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Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
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3
A Framework for Organizing OCS Socioeconomic Studies

The subject of discussion here is the charge to the Department of the Interior's Minerals Management Service (MMS) to predict and manage the effects of outer continental shelf (OCS) activities on the human environment. To do this, MMS must acquire socioeconomic information. The first step is to decide what kind of information is needed—a difficult task, because the foundation on which to build is so meager. Enough is known already about physical oceanography and ecology that the additional information needed to predict and manage the effects of OCS activity on the physical environment can be described. Information about bowhead whales is not needed in the Gulf of Mexico, and information on sea turtles is not needed in Alaska. But it cannot be said that information on subsistence lifestyles is not needed in coastal Louisiana or that information on tourism is not needed for Alaska's North Slope. What is clear is that, as is the case for ecology and physical oceanography, different aspects of the human environment will be more or less important in different places. Therefore, instead of laying out a detailed list of the information MMS should obtain—an obvious impossibility at present—the Socioeconomics Panel here describes an approach that, if carefully applied by knowledgeable people, will lead to the development of a studies program that is responsive to the requirements of the Outer Continental Shelf Lands Act as amended in 1978 (43 U.S.C. §§1331-1356, §§1801-1866) and MMS's needs. The generally high quality of the socioeconomics program in MMS's Alaska region is evidence that the task is feasible.

The process of identifying the information needed for impact assessment and management (often called "scoping") comes from the requirement of the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. §§4321-4347) that lead agencies undertake "an early and open process for determining the scope of issues to be addressed and for identifying significant issues related to a proposed action" (Council on Environmental Quality, 1980). In this process, agencies receive many public comments on what is important. There is a tendency for those who work in federal agencies (and many other specialists) to dismiss public concerns as inexpert. This assessment is accurate in some cases; most of the public is not expert on ocean currents, engineering, or population ecology. But everybody is an expert on her or his fears, desires, wants, needs, and values. And it is crucial for federal agencies to obtain this information and use it as part of the process of determining socioeconomic effects. Expert practitioners can provide expert advice, but more than for other disciplines, setting the socioeconomic research agenda requires public involvement.

IDENTIFYING AND UNDERSTANDING SOCIOECONOMIC EFFECTS

An effect, for the purposes of this chapter, is a change to existing conditions caused by a

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

specific, identifiable action. What is or can be changed varies widely, and what is threatened, put at risk, or improved by a proposal or by an action also varies widely. In the case of activities on the outer continental shelf, the threats can be as specific as the possibility of an oil spill on a beach, or as hard to define as the alteration of a way of life. The benefits can be as specific as the creation of jobs, or as intangible as "national security." A fundamental consideration is discussed in the first report of the OCS Committee (NRC, 1989a):

People conceive of possible impacts and perceive of their probabilities in terms of their environment as they experience it and not necessarily an environment constructed of features selected by an objective analyst. Because human socioeconomic systems are social and symbolic, people in different environments or milieus can have different views of those environments that are equally realistic. Because these views are real, they have real consequences (emphasis in original).

In addition to giving a detailed baseline description of particular human environments, a framework for evaluating effects must at a minimum examine three additional elements: actions that can cause effects and the possible reactions to them, the dimensions of the effects, and the distribution of the effects throughout the human environment. (These are discussed in detail in Appendix B.)

OCS ACTIVITIES THAT CAN AFFECT THE HUMAN ENVIRONMENT

For the systems that have been the subject of most of MMS's research, it is probably a safe assumption that effects cannot take place until there has been an actual physical alteration of the environment. This is not true of the human environment. Humans and their social systems can and do respond to information concerning prospective changes in the physical, biological, and social environment. For the purposes of MMS this can be the announcement of a lease sale, a part of the analysis in an environmental impact assessment, or a remark by an MMS official quoted in a local newspaper. Alterations in social systems—before any biological or physical change has occurred—can result in members of the public changing their behavior, sometimes drastically; these changes are included in the basic definition of an effect.

Freudenburg and Gramling (1992) call these effects "opportunity-threat impacts:; they happen as proponents and opponents of the action define the action either as an opportunity or as a threat. The contentiousness of the debates over lease sales in the Florida Keys, in northern California, and in Bristol Bay, Alaska, are evidence of opportunity-threat impacts, and no one who attended a hearing in one of those communities would doubt that people's lives had been altered, even though no change in the physical environment had yet occurred. These effects are real, and so are their consequences. The congressional and presidential moratoria that have all but shut down the federal OCS leasing program outside the central and western Gulf of Mexico and Alaska are among the consequences of such effects, which have not been adequately considered by federal agencies.

Another failure to consider the full range of effects on human environments comes about as analysts overlook the adaptability of humans and their social systems to a variety of circumstances. Unlike that for most biological or physical systems, the question for humans is usually not whether adaptation will occur, but what form the adaptation will take and what the consequences of that adaptation will be. For the purposes of MMS, the coastal Gulf of Mexico offers an illustration. The human environment there has been changed by the offshore oil and gas activities of more than four decades. Although the adaptability of humans (made possible by the human culture) is part of the

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

reason the species now dominates the planet, there can be problems with overadaptation. In adapting to specific opportunities, such as the discovery of petroleum resources offshore, the individual or community can become so specialized that it adapts only with difficulty to further changes, such as the inevitable exhaustion of the resources. Some anthropologists call this "loss of adaptive flexibility" (Bateson, 1972; Slobodkin and Rapoport, 1974; Rappaport, 1977, 1979) and sociologists call it "overadaptation" (Gramling and Freudenburg, 1992; Freudenburg and Gramling, 1992). The problem occurs as over long periods, and in many ways, adaptation uses up existing resources; once the activity declines or ceases, the region becomes less flexible (because some of the resources have been used up in the process of adapting) than they were before. The plight of coastal communities in Louisiana that floated bond issues to build ports to handle OCS development could be illustrative. As the activity declined, the port brought in less revenue and supported fewer jobs, but their bonded indebtedness prevents communities from raising more money for new projects. Similarly, decisions to maximize the benefits of offshore oil for a local economy might well have opportunity costs, excluding alternatives such as fishing or tourism.

The actions commonly undertaken by MMS that can affect a community range from prelease announcements to long-term patterns of leasing (NRC, 1989a). It is important to note, as the earlier report emphasized, that effects on the human environment—real, empirically verifiable effects—can occur long before the first physical alteration occurs and can continue long after the activity has ceased. This does not mean that developmental effects (those that occur as a result of the physical construction or operation of a project) should be ignored, but rather that the full range of effects, from opportunity-threat impacts to adaptation, must be considered. Because the panel's analysis of the activities that can cause effects and their dispersion in the human environment has not changed much since its earlier presentation (NRC, 1989a), that discussion is paraphrased here.

Description of OCS Activities

The activities associated with OCS oil and gas exploration and drilling can be described as fitting into five stages (for a more detailed discussion, see Appendix C):

  • Prelease activities include the announcements of the government's intention to lease, the preparation of supporting documents (environmental impact statements; secretarial issue documents), and the lease sale itself. The effects are anticipatory; they occur before there is any physical change to the human, coastal, or marine environment. They include such responses as fear, anger, distrust, uncertainty, and resentment and are amplified as groups and communities organize to prepare for, resist, or block OCS activity through legal, political, or direct action. These responses are effects that can be studied. Social and political conflict also can develop as those who favor development and those who oppose it confront one another. Finally, but still important, are the directly measurable effects that can occur at this stage, including land speculation and the initial pressures on planning and construction of infrastructure.

  • At the exploratory stage, other effects can begin. Conflicts over the planned use of the sea, for dock space, for housing, and for transportation routes are seen. At this stage, the economic and population growth associated with the project can begin. Finally, with the onset of drilling, there is the possibility of spills.

  • With development, the need for land-based support reaches its maximum, as do employment and the purchase of goods. At this stage, OCS activities can transform the social and economic environment of the community (Bunker, 1984; Gramling and Freudenburg, 1990).

  • Production, which is technology-intensive rather than labor-intensive, begins to shift

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
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OCS activities from the vicinity of the field itself to the areas of subsequent processing and use. Local communities experience drops in employment as support activities for drilling decline and as job skills appropriate to and learned for the development phase are less in demand. The potential for spills decreases or increases depending on whether the petroleum is to be transported by pipeline or tanker. Pipelines are safer, but their use can engender new conflicts over the use of space.

  • Termination, in whole or in part, brings an end to some effects and signals the start of others. Although employment generally falls off as the oil and gas reserves become exhausted, a short-term influx of population can be associated with the process. Some alterations of the social and economic environment associated with an extractive economy are not immediately reversible, or might be reversible only at very high cost. Socioeconomic systems adapt to the extraction of oil and gas, termination can cause new stresses. Residents and capital (or investment) can move out of the area at the termination phase or in the wake of a major spill or accident.

Within a given region, such as the Santa Barbara Channel in California, these stages can occur simultaneously for different leases or groups of leases.

Dimensions of Effects

Determining how an activity might affect the human environment is critical, whatever disciplinary view is adopted. Commonly considered dimensions include the following:

  • How likely is the incidence of a given effect? It is often impossible to predict what effects will attend an OCS project. This implies that it is inappropriate to measure losses only in terms of their expected ("average") value. Here the concepts related to who bears the risk, what the public perception of risk is, and how to assess the degree of risk are important, because significant costs can be associated directly with the increased risk. These costs vary from risk aversion, which is relatively straightforward, to the difficult to quantify but important effects of fear, uncertainty, and doubt. Risk bearing, risk perception, and uncertainty are critical components of the public reaction to proposed OCS oil development and they must be accounted for in any measurement of effects on the human environment (Kahneman and Tversky, 1979; NRC, 1989b). Many people perceive the likelihood of oil spills as being greater than it is. In addition, determining "objective" probabilities is itself difficult (Clarke, 1988; Freudenburg, 1988). An adequate assessment of the effects of OCS development projects should, of course, include estimates of the more certain effects of normal operation as well.

  • What is the size or severity of a given consequence? This is the most obvious dimension of effects on the human environment. It matters that an activity produces 20 jobs or 500, that a spill is 2,000 barrels or 200,000, that people's jobs or lives are threatened.

  • When, where, how long, or how big will a change be? Are the effects continuous or periodic, how long do they last, when do they occur (in winter or summer, during salmon-spawning season, during tourist season)? The spatial dimension is difficult to assess for socioeconomic effects: The ecological effects of an oil spill can be spatially delineated, but the public response can be national or even international. The Exxon Valdez spill affected the way the public perceives the activities of oil and gas producers, even though no OCS oil was involved.

  • How does one effect add to others? Is there a cumulative effect? Often, effects cannot be predicted simply by adding up the activities that create them. For example, one offshore-support vessel working out of a small harbor might produce a small change; a second might approximately double that (twice the demand for dock space, fuel, drinking water, waste disposal).

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

But after some increase in the number of vessels, qualitative changes can occur. The need for new docks, new fuel delivery routes, new water sources, additional waste treatment facilities, and other changes can result as the increased demand exceeds the capacity of existing facilities.

  • Can the damage be repaired? Some effects can be mitigated: payment can be made for lost wages, wetlands might be restored, taxes can be paid to cover increased local expenses and services. Other impacts cannot be ameliorated: If the physical environment is perceived to be unique, and if human activity or local culture are directly tied to that environment, as in the Florida Keys or in Bristol Bay, Alaska, then the effects also will be difficult or impossible to mitigate.

  • How do the effects interact? Each dimension can be considered alone, but all of them must be considered together. Thus, the probability of an event such as a blowout during exploration is low, but its effects could be severe and the possibility of repairing its damage might be slight.

DISTRIBUTION

The effects of activities on the outer continental shelf are distributed unequally to various elements of the human environment (e.g., Wolf, 1983; Dietz, 1987). For example, Gramling (1980) found that white males enjoyed disproportionate employment benefits associated with escalating OCS activities in the northern Gulf of Mexico. Coastal communities are obviously more likely to feel direct effects than are inland communities. Some consequences are distributed across geographic locations, ages, classes, races, and future generations. Intergenerational equity, an important consideration when there is an irretrievable commitment of resources, is important in economics and ethics. In general, the environmental risks of OCS oil production are borne disproportionately by residents, whereas the benefits largely go elsewhere. Harm can be national as well as local, however; cleanup costs and higher seafood prices, for example, can affect a region or the nation. Effects can be beneficial, harmful, or both at the same time; one appropriate way to consider them is according to the distribution of costs and benefits among different segments of the community and the society at large.

The economic effects of OCS development can be different for residents, producers of goods and services, and governments. Residents can experience a general reduction in an area's aesthetic benefits because of the intrusion of development; public health can suffer from increases in air and water pollution; and changes (positive and negative) in the quality and quantity of recreational opportunities (from alterations in recreational fish populations and physical alteration of beaches) can take place. OCS development can change residents' job opportunities, and, to the extent that they are uncomfortable with OCS leasing and its potential effects, residents will experience fear, uncertainty, and doubt.

Producers of goods and services can be affected as well. Commercial fisheries and charter operations can suffer from reductions in fish populations and area preemption and gear loss. Hotels and restaurants can lose revenue if OCS development reduces the general tourist trade. Any losses to primary natural resource industries can lead to reductions in demand for inputs into these industries and in the general level of economic activity. In addition, OCS activity can preclude other development and lead to increased competition for inputs, such as labor or air pollution permits in nonattainment areas.

Federal, state, and local governments also can be affected. The most obvious effect is the federal revenue from lease sales, royalties, and area rent. But state and local governments also can face fiscal changes to the extent that revenues are generated from OCS-related activities or to the extent that local businesses are harmed or helped: Tax revenues can rise or fall depending on which group is involved. State and local governments can face significant costs and pressures related to

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

planning for and mitigating the effects of OCS oil development because of the increased demand for public services. Finally, other publicly owned natural resources, such as commercial and recreational fisheries, can be affected by OCS development.

PREDICTING THE RESPONSE

Response Functions

Unlike physical systems (Trimmer, 1950), social systems frequently respond to change in nonlinear and discontinuous ways. Because of "social amplification" (Kasperson et al., 1987), public responses can seem quite disproportionate to the events that precipitate them. The public response to the 1969 Santa Barbara, California, oil spill is a case in point. Just as there is no simple one-to-one correspondence between social structure and functions, "there is no simple one-to-one relationship between variations in inputs and outputs" (Emery and Trist, 1972). For example, Holling (1978) points out that "within broad geographical and temporal limits, impacts mediated by social and economic processes need bear no obvious relation to the initial investment. For example, the local environmental impacts of a pipeline project in a developing region can usually be identified and ameliorated. But the induced effect of the invasion of capital and of construction workers on settlements remote from the pipeline can have dramatic social consequences that cause more significant environmental impacts than the pipeline itself."

Response Sequences

Adaptive structures are characterized by ordered sequences of responses that typically unfold in graduated and coordinated patterns (Rappaport, 1979). Initial responses tend to be quickly mobilized and energetically and behaviorally expensive, but easily reversible. Later responses can involve structural change and diminished flexibility. Coordination of responses is usually regulated through a hierarchical organization. Effects at the response stage can take the form of increases in structural complexity and shifts toward centralization in the locus of control. Response sequences can become disordered; interaction effects can impair adaptive capacity. These alterations represent the evolving and emergent states of social conditions and the social systems of the human environment.

Response Rates

Response rates, the temporal distribution of adaptive structures, can be expressed in terms of resource creation and mobilization. "Mobilization is the process by which a group secures collective control over the resources needed for collective action. The major issues, therefore, are in the resources controlled by the group before mobilization, the processes by which the group pools and directs these toward social change, and the extent to which outsiders increase the pool of resources" (Jenkins, 1983).

Applied to movements of institutional change, such as those formed in response to perceived threats to a group's way of life, the basic resource model involves "rational actions oriented towards clearly defined, fixed goals with centralized organizational control over resources and clearly demarcated outcomes that can be evaluated in terms of tangible gains" (Jenkins, 1983). Despite the anticipation of effects, readjustive change tends to lag behind conditions of rapid growth, especially

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

with regard to the availability and adequacy of infrastructure (Weber and Howell, 1982). The social technology for coping with these ''structural strains" appears at the end of the assessment process, which consists of evaluation, mitigation, monitoring, and management.

IMPACT EVALUATION

The response of adaptive systems to changes in their states and structures depends in part on the perception of effects, followed by the attribution of causes and the interpretation of consequences. The evaluation of consequences depends on the criteria of significance and acceptability. In recent years, the evaluation of change has been extensively analyzed in terms of risk, defined here as the probability of harm. In the terminology of risk assessment, the corresponding terms are risk perception, risk attribution, risk evaluation, and risk acceptance. The process by which risk perception and evaluation are transmitted and shared is risk communication. The individual and collective decisions made in response to risk communication make up risk management. This discussion focuses on the evaluative criteria for significance. It also reviews valuation procedures for ranking and weighting preferences, and for designating a preferred alternative to a proposed action.

Evaluative Criteria

The determination of the significance to the community of an effect is a value-added process that requires participation by members of affected and interested groups. Public participation is relevant and important at every step of the assessment (Daneke et al., 1983; Erickson, 1985); it is essential in determining whether an assessed effect is regarded as beneficial, harmful, neutral, or all three in varying combinations over time, space, and affected groups. For example, should a change in the number of hospital beds or lawyers per thousand people be interpreted as desirable, as undesirable, or as having no effect?

Although it is indispensable to the evaluation, the expression of a public preference might not be critical in deciding on a preferred alternative. The power to make such decisions traditionally has resided with public agencies, which derive their legitimacy from representing the public interest. But the concepts of representation (who does the determining?) and the public interest (on what criteria are decisions made?) are not universal; understanding them depends on scientific understanding as well as on the public's understanding of science.

On the technical side, latent "expert versus public" conflicts are implied in the distinctions between "real" and "perceived" risk (Covello, 1983) and between technical risk analysis and public risk evaluation. Risk analysts believe that because they apply such methods as revealed preference and probabilistic risk assessment, their estimates are more accurate and objective than are the evaluations of the public. On the institutional side, disputes occur over evaluative criteria and decision power. Experts too often elevate objective rationality to the highest rank and they too often view the public as harboring irrational fears. Because reason is on the side of the experts, they argue, they or those who employ them should make decisions. Needless to say, such attitudes along with agency bias alienate and antagonize members of the lay public, who are the real experts on their own interests and values (Timmerman, 1984). This is perhaps the most persuasive argument for including members of the public in setting the research agenda for socioeconomic impact studies.

What divides experts and the public is not the value of rationality as such, but the kind of rationality used and the social control exercised over it. Experts tend to uphold an instrumental rationality in which people are included among the means to achieving a socially valued goal. On the

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

other hand, the public tends to rely on what has been called a "coherent" rationality that subordinates impersonal goals to the rule of reasonableness, taking into account the relevant social contexts and values.

Values are included in both types of rationality, but in instrumental rationality people (and collectivities, such as families and communities) are considered mainly as means to an end, whereas in coherent rationality they are considered the end itself, and this gives them an aura of moral inviolability. The difference could be put in terms of efficiency on the side of instrumental rationality and equity on that of coherent rationality. The practical implication is that in the former, technological possibility forms the starting point; in the latter, sociopolitical constraints do. The link with political analysis is forged in Easton's (1979) definition of politics as the "authoritative allocation of values." This emphasis on values is well placed because "How safe is safe enough?" is fundamentally a question of values, not of science (Fischoff et al., 1984).

Valuation Procedures

The issue of science versus politics further impinges on the selection and application of valuation procedures. Many rational methods for ranking and weighting preferences have been proposed, for example, in "multiattribute utility theory" (Keeney and Raiffa, 1976) and in "contingent valuation" (Mitchell and Carson, 1969). One calculus for determining public preference and choice uses a "weighted input" scheme (Krimsky, 1984): Decision units (families and communities) are weighted by the probability of their exposure to risk and its consequences. In light of the preceding, however, it is not surprising that evaluation seems to be more a process of political negotiation (Raiffa, 1982) than of numerical calculation. Given the social and political realities of impact situations, involving multiple purposes and groups, negotiation is inescapable. The experiences of New Jersey, as described by Hance et al. (1988), and two case studies of social impact assessment in Canada (Erickson, 1985), make clear that the public must be involved in the process and must trust the motivations of the people who assess effects. Those discussions also make clear that no matter how good the analyses are, it is rarely possible to satisfy all parties.

The political dimension is further underscored by the differences in access to and control over intellectual and informational resources by the interested parties. A "fair" bargain implies equality among parties and parity of interests, but the social reality can be quite otherwise. There are limits to political solutions, resting as they do on the preferences of shifting coalitions and on the indefinite relation of information and decision (see below). One year's political solution can be the next year's political catastrophe.

The rational calculation of socioeconomic preferences incurs difficulties of its own regarding the valuation of nonmarketables, which often are held to be inherently qualitative, subjective, or intangible. The invocation of higher principles mentioned previously is partly responsible for this impression in the evaluation of the legitimacy of computational techniques that can place one party's vital interests at risk, as happens, for example, in "negotiating a way of life" (La Rusic et al., 1979). In fact, the value of a life or a species is rationally and routinely calculable on narrow technical grounds. Rather, the point is that in some value contexts such calculation violates moral sensibility and autonomy. Issues surrounding these situations and their unique features are declared non-negotiable. No better demonstration need be asked of the partiality of objectivity and the non-neutrality of information.

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

Preferred Alternatives

The evaluation of effects is one step in the process of designating a preferred alternative. How the decision is reached can go far beyond the information provided about effects, however. Although the legal requirement for impact assessment leads participants to expect that the process itself will establish grounds for a decision, the result could rest on factors outside the assessment. Legislative authorizations such as the National Environmental Policy Act of 1969 (42 U.S.C. §§4321-4347) stipulate that public officials consider impact information in reaching their decisions. Nevertheless, the relationship between the information they consider and the decisions they reach is not straightforward and the process itself lacks transparency.

These circumstances again point to a paradigm clash between instrumental and coherent rationality. Conflict resolution in this case requires an integration of facts and values, of science and politics. By rational analysis, impact evaluation can determine the balance of benefits and harm that can accrue to various affected groups as a consequence of a proposed action. Whether the public will judge those effects to be beneficial and acceptable to individuals, families, or communities depends further on provisions for mitigation.

MITIGATION

Mitigation is based on the identification, projection, and evaluation of effects that could be associated with a proposed action. The aim of impact mitigation is to bring the estimated values of impact variables to within an acceptable range.

The basic requirement of impact mitigation is that the public likely to be affected by an action will accept the likelihood of any benefit or harm the action would bring. Any viable mitigation strategy must therefore seek to create conditions that are conducive to public acceptance. Foremost among these is active public and community involvement in the assessment process itself. Such involvement raises public expectations of respectful and equal treatment, however. The condition of meaningful participation is genuine sharing of decision power between proponents of a proposed action and those who will bear its effects.

For there to be a process of participation there must be a basis for participation. Laying the foundation can entail the empowerment of persons involved in negotiating mitigation measures. It should not be assumed that elected officials adequately represent their constituents' interests, or that constituents know what the interests are with certainty and finality. Moreover, broadening the basis of participation will affect the distribution and dispensation of power. Although that is a political reality in many cases, power sharing as a mitigation strategy far exceeds the current formal authority of public agencies. The conditions of meaningful participation lie outside agency control and rest instead with the larger political system.

There is another, principled reason that autonomous power is a condition for risk acceptance. It goes beyond the interplay of special interests to the core of common values that can be said to constitute the public interest, the notions of justice as fairness (Rawls, 1971) and of respect for the rights and interests of potentially affected groups. This is especially the case where imbalances are perceived between the benefits and harms of a proposed action, such as the construction of a hazardous-waste facility. Timmerman (1984) points out that

one area or community is being asked to take on what is presented to them as a reasonable burden for the sake of a larger social and political community of which they are a part. That is, an appeal is being made on one level to people's sense of

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

community spirit, above and beyond any proposed package of additional benefits or compensation.

The only way for this appeal to catch on…is to operate within the moral framework it invokes. That means…treating a community as an end in itself, rather than as a means to some proposed goal, such as siting a facility. If a community is to be asked to act on behalf of the larger, political entity, that entity is obliged to consider its reciprocal obligations to respect the worth of that community operating as a community, by being seen to act in its best interests as well.

As a practical matter, there is a voluntary dimension to risk acceptance (Slovic, 1987) and to an attribution of control associated with it. It appears that community control is a potent factor in risk acceptance that extends the range of mitigation measures available.

Mitigation Measures

The range of mitigation measures can be viewed as consisting of enhancing effects, avoiding them, or mitigating and compensating for them. To enhance an effect is to maximize its benefits; avoidance minimizes harm. Unavoidable effects can be mitigated by economic incentives (compensation) or noneconomic ones. Mitigation is generally applied in anticipation of an effect; compensation is made after the effect occurs.

Economic incentives range from direct payments (impact fees, subsidies to community facilities and for services, prepayment of taxes) to payments such as for the purchase of land to compensate for wildlife habit destruction. In between are the creation of insurance funds, for example to guarantee property values, and policies that provide for hiring local workers and purchasing goods in the community. Noneconomic incentives range from granting access to information to allowing community supervision of proposed activities. They include access to information about site development and management, providing funds for hiring independent experts, allowing communities to monitor site operations, giving communities representation on facility governing boards, and awarding local authority to shut down a facility when treatment or management deficiencies are found. Together, these items form a package of control measures perceived to enhance risk acceptability far beyond that achievable through monetary incentives alone. Survey research findings from Wisconsin, Pennsylvania, and Tennessee confirm the effectiveness of these measures for site selection and regulation.

These measures can be specifically and selectively applied at policy, program, and project levels of assessment. Policy adjustment can alter the mix and balance of planning goals and objectives in accordance with public preference. Program alterations can similarly revise planning guidelines and design specifications. Project modifications can tailor operating procedures and activities to suit local conditions. In all cases, proposed mitigation measures must be subjected to the same kind of assessment that the proposed action receives, for example, by means of sensitivity analysis. To validate predictions of the measures' effectiveness in practice involves one more step: monitoring the effects of an action.

MONITORING

Mitigation should be coupled not only with predictions of effects, which often are imprecise (NRC, 1986; Culhane et al., 1987), but also with their occurrence. Impact monitoring provides the basis for comparison between the two. As in the case of mitigation, the very same impact variables identified and analyzed in the assessment steps form the monitoring system's structure. The kinds of

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

monitoring likewise follow the pattern of assessment (Carley and Bustelo, 1984). The goal of monitoring is to measure the effects linked to the proposed action in interaction with the human environment and to communicate the results to decision makers and the public for their use in deciding how to manage or mitigate those effects. Monitoring data also are used to inform future decisions about the effect of proposed projects and to evaluate the effectiveness of policies.

A generic problem of the impact assessment process mandated by the National Environmental Policy Act of 1969 has been the lack of sufficient monitoring in all phases of project development. Because of geological, technical, social, and political uncertainties, roughly proportional to project scale, development plans are subjected to frequent and abrupt modification; review of a proposed action at one point in the process does not accurately describe the actual or expected effects of a project. What you see once is distinctly not necessarily what you get later. Under these circumstances it is difficult to assign responsibility or enforce accountability for project development.

One corrective action would be to repeat assessment later in the development of a project (Clark et al., 1983). Far better would be to require a continuous process of assessment by instituting monitoring procedures like those employed by the Tri-County Socioeconomic Monitoring Program (1990) to assess current and cumulative effects on project expenditures, population growth, and public services. In addition to offering a direct benefit in the form of community involvement, such a program is instrumental in the effective assertion of community control.

Types of Monitoring

Socioeconomic monitoring can be categorized as shown in Table 3-1.

Technology monitoring includes following trends in technology development and project-specific applications. Implementation monitoring tracks the course of project development, including institutional and managerial factors. Environmental and ecological systems monitoring traces indirect socioeconomic effects through media and biota. Trend impact monitoring compares actual with projected changes in social conditions and systems, compiled for the ''future without" the proposed action in quality-of-life indices.

TABLE 3-1 Socioeconomic Impact Monitoring

Proposed action

Technology monitoring; Implementation monitoring; Environmental monitoring

Human environment

Trend monitoring; Quality-of-life monitoring

Response

Issues tracking; Mitigation monitoring; Compliance monitoring

Direct effects on the human environment are measured by response monitoring of social concerns generic to the state of society and specific to the proposed action (this is also called "issues tracking"). Mitigation monitoring gauges the relative effectiveness of established mitigation measures, adjusting for predicted changes in social conditions and trends; compliance monitoring tests the effectiveness of regulatory measures conditioning the stages of development. The ultimate goal of monitoring is the systematic testing of impact hypotheses formulated for use in policy analysis and impact management, a process begun under the auspices of evaluation research.

Evaluation Research

Unlike impact evaluation, which aims at judging the significance of predictions of effects, evaluation research

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

(1) assesses the effectiveness of an ongoing program in achieving its objectives, (2) relies on the principles of research design to distinguish a program's effects from those of other forces working in a situation, and (3) aims at program improvement through a modification of current operations.

Evaluation's function is to provide feedback from results to decisions …Evaluation findings can be used to modify current operations and to plan future programs and policies. It provides information for the incremental upgrading of a program, or groups of programs with similar objectives (Wholey, 1970; emphasis in original).

Program monitoring of service delivery and quality (Rossi and Freeman, 1989) are equally applicable to impact management roles and responsibilities.

MANAGEMENT

Impact mitigation and monitoring are the chief instruments of impact management (Halstead et al., 1984); essentially, what there is to management are the mitigation and monitoring plans and procedures formulated in the preceding steps. The Tri-County Socioeconomic Monitoring Program in Santa Barbara County, California, is an exemplar of such efforts (see also Leistritz, 1985). Their structure can be derived from application of the analytical framework described in this section. Their content will vary according to the specific impact situation, e.g., growth management in energy resource communities (Reiff, 1976; Summers and Selvik, 1982; Weber and Howell, 1982; Detomasi and Gartrell, 1984).

The management role can be viewed as broadly as the impact assessment process itself, however, beginning with the initial scoping phase and continuing throughout the series of steps traced in the analytical framework. Counterpart of these analytical operations are the social processes by which they are planned and performed, and the involvement of various interested parties and affected groups. Social process development is therefore a continuous management task that extends to local and larger communities as well as to the professional community of impact assessment practitioners.

QUESTIONS AND ISSUES

The panel cannot detail every aspect of the information needed for a socioeconomics studies program. However, in its assessment of information for three lease sales off California and Florida (NRC, 1989a), it outlined socioeconomic information needs. That outline (with minor changes) follows:

What Information is Needed

Assessment of the potential socioeconomic effects of OCS activity differs from the assessment of biological and physical effects in that significant socioeconomic effects can occur before a lease sale. On the other hand, socioeconomic impact assessment is similar to the assessment of physical and biological effects in that additional site-specific information should be obtained before decisions are made about development and production.

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

For all stages, information on the human environment is needed. What are the crucial aspects of people's lives that they perceive to be at risk? At the prelease stage, information is needed on the first two stages of the leasing process: prelease and exploration activities. Basic information on the distribution and dimensions of effects also is needed.

A variety of sources of information are available concerning the social and economic activities of people in the vicinity of proposed lease sales. These range from national census data to records collected and maintained at the local level. Because the data usually have been collected for purposes other than to assess the effects of OCS activities, they have three shortcomings for impact assessment. First, they are almost always collected by a political, economic, or socially delimited geographic unit (state or county government, planning district, or national park), and OCS activities and human activities do not conform to these boundaries. Second, the data are almost always collected on a convenience basis; they are collected when people engage in activities that can be recorded (they take jobs, pay admission to a state park, pay for a motel room, vote, pay taxes, catch and commercially sell fish, buy a license for a variety of activities, or cross a traffic counter on a state highway). Third, because the data are aggregated at different levels, it is difficult to link them: There is no way to know whether the person who visits a state park also pays for a motel room. Because the data are aggregate and are based on geography and on convenience, they can be used only in a limited way to assess the effects of OCS activities on the human environment. Socioeconomic data not collected specifically to assess the potential effects of OCS oil and gas activities must be evaluated carefully to determine how useful they are.

A major impediment to assessing the effects of OCS activities on the human environment appears to be the Office of Management and Budget (OMB) approval process for surveys performed with federal funds (OMB Circular A-21 concerning compliance with the Paperwork Reduction Act). OMB approval is required before members of the public can be interviewed in significant numbers. It is clear that MMS needs survey information and that an accommodation with the OMB approval process must be reached. In addition, any survey will require careful design to capture the specific local features that define the economy, sociology, and quality of life of a particular region.

Another obstacle is funding. The budget for the Environmental Studies Program has been declining recently (MMS, 1987a), even as the need for socioeconomic information is increasingly recognized. Furthermore, socioeconomic studies have received only a small share of the available funding. This is reflected in the near total absence of primary socioeconomic data.

In addition to information needed during the prelease and exploration stages, information should be gathered during development, production, and termination. It should be possible to obtain more site-specific information after exploration; this heightens the need to collect data specifically related to the potential effects of the proposed activity. At this stage, it is important to know whether the assessment considers all five stages of the OCS development process (prelease through termination) and whether it covers the dimensions of the potential effects adequately. It is possible and crucial to know at this stage whether the information permits identification of the relevant social groups and systems that will be affected.

The panel offers below a series of questions that amplify the above discussion from the earlier report; they are intended only as a guide for consideration. The list is not exhaustive, and it cannot apply to every time and place. Other questions are implicit in more detailed discussions of this and other chapters and the appendices.

Effects on Communities

What are the potential effects of the proposed action on employment, local industries,

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

infrastructure (medical and education facilities, roads), cultural and religious traditions, lifestyle options, tourism, tax bases, water supplies, community and local governments, and other organizations?

What is the public's attitude toward and perceptions of the proposed development? What are the major concerns and what are perceived as the major benefits?

Are the concerns and legal rights of privileged and special groups (such as Native Americans) treated in the studies?

Is there evidence of the assessment of stress-related disorders, including an initial statement of their existence and likelihood and a later effort to collect indices of them?

Effects on Other Local Users of the Ocean and Coastal Zone

Have the effects in the following areas been considered?

  • Fishing: commercial, subsistence, and recreational.

  • National security (military): harbor facilities, access to exercise areas, navigation and overflight losses.

  • Marine transportation: changing shipping routes, added risk of collision with offshore platforms.

  • Coastal and ocean tourism and recreation: offshore, coastal, and harbors. Pollution, visual effects that reduce recreation experience, increased traffic, competition for harbor and mooring space.

  • Other industries in the coastal zone that can compete for scarce resources, such as labor, air emission credits, land, and water.

  • Marine aquaculture: preemption of ocean space, pollution, etc.

  • Marine protected areas.

Effects on Local and State Governments

Have the following effects been considered?

  • The need to redistribute benefits to balance local costs, for example, through revenue sharing, mitigation.

  • The need for increases and distortions of administrative staffs to contend with oil activities, including opportunity costs for time spent dealing with oil issues that is no longer available for other pre-oil matters.

  • Dependencies created in state revenue bases and cumulative fiscal effects estimated for life of resource.

  • Social and political conflicts created, including institutional responses anticipated: citizen initiatives, new forms of government to cope with new demands and conflict, added legal burdens and costs.

Have allowances been made for the relative differences in the ability of local authorities to represent constituent interests and operate with the federal government? (Monroe County in Florida is not the same as Santa Barbara County in California.)

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Effects on Science and Local Scientists

Will there be harm to existing offshore, coastal, or harbor study sites?

Will there be archaeological effects of onshore facilities, and need to conduct retrieval and archival work?

Individual Lease Sales

Are estimates of petroleum resources presented in an array from lowest to highest and compared according to likely socioeconomic consequences?

Are likely negative socioeconomic consequences matched to stipulation or mitigation measures to prevent, reduce, or offset them?

Although of short duration and limited geographic scope, are the possible effects of exploration on subsistence activities considered? On recreation and tourism?

Are essential but hard-to-quantify socioeconomic factors incorporated in exploration, development, and production plans or considered at all?

Methods

Do data exist to allow the raising and answering of the above minimal set of important questions? Are they complete, appropriate, and timely? Complete means that they provide coverage of the basic set of questions just raised; appropriate means they are matched to the local situations; and timely means they reflect current realities as well as those prepared for longer term baseline trend studies.

Have significant trends been established in these terms that would allow departures from them to be detected and appraised?

Can data identification and collection wait until after exploration and discovery of resources? Who is responsible for data collection, coordination, synthesis?

Is there a socioeconomic cost-benefit study contained in the environmental impact statement or in its supporting analyses?

To what degree will research priorities be reshaped to meet the mission and operational demands of environmental impact statements and secretarial issue documents or the threat of lawsuits?

Are studies adequately comparative, revealing the unique aspects of each area and comparing them with other unique and common aspects of the same and other areas?

Have surveys and other procedures for describing and analyzing local understanding and opinions been conducted?

Do the studies and analyses adequately consider accidents caused by human error?

Are risk probabilities calculated? Are they plausible?

Are areas of uncertainty identified and described?

Is scientific knowledge adequately integrated into research plans, reports, and decision documents?

To what degree can the studies program adapt to the information gained from research? Have projected effects been compared with observed effects? Have the effects of previous leasing, development, production, and termination been properly studied in the United States and elsewhere and been incorporated into the program? In other words, can the program learn from its and others' experiences?

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×

Are the methods used to analyze the data appropriate and adequate?

Are the models and theories used appropriate and tuned to the specific contexts of interest?

Are positive and negative effects adequately disaggregated?

Are the elements of the analysis integrated?

Are the assumptions explained?

Has there been proper consideration of short-term, long-term, and cumulative effects?

Are there enough MMS personnel in each of the areas? Are they trained and diverse enough to allow these questions to be raised and answered?

To what degree do OMB restrictions prevent or hamper the study of various questions?

Have the studies been submitted for independent scientific review? Are any results of reviews available?

Have the potential effects been considered for each phase of development? If not, has the omission been justified?

Is the study clearly written, so that a lay person could read it?

Is there a summary of major effects (costs, benefits, and consequences)? Are major effects related to relevant groups in the setting?

Minerals Management Service has little expertise outside of Alaska (and some in the Pacific) to address the effects of OCS leasing on the human environment. Nonetheless, the service is coming under increasing pressure to move forward in this direction nationally. As MMS begins to establish a viable social science research program, it would do well first to recognize that the scientific community currently has the tools to assess and monitor the activities as required by the Outer Continental Shelf Lands Act and amendments (43 U.S.C. §§1331-1356, §§1801-1866). Second, members of the public who are potentially affected by OCS activities are expert in some areas of assessment and must be involved in setting the research agenda. Third, the relatively successful program established in Alaska demonstrates that the task is feasible. Finally, avoiding the pitfalls noted above and considering the full complexity of the human environment will require increased investment of human and financial resources, at least in the beginning. Development of a viable socioeconomics research program cannot be achieved overnight, as MMS's scientific committee has noted (W. Freudenburg, pers. comm., University of Wisconsin, 1989).

Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 29
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 30
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 31
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 32
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 33
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 34
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 35
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 36
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 37
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 38
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 39
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 40
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 41
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 42
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 43
Suggested Citation:"A Framework for Organizing OCS Socioeconomic Studies." National Research Council. 1992. Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies. Washington, DC: The National Academies Press. doi: 10.17226/2062.
×
Page 44
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This is the third of four volumes from the Committee to Review the Outer Continental Shelf (OCS) Environmental Studies Program (ESP). The first two dealt with physical, oceanographic, and ecological aspects of the program.

This book presents the findings of the panel's investigation of the social and economic relevance of OCS oil and gas activities and the social and economic aspects of the ESP.

It describes the potential effects of OCS activities on the human environment, presents an ideal socioeconomic studies program, and comments on the current program in the Atlantic, Gulf of Mexico, Pacific, and Alaska regions.

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