HomeMy WebLinkAboutNYS & Outer Continental Shelf Development 1977
I~EW YORK STATE AIW
OUTER CONTINENTAL SHELF DEVELOPMEIH -
AN ASSESSMENT OF IMPACTS
Prepared by
Ijew York State Oepa rtment of Envi ronmenta 1 Conservati on
Outer Continental Shelf Study Program
50 Wolf Road
Albany, New York 12233
October 1977
The preparation of this report was financially aided through a
Federal Grant from the Office of Coastal Zone Management. National
Oceanic and Atmospheric Administration. under the Coastal Zone Management
Act of 1972, as amended, Grant #04-5-158-50002
This report was prepared for the New York
Department of State
STATE OF NEW YORK
Outer Continental Shelf Study Program
Gregory H. Sovas, Program Manager
John C. Harmon, Assistant Program ~1anager
Thomas P. Eichler, Director, Resources Program Development
Charles C. Morrison, Jr., Chief, Land Resources Development
DEPARTMENT OF ENVI RO:mENTAL CONSERVATIOi~
OCS Section
Gregory H. Sovas, Chief
John C. Harmon, Assistant Chief
Susan M. Hathaway, Environmental Analyst
Patricia A. Vopelak, Environmental Analyst
Michele M. DeCesare, Stenographer
Other Contributing Staff
Ronald H. Miller, Chief, Economics Section
John Klimek, Associate Economist
Kathleen L. Morrison, Special Assistant to the General Counsel
Ronald E. Hartmann, Land Surveyor Trainee II
Boyd Kaler, Graphics
Cover by Edward Kenney
TABLE OF CONTENTS
I. INTRODUCTION
Page
1
A. Environmental Issues
B. Economic Issues
C. Energy Issues
D. Legal Issues
3
4
4
5
5
II. OeS ISSUES FACING NEW YORK STATE
A. Energy Impl ications
B. Environmental Implications
1. The Natural Environment and Uil Spills
2. Tourism and Marine Recreation
3. Commercial Fishing
C. Economic Benefits
1. Business Opportunities and Employment
2. Potential Sites and Related Implications
D. Legal and Institutional
1. Federal
2. State
9
9
10
10
11
11
12
12
13
13
14
15
III. CONCLUSIUNS
A. Federal Leasing Program - Historical j,ote
B. Relationship to Coastal Zone Management Program
C. Phases of OCS Leasing and Post-Leasing Activities
1. Preleasing Phase
2. Exploratory Phase
3. Development Phase
4. Production Phase
5. Shutdown Phase
17
17
20
21
26
28
29
31
33
IV. BACKGROUND
A. Results of Lease Sale #40
B. Timing and l,umber of Lease Sales for the Baltimore
Canyon and Georges Bank Regions
C. Estimated Recoverable Resources
D. General OCS Facilities
1. Facilities and Timing
2. Timing and Scenarios
3. Representative Facilities that Would Accrue
to the Regi on
35
35
V. DEVELOPMENT OF SCENARIOS
36
36
47
47
48
48
Paqe
VI. MAN-MADE AND ;~ATURAL ENVIRONMENTS SURROUNDII~G EXPLORATION,
DEVELopr~ENT AND RECOVERY OF DCS ENERGY 61
A. People, Facilities and Critical Natural Resources
in the iJew York Metropolitan Region
B. Selected Energy and OCS Related Industry Activities
1. Shipping and Waterborne Commerce
2. Marine Terminals
3. Tankers and Tanker Traffic
4. Refineries
5. Pipelines
6. Service Industries
C. The ;~atura1 Environment
1. Topography
2. Habitats
3. Nearshore Water Qual ity
D. Marine-Related Industries
1. Tourism and Recreation
2. Recreational Fishing
3. Commercial Fishing
61
61
62
64
67
69
72
72
74
74
75
87
88
89
89
89
VII. ENVIRONMENTAL IMPLICATIONS OF OCS EXPLORATION AND DEVELOPMENT 91
A. Envi ronmenta 1 Impacts of Onshore Faci 1 i ties
1. Water Quality
2. Air Qual ity
3. Dredging
B. Offshore Acti vi ty Impacts
1. Oil Spi 11 s
2. Other Environmental Problems
91
91
91
93
92
92
100
VIII. ECONOMIC IMPLICATIONS OF OCS ENERGY DEVELOPMENT
103
A. Potential Economic Benefits Resulting from OCS Activit: 104
1. Assumptions and Information Utilized to Assess New 104
York State Prospects
2. Identification of Potential Facilities and Economic 107
Benefits for New York State
B. Potential Economic Consequences for Marine Recreational 119
Activities
1. Marine Recreational Activity 119
2. Commercial Fishing 123
C. Potential Energy Benefits of OCS Oil and Gas Resources 133
1. Energy Problems in the i10rtheast and New York State 135
2. Energy Outlook for ,'Jew York State 137
3. Contribution of OCS Oil and Gas Resources 139
Page
IX. POTENTIAL SITES FOR DCS FACILITIES 149
A. Summa ry of Ana lyt i ca 1 Approaches to Identify Sites 149
B. Sites Identified by the Port Authority, New York 151
City and Nassau-Suffolk Regional Planning Board
1. Port Authority Study 151
2. I~ew York City Planning Commission Study 155
3. The Nassau Suffolk Regional Planning Board Study 156
C. Prospects for Utilization of Sites 157
A. Introduction
B. Issues Under Federal Jurisdiction
1. Preleasing and Leasing Issues
2. Exploration
3. Development
C. Issues Under State and Local Jurisdiction
1. Local Governments
2. State Government
159
159
159
159
162
164
168
168
169
X. LEGAL AND INSTITUTIONAL ISSUES
LIST OF FIGURES
~
1. State Roles in the Outer Continental Shelf Leasing and
Development Process 6
2. Outer Continental Shelf Areas Under Leasing Consideration 23
3. Regional Geology 24
4. Mid and North Atlantic OCS Lease Areas 25
5. Exp 1 ora t i on Rigs 30
6. Production Platforms 32
7. Typical Production Curve 34
8. Results of Mid-Atlantic Lease Sale #40 - High Bids on Tracts 37
9. Results of Mid-Atlantic Lease Sale #40 - Tract Lessees 38
10. Production Schedule for Scenario #1 41
11 . Producti on Schedule for Scenari 0 #2 43
12. Production Schedule for Scenario #3 45
13. Timing of Facilities and Activities for Scenario #1 - High
Oil and Gas Fi nd - North Atl anti c 49
14. Timing of Facilities and Activities for Scenario #1 - High
Oil and Gas Find - 11id Atlantic 50
15. Tra ffi c Lanes to Port of New York 68
16. Tidal Wetlands and Coastal Bays 76
17. Hard Clams 78
19. Exposed Shorelines 80
20. Surf Clams 82
21. Stri ped Bass 83
22. Offshore Regi on 84
23. American Lobster - Nearshore 86
24. Prooability that an Oil Spill Will Impact Long Island 97
25. Distances from Lease Areas to Shore 106
26. Coastal Recreation Sectors 122
27. Hypotheti ca 1 Oi 1 Spi 11 Locati ons 125
28. Trends in Commercial Landings of l'larine Fisheries 132
29. Projected Total New York State Oil Supply Requirements
and the Potential Contribution of OCS Oil Production 141
30. Projected Total New York State Gas Supply and the Poten-
tial Contribution of OCS Gas Production 142
31. ilew York City Potential Sites for OCS Facilities 152
32. Potential Sites for OCS Facilities 153
33. State Roles in the Outer Continental Shelf Leasing and 160
Development Process
LIST OF TABLES
1. Proposed OCS Planning Schedule 19
2. Mid-Atlantic OCS Lease Sale #40 - Major Lessees 39
3. Scenario #1: High Oil and Gas 42
4. Scenario #2: Very High Gas 44
5. Scenario #3: Low Oi 1 and Gas 46
6. Service Bases - Summary of Requirements and Impacts 52
7a. Transportation Facilities Summary of Requirements and Impacts 53
7b. Transportation Facil ities Summary of Requirements and Impacts 54
8. Gas Processing and Treatment Plants Summary of Requirements
and Impacts 55
9. Steel Platform Fabrication Yards Summary of Requirements and
Impacts 57
10. Pipe Coating Yards Summary of Requirements and Impacts 58
11. Waterborne Commerce at Major East Coast Ports, 1974 & 1975 63
12. Port of New York and New Jersey (1975) 63
13. Port of New York and New Jersey Freight Traffic (short tons) 65
14. Petroleum Handling Facilities at Major Ports 66
15. Tanker Dimensions 67
16. Trips and Drafts of Inbound Tankers at New York Atlantic Ports,
1975 (Number of Trips) 70
17. East Coast Refineries 71
18. Pipelines, 1972 73
19. Probability of Impacting Long Island Shore 94
20. Potential Resource Finds - Mid-Atlantic and North Atlantic 104
21. High Find Scenario Numbers and Kinds of Onshore Facil ities
for Mid Atlantic and North Atlantic 108
22. Timin9 of Facilities and Activities for a Typical Region 110
23. Facilities for New York State 111
24. Offshore Employment Percentage Local Hire 112
25. Peak Year Direct Employment and Wages Associated with Hypothe-
sized New York State-Related OCS Activity (Resident and
Imported Labor) 114
26. Estimated OCS Supported Employment for New York State Residents
in Peak Year 116
27. Estimate of Peak Year New York State Resident Wages From
Associated DeS Employment (Millions of $) 117
28. South Shore Recreational Activity: Annual Participation and
Expenditures 120
29. Characteristics of Long Island's South Shore by Coastal
Recreational Sectors 123
30. Economic Impact of Oil Spills Reaching Long Island Shore
Areas: Weekly Losses During Peak Summer Months 126
31. Value of Principal Marine Commercial Species Landed in New
York State and National Data on Distance Caught from Shoreline 129
32. Major Marine Commercial Fisheires Species Landed in New York
State, 1966, 1971, 1976 130
33. Economic Impacts of a Peak Season Reduction in Commercial
Harvesting Off I~ew York State Marine Waters 134
34. Energy Consumed in New York State by Source, 1960, 1970 & 1975 136
35. Contribution of Energy Sources in Meeting Sectoral Demands in
New York State, 1960 and 1974 138
LIST OF TABLES (ContJ
36. Alternative OCS Oil and Gas Finds and Production Character-
istics 140
37. Proportion of New York State Total Oil and Gas Supply Require-
ments that OCS Could Supply: Benchmark Years 1995 and 2000
(Percentage) 144
38. Average Percent Contribution to New York State Energy Needs
Over 20 Year Period (1986-2005) 144
39. Characteristics and Physical Requirements for Various OCS
Related Facilities 150
40. Possible New York State OCS Support Sites 154
41. Operating Orders 163
42. New York State Agency Functions and Responsibilities - Energy
and Energy Facility Siting 171
43. New York State Agency Functions and Responsibilities - Envir-
onmental Regulatory Functions 174
I. INTRODUCTION
The expansion of the federal offshore oil and gas leasing program to the
Atlantic Continental Shelf has posed a number of new and complex questions
for New York and other coastal states. In recognition of this, the New
York State Department of Environmental Conservation, as the state's natural
resources management agency, was asked by the Governor to begin to develop
a state policy response program. Because of its historical mission as the
coastal resources management agency, and its assignment as the lead agency
for National Environmental Policy Act reviews, DEC became the lead agency
for Outer Continental Shelf concerns.
As federal funds became available, the Department formulated a comprehensive
DCS work program, one that was tailored to answering questions concerning
the federal leasing program and its implications for New York State. Working
with the Department of State - the lead agency for the Coastal Zone Management
Program, through which OCS funds have been made available - the Department
convened a group of representatives from other state and regional agencies
and from those local governments which are most concerned with the program.
The first priority identified by the group was for a comprehensive study by
the state of all facets of the complex OCS program. The purpose of such a
report would be to educate public officials and affected citizens about the
federal program, the issues involved, and the implications of the program
for New Yorkers.
Several studies completed during the past few years have attempted to identify
and quantify the concerns and impacts of offshore drilling for regions such
as the Mid-Atlantic leasing area, but the potential impacts on individual
states were considered only as part of the total regional outlook. This
study was undertaken to fill this need for a more specific state perspective
by identifying and, to the extent possible, quantifying both the positive
and negative impacts that could result, both onshore and offshore, from oil
and gas development on the Outer Continental Shelf. Generally the federal
program has been viewed in the study from four basic perspectives: economic,
environment, energy, and legal-institutional.
The report incorporates work completed under the program by DEC, the Depart-
ment of Education (State Geological Survey), the State Office of Parks and
Recreation, the Nassau-Suffolk Regional Planning Board and the New York
City Department of City Planning. The report also draws on work performed
by the Port Authority of New York and New Jersey at the request of DEC.
Additionally, work by the New England River Basins Commission/Resources and
Land Investigations (RALI) project proved to be a most useful source of
information.
Because the Atlantic is a frontier area -- one that has never been explored
no one can say with any certainty what amount of commercially recoverable
oil and gas resources will be available, if any. This fact makes prediction
of the exact future impacts on New York State difficult. An additional
complication is New York's location between the Mid-Atlantic and North
Atlantic leasing areas -- its physical location may result in possible syn-
ergistic impacts on the State. Consequently, the report relies on hypotheti-
cal resource finds in both areas, based on U.S. Geological Survey estimates,
-2-
to develop assumptions about the range of possible impacts on the State.
Although the report is based on the best information currently available,
resource estimates may change substantially as exploration progresses.
Caution should be used when quoting conclusions of the report without citing
the resource estimates on which the conclusions are based.
This study, then, is the result of one state -- the State of New York
taking a coordinated approach to its work in developing answers to questions
about the implications of oil and gas drilling on the Atlantic Continental
Shelf. It is intended to provide information on the potential impacts of
DCS activity -- information that can aid in making decisions that will help
maximize benefits and minimize adverse impacts of Outer Continental Shelf
development. It is not intended to either promote or discourage potential
OCS development, nor is it intended to contrast the costs and benefits in
different sectors of the economy and in different regions of the state,
such as potential job gains in New York City versus potential losses to
tourism and recreation on Long Island.
Every effort has been made to use the best resources available for this study
and to be as objective as possible in presenting the facts and conclusions
of thi s report.
-3-
II. OCS ISSUES FACING NEW YORK STATE
When the U.S. Department of the Interior announced plans in 1974 for accel-
eration of the Outer Continental Shelf oil and gas leasing process, the
Mid and North Atlantic were identified for the first time as future leasing
areas. New York and other Atlantic coastal states were suddenly faced with
a multitude of new and complex issues.
The basic questions that the
front New York State today:
will oes leasing have on the
encing these impacts?
accelerated leasing program raised still con-
What environmental, economic and social effects
State? What role will the State have in influ-
The leasing process established under the Outer Continental Shelf Lands Act
of 1953 leaves little room for State participation in federal decisions beyond
State jurisdiction that may ultimately impact the State's coastal zone.
Federal responsibility for the leasing program rests with the Department of
the Interior. To help safeguard the interests of the people of the State,
iJew York State officials have chosen to actively participate in every step
of the leasing process for both the Mid and North Atlantic lease areas.
In the past few years, the Department of the Interior has expanded the
leasing program to include consideration of State views and comments in
specific steps of the leasing program and has convened a National OCS Advisory
Board made up of State and federal agency representatives for discussion of
issues. Although the actions taken by 001 allow State input, they do not
provide a way for states to actively participate in the DCS decision-making
process. Any acceptance of comments from New York State or other parties by
the Department of the Interior is strictly voluntary. In short, under
existing federal law, the OCS Lands Act of 1953, the role of New York and
other states in the leasing program is limited.
This limited state role raises a number of major issues of both statewide
and national concern:
- Is the federal government working to lease these areas in the best interests
of the Nation and is the federal government receiving fair market value
for the Nation's non-renewable resources?
- Is adequate information available to the federal government on which to
base important decisions on the leasing process (ie., is enough known
about the environmental implications of Des activity)?
- Do federal environmental impact statements and other documents and actions
accurately assess the potential impacts of OCS activity on the environ-
ment, the economy, and on other concerns of affected areas?
- Is the federal government responsive to the concerns of the states, and
do federal actions adequately take into account state interests, such as
protection of existing fishing, recreation and tourist industries?
- Are existing federal regulations and legislation adequate to regulate DCS
activity in such areas as:
-4-
- oil spill prevention and cleanup
_ exploration and development of deepwater areas on and beyond the Con-
tinental Slope
_ prevention of adverse impacts from disposal of materials from OCS
activity (e.g. drilling muds)
- prevention of navigational conflicts from OCS structures and activities
in shipping lanes and in prime fishing areas.
As exploration and development begin on the Atlantic Continental Shelf,
!'lew York State is faced with a number of new issues relating to the environ-
mental, economic, energy and social impacts of OCS activity on the State of
New York:
A. Environmental Issues
- What is the full range of environmental impacts, both short and long term,
that can De expected from OCS activity?
- What steps can be taken by state and local governments to best protect
the nearshore and offshore resources of the State from any adverse impacts,
including oil spills?
_ What kinds of environmental research and baseline studies are needed to
adequately determine the possible range of impacts and to monitor the
effects of OCS activity and to predict, prevent and ameliorate possible
adverse future impacts?
- Is existing State, federal and industry oil spill prevention and cleanup
capability adequate?
B. Economic Issues
- What level of economic benefits and costs can New York State expect to
receive from both a statewide and local viewpoint?
- Can new OCS-related industry be encouraged without adversely affecting
existing industry, such as the billion dollar Long Island tourism and
recreation industry and the multi-million dollar fishing industry?
_ Are there fi nanci a 1 burdens to be borne by commun iti es in the s tate as a
result of OCS development, and if so, how can these best be eased?
- Can some form of compensation (oil spill liability, federal revenue-sharing)
be provided at the state or federal levels to industries and individuals
adversely affected by OCS activity?
-5-
C. Energy Issues
_ What levels of energy supply will be available from Atlantic Outer Con-
tinental Shelf resources?
_ How can New York State be assured of receiving a fair share of Atlantic
OCS energy resources?
_ What impact will OCS oil and gas resources have on the short and long-term
development of energy-dependent industries in the State and how will this
energy supply affect the State's general economy?
O. Legal Issues
_ Is existing State legislative authority adequate to regulate potential OCS
onshore impacts? Will the "federal consistency" provisions of the federal
Coastal Zone Management Act give the State a greater influence over federal
OCS actions? How will the emerging State Coastal Management program inte-
grate OCS concerns? What role, if any, should local governments play?
- Are new institutional arrangements needed at local, state, and federal
levels for the discussion of issues and resolution of conflicts?
_ Will new State oil spill liability and compensation legislation be effec-
tive?
Addressing these and other issues related to the federal leasing program will
continue to require a significant commitment from New York State. State
representation in the many steps of the leasing process for both lease areas
consumes a major amount of time and effort. As the leasing process continues
into exploration and eventual production, additional State involvement and
responses to the program wi 11 be requi red. (See Figure 1).
Congress recognized in 1975 that the OCS leasing process was imposing signi-
ficant new burdens on the states, and appropriated funding under the Coastal
Zone Management Act to assist the states in dealing with OCS issues. This
funding has terminated, and the states are now faced with the question of
whether federal support will be adequate in light of the workload imposed
by the federal OCS program.
Amendments to the Outer Continental Shelf Lands Act of 1953 that would
significantly modify the OCS leasing process to give the states a greater
role and influence in decision-making are pending before Congress. The amend-
ments would modernize the way in which the 001 presently administers the
offshore leasing program by giving the Secretary more administrative authority
to better manage the Nation's resources. These amendments may resolve some
critical issues about the roles of the states, including the question of
whether the state role is meaningful in addressing issues with the federal
government and whether the states are provided with the necessary resources
to effectively participate in the leasing and development process.
FI GU RE 1 a
STATE ROLES AND THE OCS LEASli~G AND DEVELOptmlT PROCESS
PRELEASING
EXPLORATION
o
Geophysical Exploration conducted
by oil companies under federal
Department of Interior (001)
permit.
o
Lease Sale conducted by
001; no state involvement.
Leases awarded to highest
responsible bidders.
..
Environmental Basel ;ne Studies
conducted by 001; state reviews
and comments on studies.
.
Temporary Support Base Sites
selected by lessees. State
and/or local approvals may
be required, including air and
water qual; ty penn; ts.
..
Preca 11 lnforma t; on so 1; ci ted by
DOl. state submits reports on
environmental problems and on
conflicts with other resources.
..
Notice of SUPDort Activity
filed by lessees with coastal
states, 001. Notice required
by lease stipulation.
..
Call for Nominations issued by
oar. Oil industry indicates
interest in tracts. State
identifies tracts to be
excluded or to be leased only
under special conditions, due
to environmental, geologic or
other reasons.
~ Exploration Plan submitted by
.. lessees to DOL Must include
location and depth of planned
wells, description of drilling
rigs, oil spill contingency
plans and other materials.
State may review non-
confidential parts of explora-
tion plan. Plan must be
consistent with approved state
coastal management program,
if one is in effect.
o
Tract Selection made by oar but
discussed with coastal states.
~ fnvironme.ll_~t ImDdct Statement
~ for lease Sale prepared by DOl.
State reviel.is'-and comments on
Dl'aft Statement, presents testimony
at public hearing, may comment
on Final Statement.
..
Federal Permits obtained by
lessees for siting of
exploration rigs (Corps of
Engineers) for waste discharges
(EPA) and for drilling (001).
States may comment.
~ Proposed National and Reqional oes
~ Opel'ati nq Orders issued by DOL.
State may comment.
o
Exploratory Drillinq conducted
by lessees. rf a commercial
find is made, lessee prepares
for development and production.
Proposed DOr Regulations would
give states more information on
resources and on the size and
timing of planned development.
Potential Sites for Tempora~
o Support Base,:> identified by oil
com,:Janies in preparation for
exploration.
Proposed Notice of Sale issued by
~ DOl; State may comment on
~ proposed tracts and lease
stipulations.
o
Potential Sites for Permam:nt
Fa cTITffes-i oQ-n-fffTe-db y -. ------
lc~<;secs --:--
o
Notice of Sale issued by oar
if Secretary of Interior makes
decision to hold lease
sale.
State participates in National and Regional Outer Continental Shelf Advisory Boards,
Environmental Studies eOf1l11lttee. State works with other coastal states on DCS issues
th roug h Mi d -A t 1 an tic Gave rnors I Coas ta 1 Res ources Caunc i 1 (~1AGeRC) and Nc.tJ Eng 1 and
Rivers Basin Corrmission (i~ER3C).
FIGURE lb
STATE ROLES AND THE OCS LEASING AND DEVELOPMEiH PROCESS
DEVELOPMENT
A
Developn.len~ and Production Plan
and Env; ronll-'{'nta~ort
submitf"edb-:ilessees foDOr. Must
include description of new off-
shore and onshore facilities.
interpretations of resource data,
well locations, and other data.
States may review non-confidential
parts of plan and report. Plan
must be consistent with approved
state coastal management
programs if one ;s in effect.
(PROPOSED IN NEW 001 REGULATIONS)
A
Environmental Impact Statement
for Development may be prepared by
001 for frontier lease areas. State
reviews and comments on Draft
Statement, presents testimony at
public hearing, may cCl1lfTlent on
Final Statement. (PRCPOSEO IN NEW
001 REGULATIONS)
.
Permanent Onshore Facilities
established by lessees. State
and/or local approvals may be
required, including air and
water quality permits.
A
Federal Permits obtained by lessees
for sitin9 of platforTTIs (Corps of
Engineers), for waste discharges
(EPA) and for drilling (001).
States may comll.ent.
o
Transportatlon Declslon (tankers
or pipelines) made by DOl and/or
lessees.
~ Pipeline Corridors designated by
~ 001. Proposed plannin~ process
would involve states, industry
and federa 1 agenci es. Envi ronmenta 1
impact statement may be required or
may be part of DevE:lopment EIS.
.
State, Local and Federal P;oeline
Permi ts and App"rovC!.12. 0~ta i--n-ea--
by pipeline company, pipeline
constructed.
I
PRODUCT! Oil
Commercial Production 5ec;ns.
O Allocation affected by federal
Department of Energy (DOE)
regulations.
o
Production Reculated by 001:
monitors oes activities
enforces Operating Orders
supervises environmental
monitoring
initiates special environmental
studies as needed.
SHUTDOWN
o
Shutdown Reoulated by DOl:
lessees plug wells, remove
platfoms
pipeline co~panies decom-
mission, abandon pipelines.
o
Onshore Facilities
by lessees; may be
to other uses.
Closed
converted
STATE ROLE
.
A
o
State Makes Decisions
State Comments Only
No State Role
-9-
III. CONCLUSIONS
The results and conclusions of this report are based on the best information
currently available on potential Atlantic Outer Continental Shelf resources
and on resultant offshore and onshore activity. Many of the conclusions are
based on three hypothetical finds of oil and gas resources that may be dis-
covered in the Mid-Atlantic and North Atlantic leasing areas. Because the
amount of oil and gas resources has a direct effect on the associated offshore
and onshore impacts, these possibilities or scenarios are utilized to illus-
trate the range of impacts that may accrue to New York State. Please note
that tne extent of these resources cannot be determined until exploratory
drilling has been completed. In fact, it is quite possible that no economi-
cally recoveraule resources will be found at all.
A. Energy Implications
The most recent federal resource estimates in the Mid and North Atlantic
fall between the high oil and gas and low oil and gas find scenarios utilized
in this report.
_ There is no guarantee that New York State will obtain a "fair share" of
Atlantic oes resources. The scenarios assume that the Northeast will
receive 80 percent of DeS resources and that New York state will receive
30 percent of the regional share. Whatever share the state receives will
depend on a variety of factors, including national energy allocation
policies.
_ Under the high oil and gas find scenario, New York State could obtain
5% of its oil supply needs and 28% of its natural gas needs from
Continental Shelf resources over a twenty-year period.
_ Under the low find scenario, Atlantic Continental Shelf resources could
contribute 1% of the State's oil needs and 4% of its natural gas
nAeds over a twenty-year period.
- A high find may be an important supplemental source of energy supply for
the State. It could provide an important reserve cushion at a time when
the state is moving to lessen its dependence upon imported petroleum during
the rest of this century.
_ Oil and natural gas resources from the Atlantic continental Shelf could
become available to New York State in 1986, peak around 1995-2000, and
be largely depleted by 2005.
_ The cost of DCS oil and gas is expected to be high. There is no reason
to believe that the price of energy to the consumer from these domestic
sources will be less than other existing supplies including foreign sources.
_ Fo.r many important, high energy-using industries in New York State, DeS
oil and gas could reduce concerns regarding energy supply scarities resulting
from existing federal and state priority allocation regulations.
-10-
- The electrical generation industry, especially in the New York Metro-
politan Area, may benefit from additional fuel options to alleviate
the need for high dependence on imported oil or the need to convert
to coal.
- The recovery of Atlantic Coast oes oil and gas would aid in maintaining
the viability of the Northeast's economy by keeping existing industry
and capital wi thin the region and possibly attracting new investment.
B. Envi ronmenta1 Imp1 i cations
OCS development may adversely affect both the offshore and nearshore ocean
environments and may cause conflicts with the established commercial fishing
and tourism and recreation industries. The possibility of both major and
minor oil spills is perhaps the most detrimental aspect of OCS development.
According to information to date, pipelines will probably be utilized to
transport oil from the Baltimore Canyon (Mid Atlantic) leasing areas to the
shore. Pipelines, if properly designed, constructed and maintained, are a
relatively safe method of transporting hydrocarbons. In the case of the
Georges Bank (North Atlantic) leasing areas, however, tankers will most likely
be used to transport oil to refineries in the Mid-Atlantic. Because oil
spills from tankers are more likely than from pipelines, there has been
great concern that additional tanker traffic may subject Long Island to a
high degree of risk. It should be noted that the possibility of tanker
spills in the present traffic lanes exists regardless of OCS development.
1. The Natural Environment and Oil Spills
- New York State tidal wetlands, bays, and other estuarine areas are impor-
tant biologically productive ecosystems that support large and diverse
populations of aquatic organisms. Disruption of these areas by an oil
spill or other adverse impact would have major environmental and economic
effects that could have significant long-term repercussions.
- Mathematical oil spill trajectory models developed to date indicate a very
slight probability of a spill reaching Long Island from the Mid Atlantic
leasing areaso The probability of a summer spill in the westernmost lease
tracts in the North Atlantic reaching Long Island is about 10 percent.
- Based on USGS estimates for the Mid-Atlantic Des area, there is a 70%
chance that there will be between 2 and 7 spills greater than 1,000
barrels over the operating life-time of the leased area. There is a
50% chance that there will be 18 spills of 50-100 barrels.
- Based on USGS estimates for the North Atlantic oes area, there is an
81% chance that there will be between 1 and 4 spills greater than 100
barrels over the operating life-time of the leased area. There is a
50% chance that there will be 13 spills of 50-100 barrels.
- An oil spill in the Nantucket to Ambrose traffic lane along Long Island
has a high probability of reaching the beach.
- Of tIle annual 2400 tanker arrivals at the Port of New York, approximately
800 tankers utilize the Ambrose to Nantucket traffic lane near Long Island.
Transporting oil from Georges Bank to Mid Atlantic refineries could result
-11-
in an additional 150 tanker trips a year along the Ambrose to Nantucket
traffic lane, representing an increase of 19 percent. Although no
catastrophic spills have occurred in this area, additional tanker
traffic and oes navigational hazards could increase the risk of oil
spills impacting New York State.
- Geologic hazards and related bottom conditions on the Continental Slope
and in the deeper waters beyond 200 meter water depths are not well under-
stood.
2. Tourism and Marine Recreation
- The Long Island South Shore marine industry (tourism, recreation, boating
and recreation fishing) directly generates $460 million in annual expendi-
tures for goods and services. In turn~ this major industry contributes
$1.2 billion to the state's economy each year.
- The South Shore marine industry is especially sensitive to oil spills. A
major spill occurring in the Nantucket to Ambrose traffic lane could result
in direct weekly losses to the local economy of between $2.0 and $13.3
million, depending on the location of the impacted area.
- A major oil spill early in the summer season would generally deter
later visits and could have a major adverse psychological impact on
the entire recreation and tourism industry.
- Persistent smaller spills could result in a long term decline of
esthetic and waterfront property values, possibly leading to a general
reduction of the value of the tourism and recreation industry.
- Direct recreation and tourism losses are generally borne by individuals
whose livelihoods depend on the summer season for their annual incomes.
Many individuals and small businesses cannot absorb major losses.
3. Commerci a 1 Fi shi ng
- The New York State commercial marine fishing industry, comprised of some
9,500 fisherman with two-thirds being part-timers, accounts for $32 million
in commercial landings at the dockside. At the retail level, the value
of the industry is estimated at $86 million.
- A 5% reduction in New York State commercial harvesting, as a conse-
quence of an oil spill or other OeS-related loss of fishing time,
would result in dollar losses of between $190,000 and $520,000 in
the peak month of July.
A 50% reduction in the same month would result in losses of approxi-
mately $2-$5 million.
While minor reductions in harvesting can be absorbed by the industry as
a whole, the complete loss of fishing time to a few individuals or firms
for a month or even a week can cause extreme financial hardships.
-12-
_ Approximately 85% of the total New York State landing values are
attributed to shellfish, with hard clams alone representing over 50%
of the value and 25% of the total poundage landed. Because of the con-
centration of the shellfish industry in the bays, a major spill in a
nearshore location would cause serious economic losses to the industry.
Specifically, a spill occurring in or reaching Great South Bay could
have substantial econonllc consequences even if the spill were relatively
minor.
- Although most of the total value of the New York State commercial
fishing industry is concentrated within twelve miles of the shore,
the establishment of a 200-mile limit for u.S. fisheries jurisdiction
creates the potential for significant expansion of New York's offshore
commercial fishing industry. Such an expansion could increase the poten-
tial for conflicts between the state's fishing industry and oes activities.
If a major oil spill occurred during the spawning season in the offshore
region, an entire year class of fish could be reduced or eliminated,
especially if the species were presently experiencing over-fishing pres-
sures. Long term implications of such a reduction in a year class are
unknown.
C. Economic Benefits
The economic analyses in this report are based on estimates of the kinds and
extent of facilities that will locate within New York State. It is not
possible to predict exactly what facilities may be located in the State,
as companies make individual siting decisions on where to locate after specific
sites that meet technical criteria have been identified. The actual kinds
and numbers of facilities that may locate in New York State will be depen-
dent upon the successful marketing of various sites in competition with other
states on the East Coast.
To illustrate potential economic benefits to the State, it was hypothesized
that four facilities would be located in New York as a result of the high
find scenario. The low find scenario would diminish the chances of attracting
industry and thus result in fewer or no facilities for New York State.
1. Business Opportunities and Employment
_ The kindS of OCS facilities m7st likely to locate in New York State are
temporary and permanent support bases to service the offshore platforms.
A pipecoating yard is also a possibility. These facilities are not major
employment generators. Facilities that do produce large numbers of jobs,
such as platform fabrication yards and refineries, are unlikely to be
located in the state because of their siting requirements. Additional
refining capacity may be needed in the Mid Atlantic; this will depend
in part on future demand and on the extent to which Des oil replaces
oil imports.
_ OCS development could generate some 2,800 onshore and offshore jobs for
New York State residents in the peak year of the high find scenario;
three-quarters of these would be offshore jobs. Many of the skills required
for OCS-related jobs are already available in the New York State job market.
- Total potential New York State wages generated from Des develop~nt in
the peak year are estimated at more than $50 million. Direct onshore
-13-
wages, based on the siting of four facilities in New York State, would
amount to approximately $15 million annually.
- The number of jobs created by Des development could produce an addi-
tional $2 million in State income tax and some $600,000 in State sales
tax in the peak year. Lesser amounts would accrue to New York City
and perhaps other downstate communities.
- While the number of jobs is not substantial compared to the resident
employment, opportunities would most probably result in the New York
eity Metropolitan Area where the economy has been particularly hard
hit by job losses in recent years.
- The attraction of new DeS-related industry may provide a needed psy-
chological list for the City and may generate spin-off industries in
the long rUD.
- The central location of the Port of New York between two leasing areas
makes it an excellent location for ancillary industries such as drilling
mud companies, underwater divers, welders, etc., that could service both
leasing areas. These industries, some of which already exist in the Port,
could provide additional employment opportunities for New Yorkers, but
these are difficult to quantify at the present time.
2. Potential Sites and Related Implications
- Twelve sites that meet industry criteria have been identified in both the
New York city area and on Long Island. These sites were chosen as repre-
sentative of possible facility locations available in the State. Other
sites not included may also be suitable for industry purposes.
- The selection of these sites was generally based on size, existing
land use, surrounding area use, zoning, navigation, transportation
access, and environmental compatibility.
- A number of potential sites, including some of the twelve identified,
are located within presently underutilized areas of the Port of New
York where access is excellent and marine-related services are
available.
- Some capital investment for upgrading facilities in New York State may be
required, but the amount of investment is likely to be small because most
sites and facilities currently meet general specifications.
Public services are presently adequate and can assimilate any new minor
influx of workers as well as providing necessary services to facilities
that may locate here. The importance of this fact is that no new public
investment would be needed.
D. Legal and Institutional
The offshore leasing, development and production process is carried out within
the framework of the outmoded Duter Continental Shelf Lands Act of 1953.
The Act has never been significantly amended to bring it into line with the
-111-
changing priorities of the country toward energy and the environment. Amend-
ments have been introduced in the Congress that would significantly reform
the Act and alleviate some of the concerns of the coastal states. The Depart-
ment of the Interior has also recently begun a number of administrative
reforms that address state concerns, although these do not replace the need
for enactment of the OCS Lands Act Amendments.
Passage of the amendments will not end state concern with the federal admin-
istration of the leasing and development program. Coastal states will con-
tinue to have a major stake in ensuring that federal agencies proceed with
their responsibilities in an environmentally acceptable manner. The following
conclusions address some of the present shortcomings of the federal OCS
leasing and development process.
1. Federal
- The leasing of Des oil and gas resources is the exclusive responsibility
of the federal government. The states have only a limited, advisory role
in decisions on the leasing and development process. They may comment and
make recommendations in the various steps of the process, but they canno~
participate in decisions on these matters.
- The information base for federal decisions on the leasing process is inade-
quate, especially in regard to environmental data. Little is known about
the long term impacts of DeS activity, including oil spills, on the marine
environment.
- The federal DeS decision-making process is not integrated with other federal
agency concerns regarding the wise use of the ocean's resources. There is
little coordination for example, among federal agencies in the issuance of
Des permits for exploration, development and production. As a consequence,
a number of issues, such as navigational safety, may not be addressed
adequately or at all.
- Regulation of pipelines on the Continental Shelf is divided among a number
of federal agencies whose relationships are unclear. The role of the states
in Des pipeline siting is not well defined.
- oil spill cleanup and liability legislation at the federal level needs a
major overhaul to ensure that resources are available for prompt cleanup.
Further, the legislation must be responsive to the rights of affected
indi viduals and must provide compensation to these individuals, but
should not preempt existing state oil spill cleanup and liability legis-
lation.
- Coastal states suffer from a lack of information, both proprietary and non-
proprietary, to do adequate planning in advance of a lease sale. Amend-
ments to the Outer Continental Shelf Lands Act would provide a major
starting point for the transfer of relevant information to affected coastal
states. In the meantime, the Department of the Interior has taken adminis-
trative steps that would increase the amount of information available to
the states.
-15-
2. State
- New York State possesses a wide range of legislative authority to generally
deal with any new facilities resulting from oes development, either directly
or indirectly. Major environmental legislation such as the Tidal Wetlands
Law and the Stream Protection Law provide a solid regulatory base.
- The State Environmental Quality Review Act (SEQR) is the New York State
analog of the National Environmental Policy Act. SEQR requirements are
very sinillar to NEPA and duplication is effectively eliminated.
- In the case of energy facilities, New York State does have extensive auth-
orities related specifically to siting of power plants, transmission lines
and liquefied natural gas (LNG) facilities. The State does not have a
comprehensive regulatory process for the siting of other major energy
facili ties.
- New York State does not have legislative authority over the siting of
interstate oil pipelines and is preempted by federal law in some other
aspects of pipeline siting and safety.
- The development and implerrentation of an approved Coastal Zone Management
Program should provide the necessary authority for comprehensive and wise
use of the State's coastal resources, including the identification and
designation of geographic area of particular concern for industrial
devel opmen t .
-17-
I V. BACKGROUfW
A. Federal Leasing Program - Historical Note
The present Federal Outer Continental Shelf leasing program had its
origins in the late 1940's, under conditions quite different from those
that exist today.
Early oil and gas exploration and development in this country occurred on
land. As demand for petroleum products increased early in this century,
exploration activities began to move out into shallow coastal waters in
Louisiana and California. Increasing production of offshore oil and gas
and associated revenues triggered conflicts between the states and the
federal government over the ownership of underwater lands within the
three mile limit.
President Truman's Proclamation on the Outer Continental Shelf, issued
in 1945, extended the assertion of federal jurisdiction to include the
natural resources of the subsoil and seabed of the Outer Continental Shelf,
far beyond the three mile limit. The U.S. Attorney General also brought
suit against the State of California to assert federal jurisdiction within
the three mile limit. In 1947, in U.S. v. California [332 US 19(1947)J
the Supreme Court held that the United States has "paramount rights in and
power over" the three mile ocean belt. Later Supreme Court decisions, in
U.S. v. Louisiana and U.S. v. Texas, reaffirmed this federal jurisdiction.
(In U.S. v. Maine [420 US 515(1975)J, the Supreme Court held that these
cases shoul d not be overrul ed, and that the federal government has para-
mount rights to the seabed beyond the three mile limit.)
The U.S. Congress took two major actions in 1953 concerning offshore
mineral resources. The first was passage of the Submerged Lands Act,
which gave tne states exclusive rights to the resources within the three
mile limit and reaffirmed federal jurisdiction beyond that point. The
second was passage of the Outer Continental Shelf Lands Act.
The DCS Lands Act reflects conditions and attitudes that existed at the
time of its enactment. Offshore exploration was seen as a means to
develop cheap and abundant energy supplies for the nation. There was
little consciousness of the need for protection of the environment. Off-
shore petroleum activity was confined to areas adjacent to Louisiana,
Texas and California, all states that had had extensive onshore experience
with oil and gas exploration and development.
The OCS Lands Act established a framework for the leasing of OCS oil and
gas resources that involved the Department of the Interior and the petro-
leum companies but gave little or no role to adjacent states and local
governments. Under the law, the Secretary of the Interior was authorized
to lease tracts not exceeding 5,760 acres (three miles square) for a
period of five years, and as long thereafter as further activity was ap-
proved or production continued.
-18-
Because the Act gives only very general guidelines and directives to the
Secretary, much of the substance and detail of the leasing program has
Deen established through regulation. The regulation-making process in-
volves pUDlication of proposed regulations in the Federal Register,
comment by interested parties, and revision and publication of final
regulations. Until recently, there were few interested parties other
than the oil and gas industry; consequently, the present regulations
largely reflect industry concerns and are less representative of the con-
cerns of other parties.
The last eight years have seen a great expansion in national concern and
interest over offshore oil and gas development. In 1969, the Santa
Baruara oil spill, the largest in U.S. history to that date, created a
national awareness of potential environmental problems and other probl~ms
associated with the OCS leasing process and raised questions about the
adequacy of existing regulations. Also in that same year, the National
Environmental Policy Act (NEPA) was approved by Congress. NEPA required
the preparation of statements assessing the environmental impacts of all
significant federal actions, although some federal agencies were slow to
comply.
For most parts of the country, however, OCS exploration and development
remained an abstract issue until rising national demand for petroleum
led "to plans for accelerating the leasing process. In June 1971, the
Department of Interior announced a tentative five year OCS leasing schedule
that included the Atlantic Ocean as a frontier area (Table 1). Two years
later, then President Nixon announced that the OCS leasing rate would be
increased from one million acres (174 tracts) a year to three million
acres (520 tracts), and that the five year leasing schedule would be
changed accordingly.
This proposed enormous expansion of leasing activity did not actually occur
because of the huge administrative difficulties involved. The accelerated
leasing program has had major implications for the frontier states and
the Department of Interior.
Coastal states that had no previous experience with OCS oil and gas ex-
ploration and production were not prepared to actively participate in the
decisions that could affect their coastlines. Additionally, the antiquated
Outer Continental Shelf Lands Act of 1953 limited their participation in
the program.
Many coastal states viewed the federal program with suspicion. The
federal government would receive royalties from the production of mineral
resources while states would be exposed to the bulk of the risks, espe-
cially those associated with oil spills. The only way a state could
receive positive economic benefits would be from any new employment that
would be generated and/or from increased energy supplies that could ac-
crue to the state.
In the past three years, the Department of Interior has altered its
leasing schedule and associated rules and regulations to accommodate some
of the concerns of the coastal states. At the same time, the coastal
states have taken steps to acquire the expertise to allow them to ef-
fectively voice their views.
TABLE 1
SALE AREA
1~7' 1976
^0(1NU.1FMAMJJASON
pnOPOSED oes PLANtllNG scm:DUtE
Augusl19n
CIC(lOklnlel
N S
^^-f----
f P
f
42 N. AHantic
43 $oulh ,\llanlic. -
Georgia Embavment
45 Gull 01 M~xico
--f- -
65 E<lSlern Gull 01 Mulco
51 Gulf 01 Muleo
4<1 Mid-Atlanlic
48 Soulhern Cahlornia
5[1 Gul! cf ~'cxico
54SoulhAlIilnric-
BI,lkePlaleilu
FCderillSfale Buuloll
_(~earSh(lfe)
55 Gulf 01 Alaska
I
e
62 GUl' or Mexico
---~ - - -j
I
^'
--~
I
-f- --+-
461<odiak
57 North ^lIanlic
-!"d Cr'1I11,11 and NOftllern--- --
Cah!Ufllia
- --~
6UCcoklnlel
56SoulhflHanlic-
_~~~~l)~;}~~havmenl
59 Mid-Atlantic
^ ^r-
66 GIIII 01 Mexico
51 Bering.Norlon
C . CaU lor Nominations
o . Nominations Due
T. Annol/ncemenl of Tracls
E . Dtall Envlronmenlal Statement
S . Sale
T
e
e
I
[JIJ
I
^ I ^-
N S
P
N S
- ---
N S
H
N S
1-
P
^ j-- -^ -
f
P
E
f P
^ -
f
N S
- 1 ^
P N S
, ". ~ t"; ,
E H
-I-t-- ^-
E
H
E
II
^ -I ^
f
^ -
E
D
T
D
T
T
e
T
D
f-j-
D
e
D
II
T
+== I
~~ 'e' ~;
e
H . Public HearinlJ
f - final Environmeulal Slalemenl
r . Proposed Halice 01 Sale
N. Hillier Dr Sille
f- --I
-1-
P N S
-- ----
f H S
-- -. - - -
E H
E
T
-1--
e
S,l"~',.",' ...or,lm'l"nl Ill"''''' ,""""",.1111" .y,',.,,,,;.,,,.,, "';,f
1~, 1\"..1,,,;/ ""II ~" .1""I.,hf~ Ii" r'l'lm,IIH1" ,,'''111''''''1''1''',''''1
^ ,Ipn,-,r:" ",hplh"t '(1 h"'~ ,lilY <It I~" Ir,ler '."t,." I".,..d
.....11 "01 tJl' m~d~ 1~'I~ ul""l'lrl"~' pi .11T nrrr', _.LlV -,I"oleo'
I
\D
I
.,1 III0r"""'''''''''''.1I ""1'.'.1.1"""'"'''.1<1"",,,11'''1>'''_ '''.'10''1]';
.,-;""".,,111"111'-""""""'''''''.11'''''''''''',1','''(1,',,,,,,,,,,,,
'1",1,,'0. ,"HI'I".,~,' '" II..' <IN''_,,,,, .".,~.n~ 1'''" ""C ,n,<,,' '''",
.",lY_ '" 1,,,-1 I',. "UII!. ''''II"l".,.I.,,,_, ',lip t'" I''''. d".ILr'"
The Deparlment of the Inferior
-20-
This process of interaction between coastal states and the Department of
Interior is continuing in a spirit of cooperation. Many changes to the
leasing process, rules and regulations, administrative procedures, and
environmental safeguards are needed to guarantee the success of the
federal program without subjecting existing industry to undue risk.
B. Relationship to Coastal Zone Management Program
Concerns about the onshore impacts of Outer Continental Shelf oil and gas
development were among the reasons for enactment of the federal Coastal
Zone Management Act of 1972. The coastal zone is a limited area in which
many different uses compete for space. The juncture between land and
water contains some of the most biologically productive ecosystems in the
world. More than half of the nation's population live in counties along
the coast. Land and water access makes it suitable for many commercial
and industrial uses, and particularly for energy development. The ex-
pansion of the OCS leasing program to frontier areas raised the issue of
additional conflicts between land and water uses in the coastal zone.
The Coastal Zone Management Act encourages the states to take an active
role in the management of coastal resources. This requires making basic
decisions over how coastal resources are to be used, and involves balanc-
ing competing needs and making deliberate choices. The federal Coastal
Zone Program is strictly voluntary; to encourage state participation, the
law provides several incentives, including two that are particularly
important.
One is the provlSlon of grants to the states for the development and
implementation of coastal zone management programs. New York State is now
engaged in the planning and development of a management program under
Secti on 305 of the Act, with the I~ew York State Department of State bei ng
the lead agency for the Coastal Zone Management Program. Funding for the
New York State OCS Study Program has been provided under a supplemental
appropriation to the Coastal Zone Management Act; the Department of
Environmental Conservation is a major contractor for the state CZM pro-
gram and is also the lead state agency for OCS policy development and
State response to the federal leasing program.
The other provision is the "federal consistency" clause in the law, which
pledges the U.S. Government to abide by federally approved state coastal
management programs. State programs must be approved by the Secretary of
Commerce, who seeks the opinions of other federal agencies before making
his decision.
Once a management program is approved, federal agencies must make their
own actions consistent, as far as practical with the program. To obtain
federal permits for activities in the coastal zone, private parties must
also have certificates of consistency from the states.
The federal consistency clause has significant potential implications for
a state. Because the first federally approved state management programs
are only now going into effect, and because federal agencies must in effect
approve the programs, the exact consequences of this provision are not yet
clear. However, regulations proposed by the Department of Interior for
- 21 -
exploration and development plans would require concurrence with approved
state coastal management programs.
In addition, the provisions of the Coastal Zone Management Act do not
resolve the federal-state OCS issues noted earlier. The consistency
provisions affect federal actions conducted within a state's boundaries,
but most federal OCS decisions concern areas beyond state jurisdiction.
The 1976 Coastal Zone Awendments to the Act provide for some additional
financial assistance to the states for onshore coastal energy activity,
including OCS-re1ated impacts, but these amendments do not approach
questions of state-federal interaction in decisions beyond state jurisdic-
tion.
C. Phases of OCS Leasing and Post-Leasing Activities
The Outer Continental Shelf leasing process begins with the identification
of potential oil and gas resource regions on the shelf. Only certain
areas are capable of containing hydrocarbon resources; unless all of the
necessary geologic conditions are present, oil and gas will not be found
(see box).
A number of areas on the United States Continental Shelf have been iden-
tified through geophysical exploration as potentially having had the
proper geologic conditions for the formation of oil and gas. (See Figure
2) .
The Baltimore Canyon Trough, an elongated depositional basin off the
coast of New Jersey, and a similar feature beneath Georges Bank off the
coast of Massachusetts, are two of these potential areas. (See Figure 3)
The U.S. Department of Interior is the federal agency authorized to
lease lands under federal jurisdiction to the oil and gas companies for
the rights to explore and develop oil and gas resources on the Continental
Shelf. At the lease sale, these companies bid for various underwater
tracts and pay revenues to the federal government based on the amount of
oil and gas produced. The leasing process leading up to a lease sale now
consumes approximately twenty months.
One lease sale for the Mid-Atlantic has been held (August 1976 for Lease
Sale #40). The following sales have been scheduled by the Department of
Interi or:
Area Lease Sale Number Month/Year
North Atlantic 42 January 1978
Mid Atlantic 49 February 1979
North Atlantic 52 November 1980
Mid Atlantic 59 August 1981
The entire process of oil and gas development generally consists of five
phases of operation: pre1easing, exploration, deve1opmen~ production, and
shutdown. (See Figure 1).
-22-
GEOLOGY OF THE ATLANTIC COliTINENTAL SHELF
The potential for oil and gas in the Mid-Atlantic and North
Atlantic coasts is a result of geologic events that began per-
haps some 250 million years ago during the Permian or Triassic
periods. About this time, the American and Africa-Europe con-
tinental plates, which up to that point had been joined, began
to separate at the edges of what is now the Continental Shelf,
forming the Atlantic Ocean.
The great stresses caused by the separation of the continental
plates resulted in the formation of large block faults along the
edges of the continents. Low-lying blocks formed basins which
collected sediments; what are now known as the Baltimore Canyon
and the Georges Bank Basin were formed from such basins.
A "basement ridge" along the edge of the Continental Shelf
created a barrier that restricted water circulation in the then-
shallow marine basins and allowed sediments to settle. What
is now New York State was at the shoreward edge of the basin,
and here the sediments deposited were relatively thin.
Much more sedimentation occurred in the centers of the Georges
Bank Basin and the Baltimore Canyon Trough. Rapid sedimentation
may have allowed organic material to accumulate in source beds,
creating the potential conditions for petroleum formation. As
sediments accumulated over millions of years, the weight contri-
buted to a slow further deepening of the basins, allowing additi-
onal sediments to be deposited. In the center of the Georges
Bank Basin, sediments are more than 8,000 meters (26,000 feet)
thick, while in the Baltimore Canyon Trough they exceed 14,000
meters (41,000 feet) in thickness. Figure 2 shows the locations
of the Bqltimore Canyon Trough and the Georges Bank Basin as
well as the "arches" where only thinner sediments accumulated.
If organic source beds were formed, and if the proper conditions
of heat and pressure existed at the right time, and if geologic
traps exist, then commercially recoverable hydrocarbon resources
may exist in both the Mid-Atlantic and Georges Bank area. Geo-
logic conditions do not appear to have been suitable for oil and
gas formation close to the coast of New York State. Whether oil
and gas actually exists in the Baltimore Canyon Trough and the
Georges Bank Basin can only be determined by exploratory drilling.
-23-
FI GURE 2
o LTER CONTINENTAL SHEL F
AREAS U~DER LEASH'" CONSIDERATION
WASHINGTON-( \,
OREGON <. (
(I
,
"
if
--/'7'-'_"_
i \ ~--~----t-~__ ..11
i -.-T- '-.......
i I
,
c,
Ij
NORTHER~\.~
CALIFORNIA \'
\
SANTA '(i
BARBARA 1~,
CHANNEL 'f:..,
':~
SOUTHERN ~
CALIFORNIA "".
"0
,
~"-$~
; --.
._~
,
"
;
\
,
~-.-'r
-r~- -.! /
l" --..i
! L
i
/
,
\, ,J
'\
---I
i
!
I
----<-.
,
_, r
.'''1,
-\
--i-
,
r -
i
~ '
-\-----\
',.
,
,
"'0" ','.
, '
'-
"
"
~'...,,--
-~- l
i )L-':'1>.-
1.- ( h.__~/ rf
: (/"",/ '>--- j
11------- ?t~~r- ---~'~:_:"_
/).---T - __\_Jut.:, ----,
"-l, . I \ "-
;--- 1 I \ .
\ c_~
SOUTH
ATLANTIC
I
I
i
", i ,I
-..._r---,,----_.J
'\
\
\F\
--- CHU;CHI '<\<?<"-? '\
SEA \'<9</-'" \...
HOPE BASIN" ,/ ~\JZ~~","'>
NORroN BASIN ,~_ ~~,
NAVARlN __~~
BASIN,!" --' <1:i\~
ST'B~~~;:GE~~\~ e, I:l ~-RISTOL
, '-__" -' :" /BASIN f
--\S-_~> ,~~"
41.C:lj .q. " \2>'i"~,-f'\.<( ~ \
1/41\18 - ~
Itt:(f: GUI.t:: ~....
KODIAK -'1l,q ,PF "'-::, 'i,
LOWER BASIN ....JIr..q 0'1\
COOK INLET \ "
----,--.c
\
\
~'S, COnl/llen/al Margin shOWing
areas of leasing po/enllal
Source: U.S. Department of Interior, "Leasing and Management of Energy
Resources on the Outer Continental Shelf," 1976.
- 24-
I
760
I
740
I
700
- -+--(
720 I
\
6 SO
440
\
\
L VERMON1/
. , NEW ,
I ; HAMPSHIRE \.
I :
,-- ~ -- /'-
, ---
/
MAINE
-'
r
NEW YORK
420_____ _\
1----
: --I~I~I
/ CONN. I
MASS.
PENN.
),
" ,
.'
cJ:>.
A <='l
/--,
( LONG "-
\ ISLAND \
,LATFORM 1
GEOllGES
(
\ NJ.
,
-.
~
000
."
FIGURE 3
REGIONAL GEOLOGY
740
The Baltimore Canyon Trough and Georges
Bank Basin are areas where commercially
recoverable oil and gas resources may
exist. Both areas are filled with thick
marine sediments; maximum thickness of
these sediments in the Baltimore Canyon
Trough is 14,000 meters (about 9 mi 1 es) ,
and in the Georges Bank Basin is 8,000
meters (about 5 miles). The Cape Fear
Arch, the Long Island Platform and the
Yarmouth Arch are areas with relatively
thin marine sediments and little prob-
ability of oil and gas occurrence. New
York City is at the edge of the marine
sediment deposits.
700 680
720
Source: Ijew York State Geological Survey
400
I
I
I
i
I
"oj
I
I
360\
I
I
I
I - - - _ ---1---(
740 I 720 I
, \
\ ~ "
\ .
L VERMONj"
: . NEW ,
! ; HAMPSHIRE ~\
I --1 .-
:-- -- - --./
/ MASS.
760
440
NEW YORK
420_____ _\
.
,---
: _hl;'I~1
I CONN. I
),
, ,
PENN (' ',,--
\. N.J.
.'
~
~
m
.
-25-
I
700
MAINE
~
..,000
I
"I
I
I
".j
I
FI GURE 4
MID AND NORTH ATLANTIC OCS
LEASE AREAS
Lease Sale #40 call for nomin-
ati ons area
Lease Sale #42 call for nomin-
ati ons area
Lease Sale #49 call for nomin-
ations area
Tract selections, Lease Sales #40
and #42
360
Note: Tracts to east of line drawn through
Georges Bank have been withdrawn from
Lease Sale #42 because of Canadian
boundary claims
720 700 6 eO
".44-
o 50 100 150 Km
t-- " .----,
i"l "1"1 100 Mi
Scale 1.5,000,000
-26-
1. Preleasing Phase
a. ~eophysical and geologic activity - Investigation of potential
resource areas begins long before the leasing process begins. Actual
exploration wells are not allowed before a lease sale, but the Department
of Interior does allow other types of investigation under permit.
Seismic surveys, conducted by specialized firms, are among the earliest
types of exploration. These surveys have become quite sophisticated,
making use of computer analyses, and can provide much of the data required
to make estimates of potential oil and gas resources in an area.
Seismic surveys on the Atlantic OCS have been conducted since 1960.1
Other types of data are also collected under Interior permit. Bottom
samples and shallow wells provide additional data on the general geology
of an area and whether the right type of rocks exist for petroleum
formation and accumulation. In frontier areas, including the Atlantic,
deep Continental Offshore Stratigraphic Test (COST) wells are drilled
prior to the lease sale. These are deliberately drilled away from poten-
tial oil and gas structures. All of this information is used by the oil
companies and the Department of Interior to derive estimates of resource
potentials. Until actual exploration wells are drilled, of course, it is
not possible to be certain if oil or gas is present.
b. Environmental baseline studies - In addition to surveys of geologic
resources, environmental baseline studies are conducted in frontier
areas. These studies are a recent development; an OCS Environmental
Studies Advisory Committee was established only in 1974 and was recon-
stituted and renamed in December 1975. The studies are intended to
establish baseline environmental data against which any changes caused
by OCS exploration and development can be measured through an ongoing
monitori ng program.
There has been criticism that an inadequate amount of time is
lowed for baseline studies before the leasing process begins.
mental studies in the Mid-Atlantic and North Atlantic did not
a few years ago, and results from some of the studies may not
until after lease sales are conducted.
being al-
Environ-
begi n until
be available
c. Resource reports - After an area has been scheduled for a possible
lease sale, the Bureau of Land Management (BLM) in the Department of
Interior requests resource reports from other units within Interior,
including the Geological Survey, Fish and Wildlife Service, National Park
Service and Bureau of Outdoor Recreation, as well as from other federal
agencies including the ~ational Oceanic and Atmospheric Administration
(NOAA), Environmental Protection Agency (EPA), Coast Guard (Department of
Transportation), Federal Energy Regulatory Commission (FERC), Federal
Ener~y Administration (Fl::A), and tne Departments of Defense and Treasury.
The governors of adjacent states are also asked to submit similar reports.
BLM assembles these reports in a preliminary assessment of the area's
petroleum potential, its environmental sensitivity, and conflicts with
other resource values and uses such as fisheries, transportation and
defense.
-27-
d. Call for nominations and comments - BLM then issues a "call for
nominations and comments" to identify tracts that are of interest to the
petroleum industry as well as tracts that should not be leased or should
be leased only with conditions to protect environmental and other
resources. The states and interested parties within the states partic-
ipate in this process.
e. Tract selection - the Department of Interior util izes the resource
reports and information from the call for nominations and comments to
make a selection of tracts to be studied further in the environmental
impact statement for eventual 1easings. According to 001, the tract
selection process is designed to choose those tracts most prospective for
production, to avoid obvious environmental hazards to the existence of
other resources, to test additional prospective geologic structures and
trends, and to protect tracts in imminent danger of drainage from pro-
duction on other tracts. 2
f. Environmental im act statements - the 1969 National Environmental
Policy Act NEPA requires the preparation of an environmental impact
statement for any significant federal action, including OCS lease sales.
The intent of the law is to bring environmental considerations into
federal decision making at the earliest possible point. The NEPA process
includes preparation of a draft environmental impact statement, public
review and comment including public hearings, preparation of a final
environmental impact statement and filing of the statement with the Council
on Environmental Quality.
The EIS must include a description of the proposed actions, a description
of the existing environment (both marine and onshore), a detailed analysis
of possible adverse short term and long term impacts on the environment,
proposed mitigating measures, an assessment of alternatives to the proposed
action, and a record of consultation and coordination with other parties.
Although the NEPA process provides for state and public input into the
federal decision-making process, it requires only consideration of such
input; the ageney is not required to adopt comments. The agency must,
however, adhere fully to the procedural requirement of the Act.
A lawsuit was filed against the Department of Interior on the EIS for Mid-
Atlantic Lease Sale #40, alleging a failure by the Secretary of Interior
to comply with NEPA requirements. A Federal District Court decision
declaring the lease sale null and void was overturned by the U.S. Second
Circuit Court of Appeals in August [County of Suffolk v. Department of
Interior, F. 2d_, 10 ERC 1513 (2d. Cir. 1977)].
g. Lease sale - after completion of the environmental impact process,
the Secretary of Interior makes a decision as to whether the lease sale
will be held and if so under what conditions and terms. A proposed notice
of sale is published in the Federal Register, providing details on the
sale and identifying any special stipulations that may be imposed on any
or all tracts. The proposed notice of sale allows the states 60 days to
review the sale-notice and proposed stipulations. At the end of this
period, a final notice of sale is published in the Federal Register, with
the lease sale occuring 30 days later.
-2fl-
Most lease sales in the past have been conducted on the basis of a cash
bonus bid with a fixed royalty on production, usually one-sixth of its
value, although other bidding systems are possible. On the day of the
lease sale, the oil companies submit sealed bids. These are accepted or
rejected by DOl on the basis of detailed resource estimates prepared for
each tract by DOl staff.
A lease contract is issued by the Bureau of Land Management (BLM) for
each accepted bid. The oil and gas lease contract grants the right of
the lessee to conduct the operations necessary to drill and to produce
oil and gas from a specific tract of OCS land. Each tract covers an
area not exceeding 5,760 acres (2330 hectares). The lessee has 5 years
in which to find oil or gas in paying quantities or to conduct DOI-
approved drilling operations or the lease is forfeited. However, until
this year, lease extensions were routinely granted and no lease had ever
been forfeited since the beginning of the OCS program. If a discovery
is made, the contract may be extended as long as production continues or
approved drilling operations are conducted.
2. Exploratory Phase
Exploration activities are conducted by the petroleum companies to deter-
mine whether oil and gas resources are actually present and to delineate
the size and extent of any resources that may exist. Before exploration
can be undertaken, the companies must meet several requirements.
Stipulation Number Seven of Mid-Atlantic Lease Sale #40 requires the com-
panies to provide the states with Notices of Support Activity needed for
exploration programs. These are intended to provide information to the
states and assist them in planning for the onshore impacts of exploration.
This stipulation was added as a recommendation of the t~id-Atlantic States,
including r~ew York.
The Geological Survey requires lessees to submit exploration plans detail-
ing the exact location of proposed wells, safety measures, and a number
of other it~ms. These exploration plans are sent to the states for review
and comment. Under proposed regulations, USGS may not approve an explora-
tion plan until affected states with approved coastal management plans
have concurred that the exploration plan is consistent with the approved
program, or until the Secretary of Commerce overrides any state objection.
An additional requirement of the proposed regulations is that lessees sub-
mit an environmental report with the exploration plan. This may utilize
information in an existing EIS. The environmental reports are to be
submitted to affected states for review and comment.
In addition, a permit from the Corps of Engineers is required for placement
of the exploration rig (obstruction to navigation) along with a permit
from EPA for point discharges (National Pollution Discharge Elimination
System) .
Exploration rigs are highly specialized vessels, designed to be easily
moved from one location to another to drill exploratory wells. The type
expected to be most widely used in the Atlantic is the semisubmersible rig
-29-
(Figure 5) because of its ability to work in deep waters (200 meters or
more) and in severe weather conditions. Jack-up rigs, so called because
they are jacked up on long legs for drilling, may also be used in
shallower waters. Drillships are designed for use in very deep water
but have also been used recently in relatively shallow water. At
least seven semisubmersible rigs, one jack-up and one drillship will be
used for exploratory dri 11 i ng in the Lease Sale #40 tracts, accordi ng to
permit applications filed by oil companies as of this writing. Several
other types of exploration rigs also exist, including barges, but they
are unlikely to be used in the Atlantic because of water depth, weather
conditions or because of economic considerations.
A drilling program is designed to determine if hydrocarbon resources exist
in commercial amounts and to delineate the size and extent of the field.
This information is used to plan the timing and scale of development
operations. The number of wells drilled by exploration rigs is detennined
by the amount of resources present; if abundant resources exist, ex-
ploration activity may continue well into the development phase, but if
only dry holes or subcommercial finds are encountered, exploration may
cease after fi ve years or 1 ess.
Exploration generates a limited amount of onshore support activity,
primari ly through temporary support bases. These are di scussed further in
Chapters V and VIII.
3. Development Phase
If sufficient oil and gas is found in exploratory drilling, the petroleum
compani es wi 11 formul ate development programs. The Department of Interi or
has .pu,blished proposed regulations [42 Fed. Reg. 49478(1977)(to be
codlfled in 30 CFR Part 250)] that will require the companies to submit
a development and production plan and an environmental report. Copies of
these must be submitted to affected states for review and comment. The
development and production plan may not be approved until affected states
with approved coastal management programs have concurred that the plan is
consistent with the approved program, or until the Secretary of Commerce
overrides any state objection. Also under the regulations, USGS is to
determine if an environmental impact statement is required for the develop-
ment and production plan. In frontier areas, such as the Mid and North
Atlantic, a development phase EIS will be required.
The intent of the development plan EIS is to give coastal states a realis-
tic appraisal of the onshore and offshore impacts generated by the oil
and gas resources. The initial environmental impact statement dealt with
a range of estimates that could be discovered, but without exploratory
drilling no one can know exactly how much resource will be discovered.
Thus, the development plan EIS would follow the exploratory phase and would
include accurate estimates of the amount of recoverable resources. A
development plan EIS would give coastal states a better appreciation of
impacts. Additionally, the transportation strategy trade-offs would be
more apparent.
-30-
F1GURE 5
EXPLORATlOil Rl GS
Exploration rigs are used to determine if
oil and gas exists in commercial amounts
and to delineate the size and extent of
the fields. They are designed to be easily
moved from one location to another.
Seve ra"1 bas i c types are in use.
Senri-subrnersibles are suitable for use
in deep water and in severe weather condi-
tions. They float on submerged legs or
pontoons and are either anchored to the
bottom or dynamically positioned by small
prope 11 ers to 1,1,1 i nta i n pas i ti on. A semi-
submersible was used to drill tile Atlantic
Coast v1211s. This type of rig \-lill be
used extensively in both the Mid and North
Atlilntic.
Jack~~J~ are suitable for use in relatively
shallow water (generally less than 90
meters deep) and in moderate weather con-
ditions. They are floated to the site,
vlhcl-e the legs are 10\-lcred to raise the
dri 11 ing plalforll1 above the waves. Jack-
up rigs will be used in Saine of tile shallow
parts of tne Atlantic lease areas.
Obcr__t.YE~_~ - Two other types of explora-
tion rigs are in COIIll110n use. One is the
drillship, a ship designed to be used
for exploratory dri 11 ing. It can be used
in very deep waters beyond the edge of
the Continel',tal Shelf, but has limitations
in severe I-leather conditions. Drillships
wi 11 be used in so,:e of tile areas of tile
Atlantic. Tile ottler type is the semi-
submersible dri Iling barge, wlrich has Deen
used extensively in the Gulf of Mexico.
It is limited to very shallov! "later, and
will not be used on the Atlantic Uuter
Continental Shelf.
-11 -
Development drilling and production is conducted from production platforms;
these will be installed and support bases established once the necessary
permits and approvals are obtained. Chapter V discusses these facilities
and activities in greater detail and ChapterVIII assesses the implications
of such activities for New York State.
Several basic types of production platforms could be used in the Atlantic
(Figure 6). Each production platform is installed for the life of the
field, and each will support one or more drilling rigs. Each rig may
drill four or more wells per year, until the total number of development
wells per platform reaches as many as twenty or more.
Any oil or gas resources that may be found will be transported to shore
either by pipeline or tanker. The method used will depend on a number of
factors, including the total amount of resources discovered and the
expected rate of production. For the oil companies, the decisions are
primarily economic and technological. A sufficiently large oil find will
economically justify the construction of a pipeline, whereas with a small
find, tankers may prove the most economical way of transporting the
resources. For natural gas resources, pipelines are the only economically
feasible means of transportation, as the alternative of liquefying the
gas at the platform and shipping it to shore by liquified natural gas
(LNG) tanker is too expensive to be justified on the United States OCS.
The choice of tankers versus pipelines involves more than simple economics,
however. Pipelines must be approved by appropriate federal and state
authorities before they can be constructed (Chapters V and X discuss
this in more detail, including problems and conflicts that have been
identified). And the choice of pipelines or tankers can have significant
environmental implications. In general, the use of pipelines is much
less likely to result in oil spills than is the use of tankers. Tankers
present risks in loading from the platform (especially during severe
weather), during the trip to shore (possible collisions or other accidents)
and during unloading operations (accidental spills). If properly de-
signed, constructed, and maintained a pipeline should not result in oil
spills during its lifetime.
The Department of Interior has proposed a process for planning the trans-
portation of any oil and gas discovered. This proposed process would
involve the states, federal agencies, the oil companies and other groups.
The proposed multiple stage process would begin with the Call for
Nominations and would continue into the development phase, when pipeline
corridors would be designated, a transportation management plan would be
approved, and any pipelines would be constructed and operated.
4. Production Phase
The production phase may overlap both
During this phase, which may last ten
onshore support activity is required.
to maintain production levels.
exploratory and development phases.
to twenty years, a lower level of
Wells are periodically worked over
~
,."-<.-
-32-
FIGUHE 6
PRODUCTION PLATFORMS
Production platforms are ordered when
exploratory drilling has provided enough
i nformati on about the resources to jus ti fy
production. Platforms are designed for
conditions at specific sites; they are con-
structed on shore and then tmled to the
location and fixed to the bottom. Those
used on the Atlantic OCS will be designed
to support the crew and operations for
periods of a week or more to minimize
transportation problems. Materials will
be taken to the platforms by boat, an~
crews vii 11 generally be transported by
helicopter.
These platforms serve two basic purposes:
Development drilling. Drilling rigs
are used to dri 11 as many as twenty-fi ve
or more wells from each platform; more
than one dri 11 ing ri g may be used on
the platform at a time. Development
drilling may take as long as several years.
Production. After production wells have
been completed, oil and/or gas can be
transported to shore by pipeline or tanker.
Production may be delayed until all Vlells
on the platform have been drilled and the
drilling rigs have been removed, to avoid
operating problems. During the production
period, which may last from 10 to 30 years,
the level of activi ty is lOller than during
dri 11 ing. After production ceases, the
platform is removed.
Several basic types of pt'oduction platforms
are in use or in development. Steel plat-
forms (ShO\VII in the illustration) are most
common and probably will be used in the
Atlantic lease areas. Concrete platfot'llls
are a relatively new development and are
being used in the '!orth Sea. liybrid (con-
crete and steel) platforms are being
designed but have not yet been used. fJork
is also being done on developl11ent of sub-
sea production systems that Vlould not use
platforms on the surface, but these are
presently only in the design and testing
stages.
-33-
The production characteristics of an individual well are for production
to begin at a certain level and then to show continuous decline over the
economic life of the well. The average decline of gas wells on the OCS,
for example, is 12 percent a year. Because of phased drilling of wells,
the overall production of a group of fields will show a pattern of rapid
rise followed uy constant decline (Figure 7).
As production continues to decline, the economic limits of production begin
to be reached. In any reservoir, significant amounts of hydrocarbons are
trapped within the porous rock. Secondary and tertiary recovery techniques
have been developed that make it possible to extend production for a time.
The use and effectiveness of these techniques depends on the characteristics
of the reservoir and the costs of production.
5. Shutdown Phase
Eventually, the fields reach the point of economic exhaustion. Sub-
stantial amounts of nydrocarbon resources may remain behind, but these
cannot be extracted in any economically feasible way. At this point, the
wells are plugged to prevent pollution, the production platforms are
removed to eliminate navigation hazards, and any pipelines that may have
been built are abandoned.
In many ways, the shutdown phase is as important as the exploration,
development and production phases. The economic lifetime of any resource
area is limited, and it is vital that preparations be made at the begin-
ning for the inevitable loss of any jobs and related economic activity
that may have been generated by OCS development. Failure to plan for the
shutdown phase could magnify its adverse economic impacts.
Chapter VIII discusses the imp1 ications for Ne.'l YorK State of several dif-
ferent resource find and production scenarios.
FOOTNOTES - CHAPTER IV
lContinenta1 Oil Company, Offshore Oil Development on the Georges
Bank, Stamford, Conn., July 1,1976.
2U.S. Department of Interior. Bureau of Land Management/Geologi~al
Survey, LeasinG and ManaGement of EnerGY Resources on the Outer Contlnenta1
Shelf, 1976, p. 18.
~
Q
I-.:
(,)
~
c:.
g:
o
-34-
FI GURE 7
TYPICAL FIELD PRODUCTION
5
10
YEARS
15
20
Production from a field or reservoir is a composite
of production from a number of individual wells. In
turn, production from a leasing area is made up of
production from individual fields.
For a typical field, production peaks within the first
four to five years as new wells are drilled and begin
to produce. Thereafter, production gradually declines
as the output of individual wells decreases. The
rate of production will depend on a number of factors,
including geologic characteristics of the field and
the capacity of available pipelines or tankers. A
typical field may have an economic lifetime of 15 to
20 years before shutdown occurs. Production from a
leasing area may occur over a somewhat longer period
due to the timing of lease sales and the timing of field
deve 1 opment.
Source: Derived from Continental Oil Company figures.
-35-
V. DEVELOPMENT OF SCENARIOS
i\ basic purpose of this report is to identify the potential environmental,
economic and energy impacts of Outer Continental Shelf oil and gas develop-
ment on New York State. However, making accurate predictions of actual
future impacts is difficult at best because of the many uncertainties involved.
The most important is lack of knowledge of the actual oil and gas resources
of the Atlantic OCS -- there may be a great deal of oil and gas present or
there may be none at all. Another major variable is the fact that New York
State lies between two leasing areas. The additive or synergistic relation-
ship between the Baltimore Canyon and Georges Bank areas could increase the
impacts on New York State, depending on a number of other variables such
as the number of available support base sites in the Atlantic region, the
timing and length of any production, and a myriad of other factors.
Instead of attempting to make accurate predictions of actual future impacts,
this report identifies three scenarios of potential resource development
and explores their environmental, economic and energy implications. A
scenario is not a prediction, but rather is based on a set of explicit assump-
tions, using the best available information. The development of the three
scenarios focuses on the impacts that the State will face, so that state
and local officials can anticipate any decisions and approach them posi-
tively, rather than being put in the position of reacting to individual indus-
try proposals.
A. Results of Lease Sale #40
In August, 1976, the first Atlantic CQast lease sale was held, covering
tracts in the Mid Atlantic. (The validity of this lease sale, which had
been challenged in court, was recently upheld by the U.S. Circuit Court of
Appeals. See page 27 for citation).
Industry interest in the lease sale was significantly higher than had been
expected. The total amount of all bids received was $3.5 billion, and the
total amount of all bids accepted was $1.1 billion.
A total of 410 bids were received on 101 tracts, out of a total 154 tracts
offered for lease. Eight bids were rejected, leaving a total of 93 tracts
leased by the Department of Interior.
The pattern of accepted bid amounts in the lease area is shown on Figure 8.
The highest bids were concentrated in the northwest part of the leasing area
and in three other areas. Eight bids of over $50 million were accepted, the
highest of which was a record $107.8 million. An additional 17 bids of
between $10 million and $50 million were accepted; there were an additional
68 bids of less than $10 million accepted by Interior. The highest bids
accounted for the bulk of the total receipts from the sale -- the top 8
accounted for 50% and the top 25 accounted for 85% of the total value of
bids accepted.
-36-
Figure 9 shows tracts leased by successful bidding companies. Exxon, bidding
alone, won 30 tracts. The next highest were consortiums headed by Chevron
and Shell, which accounted for 13 and 12 tracts respectively. All of the
companies except Exxon participated in the bidding as members of consortiums.
The results of the bidding indicate that the petroleum industry believes
there are significant hydrocarbon resources in the Mid-Atlantic area. Although
the amount of resources actually present can only be determined by drilling,
the results of the bidding for Lease Sale #40 were taken into account in the
development of scenarios for this report.
B. Timing and Number of Lease Sales for the Baltimore Canyon and Georges
Bank Regions
The federal Bureau of Land Management (BLM) presently has seven additional
lease sales scheduled for the Atlantic Outer Continental Shelf. Three of
the seven scheduled lease sales are for areas in the South Atlantic, off the
coasts of Georgia, South Carolina and Florida. It is assumed that these
sales will not affect New York State, and they are therefore excluded from
further consideration. Perhaps the most obvious exception to this assumption
is that if the southern lease areas do not produce oil in sufficient quan-
tities to justify a pipeline, oil may be tankered to refinery facilities or
marine terminals in the Port of New York.
The scheduling of lease sales is of course subject to change by the Depart-
ment of Interior, either through modification of the time schedule or the
addition of more lease sales. For example, in August the scheduled date of
North Atlantic Lease Sale #42 was changed from November 1977 to January 1978,
and the date of Mid-Atlantic Lease Sale #49 was changed from June 1978 to
February 1979. For purposes of the scenarios, it is assumed that these
revised dates will hold and that exploratory activity for Mid-Atlantic Lease
Sale #40 will occur concurrently with that for North Atlantic Lease Sale #42.
C. Estimated Recoverable Resources
Although no one can accurately predict the level of economically recoverable
petroleum resources in the Atlantic OCS without conducting drillin~ operations,
this report utilizes United States Geological Survey stimates1,2, the
best available. The production c~rves used in the scenarios are based on
work from the NERBC/RALI project. It should be noted that although these
curves are symmetrical, actual production is likely to peak somewhat earlier
than shown. Figure 7 is more typical of actual production curves. These
estimates and production curves are subject to future revision, but they
present a basis for determining potential impacts for New York State.
Scenario #1 - High Oil and Gas Find - Scenario #1 assumes that explora-
tion activities in both the Mid-Atlantic and North Atlantic will be
successful. Under this scenario, the find for the Mid-Atlantic would
be 2.6 billion barrels (410 million cubic meters) of oil and 12.8
trillion cubic feet (340 billion normal cubic meters) of gas. The find
for the North Atlantic would be 900 million barrels (140 million cubic meters)
J(
Scole
1650,000
.x....
. . ....
. ....
:::: ,.....
.... ....
"'0"""
....
X
'X' ..,,:
. . .....
: .: .....
-37-
..
....
..~
..............
..........
..........
......,....
.... .........
.... .........
.... .... ....
.... ......... ....
.... ....... .
..... .... ....
..... ....
. . . .. ....
.......... ....
..... ...,
.x
. .
:X": :X";
. .. .
. .. .
:x":::;:;::::::::;:
. ............
. ..........
.... .... .....
.... .... ..........
.... .... ..........
.... .....
FIGURE 8
RESULTS OF MID ATLANTIC
LEASE SALE #40
High Bids on Tracts
-
-
Over $50 million
$25-50 mi 11 ion
$10-25 mi 11 ion
Less than $10 million
~.::::. Hi gh Royalty Tracts
X Bi ds Rejected
-38-
J{
r
~L'
I
.--+--
I
!
f-~-1
I '
W~_J
SSG Ie
I 550,000
L....
I
FIGURE 9
RESULTS OF MID ATLANTIC
LEASE SALE #40
Tract Lessees
i Exxon 30 tracts
:mi1!!mB Chevron 13 tracts
~ Shell 12 tracts
.~:". '.: :."; ~.~:':;; l;.: CONOCO 9 tracts
:-:: :.:"::.~ ~... Murphy 8 tracts
~"""""0 140bil 8 tracts
~\. \. \. \. \. Others 13 tracts
" ~,<~<-/~
",'''-}'::,:'_:;'''~~,:::~
.."
C~~-:J High Royalty Tracts
Note: All companies except
Exxon were members of
consortiums
TABLE 2
mD-ATLANTIC OCS LEASE SALE #40
MAJOR LESSEES
No. of Percentage Total
Tracts of Working Hectares Range of Bi ds
Company Accepted Interest Accepted for one Hectare Total Investment
Exxon 30 32.26% 69,120 $ 90 - $37,495 $342,752,000
Chevron/
Atlantic Ricnfield 13 4.52% 9,677 $ 131 - $28,308 $ 46,294,768
She 11 12 6.54% 14,031 $ 136 - $19,399 $ 83,504,432
Continental 9 8.48% 18,179 $ 138 - $10,030 $ 58,463,664 I
w
7.53% $ - $ 264 $ .0
Murphy 8 16,128 91 1 ,677 ,312 I
Mobil 8 2.05% 4,401 $ 479 - $46,783 $ 89,398,189
Houston 4 4.30% 9,216 $ 66 - $ 2,489 $ 8,504,823
Gulf 3 1.59% 3,410 $2,677 - $10 ,307 $ 18,495,840
Texaco 2 1.03% 2,212 $7,305 - $14,662 $ 24,294,396
Note: The companies indicated are lead bidders in different consortiums, except for Exxon
-40-
of oil and 4.2 trillion cubic feet (110 billion normal cubic meters) of gas.
Figure 10 and Table 3 show the production schedule assumed in Scenario #1.
This combination of resource finds in the two leasing areas represents an
upper range of potential impacts for New York State. It is assumed that
tankers would be required to transport oil from the North Atlantic to refin-
eries in the Mid-Atlantic, including those in the Port of New York area.
These tankers would pass close to Long Island on their way to the refineries.
The amount of oil in the Mid-Atlantic would be sufficient to justify pipe-
1 i nes to shore.
Scenario #2 - Very High Gas Find - The second scenario assumes an extremely
large gas find in the Mid-Atlantic. It is based on the same amount of hydro-
carbon resources as in Scenario #1, but occurring as all gas and no oil.
(The conversion from oil to gas is based on an energy equivalency factor of
5,800 cubic feet of gas per barrel of oil.) This find of 30 trillion cubic
feet (800 billion normal cubic meters) would re~resent a discovery larger
than the estimated gas reserves of Prudhoe Bay.
This scenario was chosen to illustrate energy impacts of such a find on New
York State. A summary by the New York State Geological Survey of available
data from the COST B-2 well indicates that a higher potential is present for
natural gas than for oil. Public statements by oil company officials have
supported this analysis of the COST well data.
Whether in fact only gas is present, or whether gas resources in the region
are even a fraction of the amount hypothesized in this scenario cannot be
determined until drilling is conducted.
Scenario #2 assumes the
in the first scenario.
assumed in Scenario #2.
same resource find in the North Atlantic as used
Figure 11 and Table 4 show the production schedule
Scenario #3 - Low Oil and Gas Find - Scenario #3 assumes that no commercially
recoverable oil or gas resources will be found in the North Atlantic and that
only a low find of 400 million barrels (63 million cubic meters) of oil and
2.6 trillion cubic feet (70 billion normal cubic meters) will be made in the
Mid-Atlantic. The inclusion of this scenario provides an illustration of a
lower range of impacts that may accrue to the region as a result of OCS
activity. Figure 12 and Table 5 show the production schedule assumed in
this scenario.
These three scenarios present a broad range of resource finds for the Atlan-
tic Outer Continental Shelf. The importance of the scenarios is not in the
absolute numbers presented, as these are subject to possible drastic revision
once drilling begins, but in the magnitude of impacts that may occur for New
York State. Later chapters use these scenarios to explore potential environ-
mental, economic and energy impacts on the New York Metropolitan Area. In
most instances the high find scenarios are usee! to illustrate the upper
range of potential impacts.
Oil
Thov;onds
f3o(/c!~/Doy
900
roo
700
600
500
400 .
300
200
100 .
o o-L_....LI---4--t"-l
(i980)
- 41 -
FIGURE 10
PROJUCTION SCHEtJULE FOR SCElIARIO #1
___J_ -';':uJ...~"I--_L..._....Ll-_L_+ .1
10 15
(1985) (1990)
Yeors After l<'ose Sole
t--t-.L..-t.-----L--L-1--L. I
20 25
11995) (2000)
Gos
Billions
Cubic Feet/Day
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
30
12(05)
-42-
TABLl 3
SCENA.RlO # 1: HIGH OIL AND GAS
Mid..f'.tlulltic North At 1 anti c Total
Fino: Find: Find:
2.6 bil1io~ barrels 0.9 billion barrels 3.5 billion barrels
12.8 trill-icll cu. ft. 4.2 trillion cu. ft. 17.0 trillion cu. ft.
Cal- -------Proc{uc t'i on Production Production
Year After cndar ----Ol~--Gas Oi 1 Gas Oil Gas
lease Sale Yeay' ( kBbJ1.D.L.LB.CF/DJ (kBbl/0) (BCF/DL (kBbl/O) (SCF/O)
0 1977
1978
2 1979
3 1980
4 1981
5 1982
6 1983
7 1984
8 1985 0 0 0 0 0
9 1986 20 0.1 2 0 22 0.1
10 1987 40 0.3 8 < 0.1 48 0.3
11 1988 80 0.7 2D 0.1 100 0.8
12 1989 120 1.2 50 0.5 170 1.7
13 1990 200 1.7 110 0.8 310 2.5
14 1991 2UO 2.2 130 0.9 390 3.1
15 1992 300 2.6 150 1.0 450 3.6
16 1993 340 3.0 165 1.0 505 4.0
17 1994 380 3.2 170 1.03 550 4.2
18 1995 400 3.2 172 1.01 572 4.2
19 19% 420 3.1 175 0.98 595 4.1
20 1997 440 2.9 175 0.9 615 3.8
21 1998 443 2.6 172 0.7 615 3.3
22 1999 440 2.2 170 0.4 610 2.6
23 2000 420 1.8 165 0.2 585 2.0
24 2001 400 1.3 165 0.15 565 1.5
2'- 2002 370 0.8 145 0.12 515 0.9
.0
26 2~03 300 0.4 120 0.1 420 0.5
27 2004 230 0.2 50 <0.1 280 0.2
28 2005 170 0.2 30 <0.1 200 0.2
29 2006 120 0.2 20 <0.1 140 0.2
30 2007 50 0.1 4 0 54 0.1
31 2008 10 0.1 0 10 0.1
32 2009 0 0 0 0
-~---
Note: Production curves dcri vcd from tIERBC/RALI Stud ies
Oil
Thousands
Barrels/Day
900
800
700
600
500 -
400 -
300 c
?OO -
100 -
o ---'--~r~I--'
o 5
(1980 )
-43-
FIGURE 11
PRODDCTION SCIli:DULE FOR SCENARIO #2
011,,\
-----
. t--"-I---"--'---I--'
10
(1985) (1990)
, I
L.-f._J
?O
-I 1-
15
(! (95)
Yl;or:; After Leose Sole
Gas
Billions
Cubic Feel/Day
9.0
_ L_ 1__ L 1--'--'---1- __J
25 30
(2000) 120051
8.0
7.0
6.0
5.0
- 4.0
3.0
2.0
1.0
-44-
TABLE 4
SCENARIO #2: VERY HIGH GAS
Mid-Atlantic North Atlantic Total
___un nd : Find: Find:
0.9 billion barrels 0.9 Lillian Larre1s
30 trillion cu. ft. 4.2 trillion cu. ft. 34.2 trillion cu. ft.
Cal Production Production Production
Year After endar Oil Gas Oil Gas Oil Gas
lease Sale Year (kBL1/D) (BCFlD) (kBol/D) (BCF/D) (kBb1/D (BCF/O)
0 1977
1978
2 1979
3 1980
4 1981
5 1982
6 1983
7 1984
8 1985 0 0 0 0
9 1986 0.2 2 2 0.2
10 1987 0.7 8 <0.1 8 0.7
11 1988 1.7 20 0.1 20 1.8
12 1989 2.9 50 0.5 50 3.4
13 1990 4.1 110 0.8 110 4.9
14 1991 5.3 130 0.9 130 6.2
15 1992 6.2 150 1.0 150 7.2
16 1993 7.2 165 1.0 165 8.2
17 1994 7.7 170 1.03 170 8.7
18 1995 7.7 172 1.01 172 8.7
19 1996 7.4 175 0.98 175 8.4
20 1997 7.0 175 0.9 175 7.9
21 1998 6.2 172 0.7 172 6.9
22 1999 5.3 170 0.4 170 5.7
23 2000 4.3 165 0.2 165 4.5
24 2001 3.1 160 0.15 160 3.3
25 2002 1.9 145 0.12 145 2.0
26 2U03 1.0 120 0.1 120 1.1
27 20U4 0.5 50 <0.1 50 0.5
28 2005 0.5 30 <0.1 30 0.5
29 2006 0.3 20 <0.1 20 0.3
30 2007 0.2 4 0 4 0.2
31 2008 0.2 0 0 0.2
----1L___J009 0 0
I~ote : Production curves derived from NERBC/RALl Studies
-45-
Oil
Thousands
Barrels/Day
900
FIGURE 12
PRODUCTIOij SCHEDULE FOR SCENARIO #3
Gas
Bi Ilions
Cubic Feet/Day
9.0
ODD
8.0
700
7.0
600
6.0
t:.,(lO
5.0
400 -
4.0
300-
3.0
zoo -
2.0
100 -
Oil~
. LGas\
o O-_i~~ ~~~'<I'oL-4=tC=T---f5'~=t_Li5 '---I
(1980) (19851 Ii 990) (1995) (2000) (2005)
Years After Lease Sale
1.0
30
-46-
TAGLE 5
SCENARIO #3: LOW 01 L AliD GAS
C.l-
Year After endar
_Lease ~~~_J.r
Mid-Atlantic North Atlantic Total
--~-F'n-cr:------ ----~_________rTn-a;- F; nd :
0.4 billion barrels 0.4 billion barrels
2.6 trillion cu. ft. 0 2.6 trillion cu. ft.
---P-roduct ; oii---.--~rrodlJCt ion -_..---VroductTo-n' .--
~~-orf----Gas-- oif----- Gas Oil Gas
~l!Jil IBCr/U) (kBbl/D) IBCr/Dt~j~Q!>lLD.L-J..Bcr;~
0 1977
1978
2 1979
3 1980
4 1981
5 1982
6 1983
7 1984
8 1985 0 0
9 1986
10 1987 4 0 4 0
11 1988 9 <0.1 9 <0.1
12 1989 22 0.3 22 0.3
13 1990 48 0.5 48 0.5
14 1991 57 0.6 57 0.6
15 1992 66 0.6 66 0.6
16 1993 73 0.6 73 0.6
17 1994 75 0.64 75 0.64
18 1990 76 0.6 76 0.6
19 1996 77 0.6 77 0.6
20 1997 77 0.6 77 0.6
21 1998 76 0.4 76 0.4
22 1999 75 0.3 75 0.3
23 2000 73 0.1 73 0.1
24 2001 70 0.1 70 0.1
25 2002 64 0.1 64 0.1
26 2003 53 <0.1 53 <0.1
27 2004 22 22
28 2005 13 13
29 2006 9 9
30 2007 2 2
31 2008 0 0
32 2009
-------------
Note: Production curves derived from NERBC/RALl Studies
-47-
D. General DCS Facilities
Offshore oil and gas exploration and development generates a need for a wide
range of onshore support activities. Some of these, such as temporary and
permanent support bases, are generally located in the region where explora-
tion and development occur. Others, such as refineries and platform con-
struction yards, could be located outside the region.
This section briefly describes the kinds of facilities that will be necessary
as a result of oil and gas drilling on the Continental Shelf. The general
discussions of these facilities are taken from the New England River Basins
Commission/Resource and Land Investigations Project Factbook.
The discussion of the range of facilities should not imply that any Or all
of these facilities will be located in New York State. Rather, the dis-
cussion is intended to give the reader a general idea of the scope of the
facilities that would, in all probability, be located somewhere along the
North and Mid Atlantic coast. At the conclusion of the discussion the si~ing
requirements for facilities are discussed in relation to the capabilities of
New York State to accommodate them.
As discussed in the previous section, various facilities will be needed as
the companies begin to explore, develop, produce, and distribute oil and
gas resources from the Continental Shelf.
1. Facilities and Timing
After the lease sale, companies will seek out locations for temporary support
bases to service the offshore platforms. If reserves are discovered, these
same companies will seek to establish permanent support bases for the dura-
tion of the development and production activity-- a period of between fifteen
to thirty years depending on the resource finds. Decisions on permanent
support bases may occur as early as one year after the lease sale. In many
instances, the temporary support bases may become the permanent base.
In addition to the temporary support bases, other ancillary industries may
be established to service the support bases. Drilling muds and cement sup-
plies are two examples. As permanent support bases are established, other
development-oriented industries will be established.
Through a continuing process that begins even before the lease sale, the indus-
try begins to analyze the alternative transportation costs to bring the
resources to shore. At present, two methods exist: pipelines,or tankers and
barges. The final decision in most cases is largely an economic decision
based on the amount of resources that have been discovered and distance from
shore. For small finds, tankering oil from the platforms to port areas is
the most economically desirable. For larger finds, pipelines are more
economic. Experts agree that pipelines are environmentally much more desir-
able than tankers. For natural gas, pipelines will be utilized regardless
of the find, given a commercial find. The reason for this is that liquefying
gas at the platforms so that it may be tankered is economically not feasible.
In the event that pipelines are utilized for transport, pipecoating yards and
pipeline installation service bases will be needed.
-48-
If exploration is successful, the need may arise for a platform fabrication
yard for the permanent drilling platforms. There may not be enough demand
to justify establishing a platform fabrication yard for each of the Atlantic
regions -- Mid, North, and South. The industry has indicated that perhaps
one may suffice for the entire East Coast. Platforms would be fabricated
at a specific location and towed to another region for use. In the event that
a platform fabrication yard is not established in each region, there may be
a need for a modular construction facility depending on the number of plat-
forms necessary. At modular fabrication facilities, platform modules and
deck sections are fabricated for installation on platforms at the offshore
drilling sites.
Given low finds of oil, marine storage terminals may be necessary for the
transfer from tankers and to store crude oil during peak production periods.
If the finds of oil are high and existing refineries could not handle the
increase, a refinery may be established or existing refineries expanded.
It does not appear, however, that a new refinery will be necessary for the
east coast, given the estimates of undiscovered recoverable resources.
While a new refinery may be established in the New England area, more than
likely the refinery would be tooled to accommodate imported crude oil where
a constant supply could justify such an investment.
For the natural gas finds, pipelines will come ashore to a gas orocessing
plant where the gas will be processed for delivery to gas customers for con-
sumption. Gas processing plants will be constructed approximately ten years
after the lease sale.
2. Timing and Scenarios
Figures 13 and 14 illustrate the timing of facilities for each region under
Scenario #1, the high oil and gas find. With successful finds, permanent
service bases would be established two to three years after the first lease
sales. Production platforms would be sited two to three yeans later. Pipe-
line construction (both oil and gas pipelines in the Mid Atlantic, gas
pipelines only in the North Atlantic) would begin about seven years after
the fi rst lease sales, wi th production begirming two to three years later.
Generally, the timing of the initial establisnment of these facilities would
be similar under all of the scenarios; the primary differences would be in
the number of facilities needed and the length of operation.
3. Representative Facilities that Would Accrue to the Region
Among the facilities that are expected to accrue to the Mid and North Atlantic
region are service bases (temporary and permanent), repair and maintenance
yards, marine terminals, gas processing and treatment plants, platform
fabrication yards, pipe coating yards, and ancillary industries. Chapter
VII discusses the facilities that may be located in New York State under
the scenari os.
a. Service bases - Temporary service bases are established by industry for
the purpose of supporting exploration activities. Permanent bases are
established after a commercial find has been made. In many cases, the
temporary bases become the permanent bases, all other factors being equal.
Facilities
Service Bases
Temporary
Permanent
Platform Installation
Offshore operations
Service base
Pipeline Installation
Offshore operations
Service bases
Landfail construction
Pipe Coating Yard
Gas Processing and
Treatment Plants
I
Key:
I Construction
Operation
-49-
FIGURE 13
TIMING OF FACILITIES AND ACTIVITIES
FOR SCENARIO #1 - HIGH OIL AND GAS FIND
NORTH ATLANTIC
YEAR AFTER FIRST LEASE SALE
2 3 4 5 6 7 8 9 10 11 12 13
25 26 27 28 29 30
D
SOURCE: NERBC, 1976
Facilities
Service Bases
Temporary
Permanent
Platform Fabrication Yard
Platform Installation
Offshore operations
Service bases
Pipeline tnstallation
Offshore operations
Service bases
Landfall/shore terminal
Pipe Coating Yards
Gas Processing and
Treatment Plants
Marine Terminal/Surge
Storage Facility
-50-
FIGURE 14
TIMING OF FACILITIES AND ACTIVITIES
FOR SCENARIO #1 - HIGH OIL AND GAS FIND
t-HD ATLANTIC
1 2 3 4 5 6 7 8 9 10
20
25
30
15
c=:J Construction
Key: _ Operation of facility to serve development
1".<1 Operation of facility to serve other OCS regions
Source: NERBC, 1976
- 51-
The temporary service base provides materials and personnel transfer to the
offshore platforms. In most instances siting decisions are based on the
quality of services available at the onshore base and the distance from
the onshore platform to shore. The industry is quick to point out that it
prefers to avoid areas where public opposition exists or areas that may be
environmentally sensitive.
Table 6 summarizes requirements and impacts of both temporary and permanent
service bases.
b. Repair and maintenance - Repair and maintenance yards provide a great
deal of timely service to the oil and gas industry. In general, the repair
and maintenance industry that already exists at established ports can meet
needs for underwater and surface repai rs of vessels and equi pment. To accommo-
date the new demands for services from OCS development, most of the existing
companies need only to expand present operations.
Perhaps the most pressing need of the oil industry is repair in the shortest
possible time to meet projected deadlines. Thus, the repair and maintenance
industries must be capable of doing specialized work in a short period of
time and must have excellent access for the shipping of needed parts for the
repai r.
An established repair and maintenance yard would require the services of
skilled people such as welders and shipfitters, electricians, mechanics,
machinists, riggers, carpenters, pipefitters, sand blasters, and painters.
c. Transportation facilities - As mentioned previously, the decision on
whether to pipe crude oil from the offshore platform to an onshore location
or to use tankers will necessarily result in different onshore impacts.
If pipelines are utilized, then landfalls for pipelines would be necessary.
In most cases, the decision to use pipelines would involve the amount of
find and the distance to shore. The relative economic advantages of pipelines
increase as the amount of find and distance to shore increase.
In the event that tankers are utilized, the oil would either be tankered
directly to refineries or be stored at marine terminals for later shipment
to refineries. Tables 7a and 7b summarize the requirements and impacts
of transportation facilities.
d. Gas processing and treatment plants - A gas processing plant is designed
to recover valuable liquifiable hydrocarbons not removed by normal separa-
tion methods from the raw gas stream before it enters a commercial trans-
mission line. A gas treatment plant is designed to remove impurities from
the gas. Anyone facility may include treatment, recovery, and fractionation
equipment to separate the recovered liquid hydrocarbon stream into its various
components.! The siting of the plant is dependent upon the size of the ga<;
find, the expected production rate, the location of partial processing fac-
ilities, the liquid hydrocarbon content of the gas, and the market for liquid
hydroca rbons.
Table 8 summarizes requirements and impacts.
-52-
TACLF. 6
SERVICE BASES
SUMMARY OF REQUIREMENTS AND IMPACTS
Land:
Temporary Support Bases
5-10 acres on an all-
weather harber
Waterfront:
200 feet of wharf
15-20 feet water depth
5,200,000 gal/rig/year
during dri 11 ing
Fresh Water:
Fuel:
26,000 bbls/rig/year
during- dri 11 ing
Labor:
45 jobs/ri 9
Wages:
approximately $734,000
per year
Capital
Investment:
$150,000 to $250,000
Permanent Support Bases
50-75 acres on an all-
weather harbor
400 feet of wharf
15-20 feet water depth
8,200,000 gal/platform/year
during drilling
54,000 bbls/platform/year
during dri 11 ing
19,200 bbls/platform/year
during production
50-60 jobs/platform during
drilling
approximately $1,000,000
per year
$1,000,000 to $3,000,000
hydrocarbons from fuel storage tanks and
transfer operations; carbon monoxide and
nitrogen oxides from machinery and vehicle
exhaust
Air F.rr,issions:
Wastewater
Con tami n an ts :
hydrocarbons and heavy metals from bilge
and ballast water discharged by boats
Solid Wastes:
lip to 85 deci be 1 s on a 24-hour bas i s
i~oi se:
up to 6 tons per day during drilling
operations, including hazardous, oil-
contaminated wastes
These summary requirements are given for illustration
purposes only. Operating practices and requirements
may differ for individual companies.
I~ote :
Source:
NERBC/RALI Factbook.
-53-
TABLE 7a
TRANSPORTATION FACILITIES
SUMNARY OF REQUIREr~ErlTS AND I~:PACTS
PIPELINES AND LANDFALLS
Land:
50-100 foot right-of-way for landfall
40 acres for pumping station if required
at landfall
60 acres for tanker and barge terminal
if required at landfall
250-300 jobs for each lay barge spread
(20 percent local employment) (very
little employment during pipeline
operati on)
average unskilled wage: $15,000/year
average skilled wage: $25,000/year
total per lay barge spread: approx.
$5.5 mi 11 ion
Installation
Labor anci
Wages:
P,ir Emissions:
minir..al: chiefly hydrocarbons from valve
and pump seal leaks and sulfur oxides,
hycrocarLons and ni trogen oxi des from
compressors along the route
:~oi se:
90-100 dB (uncontrolled level) from com-
pr'essors
140 dB from once-a-year venting at pipeline
Note: These summary requirements are given for illus-
tration purposes only. Operating practices and
requirenents may differ for individual companies.
Source: f.ERBC/RALI Factbook
t'ARINE TERMINALS
Land
Draft Requi rements
Labor
Tota 1 r,Jmua 1 Wages
Capital Investment
Air Emissions
Water Emi ss ions
Note:
1l
-54-
TA8LE 7b
TKANSPORTATION FACILITIES
SUMf1f,RY OF REQUIREVtEiHS AND IMPACTS
Pipeline 250 MBD 250 ~lBD
Tanker Shores ide Mi d-Depth
and Barge Termina1/ Termina1/
Terminal Tank Farm Tank Farm
60 acres 15-20 acres 35-40 acres
30-35 feet 30-35 feet 50-60 feet
25 65 37-65
$ 400,000 $ 1, 1 00 ,000 $ 1,100,000
$9,800,000 $51,000,000 $93,000,000
Hydrocarbon emissions from storage tanks and
transfer operations
exhaust emissions from boaters, sumps and
compressors
Bilge Water } BOD, COD, total
Ballast Water suspended solids,
Storm Runoff Oi 1 and Grease
chronic small oil spills from handling operations
infrequent major oil spi 11s from groundings,
collisions and other accidents
The figures shown are for surge tank farms only.
These summary requirements are given for illus-
tration purposes only. Operating practices and
requirements may differ for individual companies.
Source: NERBC/RALI Factbook
-55-
TABLE 8
GAS PROCESSING AND
TREATMENT PLANTS
SUMMARY OF REQUIREMENTS AND IMPACTS
Unless otherwise notee:, statistics are for a billion cu. ft./day plant
Land:
50 to 75 acres
,:ater:
200,000 gallons per day average
Energy :
5,400,000 kilowatt hours/month
360,000,000 cubic feet/month of natural gas from plant
Labor:
550 construction jobS (peak figure)
45-55 operation and maintenance jobs
approximately $750,000 per year (operation and maintenance)
Wages:
Capita 1
Investment:
$85 million (one billion cu./ft./day plant)
$26 million (300 million cu./ft./day plant)
Construction
Peri od:
1.5 years
Air
Emissions:
major
hydrogen sulfi de
sulfur oxides
hydrocarbons
mir.or
particulates
carbon monoxi de
nitrogen oxi des
Wes tewater
Contiminants: in cooling water: sulfuric acid
chromi um 30 ppm
zinc 3 pprr,
chlorine 0.2 ppm
in boi ler water phosphates 20-60 ppm
bases
sulfite 20 ppm
genera 1 :
dissolvee: hydrocarbons
Noise:
80-100 dec'j be 1 s from boi 1 ers, compressors, and fl a re-
stacks on a 24-hour basis
Solid Wastes:
Scale and Sludge from boiler and cooling tower cleanouts;
tank cleaning sludge; spent dessicants, filtration media
and oil absorbants.
Note: ,hese summary requirements are given for illustration
purposes only. Operating practices and requirements
may differ for individual companies.
Source: r;ERBC/RALI Factbook
-56-
e. Platform fabrication yards - Platform fabrication yards are large indus-
trial areas where offshore drilling platforms are constructed and then towed
to sea. The platforms, unlike the mobile drilling rigs used during explora-
tion, are fixed to the bottom of the ocean with steel pilings.
The siting of a platform fabrication yard in a particular region is depen-
dent on the timing of the demand of steel platforms in the region. In many
cases, a platform fabrication yard need not be established for each region.
A site in Virginia, for example, has already been purchased by Brown and Root.
This facility could produce platforms for the North and South Atlantic as
well as the Mid Atlantic.
Table 9 summarizes the requirements and impacts.
f. Pipe-coating yards - A pipe-coating yard is necessary when either a gas
or an oil pipeline is constructed to bring the resource to shore. The pur-
pose of pipe-coating is to prevent corrosion and overcome floatation.
Access to highways and waterways are necessary because of the large amounts
of raw materials that must be stored on the site. In most cases, pipe-
coating firms will locate near the service base that they have contracted
with so as to share transportation to and from the offshore platforms.
Table 10 summarizes the requirements and impacts.
g. Ancillary industries - In addition to the facilities and activities
discussed above, offshore oil development generates a demand for a wide
range of ancillary industries. These include drilling mud companies and
cement companies; drilling tool and equipment companies; helicopter com-
panies; catering companies; diving companies; fabrication, welding and
machine shop services; labor contractors; and oil spill recovery services.
Some of these industries already exist in the region.
Individually, these industries will have small locational impacts but
because they tend to cluster in ports that serve offshore operations,
the cumulative impacts may be significant. Specific siting requirements
and impacts of each type of ancillary industry differ.
-57-
TABLE 9
STEEL PLATFORM FABRICATION YARDS
SUMMARY OF REQUIREMENTS AND IMPACTS
Land:
400-800 acres
Depth at
Wharf:
15-30 feet
Sea Access
Clearances:
210-350 feet (horizontal and vertical)
Water:
100,000 gal/day at a steel platform yard, employing
1,500 workers
Energy:
Labor:
not available
Wages:
250-550 per steel platform (average)
$30 million total per year at a steel yard (2-4 plat-
forms/year): average wage $19,000
sand and metal dust from sand blasting hydrocarbons
and other organic compounds from paint evaporation;
carbon monoxide, sulferoxides, hydrocarbons, and
nitrogen oxides from vehicles.
heavy metals; particulates, anti-fouling chemicals.
Air Emissions:
Water
Contaminants:
Noise:
80-100 decibels on a 24-hour basis
So 1 i d Was tes :
packaging materials, metal scraps, contaminated
debris.
Note: These summary requirements are given for illustration
purposes only. Operating practices and requirements
may differ for individual companies.
Source: NERBC/RALI Factbook.
-58-
TABLE 10
PIPE COATING YARDS
SUMMARY OF REQUIREMENTS AND IMPACTS
Land:
100-150 acres (30 for a portable plant)
750 feet
Marginal Wharf:
Depth at Wharf:
at least 10 feet, preferable 20 to 30 feet
Wa ter:
15,000 gallons per day
Energy:
Labor:
1 million KWH; 12-13 million cu.ft.jyr. natural gas
100-200 people during production season (usually
March-September)
$2 million per year at a yard employing 175 people
average wage $11,500
$8-10 million ~l million for a portable plant)
Wages:
Capita 1
Investment:
Air Emissions:
particulate matter, nitrogen oxides, sulfur oxides,
carbon monoxide, hydrocarbons
Wastewater
Con tami nan ts :
hydrocarbons, alkaline substances, particulates,
meta 1 fragments
90-100 decibels (uncontrolled)
Noise:
Sol id Wastes:
packaging materials, concrete, metal scraps,
contaminated debris.
Note: These summary requirements are given for illustration
purposes only. Operating practices and requirements
may differ for individual companies.
Source: NERBCjRALI Factbook.
-59-
FOOTNOTES - CHAPTER V
lSmith et. al., "An Oil Spill Risk Analysis for the Mid-Atlantic
Outer Continental Shelf Lease Area," U.S. Geological Survey Open-File
Report 76-451, p. 1, June 1976.
2Smith et. al., An Oil Spill Risk Analysis for the North Atlantic
Outer Continental Shelf Lease Area," U.S. Geological Survey Open-File
Report 76-620, p. 1, 1976.
3U.S. Geological Survey, "Geological Estimates of Undiscovered Re~
coverabie Oil and Gas Resources in the United States," U.S.G.S. Circular
725, 1976.
4New England River Basins Commission/Resource and Land Investigations
Project, Estimates for New England, November 1976.
sFederal-Energy Administration, Initial Report on Oil and Gas
Resources, Reserves and Productive Capacities, p. 99, 1975.
- 61 -
VI. MAN-f1ADE MID r~ATURAL ENVIRONMENTS SURROUNDING EXPLORATION,
DEVELOPMENT AND RECOVERY OF OCS ENERGY
A. People, Facilities and Critical Natural Resources in the New York
Metropol itan Regi on
In New York State, the I~ew York City f1etropolitan Area, including Long
Island, comprises the man-made environment likely to be impacted by the
introduction of offshore oil exploration and development. With 11.5
million inhabitants, and densities up to 70,000 persons per square mile,
the New York City t1etropolitan Area is the commercial and communications
center of the world, as well as the heart of the banking community,
garment industry, and legitimate theater. r1any of the area's industrial
and commercial activities are tied to the proximity of the shore
envi ronment.
One prominent center of commercial industry is the Port of New York and
New Jersey--one of the major ports of the world. It has an annual
throughput of 117 million tons, a large percentage of which is petroleum
and petroleum products.
Various port-related service industries are centered in the highly
concentrated city, while less dense outlying areas in Nassau and Suffolk
Counties provide extensive recreational opportunities for the entire
region. The tourism and recreation industries account for expenditures
of over $1 billion annually.
Commercial and recreational fishing add more than $100 million to the
local economies of Long Island as well as providing a food source to the
New York City market at low transportation costs. The Long Island area
alone accounts for nearly 60% of the nation's hard clam production.
Both fishing and tourism/recreational industries are concerned about the
advent of OCS exploration and development because of its possible negative
impacts. Critical natural resources such as shellfish areas, tidal wet-
lands, and water quality could be adversely affected by oil spills.
There is also potential for conflicts between the priorities of the new
offshore industry and those of the established industries in the region.
At the same time, the City of New York is interested in the possible
new employment that may accrue should the industry decide to locate
facilities within the Port.
B. Selected Energy and OCS Related Industry Activities
To better appreciate the extent of the contribution of OCS energy to the
New York Metropolitan Area, a discussion of the existing energy and energy-
related industries is needed. In general, the discussion centers on the
kinds of facilities and services presently available with the Port of New
York and New Jersey, and includes some facilities located within the
New Jersey side of the Port as well as those wi thi n New York State.
-62-
1. ~i ppi n9 & waterborne commerce
The Port of New York and New Jersey is the nation's major sea and airport
complex, Viith a wide range of facilities along its 650 miles of coastline.
There are a number of federal harbor channels within the Port, with most
being at least 500 to 800 feet wide, and having a mean low water depth
of 35 feet. Some of the channels are 2,000 feet wide and 45 feet deep.
However, the channels at 35 feet mean low water are seriously inadequate
for tankers and moderately so for certain ships. This problem is
currently under study by the Corps of Engineers at Gowanus Creek Channel,
Ki 11 van Ku11, and Newark Bay. The ti da 1 i nterva 1 between high and low
water is normally about five feet. Aids to navigation are among the
finest to be found anywhere, and by 1978 the Port anticipates full opera-
tion of a New York Harbor Vessel Traffic Service by the Coast Guard to
improve the efficiency and safety of navigation.!
The Port of New York can be entered from the Atlantic Ocean by way of
Lower New York Bay, Long Island Sound, or Raritan Bay. The Lower New
York Bay entrance, served by Ambrose Channel and an alternate route via
Main Ship Channel, is used mostly by ocean vessels; this entrance also
provi des access to Jama i ca Bay. The federal channel sys tems with thei r
major branch and spur channels are the Ambrose - Anchorage - Hudson River -
Edgewater - Weehawken channels system; the East River channel system;
and the New York and New Jersey channels system.
In addition to the channel systems that constitute the prime ocean shipping
vlaterways of the Port of New York, there are sma 11 er channels with in the
boundaries of the Port District. On these waterways, shallow draft river
and harbor vessels move commerce comprised principally of petroleum
products, sand, gravel, crushed stone, cement, clay and metals and scrap.
The most recent data available on the Port of New York indicates that the
Port offers 61,736 acres of man-made and natural anchorage space; man-
made anchorages have been dredged to depths of 20 to 40 feet. Of thi s
total acreage, 57,354 acres constitute natural anchorages in Lower New
York, Gravesend, Sandy Hook, and Raritan Bays; the remaining 4,382 acres
in the Upper New York Bay area are considered man-made anchorages; these
have been under expans ion. The Port's prime and mos t used deep-water
anchorages, the I~ew York Harbor Anchorages, are in Upper New York Bay. 2
Among the largest U. S. continental seaports, the Port has long been the
leader in ship arrivals and in tons of cargo. According to the Army
Corps of Engineers, in 1975 ship arrivals at the Port were estimated at
over 10,000 vessels compared to about 6500 for Philadelphia, the next
leading port. A comparison of the waterborne commerce at the major east
coast ports is given in Table 11.
As the dcmestic oil reserves of the nation have declined, the volume of
imports has increased, especially on the east coast. In 1975 when imports
of foreign petroleum and petroleum products reached 39 million tons of 178
million tons of total commerce, 70% of the imported petroleum products
were in the form of kerosene, gasoline and fuel oils. The remaining 30%
was imported as crude oil. Both crude and petroleum products are exten-
slvely handled within the Port.
TABLE 11
WATERBORNE COMMERCE AT MAJOR EAST COAST PORTS,
1974 & 1975
Sho rt Tons
1974 1975
195,095,611 177 ,814,618
59,920,178 52,029,803
59,891,068 52,661 ,448
55,304,017 49,742,717
17,682,615 17,258,171
Port of New York
Philadelphia, Pennsylvania
Ba 1 timore
Norfo 1 k
r~ewport News
Source: U.S. Army Corps of Engineers, Waterborne Commerce of the United States, Calendar Year 1975.
I
0">
W
I
TABLE 12
PORT OF NEW YORK AND NEW JERSEY (1975)
Short Tons
% Total Commerce
Total Commerce
Crude
178,000,000
127,000,000
21,000,000
106,000,000
100%
Total Petroleum Products
71%
125~
Petroleum Products
59%
Source: U.S. Army Corps of Engineers, Waterborne Commerce of the United States, Calendar Year 1975.
-64-
Table 12 indicates the trend in the amount of imported crude passing
through the Port of New York.
2. Marine tenninals
Marine tenninals are required whenever crude oil is shipped via tankers.
The principal components of a marine terminal include berthing capacity
for vessels, loading and unloading equipment, storage tanks, tenninal
control and safety equipment, and harbor and navigation facilities.
Tenninals may vary in tenns of their function, loading facilities
and processing equipment.
Marine ternlinals may serve one or more of the following functions:
1. load crude oil received by pipeline from offshore production
platfonns onto tankers for final delivery to refineries;
2. receive crude oil from tankers for delivery by pipeline to
nearby refi neri es ;
3. receive refined petroleum products from tankers and store them
for delivery overland to final markets.
Product tenninals, designed to receive waterborne shipments of petroleum
products from refineries, serve major petroleum market areas. Petroleum
product shipments are made in smaller vessels than crude oil shipments;
thus, the draft requirements for product facilities are much less than
the draft required for the larger crude oil carriers.
Because each of the various petroleum products must be stored separately,
a product tenninal will usually require a greater number of smaller
storage tanks than crude oil tenninals, where fewer, larger tanks are
utilized for economic reasons. Petroleum products are distributed from
the product tenninals by tank trucks, rail cars, and small coastal
vessels. 3
Located in the Port of New York are petroleum tenninals owned and
operated by private industry that usually function as an integral part of
their production, processing, or distribution activities.
Thirty-four major petroleum terminals have been identified by the Port
Authority.4 The prime locations of these facilities are along the Kill
Van Kull and Arthur Kill, Raritan Bay, Newark Bay, and the East River.
Most of these tenninals are located on the New Jersey side of the Port.
According to the U. S. Anny Corps of Engineers, the Port of New York
includes 277 oil handling facilities with a total capacity of greater
than 100 million barrels. A comparison of the major ports is given in
Table 14.
TABLE 13
PORT OF NEW YORK AND NEW JERSEY FREIGHT TRAFFIC (SHORT TONS)
Year Total Tonnage Crude Petroleum Tonnage
Total Crude (TC)
Foreign Domestic
Percent Percent Percent
(TT) Tons of TT Tons of TC Tons of TC
1950 144,943,558 16,385,469 11.3 4,947,534 30.2 11 ,437,935 69.8
1955 149,848,131 17,699,353 11.9 9,254,526 52.3 8,444,827 47.7
1960 153,198,620 17,810,760 11.6 10,388,133 58.3 7,422,627 41. 7
I
'"
1965 153,830,418 17,742,336 11.7 11 ,742,336 65.4 6,218,847 34.6 c.n
,
1970 174,008,108 17,695,551 10.1 7,261,260 41.0 10,434,291 59.0
1973 216,896,434 26,483,182 12.2 20,459,599 77 .3 6,023,583 22.7
1975 177,814,618 20,912,974 11 .7 18,285,570 90.5 2,627,204 9.5
Source: U.S. Army Corps of Engineers, Waterborne Commerce of the United States; 1950, 1955, 1960, 1965,
1970, 1973, 1975.
TABLE 14
,
PETROLEUM HANDLING FACILITIES AT MAJOR PORTS"
Oi 1 Hand1 i ng Storar Tanks (No. ) Tank Barges (short
Port Facilities (No.) (No.) 000 barrels) (000 barrels) ton5-)
Port of New York 277 3,649 99,158 682 1,014
Trenton 13 72 1,014
Camden 13 144 12,158 6 20 3,392
Philadelphia 33 389 15,311 11 188
Wi 1mi ngton 3 25 1,260 34,712 14 106 3,392
Baltimore 26 535 16,664 7 61 I
0">
Norfolk 19 348 9,090 0">
8 43 82 I
Newport News 11 68 557 _4
1 Major ports as defined by U. S. Army Corps of Engineers Port Series.
2 Trenton totals are reflected in the Wilmington, Delaware to Philadelphia.
3 Wilmington figures reflect totals for all ports from Delaware City, Delaware to Philadelphia.
4 Newport News figures reflect Norfolk totals.
Source: U.S. Army Corps of Engineers, Port Series, No.5 (New York - revised 1965), No.7
(Philadelphia - revised 1967), No.8 (Wilmington, Del. - revised 1966), No. 10 (Baltimore,
i~d. _ revised 1966), No. 11 (Ports of Hampton Roads, Va. - revised 1971), No. 12
(Wilmington, N. C. - revised 1970).
-67-
3. Tankers and tanker traffic
One of the major state concerns with OCS development has been the possible
use of tankers to bring oil from offshore platforms on Georges Bank
refineries on the New Jersey side of the Port. Events such as the tlrgo
Merchant have highlighted public awareness of the dangers of spills from
tankers. Most experts agree that the use of pipelines for transport
is definitely safer environmentally. It should be noted that even if
tankers are not utilized to transport oil from the Georges Bank OCS
areas to the Port, there is still a substantial danger of spills from
tankers that presently travel nearly parallel to Long Island along the
Ambrose to Nantucket traffic lanes. The second major traffic lane, the
Hudson to Ambrose, travels in a south easterly direction from the Port.
These traffic lanes are identified in Figure 15.
Tab 1 e 15 1 i s ts the size of tankers, capacity, and loaded dra ft:
TABLE 15
TANKER DIMENSIONS
Tanker Sizes Dimensions (ft. )
(X 1,000)
DWT Barrel s Length Beam Loaded Draft
20 140 580 72 32
40 280 715 93 37
50 350 740 105 39
70 490 800 117 41
100 700 850 128 49
150 1,050 980 149 54
250 1,750 1,125 170 65
Source: Arthur D. Little, Inc. and Frederic R. Harris, Inc.,
Petroleum Development in New England, 1975, Vol. II,
p. IV-19.
The Port of New York cannot accommodate supertankers, as the loaded drafts
are greater than the depths of the channel. Generally the Port can handle
tankers up to approximately 35,000 dwt (deadweight tons) although larger
tankers can move through certain channels. No east coast port can presently
accommodate supertankers. Studies have been undertaken by the Corps of
Engineers, Maritime Administration and others examining the feasibility of
locating a deepwater port terminal along the east coast in naturally deep
water. Prime sites that have been identified are off Long Branch, New
Jersey, and inside and outside Delaware Bay.
'-
'-
MARYLAND
J\t
/
'-
PENNSYLVANIA
'-
'-
'-
'-
I
I
I
'~
/$
I '<
'ij
I Q
i l PROPOSED TRACfS FOR LEASING
LlJ :..EA.SE SALE NO. 40 TRACTS
~~ PROPOSED LEASE SALE NO 49 TRACTS
TRAffiC LANES
PHILADELPHI~
:--......
';
CONNECTICUT
.~- ')~-"
NEW JERSEY
co
=>
1>
I
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00
I
\
~
~.~~
~-
Figure 15
Traffic Lanes
to
Port of New York
-69-
Larger tankers are economically preferable to transport oil from the
Middle East to the U. S. A 275,000 dwt tanker is twice as long and twice
as deep as a 21,000 dwt tanker but carries 13 times the amount of oil.
In 1975, a 25,000 dwt tanker cost approximately $500 per dwt ($12.5
million) while a 250,000 dwt tanker cost about $185 per dwt (46 million)
to build.s
Only a fraction of the world tanker fleet is registered under the U. S.
flag. By the end of 1971, the American tanker fleet amounted to 347
vessels, with 137 owned by oil companies, 114 by companies outside the oil
industry, and 96 by the federal government. Approximately 4,000 tankers
make up the international fleet.
According to the U.S. Army Corps of Engineers, a great deal of tanker and
barge traffic presently moves in and out of the ports of New York and
r~ew Jersey (see Tab 1 e 16). Of the total annual inbound tri ps to the Port
of New York and New Jersey, it has been estimated that some 2,400 trips
account for all tankers between the 20,000 to 70,000 dwt range. Of this
number, some one-third, or 800, travel the Nantucket to Ambrose traffic
lanes near Long Island.
Oil production from Georges Bank could increase these figures. According
to the Final Environmental Impact for Lease Sale #42, if all Georges Bank
oil production were tankered to the Port and imports to the Port were
not backed off, there would be an increase of about 150 tanker trips in the
peak year along the Nantucket to Ambrose traffic lanes. This would
represent an increase of about 19 percent in tanker trips, assuming Georges
Bank oil did not replace foreign oil imports. An increase in tanker traf-
fic would present increased risks of oil spills, as would the transfer of
oil from platforms to tankers, especially under North Atlantic weather
conditions.
It should also be noted that various tanker transport organizations have
voiced concern over the possibility of leasing tracts for oil and gas
development within the generally accepted traffic lanes. Discussions and
negotiations with federal agencies are currently taking place to either
propose alternative routes or establish safety fairways to circumvent
obstructions to navigation.
4. Refineries
Most of the crude oil tanker cargos coming into the Port of New York and
other Atlantic ports go to major refinery complexes in northern New Jersey
and the Philadelphia area. Because of the size of the existing
petroleum infrastructure of the region--the marine terminals, refineries,
and pipe1ines--it is likely that most of the oil produced on the Mid and
North Atlantic Outer Continental Shelf will find its way to refineries in
the Mid Atlantic region. This is not to say that all oil will be refined
in New Jersey or the Philadelphia area, as there are other refinery complexes
in Maryland, Virginia, Delaware, as well as a small operation in New
Hampshire. Table 17 lists existing refineries and capacities along the
east coast.
TABLE 16
TRIPS AND DRAFTS DF INBOUND TANKERS AT NEW YORK ATLANTIC PORTS, E17!:> (NUMBER OF TRIPS)
Tankers Barges
18 ft. 19-29 30-39 40 ft. 18 ft. 19 ft.
State and Port Total & less feet feet & over Total & less & over
East River,
New York 1,776 1,573 15 171 17 1,619 1,547 72
New York Harbor
New York
Lower Entrance
Channels only 4,462 1,832 513 1,826 291 1,628 1,520 108
I
Hempstead Harbor, ......
a
New York 218 218 248 248 I
Port Jefferson
Harbor, New York 277 220 48 9 544 481 63
Huntington Harbor,
New York 4 4 4 4
Note: Figures are based on best available data and have been generated from U.S. Army Corps of Engineers,
Waterborne Commerce of the United States, Calendar year 1975.
- 71 -
TABLE 17
EAST COAST REFINERIES
STATE
CRUOE CAPACITY
bblsjcalendar day bblsjoperating day
New Jersey
Chevron U.S.A. Inc., Perth Amboy
Exxon Co., Linden
Mobil Oil Corp., Paulsboro
National Oil Recovery Corp.,
Bayoone
Texaco Inc., Westvi11e
Total
168,000
285,000
98,000
6,000
88,000
645,000
176,842
300,000
100,500
4,800
92,632
674,774
Note: Amerada-Hess Corporation Refinery in Port Reading has been shut down
since November 1974. The plant with its 70,000 barrel per calendar
day capacity will remain inoperative indefinitely.
De 1 aware
Getty Oil Co., Inc.,
Delaware City
Pennsylvania
Atlantic Richfield Co., Philadelphia
BP Oil Corp., Marcus Hook
Gulf Oil Co., Philadelphia
Sun Petroleum Products, Marcus Hook
Total
Maryl and
Amoco Oil Co., Baltimore
Chevron U. S . A. I nc., Ba lt i more
Total
Virginia
Amoco Oil Co., Yorktown
New HampShire
Atlantic Terminal Corp.,
Newington
TOTAL ATLANTIC COAST MAJOR
REFINERY CAPACITY
140,000
150,000
185,000
161,000
204,200
165,000
715,200
195,000
170,000
210,000
180,000
755,000
15,000
13,500
28,500
17 ,000
14,211
31,211
53,000
55,000
13,000
1,594,700
13,684
1,679,669
Source: Oil & Gas Journal, "Annual Refining Survey", March 28,1977.
- 72-
Given present estimates of recoverable oil, it is doubtful that the
Georges Bank leasing area could provide enough of a supply of crude oil
to justify investment in a new refinery in the North Atlantic. In all
probability, any new refinery for the New England area will be tooled
to accept foreign crude. The Bureau of Land Management has contended
that OCS oil would displace an equal amount of imported crude, thereby
not necessitating any increase in refinery capacity.
Mid and North Atlantic OCS peak year oil production under the high and low
scenarios in Chapter V would total between 77,000 and 617,000 barrels per
day. The existing east coast refinery capacity of 1.6 million barrels
per day could thus easily accommodate the low scenario production, assuming
compatibility of the oil (sulfur content, etc.). Under the high find
scenario, OCS oil production in the peak year would be approximately one-
third of the east coast capacity.
5. Pipelines
Because of its large consumption of energy, the New York-New Jersey area is
endowed with a number of major oil and gas pipelines that carry products
to the marketplace. Table 18 indicates the existing major pipelines by
origin and destination. It should be noted that in addition to the
major pipelines, an extensive distribution system also exists in the New
York Metropolitan Area.
According to the Bureau of Land Management environmental impact statements,
New Jersey and/or Delaware will be the most probable locations for oil and
natural gas pipelines coming ashore from this Baltimore Canyon. New Jersey
may be the most economically attractive location because of its proximity
to both the leasing areas and refinery complexes.
6. Service industries
Along with the previously energy-related mentioned industries, many sprvice
0r auxiliary facilities are also found within the Port of New York
jurisdiction that could be significant to OCS activities.
These include marine support capabilities such as bunkering, floating heavy
life cranes up to 500 tons in capacity, food supplies, ship chandlers,
marine insurance, banking, ship cleaning, towing and barging, medical
services including a U. S. Public Health Service Hospital and the Marine
Medical Services Division of Health Delivery Systems, Inc. In addition, a
wide choice of ship repair and maintenance facilities including underwater
work capabilities are available, as well as international and domestic
communication facilities. The Army Corps of Engineers, Coast Guard,
Maritime Administration, Department of Interior, Environmental Protection
Agency and other federal agencies involved in port and marine activities
maintain regional offices and facilities in the Port District, as does the
American Bureau of Shipping.6
-73-
TABLE 18
PIPELINES, 1972
Name and Product
Origin - Destination
INBOUND
Oi 1 Products
Colonial Pipeline Co.
Sun Pipeline Co.
Harbor Pipeline Co.
Pasadena, TX-Linden, NJ
Marcus Hook, PA-Newark, NJ
Philadelphia-New York Harbor
Natural Gas
Tennessee Gas Pipeline Co.
Brownsville/New Orleans-New York
Columbia Gas System
Brownsville/New Orleans-New York
Texas Eastern Transmission
McAllen, Freer, TX-New York
Transcontinental Gas Pipeline
Algonquin Gas Transmission
Brownsville/New Orleans-New York
Lambertsville, NJ-New Haven
OUTBOUN D
Oi 1 Products
Buckeye Pipeline Co.
Linden, NJ-Pittsburgh
Macuncie, PA-Syracuse, NY
Tidewater Pipeline
Bayonne, NJ-Williamsport, PA
Jet Lines, Inc.
New Haven-Springfield, MA
WITHIN
Long Island Pipeline Corp.
Linden, NJ-Long Island City/JFK
Northvi 11 e Dock Corp.
Coas ta 1 Oil Co.
Riverhead-Brentwood, NY
Newark-South Plainfield, NJ
Note: Includes Port of New York area.
Source: Tri-State Regional Planning Commission 1967; Federal Power Commission
1971; Moody's Investors Service, Inc., 1974.
-74-
C. The Natural ~nvironment
The natural environment of the New York City Long/Island area is highly
complex, having been shaped by a variety of natural and human forces.
In many ways, the region is unique, with a juxtaposition of one of the
most densely populated areas in the world with some of the world's most
productive ecosystems.
1. Topography
In recent geologic times, glaciation had a major effect on the surficial
geology and topography of the region. The most recent glacial period began
some 30,000 years ago. By 15,000 years ago, so much water was stored in
the ice sheets on the continent and elsewhere in the world that sea levels
were about 120 meters (390 feet) lower than they are today. Large areas
of the Continental Shelf, nearly to the edge, were dry land, and the
Hudson and other ri vers fonned canyons, the remnants of whi ch s till remain
today. These submarine canyons have special importance today for the
fisheries resources. 7,8
At the point of maximum advance, the ice sheet covered all of New Enqland,
part of Georges Bank, most of Long Island and half of New Jersey.
Manhattan and the Bronx are the glaciated and eroded southern portion of
the upland area that occupies a large part of New England. Bedrock is
at or near the surface in this area, and the topography is largely a
product of preglacial stream erosion, modified somewhat by glacial erosion
and deposition. The upland rises gently from sea level and reaches an
altitude of 84 meters (276 feet) in northern Manhatten and 87 meters
(284 feet) in western Bronx.
The retreat of the glaciers left terminal moraines extending across Staten
Island, through Brooklyn and Queens, and on to the end of Long Island.
These moraines are the most prominent features of the surface topography
on Long Island. They form the backbone of the island and contain the
points of highest elevation, reaching a maximum of 420 feet (130 meters)
above mean sea level at High Hill in western Suffolk County.
The land surface of the southernmost moraine on both Staten Island and
Long Island was formed primarily from glacial outwash, and slopes gently
toward the Atlantic Ocean. The actual south shore line is poorly defined,
merging into tidal marshes. Along all but the easterly end of Long Island,
the southern shore is bordered by a succession of shallow bays separated
from the ocean by barrier beaches. These beaches, including Fire Island
and Jones Beach, have sandy beaches on the ocean side, dunes in the center,
and salt marshes on the bay side. The barrier beaches are largely contin-
uous, broken only by a few inlets into the bays. The entire southern
shoreline is in dynamic equilibrium, shaped by forces of tides, currents,
storms and generally rising sea levels. Sand is continually being trans-
ported along the barrier beaches from east to west, eroding the beaches and
moving them slowly landward. The barrier beaches offer a degree of natural
protection for the marshes and bays behind them by separating them from
potential ocean-originating oil pollution.
- 75-
2. Habitats
The marine ecosystems in and adjacent to New York State have major
environmental and economic significance. In this section, four distinct
habitats--tidal wetlands, coastal bays and estuaries, exposed shorelines,
and the offshore region--are identified; and critical natural resources
in these habitats are described. Later chapters deal with the
environmental and economic impacts of oil spills and OCS activity on these
resources.
The tidal wetlands, bays and other estuarine areas, where fresh and salt
waters mix, are especially important as the foundation of the marine food
chain and because they support large and diverse populations of aquatic
species. Some species spend their entire lives in these areas while
others use them during vital stages in their life cycles, such as spawning.
Disruption of these areas by an oil spill or other adverse impact would
have major environmental and economic implications for New York State.
a. Tidal wetlands - Tidal wetlands are highly productive natural resources.
The New York State Legislature officially recognized the value of wet-
lands in 1973 through passage of the Tidal Wetlands Act, which established
a regulatory program to preserve and protect tidal wetlands. The law
provides a broad definition of tidal wetlands that includes coastal salt
marshes as well as coastal shoals, bars and mud flats. Coastal fresh
marshes and the littoral zone (waters up to six feet deep) are also
protected under the law. (See Figure 16).
Tidal marshes have special importance as critical natural areas in New
York State's coastal zone. They are among the most biologically productive
ecosystems in the entire world, far exceeding the productivity of even
prime agricultural areas. The wetlands act as "food factories," exporting
half of their production to other dependent ecosystems.
Salt marshes are characterized by a vegetative cover of salt-tolerant
grasses. They occur in protected areas where mud and other sediments
provide a footing for the plants. Only a few species have evolved to exist
and flourish in this ecological niche because most other plants cannot
tolerate salt even in small quantities, let alone twice daily immersion from
the tides.
The marsh grasses in tidal wetlands are the key to the productivity of the
entire ecosystem. One species, Spartina alterniflora (salt marsh
cordgrass), dominates the area between high and low tides, and is especially
important in terms of biological production. Another grass, Spartina patens,
dominates higher ground where it is flooded by spring tides.
The Spartinas, like many other grasses, have perennial rhizome (root)
networks that produce annual leaves and stems. The annual die-back of
leaves and stems, and the growth of algae in the marsh produce large amounts
of detritus (any type of decaying organic material--plant and animal) that
is used as food by a variety of worms, snails, insects, crabs, fish,
mollusks and other animals which in turn are consumed by larger animals.
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FIGURE 16
TIDAL WETLANDS AND COASTAL BAYS
Scale t, 830,000
Source: Nassau-Suffolk Regional
Planning Board
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40 Km
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The marshes serve as spawning areas and nurseries for a number of marine
fishes. These populations of small fish are a food source for other
marsh inhabitants, including birds such as waterfowl, herons, egrets, and
others. Waterfowl also nest in the marsh and all of the birds find shelter
in the dense marsh grasses. Predators, including osprey, hawks, owls, fox,
weasel and snapping turtles occupy the top level of the food chain in the
marsh.
The marsh also supplies food to surrounding habitats. Food is carried away
by birds and mammal predators that spend only a portion of their life cycle
in the marsh and some is carried away by marine species. Fifty percent of
the plant production of the marsh is exported by the tides to serve as
food for the organisms in neighboring bays and estuaries. Significant amounts
of this production are eventually harvested by humans in the form of fish
and shellfish. Calories produced in the marsh as plant material are harvested
in the estuary as scallops, oysters, hard clams, soft clams, scup, striped
bass, bluefish, flounder and other species. These calories may also be
harvested in the open sea as still larger fish.
In addition to food supplies, the marshes provide other benefits for humans.
They provide flood and storm protection for inland areas, provide recreation
and research opportunities, and allow for open space and aesthetic appre-
ciation. The marshes also serve to filter sediments and pollutants from
the waters. All these factors make tidal wetlands immensely valuable areas
needing protection and preservation.
Some of New York State's wetlands run a higher risk of being impacted by
DCS development than others due to their location. Areas along the south
shore of Long Island and the remaining wetlands in New York City, parti-
cularly those in Jamaica Bay and on Staten Island, are most valuable (see
map).
b. Coastal bays and estuaries - The bays and estuaries of New York State
are the second link in the rich salt marsh - marine food chain. Coastal
bays are influenced considerably by freshwater influx from river outflow,
groundwater seepage, or runoff. Consequently these bays are marked by a
salinity gradient fluctuating in position and steepness with season and
freshwater runoff. The influence of freshwater runoff as well as the
overall shallowness of estuarine waters also causes wide temperature
fl uctuations.
The semi-enclosed, protected nature of the bays, combined with the abun-
dant food supply and the wide fluctuations in salinity and temperature,
causes the estuarine waters to be marked by high productivity and rela-
tively low species diversity. The bays support permanent populations and
also serve as nurseries for many species whose adult lives are spent in the
open ocean.
The wide fluctuations in salinity and temperature causes shapr seasonal
variations in the number of species as well as density, biomass, and
community structure. Tehse seasonal species fluctuations are principally
the result of the immigration and emigration of finfish. The bay fish
populations are dominated by young-of-the-year and juvenile predator
-78-
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-79-
species which favor the shallow, naturally vegetated shore zones--the
principal nursery and feeding grounds for many of the finfish species.
About 60% of the fish important to New York State's commercial and
recreational fisheries are dependent upon the estuarine nature of these
bays for some segment of thei r 1 ife cycl e. Useful as food and/or bait,
the fish found in Great South Bay and the other south shore bays are
valuable, directly and indirectly, to New York.
Among the regular inhabitants of coastal bays and estuaries directly
significant to humans are bay scallops, hard-shell clams, soft-shell
clams, oysters, winter flounder, mallards and black duck. These species
make significant contributions to New York State's commercial fishing
industry and to the recreational fishing and hunting industries. The
bays are also of major importance to the recreational and tourism
industries because of their scenic qualities and value for boating and
other recreational activities.
The bays and estuaries provide excellent conditions for the growth of
shellfish. Shellfish are filter feeders, dependent upon an abundant supply
of detritus, bacteria and plankton. They are also able to tolerate the
changing conditions in the bays, often much better than many of their
predators.
The species most important to the state's commercial fishing industry are
hard-shell clams and oysters. The hard-shell clam is found from the
Gulf of St. Lawrence to the Yucatan, on sand or muddy bottoms in estuaries
and in protected areas of the intertidal zones (Fig. 17). The New York
State hard clam fishery which is concentrated on the south shore of Long
Island, accounts for over half of all the hard clams harvested in the
Uni ted States, and for 50 percent of the value of all commerci a 1 fi shi ng
resources landed in New York State.
The greatest abundance of American oysters occurs in sheltered shallow
and intertidal marine and estuarine water Rocky or semi-
hard bottoms and constantly renewed seawater are needed for flourishing
communities. On Long Island the principal oyster fisheries are located
in Long Island Sound, Great South Bay and the Peconic Bays.
c. Exposed shorelines - The exposed shorelines of New York are a radically
different enVlronment from the protected bays and estuaries (see Figure 19).
The most important characteristic of this habitat, which extends to a
depth of 20 meters, is the heavy wave action. The high energy of the
waves, resulting in shifting sediments and constant turbulence, creates
conditions in which few species can prosper. Compared with other habitats,
the exposed shoreline is not densely populated, even though the conditions
provide high concentrations of oxygen and suspended food.
Because the waves prevent the growth of plants such as marsh grasses and
inhibit the growth of eelgrass in shallow water, the most important food
sources are the detritus and soluble organic compounds washed up by waves
and absorbed onto the sand grains. Crabs and mollusks inhabit exposed
shorelines, feeding on the detritus and soluble organic compounds.
, : L #JTi~~ ~"i"
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FIGURE 19
-~--~_/"-/
EXPOSED SHORELINES
This habitat i~ defined to extend
from the intertidal area to a depth
of 20 meters and includes two dis-
tinct habitats: sandy shores and
rocky shores. The rocky shore
habitat is not found in New York
State coastal waters.
Scale Ie 830,000
Source: The Research Institute
of the Gulf of Maine
.
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20
40 I(m
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10 20
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-81 -
Shorebirds visit the beaches to feed on crabs, mollusks and any
organisms washed up on shore.
Two inhabitants of exposed shorelines that are of direct importance to
man are surf clams and striped bass. The surf clam is an important
shellfish resource occurring in Long Island Sound and Atlantic Ocean
waters on sand bottoms from low water level to depths of 73 meters. The
animals usually bury themselves 2 to 20 cm below the surface. The surf
clam is second in volume harvested among New York State shellfish
resources (Fi gure 20).
The striped bass is a large anadromous, migrating fish which spends its
entire life in coastal waters. In the New York area the striped bass
prefers surf-swept beaches, or shallow bays and estuaries. Striped bass
are voracious feeders, eating principally fishes and invertebrates, both
planktonic and benthic. Adults in the sea feed on small fish, squid, crab,
lobster and sea worms, while fry feed on miscellaneous freshwater and
marine invertebrates (Figure 21).
New York State beaches are a major tourist and recreation attraction. The
broad, gently sloping beaches of southern Long Island, from Coney Island
and the Rockaways to Montauk Point, are among the finest in the world.
Major federal, state, county and local beaches provide recreational
opportunities not only for New Yorkers but also for people from a variety
of other states and provinces. The significance of beaches is discussed
in more detail later in this chapter and in Chapter VIII.
d. Offshore regi on - The offshore regi on extends from 20 meter depths to
the edge of the Continental Shelf. Compared to habitats closer to shore
environmental conditions offshore are relatively uniform. The offshore
waters are usually fairly deep (up to 300 meters) and of high salinity
(figure 22). Concentrations of nutrients are localized, as revealed by
very patchy distributions of phytoplankton (floating microscopic plants).
Food for organisms living offshore is provided by phytoplankton and by
the coastal bays, estuaries, and wetlands. The offshore region has a
great diversity of organisms, some of which are directly important to
humans. The density of organisms varies with the time of year and geo-
graphi c 1 oca 1 ity. The offshore bottom is genera 11 y more densely popu1 ated
than the water column, but these areas are less densely populated than
tidal wetlands, coastal bays and estuaries.
Productivity of the offshore region roughly corresponds to the area of the
Continental Shelf. Because the Mid and North Atlantic have broad shelf
areas, they are among the most productive commercial fisheries in the
world. The deepest areas of the ocean, by contrast, are generally much
less productive.
Although New York State's commercial fishery is now largely based on
shellfish catches within the twelve mile limit, many New York fishermen as
well as fishermen from other states and from other countries fish this
area extensively.
~ '
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FIGURE 20
SURF CLAMS
~ Distribution
Spawning occur
to August s
Note:
from Mi d-July
is within
State
I: S30,OC'O
10
Distribut"
~imits Ofl~n shown
JurisdictiO~w York
Nassau-Suffolk
Planning B Regional
oard
40 Krn
.
Source:
20
30
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20
M'
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760
740
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FI GURE 21
STRIPED BASS
. General Distribution
Spawning occurs from t.larch
to July, Hudson River is
only spawning site in the
area.
360
Source: The Research Institute
of the Gulf of Maine
740
720
700
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FIGURE 22
OFFSHORE REGION
The offshore region is comprised
of two distinct habitats: offshore
plankton-based pelagic, and off-
shore bottom. The plankton-based 36~
pelagic includes the saline water
column from the shore to the edge
of the Continental Shelf, The
offshore habitat consists of all
bottom types lying under more than
20m of water to the edge of the
Continental Shelf
740
720
700
6 SO
d..4L
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-----'-0
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Scal. 15.000,000
-85-
The presence in recent years of large, mechanized fishing fleets from
other countries has caused heavy fishing pressures on the offshore catch.
The decline in catch of many commercial finfish species led to enactment
of the Fishery Conservation and Management Act in 1976. This law
establishes a national program for the conservation and management of all
living resources out to 200 miles from the coast. The Act stipulates
agreements between the U. S. and foreign nations on allotments of fish
that the nations may catch within the zone.
Even though the New York State fishing industry is not now benefiting
greatly from the 200 mile jurisdiction, there is a significant potential
for expansion in the future. Research on the potential implications of
OCS activity should be intensified because much of the fishing in the Mid
and North Atlantic (beyond the 12 mile limit) occurs in areas that may
also be used for oil and gas exploration. There exists the potential for
navigational conflicts among boats, fixed platforms and exploratory rigs.
The species commercially most important to New York State that could
potentially be impacted by oil and gas exploration in the offshore region
are lobsters, silver hake, summer flounder and scup. Important
recreational fish include Atlantic mackerel, striped bass, winter
flounder, and yell owta i 1 flounder.
Lobsters are found from Labrador to Cape Hattaras, inhabiting a band
extending from the tide zone to a depth of 183 meters. Two major
populations of lobsters exist in the offshore region: the nearshore, or
coastal lobsters (Figure 23) and the offshore Continental Shelf lobsters.
In the New York area, the nearshore lobsters support a commercial fishery,
and a sport fishery for lobsters exists in some portions of both Long Island
Sound and the Continental Shelf area. Nearshore lobsters from the eastern
end of Long Island Sound migrate into the Atlantic Ocean. Offshore lobsters
exhibit a seasonal migration pattern, moving inshore during spring and
summer and offshore during the fall and winter.
The summer flounder is a warm water flatfish that occurs most abundantly
in moderate depths (18-32 meters) off New York during the summer, but
winters in deeper waters off the Continental Shelf. During the summer
months, summer flounder are common along the coast, off Sandy Hook, New
Jersey and in Long Island bays, where they may be taken by sportsmen fishing
from the shore.
The silver hake is a swift swimming, wandering fish, independent of depth
within wide limits. Sometimes silver hake swim close to the bottom,
sometimes in the upper levels of the water, their vertical movements
chiefly governed by their pursuit of prey. Silver hake are an important
commercial species in New York State.
The scup occurs inshore in schools during the summer and offshore to
depths of 126 meters during the winter. Scup are widely distributed along
the Atlantic Coast although they prefer smooth or rocky bottoms and have
relatively narrow temperature and salinity requirements. The scup is a
valuable commercial and sport fish south of Cape Cod, and is the most
important sport fish in tidal areas of New York.
,
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FIGURE 23
AMERICAN LOBSTER - NEARSHORE
bf&l Di s tri buti on
Spawning season extends from
July through August
Note:
Distribution shown is
within limits of New
York State jurisdiction
Sou rce :
Nassau-Suffolk Regional
Pl anning Board
-87-
3. Nearshore Water Quality
The overall water quality in many areas of the Long Island - New York City
area is excellent, permitting a significant portion of the area economy
to be based on recreational and commercial water-dependent uses. There are,
however, a number of areas where water quality is not as high, due mostly
to industrial and residential development.
New York State waters are assigned a "best usage" classification. These
uses include shellfishing, swimming, finfishing, and recreational boating
or navigation. There are a number of specific areas where water quality
problems now exist.
It should be noted that water quality levels are constantly changing. After
a severe rainstorm, coliform levels in a bay may increase ten-thousand
fold and then return to a low level in a day or two. Hot weather spells
combined with an excess of nutrients (many times from unidentified sources)
will cause algae blooms which deplete oxygen levels.
The New York Harbor - Lower Hudson River area includes Upper New York Bay,
Lov.er New York Bay, and the Narrows, whi ch connects the two bays. Di scharges
of primary-treated or raw sewage in the area create significant water quality
problems. These problems are worst in "backwater" areas such as the Gowanus
Canal, where little tidal flushing occurs. Lower New York Bay has substan-
tially better water quality than the Upper Bay, both because of existing
sewage treatment plants and because of the mixing that occurs with ocean
water.
The Arthur Kill, which is a tidal channel between New Jersey and the western
shore of Staten Island, has very poor water quality. It is loaded with
industrial wastes and thermal inputs from power plants and industries along
its shores. Oil slicks are often visible on the surface of the Arthur
Kill, as well as the rest of the harbor. These are attributable to indus-
trial sources, including oil terminals, and to heavy waterway traffic and
combined sewer overflows. Many of the pollution sources are located on
the New Jersey side of the Arthur Kill.
Long Island Sound, which has an area of approximately 3500 square kilometers
(1300 square miles) has varied water quality. Most of the Sound is of
sufficiently high quality to permit shellfishing except in the extreme
western section, where water quality is degraded by the carry-over of pollu-
tants from the New York City treatment plants and combined sewers through
the Eas t Ri ver.
The water quality in Long Island's bays and harbors is generally quite
good, with extensive areas suitable for shellfishing. Water quality problems
are generally limited to small, specific areas with poor water circulation.
Water quality along Long Island's south shore is excellent.
Water quality management in New York State began in the 1950's, long before
most other states recognized that water pollution was a problem, and is now
carried out within the national framework of the Water Pollution Control
Act of 1972, which establishes national goals for water quality.
-88-
The major emphasis of the program is and has been the control of point
sources of water pollution to assure maintenance of water quality stan-
dards. The Pure Waters Bond Act of 1965 and the Environmental Quality Bond
Act of 1972, along with federal assistance, have provided hundreds of mil-
lions of dollars for the planning and construction of municipal sewage
treatment plants, and state and federal water quality discharge permit
systems are being used to assure compliance of both public and private sec-
tor discharges with water quality standards. Non-point sources of water
pollution, such as urban stormwater and runoff, are an additional concern
being dealt with in the '208' Area-Wide Waste Treatment Planning Program.
A consequence of the water quality management program has been a steady
increase in water quality in the state, an increase that will continue as
additional point and non-point pollution sources are brought under control.
Water quality has important implications for the commercial fishing and
tourism and recreation industries on Long Island. Shellfishing is particu-
larly dependent on high levels of water quality because of the tendency of
shellfish to accumulate pollutants. Standards of water quality for shell-
fishing waters are very stringent, as are the Federal Food and Drug Adminis-
tration's criteria for the taking of shellfish for marketing purposes.
These rigorous standards have resulted in the closing of a number of areas
in Long Island Sound and in some of or parts of Long Island's bays and har-
bors. In some cases, areas are closed not because they are normally polluted,
but because there is a reasonable possibility that an accident or unusual
weather conditions could temporarily pollute the area.
Water quality is also an important consideration for swimming and bathing,
although standards do not need to be as rigorous as for shellfishing.
Water quality at most of the beaches in the area is excellent, although
there are exceptions, particularly in New York City. Swimming waters are
regularly tested by city and county health departments during the summer.
If necessary, beaches may be closed on the basis of these tests. Some
areas may be regularly restricted, while others may be closed only short
periods of time. The beaches that are closed, however, represent only a
very small proportion of the total beach area.
Water quality in the Long Island - New York City area, then, is generally
very good, and in areas where it is not, efforts are underway that will
result in significant improvements in the future. Because water quality
in the regi on is an important natural ,;,esource both envi ronmenta lly and
economically, protecting this resource from any further pollution, such
as oil spills, is of special significance to New York State.
D. Marine-Related Industries
The natural environment of the shoreline and offshore marine resources pro-
vides the basis for three activities -- tourism and recreation, recreational
fishing, and commercial fishing -- that are assets to the economy of the
Metropolitan Area and the State. The unique beaches and other natural
resources and man-made facilities on the south shore, attractive to tourists
and in proximity to 11.5 million residents of the Metropolitan Area, make
-89-
it the most heavily utilized oceanfront real estate along the Atlantic
Coast. The highly valued and productive shellfish areas in the bays, sounds
and inlets support important commercial fisheries.
1. Tourism and Recreation
During the peak summer season about 50 million visits are made to the
public beaches along Long Island's south shore, creating a major marine-
related industry. Annually, beach visitations and tourism directly generate
$245 million in expenditures for goods and services and provide a source of
income for many businesses and individuals. In turn, these businesses
generate expenditures and income to support other enterprises in the Metro-
politan Area. In total, over $1 billion dollars annually flows through the
metropolitan economy as a result of south shore recreational activity.
2. Recreational Fishing
Almost 850,000 sportsmen utilize the south shore to fish in prime catch
waters. On a good summer weekend day, as many as 10,000 motor and sail
boats may be offshore. Sport fishing and boating directly generate $163
million annually. The annual retail value of sport fishing catches is $51
mi 11 i on .
3. Commercial Fishing
New York's marine commercial fishing industry is principally dependent upon
shellfish harvesting. Of $32 million in landings in 1976, shellfish accounted
for 85%, with hard clams representing 50% of this dockside value. After
processing and distribution activities these original landings have a retail
equivalent value of almost $90 million.
An estimated 9,500 full-time and part-time persons are employed in the
commercial fishing industry. Though the industry fluctuates, it is a
major one for Suffolk County. This county alone accounts for 75% of the
total state commercial fishery landings. With the increased demand for fish
products, especially shellfish, and the inability to substantially increase
supply in the short-term, the state's commercial fisheries are becoming
increasingly valuable. There is also a significant potential for expansion
of r~ew York State's commercial fishing industry as a result of the new 200
mile conservation and management zone.
More detailed information on the economic importance of marine recreational
and commercial fishing and their sensitivity to OCS energy activities is
presented in the next two chapters.
-90-
FOOTNOTES - CHAPTER VI
lAlfred Hammon, Port Facilities and Commerce, MESA New York Bight Atlas
Monograph 20, August 1976, p. 19.
2Ibid., p. 18.
3NERBC-RALI, Factbook: Onshore Facilities Related to Offshore Oil and
Gas Development, November, 1976, p. 346.
40p. cit., Port Facilities and Commerce, p. 28.
5Ameri can Petroleum Institute "Large Tankers - Our Energy Li fel ines,"
April 1977, p. 4.
6Port Authority of New York and New Jersey, "Support Bases for Offshore
Drilling: The Port of New York Potential," May 1977, pp. 1l0-11l.
7U.S. Department of Interior, Bureau of Land Management, Final Environ-
mental Impact Statement for OCS Sale No. 40, 1976.
aU.S. Department of Interior, Bureau of Land Management, Draft Environ-
mental Impact Statement for OCS Sale 42, 1976.
- 91 -
VII. ENVIRONMENTAL IMPLICATIONS OF OCS EXPLORATION AND DEVELOPMENT
A. Environmental Impacts of Onshore Facilities
The types of onshore facilities required for offshore development will
depend upon the size of the find, as discussed in Chapter V. Regionally,
these could range from support bases to new refineries, with varying environ-
mental effects. However, the facilities likely to locate in New York State
would generate minimal impacts.
Onshore support faci 1 i ti es wou 1 d generate increases in popul ati on, commerci a 1
and industrial activity, as well as their associated waste products. Water
and air quality would be primarily affected by pollutant increases. However,
population increases due to offshore development are not expected to be
significant, as discussed in Chapter V.
1. Water Quality
Surface water quality could be impacted via increased municipal sewage,
industrial discharges, and harbor activity. Unless properly controlled,
the construction phase for roads, pipelines, and industrial facilities could
increase surface runoff and cause siltation although this should not be a
significant problem in areas such as the Port of New York.
The Bureau of Land Management has used models to assess above-normal increases
in pollutant levels as a consequence of onshore development. According to
BL~l's predictions presented in the Environmental State for Lease Sale 42,
the northern New Jersey, New York, and North Atlantic area may experience
cumulative effects as a result of their location between lease sales 40 and
42. The increase has been predicted as less than five percent of the
existing pollutant levels.
Water supplies in New York State are not likely to be significantly affected
by onshore support facilities. The types of OCS-related facilities likely
to be located in New York State will not consume large amounts of water.
Inland oil spills from tank farms and pipelines do have a potential for
affecting ground water supplies if adequate precautionary measures are not
taken.
The existing legal and institutional framework to control water-related
problems is discussed in Chapter X.
2. Air Quality
Air pollutant levels would also increase with population commercial/industrial
activity. Additional population would mean more automobile emissions and
residential fuel use.
Gas processing plants, operations bases, new or expanded refineries, and
their respective construction phases would be the most significant industrial
sources of air pollution increase. The amounts involved are, again, depen-
dent on the size of the find, and the number and type of new facilities
required. New York State is not likely to receive facilities of this type
-92-
due to lack of appropriate sites, but could be impacted by expansion of new
construction of refineries in Northern New Jersey. Existing state and federal
laws concerning air quality are discussed in Chapter X.
A pot~ntial problem would be increased noise levels generated by helicopter
actlvlty transportlng personnel and materials between the offshore platforms
and support bases.
3. Dredging
Where existing facilities do not have deep enough harbor access, dredging may
take place, under permit by the Army Corps of Engineers and State authorities.
Pipeline construction would also require dredging. Any dredging would cause
resuspension of bottom sediments, turbidity, and potential destruction of
marine habitats.
At present, it appears there are enough areas of sufficient depth so that
dredging will not be necessary for either servicing or transport purposes.
The exception to this would occur in the event that pipe coating or platform
fabrication yards became necessary. Even this dredging should have only
local and short term effects if properly undertaken.
B. Offshore Activity Impacts
1. Oil Spi 11 s
The potential for oil spills is the most detrimental aspect of offshore re-
source development. Spills can occur from both tankers and pipelines, in
varying degrees of magnitude and damage. The effects of oil depend in part
on the type of oil spilled. Crude oil, for instance, can smother or dislodge
marine organisms as well as cause death for seabirds. Refined oil products
are actually toxic substances, and capable of as much, if not more, damage
to the marine and coastal environment than crude oils. Oil can become
incorporated into the food chain, causing complex long term effects.
Apart from the physical and chemical characteristics of oil, other factors
condition the effects of spilled oil on an ecosystem. These include the
degree of change an oil undergoes as it is "weathered in the environment."
Weathering processes include oxidation, vaporation, dissolution and biological
degradation.
The bi 01 ogi ca 1 damage caused by an oil spi 11 is governed by several factors.
The most important factors are the type and amount of oil spilled, and the
amount of change the oil has undergone while in or on the sea. Oil tends
to concentrate at the water's surface, or if absorbed in sediment, on the
bottom. This means that the impact of oil on a marine ecosystem is not uni-
form but is greater on organisms living at or near the surface -- sea birds,
intertidal life and larvae -- and those organisms living on the bottom.
a. Cleanup - Prevention of oil spills would be the ideal situation. However,
since spills appear to be inevitable, an effective containment and cleanup
program is needed. Much of the existing cleanup technology was developed
after the Santa Barbara, California incident in 1969.1
Currently available methods provide for either containment, removal, or
absorption of oil. Thus far, as demonstrated recently with the Argo Merchant
spill, containment equipment has not functioned well except in calm seas.
-93-
Since efforts to contain and clean up spills in areas of increased wave
heights, high winds, and strong currents have achieved minimal results in
the past, spills have been left to run the course of nature. Equipment
improvements are being made, however, as evidenced in the April 1977 North
Sea platform blowout. A prototype boom and skimmer was used, and was reported
effective in 2.5 meter waves, 1.5 knot currents, and 30 knot wind conditions.2
This equipment is not yet available in the United States.
There are also a number of chemical methods of spill cleanup, including dis-
persants, sinking agents, burning agents, biodegradants, and sorbents.
Sorbents, which absorb or adsorb oil even in hazardous conditions, are
presently the most effective and environmentally sound of these methods.
One sorbent material, reticulated polyurethane foam, absorbs thirty times its
own weight in oil and can be wrung out and reused, saving the oil resource
as well.
b. Statistics, models, and trajectories - To accurately predict impacts,
statistics and models have been used to simulate potential spills and their
distribution.
Oil spill statistics are generated by the U.S. Coast Guard, the U.S. Geologi-
cal Survey, and the Materials Transportation Bureau of the Department of
Transportation. Data collected are based on reported spills, and can be
incomplete if an operator does not report a spill. Much of the existing data
concern drilling in other areas of the United States such as the Gulf Coast
and may not be relevant to the harsher weather conditions of the Mid and
North Atlantic.
Mathematical models have been developed in an attempt to predict where an
oi1 spill will travel, given a hypothetical spill location. The United
States Coast Guard and the U.S. Geological Survey have developed the most
notable models -- the latter one was used extensively in environmental
impact statements for Georges Bank and Baltimore Canyon.3,~ Other more
specific studies and models have examined spill effects on particular areas,
such as Long Island.5, 6, 7 The most important of the oil spill models
are noted in Table 13.
It must be remembered that existing oil spill models are completely hypo-
thetical, simplified, one-dimensional, wind-driven systems, and do not
consider important oceanographic factors such as mixing, long shore pressure
gradients, long shore drift, density differences, upwelling, or settling out
in the water column. Circulation of surface and subsurface water on the
Outer Continental Shelf are presently not well understood, although extensive
studies are underway that are providing important new data. The Bureau of
Land Management's Environmental Studies Program is presently collecting
physical oceanography information as part of the ongoing environmental base-
line program. Circulation dynamics on the Shelf have a number of important
implications, including the movement of pollutants both on the surface and
underwater.
The oil spill models currently in use have important shortcomings. Because
they do not fully take into account many oceanographic factors, there are
significant limitations on their accuracy. Different models may produce
-94-
TABLE 19
PROBABILITY OF IMPACTIi~G LOI~G ISLAND SHORE
Stewart, Devanney, and Briggs, 1974
25% - spring
8% - other seasons
Lessauer and Bacon, 1975
Spill impacts shore in 4-8
days
Miller, Bacon and Lessauer, 1975
Devanney and Stewart, 1974
When summer high pressure
remains stationary for 4-5
days then spill comes ashore
When winter storm stalls and
becomes stationary south of
spill sites, there is a high
chance of spill impacting shore
South of 400 latitude:
1 ess than 10% probabil i ty of
impact in winter; less than
50% probability of impact
in summer
Brookhaven i~ati ona 1 Laboratory
Probability of impact is very
low if the spill is greater
than 15 miles offshore
Smith, Slack and Davis, 1976
70% probability of 7 major
spills
10% probability of spill
impacting shore
90% probability of pipeline
spill impacting Mid-Atlantic
shore
-95-
conflicting predictions, and the accuracy of the models decreases as the
length of the prediction period increases. Nevertheless, these models are
the best tools now available for predicting oil spill trajectories.
The size and distribution of spills is dependent on the size of the find.
For purposes of evaluating environmental impacts of possible spills, the
high find scenario has been used. The high find scenario assumes pipelines
will be used to transport oil found in the Mid-Atlantic and further assumes
that tankers would be utilized in the North Atlantic to transport oil from
the Georges Bank to refineries in the New York/New Jersey Port Area. This
scenario presents the greatest risk of oil spills for New York State.
,
High Find
Mid Atlantic
2.61 billion bbls
i~orth Atlantic
0.92 billion bbls
1assumes pipelines for transport to shore
2assumes tankers from platforms to Port of New York and New Jersey
Based on the Mid-Atlantic and North Atlantic USGS oil spill risk analyses~,9
the following tables are used as the basis for discussion.
The expected number of spills is given as the mean or 50 percent value.
Based on the statistical distribution the following assumptions are derived:
Mid-Atlantic
- 70 percent chance that there will be between 2 and 7 spills
greater than 1,000 bbls during the life of the field.
- 50 percent chance that there will be 18 spills of 50-1,000
bbls.
North Atl anti c
- 81 percent chance that there wi 11 be between 1 and 4 spi 11 s
during the life of the field.
- 50 percent chance that there wi 11 be 13 spill s of 50-1,000
bbls.
Because the high find scenario is higher than the recoverable resources on
which the statistics are based (2.6 to 1.4 billion and 0.9 to 0.65 billion),
the high number of spills greater than 1,000 bbls was chosen for discussion
pu rposes .
Assuming that a number of large spills (over 1,000 barrels) will occur
during the process of exploration. development, and production on the Atlantic
Continental Shelf. the next questions to address concern the impacts of those
spills on New York State. Paramount to that assessment are such factors as
whether the spills would reach the New York coastline and where they would
accumulate. Table 19 is a synopsis of seven studies of the probability
-96-
of oil spills impacting Long Island, as presented in the Final Environ-
mental Statement for Lease Sale 40. This table illustrates discrepancies
between and among the various studies and the problems in comparing and
contrasting the results of each.
From the numerous studies and models to date, it does not appear tnat New
York State will be adversely impacted by a large spill, if the spill occurs
within the present leasing areas. If spilJs occur outside the lease area,
for example in the Nantucket to Ambrose traffic lane, the chances of a spill
reaching Long Island are greatly increased. It should also be noted that
presently there is extensive tanker traffic along the Nantucket to Ambrose
routes on the order of 800 tanker trips per year into the Port of New York.
(See section on Tankers and Tanker Traffic.) According to the Final Environ-
mental Impact Statement for Lease Sale 42, transportation of oil from Georges
Bank would increase this traffic by no more than 19 percent in the peak year
of producti on.
Results from Stewart and Devanney (1974) indicate that during the winter it
is extremely unlikely (probability less than 0.01) that spills originating
at tracts in either the Baltimore Canyon or the Georges Bank will strand on
i'Jassau-Suffolk beaches. However, the situation is potentially more serious
for spills originating at drilling platforms when spills occur in the summer.
The Baltimore Canyon tracts pose little threat to Long Island in the summer,
a finding substantiated by the USGS model. However, there is roughly a
probability of 0.1 that spills originating at the westernmost tracts in the
Georges Bank during summer will strand on Long Island.10
An analysis of the Nantucket to Ambrose traffic lane in relation to the
Stewart and Devanney probability contours indicates that the potential oil
spill problem is much more serious if tanker spills occur south of Long Island.
The probability of such spills stranding on Long Island in summer could be
higner than 0.6, depending on spill locations in the shipping lane (see
Figure 24). Work done by Hardy, et. al., generally confirms the results of
Stewart and Devanney.
It should also be noted that a primary concern of each coastal state is to
assess the probabilities and implications of a spill reaching its own shore
and/or the resources in its own coastal zone. This kind of spill would have
a major impact -- both environmentally and economically -- on the states'
resources. A recent study, done by the Office of Parks and Recreation11 as
part of New York State's OCS program, estimated losses of between $25-30
million to the tourism and recreation industries as a result of an incident
(summer, 1976) when a great amount of debris washed up on the beaches of
Long Island. Additional studies of impacts on recreation and tourism are
discussed in a later chapter.
c. Environmental im~acts of oil Srills - The following discussion relates
life cycle characterlstics and bio ogical sensitivity of key species in
these habitats to petroleum contamination. An oil spill may have a direct
effect on a species depending on the time of year and stage in the organisms
life cycle. Indirect effects may result through incorporation of oil into
the food chain.
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-98..
. Onshore and nearshore impacts - Environmental effects of oil spills would
be most profound in the onshore and nearshore areas, where recovery and
oil retention time are both longer than in other areas.
An oil spill that impacts a salt marsh can have catastrophic effects, not
just on the marsh itself but on surrounding habitats. A large loss of
marsh area, for example, may cause a significant loss in the populations
of filter feeders, such as clams and shrimp, and their predators in sur-
rounding waters. There are potentially great regional ramifications from
a spill in a salt marsh.
A major spill in a marsh can have significant long-term as well as short
term impacts. Because thartina alterniflora is the key to marsh product-
ivity, the survival of t is plant will influence recovery times. A major
spill that kills the Spartina root system would be extremely serious. The
propagation mechanisms of Spartina alterniflora are not well understood,
but because recolonization would occur from floating seeds or root frag-
ments, or from in-filling from adjacent marsh areas, full recovery would
occur only many years after conditions are again suitable for the growth
of the marsh grasses. The estimated minimum recovery time for the physical
and chemical environment is four years. During this time, erosion of the
unprotected area could occur, reducing the size of the eventually recovered
marsh.
Damage or destruction of the grasses, especially Spartina alterniflora,
can disrupt food chains within the marsh and also in adjoining habitats
including the bays. There may be high losses of clams and other filter
feeders and their predators, for example. The declining catch of offshore
fish species may be attributed in part to widespread destruction of tidal
wetlands along the Atlantic coast.
A major spill that killed all organisms in the marsh except for the Spartina
root system would also be extremely serious, although recovery times would
not be as lengthy. The Spartina rhizomes (roots) are fortunately quite
hardy and are capable of remaining dormant for several years until physical
and chemical conditions are once again suitable for growth. Even so, the
loss of food production during the recovery period will have serious impli-
cations for surrounding ecosystems.
It is clear that tidal marshes are extremely valuable and must be protected
from the possibility of oil spills associated with OCS activity.
Coastal bays and estuaries and their resident species are also vulnerable
to the impacts of oil spills. The effects of oil on water birds such as
black ducks, mallards and gills are well documented, but a spill could have
equally disastrous effects on other species living in the bays and estuaries.
The impacts of oil on the marshes was noted earlier. Petroleum products
that enter the water column can have major consequences, particularly on
eggs, larvae and juveniles of many species. The subtle effects of a spill
may be more important than the number of organisms that may be killed out-
right. For example, the feeding habits and physiology of shellfish cause
them to retain and concentrate a variety of materials, including oil.
Even in low concentrations, petroleum products may impair reproduction in
.99-
clams, alter them physiologically, or induce a variety of tumors, in
addition to making them unfit for human consumption. Oil that becomes
incorporated into bottom sediments may have a continuing effect on the
ecosystem for many years. Additional research is needed into the precise
impacts of oil spills in bays and estuaries. Research is also needed in
possible ways of protecting bays from spills, such as temporarily closing
off inlets to prevent spills from entering.
An oil spill in the exposed shoreline habitat would have major impacts.
A spill that impacted the beaches during the peak tourist season would have
far reaching economic consequences that are discussed in Chapter VIII.
Obvious losses would also occur to bird populations, but less obvious losses
would occur among the other inhabitants of the beaches. The wave action
would incorporate oil into the sands, where it could persist for long per-
iods with adverse effects on the habitat. Surf clams, like other shell~
fish, are vulnerable to oil pollution and cleaning agents. It is possible
that the striped bass population could also be seriously impacted if an
oil spill hit a migratory group during the spawning season. A less serious
threat exists during the rest of the year when the population is less densely
congregated. Although re 1 ati ve ly tolerant of temperature and sa 1 i nity
changes, eggs and young are susceptible to pollution in estuaries throughout
the year.
. Offshore impacts - An oil spill in the offshore region could have significant
long-term and short-term impacts. Little is known of the precise implica-
tions of an offshore oil spill. However, data collected following recent
large spills, such as the Argo Merchant incident, may provide additional
data on possible impacts.
Lobsters are one of the most sensitive species in the offshore region. The
most vulnerable period of lobster development occurs during the first four
larval stages. Considering the buoyancy factors of crude oil in the ocean,
the fact that development of lobster larvae takes place in near surface
waters is very important. Lobster larvae exposed to low concentrations
of oil are generally lethargic; feeding is depressed and active motions are
minimal. Such an exposure would lower survival rates and could reduce the
number of lobsters living to maturity. Thus, an oil spill could have a
deleterious ~ffect on the commercial catch of lobsters.
An offshore oil spill may also have adverse effects on other aquatic micro
and macro organisms, both those living in the water column and on the
bottom. Adult fish are less vulnerable to oil spills than lobster larvae
because their surfaces, including gills, are coated with mucus that is oil
repellent and fish simply move away from an area affected by oil. However,
there is the potential for impacts on the reproductive cycle. The eggs
and larvae of fish are much more vulnerable to oil spills than adults.
If an oil spill occurs in a particular time of year there is the potential
for reducing or eliminating an entire year class (eg., eliminating all
three year old fish) especially with species experiencing overfishing
pressure. A spill occurring any time during the summer months (June through
August) would have the greatest impacts as that is the spawning season for
lobster, scup, summer flounder, silver hake, and other species.
-100-
2. Other Environmental Problems
a. Geophysical and Geologic Hazards12
Geologic hazards are another element of significance to OCS activity. Fail-
ure to take potential hazards into account could result in an oil spill with
major environmental consequences. There are a number of different types of
geologic hazards that could be encountered in the Atlantic.
Slumping, the mass movement of sediments on the continental slope, is known
to have occurred in the past in the Atlantic region. This is a concern be-
cause some of the tracts proposed for leasing are on the continental slope;
very careful analysis of sediments in the area and their engineering proper-
ties is essential before offshore platforms are located in these areas. Such
concern is doubly warranted because some of these tracts are located in deep-
water areas at depths now beyond the development capability of the oil
industry.
Seismic risk in the Atlantic OCS is described by USGS as moderate in compar-
ison with other areas of the United States. At least four epicenters of
earthquakes have been located on the Continental Slope east of the Baltimore
Canyon Trough in historic times, and since the early 1960's a number of minor
earthquakes have been located across 11ew Jersey and the continental shelf.
Few earthquake epicenters have been pinpointed offshore due to the difficulty
of onshore seismographs in focusing on such earthquakes unless they are
large or nearshore. It is clearly essential that seismic risks be taken into
account in the design and construction of OCS structures in the region.
Shallow hazards are of two types: shallow faults, which may present minor
seismic risks that must be considered during OCS operations, and shallow
gas deposits, which can present a risk to drilling operations. High reso-
lution seismic surveys and proper drilling procedures are necessary to over-
come this problem.
Overpressure is a geologic hazard that can result in blow-outs and oil
spills if npt properly anticipated and allowed for in the design of the
exploratory and development drilling programs. Careful seismic study and
observations in an area generally can detect the existence of overpressure
in advance of drilling.
All of these geologic hazards must be carefully considered in offshore
exploration and development in order to prevent serious environmental and
sa fety prob 1 ems.
b. Pipeline Burial
If pipelines are chosen as the transport method, their burial would require
trenching of the ocean floor, resulting in resuspension of sediments, increased
turbidity during burial activity, and local destruction of marine habitats.
The Bureau of Land Management estimates that 6 million cubic yards of sediment
be disturbed during pipeline installation.13 Offshore, the sediments involved
would generally be sand. Nearshore, however, resuspended materials could
- 101 -
include toxic metals, pesticides, and other organic and inorganic substances,
depending on whether or not the pipeline route passes through dumpsites.
Onshore pipeline placement could interfere with nesting and feeding of
shoreline bird species. The construction phase, as mentioned earlier, could
cause long term adverse effects on drainage, erosion, and water quality.
Care must be exercised in routing and construction of pipelines to ensure
minimal environmental impacts.
Once installed, pipelines themselves would not affect the environment adversely.
Damage to a pipeline, however, could cause a spill equal in impact to a
tanker spill. In identifying pipeline corridors it will be important to
consider problems of soil instability and seismic risk, and to know where
scouring and deposition, with subsequent exposure to hazards, could occur.
Further investigation of these subsurface dynamics will be needed before
pipeline siting takes place.
c. Drilling Muds
Drilling requires the use of specially compounded drilling muds which lubri-
cate the dri 11 bit, control pressure in the well, seal the strata until
casing is in place, support the sides of the well hole, and carry drill
cuttings up to the surface. They are composed of clays and other components
in a fresh water, salt water, or oil base. While oil based drilling muds
are not allowed to be discharged at sea and require onshore disposal sites,
discharging used, water-based muds directly into the marine environment
is a standard practice, and is allowed by EPA discharge permits. In the
exploratory phase of Lease Sale 42, between 62,927 and 125,853 tons of mud
are expected to be discharged, according to the Final Environmental Statement
(BLM). Further comment in the EIS suggested that discharges are rapidly
diluted in the seawater or dispersed rapidly in the top sediments of the
seafl oor.
Despite such statements, long term effects of dri 11 ing mud components and
their eventual deposition sites are conjecture at this time, and deserve
further investigation.
-102 -
FOOTNOTES - CHAPTER VII
IKash et. al., Enerqy Under the Oceans: A Technology Assessment of
Outer Continental Shelf Oil and Gas Operations, p. 160, 1973.
2Memorandum: Report on the North Sea Oil Spill, Executive Summary
to the Secretary of Interior from the U.S. Environmental Scientists Team,
Laurel, Md., 1977.
30p. cit., "An Oil Spill Risk Analysis for the Mid-Atlantic Outer
Continental Shelf."
40p. cit. "An Oil Spill Risk Analysis for the North Atlantic Outer
Continental Shelf."
5J.IV. lJevanney III, and Robert J. Stewart, "Long Island Spill Trajectory
Study," February 28, 1974.
6J.W. Devanney III, and Robert J. Stewart, "Probabilistic Trajectory
Assessments for Offshore Oil Spi 11 s Impacti ng Long Is 1 and," November 15, 1974.
7J.W. Devanney III and Robert J. Stewart, "The Likelihood of Spills
Reaching Long Island from Hypothetical Offshore Finds Over the Developments
Life," Februa ry 1975.
80p. cit. "An Oil Spill Risk Analysis for the Mid-Atlantic Outer Con-
tinental Shelf."
90p. cit. "An Oil Spill Risk Analysis for the North Atlantic Outer
Continental Shelf."
IONassau-Suffolk Regional Planning Board, "Analysis of Potential Oil
Spill Impacts in the Nassau-Suffolk Coastal Zone, December 1976.
II0ffice of Parks and Recreation, "Economic Study of Beach Pollution
Incident," November 1976.
12New York State Science Service - Geological Survey, "Assessment of the
Geologic Information of New York State's Coastal Zone and Continental Shelf
and Its Significance to Petroleum Exploration and Development," 2 Volumes,
August 1977.
13U.S. lJepartment of Interior, Final Environmental Statement OCS Lease
Sale 42, 5 Volumes, 1977, p. 847.
-103-
VIII. ECONOMIC IMPLICATIONS OF OCS ENERGY DEVELOPMENT
Outer Continental Shelf energy exploration, development and production
may have important ramifications for New York State's economy. In the
years to come many businesses, individuals and localities across the
state will in some way be affected by OCS energy-related activities if
significant oil and gas resources are found offshore. Enterprises sup-
plying goods and services for marine operations, from the provision of
food to the underwriting of insurance, will benefit. Job opportunities
may be found in onshore support facilities and ancillary industries.
Significant finds of oil and gas in the leasing areas could help al-
leviate the state's energy supply problems and improve its economic
prospects.
Concurrent with the prospects for substantial economic benefits, there
are real concerns about the possible negative environmental and subsequent
economic consequences of OCS activity on existing industry. This chapter
focuses upon three elements that represent the major economic issues as-
sociated with OCS:
potential economic benefits from attracting OCS related onshore
activities
potential economic consequences of imposing OCS activity on the
marine environment and related industries
potential benefits of having OCS oil and gas resources to meet
critical state energy needs.
Tnese three issues do not cover the total range of potential OCS economic
effects. They do, however, represent the core of the considerations that
I~ew York State must identify and address to plan on maximizing benefits
and minimizing any possible detriments. In this chapter, which summarizes
tne economic analysis elements of the first year OCS Work Program, each
of the three issues is identified in detail and analyzed. Conclusions are
drawn which will aid in the formulation of state and local government
policy decisions with respect to:
strategies concerning the feasibility and desirability of attracting
onshore OCS-re1ated activity.
policies and programs to ensure that the marine environment and
related industries are protected so that activities dependent upon
its survival are not adversely impacted.
planning to ensure that any OCS oil and gas resources will be
directed toward supplying the state's future energy requirements.
In-depth information, analysis and findings in support of this chapter
are contained in various documents prepared by DEC and the Office of Parks
and Recreation as part of the first year OCS program.
-104-
A. Potential Economic Benefits Resulting from OCS Activity
Perhaps the most speculative aspect of this report deals with an assess-
ment of the kinds and numbers of OCS-related facilities that may be
located in New York State and the resulting jobs, income and business
opportunities that may accrue to the state's economy. Any economic
benefits the state recei ves will be dependent on the amount of recoverable
resources found, the relative attractiveness of the state of meeting OCS
onshore service needs, and the actual number and types of facilities that
may be located in the state to provide support services for OCS offshore
acti vity.
1. Assumptions and Information Utilized to Assess New York State Prospects
The actual amounts of recoverable oil and gas resources in the Mid and
I~orth Atlantic cannot be known until exploratory drilling is undertaken.
Although estimates have been prepared by the U.S. Geological Survey and
other groups, these are only estimates. The fact that oil companies
paid over a billion dollars for leases in the Mid-Atlantic is not a cer-
tain indicator either. In a recent lease sale in the eastern Gulf of
Hexico, there was also high oil company interest, but exploratory drilling
was unsuccessful. A similar situation could occur in the Atlantic.
In Chapter V, three possibilities, or scenarios, were developed based on
USGS estimates and on work by the New England River Basins Commission/
USGS Resource and Land Investigations Project. These scenarios are highly
speculative but represent possible ranges of resources that can be trans-
lated into potential impacts for New York State. They are a high oil
and gas find, a very high gas find, and a low oil and gas find. Potential
resource yields for scenario are depicted in the following table:
TABLE 20
Potential Resource Finds
Mid-Atlantic and North Atlantic
Mid-Atlantic North Atlantic
Scenarios Oil Gas Oil Gas
#1 high oil and gas 2.6 12.8 0.9 4.2
#2 very hi gh gas 0 30.0 0.9 4.2
#3 low oil and gas 0.4 2.6 0 0
Total
Oi 1 Gas
3.5 17.0
0.934.2
0.4 2.6
Oil quantities are noted in billions of barrels. Gas quantities are
noted in trillions of cubic feet.
The scenarios assume that several lease sales will be held in both the Mid-
Atlantic and North Atlantic leasing areas. At present, one sale has
already been held in the Mid-Atlantic and one is scheduled for January
1978 in the North Atlantic. At least three more sales have been scheduled
by the Secretary of the Interior through 1981.
-105-
The high oil and gas find scenario is used in this chapter for economic
analysis, to indicate an upper range of economic benefits that may be
obtained from OCS activity and to avoid possible underestimates of
economic impacts. Because the analysis is based on facilities, lower
resource estimates would mean less facilities regionwide and perhaps
less facilities for New York State. Thus, the high find would give
maximum economic benefits and would more truly represent the mix of
facilities needed for both oil and gas development.
The very high gas find scenario represents the same total energy resource
as the high oil and gas find, but expressed in terms of a gas find only.
This scenario was developed to highlight the possible energy contribution
to the state, discussed later in this chapter; the direct onshore
economic benefits for the state would be similar to those of the high
oil and gas find, although the ratio of gas to oil production could af-
fect these to some extent. In addition, it should be noted that such a
very high gas find is unlikely; this find would be greater than the proven
gas reserves of Prudhoe Bay in Alaska. The low find scenario is not
discussed because substantial onshore facilities would not be required.
It is likely that most facilities required would be located as close to the
resources as possible, and probably not in New York State.
Additional information has also been taken into account in exploring the
economic implications of the high oil and gas find scenario. One factor
is the bidding patterns in Lease Sale #40. Because twelve groups of bid-
ders were awarded leases in Lease Sale #40, approximately twelve bases
would be needed for support activities for this lease sale; economies of
scale would probably apply to future lease sales, so that some support
bases would be used to service tracts in more than one lease sale area
within a region. Some of the companies have refineries in place in New
Jersey and offices in New York. This may have implications for the
location of support bases, as one factor influencing siting decisions
is an inclination by oil companies to locate new facilities on or near
company-owned land.
Another factor influencing economic impacts is the distance from potential
resource areas to shore. When the Call for Nominations for Lease Sale
#49 was announced, the northern-most part of the call area was only 15
miles from Long Island. The Department of Environmental Conservation
requested the State Geologist to undertake an examination of whether
areas near New York State had the geologic potential for oil and gas
deposits. That report, submitted to the U. S. Department of Interior dur-
ing the Call for Nomination process, stated that an area of low petroleum
potential exists to the north and west of a line coming no closer than 25
miles (40 km) to the south of Montauk Point. This line, which is ap-
proximately along the 400 north parallel, can be extended southward from
central Long Island to the coast of central New Jersey.
This distance from potential resource areas to shore is an important
consideration in the siting of on-shore facilities and also strongly affects
resource t,ansportation decisions. The low petroleum potential of areas
near New York State and the location of high potential tracts in the
Lease Sale #40 area may tend to reduce the attractiveness of New York State
-106-
760
740
-+--
720 I
\
700
680
440
\
\
L VERMONT;'
, : N
AMPSHIRE
-'
MAINE
r
NEW YORK
- ~-----/..
MASS.
420_____ _\
)-,
1---
: ---I-~
I CONN.
PENN.
(
, .'
',,- y
~
400
400
~
'!lOOO
o
38
FIGURE 25
DISTANCES FROM LEASE
AREAS TO SHORE
(Miles)
2:
o
o
~
~
o
o
o
'"
Note: Tracts to east of line drawn
through Georges Bank have
been withdrawn from Lease
Sale #42 because of Canadian
boundary claims
360
o
I
o
100
50 '
. ,
100
200
,
15~
300 KM.
, ,
250M!.
740
720
700
680
Scale 1'5,000,000
-107-
service base locations and especially for pipeline landfalls. Conversely,
the proximity of New Jersey and Delaware to high potential tracts may
tend to increase their relative attractiveness for such facilities, all
other factors being equal. The bulk of onshore activity from Lease Sale
#40 can thus be expected to occur in New Jersey, and possibly Delaware
and I~aryland. Pipeline landfalls in these areas are particularly likely.
Temporary support bases for the exploration of Lease Sale #40 have al-
ready been es tab 1 i shed by severa 1 oi 1 compani es in Oavi s vi 11 e, Rhode
Island and in Atlantic City, New Jersey. Information on these facilities
is required under Stipulation i1umber 7 of Lease Sale #40, which requires
lessees to provide the coastal states with a "Notice of Support Activity
for the Exploration Program" that details the location of facilities and
number of employees needed for the temporary support base. Many of the
companies will probably move to closer locations in the Mid-Atlantic
states if exploration is successful and economically recoverable resources
are found.
2. Identification of Potential Facilities and Economic Benefits for
liew York State
The numbers and kinds of OCS-related facilities that may be located in
New York State will depend on a number of factors, including resource
finds, site requirements and existing onshore facilities, distance from
the find to onshore energy facilities such as refineries, and general
economi c and bus i ness factors, i ncl uding 1 abor conditions, government
policies and public attitudes. Under the high oil and gas find scenario,
New York State could receive significant economic benefits through
employment of state residents in OCS-created jobs, expanded business
opportunities and the generation of public revenues if successful in
attracting facilities to locate here.
a. Regional impacts - The high oil and gas find scenario would require
a variety of onshore facilities and services to support exploration, devel-
opment and production. To provide a regional perspective, Table 21 illus-
trates the onshore facilities that would be needed to develop the Baltimore
Canyon and Georges Bank OCS areas. These numbers and kinds of facilities
were derived from an independent assessment of facilities for each of the
lease areas. There may be significant economies of scale when considering
the two regions together.
The regional estimates assume that the high find scenario gas and oil
resources in the Mid Atlantic will be sufficient to justify construction
of pipel ines to shore. The extremely high cost of underwater pipelines
makes distance to shore an overwhelming factor for pipeline location;
as a result, it can be anticipated that oil and gas pipelines from the Mid
Atlantic lease areas would come to shore in New Jersey, Delaware and/or
Maryland and Pennsylvania. Because of the greater distances involved, it
is assumed in this section that pipelines will not land in New York State.
Figure 25 shows distances from New York State to the leasing areas and
also shows the 400 north parallel; areas above this line near New York
are believed to have low petroleum potential. It should be recognized,
Number
-108-
TABLE 21
HIGH FIND SCENARIO
NUMBERS AND KINDS OF ONSHORE FACILITIES
FOR MID ATLANTIC AND NORTH ATLANTIC
Mid
4-5
10-20
2
2
2
4
2
6
North
4-5
6-12
Facil iti es
Temporary Service Base
Permanent Service Bases
Platform Installation Service Bases
Pipeline Installation Service Bases
Platform Fabrication Yard
2
Pipecoating Yard
Natural Gas Pipeline Landfalls
Crude Oil Pipeline Shore Terminals
2
Gas Processing and Treatment Plants
Source: Adapted from NERBCjEstimates for New England
-109-
however, that gas finds in the northern parts of the lease area could make
landfall sites on Long Island economically more attractive.
For the North Atlantic area, the assumption has been made that oil pipe-
lines to shore cannot be economically justified and that tankers would
be utilized to bring oil from the offshore platforms to marine terminals
or directly to refineries in the Mid-Atlantic area. In the case of
natural gas, however, pipelines would be used to transport the resources
to shore. Finds closer to Long Island could make landfall sites
economically competitive with somewhat closer sites in Massachusetts, Rhode
Island and Connecticut. However, because of the distances and costs
involved it is assumed that such pipelines will not land in New York State.
Table 21 also assumes that a new refinery will not be needed in the region,
in part because existing refinery capacity can be expanded and because
OCS oil can be expected to replace some of the imported oil now being
processed in Mid Atlantic refineries. In any event, there is virtually no
chance of a new refinery being constructed in New York State because of the
siting requirements for a refinery.
TaLle 22 indicates the general timing of facilities and services that
would be needed to support OCS activity in a typical region. An important
aspect of the table is the long 1 ead time requi red for many of the facil-
it i es and servi ces . Temporary and permanent servi ce bases are the fi rs t
facilities to go into operation; temporary service bases have already been
established in Rhode Island.
A platform fabrication yard would be the next major facility to go into
operation. Brown and Root, a major platform manufacturer, has acquired a
site in Virginia that could serve the needs of the entire East Coast. Even
without the Brown and Root facil ity, it is unl ikely that a platform
fabrication yard would be established in New York State because of the
large sites required (as much as 1,000 acres with water access). However,
a spin-off of the platform fabrication yard is the possible need for a
modular construction facility in the New York-New England region if demand
is sufficient. Conceivably, New York State could accommodate such a
fac il ity.
Pipeline installation service bases and pipecoating yards are required next,
followed by gas processing and treatment plants. In some areas, a marine
terminal or surge storage facility may be required.
Most of the facilities and activities required for lease sales in the Mid
and North Atlantic would not go into operation until the mid-1980's, and
some would not be needed until the 1990's. Operation of some of the
facilities would continue until around 2005 under the high oil and gas
find scenario, when production would cease.
b. New York State impacts - New York State's share of the regional total
of OCS onshore facilities under the high oil and gas find scenario will be
Facilities
Service Bases
Temporary
Permanent
Platform Fabrication Yard
Platform Installation
Offshore operations
Service bases
Pipeline Installation
Offshore operations
Service bases
Landfall/shore terminal
Pipe Coating Yards
Gas Processing and
Treatment Plants
Marine Terminal/Surge
Storage Facility
-110-
TABLE 22
TIMING OF FACILITIES AND ACTIVITIES
FOR A TYPICAL REGIUN
YEAR AFTER FIRST LEASE SALE
1 2 3 4 5 6 7 8 9 10
15
20
25
30
C=:J Construction
Key: _ Operation of facility to serve development
fMJiMMiI Operation of facility to serve other OCS regions
Source: NERBC, 1976
-111 -
limited. As noted above, a number of major facilities would not be expected
to be located in the state, including refineries, platform fabrication
yards, and pipeline landfalls and associated facilities. Perhaps the best
chance for New York State to share in the economic benefits of OCS-related
activity would be the establishment of temporary and permanent support
bases, and possibly pipecoating yards. These facilities may also induce
the location of various ancillary industries in the immediate location.
The state can be expected to be more directly influenced by activity in
the Mid Atlantic than in the North Atlantic because of the distances
involved, although the state could present economies of scale for
activities for which distance to the offshore platforms would be offset
by economies of joint facilities serving both lease areas. In Table 21
it was assumed that 4 to 5 temporary service bases and 10 to 20 permanent
service bases in the Mid Atlantic would be required under the high find
scenario. These numbers are consistent with the conclusion reached
earlier that approximately twelve service bases would be needed in the
region as a result of Lease Sale #40.
Potential support base sites in New York State, both in the Port of New
York and in Nassau and Suffolk Counties, are assessed in Chapter VII.
The attributes of the Port of New York with its excellent access, readily
available sites and numerous ancillary industries make the New York City
area most attractive; however, even if sites identified on Long Island
can be judged to be environmentally compatible with the wise use of
coastal resources and if any potential conflicts can be resolved, there is
no reason to assume that all of OCS development would take place in the
Port of New York.
New York State's share of the regional facilities totals has been
hypothesized in the following table, based on a variety of factors,
including transportation and siting considerations:
TABLE 23
FACILITIES FOR NEW YORK STATE
Type of Facility
Number
Temporary Support Base
One
Permanent Support Base
Two
Pipecoating Yard
One
-112-
It should be remembered that these figures are highly speculative; the
actual numbers, should significant resources be found, could be none at
all or could be as high as five or more. These figures provide a basis
for determining the onshore employment that may accrue to New York State
as the result of the level of discovery postulated in the high oil and
gas find scenario.
Direct economic benefits for the state would begin during year one
after the initial lease sale, as support bases are established. Ge~~rally,
the greatest amount of activity occurs during the exploration and d~velop-
ment phases of overall OCS development. The bulk of this activity, and
consequent need for labor and materials, occurs relatively early in the
life span of successful oil and gas fields. Economic benefits for the
state would peak between years six and twelve when the hypothesized
pipecoating yard is established and then decline slowly through the
production phase until the oil and gas fields are depleted. Onshore
facilities that are no longer needed would be phased out, and it is
important to recognize that the onshore benefits would accrue for a
specific period, rather than indefinitely.
The potential impacts on New York State residents will be determined in
part by the share of local employment at these facilities. Based on
information from the New England River Basins Commission and the Port
Authority, it is assumed that 80 percent of service base employment will
be 1 oca 1 hires.
The state may also receive economic benefits from residents who find
employment offshore on exploration rigs and on development and production
platforms. Estimating the percentage of local hires for offshore employ-
ment is difficult. The following estimates of local employment in dif-
ferent OCS phases are used in this report:
TABLE 24
OFFSHORE EMPLOYMENT
PERCENTAGE LOCAL HIRE
Exploration
Oeve10pment
Production
20%
40%
90%
Source: Personal communication with Irvin Waitsman, New England River
Basins Commission
The levels of offshore local hire will be affected by attitudes of offshore
drilling and production companies toward labor unions. The oil industry
has indicated that it would like to avoid offshore unionization, which
could work to the disadvantage of highly unionized New York State.
-113-
Offshore employment practices vary from company to company; it is as-
sumed here that two crews averaging 100 each are needed to work on the
platform on a schedule of seven days on and seven days off. Supervisors
work five days on and two days off. It is assumed that the wage levels
of offshore jobs will average $20,000 annually in 1976 dollars. This
figure is somewhat higher than tlERBC estimates and is attributed to
generally higher wage scales within the New York Metropolitan Area.
It should be noted that New York State residents would not necessarily
work on platforms when support bases are located in the state. For
example, New York State residents may work on platforms that are ser-
viced in New Jersey, and vice versa. For purposes of discussion and
illustration, however, it is assumed that all of the local hires offshore
will have residences within the state where the support base is located.
It should also be noted that although the share of local hires would
increase to 90 percent during production, the total number of offshore
production jobs would be substantially lower than during the peak year
of the development phase.
Direct total resident and non-resident employment and wages generated in
the peak year by the hypothesized OCS activities associated in New York
State are shown in Table 25. The actual employment figures would be
determined by such factors as individual company operating practices, the
number of platforms and rigs being serviced, and other factors, and could
be larger or smaller than represented here.
Table 25 illustrates peak year economic impacts; however, because the
peak years for individual facilities will not necessarily coincide, the
estimated impacts may be somewhat overstated.
Beyond the benefits that may be derived from offshore employment and
the location of service bases and pipecoating yards, New York State may
also receive significant economic benefits from the location of ancillary
industries in the state. According to NERBC, the oil companies typically
contract with other firms for many of the specific operations, equipment,
supplies, and services needed for exploring and producing oil and gas.
The individual capital investment, land, water, power and labor require-
ments of these ancillary industriesare small. However, due to similar 10c-
ationa1 requirements, many of these industries are likely to cluster,
generally near ports, producing local impacts comparable to a large-
scale marine industry. Together, they are likely to generate significant
economic activity including increased jobs, tax revenues, business
opportunities and cash flow in the area developed.
New York State's geographic position between the Mid and North Atlantic
leasing areas may present economies of scale to some of the ancillary
industries. Although some of the firms are highly specialized, others
provide more general functions. A number of the materials, services and
skills required already exist in the state, particularly within the
Port of New York.
-114-
TABLE 25
PEAK YEAR DIRECT EMPLOYMENT AND WAGES ASSOCIATED WITH
HYPOTHESIZED NEW YORK STATE-RELATED OCS ACTIVITY
(RESIDENT & IMPORTED LABOR)
Employment Wages 3
Onshore Offshore Onshore Offshore
Tempora ry Service Basel 150 400 $3,000,000 $8,000,000
Permanent Service Base2 480 1600 9,600,000 32,000,000
Pipecoating Yard ~OO 0 2,600,000 0
TOTAL 830 2000 $15,200,000 $40,000,000
I Assumes base will support 4 exploratory rigs; offshore 50 workers per
crew per rig (2 crews)
2 Assumes two permanent support bases each supplying 4 platforms; offshore
100 workers per crew per platform (2 crews)
3 Wages estimated at $20,000 per employee, except for pipecoating yard
at $13,000, all wages are in 1976 dollars.
Source: Derived from NERBC/RALI Factbook
-115-
Ancillary industries include mud companies, cement companies; drilling
tool and equipment companies; wellhead equipment companies; fishing and
rental tool companies; logging and perforating companies; helicopter
companies; catering companies; diving companies; well completion and
production companies; inspection and testing companies; trucking and
stocking companies; supplies and services companies; fabrication, welding
and machi ne shop servi ces; 1 abor contractors; and oi 1 spi 11 recovery
servi ces.
A separate analysis of the specific potential economic benefits to the
state from ancillary industries was not attempted because of the
complexity of factors affecting their locational decisions. However,
ancillary industries could significantly increase the potential benefits to
be derived from oes onshore facilities.
c. Total ilew York State economic benefits - Tables 26 and 27 present
estimates of the direct, indirect and induced employment opportunities and
resulting wages that could accrue to New York State residents from oes
energy development activities during a peak yearin the high find scenario.
These figures include some but not all of the potential contributions from
ancillary industries. The total number of jobs--almost 2,800--is not sub-
stantial compared to the current base resident employment in the state of
about 7 million. However, most of these jobs would be located in the New
York Metropolitan Area whose economy has been particularly hard hit by job
losses in recent years.
While this section focuses on the contribution of oes energy development
for the state's economy, there could be some dislocative effects that
reduce the net benefits. For example, the substitution of oes pipeline
oil and gas for imported tankered oil would have negative effects on
activity levels at the Port of New York and, therefore, have some
negative economic implicatons.
oes employment opportunities, especially since they are relatively high
paying positions, would be a welcome addition to the area's job base. The
aggregate wages of $54 million (1976 dollars) would be an important
contribution to the area's income flow. It should be noted, however, that
this lev~l of income flow would be of relative short duration given that
this is a peak year figure. Both start-up and shutdown periods would be
characteri zed by lower level s of jobs and income flows.
The projected employment and wage estimates should be considered as
reasonable orders of magnitude, subject to the many assumptions noted
earlier concerning uncertainties with respect to oes activity levels
and their location. In addition, the indirect and induced job and wage
estimates in the two tables were derived through aggregate regional multip-
liers rather than by detailed analysis of the specific employment and
income effects of oes activity on the economy.
Besides the prospects of increased job opportunities, oes activity could
provide other stimuli to the state's economy. There would be expenditures
by the oil and gas exploratory companies in New York State related to site
and facility requirements and the purchase of goods and services.
-116-
TABLE 26
ESTIMATED oes SUPPORTED EMPLOYMENT FOR NEW YORK STATE RESIDENTS IN PEAK YEAR
Total Direct Employment
2,830
Onshore: 830
Offshore: 2,000
Direct Employment for New York State Residents
Onshore: 6841
1,404
Offshore: 7202
Indirect and Induced Resident Employment
in New York State
1,380
Indi rect:
Induced:
2833
1,0974
Total Employment Generated from oes Development
for New York State
2,784
Residents
Assumes 80% local hire for onshore suppor~ bases, 90% for pipecoating
yard.
2
Assumes 20% local hire during exploration phase, 40% for development
phase.
3
Assumes 0.1 multiplier times Total Direct Employment.
4
Assumes 0.65 multiplier times Direct Employment for New York State Residents
plus Indirect Resident Employment.
-117-
TABLE 27
ESTIMATE OF PEAK YEAR NEW YORK STATE RESIDENT WAGES
FROM ASSOCIATED OCS EMPLOYMENTl
(MILLIONS OF $)
Total Direct Wages2
Onshore
Offshore
(1976 Wage Levels)
$55.2
15.2
40.0
26.8
12.4
14.4
Total Direct New York State Resident Wages
Onshore
Offshore
Total Indirect and Induced New York State
Resident Wages
Indirect3
Induced4
27.0
3.8
23.2
Total New York State Wages Generated from
OCS Development
53.8
lWages reflect 1976 prevailing levels. With inflation and changes
in wage rates among industries and occupations, the actual OCS
related wage levels prevailing in the 1980's and 1990's will be
substantially higher.
2Assumes an annual salary of $20,000 for offshore employment,
an annual salary of $20,000 for onshore support base workers and
an annual salary of $13,000 for pipecoating yard workers.
3Assumes an annual salary of $13,500 for indirect employment.
4Assumes induced wage multiplier of 1.0 onshore and .75 offshore
applied to direct New York State resident wages.
-118-
However, it is not likely that substantial capital investment would occur
within the state. For one, the construction of platforms and rigs
would probably not take place within the state. Also, the oil companies
who utilize sites in New York for support bases and a pipecoating yard
would seek facilities that require only minimal investment for upgrading
rather than sites that need major construction and renovation.
The attraction of a new industry such as OCS to the state, even though
it ,/ill be a relatively small activity, has potential long-term benefits
to the economy. It may support the i ncubat i on of other offshore
industries and activities and give the city a psychological lift. Given
the entrepreneurial talents available in New York, any new business op-
portunities and markets will be aggressively pursued.
An advantage of any onshore OCS activity that is attracted to the state is
the fact that it should not result in any significant financial burdens
on state or local governments. Given the public services infrastructure
available in the Port area of New York City, the prime potential location
for onshore support activity, OCS activity would not cause overloads or
result in necessary and costly increases in local public service.
On the revenue side, OCS onshore activity would result in significant gains
to the public purse. At the state and local government levels, the wages
generated from direct, indirect and induced jobs would increase tax flows
to the governmental treasuries. Based upon the peak year employment and
wages indicated in the previous tables, DEC estimates the following state
income and sales tax gains:
Peak Year
Income Tax
Sales Tax
$2.0 million
$600,000
Lesser amounts of tax gains would also accrue to New York City and perhaps
other downstate communities. Since OCS onshore operation is not likely
to require major new public services and facilities the tax gains would
be considered net additions.
Another major consideration is that the New York Metropolitan area can
easily assimilate the job losses as the industry prepares to shutdown
operations in this region.
All told, New York State could expect modest but important benefits to its
economy from attracting onshore OCS-related activity. In the long run,
given the potential benefits of the OCS oil and gas resources discussed
in Section C of this chapter, the economy of the state could be enhanced
by exploration, development and energy recovery activities on the
Atlantic Outer Continental Shelf.
- 119-
B. Potential Economic Consequences for Marine Related Activities
The exploration, development and recovery of OCS oil and gas resources
will occur in and within close proximity to a marine environment that is
a major economic asset for New York State. The historical basis for the
economic development of New York City and indeed the rest of the state
was its location on the Atlantic Coast where it became the principal port
of entry for people and commerce. Today, the city and state are also
dependent upon the sea for important recreational pursuits and as a food
source.
The integration of OCS energy activity into the marine environment
adjacent to the state could result in damages to these resources and
impact the state's economy and the we ll-bei ng of its res i dents. The
south shore of New York and Long Island are the most sensitive
ecological areas and the location of a major recreational industry and
corrmercial fishing operations. Therefore, OCS disruption to the marine
environment could have costly economic consequences.
It should be noted that the south shore of Long Island is already exposed
to oil spill risks and will continue to be exposed even without OCS
development. The major focus of the following discussion centers on
tanker spills within the Nantucket to Ambrose traffic lanes. Thus, if
tankered oil from the North Atlantic and pipelined oil from the Mid
Atlantic replaced a like amount of imported oil, then an argument could
be made that the overall risks of spills are essentially the same or
reduced by the amount of pipelined oil. However, in all likelihood, the
consumption of oil will increase thereby not reducing present levels of
imported oil over the next thirty years.
Further, the probabilities of a spill reaching shore from the leasing
areas is considered to be remote by the USGS. However, the basis of this
conclusion is theoretical, mathematical data (see Chapter VIr).
1. Marine recreational activity
The economic importance of south shore marine-related recreational
activity has been documented with the assistance of the State Office of
Parks and Recreation and the Long Island State Park and Recreation
Commission. Surrmary information is presented in Table 28 with more
geographic details provided in later material.
Marine related recreational activity on the south shore directly generates
over $460 million in annual expenditures for goods and services. A whole
array of business and individuals provide facilities and services for
public beach visitors and tourists, private beach and recreation club
members and persons engaged in boating and sportfishing pursuits. This
sector's viability, in turn, supports other businesses and individuals
in the New York Metropolitan Area. As a result almost $1.2 billion is
generated directly, indirectly, and induced from recreational activity on
the south shore annually.
-120-
TABLE 28
SOUTH SHORE RECREATIONAL ACTIVITY:
ANNUAL PARTICIPATION AND EXPENDITURES
Measures of Partici- Expenditures for
Beach Visitations pation and Usage Goods and Services
and Tourism (annua 1 attendance) ($ millions)
Total 60 mill ion $245
New York City 22 mi 11 ion 48
Nassau-Suffolk 38 mi 11 ion 197
Sport Fishing
845,000 primary anglers
6.7 million fishing days
96
Boating
512 Marine Facilities
82
416 in Nassau Suffolk
96 in New York City
100,000 registered boats in
Nassau-Suffolk
Private Club Members~
120 Clubs in Nassau-Suffolk 40
Subtotal Direct Expenditures
$463
$1,1581
Direct, Indirect and Induced Expenditures
~ased upon a Regional multiplier of 2.5 applied to the
direc~ expenditures
Sources: New York State DEC and Long Island State Park
and Recreation Commission
-121 -
The unique natural resources and man-made marine facilities on the south
shore--150 miles of ocean front with 38 major beach areas and over
500 marine facilities--along with its proximity to 11.5 million people
in the New York Metropolitan Area and its attraction to tourists makes
it the most heavily utilized oceanfront real estate on the Atlantic
Coast. During the peak summer season close to 50 million visitations
are made to the public beaches in New York City and Nassau-Suffolk
counties. Almost 850,000 sports fisherman utilize the south shore to
fish in prime catch waters. On a good summer weekend day, as many as
10,000 motor and sail boats may be offshore.
The uniqueness and value of the marine environment is not only recognized
at the state and local level , but also by the federal government. The
Fire Island National Seashore was established in 1964 and in 1972 the
National Gateway Park, the first major urban federally administered
recreational area, was established. Numerous state parks, with Jones
Beach the most well-known, are located along the 150 miles of oceanfront.
The millions of visitors and varied recreational uses make marine recrea-
tional activity of major importance to the Metropolitan Area's economy
and especially to Long Island. This diversified "industry" compares
favorably with those that are recognized among the "traditional base sectors"
in the area's economy, including apparel, printing and publishing and
business services. Expenditure levels for marine recreation are significant
even in comparison to the "traditional base sectors" for which the
Metropolitan Area is noted at the national and international level.
Recreation on the south shore is primarily a summer activity. Most of the
participation and visitation occurs during the 18-week seaso" stretching
from mid-May through mid-September. Therefore, for the bulk of businesses
and individuals serving visitors, a limited period of time determines their
annual incomes. An estimated 85 percent of total annual recreational
expenditures occurs during the summer season.
While almost all of New York City's and Long Island's ocean shorefront
is utilized for some form of public or private recreation, there are varying
use patterns and intensities which result in different expenditures within
geographic sub-areas. For example, Coney Island, the Rockaways and the
beaches in Nassau County are relatively crowded and tend to have primarily
day-use visitors. Suffolk County beaches, especially the more eastern ones,
are generally less crowded and are used by weekenders and vacationers who
rent motel rooms and seasonal homes; consequently spending more per capita
than day-use visitors.
Long Island's south shore has been divided into coastal recreational
sectors by the Long Island State Park and Recreation Commission. This
breakdown is shown on Figure 26. Characteristics of these sectors
with respect to facilities, seasonal attendance and expenditures are indi-
~ated.i~ Ta~le 29. Thi: geograph~c information base will help in the
ldentlflcatlon of potentlal economlC losses resulting from OCS-related
acti vity.
~),'r:~I~
FIGURE 26
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IAMBROSE.NAN
WEST BOUND
SEA LANE)
COASTAL RECREATION SECTORS
IA.
I.
II.
III.
IV.
V.
Coney Island - Rockaways
Wes tern Nassau
State Park Region
National Seashore Region
Westhampton - Tiana Beach
The East End
L
Source: Long Island State Park and
Recreation Commission
TABLE 29
CHARACTERISTICS OF LONG ISLAND'S
SOUTH SHORE BY COASTAL RECREATIONAL SECTORS
Seasonal Expenditures 3
Number of ($ millions)
Miles Number Mari ne Average Seasonal 3 Boati ng &
of Ocean of Facil- Dai ly Attendance Beach Vi s its Sports-
Sector Front Beaches ities Attendance2 (mi 11 ions) Total and Touri sm fishing
I - Western Nassau 13 211 107 45,000 5.6 38.8 4.5 34.3
II - State Park Region 26 7 120 89,000 11.0 52.8 8.9 43.9
III - National Sea Shore 31 17 62 22,000 2.7 38.1 22.2 15.9
IV - West Hampton-Tiana 18 18 56 27,000 1.5 51. 9 33.5 18.4
'"
w
V - The East End 45 29 71 50,000 6.2 164.8 124.0 40.8 ,
Total 133 92 416 233,000 29.0 $346.44 $193.1 $153.3
IThe City of Long Beach has 32 small beaches, they are counted as 1 in this table
20n a summer day
318 week season from mid-May to mid-September
4Excludes $40 million expenditures related to club membership
Source: "Assessment of Impacts of Proposed OCS Activities on Long Island's Shoreline Recreation Industry"
Prepared by the Long Island State Park and Recreation Commission under New York State CZM/OCS
Program (June 1977).
-124-
a. Potential impacts of OCS activity - The prospective damages that could
result from oil spills occurring in nearshore areas is a major concern of
the south shore recreation industry, especially since there is a strong
likelihood of ~pi~ls impacting the beac~es. Spills that occur in the leasing
areas, from drIllIng or transfer operatIons, are also of some concern since
they could also reach the shorefront, although the probabilities are quite
low.
An analysis was undertaken by the State Office of Parks and Recreation
and the Long Island State Park and Recreation Commission to identify the
range of prospective economic losses that could occur to the recreational
industry from nearshore spills. They established five hypothetical oil
spill locations along the heavily used Ambrose-Nantucket traffic lane that
parallels Long Island's south shore (Figure 27). At certain points the
lane is within 3-8 miles of the shoreline. The impact analysis assumed
both medium (500-1,000 barrels), and large spills (over 1,000 barrels),
occurring at these alternative locations, at the worst possible time--
the end of June before the peak summer period.1
Oil spills occurring at random points along the Ambrose-Nantucket route
during the summer months would very likely wash ashore Long Island
beaches within a period of 2-10 days. This conclusion was based upon
trajectory studies prepared for the Nassau-Suffolk Regional Board by Massa-
chusetts Institute of Technology's Department of Ocean Engineering.
The analysis, based upon detailed seasonal and geographic sub-area
estimates of recreational participation and expenditures for the south
shore was based upon the following assumptions:
Medium spills at the various locations could impact about
20 miles of beachfront.
Large spills at these same locations could impact about 60
miles of beachfront.
Impacted beaches will be completely closed for periods of
1-4 weeks.
There will be a 100-percent diversion of potential beach users
to outside Nassau-Suffolk during this period. No money will be
expended by beach visitors in the impacted area.
Losses of 10-30 percent in expenditures for the sports fishing
and boating components of the recreation industry will be
realized (based upon the Commission's study of the economic
impact of the June 1976 waste pollution wash-up on Long Island's
beaches) .
Table 30 summarizes the findings concerning the direct expenditure losses
that would be experienced as a result of the hypothesized spills. The
dollar losses are presented within the context of the total weekly re-
creational expenditures for the onshore impact areas identified above.
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FIGURE 27
HYPOTHETICAL OIL SPILLS LOCATIONS (A-E)
Proximity of Sea Lane to Points Along
1. Montauk Point . 34 mi les
2. Napeague Harbor 30 mi les
3. Southampton 23 miles
4. Moriches Inlet 18 miles
5. Smith Point Beach - 14 miles
Ocean Shore
6. National Seashore
7. Robert Moses State Park - 7 miles
8. Jones Beach State Park - 7 miles
9. Atlantic Beach . 7 miles
10. Rockaway Beach - 6 miles
ll. Coney Island - 3 miles
Source; Long Island State Park and Recreation Commission
-126 -
TABLE 30
ECONOMIC IMPACT OF OIL SPILLS REACHING LONG ISLAND SHORE AREAS:
WEEKLY LOSSES DURING PEAK SUMMER MONTHS
III us trati ve Range of Like ly
Offshore Oi 1 Week ly Expen-
Spi 11 Locati ons di ture Loss
(See maps) n Mi 11 ions)
Large Spill at Location A 7.4 2.0 - 3.6
Large Spi 11 at Location B 6.5 1. 7 - 3.1
Large Spill at Location C 7.4 2.0 - 3.6
Large Spill at Locati on [) 8.5 2.7 - 4.4
Large Spill at Location E 23.7 8.9 - 13.3
Medium Spill at Location A 2.0 0.4 - 0.9
Medium Spill at Location B 2.5 0.6 - 1. 2
Medium Spill at Location C 2.9 1. 2 - 1.7
Medium Spill at Location D 3.6 1. 6 - 2.2
Medium Spill at Location E No impact Negligible
Source: Long Island State Park & Recreation Commission
-127-
The losses represent estimated low and high ranges for both medium and
large spills occurring at the five hypothetical Ambrose-Nantucket spill
locations noted in Figure 27.
The range of losses is substantial. A large spill at location E would
cause the most extensive dollar damages, between $9-13 million in direct
recreational spending. A medium spill at location E, however, would not
have an appreciable impact. A medium spill at location A would have
the smallest dollar loss, less than $1 million.
The spills have significantly broader economic and social ramifications
beyond the direct dollar losses presented in Table 33. Extensive impacts
on the regional economy would occur as a result of the "ripple effect".
Secondary businesses and individuals who depend upon the recreation
industry's flow of dollars would shortly feel the indirect effects of the
loss of recreational expenditures.
Many individuals and businesses within south shore recreation-related
industries--concessionaires, motel operators, sport fishing and boating
supply shops--cou1d suffer extensive losses that could result in a collapse
of their business. Given the short season upon which the annual revenues
depend, and the generally small size of the enterprise, many businessmen
could not absorb the losses resulting from extensive reductions in
tourism and recreational activity.
Additionally a spill early in t~e season could set the business tone for
the entire sUlTlller by deterring later visits and trips to the south shore.
While an actual spill might only restrict beach use for a limited period,
it could have the psychological impact of reducing south shore recreation
for an entire summer season.
Other economic and social consequences of prospective oil spills are
difficult to measure, yet could affect the welfare of individuals and
businesses in the region and communities along the south shore. These
concerns include:
The displaced recreational opportunities of hundreds of
thousands of individuals which would represent a significant
"psych i c income loss"
The depreciated value of waterfront property because of potential
exposure to oil spill dangers and effects.
A decrease in the high level &esthetic values and environment
typical of many south shore communities.
The OCS oil spill analysis represents hypotheses about possible future
random events; tnerefore, the economic consequences are probabilistic, not
planned certainties. The Santa Barbara oil spill in 1969 and the recent
Argo Merchant disaster off Georges Bank near Cape Cod are only two of these
recent occurrences.
-128-
The June 1976 fouling of Long Island beaches as a result of the wash-up
of sea-borne debris and organic wastes dramatically documents the
economi c impact of envi ronmental di sasters. Si xty-ei ght mi 1 es of south
shore beaches were affected over an 18-day period, resulting in multiple
closings of about 20 major beaches. As a result, there was a loss of
$25 million to the recreational industry on Long Island.2
If significant DCS-related oil spills occur in the future and they impact
shore areas, there will be tangible and, unfortunately, substantial
eGvironmental and economic damages.
2. Commercial Fishing
Commercial fishing for finfish and shellfish off the south shore takes place
within the overall complex of businesses and activities comprising the
Metropolitan Area's seafood industry, which includes harvesting, processing,
distribution and consumption of fish products. The industry is dependent
upon fish caught in or near New York waters as well as fish from other
domestic fisheries and foreign sources. These latter sources comprise the
overwhelming bulk of fish products processed and wholesaled in the
Metropolitan Area.
Overall dollar transactions of the various components of the Metropolitan
Area's seafood industry are as follows:
1976
( $ millions)
Value of Commercial Landings
Value of Processing Activities
Wholesale Sales
Retail Specialty Seafood Market Salesl
32
93
364
96
lSales of fish products are significantly greater in general food stores
and in consumption in restaurants and other eating places.
Source: ~.S. Census of Retail & Wholesale Trade (1972) and National Marine
Fisheries Service, 1976.
The harvesting of commercial fisheries is the sector of the seafood in-
dustry directly sensitive to impacts of OCS energy-related activities.
Therefore, DEC/OCS Program staff concentrated on assessing the character-
istics of this function and the potential consequences of OCS activity.
Currently, New York's commercial fishing is principally dependent upon
high value shellfish resources located in and around the bays, sounds and
inlets and nearshore ocean waters as indicated in Table 31. These
resources represented 85% of the total landing values in 1976, with hard
clams being the most important species, representing about 25% of the
total poundage and over 50% of the value (see Table 32). Suffolk County
TABLE 31
VALUE OF PRINCIPAL MARINE COMMERCIAL SPECIES LANDED IN NEW YORK STATE
AND NATIOI~AL DATA ON DISTAIKE CAUGHT FRot~ SHORELINE
Valuel Percentage Caught2
0-3 3-12 oye r 12
Fish: ($ millions) miles miles miles
Butterfi sh 0.3 48 13 39
Flounders 1.5 34 13 53
Scup or Porgy 0.6 38 8 54
Sea Trout 0.3 64 33 3
Stripped Bass 0.4 97 3
Whiti ng .3 12 44 44 N
<.0
I
She 11 fi sh:
Lobs ters 1.3 73 10 17
Hard Clams 18.1 100
Surf Clams 1.1 13 23 64
Oys ters 4.8 100
Bay Sca 11 ops 0.8 100
Sea Scallops 1.2 4 6 90
Source: National Marine Fisheries Servi ce:
11976 Landings in New York State
2Fisheries of the United States, 1976
TA8lE 32
MAJOR MARINE COMMERCIAL FISHERIES SPECIES lANDED IN NEW YORK STATE
1965, 1971, 1976
1966 1971 1976
Pounds Value Pounds Value Pounds Value
\OOOi (SOOO) (%) \OOOi ($000) (%) \OOOi ($000) (:)
Fi sh:
Butterfish 593 55 0.6 353 95 0.5 959 274 0.9
Flounders (Fluke) 2,466 586 5.2 1,090 360 1.9 3,203 1,500 4.7
Flounders (Yellow Tail ) 3,486 305 2.7 7,242 449 2.4 595 168 0.5
r'1enhaLlen 4,870 82 0.7 999 36 0.2 1,014 43 (),l
Scup or Porgy 4,077 637 5.6 1,321 404 2.2 2,468 580 1.8
Sed Trout [Grey) 26 5 1,280 205 1.1 1,345 304 0.9
Stripf}ed Bass 1,050 193 1.7 1,159 324 1.7 693 422 1.3
~Ih i ti ng 2.008 89 0.8 1,058 95 0.5 2,546 290 0.0
SllLtotal 18,576 1,962 17.3 14,855 1,968 10.6 12,823 3,581 11. 1 w
Otiier Fish Species 32,102 950 8.4 5,212 585 3.2 3,728 309 2.6 0
I
Total Fish 50,678 2,912 25.7 20,067 2,553 13.8 16,551 4,390 13.7
She llfi 511:
Lobs te rs 730 613 5.4 1,791 2,054 11.1 593 1,338 4.2
Hard Clams 6,581 5,788 51.0 8,549 10,756 58.0 9,028 18,120 56.0
Surf Clams 1,840 148 1.3 3,688 438 2.4 3,455 1,089 3.4
Oys te rs 177 335 3.0 788 1,682 9.0 1,901 4,764 14.8
Bay Sea 11 ops 317 323 2.8 144 234 1.3 438 816 2.5
Sea Sea 11 ops 2,128 1,009 8.8 402 609 3.2 758 1,236 3.8
Subtota 1 11,773 8,216 72 .4 15,352 15,773 85.1 16,173 27 ,363 85.1
Other Shellfish Species 1,662 221 1.9 824 219 1.1 1,438 387 1.2
Total Shellfish 13,435 8,437 74.3 16,176 15,992 85.2 17,611 27,750 8n.3
Grand Total 54,ll3 ll,349 100.0 36,243 18,544 100.0 34,163 32,139 100.0
Source: U.S. Department of COlMlerce. r~ational Marine Fisheries Services
-131-
is the center of activity, accounting for over 75% of the state's
total marine landings, with Nassau County comprising 15% of the total.
Employment associated with commercial fishing is estimated at 9,500.
However, two-thirds of the employees are part-timers, reflecting
the seasonality of the industry and its inability to provide large numbers
of full-time jobs. The industry has gone through ups and downs over the
past few decades. Finfish landings, which were once very important, have
declined dramatically because of the comparative economics of harvesting
and processing, in part due to the overfishing of certain species by
domestic and foreign fleets. The supply of shellfish has not increased
significantly while the demand for shellfish has. This factor, coupled
with inflation, has caused rapid increases in dockside prices, as well
as who 1 esa 1 e and reta il pri ces . (See Fi gure 28).
The economic outlook for shell fishing and other comnercial species
harvested is uncertain. Short and mid-term prospects are poor because of
overfishing pressures, a reduction in harvesting acreage because of
water pollution, and the need to modernize an industry characterized by
small family~operated enterprises. Over the long-term the outlook could
be more positive as a result of the enactment by Congress of the 1976
Fishery Conservation and Management Act. This Act extends the U.S.
fisheries jurisdiction to 200 miles and sets quota limits for recent
growing foreign fleet catches within this jurisdiction. The Act will
promote the expansion of domestic commercial fisheries through standards
and management plans for species found along the east coast. New York
State's commercial fishing industry, now oriented towards species within
12 miles of shore, will have the potential to expand to more distant
fisheries. Long Island's excellent proximity to major migratory north/
south species could accelerate the long-term development of a valuable
commercial finfishery.
a. Potential impact of OCS activity - The potential implications of OCS
exploration, development, and the recovery of any oil and gas resources
from the Baltimore Canyon and Georges Bank lease areas for the State's com-
mercial fishing industry were evaluated with respect to at-sea conflicts,
competition for harbor and shore space, and oil spills.3
Findings concerning the specific implications for New York State's marine
commercial fishing industry are based on work by the Woods Hole Oceano-
graphic Institute and information developed by OEC on the overall conditions
and characteristics of the state's industry. These findings should bp
subject to further evaluation, especially with respect to micro impacts for
particular segments of the industry and as the actual OCS energy recovery
operations are initiated. Major findings are as follows:
At-sea conflicts might be a significant factor if New York's
commercial fishing expands from its current near-shore concentration
as a result of long-term developments resulting from the 1976
Fishery Conservation & Management Act. Under current conditions
since the lease areas are more than 50 miles off-shore there would
be little conflict with the overall industry, but conflicts might
occur with specific offshore finfisherman.
Tolal Shellfish
FI GURE 28
TRENDS IN COMMERCIAL LANDINGS OF MARINE FISHERIES
IN NEW YORK STATE, 1975-1976
Pounds (millions)
and Value
(million 1)
30-
28
26
24
22-
20
10
16
14
12
10
o
6
4-
21
\l a\l..Il)
I
19~6
I
1910
I ,,--
1915
1
1960
I
I%G
Sou,ce: National Marine Fisheries Service
Total Fish
Pounds Value
(millions) (~mlllions)
160 -10
140 B'
120 6
100 - 5
eO-4~
~VOJUfJ
GO 3
40 2
20,1
1956
1960
I
~
W
N
I
1966
1970
1975
-133-
Conflicts at sea between OCS energy recovery operations and fishing
operations could result from the obstructions caused not only by
platforms and rigs but perhaps more significantly by the network
of collection pipelines between platforms. These conflicts are
not likely to impact the overall commercial fisheries industry,
but could be detrimental to those operators which harvest species
concentrated in the leasing areas.
Platforms could provide artificial reefs and enhance fishing
around platforms in some cases. vJhile this phenomenon is well
documented in the Gulf, it is not known wilether the speci es or
the Ivaters in the Atlantic would be appropriately suited.
Onshore friction and competition between OCS operations and
commercial fishing related facilities and operations should be
minimal. The modest level of potential OCS onshore activity
projected for the Metropolitan Area and its probable location
should not cause any significant disruption to onshore commercial
fishing operations.
Oil spills should be of concern--even those occurring well out
at sea and not within current principal fishing areas--because
of the uncertainty surrounding the impacts of oil on the sensitive
fi shery resources.
Oil spills--even minor ones--that occur in the immediate off-
shore areas, particularly those that may reach the productive
south shore bays and inlets, will present the most critical
concern. In th i s s i tuat i on the economi c losses coul d be dramat i c.
Although at-sea conflicts and competition for harbor and shore space
may be of concern, the potential impacts of oil spills pose the most
serious OCS-related issues for the state's commercial fishing industry.
The probability of the complete destruction of a major fisheries
resource is very slight and would require a catastrophic spill. However,
spills which occur well out at sea may affect spawning areas and have
unforeseen impacts on future fisheries. Given the precarious nature of
commercial fishing due to weather and other natural conditions, any
factors that change harvesting conditions even marginally can cause
economic dislocation. In an industry composed of relatively small enter-
prises, marginal impacts for the industry in general could have significant
impact on the viability of individual firms.
Major spills that occur in nearshore waters, either through tanker ac-
cidents or platform spills that reach shoreline areas, could present
critical problems. Nearshore spills may result in the immediate loss of
harvesting opportunities because of bans placed on fishing in order to
expedite cleanup operations. Additionally, if public health concerns
develop with respect to contamination of the fishery resources or their
habitat, there could be prolonged economic misfortune for the commercial
fishing industry.
-134-
The prospect of a major spill hitting the extremely productive shellfish
beds in Great South Bay and other similar bodies along Lo~g Island's south
shore should be of principal concern to New York State, SlI1C~ even re-.
latively minor spills in these locations could have substantlal economlC
consequences.
DEe did not develop the dollar losses or broader economic con~equences
of oil spills occurring at specific locations such as a~compllshed for the
shorefront recreational activity. A means of illustratlng the overall
potential damages was developed. In this approach prospective reductions
in commercial harvesting and attendant dollar value losses are presented.
In this way, one can see the potential implications of any oil spills
that might interfere with or restrict commercial harvesting.
Table33 provides a basis for determining the current dollar value of
losses associated with any spills reaching major fisheries that could
reduce commercial harvesting activities. The table illustrates the
potential displaced or lost gross income to fisherman as well as losses
valued at the retail market stage, for the summer time, which is the
peak period for commercial landings.
At the maximum end of the scale, a 50% reduction in harvesting for the
month of July 1976 would have resulted in a loss to commercial fisherman
of $1.9 million (5.2 at the retail stage). A five percent reduction in
Ilarvesting for a week would result in a loss of $50,000 in gross income
to the industry ($130,000 at the retail stage).4
While small reductions in harvesting can be absorbed by the industry as
a whole, the complete loss of harvesting to a few individuals or firms
for a month or even a week can cause extreme financial hardships as
discussed previously. The data in Table 33 , therefore, cannot identify
the important distributional implications, but only serves to illustrate
the macro-effects upon an industry dominated by micro-enterprises.
New York State's concern with the economic effects of oil spills or normal
oes operations should not be limited to direct conflicts with the state's
commercial f~sheries. The interdependence of the state's seafood
industry with other domestic fishery resources and commercial harvesting
was noted earlier in this section. Therefore, any major OeS-related
disruptions, even those that might happen on the Georges Bank, could have
economic ramifications for New York State.
e. Potential Energy Benefits of oes Oil and Gas Resources5
While current attention is primarily focused on the immediate potential
benefits of onshore jobs and business activity to support oes operations,
the ultimate value of oes activity will be in its contribution to meeting
national, regional and state energy needs. This fact underlies the ex-
penditure of significant public and private resources and could justify
the willingness to risk environmental dangers. If significant oil and gas
resources are recovered and directed towards meeting the critical energy
needs of the Northeast, then the costs to the nation with respect to al-
location of scarce resources and potential environmental damages is likely
to be balanced in the resulting resource trade-off.
TABLE 33
ECONOMIC IMPACTS OF A PEAK SEASON REDUCTION IN COMMERCIAL
HARVESTING OFF NEW YORK STATE MARINE WATERS]
Tota 1 Value of
Corrmercial Landinqs2 5%
Month of July (1976) ($000)4
Gross Revenues of
Commercial Fishermen $3,833 $ -190
Retail Value of
Seafood Products 10,349 -520
Average Week in July (1976 )
Gross Revenues of
Commercial Fi shermen 958 - 50
Retail Value of
Seafood Products 2,587 -130
Displaced or Lossed Values
Reduction in Commercial Harvesting ($000)3
10% 20% 50%
$- 380
100
$- 770 $-1,920
-2,070 -5,170
I
~
190 480 w
<..n
I
520 -1,290
-1,040
260
Note: Total harvest in July 1976 was 3,535,000 pounds of fish and shellfish.
] Principally reflects harvesting and landings within South Shore area of Long Island.
2 Data for July 1976 as reported by National Marine Fisheries Service; retail value based on average
national retail markup figures from National Marine Fisheries Service.
3 Assumes that no price/supply interactions occur and that a reduction in harvesting leads to a proportional
change in revenue and income.
4 Rounded to nearest $10,000.
-136-
The underlying assumption of this section is that New York State will
receive its fair share of energy from OCS development. In fact, this
assumpti on may not be accurate. Therefore, it is encumbent upon the
state leadership to ensure that appropriate steps be taken to guarantee
its "fair share".
1. Energy problems in the Northeast and New York State
Tile energy crisis of 1973 and its on-going effects have impacted the
Northeast more than any region in the nation. The Northeast currently
obtains more than 90% of its energy supplies from outside the region
and over 40% of these from foreign countries~ As a result, the region
suffers from high energy costs and uncertainties with respect to suf-
ficient long-term sources of supply.
The energy problems of the region have occurred at a time when its overall
economy is suffering from growing competitive disadvantages with the
south and west. Thus, its disadvantages with respect to energy costs and
supply coincide with the deterioration of its industrial base as a result
of higher labor costs, tax disadvantages, plant obsolesence, urban problems
and other factors. The region cannot afford to have energy needs as
another factor contributing to its economic decline. 7
Since 1970 I~ew York State has experi enced absolute popul at ion decl i nes ,
substantial erosion of its once dominant economic position, and high
energy costs second only to the New England states. In the New York
Metropolitan Area, Consolidated Edison, which provides electric and gas
to New York City and surrounding suburbs, has the unenviable position of
having by far the highest electric rates of any utility in the nation.
A major factor for this situation is its dependence upon costly imported
foreign oil. While upstate the electric energy situation is better, the
entire state has experienced continuous curtailments of natural gas
deliveries over the past few years, together with rapidly rising prices
for heating oil, gasoline and other fuels.
The state's energy supply options are limited as a result of trends in-
dicated in Table 34, including:
Dramatic declines in the use of domestic coal because of cost
(pre-embargo) and environmental factors.
Declines since 1970 in the availability of natural gas because
of national supply and price conditions.
Gains from hydro and nuclear power plants, though these sources
have not reached the levels anticipated because of limits on
hydro resources and concerns about the safety of nuclear power
plants.
Growing dependence upon costly foreign sources of petroleum
products.
TABLE 34
ENERGY CONSUMED IN NEW YORK STATE
BY SOURCE 1960, 1970 & 1975
1965 1975 1975 % Chanre
Trillion % Trillion % Trillion % 1965- 970-
BTU Dist. BTU Dist. BTU Dist. 1970 1975
Total 3,602 (100) 4,293 (100) 3,806 ( 100) +20% - 11 ~&
Coal 761 ( 21) 589 ( 14) 285 ( 8) -23 -52
Petro 1 eum 2,056 ( 57) 2,638 ( 62) 2,481 ( 65) +28 - 6
,
~
Hydro & Nucl ear 219 ( 6) 331 ( 8) 445 12) +51 +34 w
-...J
,
Natural Gas 567 ( 16) 735 ( 17) 594 16) +30 -19
Note: Due to roundings components may not sum to totals
Source: New York State Public Service Commission, Office of Research Report A-3, June 1976 and
Report B-2, April 1977.
-138-
The shift from coal to oil is dramatically illustrated in the case of
electric utilities. In 1960, coal accounted for 54% of the fuel required
in the generation of electrical energy. By 1974 its share had declined
to 14% (see Table 35). Currently, downstate power plants do not burn
coal because of air pollution control requirements, and foreign oil
represents the dominant source of fuel.s The use of coal has also declined
substantially in all other sectors of the economy.
Since utilities represent the most rapidly growing sector of energy
demand in the state, their dependence upon foreign oil further clouds the
state's energy cost picture. The oil situation and the growing national
shortage of natural gas and its limited allocation to interstate markets
makes the issue of DCS oil and gas recovery an important element in
New York State's energy future.
2. Energy outlook for New York State
DEC has projected the state' energy outlook to the year 2000. These
projections have been prepared within the context of the national and
regional energy outlooks and policies for fuel supplies and use sectors,
and provide a basis for assessing the potential contribution of OCS
oil and gas resources to meeting critical energy needs of the state.9
A complex combination of economic, environmental and technological forces
plus national and international policies will determine the state's
future energy situation. A series of alternative projections have been
prepared, reflecting explicit and implicit assumptions concerning key
variables such as growth and demand, energy conservation policies, shifting
fuel options to coal and nuclear power, the supply of conventional energy
sources, and the potential contribution of non-conventional sources, such
as solar and wind energy.
Some basic facts with respect to the state's outlook appear to be
reasonably certain. During the next 10-15 years, which covers the period
when OCS oil and gas could begin to be recovered, the state's energy
supply prospects are likely to be the following:
Continued dependence upon petroleum products as the principal
energy source, with foreign imports accounting for the dominant share.
No increase in the availability of natural gas supplies to the state.
In fact, the state will be fortunate to maintain its current level
of supply.
Some fuel shifts back to coal. However, due to lead time for equip-
ment conversion, high capital costs and environmental requ1ations,
a massive return to coal by electric utilities and industry is not
expected within the next 10-15 years.
A continuing increase in the share of energy provided by nuclear
power. However, because of environmental and safety concerns and
long lead times for power plant construction, at most nuclear power
will provide 25% of the state's electrical energy by 1990.10
-139-
TABLE 35
CONTRIBUTION OF ENERGY SOURCES IN
MEETING SECTORAL DEMANDS IN NEW YORK STATE
1960 AND 1974
Res i denti a 1
Total Electric*** and Trans-
Consumption Utilities Commerci al Industry portation
Total,1974
Tri 11 i on BTU' s 3,969 1,171 1,339 410 1,048
Percent Distribution 100% 100% 100% "TUOI 100%
Natural Gas 16 3 36 32 *
Petroleum 64 47 64 23 100
Distillate (24) (4) (37) (6) (5)
Residual (16) (43) (23) (15) (7)
Gasoline 19 * * * (71)
Other** (5) * (4) (2) (17)
Hydro & Nuclear 11 35 * * *
Coal 9 14 1 45 *
Total, 1960
Trillion BTU's 2,857 566 1,058 500 734
Percent Distribution 100% 100% 100% 100% 100%
Natural Gas 16 11 29 16 *
Petro 1 eum 55 12 64 21 100
Distillate (17) * (38) 6 (7)
Residual (17) (11 ) (23) 14 (14)
Gasoline (19) * * * (74)
Other** (12) * (3) 1 (5)
Hydro & Nuclear 5 23 * * *
Coal 25 54 8 64 *
*Indicates zero or less than 0.5%
**Kerosine, jet fuel or LPG
***In this table, electric utilities are treated as a consumer of primary
fuel resources. They are, however, an intermediate user since they
produce energy and supply other sectors. A table presenting only final
users, ie., residential, commercial, industrial and and commercial with
electric energy as input to these sectors, would show different per-
centages. For example, in 1974, electricity supplied 48% of the BTU
needs of industry. Therefore, other source categories would show declines,
coal for example declining from the 45% indicated in this table to 23%.
Source: New York State Public Service Commission, O.R. Report A-3
(June, 1976)
Note: Due to rounding components may not sum to totals.
-140-
Beginnings in the utilization of solar and wind energy, but
due to technological and economic factors, these sources will
only represent a very marginal contribution.
Improved efficiencies in energy production and distribution
along with national and state energy conservation policies will
reduce supply requirements somewhat. However, New York State
will still have significantly greater energy needs than current
demand levels.
3. Contribution of OCS Oil and Gas Resources
The uncertainties with respect to the amounts of recoverable OCS oil and
gas resources, the future overall energy supply/demand conditions and
the fact that there are no assurances guaranteei~ N. Y. State a share
of OCS oil and gas, make any analysis a difficult task. The three OCS
energy scenarios identified in Chapter V (#1 the high oil and gas find,
#2 the very high gas find and #3 the low oil and gas find) are sum-
marized in Table 36 , and assessed within the context of specific
constraints concerning projected total state oil and gas supply require-
ments over the 1985 to 2000 period.
Figures 29 and 30 contain projections of total state oil and gas require-
ments. Three levels of projected needs are shown for oil, the highest
being the baseline case with a nuclear moratorium, and the lowest reflecting
an energy conservation assumption with the baseline case falling in the
middle. These charts also present curves depicting the annual amount of
OCS oil and gas resources that could be available to New York State under
each of the three total find scenarios. These amounts are based upon the
following elements:
Daily oil and gas production curves developed from information
prepared by the New England River Basins Commission under the
Resource and Land Investigations (RALI) Program of the USGS.
Assumed allocation of the total Mid-Atlantic and North Atlantic
OCS production presented on Table 36 as follows--80% to the
Northeastern states with New York State receiving 30% of the Northeast's
total. .This distribution is consistent with the analysis contained
in the Brookhaven National Laboratory Study, cited earlier with the
State's.share basically reflecting its proportion of the Northeast's
total 01 I and gas consumpt10n.
While the estimates in Figure 29 and 30 are subject to all of the supply
uncertainties noted earlier, they graphically illustrate the wide range of
OCS production possibilities. The three OCS scenarios result in signifi-
cantly different prospects with respect to contributing to the State's
future energy needs as summarized in Table 37 , for future benchmark years.
OCS oil and gas production will be significally less during the exploration
phase prior to 1990 and the shutdown phase beginning around the year 2005
than for the benchmark years of 1995 and 2000. Therefore, the best picture
of the potential contribution of OCS energy to the state's needs would be
the average over the economic life of the Mid-Atlantic and North Atlantic
TABLE 36
ALTERNATIVE OCS OIL & GAS FINDS AND
PRODUCTION CHARACTERISTI CS
Scenario #1 Scenario #2 Scenario #3
High Oil and Gas Very Hi gh Gas Low Oil and Gas
~1i d- North Mid- North Mid- North
Atlanti c Atlanti c Total Atlantic Atlantic Total Atlantic Atlantic Total
TOTAL FIND
Oil (Billion 2.6 0.9 3.5 0 0.9 0.9 0.4 0 0.4
barrels)
Gas (Tri 11 i on 12.8 4.2 17.0 30.0 4.2 34.2 2.6 0 2.6 I
cubi c feet) ~
.".
~
I
DAILY PRODUCTION
Oil (Thousands
of barrels)
First Year (1986) 20 2 22 2 2 1 1
1990 200 110 310 110 110 48 48
1995 400 172 572 172 172 76 76
2000 420 165 585 165 165 73 73
2005 170 30 200 30 30 13 13
Gas (Billions of
cub; c feet)
First Year (1986) 0.1 0.1 0.2 0.2
1990 1.7 0.8 2.5 4.1 0.8 4.9 0.5 0.6
1995 3.2 1.0 4.2 7.7 1.0 8.7 0.6 0.6
2000 1.8 0.2 2.0 4.3 0.2 4.5 0.1 0.1
2005 0.2 0.1 0.2 0.5 0.1 0.5
Source: See Chapter IV
-142-
Figure 29 Projected Total NY State Oi I Supply Requirements
and the Potential Contribution of OC S Oi i
P roduc tio n
Millions
of Sarrels / Day
'Or
I
I
2.5 I-
I
,
I
2.0 -
/"" ,/ /' l NY Statl;l
/ ;x ~ Tolal 011
,/ ,/ X/ /"'" ) RdG,uilements
~~ ,/ ,/ ..-/
o\o(.'x- /'
,~\o~ /' /" ......... /"
~~\'6C~'/ /' x
,," .-- / ./
\~ /' /' /
.;j.'/ ./'
'It'''' ~':"'"o\'
("_o~-" ,/ ./ X <v\\
v " -' ~ ~ "-\,)((\
o /' sa ./' I'\.S-~
e>'(;\ ./ / cl> ~ (;(\ I~
_ or:",/ ,(\0 .......-::: c\'
" ,/;.-:-; 0\\ .... ~0~"
/ IQO~ /Cof.
~ /0.\0
/~.'
.- ~,o
151- X/
.~
T hcusands
of Bdrrels / Day
150 ~
P01ential N.Y. State - DirectEio oes Oil Production
100
'r\,qh 0:' a Gas
-* \ :----- -.----------------
,\0 /~/
^o ,./
lei", -
s~//
/
/
/
.~~
"
'\
20
.........-/
/ 0 # 2-Very HI,h Gas
/1 5C\}(\~.r:- __ -_.x-- -. ---- - -- x~_
// x -- scenarlo:lt 3 - LGw _~_~~~~~s
x...... --" '~...l\----------- .~-_._----_.,JI(--- -. -- X
--
I j---'-IT~l--r--------r-1 r
1990 1995 2000
.
,
'..'..~
50
1985
""--.::.'"
I" I
Z005
Sources' See Chapter TIT and "Identification of Economic Impocts of OCS
Energy Reloted Activities on the Economy of New York Slate" Port ill,
NYSDEC OCS Study Program (July,1977)
-143-
Figure 30' Projected Total N.Y. State Gas Supply
and the Potential Contribution of OCS
Gas Production
BdllOrlS
CUUIC Feet !Day
I
"f
Potential NY 51011)- Directed OC5 Gas Production
,
20r
1
,
x_ __
-~
-/-,~:--
/ \
/ \
c/'
"-
'OJ
7:
.:z.-
.,
;
'>,
, I
'v /
:'j
c-'
21
{~' /
VJ/
NY Stole
- x -- __ T'.:I I:.) 1 Gos
SLlppiy
I ,5
\
\
:.0
jf !-r-!rlj,~ O.
,c. ~-----.....'I<i
(}',/ " O.
'1.>0/ ",-"',r
CJv// "
'; \
/ \
/
/ /
/ i
I i \
/ / \
I / _ ",
/ I (nO # .~ . t_OW ()Ii cl " '"
/ (e'-"" .___ ~--__~ bO.- "-
I '-'_// ~____::-~~------ -. .----:".~---.__._.~._._ """,,,__.
I /" ____.. ..-...._
-----1---'~1~---1.--1--1--1-1'-____.___ -:------;-.-'-I--.~-..~ !......,.-,.-.-;----i-i
1985 1990 1995 2000 2005
\
.
0.5
\
,
\
Sou rces: See Chapter III and" Identification of E.canomic Im;>octs
of DeS Energy Related Activities on the Economy af New York
State" Part m 1 NYS D EC OC S Study Pro~rarn (July, 197'7)
-144-
TABLE 37
PROPORTION OF NEW YORK STATE TOTAL OIL AND GAS SUPPLY REQUIREMENTS THAT
OCS COULD SUPPLY: BENCHf1ARK YEARS 1995 AND 2000 (PERCENTAGE)
Scenario #1 Scenario #2 Scenario #3
Hi gh Oil & Gas Very Hi gh Gas Low Oil & Gas
1995 2000 1995 2000 1995 2000
---r ---r ---r ---r ---r -r
Oil Supply Requirements
Base 1 i ne Case 6 6 2 2
Baseline case plus
Nuclear Moratorium 6 5 2
Moderate Conservation 7 6 2 2 1 1
Gas Supply Requirements 51 25 1071 561 7
IThese figures for gas should not assume that New York State will actually
receive amounts of OCS gas greater than its estimated needs in 1995-2000.
Complex regulatory proceedings involving Federal and State agencies, the
supply situation for other sources of gas coming into the State, and
national policy and energy conditions will ultimately determine the amount
of OCS gas earmarked to the State.
TABLE 38
AVERAGE PERCENT CONTRIBUTION TO NEW YORK
STATE ENERGY NEEDS OVER 20 YEAR PERIOD*
(1986-2005)
Scenario
Oil
Gas
High Oil and Gas
Very Hi gh Gas
Low Oi 1 and Gas
5%
1.3%
28%
56%
1%
4%
*Using the baseline case projections of total state requirements indicated in
Chart 1, the total gas requirements indicated in Chart 2, and the assump-
tion that New York State receives 30% of the Northeastern states' total.
-145-
fields. For this approximately 20 year period, the potential contribution
will vary considerablv depending upon the specific find scenario as
indicated in Table 38.
The principal conclusion concerning the contribution of DeS oil and gas is
that a high find could be an important supplemental source of energy
supply for the state. However, obtaining the state's "fair share" of
DeS oil and gas will not by itself be enough to alleviate overall energy
problems. At best, it could provide an important reserve cushion at a time
when the state is mo\:ing to lessen its high dependence upon imported
petroleum and gas during the rest of this century. After the year 2000
a combination of both nuclear power, extensive use of environmentally
compatible coal resources, and growing reliance on renewable energy sources
such as solar and wind energy should improve the state's energy situation.
The overall effect of oes energy resource on the pri ce of oil .and gas to
New York State intermediate users such as electric utilities and final
users in the residential, commercial and industrial sectors is not likely
to be significant. Complex governmental regulatory policies and
procedures and the economics of recovering and distributing DeS oil and
gas will determine specific supply and price conditions. While major
unknowns surround these cri ti ca 1 infl uences, DeS energy costs and pri ces
can be expected to respond to the overall national oil and gas economic,
regulatory and price forces. Therefore, DeS energy will likely be priced
at the high levels expected for all energy supplies in the coming
decades.
Within this context potential specific contributions of DeS energy to
critical use sectors and geographic sub-areas of the state--particularly
in the New York Metropolitan Area--were evaluated. Given appropriate
policy directions, the following specific benefits might be obtainable:
Lessening of restricted fuel options in electrical generation:
Des oil and gas could alleviate some of the need to continue
to import high cost foreign oil, during the transition to
nuclear power plants and the utilization of coal.
~eduction of hardships due to exclusion from other domestic supply
sources: oes oil and gas could provide the state with sufficient
natural gas for a period of time to alleviate the growing deficits
in natural gas coming from the southwest and other domestic sources.
Lessening the need to impose very restrictive energy conservation
policies: DeS oil and gas could reduce the need to resort to
severe conservation actions required under continuing shortfalls in
domestic oil and gas supplies and international policies that
reduce the importation of foreign oil.
Reduction in possible energy-related disruption and costs for heavy
energy and feedstock using industries: Many important industry
groups :n New York State, such as chemicals, primary metals, power
generatlon, food products, stone clay and glass are major users of
-146-
petroleum products and natural gas for power and heat needs and
in industrial processes requiring them as feedstocks. Most of
these industries are faced with supply restrictions because of
federal and state fuel priority allocation regulations. DeS
oil and gas could allow many of these important industrial
sectors to continue to operate in the state without the critical
disruption and costs associated with supply scarcities.
In addition to the above potential benefits, the finding of significant
oil and gas resources in the DeS areas could generally benefit the state's
general economic health. As the nation seeks to "solve" its energy
problems, emphasis is being placed on mining western coal and tapping
petroleum resources in the south and west that to date have not been
economically recoverable. These strategies, while perhaps well-intentioned
with respect to national energy needs, would result in more capital and
other resources from the Northeast states being redistributed to the south
and west.
Gi ven the current economi c dec 1 i ne of the tlortheas t, the reg i on can ill
afford an acceleration of this trend. The recovery of DeS oil and gas
would mean that significant investment, jobs and business opportunities
would be required in the Northeast. This would keep existing resources
here and attract capital and other resources from the outside into the
region.
Whil e oes energy development wi 11 not be a panacea for the economi c and
energy problems facing New York State, it could offer important benefits
to the state as a whole and to individual sectors of the economy.
Therefore, its potential should be considered in state energy and economic
planning programs as Des activity moves from the current preliminary
leasing and exploratory stage to development and production.
-147-
FOOTNOTES - CHAPTER VI I I
lIt was determined that oil spills occurring at random points along the
Ambrose-Nantucket route during the summer months would very likely wash
ashore Long Island beaches within a period of 2-10 days. This was based
upon trajectory studies prepared for the Nassau-Suffolk Regional Planning
Board by MIT's Department of Ocean Engineering under the OCS Program.
2Decribed and documented in the following reports: "Long Island Beach
Pollution: June 1976," Report coordinated by the National Oceanic and
Atmospheric Administration, February 1977; "Report to Governor Hugh L. Carey
on the 1976 Fouling of Long Island Beaches," New York State Department of
Environmental Conservation, February 1977; and "Long Island Waste Pollution
Study; An Economic Analysis," Long Island State Park and Recreation Com-
mission and New York State Office of Parks and Recreation, November 1976.
3The framework used to evaluate potential economic consequences is
adapted from a Woods Hole Oceanographic Institute study on the'tffects on
Commercial Fishing of Petroleum Development off the Northeastern United
States," April 1976.
4Given the upward pressures on the price of seafood products, over time
even without increase in the volume of harvesting, the state's commercial
fisheries will become even more valuable. Therefore any reductions in
harvesting occurring during the 1980's and 1990's as a result of OCS energy
recovery will result in substantial higher economic losses.
sThis section represents a summary of the detailed investigations
under item 8.7 of the OCS work program and reported in "Jdentification of
Economic Impacts of OCS Related Activities on the Economy of New York
State" New York State Department of Environmental Conservation Outer Con-
tinental Shelf Program, July, 1977.
6Brookhaven National Laboratory, A Perspective on the Energy Future
of the Northeas t Un ited States, June 1976.
7The importance of energy and favorable energy policies as an aid in
the recovery of the region's economy is well documented in the application
by New York State and other sister states for designation as an economic
development region and eligible for special assistance from the Federal
government. See "Mid-Atlantic Economic Development Region Prospectus for
Development - Challenges and Opportunities for the Mid-Atlantic Region,"
Governors of Delaware, Maryland, New Jersey, New York, and Pennsylvania,
February, 1977.
8For the three downstate utilities, Con Edison, Long Island Lighting,
and Orange and Rockland, the dependence on oil is 81%, 99% and 92% respec-
tively in terms of total fuel requirements (Utility Statistics Handbook 1970,
published by Public Service Commission, October 1976).
-148-
FOOTNOTES - CHAPTER VIII (cont)
9Full documentation is provided in the OEC report cited at beginning
of this section.
lOIn 1975 nuclear power accounted for about 10% of the State's elec-
trical energy production.
-149-
IX. POTENTIAL SITES FOR OCS FACILITIES
A. Summary of Analytical Approaches to Identify Sites
Offshore oil and gas exploration and development generates a need for a
wide range of onshore support activities. The Department of Environmental
Conservation recognized at a very early stage that New York State was a
potential location for onshore OCS facilities. At that time, DEC asked the
Port Authority of New York and New Jersey to assess the feaSibility of
locating OCS support bases within the Port jurisdiction. That effort cul-
mi na ted in a report enti tl ed "Support Bases for Offs hore Dri 11 i ng: The
Port of New York Potenti a 1 ," May 1977.
When the OCS Supplemental grant became a reality, DEC, working with the
Department of State, contracted with the New York City Planning Commission
and the Nassau-Suffolk Regional Planning Board to survey and identify sites
that meet industry criteria and potentially could be used to support Outer
Continental Shelf exploration, development and production activities.
The Factbook prepared by the New England River Basins Commission/Resource
and Land Investigations project was a primary source of information on the
criteria used to site OCS-related activities. Each agency utilized this
and other information to survey and screen a number of potential sites and
to determine those which met the siting criteria.
This section describes the sites identified by the three agencies and
summarizes the criteria used to select these sites. The willingness of
owners to sell or lease property has not been determined nor has there been
a thorough assessment of general public attitudes toward locating OCS facil-
ities within the area. It should be noted that other sites in the State
beyond those identified may also be suitable for supporting OCS activity.
Any sites considered by industry will, of course, be subject to normal state
and local approvals, including environmental reviews.
Of the total range of OCS onshore activities, some are more likely than others
to be located in New York State. Table 39 summarizes the general siting
requirements of OCS-related activities. Two of these, steel platform fabri-
cation yards and refineries, require such large sites that they are unlikely
to be located in the state. A modular construction facility for platforms
cannot be ruled out as work can be done in an existing shipyard. Refineries
also pose air and water quality problems that, would be difficult to resolve
in the New York MetropOlitan Area; in addition, the economics of a new refinery
would be questionable in light of the potential for expansion of expansion
of existing refineries in the New Jersey and Philadelphia areas.
Because of the high cost of underwater pipelines, it appears unlikely that
oil or gas pipelines from either the Mid or North Atlantic would be landed
in New York State, because of the distances from the leasing area to shore.
Pipeline landfalls are likely to be in New Jersey or Delaware for the Mid-
Atlantic and in Massachusetts or Rhode Island for the North Atlantic. Con-
sequently, pipeline landfalls and associated facilities such as gas processing
and treatment plants are unlikely to be located in New York State.
TABLE 39
CHARACTERISTICS AND PHYSICAL REQUIREMENTS FOR VARIOUS OCS RELATED FACILITIES
Land
(Acres)
Temporary Servi ce Uase 5-10
Permanent Service Base 25-50
Steel Platform Fabri ca- 200-1000
tion Yard
Steel Platform Installa- 5
tion Service Base
Pipelines and Landfalls See
Footnote 3
Pipeline Installation 5
Service Bases
Pipe Coating Yards 100-150
Partial Proc7ssing 15
Facil i ti es
Gas Processin~ and Treat- 50-75
ment PlantsS
t'iarine Terminals 15-60
Refi neri es 9 1000
Waterfront
Wharf ~ePth
(Feet) Feet)
2001 15-20
2002 15-20
2
200 15-30
2002 15-20
NR NR
2006 15-20
750
20-30
Average Wages
Onshore Offshore
Capi ta 1
Investment
(Millions)
$0.15-25
NR
NR
Emp 1 oymen t
Onshore Offshore
45
50-60
250-5501
252
1501
2002
$17,000
$17,000
$17,000
$17,000
$19,000
$ 1.0-3.0
$ 30-60
NR
NR
1002
$17,000
$18,000
ijA
204 250-3504
25
100- 200
10
45-55
30-60 25-65
440
Source: Adapted from NERBC Factbook
Footnotes:
~A is not available; NR not required
2per exploration rig
3per platform
50-100 foot right-of-way for landfall; 40 acres if pumping
station required at landfall, 60 acres if tanker and barge
terminal required.
40nshore figure assumes terminal or pumping station; off-
shore figure is construction jobs per lay barge spread
$16,000 $15,000-25,000 See
Footnote 5
$17,000 NA I
~
t.n
Cl
I
$11,500 $ 8-10
$14,400 $ 13
$15,500 $ 85
$16,000 $10-93
$15,300 $ 815
5Capital investment is $700,000 per mile for 8"
pipe; $2.0 million per mile for 42" pipe; shore
6terminal $2.5 million
7per installation spread
sassumes 100,000 barrel/day capacity
9assumes 1 billion cubic feet/day capacity
assumes 250,000 barrel/day capacity
-151-
A number of OCS-related facilities, however, do appear to have potential
for being located in the State. These include temporary service bases,
permanent service bases, pipecoating yards, pipeline installation service
bases, and steel platform installation or module construction bases. Siting
requirements for these facilities and others are discussed in Chapter V
and in Table 39.
B. Sites Identified by the Port Authority, New York City and Nassau-Suffolk
Regional Planning Board
Potential OCS sites identified by the Port Authority, the New York City
Planning Commission and the Nassau-Suffolk Regional Planning Board are
discussed below. The locations of these sites are shown on Figures 31
and 32; further information on the sites is provided in Table 40.
1. Port Authority Study
The Port Authority was supplied by the Department of Environmental Conser-
vation with OCS facility siting criteria, including materials from the New
England River Basins Commission/Resource and Land Investigations. The Port
Authority study based the selection of sites on eight criteria: size,
existing land use, surrounding area use, zoning, navigation areas, vehicular
access, railroad access and avoidance of wetlands.
In the preliminary survey the Port Authority screened fifty-seven waterfront
land areas that offered certain characteristics that could be suitable for
potential OCS support base activities. Of these, eight were chosen as
representative sites and were studied further. Of the final eight, four
are located on the New Jersey side of the Port and are not discussed in this
report.
The four sites chosen on the New York side a~e dS follows:
Name
Locati on
Brooklyn Navy Yard
Erie Basin and Columbia Street
Marine Terminal
Northeast Container Terminal
Stapleton Piers
Brooklyn
Brook lyn
Brooklyn
Staten Island
Brooklyn Navy Yard - Approximately fifty-eight acres is available
at this site. The site is operated for the City of New York
under a long term lease by the Commerce, Labor and Industry Corp-
oration of Kings County (CLICK), a non profit organization.
The site is part of a larger CLICK industrial complex, and offers
the possibility of an additional 34 acres presently in use by
the U.S. Navy. The CLICK complex presently houses some forty
trucking and manufacturing industries as well as two ship repair
and building companies.
-152-
1-
NEW JERSEY
o
\ '
, )~
,~
" '
,
RARITAN BAY
rJEW JERSEY
8.~.
C I , 4 5
I , , , , , , ,
, ,
2 , 4 5
0
10 Km
I
""Ies
--1
0,
I
~ ~'
I'
"G I
'v0 ~'V
" ,
'~
I
I
I
,
I
I
I
,
I
J ~ l([ N NE ~Y:;""'." I
J~;~~~
~-'
/ I
~ !
-----
AIR~O~T
Ql.IlOllO'l
NEW YORK
LOWER NEW YORK BAY
A TLA NTIC OCEAN
FI GURE 31
~EW YORK CITY POTENTIAL
S~TES FOR OCS FACILITIES
Brooklyn Navy Yard
1. .
2. Erie BasltnC ntal'ner
Northeas 0
3.
Termi na 1
Stapleton Piers
St. George '1
Brook lyn Army Terml na
J
4.
5.
6.
S col e I 275,000
J{
.~.'J.';r;IC
/
j "-"-'
,,-'
~ )
I
"
),~
,
f~-:':""
?
/
\.---'
Scali I' 830,000
0 10 20 30 40 I(m
I , , ,
0 '" 20 MI
,ot,'
i~. (''''._
.--.:i ~v-- 'S,.
=,",- ":~~
\1 )./
'1~'
1
,
o N
L
yr_.
G
,."" "'-'~~l'C~
-O~__~"'____~ ~
'-~ \:
,
\..,. _'J
1.
'''.""
'- -"'.., .,.,~-
~\ ..-
"~.1
)
\:
,{
5
o
u
N
D
.1.
.,
.'
$; ,
~'" b
. ~"-~
~. 7:::;',:~'~o " '
I I .
~J~ I
"'- ~ () / I, -~' c0..
'- ~ of:;',~ ~ ~ ~_ _ "'I 10,-'. r ~l ~ ~~ ~~<;r,::., ',"c"
_~- 'h\3 ~ c' 4'~ "/,,, ~r k ~:c:::-,~_
5 ' ~ ,/.f/v,-' - ,.11"- ~ . ",. ,,<=,,_o~
c -. ...~ "- "",".,~l':" ~.'
6 ..f~ <;Fc ,,&{'" ~,'M,o:!-~-~'-"""'dr~/
oJ=Z 4 LO;':'c::::::_3~/ ~ -..-_-~ -=-'~.:~:..- '=--~
Ai" ///'
5
L
A
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,~-;J
J
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','
~.,W''''E''5
ky~-"-
." .9~'''''
- -'.\ '
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"~"'--J
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8.,. /,""--"-Ff:.>
""'/ '
" .
-,.~'---_ ,,/ C''''~'iO''''Oj: _ _' ': ,>"' t':
-'''57<r'"": -':-1-"-{-",,. ,.b j ";,. I:;fy (
__"""""~_~/ . '~~--.-'R ,oY
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p
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<~~~~:_/
c -;;;;,'
~ '~__ ." ~:~~r--)Y
-.f,",--' a /!/
~;u'~ ~/~
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12
FI GURE 32
POTENTIAL SITES FOR OCS FACILITIES
1. Brooklyn Navy Yard
2. Erie Basin and Columbia Street
Marine Tenninal
3, Northeast Container Terminal
4. Stapleton Piers
5. St. George
6. Brooklyn Army Terminal
7. Fort Pond Bay
8. Village of Greenport
9. Village of Port Jefferson
10. Village of Freeport
11. Oceanside
12. Yaphank - Shirley
.~ ,J
,,'
,
~
I
~
on
W
I
TMLE 40
POSSIBLE NEW YORK STATE
OCS SUPPORT SITES
1 Env; ronmenta 1
Loca ti on Acres Zon;nq Water Transportation Vtil it; es Restrictions
Unde r- Front Depth
Upland Water (feet) (r.ILW) Road Rail Adequacy
Brooklyn Navy Yard; Brooklyn 58 m3 4,600 20 1-278 Float Partial Historical
Landmarks
Erie Basin & Columbia St. Marine 47 99 m3 9,287 30 1-278 Float no none
Tenninal; Brooklyn
i~ortheast Container Term; na 1 ; 83 45 m3 15,200 35 1-278 yes yes none
Brooklyn
Shapleton Piers; Staten Island 52 139 m3 4,000 45 1-278 yes no none ~
en
St. George Area -I'>
I
a. Alcoa 33 m2 1,900 18-35 NY rts yes Part; a1 none
, Coast Guard 9 Fed. land 600 le-35 NY rts no yes none
J.
6rooklyn Army Teminal; Brook 1yn 70 26 m3 8,000 40 1-278 yes yes none
2
Fort Pond Bay; L. I. 50 ind 3,000 40 NY 27 yes no none
2
Greenport, L. I. riA Resident 500 40 NY 25 yes no none
Port Jefferson. L.I. 5 ;nd 500 35 yes yes yes nOlle
Freeport I L. I. I~A ind 200 10-17 yes no NA none
Oceans i de, l. 1. 5 ;nd 200 11-12 yes NA NA none
Yaphank-Shirley 333 ind none none 46-A-66 yes NA none
1
m3 and ;3: allows maximum flexibility and essentially heavy industrial use, even those with low performance standards
m2 and 12: Prohibits natural synthetic gas production processing storage as distribution
ind: Industrial zoning
NA: Not available
'40 feet 200 yards offshore
Source: Port Authority; ile\'l York City Department of Planning; Nassau-Suffolk Counties Regional Planning Board
-155-
Erie Basin and Columbia Street Terminal - Owned and operated by
the Port Authority, these two adjacent areas encompass some
47 acres of upland area and 99 acres of land under water, including
pi ers.
Northeast Container Terminal, Brooklyn - Approximately 128 acres
is available at this site, including 83 acres of upland (including
25 acres of piers) and 45 acres of land underwater. The property
is owned and operated by the Ci ty of New York and is part of the
City's Waterfront Renewal Project.
Stapleton Piers, Staten Island - Approximately 191 acres is avail-
able at this location including 52 acres of upland and 139 acres
of land underwater. It is owned by the City of New York. Most
of the property is essentially vacant and deteriorating. However,
the deteriorated piers within the study area are scheduled to be
removed by the Army Corps of Engi neers as part of thei r "New York
Collection and Removal of Drift Project." It is hoped that this
project will provide a stimulus to Port investment.
2. New York City Planning Commission Study
As mentioned previously, the New York City Planning Commission undertook a
similar study to complement the efforts of the Port Authority study. It
identified sites \.lithin the City jurisdiction that could serve as OCS support
bases.
Through federal funds provided by the State's Outer Continental Shelf Study
grant, the Planning Commission contacted key city agencies to obtain input
and advice regarding site selection and possible future use.
Criteria for site selection were supplied by the Department of Environmental
Conservation, largely through materials from the New England River Basins
Commission/RALI project, and by the Port Authority.
The Planning Commission identified six sites:
Name
Locati on
Brooklyn Navy Yard
Erie Basin and Columbia Street
Mari ne Terminal
Northeast Marine Terminal
Stap 1 eton Pi ers
St. George
Brook lyn Army Termi na 1
Brooklyn
Brooklyn
Brooklyn
Staten Island
Staten Island
Brooklyn
Because four of the six sites were described earlier, only the Brooklyn Army
Terminal and St. George sites will be discussed below.
St. George - The federally owned land has been designated by the
federal government as excess property. Operated by the Coast Guard,
it has pier and wharf facilities and industrial plant and living
quarters.
-156-
Brooklyn Army Terminal - This facility of 40 acres is owned by the
federal government., and is currently underutilized. The property
is under license for operation by the City of New York.
3. The Nassau Suffolk Regional Planning Board Study
The Nassau Suffolk
onshore facilities
following sites:
Regional Planning Board applied siting criteria for OCS
to I,assau and Suffolk Counties. The Board examined the
;'jame
Locati on
Fort Pond Bay
Village of Greenport
Village of Port Jefferson
Village of Freeport
Oceans ide
Yaphank-Shirley
Montauk. Suffolk County
Southold, Suffolk County
Brookhaven, Suffolk County
Hempstead. Nassau County
Hempstead, Nassau County
Brookhaven, Suffolk County
Fort Pond Bay - At Fort Pond Bay there is a site of over 1050
acres that might accommodate support bases. A sand mining area
occupies at least 50 acres of the si te. Rai 1, sea and road access
are available. Water depths offshore are 40 to 60 feet; however,
some dredging is necessary to meet the necessary draft limits.
Village of Greenport - The Village of Greenport in the town of
Southold, Suffolk County, has two sites that might accommodate
temporary OCS support bases. They are not presently zoned for
industrial or commercial use.
Village of Port Jefferson - In the Village of Port Jefferson in
the Town of Brookhaven. Suffolk County, an oil terminal site is
being phased out. Approximately five acres could be obtained
for oes needs. There is an existing channel 25 feet deep and
300 feet wide. with 35 foot depths at dockside.
Village of Freeport - The industrial area in the Village of
Freeport, Town of Hempstead. Nassau County, could be considered
for an OCS support base. Sea access is by Jones Inlet with depths
of 10 to 17 feet. The area is highly industrial.
Oceanside - There is a five acre site adjacent to the oil terminals
at Oceanside in the Town of Hempstead, Nassau County. In addition,
there are two large tracts of industrially zoned land in the
area that have good highway access.
Yaphank-Shirley - Yaphank-Shirley in the Town of Brookhaven,
Suffo 1 k Coun ty has two sites. They are 118 acres and 215 acres
in area and are located between the Long Island Railroad mainline
and the William Floyd Parkway. tlon-residential uses such as the
Brookhaven Laboratory, a racetrack. and a proposed shopping center
border the site.
-157-
C. Prospects for Utilization of Sites
The studies by the Port Authority, the New York City Planning Commission
and the Nassau-Suffolk Regional Planning Board utilized criteria for the
minimum physical requirements of DCS-related onshore facilities. On the
basis of these minimum requirements, a total of twelve potential sites have
been identified, although additional suitable sites may also be available in
the state.
Whether any of these sites are actually used for DCS facilities will depend
on a number of factors, including the amount and location of any hydrocarbon
resources that may exist on the Continental Shelf. A large find of oil and
gas will increase this possibility. Distance from offshore fields to support
bases is also important. i~ew York State is close enough to the leasing
areas, particularly the Mid Atlantic, to be a feasible site for support
activities although locations in rJew Jersey, Delaware and Maryland have
relative advantages in this respect.
Existing port facilities are likely to be used. Several small ports exist
in New Jersey, Delaware and Maryland, but the Port of New York is the closest
major port to the Mid Atlantic. Its size gives it certain advantages.
Environmental conflicts in the Port area would tend to be minimal for DCS
support facilities. A wide range of ancillary services and industries is
available, many of which will be needed to support DCS activities. Some of
these ancillary services could support DCS activities in both the Mid and
North Atlantic. Vacant and underdeveloped facilities exist in the Port that
would require little, if any, industry investment. The Port provides a
high degree of access by rail, air and highways, and also has available a
wide range of housing and services to meet the needs of employees. The size
of the New York Metropolitan Area would make it relatively immune to adverse
effects associated with fluctuations in employment during the exploration,
development and shutdown phases of offshore acti vity.
The sites identified on Long Island also meet physical siting criteria. If
these sites can be judged to be envi ronmenta lly compati b 1 e wi th the wi se use
of coastal resources and if conflicts can be resolved, there is no reason
to assume that Des activity in New York State would be confined to the Port
of New York.
The ultimate decisions on siting will be made between the oil companies and
the local government. Exploration support bases have already been established
in Davisville, Rhode Island and Atlantic City. Whether additional or replace-
ment support base sites will be used and where they would be located will
depend on factors in addition to economic and physical considerations. Among
the most important of these are oil company perceptions of the desirability
of different areas, taking into account such matters as labor relations and
community attitudes.
New York State's prospects for being chosen for DCS onshore facilities will
depend on its relative attributes compared to other areas. The twelve sites
identified by the Port Authority, the New York City Planning Commission and
the Nassau-Suffolk Regional Planning Board meet at least minimum siting
criteria for DCS support facilities and are potential locations for DCS-
related activity. Competition for the new industry will be formidable and
communities along the East Coast are actively pursuing industry consideration.
-159-
X. LEGAL AND INSTITUTIUNAL ISSUES
A. Introducti on
The Outer Continental Shelf leasing and development process, described in
Chapter IV, is carried out within the framework of existing and future
federal, state and local laws and regulations. The development of Mid and
North Atlan~ic DCS oil and gas resources raises a number of issues not
previously resolved by the federal government and a host of issues never
before faced by state and local governments in the region. Although a basic
legal framework is in place, these critical issues must be resolved to assure
adequate control of DCS development and of DCS-related onshore activity.
B. Issues Under Federal Jurisdiction
The federal government has exclusive jurisdiction over oil and gas resources
occurring offshore beyond the three mile limit. At present, the basic
decisions of whether and when to lease DCS lands for oil and gas develop-
ment are made solely by the federal government, with little or no partici-
pation by the states. Lack of participation nas been a major concern of the
coastal states, for they in effect have been asked to bear the economic,
social and environmental costs of DCS development without adequate compen-
sation and without adequate consultation in the leasing, exploration and
development process. Figure 33 illustrates the role of the states in the
various steps of the process.
In the past few months, the Department of Interior has made several proposals
for administrative changes that would ease some concerns of the coastal
states. Other concerns remain. A basic reform supported by the states is
amendment of the outmoded Outer Continental Shelf Lands Act, which has been
unchanged since 1953. The DCS Lands Act Amendments now before Congress
would provide substantial improvements in the leasing and development
process and would resolve many outstanding state concerns.
1. Preleasing and Leasing Issues
The Department of Interior has taken positive steps in the past year that
increase the State role in the leasing process. Several opportunities now
exist for states to contribute to feder~l decisions leading up to the lease
sale. At the beginning of the process, the Department of Interior seeks
information from the states and other parties on environmental problems in
the general lease area and on potential conflicts between DCS development and
other resources. The states may review and comment on environmental base-
line studies conducted by the Department of Interior. In the call for
nominations of tracts in a lease area, states may suggest the inclusion or
exclusion of tracts for various reasons, such as protection of prime fishing
areas and concerns over navigational and geologic hazards. Opportunities
for state and local participation are also provided through the Environmental
Policy Act. However, comments from state and local governments, private
groups and citizens on these steps in the leasing process are strictly
advi sory.
FIGURE 33a
STATE ROLES ANO THE OCS LEASl,iG AND OEVELOPliEliT PROCESS
PRCLEASUjG.
o
~~_~t:?J~__all~J~.!:.Q..~_i~ conducted
by oil companies under federal
De~artment of Interior (GOI)
pennit.
A
Env;ron~ental Gaseline StuJics
-conducted l)"jQ6T;-s-ta te r-em;~'s
and COf1I'J1ents on studies.
A
Precall Information solicited bj
001 ~ stat"f~.-suh;1Tfs-reports on
environmental proble~',s and on
conflicts with other resources.
A
Call for Nominatiolls issued by
DCn--:-oTlln<fustry-fnd i ca tes
interest in '~racts, State
identifies tracts to be
exclud8d or to be leas~o only
under special candi tions, due
to environmental, geologic or
other reasons.
o
Tract Selection made by oar but
discuss8d-w-llh-coastill states.
EI]Y i ~g!lillr!~t.0 tJI~~1s:_~__S_~ilt..::::.r~'?r'lt
A {ol"--Lr:~,~'-(" SCill' P r'epa )'cd Dj DOl.
Statet"(;\'lC'~I~,. -ill"IJ cOEII1;en;,S on
Dl'aft StatJ"y:nt, prCSlflts tc~,~~;1:0riY
at public flC'JYin], n',uY COP\,~l!:nt
on Final Statcl'\cnt.
A
Proposed Nat40nal and~B~gioniJ_~OCS
Opefatin~!:d.Q.T_~ iSSIJ0d by COI,
State may cO~Elcnt.
o
Po te 1~!j~L5.Lt~_J Q!~..~r ~~!!'2Q:~~Y.
~2.o..!:.Ll.?~_~ identifiea by oil
cow~anies in preparation for
exploration.
A
~ropose~tJi9tice-..2i_5iiJ~ issud uy
DO~; State may [')Irment on
proDosed tracts dl1d lease
stipulations.
Notice of Sale issued by 001
O TI-secretary o-f lnter',or makes
decision to hold lease
sale,
EXPLORATJ.9~
o
Lease Sale conducted by
001; nosta te i nvo 1 venlent.
Leases awarded to highest
responsible bidders.
.
Tempoi~j~~2i~ Base Sites
selected by lessees. State
and/or local approvals Itay
be requlred, in(luding air a~d
water qUolit)' permits,
A
Nol.:L:~...Qf S\Jj?.:T)Q.!....~~_0.iLi!Y
filed by lessees with coastal
states, 001. i'iotice required
by lease stipulation.
.. Exploration Pl_an s'Jbr.Jltted by
~ lessees to 001. Must include
location and depth of planned
wells, description of drilling
rigs. oil spill continge~.:-,
plans and other Materials.
State may review r10n-
confidential parts of exolora-
tion plan. Plan must be
consistent with Jppt-ov~d state
coastal management progfam,
if Olle is in effect.
Federal Pe:,,;d!~ GLtai'led by
A lessees forsftill'J of
exploratioll rigs (Corps of
Engineers) for waste discharges
(EPA) and for drilling (coIl.
States lI1ay COIl';rnent.
o
~2!at.9Iuc.DJJ~ c01lducted
by lessees. If a cumn,ercial
find is made, lessee prepares
for developn,cnt and production.
PrGposed 001 Regulations would
give states GlOre infon".ation on
resources and on tile size and
timing of planned development.
o
PO:.enti,)l :~,j:;)C; for rer::1J'iC:1t
n~~{~~~t-~'s- -{Gc'l1trfTEd--b-j--
State partic4pates 4n National and Regional Outer Continental Si1elf Advisory Boards,
Environmental Studies Comnittee. State I'ior'ks I'lith otner coastal states on CCS lssues
through Mid-Atlantic GoverrJrs' Coa:;:al Rcsource~ Council :YAGCRC) ar,d NCtI England
Rivers Basin COffl11i5S1on (UER3C),
FIGURE 33b
STATE ROLES AND THE DCS LEASING AND DEVELOPMENT PROCESS
DEVELOPHENT PRODUCTIOi<
-~~-
A
Qeve 1 oJ::!'~..!~~_~~~ r_~Q..d_(!"~ t i.?~ ~
an~E_f]YJrlJr~t_en.ta L-'l~_~_~
submitted LJy lessees to oor. Must
include description of nc\~ off-
shore iwd onshore facilities,
interpretations of resource datd,
well locations, and other data.
States may review non-confidential
parts of plan and report. Plan
must be consistent wlth a~proved
state coa~tal manageiilent
rrogranls if one is in effect.
(PROPOSED II: r:u, 001 REGUL/IT I DIIS)
A
~v_i~~nr1ental Impact S.tatem.?,~~
12..1' De'i_~J opme!1...t. 11'ay be prepared by
001 for frontler lease areas. State
reviews and comrrlents on Draft
Stateru:nt, presents testimony at
public hearirlg, may Ccnlll'ellt on
Final Statement. (PKCPOSED IN I:EW
001 REGuLATIONS)
.
Permanent Onshore Facilities
estaETlShedbYTe-ssee-s. State
and/or local approvals may be
required, includinq air and
water quality pern:lts.
A
Federal Pennits obtained by lessees
for siting of p-latfoms (Corps of
Engineers), for waste discharges
(EPA) and for drilling (DOl).
States may comn,cnt.
o
Transportatlon Decislon (tanyers
or ploel1nes) rnaGe by oor and/or
lessees.
A
Pipeline Corridqrs designated by
001. Proposed plannin; ~iroc~ss
would involve states, industry
and federal agencies. Envirorr:ental
impact statement ~Ia/ he requjreJ or
may be part of DevElopment EIS.
.
State, Local and Federal Pioeline
Perini ts__~~c; h2Pj2_"~~G~of)ta-~~~
by pipeline cornr>2ny. pipeline
constructed.
o
Corrnercial Product;!)" 5ecins.
Allocation a"fected by federal
Department of Energy (DOE)
regulations.
o
Production Reculated by DOr:
monitors DeS activities
enforces Operating Orders
supervises environmental
moni tori ng
initiates special environmental
studies as needed.
SHUTDQl.i,'1
o
Shutdo~'n Reoul atEd hy 001:
~ees Plug wells, remove
pl atforr:is
pipeline co~panjes decom-
mission, abandon pipelines.
o
Onsrore Fccilities Closed
by lessees;- may be-corl~;erted
to other uses,
STATE ROLE
.
A
o
State Makes Decisions
State Com~lents Only
No State Role
-162-
An additional avenue for state involvement has recently been created with
the addition by the Department of Interior of a Proposed Notice of Sale in
the leasing process. The Proposed Notice of Sale identifies tracts that
will be leased and stipulations that must be met by successful bidders.
The new step allows states to comment on the proposed lease stipulations
and on the tracts to be leased. Lease stipulations can be important to the
states; for example, Stipulation #7 in Mid Atlantic Lease Sale #40 requires
lessees to notify the states of their plans for onshore support bases, although
the stipulation does not specify the degree of detail that must be supplied.
States may comment on these submissions, but do not have power of approval
or rejection. Affected states do have authority over any onshore support
bases needed for exploration.
2. Exploration
Successful bidders at the lease sale must obtain several federal approvals
before initiating exploratory drilling. Exploration plans must be developed
by the companies and submitted to the U.S. Geological Survey. Permits for
discharges from the exploration rigs must be obtained from the Environmental
Protection Agency. Also, permits from the Army Corps of Engineers must be
obtained for any obstructions to navigation (eg., an exploratory drilling
rig) on the Continental Shelf, and Coast Guard regulations for aids to navi-
gational safety must be followed. The states may comment on these permits
but they have no direct role in off~hore permit issuance. However, under
proposed regulations, states may review the exploration plans to ensure
that they are consistent with a state's approved coastal management program.
Coordination among federal agency offshore permits is a concern to the
states. Because each agency issues its permits independently, a number of
critical issues may not be addressed adequately or at all. Navigational
safety, for example, is a major concern in the Atlantic. Several of the
Mi d and North At 1 an ti c 1 ease tracts are located in heavi ly used vesse 1
traffic lanes from the Port of New York, creating the possibility of collisions
between ships and oil rigs and platforms. Similarly, many tracts in both
the Mid and North Atlantic lease areas are in locations heavily used by
domestic and foreign fishing fleets. No formal coordination mechanism
presently exis{s to resolve conflicts between navigational safety and placement
of oes facilities, although discussions have been initiated between the Corps
of Engineers and the shipping industry.
Offshore operations are regulated under Operating Orders issued by USGS.
In the past, separate sets of operating orders were issued for each lease
area. These separate regional operating orders are now being replaced by
a single set of r~ational Operating Orders, to which regional appendices are
added where appropriate. Each Operating Order covers a specific aspect
of oes activity (see Table41). The orders establish general requirements
for operations and some tend to lack specificity. Offshore opera-
tors are thus given a great deal of latitude. Although the oil industry's
-163-
TABLE 41
OPERATING ORDERS
OCS Operating Orders are issued by the United States Geological Survey as
part of the agency's responsibilities in supervising oil and gas operations
on Federal lands, including the OCS. One set of National Operating Orders
is now replacing the previous regional Operating Orders. Appendices to
specific Orders will be issued as appropriate for individual lease areas.
A total of fifteen OCS Orders will be issued.
1. Identification of Wells, Platforms, Structures and Subsea
Objects
2. Drilling Procedures
3. Plugging and Abandonment of Wells
4. Suspensions and Determination of Well Productivity (Extension
of Leases)
5. Installation of Subsurface Safety Devices
6. Well Completion and Workover
7. Pollution and Waste Disposal
8. Platform and Structures
g. Approval Procedures for Oil and Gas Pipelines
10. Oil and Gas Production Rates, Prevention of Waste and Pro-
tection of Correlative Rights
11. Public Inspection of Records
12. Measurement and Commingling of Production
13. Diligence Requirements
15. Submittal of Information for Plans of Development
-164-
own standards may generally be more than adequate, there is some question
of whether the operating orders provide assurances that minimal reasonable
standards will be met.
Navigational safety and pollution controls are particular concerns of states
in the Atlantic. Standards in the operating orders for navigational
lighting and sounding devices may not be adequate for the harsh weather
conditions and high traffic density in the Atlantic. Pollution and waste
contro 1 regul ati ons, especi ally regardi ng oil spi 11 s, do not adequately
address means to minimize environmental and other damages.
3. Development
A discovery of offshore oil and gas resources raises many issues for coastal
states. Although there is some onshore activity during exploration, a
marketable discovery substantially increases onshore impacts, both in terms
of onshore facilities and transportation of resources to shore. The states
have authority over onshore activities, but offshore development activities
are the exclusive responsibility of federal agencies. The linkages between
and among these authorities and responsibilities are a special concern to
th e s ta te s .
The Department of Interior has proposed new regulations, consistent with
the proposed Outer Continental Shelf Lands Act Amendments, requiring offshore
operators to prepare and submit a development and production plan for USGS
review and approval. Affected states would be given an opportunity to review
these plans. The development plans would be subject to the Coastal Zone
Management Act's federal consistency provisions. This would mean that USGS
could not approve development plans unless the state finds they are consistent
with the state's approved coastal management program, or unless the Secretary
of Commerce overrides any state objection. States without approved coastal
management programs would not have this power, although they could comment
on development plans. A development phase environmental impact statement
may also be prepared, which could also be reviewed and commented on by the
states.
As in the case of exploratory drilling, companies must obtain necessary
federal permits, including drilling permits from USGS, discharge permits
from the Environmental Protection Agency and permits to obstruct navigation
from the Army Corps of Engineers; compliance with Coast Guard regulations
is also required. The same issues of coordination discussed for explora-
tory permits apply to development drilling permits. Likewise, concerns over
navigational safety will exist in the development phase; in fact, because
seventy-five or more development platforms may eventually be in place in
the Mid and North Atlantic, conflicts with shipping and fishing may be much
more of a problem than during exploration. The State role on these federal
permits is limited to reviewing and commenting.
If marketable resources are discovered, they must be transported to shore.
Resource transportation raises issues of critical importance to the states.
This is one of the most complex aspects of the entire OCS process. Fifteen
federal agencies have direct or indirect involvement in OCS resource trans-
portation, as well as state and local agencies in affected states. There are
serious questions about the degree and adequacy of coordination among
-165-
these agencies. Resource transportation is also a potential source of oil
spills, which could have devastating effects on coastal states.
The Department of Interior has proposed a leasing and resource transporta-
tion planning process that would involve federal agencies, the petroleum
industry, coastal states and other interested parties. This process may
provide a means to achieve better coordination in oil and gas transporta-
tion planning and development, but the proposal had not yet been implemented
to date.
A primary objective of the process will be the identification of corridors
in which pipelines proposed by lessees or transportation companies can be
placed. The process would not affect existing permitting procedures, which
will remain in effect. Among the agencies now involved in pipeline regulation
are the Department of Interior (USGS and BLM), the Department of Transportation
(Materials Transportation Bureau and Coast Guard), the Army Corps of Engin-
eers, and the Department of Energy (Federal Energy Regulatory Commission).
Precise interagency and agency-state relationships have never been fully
spelled out. Consequently, a number of uncertainties remain about the
exact sequence of events involved in pipeline siting and construction.
The Department of Interior has responsibility for the issuing of rights-
of-way for the construction of pipelines on the Outer Continental Shelf,
in addition to its other responsibilities for OCS development. Within
Interior, BLM has responsibility for granting rights-of-way for common
carrier pipelines from the platform to shore while USGS has responsibility
for rights-of-way for gathering lines. Gathering lines are owned by the lessee
and are used to move production to a central point, to deliver production
to a point of sale, to deliver production to a pipeline operated by a trans-
portation company, and to move fluids in connection with lease operations,
such as for injection purposes.
Safety regulations for interstate pipelines handling gases and hazardous
liquids are the responsibility of the U.S. Department of Transportation (DOT).
DOT shares jurisdiction for pipelines on the Outer Continental Shelf with
the Department of Interior (USGS) through a memorandum of understanding.
Basically, the DOT Materials Transportation Bureau establishes and enforces
design, construction, operation and maintenance regulations for pipelines
extending from the production platform to shore, while USGS exercises such
safety jurisdiction on the platform and "upstream," including gathering
lines and production equipment.
The navigational impacts of pipelines are regulated by the Army Corps of
Engineers and the Department of Transportation (Coast Guard). As noted
earlier, the Corps issues permits for placement of obstructions to navi-
gation, including platforms and associated structures. The Corps also has
responsibility for dredge and fill operations on lands below navigable
waters, including the laying of pipelines in excavated trenches leading up
to the coastline.
The Coast Guard, which is responsible for navigational safety, requires
that aids to navigation be installed on obstructions to navigation, including
pipelines on the ocean bottom. There are no official standards for pipe-
line marking, although internal Coast Guard guidelines generally require
bouys to be installed over pipelines less than 200 feet deep.
-166-
Regulation of interstate oil and gas pipelines is the responsibility of
the Federal Energy Regulatory Commission (FERC) in the Department of
Energy. Its responsibility for oil pipelines is largely limited to rate
regulation and assuring that the legal requirements of common carriers are
met; and does not involve pipeline siting decisions. Its responsibility for
gas pipelines, however, includes both rate regulation and the granting of
certificates for the construction and operation of interstate gas pipelines.
The FERC may exercise the power of eminent domain to acquire rights-of-
way for interstate gas pipelines. The relationship between BLM right-of-
way permits on the OCS and the FERC construction certificates is not clear.
Formal procedures do not appear to have been established to provide coor-
dination between the two processes or to prevent overlap or duplication.
In summary, regulation of pipelines on the Outer Continental Shelf is divided
among a number of federal agencies. Although some of the relationships among
different agencies have been formally spelled out in memoranda of under-
standing, other relationships remain unclear. There is further uncertainty
with respect to the roles of the states in pipeline siting. The amendments
to the Outer Continental Shelf Lands Act now before Congress would help to
resolve some of these problems. It is possible that the proposed Department
of Interior leasing and transportation planning process could also help
resolve some of the problems.
OCS oil resources may not necessarily be transported to shore by pipeline.
If the resources are not sufficiently large, or if they are too far from
shore, it may only be economically feasible to use tankers. In fact, it
is anticipated that oil from the Georges Bank lease area may be taken by
tanker to refineries in New Jersey. However, tankers present a greater
risk of oil spills than do pipelines. The possible environmental and
economic implications of a tanker oil spill off the New York coast are dis-
cussed in earlier chapters.
The U.S. Geological Survey has jurisdiction over transfers of oil from
platforms to tankers. The Coast Guard regulates tanker safety, with differing
standards for U.S. and foreign-flag tankers. U.S. flag tankers, which must
meet stricter standards, would necessarily be used to carry Atlantic OCS
oil to shore. Recent oil spill incidents in the Atlantic raise questions
about the adequacy of these standards in preventing and minimizing the
effects of tanker accidents.
Oil spills could alsooriginate from OCS platforms. Prevention of such spills
is the responsibility of USGS, with requirements for spill prevention
handled through the USGS Operating Orders. As noted earlier, there are
potential problems with the adequacy of these orders, as they identify the
kinds of equipment and procedures required, but do not generally set specific
standards and criteria that must be met. USGS does require that exploratory
and production drilling occur with safeguards designed to prevent blow-outs,
and requires the use of subsurface blow-out preventers at the platform.
-167-
If a spill from a platform should occur, USGS divides its responsibility
with the Coast Guard, which has general responsibility for ocean oil spill
containment and cleanup. Under a memorandum of understanding between the
Department of Interior and the Department of Transportation, USGS has
responsibility within 500 meters of the platform, while the Coast Guard has
responsibility beyond that point. It remains unclear precisely how this
relationship would work in the event of a spill. The Coast Guard apparently
reserves the right to take over containment efforts if removal efforts under
USGS are not carried out to the satisfaction of the Coast Guard on-scene
coordinator.
Operating Order #7 holds operators responsible for cleanup of oil spills,
but does not impose specific requirements for assuring the adequacy of avail-
able clean-up equipment. The emphasis of the order, as with many of the other
operating orders, is on self-policing by the operator. A consortium of oil
companies has formed Clean Atlantic Associates to deal with potential Mid-
Atlantic oil spills. Clean Atlantic is composed of a number of private oil
spill cleanup contractors and is stockpiling cleanup gear at various sites
along the coast.
There are serious questions about how quickly and how effectively cleanup
operations could be conducted by either the Coast Guard or Clean Atlantic
Associates. Clean Atlantic claims that its equipment could be operational
at a spill site 125 miles from its shore base within 12 hours. However,
in 12 hours, a major spill could become so dispersed as to be impossible
to collect. Furthermore, there are significant limits to weather conditions
under which even the most advanced available cleanup equipment can operate.
The response by the Coast Guard to the Argo Merchant incident is indicative
of a lack of specific Coast Guard action plans for dealing with ocean oil
spills and a lack of effective technology for containment and cleanup.
Whether effective action plans and technology will be available in the event
of Mid or North Atlantic OCS-related spills is an open question. Because
of the relatively primitive means available to combat spills, it is clear
that primary attention must be given to prevention of spills through effective
regulation of tankers and offshore operators.
Several federal statutes deal with liability for oil spills. These laws,
however, are primarily concerned only with liability to the federal government
for oil spill cleanup costs. They do not provide an adequate legal framework
to deal with issues of liability for damages from oil spills.
The Water Pollution Control Act limits liability for cleanup costs for spills
from onshore and offshore facilities within the territorial sea to $8 million.
Liability for spills from vessels is limited $100 per gross ton or $14
million, whichever is less. If willful negligence or misconduct can be
shown, liability is unlimited. The Deepwater Port Act sets similar but higher
limits. The OCS Lands Act makes lessees responsible for all Cleanup costs without
exception and allows no defenses to be pleaded. The oil industry has estab-
lished an insurance company, Oil Insurance Limited (OIL), to provide insurance
not otherwise available through the insurance industry for onshore and
offshore catastrophes, property damage and wild-well control. Premiums are
retroactive, paid over a ten year period.
-168-
In contrast, the Limitation of Liability Act of 1851 limits shipowner lia-
bility for damages from spills from vessels to the value of the vessel and
freight, unless the damage is the result of the owner's deliberate negli-
gence. If the vessel and cargo are totally destroyed, the owner's liability
is reduced to zero. This limited liability is supplemented, however, by
private arrangements and international conventions.
These laws do not provide a framework for liability for damages to injured
parties. Those who are directly damaged by oil spills must attempt to seek
compensation from the spi ller through common law proceedings in state courts,
a process tha t can be di ffi cult and expens i ve. And those who are i ndi rectly
damaged, such as inland motel owners, may be completely unable to obtain
compensation under existing case law.
It is clear that significant changes in federal legislation are needed to
ass ure tha t parti es damaged by oi 1 spi 11 s from DeS acti viti es wi 11 be able
to obtain compensation for losses. Legislation is pending in this session
of Congress that would accomplish this objective. In the absence of such
federal legislation., individual states, including New York, have enacted
laws establishing oil spill compensation laws. New York's law is discussed
later in this chapter.
e. Issues Under State and Local Jurisdiction
Ijew York State and local governments have primary authority over DeS-related
activities that occur within the three mile limit. As discussed earlier,
state influence beyond the territorial sea is limited. In effect, the present
federal DeS leasing program is a program between the federal government and
the petroleum industry. The states can comment on and occasionally influence
federal actions, but the only substantive decisions that states can make,
given present federal legislation, are relative to siting of DeS-related
acti viti es withi n s tate juri sdi cti on. Amendments to the Duter Conti nenta 1
Shelf Lands Act now before Congress would give the states a stronger voice
in the DeS leasing and development process.
The Coastal Zone Management Act federal consistency provisions may also
gi ve the states greater i nfl uence over federal deci s ions. Secti on 307 requi res
federal actions to be consistent with federally-approved state coastal
management programs. Because only a few states now have approved coastal
management programs, it is not yet possible to tell exactly how this provision
of the law will affect federal-state relationships. The consistency provisions
will, however, will be more significant in regard to onshore and nearshore
DeS-related activities than for offshore DeS activities.
1. Local Governments
Within New York State, there is a strong "home rule" tradition, in which
local governments have been given major responsibility for land use decisions
within their boundaries. The major controls used by local governments include
planning, zoning, and subdivision ordinances. Local governments in areas
of the state that may be affected by DeS development range in size from
small villages to New York City, which has a larger population than most
of the 5D states. The sophistication and ability of local governments to
respond to the issues raised by DeS-related development also varies
although all local governments along the marine edge exercise at least
minimal zoning controls.
-169-
Some of the communities on Long Island exercise control not just on land
but also over certain underwater lands in their jurisdictions. This control
dates back to colonial charters granted in the seventeenth century. It
appears that any OeS-related development, such as a pipeline, that crosses
underwater lands under local jurisdiction would first require approval from
that community.
The recent enactment of the State Environmental Quality Review Act (SEQR)
should assure that the environmental impacts of local government decisions
relating to oes activity will be considered.
2. State Government
The state exercises jurisdiction over a number of functions that have state-
wide or regional significance. Several of these, including energy planning,
energy facility siting and safety regulation, as well as more general
regulatory functions, are relevant to OeS-related development.
a. Energy Planning - General responsibility for energy policy planning in
New York is under the jurisdiction of the newly created State Energy Office.
The Office consolidates the functions of several state agencies, including
the former Emergency Fuel Office, and is the policy, planning and programming
agency for the state. It is charged with ensuring the wise use of energy
sources and the conservation of these sources, and has emergency fuel alloca-
tion powers and responsibility for preparation of a state energy conservation
plan.
An additional planning framework exists for long-range electric generation
plans under Section 149-b of Article VIII of the Public Service Law. Each
electric generating corporation in the state must submit annually a 15-year
electric system plan that includes, among other requirements, an identification
of future generation and transmission facility sites. The Public Service
Commission is currently holding public hearings to determine if similar
long range plans should be required for gas corporations in the state. The
electric system planning requirement will not have a direct impact on oes
related facilities, though gas planning requirements may.
Planning that may have a more di rect effect on the siting of OeS-related
facilities is being carried out under the state's coastal management program.
The Department of State is the lead agency for coastal planning, with DEe
and other state and local agencies playing key roles. Two OeS-related aspects
of the planning work are designation of "geographic areas of particular
concern" and priority uses for the coastal zone. These activities are now near
COOlp letiOl, with specifi c elements of the DEe aes work program i dentifyi ng
potential oes staging areas and areas vulnerable to environmental damage
from DeS activity. The exact impacts of designation will depend on the scope
of the management program that will be developed and implemented for the
coas ta 1 zone.
Another related aspect of the state's coastal planning work is the develop-
ment of a coastal energy planning process. When it is completed, this process
could affect the siting of OeS-related facilities in the state.
-170-
b. Energy Facility Siting and Safet~ Regulation - State legislation
presently exists to regulate tne sitlng of three types of major energy
facilities: steam electric generating facilities, major utility transmission
lines, and liquefied natural gas storage and handling facilities. Of
these, the siting laws for LNG facilities and for major transmission lines
are most relevant to OCS-related activity.
Title 17 of Article 23 of the Environmental Conservation Law, enacted in
1976, gives the Department of Environmental Conservation responsibility for
regulation of the siting and operational practices of any liquefied natural
gas (LNG) storage or conversion facility in the State that was not in actual
operation on September 1, 1976. A hearing process is required to assure that
such facilities (1) conform to siting safety criteria established by the
Department, (2) are necessary, and (3) are otherwise in the public interest.
Any certificates of environmental safety obtained through these hearings
may include operating requirements for the facilities. The Department of
Transportation, in consultation with DEC, must establish criteria for the
safe intrastate transportation of LNG, including certification of land routes.
This law is unlikely to affect OCS-related activities directly because LNG
faci lities are not expected to be needed for Atlantic OCS gas production.
The costs of liquefication and transport of LNG are generally too high to
justify this method of transportation for United States OCS gas resources.
Pipeline siting is partially regulated under Article VII of the Public Service
Law, which specifies that certain major utility fuel gas transmission pipe-
lines and electric transmission lines require Public Service Commission
certification prior to construction. The law establishes a formal hearing
process for issuance of certificates of environmental compatibility and public
need, with the applicant, the Department of Environmental Conservation,
the Departmeht of Commerce and the Secretary of State as statutory parties
to the proceedings. The proceedings are also open to other parties.
This article does not apply to any major utility transmission line "over
which any agency or department of the federal government has exclusive
jurisdiction concurrent with that of the State and has exercised such juris-
diction, to the inclusion of regulation of the facility by the state" [Public
Service Law. ~121 ,4(c)J. Because the Federal Energy Regulatory Commission has
preemptive authority over siting and regulation of interstate gas pipelines,
including those coming ashore from beyond the three mile limit, the Article
VII procedure applies only to intrastate pipelines. Consequently, Article
VII would not apply to OCS gas pipelines if they were to land in New York
S ta te .
There is presently no state law that would regulate the siting of liquid
petroleum pipelines. It appears that state regulation of oil pipeline
s iti ng is not preempted by the federal government, although thi s issue
is n,ot clearly defined. Any pipeline that crosses State underwater land,
including lands out to the three mile limit, would require an easement from
the State Office of General Service (OGS). A license from OGS for removal
of sand, gravel or other material from underwater land would also be required.
In addition, similar easements would also be required from local governments
for pipelines crossing underwater lands under local government jurisdiction.
This would include lands under the Long Island South Shore bays.
TABLE 42
NEW YORK STATE AGENCY FUNCTI ONS & RESPONSIBILITIES
ENERGY & ENERGY FACILITY SITING
c c
,~ ~ . . , ~
"' c , .~ ,. .,
.~ .~ () ... .... , ~~ , r.
Intcn:;tatl' r i ~'C 1 lne!? ..... ~... " . ~ ,~ , u
., tl k ,u,,, " o. :-,., ><"
., ., "' f ., "~ " -I '-~ D"U U ,
~E!~ o u , . " , J '''; " , ""' " .
FlA'~l Oi 1 Fu,~l (;"1" ". , " "' . , u ~ ,. " , OJ ;..; , "'
Sitinq- ~~i{'ty ,~ " .,~ u , ~ S ' ~ " 0 c .
Siting S.lfcty :;,:t., ... " vlo.o1LJ('" " " "u ".
Envirormlcntdl Conservltion 3 J 3 1,2 3 3 5
Public Service Commis]ion 3 1 1 1 (1),5
Office of General S~r"ices J 3
Energy Office 3 5 5 5 5 3,5 5
Economic Development Ooard 3 3
m
"
H
U C('(r.!r.erce
z 3 3
"
u
~
~ State 3 3
m
Geological Survey 3 J 3 3 3
Tra..'1sportation 3 J 3 5
Parks & Recreation 3 J 3
Energy Research & ,
DeveloFIDent Authori~y
Port Authority of ~e""
York , Neloo' Jersey
m
~ tie",,. England River
u Pas ins Commission
z
"
~
" hi-State REgional
~
8 Planning Commission
u
~
Atlantic States Marine
Fiiheries Commission
Interstate Sanitation
Carmission
~ NE:~I Yoz-k City P-gencies 3 3
H
U
Z
" Nassau Suffolk Regional
~ 3 3
~ Planning Board
~ ~3S<lU
, Suffolk 3
County Ager:cies
3
3
3
3
3
3
3
3
!f::!:
I:ssu('s r~'rnlit
4
Fun~s th~ Activity
2
rrc'par(-; ~:1::: or
Df'v.'J~";':''''I\t r] ilfL
POl" U,,,lefin(,d
3
!h :'ole
F/evi,_......,: S C,'rt'nL{,r,ts (;1\ l'r:-~
or l!<'\','lc'I'll'l'tLl: ['Jul,';
(J hJJ( J'prLiljr,:, '~r,jy t(, .~r,,-,cia]
1 t, ,t .JIW"'; ',7 (~,)I,d i l i')I1~;
-172-
The State does have a voice over federal permits that would affect federally-
approved State water quality standards. Section 401 of the Federal Water
Pollution Control Act of 1972 requires that applicants for any federal permit
or license must obtain State certification that the project proposal will
meet appropriate water quality standards.
Under Corps of Engi neers regulati ons, 401 certifi cati on is not requi red
for applications for dumping outside the territorial sea unless the State
can demonstrate that dumping in the contiguous zone (three to twelve miles
from shore) will violate water quality standards within the three mile limit.
The Department of Environmental Conservation has taken exception to these
regulations, but they remain in effect. The 401 certification consequently
would apply primarily to projects requiring federal permits that occur
within the three mile limit. This would include projects such as pipelines
entering State waters but not such activities as placement of platforms
on the Outer Continental Shelf.
If the State is to exercise greater direct control over pipelines that may
come ashore from the Outer Continental Shelf, including selection of landfall
locations, additional state legislation will be required.
The State has a limited role in the regulation of pipeline safety. The federal
Department of Transportation has responsibility for setting interstate gas
pipeline safety standards under the federal Pipeline Safety Act. The Act,
however, prohibits the application of more stringent standards to interstate
pipelines within a state. States can become the agent of the federal DOT
for interstate pipelines, but the enforcement role of the State is limited
to identifying problem areas to federal DOT for that agency to take enforce-
ment action. Because New York State cannot enforce its own more stringent
standards and because of the cumbersome enforcement role, the Public Service
Commission has declined to be the agent for interstate pipeline safety.
The provisions of federal laws mean that the states do not have effective
independent control over siting or safety regulation of OCS pipelines.
In the case of intrastate fuel gas pipeline safety, states can adopt their
own safety standards if the standards are equal to or more stringent than
those set by the federal Department of Transportation. PSC serves as the
agent of the federal DOT for intrastate gas pipeline safety, annually certifying
that the enforced standards of this State are equal to or more stringent than
the national standards promulgated under the Federal Pipeline Safety Act.
The situation with respect to petroleum pipelines is somewhat different.
The Public Service Commission has broad powers under Section 63-ff of the
Public Service Law with respect to liquid petroleum pipeline safety. The
Commission has general supervision over the safety of all intrastate and
interstate liquid petroleum pipeline corporations that operate within the
state, both onshore and within the three mile limit. No additional state
controls over liquid petroleum pipeline safety appear to be needed at this
time.
c. Oil Spills - Oil spills in New York State waters are a major environ-
mental and economic concern. The State is largely dependent on the U.S.
Coast Guard for the cleanup of ocean spills that affect marine waters and
shores within the State's jurisdiction. There is some question of whether
the Coast Guard is adequately prepared to undertake vast new responsibilities
on the Continental Shelf.
-173-
The inadequacies of existing federal oil spill liability laws were discussed
earlier. New York State has enacted legislation which addresses the inade-
quacies of previous state and federal law. Chapter 845 of the laws of 1977
creates a New York Environmental Protection and Spill Compensation Fund,
financed by a tax of one cent per barrel on petroleum products the first
time they are transferred within the state. The maximum size of the Fund
is limited to $25 million. The Fund is to be used to pay for oil spill
cleanup costs and for compensation to those who are harmed as a result of
oil spills. The law provides an administrative remedy for persons harmed by
spills, allowing them access to the Fund without going to court. The law
a:so imposes liability on the spiller for both cleanup costs and for damages.
Flnes of up to $25,000 a day can be imposed on spillers.
The law, which is effective on April 1, 1978, gives the State Oepartment of
Transportation responsibility for oil spill cleanup, limited by the require-
ment that cleanup operations be conducted in an environmentally sound manner
as Jetermined by DEC. The State cooperates with the Coast Guard and Environ-
mental Protection Agency for cleanup of spills in State waters. DOT is also
responsible for administering a licensing system for all operators of major
petroleum storage facilities, defined as facilities with capacity of 400;000
gallons or more. The deadline for licensing is July 1, 1978.
An earlier state oil spill law deals more broadly with spills of bulk liquids,
including oil. Fines for spills are imposed, and failure to report a spill
is subject to a fine or jail. DEC maintains a 24-hour "Hot-line" telephone
(518) 457-7362 to receive-reports of spills from State Police, public offi-
cials and private citizens.
d. Other Regulatory Functions - A variety of State programs exist to protect
the air and water quality of the State and to protect certain critical
natural areas. Any proposed OCS-related activity would be required to meet
the same requirements as other permit applicants. The major programs admin-
istered by DEC cover air quality, water quality, tidal wetlands, freshwater
wetlands, flood insurance, and stream protection. In addition, other pro-
grams provided for broad environmental reviews.
. Air Quality - New ~ork State's air resources management program is carried
out under authority of the State Air Pollution Control Act (ECl Article 19),
within the national framework established by the Clean Air Act. The
mechanisms for achieving the goals of the Clean Air Act include a broad
array of plans, programs and regulation actions with powers and respon-
sibilities delegated from the Federal Government to the State.
New York State is subject to established federal standards that apply
nationwide, but a state may impose more strict limitations or may promul-
gate standards for additional contaminants not yet specified by the
federal government. In New York State, air quality standards are applied
according to a four-level classification system designed to assure that
air quality will correspond to the best and/or most dominant land use in
a particular area.
TABLE 43
NEW YORK STATE AGENCY FUNCTIONS & RESPONSIBILITIES
ENVIRONMENTAL REGULATORY FUN CTI ONS
.
~
~
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, " . , ~ ., . . ,~ ~ .
. 0> , . " ~ " & ~ " 0> "
0 " . " " " f, " '" ~ " " " ," ,
" " . " &,lJt:2," " " >~, <: ~' " " . " , . . " ~
. ," I-l 'f:j 0"; ~ '-" vi -~ .::;::: " " . " , , " , .
. ~ 2:: III ~ ,~ ,~ OJ ~~, ,j " " " ~ ., . ., OJ ;~ ~ . ~ ~
AGENCIES " ," :J ... ~ p, " ,..., c: > ~ " , ~: U U " .
~~ . " ," . . " , " ;~ " 0 , ~~ , 22 x , . ~ . "
---- ~ ~Q" iJlt-<"'iJl . OU Q < 0 . l-l...;:;': " 0
Environt\\t'ntal Conscrvetion 1,2 1,2 1,3 1,_ 1.2.-l4 1,2 1,2 1,2,3 1,3 1.3
Public service CorrJllis:;ion
Office of General Scr~iccs 3 3 3 1,3
Energy Office
Economic Dcveloprr.ent F0ard
~
.
~
U
Z Coolll1erce
"
~
~ State
8
"
Geological Survey 3
Transportation 3 3 3 3 3
Parks & Recreation 3 3 3 3 3 3 3 ( 1),]
Energy Research ,
Develo~ent Auth0rity
Port AuU:od ty of :1e,..' (1) 3 3 3 3 1,3 1,3 1,3
York , New Jersey
New England River 4 3
~ BaSins Corr.rnission
"
H
U
Z
" Tri-State Regicnal 3 3 3 3
~ 3 3 3
Planning COll1r.lission
~
z
Q
H Atlantic States Marine 4
~ Fisheries Con-mission
Interstate Sanitation 3 3 3 3 3 3 3 3 3 3
Corrmission
New York City Ager,cies 3 (ll,3 (1) ,3 5 3 (ll,3 (1),3 1,3
~
"
H
U
.. Nassau~Suffolk pegional
" 2,3 3 3 3 3 3
~ Planning Board
g t<assau , Surfon. 3 (1},3 (1) ,3 4 3 3 3 Ul,3 U),3 1,.
County Agencie!l
KEY: 1 Issues l'ermit 4 Fund5 the Activity
2 PrcFa.rc1;; F.I~ DC Pol", Undt:fincd
Dc....",lopmcllt FIan
No Fole
Rcvie",s , COr".ft'f,nt.~ 00 FI3
or Development pl.)lH) ~1J1(' h:rt,lins On1:, to Spcci;ll
rr,:;l;lncc; oc COI,(liti-ons
-175-
To achieve the national ambient air quality standards, states had to pro-
duce implementation plans that would specify the strategies to be employed
to achieve standards. In the New York Metropolitan Area, motor vehicle
emissions are a significant problem, and a separate Transportation Control
Plan was developed by State and City agencies with DEC being the lead
agency.
Another air resources program is designed to control so-called indirect
sources of air contamination. These are primarily facilities such as
highways, shopping centers, parking lots and airports, that generate asso-
ciated vehicular or aircraft traffic which may degrade ambient air quality.
DEC regulations establish a permit system for construction of new indirect
sources or expansion of existing indirect sources. The size and location
of the indirect source determine whether its construction comes within
the scope of the regulations. Most OCS-related activities are unlikely
to generate significant vehicular traffic.
An additional set of regulations requires that Permits to Construct and
Permits to Operate sources of air pollution be obtained from the Department.
App 1 i cants mus t provi de proof that the source will not vi 0 1 ate air quality
standards or any of the State emission regulations which apply, and that
the source will be operated in accordance with the established emission
limitations outlined in the rules and regulations. Certificates to Operate
must be renewed every three years, ensuring that sources of air contamina-
tion undergo periodic review. These regulations are sufficient to ensure
that OCS-related activity in New York State will not contravene air quality
standards.
Water Quality - Water quality management in New York State began in the
1950's, long before most other states recognized that water pollution was
a problem, and is now carried out within the national framework of the
Water Pollution Control Act of 1972 (P.L. 92-500), which established
national goals for water quality.
A major provision of the federal law is establishment of the National
Pollutant Discharge Elimination System (NPDES), under which federal permits
are required of all parties who propose to discharge pollutants into the
state's surface waters. The law provided for delegation of the program
to the states, and all permits in New York State are now handled by the
Department of Environmental Conservation. As discussed earlier, the
Envi ronmenta 1 Protection Agency issues NPDES permi ts for offshore di scharges
on the Outer Continental Shelf.
The State Pollutant Discharge Elimination System (SPDES) covers all exist-
ing and future discharges to both surface waters and groundwater in the
State. DEC issues SPDES perm~for periods up to five years, subject
to renewal, specifying effluent limitations and standards, compliance
schedules and required monitoring. Discharges cannot contravene estab-
lished federally approved state water quality standards. These standards
are es tab 1 i shed on the bas is of "best" uses of waters wi th respect to
allowable discharges, and are reviewed every three years. Where water
quality is at the limits, in "water quality Hmiting segments" of classi-
fied streams, new discharges must provide a greater degree of treatment.
-176-
The SPDES permits will ensure that any DCS-related development in New York
State will not contravene state water quality standards.
. Stream Protection - Conservation laws covering the use and protection of
waters date back to 1911. These laws, as amended, are now consolidated
as Article 15, Title 5 of the Environmental Conservation Law, generally
known as the "Stream Protecti on Law." The Stream Protecti on Law regul ates
activities affecting the beds and banks of protected high quality streams,
excavation and filling in navigable waters, and construction of certain
dams and mocks. It requires removal, replacement or repair of illegal or
unsafe structures, fills or excavations. The permit system is designed
to minimize environmental damage to protected streams, protect water
rights of landowners, protect navigable waters and to ensure safety to
the public from existing dams, docks and piers.
DCS-related activity in New York State could be affected by the stream
protection law. Any excavation or filling in the state's navigable waters
or in protected streams would be subject to a permit. The erection,
reconstruction or repair of a dock, pier, or wharf would also be subject
to a state permit, except in the Port of New York and the Town of Hempstead,
which are exempted from this portion of the law, and where local regulatory
requirements would apply.
. Tidal and Freshwater Wetlands - Public awareness of the special value and
sensitivity of wetlands has led to enactment of two state protective pro-
grams, a tidal wetlands law in 1973 (ECL Article 25) and a freshwater wet-
lands law in 1975 (ECL Article 24). The legislative intents of the two
laws are similar, designating wetlands as areas where growth should not
occur, although not absolutely prohibiting all development.
The regulations for tidal wetlands establish land use regulations for
different wetlands categories, including development restrictions on new,
regulated activities. Land use guidelines are incorporated for different
uses. Permits can only be issued if the applicant can establish that
the proposed activity is compatible with the policy of the law and the
regulations. An applicant for a proposed activity defined as incompatible
must overcome the burden of this presumption and demonstrate that the
activity will be compatible with the area involved and with the preserva-
tion, protection and enhancement of the present and potential values of
tidal wetlands.
Freshwater wetlands are now protected by an interim permit program that
will remain in effect until inventories of the wetlands are completed.
However, administration of the freshwater wetlands law may be delegated
to local governments meeting State standards.
The tidal and freshwater wetlands laws will provide adequate protection
for the state's wetlands from any adverse effects of DCS-related activity.
. Cumulative Impact Reviews - Several of the DEC permit programs, including
the Stream Protection Law, have narrow and specific statutory authority
that does not take into account the complex environmental impacts that
may result from proposed developments. Section 3-0301 of the Environmental
-177-
Conservation law remedies this situation by allowing DEC to examine the
collective and cumulative environmental impacts of proposed developments
that would not otherwise be taken into account during single purpose
program reviews. An application under any of DEC's permit programs
may be denied following a cumulative impact review if it is determined
that the proposed action may cause "irreparable and irretrievable damage
to the environment and the natural resources of the State of New York."
The potential impacts of cumulative impact reviews on development in New
York State could be quite large. However, these reviews have been used
sparingly -- appl ied only to large scale projects with regional or statewide
impacts. Most projects so reviewed have been in largely rural areas of
the State.
. State Environmental Quality Review Act (SEQR) - Article 8 of the Environ-
mental Conservation law (ECl) requires the preparation of environmental
impact statements on actions that may have a significant effect on the
environment. The purpose of SEQRA, passed by the State legislature in
1975, is to incorporate environmental factors into the existing planning
and decision-making processes of the State, regional, and local agencies
at the earliest possible time. SEQRA also specifies that a balance of
social, economic and environmental factors is to be incorporated in the
planning and decision-making processes of State, regional and local agencies.
A recently enacted amendment to the Act provides for a phased implemen-
tation. Presently, all actions directly undertaken by State agencies are
covered by SEQR requirements. Major projects (those listed as Ty~e I
activities in the rules and regulations) undertaken by local governments,
including those funded by State government, were covered by the law as
of June 1, 1977; major projects that involve licensing and permitting
activities of State and local governments were covered as of September 1,
1977. On September 1, 1978, the SEQRA process will be requi red for a 11
non-Type I activities which are undertaken by local governments or which
involve licensing or permitting by State and local governments.
State and local actions relating to OCS-related activity will be subject
to SEQRA requirements. This should help to ensure that OCS-related
activities in New York State will be carried out in an environmentally
sensitive manner.
e. Gaps in Existing State legislation - New York State possesses a wide
range of legislative authorities to deal with any OCS-related activity in
New York State. Existing legislation is adequate to ensure that such activity
would not violate air and water quality standards, and to protect certain
critical areas, particularly tidal and freshwater wetlands. These specific
programs, along with other programs addressed above, would ensure a thurough
environmental review of any proposed significant project requiring a permit
from the Department of Environmental Conservation. The provisions of the
State Environmental Quality Review Act should also ensure an adequate environ-
mental review of any significant project that requires permit approval or
other action by local agencies or other state agencies.
-178-
There is, nevertheless, a significant gap in state authority. The state has
little control over where DeS-related activity is located and little ability
to steer such development toward areas that would be desirable from environ-
mental, social and economic viewpoints. The energy facility siting laws
that exist do address these issues, but they are not applicable to oes-
related activity. Consideration should be given to broader state energy
facility siting legislation, with particular emphasis on pipeline siting
in New York State. Specifically, consideration should be given to expanding
Article VII of the Public Service Law to include oil pipeline siting respon-
sibility.
The development, approval and implementation of a coastal management program
for New York State should provide additional authority over coastal uses.
It would enable the state to take advantage of the Coastal Zone Management
Act's federal consistency provisions, giving the state a greater voice in
federal DeS-related decisions. Other aspects of the program, including
designation and management of areas of particular concern, designation of
priority uses for the coastal area, and development of a coastal energy
planning process should give state and local governments tools to influence
siting of DeS-related activities, and to encourage the location of such
activities in areas that are most desirable from environmental, economic
and social standpoints.