. Information was obtained through interviews and materials provided by those involved,
by examining files. and by reviewing published materials.
Five Common Elements
Five elements were found in these socioeconomic programs which can guide the development of a
basic structure and strategy for a local community. These elements are: ( l) a professional advocacy
team; (2) a local or community generated needs assessment; (3) a mechanism to match resources; (4) a
special impact fund; and (5) a public participation program.
253
Table 1
f. Comparison of large Energy and Construction Project Costs, Social and Economic Costs,
and Substantive Areas Covered by Contractors andlor Federal Government
Case I
Project
Project
Cost
Washington $7 Billion
Publk
Power·
Supply
System
(2 Nudc.u
Power
Pl<~nts)
Social and Economic
Payments'
$13 Million
Transportation
HousinK & School
Social Services
Law Enforcement
Sewer/Water
Fire
Recreation
Library
Information
Other Services ···*Courts, MonitorinK
Work
Force
6500 Construction
200 Operating
Description of
ExistinK lnfr.Jstrudure
The counties of Thurston, Grays Harbor .• md M.1son <~lrc.Jdy h.td dd..,quate
infrastructure in terms of ro.Jds, communic.Jtions, <~nd housing. The Jddi-
tion<~l workers produced incremental as opposed to threshold Jlicds.
Within 50 miles of the area are Seattle and Tacoma with J mmbirwd
population of over l.S Million.
Le1-1al Authority
a. Requires Supply System to monitor Prim<~ry/SecondJry SociJI and
Economic Impacts. ·
b. The WashinKton Facility SitinK Act requires payment of substantiJted
daims by State and all political subdivision d<~ims net finJnce burdens
above revenues of claimant.
Soun:e: lim Connely. WashinKton EnerKY Siting Commission and Dr. Ralph Murphy, Turston ReKional PlanninK Council
Case II
l'rojl>d
Northern
Tier
Pipeline
Company
Project
Cost
This list is not complete as
Social and Economic costs and other issues will Work
Force
$500
Million
Washington
State
$1.8
Billion
for Five
States
Payments' continue to be negotiated
Transportation
Housing
School
Social Services
law Enforcement
Sewer/Water
Fire
Recreation
Library
Information Services
or Impact
Coordinator
Other Services
•
1000 Peak
Construction
100-200
Operation
-·· $16 Million for Harbor facilities
relocation in Port Angeles.
Source: Gary Smith. Northern Tier Pipeline Comp.my
Description of
Existing Infrastructure
Semi-rural community with National Park. National Forest. and fishing as
the m.1instay of the community. Port Angeles is a community of lll,LlOLl.
Reimbursement Philosophy aml LeKal Authority
The company maintained a philosophy of cooperative planning with local
entities. The local communities negotiated for any costs to local govern-
ments beyond taxes and for up front preparation costs. The Company
agreed to construction of the Seamans Center, to provide a sm.JII boat har-
bor, and other facilities to gain use of area where the existing recreational
harbor is located. The Washington Facility Siting Law was in oper.Jtion.
N
(.n
(.n
Co~se Ill
Project
Rio Blanco
Sybfueltoil
Shale
Mining
Project
Cost
$160
Million
Social and Economk
Payments'
$9 Million
Transportation
Housing/Planning
School
Social Services
Law Enforcement
Sewer/Water
Fire
Recreation
library
Information Services
or Impact
Coordination
Other Services
Table I Continued
Work
~orce
(Data not
···Reimbursement available)
for roads being
negotiated.
... *Required of Company to provide
... Mental Health
Source: Duane Rehubrg. Rio Blanco County Planner
Description of
Existing lnfro~strudun·
Rio Blo~nco is a rural r.lrKhing county of 2oll0 people on 2.2 Million Jlrt's
of l.md. Expect $.~ billion in projects in next S ye.1r~ .111d mmpJnie~ lo I"'Y
for $100 Million in government services.
Legal Authority
State law requires dn imp.1d .Jn.JiysislmitigJiion if Jdivily inne.ISl'~ popul.l·
lion 1.25%.
---------------------------------------------------------------------·------------------·-·------------··----------------------------------·------------------------------------·-------··---------------------------------------------------····---------·---------------·-··--------------
Case IV
Project
Project
Cost
Trident $1 Billion
Missile
Subm.uine
BJse
Social and Economic
Payments'
$75 Million
Transportation
Housing
School
Social Services
Law Enforcement
Sewer/Water
Fire
Recreation
Library
Information
Other Services
···$-10 Million
···$20 Million
---$15 Million
---Courts, Planning
Source: John Horsely. Kitsap County Commissioner
Work
Force
2000 Peak
Construction
Description of
Existing lnfro~structure
The existing county ared work force w.Js approximJtcly .~O.Ollll people.
The infrastructure WdS in plo~ce before the wnstrudion bl•gJn.
Legal Authority
MilitJry Construction and Authorizo~tion Ad Sedion l>Llll of I'L '>-'·552: the
~ederal Government pdid tor the cost ot the pmjl'd, induding primJry
social and economic costs.
, ..... lndicJtes the category the local government received impact funds for, from the Company dllll ~eder.JI Government in the case of Trident.
--~------------------
Professional Advocacy Team
Resource development occurs often in communities which do not have ·immediate organizational
structure and skills to solve the problems associated with growth. Communities have responded by
developing professional advocacy teams. Professional advocacy teams are organized to help local com-
munities identify problems, find solutions, and provide expertise in public involvement and negotiation
with private industry. Professionals on these teams have a variety of skills which usually include plan-
ning, community administration, sociology, demography, legal experience, and financial expertise.
These teams have been set up in a variety of ways. For example, COlorado State Law formally sets up a
State agency which sends teams out to live and work in energy impacted communities. Companies
have hired consultants to work with communities. The Foundation of Urban and Neighborhood
Development (FUND) is an example of a consulting group which has worked under the sponsorship of
large oil firms to help local communities identify needs, priorities, and goals. Northern Tier funded a
community liaison officer. Usually these consultants ad as facilitators, information conduits, and public
involvement specialists. Another approach has been to form teams composed of State, Federal, and
local members on loan to the project office. The Mountain Plains Federal Regional Council set up such
a program. External professional planners provide the emphasis, organizational focus, and expertise to
develop a socioeconomic program. How a team is set up depends on local and State organizations.
However it occurs, this team needs to be in place during the facility-siting and design phase of a large
project.
Needs Assessment
The needs assessment documents existing conditions; for example, the capacity of the local hospital
or housing rental market. A needs assessment examines trends within the community's population,
economic expansion, service activities level, level of unmet needs, etc. The demand(s) placed upon the
community by the project should be identified during this process. The needs assessment is the
systematic documentation of local, state, and Federal services. Assessments require information from
social service providers and the resource development company be compiled and correlated. Technical
assessments usually are prepared by professionals with assistance from key informants. Needs
assessments take considerable time; for example, an assessment of Fairbanks would probably require
eight months of staff time and cost $85,000 to $100,000. This estimate is the result of work jointly
developed by Elstun Lausen, the Alaska State Pipeline Coordinator's Socioeconomic Officer, and
myself. The estimate was based upon the costs of other similar projects completed by the North Star
Borough Community Research Center.
Needs assessments are most effective when the service providers, usually the local communities, par-
ticipate in the process. Outside specialists can do an adequate job of assessment, but without local par-
ticipation, action to satisfy identified needs is unlikely to occur. Needs assessments, however, are dif-
ficult to accomplish because of timing, financial demands, and the availability of professional expertise.
Advocacy teams have been able to facilitate the preparation of assessments by encouraging and focus-
ing the process for local communities, by obtaining grants for planning, and by providing professional
assistance. Most Alaskan communities, particularly the smaller ones, would have the above problems in
developing an assessment of the potential changes occurring from resource development.
Impact Fund and Resource Matching
Special funds have been set up and resource matching has occurred in effective socioeconomic
mitigation programs. These funds have been instituted through State and Federal legislation or through
agreements negotiated with private industry. Rocky Mountain Western States, such as Montana,
Wyoming, and Colorado, recently affected by energy development use special funds in their respective
programs. Funds are in the form of single legislative grants or are earmarked receipts from a revenue
source. Most of the time a board allocates these resources based upon joint consideration of population,
need, merit of proposals, and willingness of applicants to match funds with their own effort and finan-
cial resources. The Alaska Constitution prohibits the establishment of dedicated funds, therefore, an
appropriation by the Alaska State Legislature or the development of a Grants Program are a more likely
mechanism by which the State can assist in resource matching. Local community leaders should be
aware of the probable need for additional funding and should encourage strategies which will enhance
resource matching by private industry, State government, and Federal agencies.
256
Public Participation
Resource development agencies, such as the U.S. Forest Service, have used public participation to
reduce conflicts, set goals and priorities, and reduce stress by communicating with the local com-
munities. Public participation and review has been commonly approached through citizens or public
officials, boards, and commissions. To be effective the groups must have adequate financial support
which enables staff assistance and, in Alaska, travel expenses. Travel expenses were a major item for the
interim Alaska State Socioeconomic Advisory Committee on ANGTS whose membership was spread
along the pipeline corridor between Barrow and T ok. Effective boards have resulted when good com-
munication between political authorities such as Mayors, Governors, or Siting Councils and the citizens
groups is achieved. Equally important has been the involvement of industry on these boards. Care must
be taken to ensure that these boards and commissions are asked to review and provide advice on issues
on which they are knowledgeable. Citizen boards should not be asked to draw up technical documents
such as socioeconomic terms and conditions for a project but should be involved in setting priorities,
goals, and objectives for such documents. Clearly articulating the responsibilities, authority, and effort
required for these commissions is imperative. Boards and citizens' advisory groups are not the only
approaches available; other forms of public participation such as surveys, polls, and hearings are
valuable tools which can be effectively used by local governments. Two manuals, Mtmaging Growth in the
Small Community (EPA-908/4-78-00Sa) and the Alaska State Department of Transportation and Public
Facilities, Public Participation Manual are useful references for local communities initiating a public par-
ticipation program.
Developing A Socioeconomic Program
The above elements can be incorporated into a logical sequence of actions which will help a com-
munity developing a socioeconomic mitigation program. These steps are illustrated in Table 2, Five
Steps to Develop a Socioeconomic Program. Table 2 also shows the interrelationship between the
specific actions taken in developing a program and the elements described in the first section of this
paper.
Step 1-Needs Assessment
The purpose of a needs assessment was discussed in the previous section. The needs assessment pro-
vides community members with the information necessary to negotiate with Federal, State, and Com-
pany officials .. Timeliness is essential if the assessment is going to be useful; therefore, assessments
should be accomplished as soon as possible. If company information is unavailable, communities should
not wait but should base the assessment on a range of time sequences and population growth. The
needs assessment effort should produce a critical path for the community to solve growth related prob-
lems.
Step 2 -Identification of Goals and Priorities
A community by definition has an identifiable economic base, shared values and goals. The iden-
tification of these factors helps the professional developing a socioeconomic program to prioritize the
actions to be taken. For example, schools, health care, and law enforcement m&y be affected by a con-
struction boom. One community may emphasize maintaining schools at a preconstruction level while
another community may choose to emphasize law enforcement. During this step, it is important to
combine information provided by local citizens, community leaders, and service providers to produce a
priorities list. The objectives of this step are to prioritize goals, to identify significant activities affecting
those goals, and to identify the factors which can reduce the magnitude of the negative changes and
enhance the benefits of growth.
Step 3 -Matching Resources
Resources are the available organizationaL human, and financial capabilities of a community to
address an impact problem. These resources include existing capabilities, undeveloped potential within
the community and additional capabilities that can be attracted from other levels of government and
private industry. For example, an existing utility maintenance crew may have the potential for installing
new systems. Schools may be reorganized for more effective use of space. Federal programs may be
identified and matched with special funds for impact mitigation efforts provided by the State or the
257
Table 2
Five Steps to Develop Socioeconomic Program
'-
I. Needs Assessment 2. Goals/Priorities
_I
3. Resources I 4. Monitoring 5. Adjustments I I I
J I I I I I I
Profile R Goals Significant Existing Values of ~ Financial Programatic Existing Needed f--+ Missing
Cdpacities Local Community
Impacts Data Data Data
I I t I J I y ~ ~··" Existing Secondary I Model Study I I Physicaf II Soda) J Without With Members Limiting Local New Sources Development Development
Project r~ Serre Provi1ers Factors State ~ • l.J Federal
Available
. On Going j~ Key Variable Water
Sewer Programs
II
Collection Collection
Hospitdl Health Citizen's Technical I
Telephones Law Enforcement Groups Groups
Schools Welfare
Non Profit I Project M.anagement 14
To Do List
Church ~ or Program
Dec1s1ons Development
Professional Advocacy Citizens All Levels of Private Industry Professionals Planners Professionals Government
Impact
Center
Source: Office of the Federal Inspection, 1982.
resource development company. Innovative financing mechanisms such as leasing programs may be
developed at this stage to resolve revenue shortfalls. Steps I-3 should occur at least one budget cycle
and one building season before construction begins. In Alaska, that would be I8-24 months prior to the
time preconstruction activities take place. The Environmental Protection Agency has developed a time
chart for major infrastructure development in the contiguous States which stress lead times of a year or
more (U.S. Environmental Protection Agency, I978). Alaska would have similar restrictions plus the
additional time required for the transportation of materials to the community and the limitation of a
shorter construction season.
Step 4 -Monitoring
Step 4 continues the documentation of the existing situation begun in step I. Monitoring provides a
mechanism to evaluate project-induced change and the effectiveness of the impact mitigation program.
Monitoring has been used to apportion level of responsibility as well. For example, population change
and therefore the reimbursement for government services by the company in the Western Fuels
Deserado Mine agreement was tied to monitoring results. Monitoring systems require an analysis of
key indicator variables. Ideally, this analysis is accomplished during step I, since variables in a monitor·
ing system should be standardized with a preconstruction information base. The purpose of this step is
to provide a mechanism to evaluate project-induced change and the effectiveness of socioeconomic pro-
gram actions. Monitoring provides policy makers with a method to evaluate policy decisions.
Step S -Adjustments .
Any socioeconomic program needs to be developed to accommodate changes in the project and the
local community. For example, construction schedules and labor force requirements change dramati-
cally from the time a project is initiated to construction completion. Adjustment of an ongoing pro-
gram, such as increasing staff at a local school if more students than were anticipated arrive, is an exam-
ple of how a program might be changed to remain effective.
Again, the steps to develop a program are:
(I)
NEEDS ASSESSMENT
!
(2)
IDENTIFY GOALS AND PRIORITIES
!
(3)
IDENTIFY AND CONSOLIDATE RESOURCES
l
. (4)
DEVELOP PROGRAM ACTIONS
! -----.(s)
MONITOR COMMUNITY IMPACT
!
(6)
ADJUSTMENTS TO PROGRAM
I
The roles of industry and government in this process are a policy decision, but it is generally agreed
upon by those within the profession that the assessment shoulcl. be done by those in local government
259
-------------------------------
providing the services. with financial and technical as~istance being provided by private industry. State.
and Federal governments. Information. priorities. and action steps are given credibility if developed by
those who are most affected.
Mechanism to Initiate a Program
State of Alaska
Mechanisms local communities use to ensure orderly resource development in Alaska may vary. The
State of Alaska does not yet have a comprehensive facility siting law which would force the considera·
tion of socioeconomic concerns. although it does have water quality and other permitting authority.
Local Colorado communities, by working closely with those agencies with environmental concerns,
were able to ensure that social concerns were addressed in the Rio Blanco County area. Similarly, the
Washington Energy Facility Siting Council notes whether local communities have objections before
approving permits. The Department of Natural Resources is required by laws (such as AS 38.35.100) to
determine if the proposed uses severely conflict with existing uses and to protect subsistence resources
in certain types of resource development such as rights-of-ways. Also, the law·requires the Commis·
sioner to insert reasonable provisions and conditions that protect the public interest. Broadly inter·
preted, these laws can apply to socioeconomic concerns. Although the above are not an exhaustive list
of laws which pertain to socioeconomics, they are intended as an example of how existing legislation
can help. Working with State officials, including the legislature, during the planning and siting stages
for timely and coordinated assistance is the most effective way a local community can utilize State
resources. Once ground is broken and the construction force is present. effective socioeconomic mitiga·
tion programs are unlikely. ·
Federal
During resource development. Federal agencies are required by various laws, examples of which are
the National Environmental Policy Ad (NEP A) and the Federal land ·Management Practices Act
(FLMP A), to address socioeconomic is$ues. NEPA requires that impacts on human communities be con·
sidered, assessed, and monitored. Local communities should insist that any resource development
occurring on Federal lands which require an environmental impact statement have an adequate social
impact assessment component and monitoring effort. Most Federal resource management agencies
have recognized this need and have social science staffs available to do the assessments.
Federal socioeconomic involvement has varied dramatically depending on the characteristics of the
project. There is more likely to be Federal involvement if the project falls under the Military Authoriza-
tion Act and is a national security or defense project, and is Federally funded; or if the project is con·
troversial. For example, if it involves nuclear power and/or wastes, and if the interest and the influence
of the Congressional delegation is focused on the project, such as the Alaska Delegation's recent
encouragement to the Federal Energy Regulatory Commission to hold hearings in Alaska on
socioeconomic impacts of the proposed Alaska Natural Gas Transportation System. Local communities
should recognize that the Federal government programs, until recently, have focused on passing
receipts from resource development to local communities for roads and schools. Recent Federal legisla-
tion has broadened that scope (see Table 3, Chronology of Federal Legislation Addressing Resource
Development and Socioeconomic Mitigation).· Local communities' interests are not necessarily the
interest of the national clientele and legislation which the Federal agencies must respond to, so strategies
developed locally should also recognize that Federal assistance may be limited.
Local Communities
Each community has the option to zone land, set standards of acceptable conduct. and tax resource
development. Alaskan communities should not overlook these methods as tools for implementing
socioeconomic programs. Local action in producing a preliminary needs assessment and a statement of
goals and priorities, consistency in responses, and willingness to work with other government agencies
and industry will often produce the cooperation from these entities n_eeded for small communities to
implement a socioeconomic program.
260
Date
1920
1969
1975
1976
1976
1978
1981
1981
Table 3
Chronology of Federal Legislation Addressing Resource Development
and Socioeconomic Mitigation
Federal Law
Mineral Leasing Act (41 Stat 449)
Coastal Energy Impact Program
National Environmental Policy Act
Federal Coal Leasing Amendments Act
Federal Land Policy Management Act
Mineral Leasing Act Amendments
Power Plant and Industrial Fuel Use Act
Military Construction and
Authorization Act
Inland Energy Impact Assistance Act
261
Socioeconomic Mitigation
Allowed 37.5% of receipts be returned to
local governments for schools and roads;
required protection of subsistence habitats.
Places Federal government in a secondary
role behind State and local governments.
Required human community conditions to
be assessed and monitored.
Increased percent of revenues for socio-
economic mitigation.
Required revenues received by States to go
to impacted areas.
Increased the amount of receipts to 50%
and broadened categories of receipts tftat
could be spent on courts, sewers, infras-
tructure, etc.
Federal government can pay for planning
and land acquisition for housing and com-
munity facilities in coal!uranium develop-
ment.
Allows up to $1 million of Federal funds
per county for impacts.
Most comprehensive socioeconomic ad to
date. Provides mechanism and funding for
an active Federal role in mitigating impacts
through Departments of Energy and
Agriculture. Did not pass Congress by one
vote.
-------------------
Conclusion
Local communities have the most to gain or lose in the development of a socioeconomic program
when resource development affects their communities. Elements and a conceptual framework for
developing a program have been discussed in this paper. Principles which community leaders should
keep in mind while developing a program are:
Timeliness
Concern about socioeconomic impact should occur in the planning and facility siting stage-not
after the construction work force arrives.
Application of Legal Mechanisms
Be aware of requirements in Federal and State laws involving socioeconomic issues. Make sure
agency officials are aware that you are monitoring their performances.
Oearly Articulate Goals and Objectives
Clearly stated goals and objectives provide the emphasis and focus for community action and the
ability to negotiate for assistance &om other government agencies and industry.
Local Initiative and Cooperation
Demonstrating local initiative and willingness to work with resource developers to help everyone
achieve their objective encourages joint development of a socioeconomic program.
Promote Communication
Keep parties informed at all levels, private, locaL State and nationaL of problems and success in
solving them. Formalize systematic communication channels as soon as possible.
262
References
Brody, Susan. Federal Aid to Energy Impacted Communities: A Review of Related Programs tmd Legislative Proposals.
Cambridge: Massachusetts Institute of Technology, 1977.
Sanderson, Debra. State Response to the Adverse Impacts of Energy Development in Texas. Cambridge:
Massachusetts Institute of Technology, 1977.
U.S. Environmental Protection Agency. Action Handbook: Managing Growth in the Small Community.
EPA-908/4-78-005. Three Volumes, 1978 ..
Interviews*
Barrows, Jim. Washington Energy Facility Siting Commission on WPPS and Northern Tier Pipeline
Company.
Connely, ]im. Washington Energy Facility Siting Commission on WPPS and Northern Tier Pipeline
Company.
Horsley, John. Commissioner, Kitsap County, Washington. Telephone interview on Trident Missile
Base Construction. ·
Rehubrg, Duane. Rio Blanco County Planner on Rio Blanco and Western Fuels Agreements.
Smith, Gary. Government Liaison, Northern Tier Pipeline Company, Port Angeles, Washington.
Telephone and personal interviews.
Smith, Jerry. Colorado State Department of Local Affairs, Grand Junction, Colorado.
• O,tfrs <'{ illfm!irws arc 11111 availablr-E,/.
263
Is A Legal Basis for Impact Mitigation Necessary?
Nancy J. Owens
Resource development has environmental and socioeconomic consequences, some beneficial and
some adverse. The goal of mitigation is to enhance the beneficial effects and reduce the negative effects.
In the past, mitigation efforts focused primarily on such factors as reclamation, air and water quality,
and pollution control. Today, environmental analyses generally suggest mitigation measures for the full
array of sociaL economic, culturaL biologicaL aquatic, and atmospheric impacts. Mitigation measures
for sociaL economic, and cultural impacts have been given particular emphasis recently because large-
scale energy developments have been proposed for ruraL sparsely populated areas that don't have the
infrastructure to accommodate the influx of workers and their families caused by the development.
The question under consideration is: Is a Legal Basis for Mitigation Necessary? I'd like to examine the
needs of both local and state governments in managing the growth that comes with large-scale develop-
ment. I will then review Montana laws that respond to resource development mitigation needs, and
conclude with a summary of the best features of those laws which might be generalized for use by •
another state. Finally, I will answer the question that has been posed.
Local Government Mitigation Needs
Local governments bear substantial financial and planning responsibilities in dealing with large-scale
developments. The three biggest problems for local governments in Montana are:
1. Up-front costs, including money to plan for the population influx, obtain technical assistance, and
finance capital facilities and services. To do successful planning, local governments and the local
citizenry need to participate in the environmental impact statement studies, which are usually under-
taken by state or federal agencies. Meaningful participation can occur only if a clear structure is pro-
vided for local input and if funding is made available for local government participation.
2. Jurisdictional mismatch of costs and revenues, resulting in problems in financing infrastructure
improvements when the facility is located in one taxing jurisdiction but the impacts occur in another
taxing jurisdiction that does not receive tax benefits.
3. Back-out costs, when the "bust" comes, or even when intermediate economic and production
slumps occur, and the community loses jobs, purchasing power of workers, and its tax revenue base.
Often there is dependence on the one large industry and the local economy.does not have the diversity
to sustain itself after the "bust."
State Government Mitigation Needs
In· Montana it is a constitutionallly declared policy to maintain a clean and healthful environment for
present and future generations, to protect the environmental life-support system from degradation, to
prevent unreasonable depletion and -degradation of natural resources, and to provide administration
and enforcement to attain these objectives.
It is naturaL then, that Montana's regulatory laws would be statewide in scope and that permitting
would be controlled at the state level. From a state perspective, effective mitigation measures include
giving the people of the state a voice in major natural resource decisions by providing them with infor-
mation and allowing them to express their concerns in public hearings. Sit-ing and related laws should
give the state some options in controlling the pace and location of development; ensuring that revenues
264
--------··-·-·-···-----~-----·--
are adequate to meet the costs of development; ensuring that revenues will reach the jurisdiction that
are incurring the costs; ensuring that the location, construction, and operation of major facilities will
produce minimal adverse effects on the environment and on the citizens of the state; ensuring the pro-
tection of the existing economic base; promoting use of renewable resources; and providing for long-
term economic prosperity and a clean environment for future generations.
In sum, the state's needs for socioeconomic mitigation are to smooth out the boom-bust cycles,
ensure citizen involvement, ensure that the benefits of environmental regulation are available uniform-
ly to communities across the state, establish mechanisms to resolve jurisdicti.onal mismatches between
revenues and costs; and to ensure that the state receives some tangible, long-term benefits from the
extraction and conversion of nonrenewable resources.
Other Mitigation Needs
Some of the socioeconomic impacts can best be mitigated by the private sector. For example, local
governments cannot deal with housing problems such as shortages of housing, inflated housing costs, or
the availability of local financing for housing construction. Private sector initiatives are need~d in the
housing arena. .
Local communities face the problem of providing human services, and of recruiting health and
human service professionals: doctors, nurses, dentists, mental health workers, teachers, and counselors.
In some cases the salaried professionals (for example, teachers and social workers) cannot command the
pay that energy workers do, and cannot compete for high-cost housing.
Local communities also face the task of community-building in an environment where there are
many newcomers, often with transient lifestyles different than the original community. For example, in
eastern Montana where the coal fields are, the economic base is agriculture. Both the ranching com-
munities and the Native American communities in the area are long-term communities with relatively
stable social organizations and well established social relationships and networks. The political and
economic power bases of these communities reflect these social relationships.
The lifestyle of newcomers connected with coal development may be markedly different. Their
social organization, patterns of social interaction, values, and expectations may differ from those of the
existing populations. In addition, coal development represents a major economic shift. In any major ·
economic shift, some people lose power and some gain it. The highly capital intensive nature of coal
development, and the sheer amount of capital involved in comparison with agriculture, suggest that
energy interests will replace agricultural interests in both the political and economic power base of coal
regions. It is possible that with the scale of energy development being proposed for eastern Montana,
an entire transformation of the social structure will occur. Corporate and union interests are likely to
become dominant locally, in state government and in the state legislature. The existing agricultural
communities could become a minority in their own territory.
These are substantial sociaL culturaL and economic impacts. As a result, opposition groups have
developed among eastern Montana ranchers and among the Native AmericaA groups, which have
worked to slow down the pace and scale of coal development, to protect agricultural interests and the
existing social communities.
No real mitigation is possible for the kinds of social impacts such groups are concerned about. Their
preferred action is therefore avoidance of this kind of impact.
The Montana Power Company has responded to these kinds of social concerns in selecting a site for
its new proposed coal-fired facility. They decided to put the plant near Great Falls, which is the second
largest city in Montana with a population of about 60,000, rather than site it as a mine-mouth plant in
the sparsely populated agricultural areas of eastern Montana. This decision is an excellent example of
mitigation by avoidance. Great Falls has adequate infrastructure capacity and social and economic
diversity to handle the population influx associated with the project.
Montana Laws Which Respond to the Goals of Socioeconomic Impact Mitigation
Most of Montana's energy-related laws have been passed since 1971, in response to the growing
interest in developing the West's energy resources and in the potential adverse impacts of extracting
and converting nonrenewable energy sources.
The regulatory laws relating to energy are administered primarily by the Department of Natural
Resources and Conservation (DNRC), the Department of State Lands (DSL), and the Public Service
Commission. A common theme is the recognition that environmentaL sociaL economic and human
265
health-related factors may be adversely affected by energy extraction, conversion and distribution
activities. Minimization and mitigation of impacts. equitable distribution of energy production costs,
reclamation of natural resources. and energy conservation are primary points of emphasis (see Figure l).
The Montana Environmental Policy Act (MEPA) is the cornerstone of Montana's environmental
laws. It is virtually a carbon copy of NEPA. the National Environmental Policy Act. and requires that an
environmental impact statement be prepared for any major state action, such as issuance of a lease, per-
mit. or certificate. Actions covered by Montana's other regulatory laws, such as the Major Facility
Siting Act, the Mine Siting Act, the Strip Iytine and Reclamation Act, and the Hardrock Mining Act, all
trigger an EIS (environmental impact statement) done under MEP A. MEP A provides an opportunity for
public input into the decision-making process, and allows the state to make an independent evaluation
of the environmental and social effects of a proposed undertaking.
-
All State Agencies
.Montana Environmental Policy Act (MEPA)
Department of Natural Resources and Conservation (DNRC)
Major Facility Siting Act .
Renewable Energy Grant and Loan Program (funded by Coal Severance Tax)
Oil and gas pipelines and water development projects covered under MEPA
(environmental analysis done by DNRC)
Department of Health and Environmental Sciences (DHES)
Major Facility Siting Act (health-related provisions such as air and water quality)
Department of State Lands (DSL)
Underground and Surface Mine Reclamation Act
Underground and Surface Mine Siting Act
Hardrock Mining Act
Department of Commerce
Coal Impact Board ,
Hardrock Impact Board .
(Commerce Department also provides a broad range of technical assistance to local governments)
Department of Revenue
Coal Severance Tax
Oil and Gas Severance Tax
(Collection and administration of a variety of other resource taxes)
Public Service Commission (PSC)
Public utility rate regulation
Figure l. Montana Laws Relevant to Socioeconomic Impact Mitigation
and State Agencies Administering Them
Major Facility Siting Act
The Montana MajorFacility Siting Act (MFSA), enacted in l973, provides for comprehensive review
of proposals to construct and operate certain kinds of facilities for generating, converting or trar:smit-
ting energy in Montana. The Act covers: 1) facilities that can generate 50 megawatts or. ~~xe ot elec-
tricity; 2) facilities that can produce 25 million cubic feet or more of gas per day; 3) faCilities that can
produce 25,000 barrels of liquid hydrocarbon products per day; 4) uranium enrich~ent faci_lit~es;
5) facilities that can use, refine or convert 500,000 tons of coal or more per year; o) electnc transmission
lines greater than 69 kilovolts capacity, with certain exceptions for lines covering short distances;
266
7) facilities for developing and using geothermal resources capable of producing 25 million Btu per hour
or more; 8) facilities for i11 ~ifu coal gasification; and 9) pipelines leading from or to a facility as defined
above. Facilities under exclusive federal jurisdiction are exempt as are oil and natural gas facilities. Thus
the Northern Tier oil pipeline from Port Angeles. Washington to Minnesota, and the Northern Border
natural gas pipeline (which eventually will connect with the Alaska pipeline) are covered only by
MEP A and not by MFSA. Mining is covered by other laws. which I will describe later.
The Major Facility Siting Act has four provisions which are important for impact mitigation. First. the
Act requires all parties planning to construct a facility (as defined by the Act) within the ensuing 10
years to file a long-range plan with DNRC. All proposed facilities must be adequately described in a
long-range plan at least two years before DNRC may accept an application. The plans are submitted on
April Ist of each year and any new plans are generally covered by the press. The plans thus serve to
notify the public of any proposed facilities substantially in advance of when they will actually be con-
structed. ·
Second, the Act requires that an application for a facility must be filed with the DNRC. The applica-
tion must include a description of the proposed facility, with discussion of alternative sites, an explana-
tion of need for a utility facility, discussion of efforts to promote conservation and reasonable alter·
native energy sources, and a filing fee, based on the estimated construction cost of the facility, to
finance the state's evaluation. The flow chart (Figure 2) illustrates this application and certification pro-
cess and I will briefly describe it to you. The DNRC has 90 days to determine whether an application is
complete; that is, whether it contains the information required by the law and associated rules. When
the DNRC accepts the application as complete, it then has 22 months (in the case of generating plants)
or 12 months (in the case of small transmission lines) to do an independent analysis, including prepara-_
tion of an EIS under MEP A, holding public hearings, and preparing a final report to the Board of·
Natural Resources and Conservation (BNRC).
In the meantime, the Department of Health and Environmental Sciences and the Board of Health
have a year, plus an additional 6 months if applicable, to determine whether the project will comply
with air and water quality standards, and other laws administered by the Department of Health and
Board of Health.
Note that this period of state evaluation provides the opportunity for working with the affected local
communities to analyze impacts and suggest mitigation strategies. It also provides for a mandatory
public hearing where the public can comment on DNRC's and the Department or Board of Health find-
ings.
The third provision of the Siting Act that provides opportunities for mitigation is the Board of
Natural Resources and Conservation decision as to whether to issue a certificate for project construc-
tion. The Board is a 7-member citizen board, appointed by the Governor. A certificate may not be
granted unless the Board finds and determines: l) the nature of the probable environmental impact;
2) that the facility represents the minimum adverse environmental impact, considering the state of
available technology and the economics of various alternatives; 3) that the facility is consistent with
regional plans for expanding utility grids and will serve system economy and reliability; 4) that the
facility's proposed location conforms to state and local laws and regulations; 5) that the Board of Health
has certified that the facility will not violate air and water quality standards and implementation plans;
and 6) for a utility application, that the facility serves the public interest. convenience and necessity.
Need, environmental impact, benefits to the applicant and the state, effects of resulting economic activi-
ty, and effects on public health, safety and welfare must be considered in making these determinations.
After receiving the DNRC's final report on the proposed project, the Board has 11 months to make
its decision. As part of its decision-making process, it must hold public hearings under the Montana
Administrative Procedures Act. These are contested case hearings involving attorneys, witnesses, and
cross-examination. The affected local governments must be a party to the proceedings or state why it
will not be and the applicant. of course, participates in the process. Citizen groups and industry groups
usually also participate. The Board must consider all the evidence and prepare Findings of Fact and Con-
clusions of Law. It has three options regarding the Certificate: I) deny a Certificate; 2) issue a Certificate
for the project as proposed by the applicant; or 3) issue a Certificate for the project, but with conditions
attached. It is this power to apply conditions to the Certificate that enables the Board to specify mitiga-
tion which the applicant must follow. Certificates may be revoked for failure to meet safety standards
or failure to comply with any other conditions imposed by the Board. Unlike Montana's mining laws,
267
ApplicJnt Identifies
FJdlity in Long·
Range PIJn
Applicant Files
Intent to Apply
(OptionJI)
( 12) months)
(3 months)
Application Filed f/ DNRC Accepts/ / I Rejects
If Rejed
Applicant
Rcfib
(I month)
-'-"' I
~I DNRC Accepts
I BNRC
Decision
DNRC = IJq,Jrtment oi Natural Resources Jnd Comervation
13NRC = Board of NJtural Resources and Conservation
IJHES = IJepMirnent oi HeJith and EnvironmentJI Sdences
If Accept
(22 months)
f--
(12 months)
.J DHES • ~I DHES j -~ Report Decision
I (2 months)
Hearing ExJminer I ... RecommendJtion I
figure 2. MFSA ApplkJtion Jnd Review Process
(-l month~) I BNRC I -~ Report 1
lr
BNRC Sets
Hearing Dale
(Limo nths)
,He,~ring _l
Condudt'~
(2 months)
the Board is not restricted in the kinds of mitigation it can specify and consequently, socioeconomic and
cultural mitigation measures can be required. ·
Examples from the Certificate which was issued in 1976 for the Colstrip coal-fired generating plants
include two provisions affecting the Northern Cheyenne Tribe. The Northern Cheyenne Indian Reser-
vation is about 20 miles south of Colstrip, and the Tribe opposed the plants for three reasons: l) because
of the potential effects of air pollution; 2) because of the impacts to their culture from a large influx of
construction workers; and 3) because they had gotten only a handful of construction jobs with other
Colstrip plants. Thus, they felt they received no economic benefits, yet had to suffer the adverse
environmental and cultural effects of the plants. The Board's conditions to the Certificate required
Montana Power Company to work with the Tribe in setting up, at MPC's expense, an air quality
monitoring program. They also required that MPC work wi~h the Tribe to establish training programs
to develop skilled labor so that Tribal members could be employed during construction and operation
of the coal plants. The result has been that. while only 12 Northern Cheyennes obtained employment
on Colstrip Units One and Two. over lOci have been consistently employed on Units Three and Four.
The fourth important provision of the Siting Act from a mitigation point of view is the requirement
that DNRC must monitor the construction and operation of the facility to ensure that the Board's condi-
tions are being met and the application must pay for the monitoring program. If the ·Board finds that a
condition is not. being complied with, it can revoke the Certificate.· This enforcement power has the
following two benefits: 1) it ensures that mitigation efforts are carried out .and 2) it provides information
on whether the mitigation measures are successful in solving the problems, whether the anticipated'
problems turned out to-be real ones, or whether unanticipated problems. develop. This informatiof1 is
invaluable for fu.ture impact assessments .
. Mining Laws
Montana has three mining laws relevant to energy and mineral development impacts. These include
the Strip and Underground Mine Reclamation Act, the Strip and Underground Mine Siting Act (which
applies to coal and uranium), and the Hardrock Mining Act. The reclamation act served as a model for
the federal strip mine and reclamation act. The mining laws are administered by the Department of
State Lands (DSL). However, none of the mining laws contain provisions that allow DSL to condition a
mining permit for socioeconomic mitigation. The reclamation act is quite stringent about requiring suc-
cessful reclamation of land as it affects vegetative cover, wildlife, and air and water quality. The act is
thus economically important to ranchers and other residents of mining areas because it protects the
ecology of the area. However, there are no provisions for mitigating the impacts of a population influx.
Large-scale mining activities can have substantial socioeconomic impacts. In recognition of the need
for communities to have up-front money to provide infrastructure for a population influx, Montana has
enacted several laws that provide money for up-front costs to local governments: The most important is
the coal impact legislation which channels part of the coal severance tax revenues (see coal severance
tax section below) into the coal impact areas of the state. The purpose of the impact program is "to assist
local government units which have been required to expand the provision of public services as a conse-
quence of large-scale development of coal mines an·d coal using energy complexes" (90-6-20 l. MCA).
The program is funded by 8. 75 percent of the coal severance tax revenue, and the impact fund is
administered by the Coal Board.
The Coal Board, composed of seven gubernatorial appointees and assigned to the Department of
Commerce, was established to evaluate grant applications from local governmental units (or state agen-
cies assisting such units) for funds which c.ould be used for local coal development impacts. The Board
awards grants from a designated portion of coal severance tax revenues which are deposited in the local
impact and education trust fund account. The Board is directed to give attention "to the need for com-
munity planning before the full impact is realized." The Department of Commerce is responsible for
designating counties, towns, school districts and other governmental units which have had or expect to
have an estimated 10 percent population increase during any three-year period since 1972 as a result of
the impact of coal development. These units are to receive at least 50 percent of the funds available to
the Board. The unexpended balance in the local impact and education trust funds account is invested
and the resulting income is used to support public schools, colleges, and universities. Coal Board grants
are awarded on L'he basis of need, degree of severity of impact, availability of funds and degree of local
effort in meeting the need. (In determining the degree of local effort. the Board shall consider millage
269
rates and bonded indebtedness as they apply to each applicant.)
From !975 to L 980 over $30 million was granted to local impact areas for such projects as school
planning, school construction, water and sewer systems. fire trucks, police cars and related city equip-
ment, libraries, and so on.
Recently the Coal Board made a grant to the city and county planning agencies in Great Falls to allow
them to participate in the evaluation of Montana Power Company's application for a new coal-fired
power plant located in Great Falls. The Major Facility Siting Act is designed to give state government
the evaluation and permitting authority. There are no provisions in the Act to provide funding for local
government participation. Thus the Coal Board planning grant has filled an important gap in the impact
evaluation process which, of course, is the first step in mitigation.
Depending on the needs identified by the local government, the Coal Board will again be able to pro-
vide funding in a timely fashion for whatever infrastructure is necessary for local government to deal
with the impacts.
Coal impact funds are presently limited to coal impact areas. For example, areas experiencing growth
from hydroelectric development or hardrock mining are not eligible for coal impact funds. In the latter
case. the Legislature enacted a law establishing a Hardrock Mining Board, requiring companies opening
a hardrock mine to submit an economic impact plan to the local community and the Board, and pro-
viding for pre-payment of taxes to cover the costs of the impact/mitigation plan. This law is. very
specific about impact mitigation, particularly economic mitigation of up-front costs. Unlike the Coal
Severance Tax Legislation (see below) there are no provisions for back-out costs when the bust comes.
Thus, when the Anaconda copper mining and smelting operations pulled out of the cities of Butte and
Anaconda recently, there were no funds available from state coffers to help these communities develop
a new economic base.
Oil and Gas
Oil and gas development is relatively unregulated in Montana as it is not covered by any siting or
reclamation acts. However, there is a severance tax on oil and gas production amounting to 2.65 per-
cent of the gross value of production. There is a mitigation provision that returns a portion of the tax
collections to the county affected by oil and gas development in those years when production has in-
creased. Thus, during growth periods, the county receives that portion of the severance tax which
results from increased production. The drawbacks of this provision are that the county is unable to plan
its budget to cope with growth problems because it cannot know in advance how much the revenues
will be; in addition, there are no provisions for the county to share the revenues with affected
municipalities which may be experiencing the bulk of the population growth and related infrastructure
problems. Further, there are no back-out provisions. Thus, in the recent economic decline, when nearly
all the rigs pulled out of eastern Montana, the results were a decline in both production and taxes. There
are no state funds or programs to handle this situation. However, the local communities had committed
themselves to long-term infrastructure expansion projects to handle the boom that was taking place.
Other Mitigation Laws
Montana has a general tax pre-payment law for manufacturing and mining facilities that allows the
County Commissioners to request pre-payment of taxes in an amount up to three times the expected
tax revenues due the year the facility is completed (15-16-201, MCA). The amount prepaid is credited
against future tax payments so there is no net benefit to the county. Pre-payment does, however, make
funds available for up-front costs. A county government affected by a hydroelectric project might use
this provision because there are no separate impact funds that cover hydroelectric development.
Montana also has a law that allows a county superintendent of schools to require that a person
intending to construct a mine or major facility prepare an educational impact statement (20-1-208,
MCA). The statement must include the number of workers, family members, and school-age children
expected, their anticipated residential distribution, and the time periods they are expected.
A school district may also require the owners of a proposed facility to enter into an agreement to
pay, in addition to their property taxes, a certain percentage of the principal and interest on school con-
struction bonds that exceeds the school district's legal limit on bonded indebtedness (20-9-407, MCA).
This ensures that schools needed to accommodate a population influx can be constructed.
270
The Coal Severance Tax Trust Fund
The current coal severance tax was enacted in 1975.
The purposes of the tax are: 1) to maintain severance taxes on coal production at a constant percent-
age of the price; 2) to stabilize the flow of tax revenue from coal production to local governments; 3) to
simplify the structure of tax revenue from coal production and improve reliability of revenue from coal
production and improve reliability of revenue projections; and 4) to establish tax categories that
recognize the unique character of coal. This act repealed the coal mine license tax and deleted coal from
the provisions taxing the net proceeds of mines.
The coal severance tax ad established a variable tax rate depending on the heating (Btu) value of the
coal mined and whether it was mined and its Btu value is high enough to be taxed at a rate of 30 percent
of the contract sales price at the mine.
In 1976, Montana voters approved an amendment to the constitution to create a permanent trust
fund with part of the coal severance tax revenue. Since January 1, 1980, this revenue has been allocated
to ten accounts as follows:
1. Fifty percent to a permanent coal tax trust fund. The interest from this constitutional trust fund
may be appropriated by the Legislature each session, but its principal is inviolate unless three-quarters
of the members of each house vote for its appropriation;
2. Nineteen percent to the state general fund where it can be used to fund a variety of the state's pro-
grams;
· 3. Ten percent to the education trust fund to support the state's public education system. Of the
interest earned on this trust, 66.5 '1o is paid into the state public school equalization program, 22.5 '1r,
goes to the Board of Regents for the university system, and 10 '1o is reinvested in the trust;
4. Eight and three-quarters percent to the local impact account. The state Coal Board awards grants
from these funds to local governments to assist them in providing facilities and services needed as a
direct result of coal development;
5. Five percent to the state public school equalization aid program which provides assistance to
schools throughout the state, based on financial need and student enrollment;
6. Two and one-half percent to the alternative energy research development and demonstration
account. DNRC awards grants from this account to citizens, businesses, and government units for
research, development, and demonstration of alternative energy sources;
7. Two and one-half percent to a parks acquisition and cultural projects trust fund. One-third of the
interest from this trust may be appropriated by the Legislature to protect works of art in the state capitol
and for other cultural projects. The other two-thirds may be appropriated for the acquisition, operation,
and maintenance of state parks, recreation areas, monuments, and historic sites;
8. One and one-quarter percent to the renewable resource development account for loans and grants
to government units for project that will develop Montana's renewable .resources;
9. Orie-half percent to the State Library Commission to provide basic library services to all counties
and to pay participation costs in information networks. The Commission is currently passing these
funds on to the state's six library federations to fund resource sharing, particularly interlibrary loan ser-
vices.
10. One-half percent to counties for land planning projects. Montana's 56 counties have used these
funds for a variety of projects including sanitation planning, mapping, subdivision review, and housing·
studies.
The permanent coal trust fund is a legacy for the time when coal reserves will be depleted. By the
end of this year the trust fund will have accumulated about $100 million. While this is far short of the
billions of dollars in Alaska's permanent trust fund, it still provides the opportunity for meeting future
economic needs.
States like Alaska, Montana, and Wyoming have economies based on the primary production of raw
materials. We are thus dependent upon world commodity markets and experience regular boom-bust
cycles. Montana's history with copper makes us appreciate the significance of our coal tax trust fund.
The city of Butte is built at the foot of a mountain once described as the "richest hill on earth." Today it
is a gaping pit undermining the foundations of the downtown area. Copper mining has all but ceased
and unemployment skyrocketed. The nearby town of Anaconda used to boast the "world's largest
smelter" but the Anaconda copper company has now pulled out and sends its copper to be smelted in
Japan. Montanans look to the coal tax trust fund to ensure that the current coal boom in eastern Mon-
271
tana will not leave them in the same state as Butte and Anaconda.
There is debate in Montana that parallels the debate here about the extent to which our natural
resource trust fund should provide capital for in-state investment and diversification of our economy.
The other option is to invest it simply to maximize return. whether in-state or out of state. Those who
advocate in-state investment of coal tax monies still have not yet determined how to use such funds to
diversify and stabilize our economy. Research and exploratory efforts are underway by a variety of
groups. In terms of socioeconomic mitigation. the trust fund is a long-term mitigation measure for deal-
ing with the inherent boom-bust of a natural resource based extractive economy. Perhaps Montana and
Alaska will have the opportunity to share ideas and experiences on how these permanent trust fund
monies can most profitably be used for the long-term benefit of the state's economy.
Summary
The goals of impact mitigation are to enhance positive effects of resource development and reduce
negative ones. Mitigation responsibilities belong to state government, local government, local com·
munities, and the private sector. A summary of these responsibilities is produced in Figure 3.
State Government
-Information to local governments &
general citizenry
-Provision for public input
-Revenue collection and revenue sharing
adequate to cover costs of development.
including back-out costs .
-Mechanisms for revenues to reach the
jurisdiction incurring the costs, and in time to
meet the cost requirements (e.g. impact fund)
-Ensuring that the location. construction, and
operation of facilities will produce minimal
adverse effects on the environment and on the
citizens of the state
-Protect existing economic base
-Maintain clean and healthful environment
for future generations
Private Sector
-Timely information about project
-Technical assistance to local government
and local community
-Housing
Local Government
-Planning, including participation in
environmental studies of project
-Finance capital facilities and services
Local Community
-Assume planning functions if no
local government is organized
-Recruit health and human service workers
(may be shared with local government)
-Community-building, incorporation of
newcomers, accommodating significant
lifestyle changes
Figure 3. Mitigation Responsibilities
(Based on Montana Governmental Structure)
272
Now. to answer the question. is a legal basis for impact mitigation necessary? It is my opinion that
each identified unit should have the ability to control and act upon the areas that are most directly its
responsibility. Thus. local government. which has fiscal responsibility for water. sewer. education. and
~o on. should have the financial means to participate in the analysis of impacts. conduct the planning
tunctions necessary to determine appropriate mitigation ·measures, obtain technical assistance when
needed. and be in a position to finance the needed capital and service improvements. This means. in my
opinion. that local governments should not be dependent on private sector control of funds. nor be in
the position of having to negotiate with the private sector for the funds it needs to carry out its respon-
sibilities. It needs a legal mandate for carrying out its responsibilities, as well as a funding source.
State government has the responsibility to ensure the long-term economic and environmental viabili-
ty of the state. It must provide mechanisms for citizen participation in natural resource decision-making.
It must ensure that developments are paying their way and that tax revenues are adequate and
equitably distributed to those bearing the costs of development. Again, a legal mandate and a funding
structure are necessary to discharge these responsibilities.
The efforts of industry to mitigate socioeconomic impacts are in many cases outstanding. The private
sector should be a partner in providing technical assistance. Further, there are some impacts such as
housing shortages that are outside the province of government control and are best handled by in-
dustry. In spite of the leadership role that some companies have taken, ultimately community develop-
ment will be best served if there are legal .mechanisms in place that enable local people to plan and
finance the mitigation efforts that they determine are needed.
Montana's laws are a patchwork of mitigation measures. There are some outstanding features,
however, that apply generally to resource development impacts, and may be worth borrowing or
modifying for Alaska.
I. Local and state governments must have a legal mandate for carrying out their responsibilities.
2. There must be a legal framework or structure for cooperation among the different entities
involved (state agencies, county and municipal governments, affected local communities, the public at
large, and the project sponsor). Montana generally handles cooperation with the federal government
through memoranda of understanding.
3. There should be a cornerstone law, such as the Montana Environmental Policy Act, which covers
all major undertakings.
4. There should be a unified community impact program that provides:
a. grant/loan assistance to communities for resource development impacts -including planning,
capital facilities and services, tax credit to companies against a state severance tax for helping
communities put together an impact plan, and assistance for communities which aren't in the
taxing jurisdiction and do not qualify.for tax pre-payment;
b. technical assistance for local communities;
c. grant/loan assistance for any other economic development (as a lower priority)
A unified impact program could be funded from one resource tax or royalty base or be funded by a
portion of a variety of resource taxes. In Montana the coal impact fund covers only coal impacts. The
hardrock impact board duplicates the functions of the coal board. Other developments, like oil and gas
or hydroelectric, have no impact funds to draw on for up-front costs. A single, unified program would
be preferable.
5. Siting .laws that are developed should include adequate time frames for independent analysis,
explicitly cover the full spectrum of impacts that might be encountered (such as section 503 of MFSA),
including social and cultural impacts as well as economic and environmental ones. There must be provi-
sions for meaningful public involvement, and local and state government cooperation. The decision-
making board must have broad powers to condition the certificate. Monitoring of facility construction
and operation must be required to ensure compliance with certificate conditions.
6. A permanent trust fund from nonrenewable resource development revenues should be set up to
nelp diversify and stabilize the state economy and provide assistance for resource "busts."
A sound legal and financial basis for impact mitigation can establish control where it belongs and
ensure that the standard of minimum adverse impact is achieved.
273
Human Impacts of Large Scale Development Projects
The Process and Legal Basis for Mitigation
Janice Rae Cole, Allison Fargnoli and Betty Ramage
Large-scale development projects bring benefits such as employment opportunities and other
economic advantages to areas in which they locate. However, adverse social, cultural and economic
impacts can also occur, especially in rural areas. The goal of impact mitigation is to prevent, or mitigate
adverse impacts, mui to assure fowl reside11ts share i11 the bwefits of development. This can be accomplished through
actions by industry, and federaL state and local governments to mitigate impacts.
Mitigation is generally focused on three types of impact issues:
• responding to the strain on the provisions of goods and service~;
• assuring residents share in the benefits of development; and
• preventing or mitigating social disruption and cultural change.
The majority of successful mitigation strategies have dealt with the need to respond to the strain on
the provision of goods and services, particularly local infrastructure. In some cases nationally,
agreements have been negotiated to assure that residents benefit from employment and business oppor-
tunities. Less emphasis has generally been placed on minimizing the negative aspects of social and
cultural change. It is essential to address the full range of impact issues when evaluating the planning
and legal basis for mitigation.
Components of the Mitigation Process
The central need in any large-scale development situation is the capability to anticipate, plan for, and
respond to sudden sociaL cultural and economic change. This includes the need for legal authority to
assure the concerns of local residents are considered. This may be a monumental task, particularly in a
rural area. The necessary efforts are quite extensive and include major components listed below.
1) Identify and involve all affected parties (public groups, industry, locaL state and federal govern-
ments):
• provide a mechanism for public participation in the planning process;
• provide a forum for joint planning between industry and government authorities;
• provide a mechanism for negotiations between all parties and a method of resolving conflicts
between competing interests; and
• analyze the consistency between industry proposals and local goals and policies.
2) Assess impacts and determine needs:
• assess short-and long-term impacts;
• analyze the demographic, economic and social change expected;
274
• determine the services and facilities necessary to respond to the increased need (amount,
cost, etc.);
• evaluate the costs and benefits to various population groups, the industry, the local
community and the State; and
• identify mitigation activities necessary.
3) Develop a formal agreement or binding plan between industry and government authorities:
• identify and apply the legal mechanisms necessary to assure the communities concerns are
addressed (e.g., zoning, permitting, taxing);
• develop and negotiate an agreement between the community/state and the developer; and
• determine any requirements that must be placed on the participants.
4) Provide financing for necessary facilities and services:
• determine who is responsible for providing and funding the facilities and services necessary;
• plan for and assign responsiblity for providing the needed public services; and
• determine how front-end financing requirements in the community will be met.
5) Implement mitigation activities:
• proactive mitigation -prevent impacts through efforts to reduce the magnitude and speed of
change (e.g., influencing the size of the workforce or other project plans); and
• reactive mitigation -provide for the services necessary to respond to change.
6) Monitor the project:
• monitor the demographic, economic, and social indicators;
• monitor the project workforce information; and
• monitor project activities ~or consistency with agreed upon standards.
Major Impediments to Mitigation
Adequate planning for and responses to development impacts are frequently prevented or impeded
by the following: 1) lack of communication between the various responsible parties (e.g., community,
developer, public, state); 2) lack of local expertise in impact planning; 3) inadequate lead time and/or
uncertainty about when and if a project will actually proceed; 4) lack of accurate and timely informa-
tion for planning and monitoring; 5) lack of timely financing of public services and community
infrastructure; 6) confusion about the assignment of responsibility for impact mitigation; and 7) lack of
local or state legal authority to implement planning recommendations. Each of these factors is discussed
bdow. ·
I) Communication Between Affected Parties -In many cases, the lack of communication and
cooperation between loca!lstate government and industry has contributed to the impacts
resulting from a project, because no appropriate mitigation is planned and implemented.
National boomtown literature, as well as literature from major industries, agrees that the most
promising new strategy for addressing human impacts is in industry/community cooperative
planning. This interaction involves a combination of public involvement in planning and
industry sponsored efforts, such as local planning grants, local project coordinators, loans of
technical expertise and demographic monitoring programs. It is important that local officials
work with the project developer to identify potential impacts and to propose solutions.
Although technical expertise must be applied in this process, many social impact issues involve
value judgments which should be resolved by the affected residents.
2) Local Expertise-Local communities, particularly in rural areas, may lack the technical capability
to assess and plan for impacts of a .major development project, the legal expertise to negotiate
with industry, and the administrative capability to expand services. A number of states have
initiated programs for impact aid and assistance to communities to alleviate this problem.
275
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3) Lead Time-It is important that adequate lead time exist to assess potential impacts of a develop-
ment project, to plan mitigating measures and to provide financing of community needs. These
activities must be accomplished before major decisions regarding design and management of the
project are finalized, before legal agreements and permits are finalized, and with enough lead
time before project start-up to allow for construction of any needed facilities. Uncertainty about
project start-up caused by fluctuations in resource markets, changes in public development
policy, and confidentiality of industry data (particularly with those firms facing strong competi-
tion), contribute to the problem of assuring adequate lead time.
4) Information Needs -The provision of accurate and timely information is vital to predicting and
planning for the needs of a large population increase. Without demographic projections and pro-
jed specific information, planning is almost impossible or at best. a matter of guesswork. This
problem occurs when there is poor communication among the affected parties. Developers may
withhold information in the interest of confidentiality, or in some cases, predictive information
provided to government agencies becomes invalid as project plans change.
5) Financing Problems-A major development project can create serious public and private financ-
ing problems. Local governments generally face the most difficult financing problems because of
the need to expand services and facilities to accommodate a large population increase. "Up-front"
financing is usually needed as locally generated funds seldom are sufficient to cover the cost of
needed expansion. The timing of state government costs versus revenue is a less serious problem,
but the State must assure that the expected revenue will offset increased government costs due to
expanded services. Local private developers may have difficulty in obtaining capital in order to
expand in housing and local businesses.
The types of financing problems experienced by communities include tbose discussed below.
• Jurisdictional mismatches and lack of taxing powers -If a project site is located in one taxing
jurisdiction and in-migrants locate in another, project derived revenues will not go to the
jurisdiction providing and paying for the increased services. A constraint on local financing
peculiar to communities lying within Alaska's unorganized borough, is the absence of a local
taxing authority.
• Cash flow/tax lead time problems · Even if the tax revenues expected from a project cover
the increased government service costs, there generally is a cash flow problem. Major
increases in government costs occur prior to the start of a project while increased revenue
may be realized years later, when the project begins operation. This cash flow problem can
create major difficulties particularly for small communities and as a result front-end financing
arrangements are necessary in most cases.
• High financial risk/difficulty in borrowing -Because of the uncertainty associated with large
development projects, builders, developers and lenders are reluctant to risk major
investments based on projects that might not transpire. This reluctance extends to private
borrowers (e.g., local housing developers)..
• Institutional problems -Many small communities have legal debt limits and bonding caps
which can prevent borrowing and issuance of bonds.
In addition to government fiscal needs, there may also be a shortage of" private capital for construc-
tion of homes, stores and offices in impacted regions. Options for alleviating this shortage of private
working capital include:
• State mortgage purchase or "loans to lenders" programs;
• federal housing and development loan programs; and
• financial aid programs (e.g., standard housing loan programs, sinall business loans, non-
residential development loans).
276
6) Confusion about responsibility· One of the fundamental problems noted in impacted areas is
confusion as to what entity actually has the authority to make various decisions regarding
development as well as uncertainty as to who has the responsibility for certain services, costs and
activities. Negotiation between all parties involved in and affected by development is necessary
to clarify these uncertainties. Uncertainty can further be reduced if the State has straightforward
and consistent policies regarding development (e.g., the process for involving all parties in
decision-making, methods for monitoring impacts, programs for impact assistance, guidelines for
assigning responsibility for fiscal costs, and statutory authority regarding the evaluation of pro·
jects).
7) Legal Authority· Community, state or federal legal authority is necessary in order to negotiate
formal binding agreements which specify the responsibility of various parties; to assure equitable
financing of impact-related costs; and to assure that those affected by a project are involved in
the decision-making proceSs. Alaskan communities as well as the State government have limited
legal authority regarding large scale development compared to other energy producing states.
Many communities in Alaska lack zoning authority or taxing powers, and the State does not
have general statutory authority for facility siting.
8) Alaska Conditions· Many of the impediments discussed above are relevant to existing condi·
tions in Alaska. A recent report by the House Research Agency dealt with Alaska impact plan·
ning mechanisms. House Research findings along with those of this study are presented below as
a brief outline of concerns regarding the Alaska situation.
• State agency responsibility (including the review process) for socio-economic impacts is
unclear;
• a number of permits deal with various environmental controls and/or types of projects, but
few permits encompass social impacts;
• there is no process for monitoring the social impact of major projects on a consistent basis;
• few mechanisms exist to encourage industry to provide for human impact planning and miti·
gation;
• the standards for how social and economic impact costs should be assessed and allocated are
unclear;
• funding for local planning efforts and technical assistance to communities is limited;
• there is no consistent mechanism for providing impact funds to local communities (other
than Coastal Energy Impact Program funds);
• few local government entities in the unorganized borough have planning powers; and
• there is no established forum for communication among all parties who receive benefits or
bear costs of a development project.
State Initiatives in Human Impact Planning
Recognizing impediments to impact mitigation, many of the energy producing states have developed
a special office to address human impacts of development and to assist communities in impact mitiga-
tion. A state impact office could perform the following functions:
• Act as a central coordinating office responsible for addressing development impacts.
• Develop guidelines for evaluating major development projects. (Impact assessment techniques,
cost analysis and impact monitoring.)
• Provide a forum for negotiations and joint planning between communities, industry and the
state.
• Assist in negotiations with .industry representatives for state/industry or local/industry agree·
ments and work with industry in mitigation planning.
• Provide technical and legal assistance to potentially impaded com·munities in the following
areas: impact assessment, fiscal analysis and community planning assistance; citizen participation
methods; monitoring techniques; legal advice regarding use and implementation of local govern-
ment powers (e.g., zoning); and aid in the development of front·end financing.
277
• Administer community impact grant and aid programs for local impact assessment and planning
as well as providing impact-related facilities and services.
• Participate in facility siting evaluation (where applicable).
• Monitor development impacts and the effectiveness of mitigation methods applied to large
projects.
• Provide a library of human impact related material for use by communities, state agencies and
industry representatives.
Developer Initiatives
Several authors have noted that companies developing large-scale projects in remote areas have
themselves recognized adverse socioeconomic impacts and are investing time and capital in mitigation
efforts.1
Industry is more likely to be willing to share the responsibility and cost of impact assistance. 2
• If the project will operate in the area for a long period of time;
• If the project is a necessary part of the company's overall plan;
• If construction delays will cause project costs to escalate especially due to community opposi-
tion, through legal challenges;
• If community opposition to the project is present but may be minimized through impact plan-
ning and assistance;
• If worker productivity will improve and turnover rates decline due to impact assistance;
• If the company does not feel that the project is being expected to remedy long-standing deficien-
cies in public services;
• If the community is well-organized for planning and implementing impact assistance programs;
• If extremely adverse impacts are likely to result from the project;
• If the public image of the company would be hurt by the publicity involved in not helping to
mitigate impacts;
• If the company can recoup its costs (e.g., pre-payment of taxes, tax credits for mitigation costs);
and
• If impact assistance facilitates acquisition of required government permits or licenses.
Industry mitigation efforts typically include one o.r more of the following: I) pre-payments of proper-
ty taxes so that communities have revenue for service and infrastructure needs before the development
occurs; 2) payments to potentially impacted communities which may not receive tax revenue because
of jurisdiction inequities in taxing districts; 3) dedication of industry expertise to assist communities in
planning for development impact; 4) provision of area planning grants; and, 5) implementation of com-
pany impact monitoring programs.
Industry as well as impacted communities have begun to recognize the need for cooperative
community-developer planning. Cooperative efforts have utilized company technical expertise com-
bined with public involvement in the planning process.
Legal Authority for Implementing Mitigation
Formal binding agreements between industry and government entities are usually necessary to assure
equitable financing of impact-related costs, and to assure that those affected by a project are involved in
the decision making process. Legal authorities which can be used toward this end include local zoning,
state and federal permitting, state and federal leasing procedures, and facility siting legislation. These
'William C: Metz, "The Mitigutio11 of Socioeco11omic Impacts by Electric Utilities," Public Utilities Fort11igtly (/980): 41-42. (Volume Number
Umwailable · Ed.)
Sheila Helgath, "Commo11 Socioeco11omic Program Elemmts ilr Four Large Co11structio11 Projects: lmplimtio11s for Alaskmr Commu11ily Strategies." /11
/Iris S)llllposium Volume, Sectio11 IV, 1983.
Lmd Use Plamzi11g Report, Compa11ies Ease Pressures Created by 'Boomtowll Sy11drome' i11 the West, 1981.
2Lmvmzce Susskiwlamf L\lliclwel O'Hare, Ma11agi11g the Social and Economic Impacts of E11ergy Developmmt (Cambridge: Massachusetts Institute
of Teclmology, 1977). ·
278
means can be used to influence or control the location, type, magnitude, and timing of development
and to assure agreements between communities and developers. This legal authority can be used to pro-
tect against adverse sociaL politicaL cultural and economic impacts as well as maximize economic and
employment benefits. Local financing needs can also be assured through these agreements.
Tax policies and financial agreements can be geared to recouping the increased costs of public goods
and services. In some cases, tax policies can also be used to encourage or mediate the pace, scale and
location of development.
Local Authority
The human impacts of a development project generally occur at the local community leveL and local
entities must respond to project-related problems. Local governments should play a central role in
assessing potential project-related impacts, planning mitigation, and responding to the increased need
for public services. It is therefore crucial that local communities be empowered with the authority to
implement mitigation strategies and to negotiate agreements with developers assuring the project is
consistent with goals of the community. ·
Local Zoning Powers
An effective tool that can be instrumental in mitigating adverse socioeconomic impacts is a local
government's zoning power. Well designed zoning codes mean that local jurisdictions have the authori-
ty to control the type and location of development.
Zoning has not been widely used as a means of regulating development decisions. Yet it is potentially
the most powerful regulating and bargaining tool a community possesses. A good illustration of com-
munity use of its zoning power as a bargaining tool is Skagit County in the State of Washington. Skagit
County is a rural district largely dependent on agriculture for its livelihood. A Washington based utility
company, Puget Sound Power and Light Company of Bellevue, petitioned the Skagit County commis-
sioners to reclassify approximately 260 acres of a forestry-recreation site to permit construction and
operation of a proposed 2,600 megawatt nuclear electric generating facility. Since the economy of
Skagit County is so heavily dominated by agriculture, the majority of residents wanted Skagit to
remain rural in character.3 Due to this attitude zoning ordinances regulating land use were already in
effect. But popular opinion was not anti-development; rather it favored a selective program of attract-
ing industry compatible with agriculturally-based interests. Faced with the decision to accept or oppose
construction of the nuclear project, the majority of the residents favored acceptance, with the stipula-
tion that Puget Power would share the responsibility of mitigating adverse impacts through impact
payments. Puget Power was faced with the decision to either accept the county's proposal or not obtain
the zoning permit necessary for construction. The company agreed to provide impact payments to
schools and law enforcement agencies in the county as a condition for obtaining the rezone permit. The
type of zoning change agreement entered into by Puget Power and the County is an effective use of
zoning to mitigate adverse socioeconomic impacts.
The efforts of municipalities in Alaska in the use of zoning have been sporadic. Chapter 29 of the
statutes contains the provision giving municipalities planning, platting and zoning powers. Only incor-
porated municipalities have planning, platting and zoning powers, and the power to undertake capital
improvements. The Department of Natural Resources has a general grant of power to zone within the
unorganized borough,· however, this has not yet been exercised.
. Probably the most successful use of zoning powers to mitigate socioeconomic impacts in Alaska was
undertaken by the community of Yakutat. Through their zoning powers, city officials refused to grant
the oil companies rights to construct docks and bring in large ships on the tidelands owned by the city
in front of the land owned by the oil consortium. Yak-Tat Kwaan, the native village corporation,
offered to purchase the site in return for leasing the firms another piece of property on the far side of
the bay. Left with few alternatives, the oil companies accepted the offer. The oil companies also agreed
to prohibitions against owning property, construCting shore-based facilities, and housing employees
locally, and agreed to hire local residents whenever possible. ·
This type of approach can be used successfully in other incorporated communities in Alaska. It is an
'Davis, lvf.ayhm. "Om Nuke Gets a Wann Welcome," Plmznhlg (I 975): p. 4. (Volume Number U~:avai!able-ed.)
279
exceptionally effective tool because it requires industries to deal directly with impacted communities. It
gives the parties most directly affected a powerful tool to guarantee these problems and needs are
addressed.
Local Taxing Powers
The most common way for local governments to raise revenue to help mitigate impacts of develop-
ment is through their taxing powers. Article X, Section 2 of the Alaska Constitution limits this power to
organized municipalities. There are two general taxes available to Alaska municipalities-property
taxes and sales.taxes. Use taxes are also available, but rarely used.
There are limitations on the amount of taxes that can be levied by a municipality. Alaska Statutes,
Title 29 (Municipal Government) and Title 43 (Oil and Gas Property Taxes) impose such limitations.
For example, AS 29.53.050(a) states that no municipality may levy and tax for any purpose in excess of
three percent of the assessed valuation of property within the municipality in any one year. AS
29.53.050(b) limits the amount of taxes that can be levied to $1500 a year per person residing within
municipal boundaries or upon values which, when combined with the value of property otherwise tax-
able by the municipality, exceed the product of 225% of the average per capita assessed full and true
value of property otherwise taxable by the municipality. AS 43.56.010 puts a similar limitation on taxa-
tion of oil and gas property.
However, these limitations do not apply to taxes levied or pledged to pay or secure the payment of
principal and interest on bonds (See AS 29.53.055). Bonds are limited to paying for capital projects. The
State Supreme Court in North Slope Borough v. Sohio 4 has interpreted this to mean that a municipality is
limited as to the amount it can tax for operating costs, but is not limited in the amount it can tax to pay
off bonded indebtedness of capital projects. Since much of the mitigation efforts of a municipality
would be directed towards building capital projects (sewer systems, water systems, schools) the bonding
exception to the taxing limitations becomes crucial.
There are two issues relating to local taxing powers that should be examined further. They are the
special circumstance of the unorganized borough, and prepayment of taxes.
1) The Unorganized Borough-Seventy-five percent of Alaska's land area lies within the unorgan-
ized borough. Neither the unorganized borough nor unincorporated communities within it have
the power to levy and collect taxes. Although much of the unorganized borough does not have
an adequate tax base to compensate for services now received from the State and federal govern-
ments, in some cases, especially in areas where oil and gas related properties are located, there is
a great potential for tax revenues. These areas currently include the existing oil pipeline and
pump stations between Prudhoe Bay and Valdez and along the proposed natural gasline route
between Prudhoe Bay and the village of Northway. According to the report, Problems and
Possibilities for Service Delivery and Government in the Alaska Unorganized Borough, the January 1, 1979
assessed value of Alyeska Pipeline Service Company's property within the unorganized borough
was roughly $4.325 billion. The report further states:
To date only one borough has formed to take advantage of the tax revenues from oil and
gas development. This is the North Slope Borough, incorporated in 1972. Starting with a
revenue budget of $500,000 in 1972, by 1977 the Borough collected $30 million in
petroleum revenues and was in the third year of a projected $150 million capital
improvements program. Nearly two-thirds of the Borough's revenue comes from the taxa-
tion of oil properties at Prudhoe Bay.
One other region along the pipeline route is considering incorporation. During the 1973
legislative session, the Department of Community and Regional Affairs received a special
appropriation to fund a borough feasibility study for the Yukon Flats Region. The study
found the estimated Trans-Alaska pipeline assessed value for this area to be $900 million,
which would be converted into property tax revenue of around $6 million in fiscal year
1981, or approximately $13,750 per capita. If the natural gas pipeline assessed valuation
was added in fiscal year 1982, the total assessed value could increase by $155 million for a
total of $1 billion assessed value.
'North Slope Borough vs. Sahio, 585 P. 2d534 (1978).
280
In contrast, without oil and gas properties, the net taxable, locally assessed property for
the proposed Yukon Flats Borough for fiscal year 1981 would be $8.5 million.
Organization of the unorganized borough has not been an easy task thus far. Most of the
opposition comes from residents of the unorganized borough. Many of them feel that there are
insufficient numbers of people with basic skills and training necessary for efficient administra-
tion of programs and organizations at the local level. In some areas, such as school construction,
there are financial disincentives to incorporation. An excellent analysis of problems of incor-
porating is found in the study cited above.
2) Prepayment of taxes -Public cash flow problems at the local level are a documented fact of life in
the boom process. The majority of local capital expenditure increases for schools, sewer treat-
ment facilities, etc. must be initiated two years prior to the arrival of the expanded population.
Operating expenditures need to be increased at the time of arrival of the population. Meanwhile,.
increased receipts from local property taxes are usually realized one or two years after the arrival
of the increased population. ·
One way to reduce the impact of this time lag is through tax prepayments. Tax prepayments
are, in effect short-term, stop gap loans by industry to local (or state) governments otherwise
unable to finance development of public facilities and services in anticipation of large-scale
development. Such payments can be either mandatory or voluntary. In either case the developer
prepays property taxes which would usually have been due when the facility was complete and
in operation. Actual terms of a prepayment plan vary according to each community's needs. The
size of the prepayment would depend on the needs of the community and the projected future
tax liability of the developer. Terms also include a plan for crediting the developer for the
prepayment.
There are currently two bills in Congress, S. 1919 (the Energy Community Self-Help Act of
1981) and S. 1731 (Energy Impact Mitigation Tax Incentive Act of 1981) which would provide
current year deductibility of prepaid state and local taxes from federal income taxes, as opposed
to "when assessed" payment as under current law. The bills are a part of recommendations
advanced by the Western Regional Council as a new approach for addressing community
socioeconomic problems associated with energy and natural resource development.
Thus far, prepayment of local property taxes has not been attempted in Alaska. Although
there is nothing in the statutes prohibiting prepayment, a statutory provision that included each
party's interest and responsiblities might prove helpful to communities wishing to institute such
an arrangement.
Local Development Plan-Even when communities have limited legal authority to control develop-
ment, the community/region can prepare development guidelines. These guidelines are a formal record
of community or regional development plans and provide a standard against which all projects can be
evaluated. Violations of such guidelines could be met with moral and political sanctions &om govern-
ment and/or interest groups.5 The Coastal Zone Management process of regional deveiopment pians
follows this process although the CZM program does have the force of law as federal and state actions
must be consistent with local approved coastal district plans. An Alaskan initiative toward regional
planning is the NANA Regional Strategies which involves public participation in the development of
regional goals and objectives regarding development.
State Authority
The broadest and most powerful statutory authority and taxing powers, the most expertise in plan-
ning, and the strongest leverage in negotiating with developers generally belongs to state governments. ·
The authority and role of a state is therefore crucial to planning future development and to successful
mitigation.
'Dr. Howard R. Balmzoff. lmp/emwtatio11 of La11d Use Codes .md Ordi111111ces i11 Small Tvwns ·alld Rum/ Cvunties, 1979. (Place awl 1wme v1
Pttblislrer Uwwailab/e · Ed.) ·
281
Current Alaska Statutory Authority
Alaskan laws which deal with development projects disperse decision authority among various
departments. Evaluation of State policy and State authority is thus difficult. The following pages sum-
marize selected examples of the State statutory authority which might apply to sociaL cultural and
economic issues. Some of these powers are quite general, however, ~nd may not have been applied to
socioeconomic issues,~.
This summary is not comprehensive and additional analysis of the applicable statutes, regulations and
procedures will be necessary for a thorough understanding of the strengths, weaknesses, and potentials
of existing systems. ·
Department of Natural Resources -There are several statutes administered by the Department of
Natural Resources that could be used by the State to ensure that mitigation strategies to alleviate
socioeconomic impacts are a part of an industrial development plan. Most of the statutes do not
specifically address socioeconomic concerns, but contain language broad enough to justify including the
concerns when evaluations are performed. The following is a summary of these laws.
• Water Permits (AS 46.15.080) -Natural Resources is the agency that issues permits for water
rights. Although socioeconomic impacts are not mentioned in the statute as specific criteria that
must be considered before issuing the permit, the law is broad enough so that such criteria could
be considered.
The statute could be interpreted to require the applicant to provide detailed socioeconomic
information on construction and operation of the proposed facility, and stipulations designed to
address concerns raised on the application could be required as a condition of issuing the permit.
Thus far the department has not used its power to issue permits in this way.
• Powers and Duties of the Director (AS 38.05.035)-The Director of Land and Water Manage-
ment has broad powers in drafting contracts and other agreements for State resources. As with
the water permit laws, the statute gives very broad powers to the director in approving State
contracts. Again, stipulations that address socioeconomic mitigation measures could be included
in such contracts.
• Planning and classification in the Unorganized Borough and on State Lands (AS 38.05.037) -
gives the Department of Natural Resources the power to zone lands located in areas outside
organized boroughs where there is no municipality with zoning power. Chapter 04 of Title 38
gives the Commissioner of Natural Resources the authority to develop, maintain and revise land
use plans for state-owned lands. In classifying lands the commissioner must provide for mean-
ingful participation in the planning process by affected local governments, state and federal
agencies, adjacent landowners and the general public. The physicaL economic and social factors
·affecting the region must be considered in the classification process. Thus far the State has not ex-
ercised its zoning power in the unorganized borough. Most of the land classifications have been
in the areas of the land disposal program and habitat classification.
• Right-of-Way Leasing Act-Chapter 35 of Title 38 regulates the leasing of right-of-way on the
State lands for pipeline purposes. Because of the requirements of the statute, socioeconomic
impacts must be considered in the analysis of a project. However, these impacts do not appear to
have been the major consideration of such analysis. Although the majority of laws that could be
used to mitigate human impacts are located within the province of the Department of Natural
Resources, the department's primary_ mandate involves resource issues rather than human
impacts.
Alaska Coastal Management Program-Under the federal Coastal Zone Management Ad, the U.S.
government provides funding and technical assistance for voluntary State planning and management of
the coastal zone. The basic responsibility for such planning and management is left to the states with the
federal government retaining the authority to approve state coastal management plans. The Act
requires that federal actions within a state's coastal zone be consistent with the state's approved pro-
gram. These consistency provisions apply to fec!_~rally sponsored energy exploration and development
282
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activities on the Outer Continental Shelf (OCS) and activities of state and local government that are
supported by federal funding and affect the coastal zone.
A local community or district receives two benefits related to the mandatory planning activity
required by the Coastal Management Act:
I) funds to develop and implement a coastal plan;
2) the assurance that both state and federal actions will be consistent with the provisions of the local
program. (State program guidelines and standards apply to coastal management decisions in cases
where a local program has not been developed.)
The formulation and utilization of local coastal management programs can be an effective tool in
achieving local goals and objectives, and assuring substantial local control over the types and amount of
development that occurs. The program standards include provisions addressing wildlife habitat, energy
facility siting, geophysical hazards. pollution control. forestry practices, transportation and utilities,
recreation, subsistence, and mining. The act itself addresses socioeconomic issues (AS 46.40.020(2)) but
specific standards have not been developed as yet.
Atomic Energy Facility Siting Permit -In 1981, an atomic energy facility siting act was passed in
Alaska (AS 18.45.025). It covers nuclear fuel production facilities, utilization facilities, reprocessing
facilities, and nuclear waste disposal facilities. None of these facilities can be built except on land
designated by the Legislature. Once land has been designated, a facility can be built only after a permit
has been obtained from the. Department of Environmental Conservation. The statute is not a com·
prehensive facility siting law. There is no mention of socioeconmic impacts, but AS 18.45.025(c)(2)
states that D.E.C. may not issue a permit until the municipality with jurisdiction over the proposed site
has approved the permit. The statute is therefore significant because it gives power to the muncipality
to accept or reject the proposal. The department has not received any applications for a permit thus far.
Alaska Environmental Procedures Coordination Act -Enacted in 1977, AS 43.35 provides for a
"master application" process coordinated by the Department of Environmental Conservation for review
and decision on state permits required for a development project. The law also provides for the
establishment of Permit Information Centers which on request provide detailed information to
developers regarding local, state. and federal permits and agency contacts. The centers also coordinate
pre-review meetings with all governmental levels with jurisdiction on a given project. This coordinated
permit process has been infrequently used. The program is voluntary, and an applicant may feel more
comfortable dealing directly with the state, local. or federal agency issuing a particular permit than
using the coordinated review.
Although the emphasis of the Environmental Procedures Coordination Act is (as one would expect
from the title) environmental, there may be potential for expanding the purview of such a process. Of
the many permits which fall under this statute at least one type, water permits (which are discussed
above) requires a fairly broad finding of public interest.
However, according to Ernst Mueller, Commissioner of Environmental Conservation in a recent
speech to a Conference on Alaska Energy Development:
The master application process is not, however, designed to be a generic, holistic review
of a project. It is based on an aggregate of the permit requirements and not designed to in·
elude factors which are outside any single agency's jurisdiction, and as a result some public
interest issues may not be examined. Therefore, the governor often must establish special
institutions to handle large project proposals on a generic basis.
Alaska Royalty Oil and Gas Development Advisory Board -The purpose of the Alaska Royalty Oil
and Gas Development Advisory Board as expressed in AS 44.83 is to facilitate the wise development of
Alaska's royalty oil and gas interests by providing means and procedures for sales, exchanges. or other
disposition of those interests in ways calculated to promote private economic growth consistent with
applicable environmental standards and public fiscal stability. In exercising its powers, the board must
consider certain socioeconomic im·pacts.
The Royalty Oil and Gas Board's enabling statute contains some of the most specific language on
socioeconomic impacts that exists in Alaska's statutes. Thus far, the Board in its analysis of proposals for
283
the use of the State's royalty oil and gas, has not addressed socioeconomic questions in the detail that
might be expected given the statute. Although the matter is discussed informally whenever a develop-
ment proposal is considered, the Board often assumes that the subject of socioeconomic concerns will
be analyzed more thoroughly when the proposed development goes through other federal and State
permitting processes.
Alaska Power Authority • The Alaska Power Authority has authority to evaluate, design, finance:
construct and operate energy projects for the people of Alaska (AS 44.83). Its purpose is to offer the
lowest energy costs possible to a community without undue adverse socioeconomic and environmental
impacts. Although enabling legislation for the Authority puts limited emphasis on socioeconomic
impacts, the regulations are more specific (SAAC 94.055 -94.060). For instance, the A.P.A. is em-
powered to conduct reconnaissance studies and feasibility studies on a specific project. The purpose of a
reconnaissance study is to identify and assess the present and future power needs of a community or
region, whereas, a feasibility study is used to assess the technical, economic and environmental aspects
of a project identified in a reconnaissance study. Local community input is solicited while both studies
are being conducted. The plans for a project resulting from these studies are evaluated using the follow-
ing indicators relating to socioeconomic impacts: 1) environmental; 2) community; 3) impact on com·
munity infrastructure; and 4) land-use input and ownership status. According to the A.P.A.,
socioeconomic impacts have not been a major factor in decisions thus far. The emphasis is on providing
the lowest energy costs possible. However, impact analyses are expected to become more important in
the future.
Facility Siting
In contrast to the dispersed legal authority described above, some states have taken a more com-
prehensive approach to control of socioeconomic impacts through facility siting legislation. Facility
siting laws may delineate a process for public review of development proposals, describing what infor-
mation is required, in what time sequence, by whom it will be considered in what forums, what the
considerations should be, and what kinds of decisions may result. The general outline of sequential
steps in a state certification process is given below.
1) Applicant files an application for certification to appropriate commission or agency accompanied
by filing fee.
2) Agency or applicant distributes application to interested parties.
3) The application for certification provides the major basis for evaluating the proposed facility
sites. Included in the application may be alternative plans and their effects on various physical,
biological, environmental, land use and social and economic elements of the area, and ways to
mitigate adverse impacts. It also may include financial information on the project, a statement
explaining the need for the proposed facility, a statement of compatibility of the facility with
State or local land use plans, and long-range development forecasts.
4) The agency or commission performs its own staff evaluation of the application or hires an
independent consultant to perform the evaluation. A series of public hearings near the proposed
site are hetd to obtain public input on the proposed development. Social and economic con-
siderations can be raised here.
5) Additional studies may or may not be required depending on the adequacy of information pro-
vided in the application.
6) The agency integrates the comments and criticisms obtained from public, state and local agencies
to formulate its decision regarding approval or disapproval of the application. Among the alter-
natives may be approv~l of the application with conditions imposed.
7) If the applicant or parties to the proceeding are not satisfied with the decision of the agency,
appeal procedures are provided.
The main advantage to this approach is that a single agency or council is responsible for approving a
site, resulting in streamlined development approval and improved efficiency. A second advantage is
that facility siting laws provide an excellent forum for interested parties to express their concerns at an
early stage of development when it is still possible for conflicts between parties to be resolved.
Agreements reached between parties to mitigate Impacts can be incorporated into the permit itself.
284
At least 32 states have enacted some form of facility siting legislation, many of them modeled after
the State Utility Environmental Protection Act developed by the National Association of Regulatory
Utility Commissioners in 1970.6 But the states vary in approaches to the legislation in several main
areas:
• Type of facility covered by legislation. Since facility siting was originally design~d to balance
the demand for more energy facilities with the necessity to reduce pollution and improve the
environment, most states cover only energy facilities. Some states do cover a broader spectrum
of development. Maine covers any state, municipal, educationaL charitable, commercial or
industrial development which occupies land or water more than 20 acres, or which have a single
structure with ground area of more than 60,000 square feet, or any mining activity or hazardous
activity (including oil development). Wyoming's statute covers general industrial facilities with
estimated construction costs of more than $50 million, in addition to energy generating and con-
version plants.
• Administrative structure issuing a permit. There are two main approaches states have taken in
this area. Some states have created an independent commission or council charged with
implementing legislatively mandated siting procedures. The makeup of such commissions or
councils varies from state to state, but a typical membership consists of relevant state department
heads, members of local governing bodies, and public members. The membership from local
governing bodies is selected according to the location of proposed facility under review. The
commission or council is usually authorized to give final approval to facility site requests. Staff
support is usually given by an existing state agency. The second approach taken by some states is
to place responsibility for implementing facility siting legislation on an existing state agency,
typically a state environmental or natural resources agency. Again, the agency is usually
authorized to give final approval to facility site requests.
• Role of local governments. The role of local government is another area where states have
taken different approaches. At one end of the spectrum are those states requiring that notice and
an opportunity to be heard be given to local governments, but in which the facility siting statute
preempts all local ordinances and regulations, including zoning (e.g., Washington and Arkansas).
At the other end of the spectrum are the states where local laws and regulations are binding on
the siting authority (e.g., Wyoming and Nevada). A middle position is taken by Arizona and
Montana who condition their permits on an applicant's compliance with local regulations unless
such regulations are found to be unreasonable.
• Funding options. A typical siting statute provides a mechanism by which the state collects a
filing fee from a person or business who applies for a siting permit. The fee is then used to cover
any evaluation reports, administrative costs or compliance costs incurred by the state in process-
ing an application.
• Criteria for approval of a particular site. Criteria for approval of an application also vary from
state to state. Some states give discretion to the siting authority to formulate criteria, while other
states have implemented statutes that go into great detail about the criteria that must be con-
sidered before issuing a permit. These criteria often include socioeconomic impacts.
In addition to the basic provisions and alternatives ·offered above, some states have individual provi·
sions that deal with specific items, as identified below.
• Conflict of interest provision. Some states have conflict of interest provisions in their siting
statutes that prohibit a member of the siting council or employee of a siting agency from having
any pecuniary interest in a facility covered by the statute during his tenure or for two years
following. Oregon further states that employment of such a person by a facility is grounds for
revocation of any license issued by the state and held by the owner of the energy facility that
employs such a person.
• Notice of intent to file. In Montana, a potential applicant may file a notice of intent to file an
•Council o;l Stu/e Governments. 1972. Suggesletf Sllllt Legislation. Model Stale Utility f.Jwiromnmltil Prolc.:lion ALt. 2i7 et. ,;eq. (I <~i 1).
285
application for a certificate at least 12 months prior to actual filing. An applicant who does this is
entitled to a 5% reduction in the filing fee. This provision provides both state and local govern-
ments lead time for a major facility development.
• Accounting and Refund. Montana also provides that an applicant is entitled to an accounting of
monies expended by the siting agency, and a refund with interest of 6% a year for the portion of
the filing fee not expended by the department in carrying out .its responsibilities under the law.
• Hearing process. Several states require that a certification hearing be conducted as close as practi-
cable to the proposed site, thus affording impacted .residents a chance to be heard. Montana
allows the applicant, each local entity, state agencies, nonprofit organizations, and any other
interested person who establishes an interest in the proceeding to be parties to the certification
proceeding. This provision allows potential conflicts to be aired and resolved early in the pro-
ceedings.
• Burden of proof. Montana also provides that the applicant has the burden of showing by clear
and convincing evidence that the application should be granted and that the required criteria are
met.
• Local governments. Some states provide that representatives of the local governments sit on the
siting council as voting members during the time that a proposed facility in their area is being
considered.
• Conditions imposed. Wyoming provides that a permit may be issued conditioned upon the
applicant furnishing a bond to the siting office in an amount determined by the director. The
bond would be used in the event the applicant did not complete the facility proposed. It would
allow local governments to recover funds they had spent· in preparation for impacts caused by a
facility in anticipation of increased revenues from such a facility.
A report by the Western Interstate Nuclear Board 7
, points out that existing state siting statutes also
contain certain shortcomings or inadequate treatment of specific problems. Consideration should be
given to the conditions listed below which contribute to the success of such a process.
• The power or responsibility to monitor and enforce stipulated permit conditions, to institute
reporting procedures and maintenance of records, and to impose penalties should be clearly
defined. ·
• Actions open to the parties at interest at each possible decision point (e.g., amend, resubmit, or
appeal) should be clear.
• There should be provisions for the early identification of the issues to be addressed in subsequent
proceedings by the parties at interest. Additionally, the system should require the consideration
of all reasonable alternatives plus allowing the discarding, as the process proceeds, of items that
are determined in the proceedings to be nonsubstantive.
• Statutes should require explicit consideration of regional factors, for example, need for power,
economic factors, environmental considerations, socioeconomic impacts, and mitigation of
impacted areas.
• The exact authority of the siting law and agency with respect to interagency actions, other state
agencies, laws and local ordinances and regulations, including zoning, should be explicitly
detailed.
• Local municipalities should be involved from the beginning of the siting and planning process to
obtain early problem identification, and thus avoid resistance and emergency catch-up actions
later.
• Methods should involve appropriate federal agencies and all other parties at interest.
• Consistent with administrative due process the approval or denial of applications and other deci-
sion points should have specified double enped time scales. A minimum time period is needed to
allow the public and other parties at interest an opportunity to present information and their
views while a maximum time limit protects the applicant from delays or inaction.
'Weslem lulerslale Nuclear Board, Regiou•tl Fat"/ors ilz Plmmiug amlSitiug Electrical Euergy Facilities iullze Weslem Stales, (JY77), pp. Jt>·/8.
(Place of Publwztzotz Ulllzvailable · Ed.)
286
As discussed earlier, Alaska does not have a comprehensive facility siting law, but it does have a
statute, AS 18.45, that covers nuclear facilities. An attempt was made during the State Legislature in
1977 to pass a facility siting bill that covered the construction of shore-based support facilities for off-
shore oil and gas exploration development and production. The bill required that a permit be obtained
from the Department of Community and Regional Affairs to construct such a facility.
The main thrust of the proposed legislation (HB 219) was to provide a mechanism to ensure that the
construction of the support facilities would produce minimal adverse impacts on the affected local
governments. This was to be accomplished in three ways. First, a permit fee was to be paid by the appli-
cant. The proceeds from the fee were to be appropriated by the Legislature from the general fund for
use by municipalities affected by the construction. Second, a permit could not be issued by the Depart-
ment without a resolution of approval of the governing municipal body where the facility was to be
located or any municipality within 10 miles of the proposed facility. Third, it was to be required that a
person contemplating construction of a shore facility submit a long-range plan to the Department. The
plan was then to be distributed to affected municipalities. The bill did not pass the Legislature, and
similar legislation has not been introduced since then.
State Taxing Powers
Some states have helped mitigate costs of socioeconomic development by passing laws whereby a
certain percentage of mineral tax revenues received by the State is earmarked for local impact
assistance. For instance, in 1980 North Dakota's citizens added a new section to their Constitution that
earmarked 15 o/o of the state's coal severance tax to a permanent trust fund for loans to impac~ed areas.
The North Dakota statutes further lay out the scheme for distribution of the remainder of the tax. All
money received from the tax is deposited in the Coal Development Fund. Thirty-five percent of the
money is distributed by the energy development impact office to coal impacted cities, counties, school
districts and other taxing districts.
As mentioned above, fifteen percent is deposited in the permanent trust fund. Twenty percent is
allocated to coal producing counties and is distributed in proportion to the amount of coal extracted
from the county. The remaining thirty percent of the tax is deposited in the state's general fund.
Another example of state earmarking of funds is Wyoming which has a special severance tax on coal
of two percent of the value of the gross product extracted. The funds generated by the tax are dedicated
for use in areas which are directly or indirectly impacted by the production of coal. The Farm Loan
Board is authorized to disburse the funds. Fifty percent of the funds must be used on highways, roads,
water and sewer projects.
Alaska is precluded from earmarking its resource revenue for impact aid by its Constitution. Article
IX, Section 7 of the constitution states:
Dedicated Funds. The proceeds of any state tax or license shall not be dedicated to any
special purpose, except as provided in Section 15 of this article or when required by the
federal government for state participation in federal programs. This provision shall not pro·
hibit the continuance of any dedication for special purposes existing upon the date of
ratification of this section by the people of Alaska.
This section has been interpreted to prohibit the dedication of funds for a special purpose, such as
community impact aid. A special fund could be established, but it would be dependent on yearly
appropriations from the legislature. In other words, it would be in competition with all other state·
funded projects. An argument has been made that since a local government has legislative powers, it is
not a "special purpose" within the meaning of the constitution provision, and therefore the state may
earmark a share of its revenues to local subdivisions without violating the constitutional prohibition.
Even assuming the validity of this argument, there might still be a problem because impact mitigation
itself is a special purpose. Whether the state could share its revenues only with impacted communities
or whether a community would have to use the money for socioeconomic impacts are quest~ons
beyond the scope of this project. Suffice to say that it would be, at the very least, extremely difficult to
draft a constitutional law for Alaska that earmarks state revenues for local impact aid.
287
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Conclusion
This paper summarizes selected material from a policy analysis paper prepared by the Division of
Policy Development and Planning, Office of the Governor. The report identified a number of serious
impediments to mitigating the negative impacts and enhancing benefits of large-scale development pro-
jects. The following recommendations are presented as options for overcoming these impediments.
State policy regarding human impact planning and mitigation is not well established. The following
improvements are suggested:
• the State develop more specific policy guidelines regarding human impacts of major develop-
ment projects including policy on review or permitting of major projects, assistance to impacted
communities, State impact analysis, industry incentives and the role and responsibility of the
State, local communities, the federal government, and industry; and
• the State consider establishing an office responsible for impact issues.
Communities may lack sufficient legal authority (or the expertise in utilizing their legal authority) to
assure community concerns are addressed. Therefore, it is recommended that:
• the State continue to encourage communities to maximize their use of zoning and other powers
to assure development consistent with community goals;
• the State provide legal aid to communities regarding their zoning and other development related
powers. This could extend to assisting communities in initiating agreements and negotiating with
developers;
• the State continue to encourage communities to develop their own development plans and a pro-
cess for determining if proposed projects are consistent with these plans; and
• the State consider use of its zoning powers, where appropriate.
Timely financing for impact-related needs is often unavailable, creating major infrastructure and ser-
vice delivery problems for communities. Therefore, it is recommended that:
• the State establish a means to provide financial impact aid to communities anticipating major
development projects where such aid is needed. Such aid could be provided through a grant pro·
gram, loan program or by revising the formula for the revenue sharing and!or municipal
assistance program; -
• the State encourage that front-end financing of community impact costs through industry
agreements, pre-payments of taxes, federal funds or State funds; and
• the State work through its Congressional delegation to ensure that federal assistance is available
for those Alaskan development projects meeting national needs.
Local expertise in impact assessment and planning is generally quite limited. Therefore, it is recom-
mended that:
• the State expand its technical assistance to potentially impacted communities, including tech-
niques for impact assessment, fiscal analysis, community planning, citizen participation and im-
pact monitoring; and
• the State maintain reference material on human impacts of development for use by com-
munities, State agencies and industry.
State review authority over major projects needs to be clarified, and the quality of such review
should be improved. Therefore, it is recommended that:
• a review and evaluation process be applied on a consistent basis (i.e., across all projects meeting
certain criteria), including guidelines for human impact assessment, methods for evaluating cost,
and methods for monitoring impacts;
• facility siting legislation be considered by the state;
288
• the timing of major State-sponsored capital projects be evaluated in relation to other related
development to assure maximum employment benefits for Alaskans; and ·
• formal monitoring and follow-up research on the impact of major development projects be
assured. State data systems should be evaluated to assure development impact data is available
wherever feasible within the system.
Industry initiatives are an important resource to addressing impacts. Therefore, it is recommended
that:
• there be a forum for negotiations and joint planning between the communities, industry and the
State; and
• the State develop mechanisms to encourage or reward industry for impact planning and mitiga-
tio!l (e.g., State tax credits for pre-payments to communities to cover front-end financing).
289
--·-·---··-----~------------~~-------~--··--·-------------··----·--·
Kevin Banks
Socio-Economic Specialist
Minerals Management Service
Alaska Outer Continental Shelf Region
6.!0 E. lOth Avenue
P.O. Box 1159
Anchorage. Alaska 99510
Marsha Bennett
Sociologist
Minerals Management Service
Alaska Outer Continental Shelf Region
620 E. lOth Avenue
P.O. Box 1159
Anchorage. Alaska 99510
Robert E. Black
Economist .
Massachusetts Maritime Academy
P.O. Box D
Buzzards Bay. Massachusetts 02532
Nancy L Blunck
Director of Public Participation
Alaska Power Authority
334 West 5th Avenue
Anchorage. Alaska 99501
Roy T. Bowles
Fellow
Training Program on Family Violence
Children's Hospital
Boston. Massachusetts
Janice Cole
Office of the Governor
Division of Policy Development
and Planning
Pouch AD
Juneau, Alaska
Peter Cook
Regional Director and
Project Manager of Enclave Study
Lewis Berger and Associate$
1135 W. 8th Avenue, Suite 9
Anchorage. Alaska 99501
Charles F. Cortese
Sociologist
University of Denver
Denver. Colorado
Contributors
290
Judith A. Davenport
Associate Professor
Department of Social Work
University of Wyoming
Laramie. Wyoming
Cynthia B. Aynn
Social Impact Research. Inc.
4020 East Madison. Suite 300
Seattle. Washington
William Freudenburg
Department of Rural Sociology
Washington State University
Pullman. Washington 99164
Karen .Cibson
Socio-Economic Specialist
Minerals. Management Service
Afaska Outer Continental Shelf Region
620 E. lOth Avenue
Anchorage. Alaska 99510
John S. Gilmore
Senior Research Fellow
Industrial Economics and
Management Division
University of Denver
Research Institute
Denver. Colorado
John M. Halstead
Department of Agricultural Economics
North Dakota State University
Fargo. North Dakota
Terry L Haynes
Research Anthropologist
Upper Tanana Development Corporation
Tok, Alaska
Jack Heesch
Socio-Economic Specialist
Minerals Management Service
Alaska Outer Continental Shelf Region
620 E. lOth Avenue
Anchorage. Alaska 99510
Sheila F. Helgath
Socioeconomic Advisor
Office of the Federal Inspector
Alaska Natural Gas
Transportation System
Fairbanks. Alaska
Thor A. Hertsgaard
Department of Agricultural Economics
North Dakota State University
Fargo. North Dakota
Katie Hurley
Alaska Commission on the
Status of Women
338 Denali Street. Suite 850
·Anchorage, Alaska
Lee Huskey
Institute of Social and
Economic Research
University of Alaska
Anchorage, Alaska
Michael J. Jeffery, JD
Supervising Attorney
Alaska Legal Services Corporation
Barrow, Alaska
Roger Justus
Justus·Simonetta Development
Consultants Limited
Vancouver, B.C., Canada
Gunnar Knapp
Institute of Social and
Economic Research
University of Alaska
Anchorage, Alaska
Robert Laidlow
Anthropologist
Division of Resources
Bureau of Land Management
2800 Cottage Way
Sacramento, California 95825
Geoffery Larminie
British Petroleum Company
Britannic House
Moor Lane
London, EC2Y-9BU ENGLAND
Steve McNabb
Anthropologist
Muir Institute
6133 Kensington Drive
Anchorage, Alaska 99504
William C. Metz
Division of Energy and Economic Analysis
National Center for Analysis
of Energy Systems
Department of Energy and Environment
291
Brookhaven National Laboratory
Associated Universities
Upton, New York
Steve H. Murdock
Department of Rural Sociology
Texas A&M University
College Station, Texas
Robert M. Muth
Regional Social Scientist
USDA Forest Service,
Alaska Region
Juneau, Alaska
Nancy J. Owens
Energy Division
Department of Natural Resources
and Conservation
32 South Ewing
Helena, Montana
Phil Penatac, Spokesman
Committee for Indigenous Peoples' Survival
c/o Margaret Penatac
1608-2Ist Street
Fairbanks, Alaska
George W. Rogers
Institute of Social and
Economic Research
University of Alaska
Anchorage, Alaska
John Schaeffer
President
NANA Regional Corporation
P.O. Box 49
Kotzebue, Alaska 99752
JoAnne Simonetta
Justus-Simonetta Development
Consultants Limited
Vancouver, B.C., Canada
Charles Smythe
Socio-Economic Specialist
Minerals Management Service
Alaska Outer Continental Shelf Region
620 E. lOth Avenue
Anchorage, Alaska 99510
Tom Warren
Socio-Economic Studies Coordinator
Minerals Management Service
Alaska Outer Continental Shelf Region
620 E. lOth Avenue
Anchorage, Alaska 99510
.. ·~-------~----~ -~----------~--------·---·~--..
Participants
Chuck Ackley Ralph Anderson Jim Barrows
Alaska Humanities Forum North Slope Borough Energy Evaluation Council
429 D Street. Suite 312 P.O. Box 69 4224 6th Ave., SE, Bldg. 1
Anchorage, AK 99501 Barrow, AK 99723 Lacey, Washington 98504
Dr. Muhammad Akhan Elizabeth Andrews Elizabeth A. Baron
DOT AK Dept. of Fish & Game Dept. of Natural Resources
P.O. Box 4-643 1300 College Rd. Pouch 7-005
Anchorage, AK 99509 Fairbanks, AK 99701 Anchorage, AK 99510
Richard Aks Nelson Angapak Betty Barton
Dept. of Comm & Reg Affairs Calista Corp. State of Alaska
Pouch B 516 Denali St. Pouch X
Juneau, AK 99811 Anchorage, AK 99501 Juneau, AK 99801
Larry Albert Jane Angvik Edgar Blatchford
Sohio Comm. Planning Consultant Chugiach Natives, Inc.
1386 South Elm St. 1538 Orca St. 903 W. No. Lights Blvd., #210
Denver, CO 80222 Anchorage, AK 99501 Anchorage, AK 99503
Jim Allaway Helen Armstrong Molly S. Brady
Dept. of Natural Resources Alaska Consultants, Inc. Bureau of Land Mgt (202)
Pouch 7-995 725 Christensen Dr. Dept. of Interior, BLM (202)
Anchorage, AK 99511 Anchorage, AK 99501 Washington, D.C. 20240
John Alexander Abby Arnold Steve Braund
Office of the Federal Inspector Tanana Chiefs Conference Inc. Braund & Assoc.
1200 Pennsylvania Ave. 201 1st Avenue 42 9 "D" Street
Washington, D.C. 20044 Fairbanks, AK 99701 Anchorage, AK 99501
Bill Allen Alison Atkins Bob Brean
SADAR Northern Pipeline Upper Tanana Dev. Corp.
P.O. Box 74330 4114 4th Ave., Suite 200 P.O. Box 459
32 Adak St. Whitehorse, Yukon YIA 4N7 T ok, AK 99780
Fairbanks, AK 99707 Canada
George Allen Dr. Steve Aufrecht Barbara Britch
(speaker) 2127 E. 37th Ave. SRA Box 79-4
Anchorage, AK 99504 Anchorage, AK 99507
Karyn R. Ames Christy Baker Dixie Brown
Corp. of Engineers, Office of the Fed Inspector UAF
NPAEN-PL-N 1006 Noble St., Suite 350 113 Bunnell
P.O. Box 7002 Fairbanks, AK 99701 Fairbanks. AK 99701
Anchorage, AK 99510
Cheryl Anderson Don Barrett E. Michael Brunet
MMS Bureau of Indian Affairs Mun of Anch Hum Res Center
Branch of Off-Shore Studies P.O. Box 3-8000 Pouch 6-650
18th & C St., N.W. Juneau, AK 99802 Anchorage, AK 99502
Washington, D.C. 20240
292
Don Bullock
St of AK Dept of Revenue
Pouch S
Juneau, AK 99811
Stephen Burgess
Dept of Fish & Game
333 Raspberry Road
Anchorage, AK 99502
Ruth Burnett
Former Mayor of Fairbanks
410 Cushman St.
Fairbanks, AK 99701
Crystal Coleman
OFI ANGTS
402 Wedgewood Dr.
Fairbanks, AK 99701
McKie Campbell
2695 David St.
Juneau, AK 99801
Vicki Cannard
DOTIPF
Pouch 6900
Anchorage, AK 99502
Cynthia Cook
World Bank
2329 N. Jackson St.
Arlington, VA 22201
Charles Corinth
DOT
Pouch 6900
Anchorage, AK 99502
Paul Cunningham
Dept of Comm & Reg Affairs
Pouch B
Juneau, AK 99811
Michael Cushing
Dept of Comm & Reg Affairs
Pouch B
Juneau, AK 99811
Frank Dalley
Div.of Fam & Youth Services
Dept of Health & Soc Services
338 Denali St., Rm 222
Anchorage, AK 99501
Dr. Bill Davis
do Steve McNabb
· .6133 Kensington Drive
Anchorage, AK 99504
Dr. Nancy Davis
do Steve McNabb
6133 Kensington Drive
Anchorage, AK 99504
Sue Degler
SOHIO
Pouch 6-612
Anchorage, AK 99502
Anne De Vries
State of Alaska
Pouch A
Juneau, AK 99811
Piet De Witt
MMS
Branch of Off-Shore Studies
18th & C St., N.W.
Washington, D.C. 20240
Dennis Dooley
North Pacific Associates
4434 E 5th
Anchorage, AK 99504
Dave Drew
Dept of Trans & Public Fac
600 University Ave., Suite D
Fairbanks, AK 99701
Norman Dupre
US Borax
2415 Hemlock
Box 5320
Ketchikan, AK 99901
Kathryn Eberhart
Ak Dept of Natural Resource:
Div of Agriculture
Pouch A
Wasilla, AK 9968 7
293
Ralph Eluska, Director
Instructional Support
Rural Education
3605 Arctic Blvd. #420
Anchorage, AK 99503
Richard L. Ender
University of AK-Anchorage
3210 Providence
Anchorage, AK 99508
Peter Esposito
Office of the Federal Inspector
Pouch 6619
Anchorage, AK 99502
Gordon Euler
MMS
2636 E. 20th
Anchorage, AK 99504
Carrol Fadar, Mayor
Ketchikan Gateway Borough
344 Front St.
Ketchikan, AK 99901
Kurt Fredriksson
St of AK-Office of Coasfal Mgt
Pouch AP.
Juneau, AK 99811
Betty Galbraith
Biblio Data
544 Longspur Loop
Fairbanks, AK 99701
Bill Galbraith
Biblio Data
544 Longspur Loop
Fairbanks, AK 99701
Tony Gasbarro
Forest & Land Resources
Cooperative Extension-UAF
Fairbanks, Alaska 99701
Lincoln Gayton
BIA Juneau Area Office
P.O. Box 3-8000
Juneau, AK 99802
Jan Gehler
Municipality of Anchorage
Human Resource Planning
Pouch 6-650 ·
Anchorage, AK 99502
Reed Gibby
Alaska DOTtPF
Pouch 6-650
Anchorage, AK 99502
Don Gilman
State Senate
P.O. Box 630
Kenai, AK 99661
Ronald Glass
P.O. Box 831
Juneau, AK 99802
Hershel W. Gober
Northwest Alaska Pipeline
ioo1 Noble St., Suite 300
Fairbanks, AK 99701
Nat Goodhue
Div of Parks
619 Warehouse Ave.
Anchorage, AK 99501
Bill Griffith
Ak Transportation Consultants
212 C Wedgewood Dr.
Fairbanks, AK 99701
Dr. Thomas A. Grigalunas
Resource Economics
Univ. of Rhode Island
Kingston. Rl 02881
Ken Hamm
Nunam Kitlutsisti
Box 267
Bethel. AK 99559
John A. Hampton
DOT
Pouch 6900
Anchorage, AK 99502
Ellen H. Hayes
National Parks Service
540 West 5th Ave.
Anchorage, AK 99501
Gary Hennigh
Dept of Trans/Public Fac
4111 Aviation Ave.
Pouch 6900
Anchorage, AK 99502
John Hickey
Conferences & Institutes
UAF
Fairbanks, AK 99701
Tom Hicklen
Alyeska Pipeline Seryice Co.
1835 S. Bragan St.
Anchorage, AK 99512
M. A. Higgins
Woodward-Clyde Consultants
701 Sesame St.
Anchorage, AK 99503 ·
JoAnn Holmes
North Pacific Rim
903 W. No. Lts., Suite 203
Anchorage, AK 99503
Alice Hossfeld
Bureau of Land Management
P.O. Box 82121
Fairbanks, AK 99708
Jon Isaacs
Woodward-Clyde Consultants
701 Sesame St.
Anchorage, AK 99503
Ron Inouye
Conferences & Institutes
UAF
Fairbanks, AK 99701
Madelaine Jacobs .
225 108th Ave. N.E. Suite 311
Bellevue, Washington 98004
294
Karen Janicek
3500 LaTouche, Suite 301
Anchorage, AK 99508
Katherine Jesch
Los Padras Nat. Forest
42 Aero Camino
Goleta, CA 93117
Joel Johnson
Denver Research Institute
2455 E. Asberry
Denver, CO 80208
Nina Johnson
State Legislature-House Democrat
Pouch V
Juneau, AK 99811
John Paul Jones
Box 267
Bethel. AK 99559
Dr. Alan Jubenville
School of Agric & Land Res
UAF
Fairbanks, AK 99701
Gretchen Keiser
8278 Gamet St.
Juneau, AK 99801
Dennis Kelso
AK Management Tech.
1135 W 8th Ave.
Anchorage, AK 99510
Ronald D. Kelso
Gen. Accounting Office
Box 18, Room D-267
701 C Street
Anchorage,·AK 99513
Sigrid Khera
716A Chandalar
UAF
Fairbanks, AK 99701
----------------.
Dr. Robert E. King
BL).1-Fairbanks
328-! :\dams Dr. =A-302
Fairbanks. AK 99701
Lesly,e Korvola
F:\SB-CRC
Advisory Board Member
1094 Coppet St.
Fairbanks, AK 99701
Steve Konkel
Div of Policy Dev & Planning
450 Court Bldg., Pouch AD
Juneau, AK 99811
Steve Langdon
Dept of Anth.-UAA
3221 Providence Drive
Anchorage, AK 99508
Dr. Robert Lee
College of Forest Resources
AR-10, U of Washington
Seattle, WA 98195
Dona Lehr
Div of Policy Dev & Planning
450 Court Bldg., Pouch AD
Juneau, AK 99811
Adrian Longacre
Dept of Comm & Reg Affairs
Pouch B
Juneau, AK 99811
Dr. Thomas Lonner
U of A
3211 Providence Dr.
Anchorage, AK 99504
Amos Mathews
Office of Fed Trans
lOO l Noble St.. Suite 350
Fairbanks, AK 9970 l
Dr. Gerald A. McBeath
Assoc. Prof. Political Science
UAF
Fairbanks, AK 99701
Maureen McCrea
MMS
800 A St.
Anchorage. AK 99510
Betsey W. McGuire
Council on Domestic Violence
Pouch N
Juneau, AK 99811
Peggy E. McNees
Dept. Natural Resources
Pouch 7-005
Anchorage, AK 99510
Ms. Terry McWilliams
2270 Knoll Circle
Anchorage, AK 99501
Dawn D. Mach
FNSB
P.O. Box 1267
Fairbanks, AK 99707
Dr. John Middaugh
AK Dept of Public Health
3010 Glasien St.
Anchorage, AK 99504
Tom Middenlort
DOT
2360 Homestead Ct., Apt. E
Anchorage, AK 99507
Harold W. Moles
NW Alaskan Pipeline Co.
100 I Noble St., Suite 300
Fairbanks, AK 9970 I
Tom Morehouse
ISER
707 A St.
Anchorage, AK 99501
Thomas Newbury
Lower Fire Lake West
Eagle River, AK 99577
295
Chri-stopher Noah
Executive Director
AK Council on Science & Tech.
Pouch CV
Juneau. AK 99811
Heinz Noonan
· .Economist
Ak Power Authority
334 W. 5th Ave.
Anchorage. AK 9950 l
Dupre Normand
US Borax
2415 Hemlock
Box 5320
Ketchikan, AK 99901
Louis Overstreet
8521 Golden St.
Anchorage, AK 99502
Walter Overton
Kuskokwim Native Assoc.
Box 106
Aniak, AK 99557
Loren Pahlke
8643 Cameron St.
Anchorage, AK 99507
Walt Parker
Parker Associates
3724 Campbell Airstrip Rd.
Anchorage, AK 99504
Charlie H. Parr
SR Box 50599
Fairbanks, AK 9970 I
Roger Pearson
Georgraphy Dept.
UAF
Fairbanks, AK 99701
K.1ren Perdue
Fairbanks. AK \JIJ70!
John Petterson
Outer Continental Shelf
Univ. of CA. San Diego
Dept. of Anthropology
San Diego. CA -?2093
William Pink
1\ati\·e American
Heritage Comm.
1-l:OO lOth St.
Sacramento. CA 95814
Richard Rainery
Rural Development Council
Pouch B
Juneau, AK 99811
Rob Ridgway
Comm. Dev. Director
City of Valdez
Valdez, AK 99686
Eleanor C. River
State of AK. Dept of Labor
42.0 L St.. Suite 100
Anchorage. AK 99501
E. Allen Robinson
US Dept. of Housing
& Urban Dev.
701 C St. · Box 64
Anchorage. AK 99513
Roy Roehl
1001 Noble #350
Fairbanks, AK 99701
Peter Rogers
Frank Orth & Associates, Inc.
225 108th Ave. NE Suite 311
Bellevue. WA 98004
David Ruppert
Federal Inspector's Office
1001 Noble St., Suite 350
Fairbanks, AK 99701
Herman A. Schmidt
Sohio Alaska Petroleum Co.
Pouch 6-612
Anchorage. AK 99502
Bill Semmes
Alaska State Parks
3731 University Way, N.E.
Seattle. WA 98105
Richard V. Shafer
Sohio Alaska Petroleum Co.
Pouch 6·612
Anchorage, AK 99502
Floyd Sharrock
SRA Box 304
Anchorage, AK 99507
Derek Sherman
Louis Birchert Associates
212A Wedge wood Dr.
Fairbanks, AK 99701
Paul Sherry, Director
Regional Services
Tanana Chiefs Conference
201 First Ave.
Fairbanks. AK 99701
Dr. Leah J. Smith
Woods Hole
Oceanographic Inst.
Woods Hole, Mass 02543
Larry Soden
State of "Alaska DOT!PF
600 University Ave., Suite D
Fairbanks, AK 99701
Barbara Sokolov
University of Alaska (AEIDC)
707 A Street
Anchorage, AK 99501
James N. Souby. Director
Div of Policy Dev/Pianning
Office of the Governor
450 Court Bldg., Pouch AD
Juneau, AK 9981 1
296
Richard Spitler
Planning Supervisor
Div of Community Planning
Dept of Comm & Reg Affairs
310 Community Bldg .. Pouch E
Juneau, AK 99811
Norman Stadem
1826 E. 26th
Anchorage, AK 99504
Mark Stephens
Div of Com Planning
225 Cordova St., Bldg. B
Anchorage, AK 99501
Ted Stevens
U.S. Senate
127 Russell Office Bldg.
Washington, D.C. 20510
Clyde Stoltzfus
Copper River Native Assoc.
Drawer H
Copper Center, AK 99573
Virginia Stankus
Office of the Governor
Div of Budget & Management
Pouch AM
Juneau, AK 99811
Derenty T a bios
Chugiach Natives, Inc.
-.JOJ W. No. Lights Blvd., #201
Anchorage, AK 99503
Dennis Tiepelman
NANA Regional Corp.
P.O. Box 49
Kotzebue, AK 99752
Susan Todd. Project Man.
Tanana Basin Forestry Plan
Div. of Research & Development
Dept. of Natural Resources
4420 Airport Way
Fairbanks. AK 9970 L
-I
John Tremont
:V!inerals :V1gmt Service
P.O. Box 115-?
,-\nchorage. AK 99510
Charlotte Thomas
Alaska Power Authority
33-! W 5th Ave.
Anchorage. AK 99501
W. M. Toskey
Offic~ of Federal Inspector
1001 Noble St. ,f350
Fairbanks. AK 99701
Amy L. Van Domelen
Municipality of Anchorage
Pouch 6·650
Anchorage, AK 99502
Mr. Ton~ Vaska
State Representative
P.O. Box 892
Bethel. AK 99S59
Edith L. Walker
City of Delta Junction
Box 314
Delta Junction. AK 99737
Margo Waring
Senator Sturgulewski's Office
Pouch V
Juneau, AK 99811
Austin G. Ward
OFI ANGTS
WO 1 Noble St.
Fairbanks. AK 99701
Mavis Waarvik
Dept. of Trans&: Public Fac
Pouch Z
Juneau. Ak 99801
Kent Ware
Gulf Oil
1307 E 75th St.
Anchorage. AK 99502
Paul Z. Wasserman
Dept. of Interior. OCS. S-ESP
1421 N Street
Anchorage. AK 99501
Dr. Leon Webber. Director
Family Institute of Alaska
3500 LaTouche
Anchorage. AK 99508
Leila Wise
123 West 12th
Anchorage. AK 99501
Craig Weise
Marine Advisory Program
2751 Providence Ave.
Anchorage. AK 99504
Pam Wells
3323 Wesleyan
Anchorage. AK 99504
Cynthia Wentworth
U.S. Fish &: Wildlife Service
101 11th Ave .. Box 20
Fairbanks. AK 9970 I
Carol Wilson
Dept. of Natural Resources
Pouch 70005
Anchorage. AK 995 10
297
Dr. Charles P. Wolf
Box 587
Canal St. Station
New York. N.Y. IOOU
Ms. Rosita Worl
Arctic Environmental Info.
and Data Center
707 A St.
Anchorage. AK 99501
Esther W unnicke
Minerals Management Service
800 A St.
Anchorage. AK 99510
Glen Yanjus
Minerals Management Service
800 A St.
Anchorage. AK 99510
Marvin Yoder
Ketchikan Gateway Borough
344 Front St.
Ketchikan, AK 99901
AR 1
HC
107
A45
~52
198: