Secondary Employment Secondary employment has been defined in this analysis to include both jobs generated in industries involved with machinery, supplies, services, or facilities necessary to the primary activities (i.e. refineries or the manufacture of oil field machinery and equipment) and jobs induced by increased demands for consumer goods and services by new employees. Secondary employment estimates were derived using employment multipliers suggested by several sources (see Appendix B for details of how multipliers were derived). The magnitude of these multipliers will basically be a function of the degree to which principle products and services necessary to direct OCS development are available in the region, the diversity of the area's consumer economy, and the extent to which new industries and services may relocate to this area. In the case of the mid-Atlantic, many of the principle products required for direct OCS operations are currently available in large quantities. In terms of fulfilling demands for consumer goods and services, the region as a whole is characterized by a highly developed consumer economy. Only minor introduction of new industry is anticipated because of the low level and short duration of the activity associated with this sale. It is likely, for example, that much of the fabrication of required equipment such as platforms and rigs will be done by established facilities such as those in the Gulf of Mexico area. Total Employment Total employment which could be generated in the study area by the proposed sale was estimated by combining the estimates for direct and secondary employment (Table IV.E.10-2). These estimates, as any estimates of employment generated by new industrial activity, are not intended to be exact predictions but were developed to provide an understanding of the general extent of OCS impacts, to identify some potential onshore problems, and to provide a general understanding of the factors that could determine socioeconomic impacts. They exclude transients and include both jobs filled by local hiring and those filled by relocating workers. According to the analysis, regional employment (both direct and total) is projected to increase steadily until 1995; decrease sharply in 1996; peak in 1997 and then decrease sharply again. This jagged level of employment is the result of the proposed production schedule (see Section II.A.) which calls for gas production to begin in 1998 three years after oil production begins. This delay in gas production shifts the construction of the gas processing facility (400 workers) and gas pipeline (200 workers) to 1997. It is determined that the gas requires only partial treatment (gas found in the area to date requires only partial treatment) and the construction of a gas processing plant would not be required. In that case employment would peak in 1995 and slowly decline thereafter. In either case the peak level of employment associated with the proposed action would represent less than 0.02 percent of the region's current and projected 1995 employment. This implies that on a regional basis OCS activity will have little or no impact on either the size or character of the region's labor force. The majority of these employment increases are expected to be concentrated in those counties and independent cities experiencing the greatest direct activity and scattered in any additional industrial areas which may participate in secondary activities. Based on the employment estimates previously described, impacts on local employment or composition will be minor in all areas. In 1995 employment increases associated with OCS development are expected to peak in the localities projected to be the location for OCS support bases, Washington County, Rhode Island and Hampton Roads, Virginia. In that year it is projected that approximately 590 jobs could be generated by each support base (includes offshore and onshore employment). This amount of employment would represent less than 0.5 percent in the projected 1995 employment levels for Hampton Roads, Virginia and less than 1.0 percent for Washington County, Rhode Island (projections from BEA; 1980, 1982). These increases are expected to result in only minor impact to the civilian labor force of the affected locality. Furthermore, any increase in employment associated with OCS development will take place over several years, thereby lessening any impacts. Employment increases in areas in which the OCS-related gas facility may be During construction it is estimated that approximately 400 construction workers will be needed for each facility. This increase in construction employment will have only a minor impact in New Castle County or Monmouth County because these areas already possess a large, well developed construction sector. New Resident Employment As previously stated, the total employment estimates make no distinction between those jobs filled by local hiring and those filled by relocating workers. This distinction is important because it is the relocating workers, called new resident employees, and their families, and not the local hires, who will put new demands on public and private services and facilities and thus generate the greatest impacts on infrastructure. There is no standard relationship between new resident employment, local hire, and total employment. The proportions of local hire and new resident employment will fluctuate with both the quality (skills) and quantity (supply) of local labor in relationship to industry demands. Both quality and quantity will vary over time with other job opportunities and training. Therefore, local hiring can vary from minor to extensive. A situation in which no local hiring occurs, however, is considered highly unlikely. Many of the direct non-transient positions (possibly as high as 30 to 40 percent are considered unskilled or semi-skilled and should easily be filled by local residents. Training efforts could increase the potential for local residents to get positions requiring greater skills. Estimates (Table IV.E.10-3) were made of "new resident" versus "local hire" using trends and skill level requirements identified in several studies (Roy F. Weston, Inc. in association with Frederick R. Harris, Inc., 1978; Woodward Clyde Consultants, 1975; Arthur D. Little, Inc., 1975; SFRPC, 1983) and by industry. While these are rough estimates, they are thought to be representative of a hiring pattern that could occur in the mid-Atlantic region. According to this analysis peak new resident employment could be 620 jobs in 1997, representing a negligible addition to the total current employment level of the region. This same "new resident" versus "local hire" allocation methodology is less exact when extended to the local level for a number of reasons. First, though the region itself may be expected to experience limited interregional migration and new resident employment, primary counties might experience extensive intraregional migration (i.e. migration from other counties within the region). This intraregional migration, which would be considered local hire on a regional basis, represents new population on a county basis. Also, it is much harder to make assumptions and to qualify the degree to which the local labor force of a county might get involved in new activity since the potential labor forces are much smaller and of less diverse talents than the regional labor force. Such an estimate would be very sensitive to small changes in quality and quantity and could vary greatly over time. Therefore any estimate of the percentage of jobs filled by local residents of the affected county would have to be lower than the regional estimate. Local level increases are expected to be minor both in those localities assumed as potential locations for a gas facility and in those which may serve as operations support base locations. Conclusion: It is estimated that the proposed action could increase the number of people employed in the mid-Atlantic region by 1,810 persons. This represents about 0.02 percent of the current employment level of the region and implies a negligible impact of the employment level on the region as a whole. Previous mid-Atlantic, south Atlantic and north Atlantic sales would all impact to some degree on employment in the mid-Atlantic region. Employment increases would be approximately 50 percent greater in the peak year, 1997, if all cumulative impacts are assumed. This cumulative increase in employment still represents virtually no impact on employment at the regional level (less than 0.05 percent of current employment). The major impacts of supporting oil and gas exploration and production from previously leased lands would be in the localities assumed to be locations for offshore bases. The largest impact would most likely be in Washington County, Rhode Island which is expected to serve as a support base for all blocks leased in previous north Atlantic sales, North Atlantic Sale No. 82 (September 1984) and much of area leased under previous mid-Atlantic sales. The support base in Hampton Roads, Virginia will be impacted by previous mid-Atlantic sales but will only be impacted minimally by previous south Atlantic sales which are expected to use Morehead City as a support base. The effects of oil and gas exploration and production from previously leased lands would have no impacts on the level of employment in those localities assumed to be locations for gas processing facilities. This is because the demand for labor associated with gas processing facilities is highly inelastic once a minimum production level is reached. It should be noted that OCS development will be only one (and a minor one) factor which will have an impact on employment in the region over the next 35 years. Total employment in the two most affected areas--Hampton Roads, Virginia and the Washington County, Rhode Island area--is expected to increase by 24 percent and 20 percent, respectively (USDOC, BEA, 1982; 1981a) Employment in the entire region is expected to increase at a somewhat slower rate. Conclusion: There will be a major cumulative impact on employment at both the regional and local level. It is assumed that new resident population will be generated in proportion to new resident employment. The estimated new resident population generated by the OCS activity related to the proposed sale is summarized in Table IV.E.11-1. NOTE: Assumes population multiplier of 2.75 per new resident SOURCE: Atlantic OCS Office Estimates, 1984 The estimated peak year maximum resident population increase generated in the mid-Atlantic region is estimated at approximately 1,700 persons in 1997. This represents less than 0.01 percent of the current total population and implies a negligible impact on the regional population level. Impact on population at the local level will be only minor. Population increases caused by OCS activities in the localities assumed as the location for an OCS support base are expected to peak in 1995. In that year approximately 760 people could be added to the population of either locality. Such an addition would represent an increase of less than 1 percent in the projected |