A STUDY OF THE ECONOMIC IMPACTS of Navigability to Dare County, the Surrounding Region, and the state of

FINAL REPORT | May 2014

Photo Credits: NC Department of Commerce & Outerbanks.com

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STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

EXECUTIVE SUMMARY

The objective of this study was to examine the economic impacts of Oregon Inlet navigability to Dare County, the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), and the state of North Carolina. The study was completed by Moffatt & Nichol who was responsible for overall project management, interview/questionnaire coordination, and compilation of the final report. Moffatt & Nichol was supported by Dr. Chris Dumas (UNCW), Dr. John Whitehead (Appalachian State), and Dr. Craig Landry (ECU) who completed all the economic impact analysis. This study involved a significant literature review and data collection effort, on-site and telephone interviews with individuals knowledgeable of inlet usage and related economic impacts, and detailed economic modeling and analyses. Various economic sectors were considered in the economic analyses including:

 Commercial Fishing  Seafood Packing/Processing  Boat Building and Support Services  Recreational Fishing (Charter and Private) and Tourism  Tournament Fishing  Offshore Drilling  Offshore Wind Energy  Soundside Flooding

For each economic sector listed above (except soundside flooding), several measures of economic impacts were calculated:

 Employment  Economic output / business activity  Wages/salaries/sole proprietor income/partnership income  Dividend, rent, and interest income  Government tax revenues

For each of the economic impact measures listed above, impacts are sub-divided into several sub-categories:

 Direct Impacts (the direct impacts of the activity itself) – listed in report tables  Indirect Impacts (the impacts associated with business activities supporting the direct activity) – not listed in report tables  Induced Impacts (impacts associated with additional household spending by employees and business owners who receive additional wages and profits due to the direct and indirect impacts) - not listed in report tables  Total Impacts (the total of the direct, indirect, and induced impacts) - listed in report tables

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Together, the indirect and induced impacts are known as ―economic multiplier effects‖. Multiplier effects track the ―trickle down‖ effect of direct impact activities in the regional economy. These economic impacts were calculated using the widely accepted IMPLAN model utilizing results from the field interviews and published data.

To avoid potential confusion about the report analysis and findings it is prudent to discuss the difference between economic impacts versus economic benefits. The term ―economic impacts‖ refers to changes in economic activity in a specified geographic area. For example, if a change in the economy causes sales to increase by $100 in Dare County, that is an economic impact. However, the increase in sales does not measure the net gain to the economy. All relevant costs must be subtracted from the sales before we arrive at the net gain. The term ―economic benefit‖ refers to net economic gains. Economic benefits can be measured using the concepts of consumer surplus and producer surplus; however, such measurements involve a more detailed analysis and require more data. As is typical for regional economic studies, this report presents primarily economic impacts, not economic benefits.

Economic impacts can be positive or negative. For example, an increase in sales is a positive economic impact, and a decrease in sales is a negative economic impact. Economic impacts that are positive at one geographic scale (e.g., at the county level) may be cancelled out by negative economic impacts at larger geographic scales. For example, if sales were to increase by $100 in Dare County and to decrease by $100 in Carteret County, then there is a positive economic impact in Dare County and a negative economic impact in Carteret County. However, at the state level, the two impacts would cancel out, leaving a net economic impact of zero at the state level. Similarly, for employment, if Dare County gains 100 jobs and Carteret County loses 100 jobs, there is a positive economic impact in Dare and an negative economic impact in Carteret, but no net economic impact in jobs at the state level. Similarly, but at an even larger geographic scale, if sales were to increase by $100 in North Carolina and to decrease by $100 in Virginia, there is a positive economic impact in NC and a negative economic impact in VA, but no net economic impact at the national level. Economic impacts are reported at three geographic scales—county, region, and state—in this report to capture any ―cancelling out‖ of economic impacts that occur at the county and regional levels.

All of the economic measures mentioned were calculated for three different inlet condition scenarios (for the five main study sectors of commercial fishing, seafood packing & processing, boat building & support services, recreational fishing & tourism, and tournament fishing) as decided on by the project team members and the Dare County stakeholders based on historical USACE survey data of the inlet:

(1) Recent Conditions – assumes a depth of 6 feet or greater in the navigation channel only 40% of the time (based on an average over the last 3 years) (2) Fully Open – assumes a depth of 14 feet or greater 85-100% of the time (14 feet is the current federally authorized depth for the navigation channel) (3) Essentially Closed – assumes a depth of 6 feet or greater only 5% of the time.

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Economic measures for offshore drilling and offshore wind were only calculated for fully open conditions since uncertain recent conditions or essentially closed conditions would preclude any offshore energy development from using Oregon Inlet.

The reason for these separate analysis is that it is important to not only note the current economic impact that Oregon Inlet brings to Dare County, the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), and the state of North Carolina but also the potential economic impact it could bring if the inlet were to be fully maintained to its authorized depth or the potential economic impact that could be lost if the channel were not maintained.

Commercial Fishing

Oregon Inlet is considered one of the most commercially vital inlets along coastal North Carolina with fishermen from the communities of Wanchese, Manteo, Manns Harbor, and Stumpy Point in Dare County and communities in other coastal counties (e.g. Hyde, Pamlico) using the inlet. The commercial fishing industry has seen a decline in the region over the past 30-40 years due to several factors, which includes the declining condition of Oregon Inlet. It was noted that in the 1960s there were approximately 40-50 different commercial seafood businesses in Dare County. However, presently there are approximately only 15-20 in Dare County. Of these businesses, most landings are handled by the 4-5 largest dealers.

Present day commercial boats are significantly larger than those used historically. Due to shallow and dangerous inlet conditions, fewer fishermen choose to operate through Oregon Inlet. Potential trips are frequently lost or shortened due to dangerous inlet conditions, resulting in reduced catch. It is important to also note that current Oregon Inlet conditions have caused many smaller commercial drop net boats drafting 4-6 ft to use unmarked and unlighted narrow spans bordered by concrete pillars, outside of the navigation span at the Bonner Bridge, in order to traverse Oregon Inlet. This represents a major safety concern and exposes these users and their equipment to extreme risk levels. Also, shallow draft conditions force commercial boats to lighten tonnage so that they might be able to pass through the inlet with less chance of grounding the boat or hitting the bridge. The few remaining commercial fishing boats that are now based out of Oregon Inlet must sometimes offload their landings in Virginia due to current inlet conditions and safety concerns of traveling the inlet under loaded conditions. If the navigability of Oregon Inlet is not maintained, the field interview results indicate that the remaining few commercial fishing vessels would choose to remain in the fishing business but would relocate their fishing operations to other ports, most likely located in southern North Carolina or Virginia.

Recent Conditions Oregon Inlet dependent commercial fishing currently provides a total annual economic impact of 604 jobs and $25.0 million to Dare County, 640 jobs and $26.2 million to the surrounding region (including Dare County), and 748 jobs and $45.7 million to the state of North Carolina (including Dare County and the surrounding region).

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Fully Open Conditions Oregon Inlet dependent commercial fishing could potentially provide a total annual economic impact of 1,243 jobs and $67.0 million to Dare County, 1,323 jobs and $69.8 million to the surrounding region (including Dare County), and 947 jobs and $58.0 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $79.7 million in Dare County, $83.1 million in the surrounding region (including Dare County), and $69.0 million in state of North Carolina (including Dare County and the surrounding region).

Essentially Closed Conditions Oregon Inlet dependent commercial fishing may only provide a total annual economic impact of 88 jobs and $5.1 million to Dare County, 94 jobs and $5.3 million to the surrounding region (including Dare County), and 252 jobs and $15.4 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

Comparison to 2006 Study Results The value of landings varies from year to year, depending upon inlet conditions, economic conditions (including fish prices, and fuel prices, which effect landings by affecting the number of trips taken), the availability of imported seafood products, natural fish abundance in the sea, and fishing regulations. The value of ocean commercial fishery landings used in the 2006 report was $12.5 million, based on data from 1994 to 2005 (Due to an oversight, this number was incorrectly reported in the 2006 report which solely stated the impact of captain and crew labor income, excluding the impacts of goods and services purchased by the industry which should have been incorporated.). The value of Oregon Inlet-dependent landings used in the present (2014) study for the "Recent Inlet Conditions" scenario (years 2011-2013) is $10.5 million.

Seafood Packing and Processing

A number of support businesses have located in Dare County to service and supply the commercial fishing vessels. Once fish are landed, seafood packing and processing businesses prepare the catch for market. In fact, several commercial fishermen also have packing and processing operations within their businesses. All of these activities generate jobs, wages, and profits for local workers and business owners, as well as tax revenues to support local government services. Again, a recent trend is showing that some local businesses have also begun packing and processing businesses in Virginia so that the loaded vessels are not dependent on Oregon Inlet conditions. It is assumed that if Oregon Inlet is closed, Oregon Inlet dependent fishery landings would be lost.

Recent Conditions Oregon Inlet dependent seafood packing and processing currently provides a total annual economic impact of 149 jobs and $31.6 million to Dare County, 176 jobs and $35.2 million to the surrounding region (including Dare County), and 223 jobs and $42.7 million to the state of North Carolina (including Dare County and the surrounding region) through Oregon Inlet dependent landings.

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Fully Open Conditions Oregon Inlet dependent seafood packing and processing could potentially provide a total annual economic impact of 526 jobs and $112 million to Dare County, 624 jobs and $124.7 million to the surrounding region (including Dare County), and 437 jobs and $83.8 million to the state of North Carolina (including Dare County and the surrounding region) through Oregon Inlet dependent landings if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $129.1 million in Dare County, $143.8 million in the surrounding region (including Dare County), and $96.6 million in state of North Carolina (including Dare County and the surrounding region).

Essentially Closed Conditions Oregon Inlet dependent seafood packing and processing may only provide a total annual economic impact of 43 jobs and $9.0 million to Dare County, 50 jobs and $10.1 million to the surrounding region (including Dare County), and 143 jobs and $27.4 million to the state of North Carolina (including Dare County and the surrounding region) through Oregon Inlet dependent landings if the inlet were to be essentially closed.

Comparison to 2006 Study Results The value of Oregon Inlet-dependent seafood processing and packing depends on the level of Oregon Inlet-dependent commercial fishery landings. For example, the direct impacts of seafood processing and packing in the 2006 report were $25,000,000, based on commercial fishery landings of $12,500,000. In 2014, the direct impacts of seafood processing and packing were $21,678,000, based on commercial fishery landings of $10,500,000. The number of jobs supported per dollar of sales by the Seafood Processing and Packing industry in 2014 is lower than the number of jobs supported per dollar of sales in 2006 possibly due to improvements in production efficiency, increases in sales dollars received per pound of seafood processed, or change in the mix of workers from a large number of part time workers to fewer full time workers.

Boat Building and Support Services

The boat building business has a significant impact on the Dare County economy. The 15 boat builders located in Dare County represent a substantial portion of the 47 manufacturing businesses in the county (NCDC, 2014), directly employing 274 workers in 2012, who earned $10.6 million in wages. Boat building accounted for approximately 274 of the 480 manufacturing jobs in Dare county in 2013 (NC-EDIS, 2014). Boat building jobs are relatively high-paying, with an average weekly wage of $744 in 2012, compared to the county average weekly wage for private industry of $517 (NC-EDIS 2014, NCDC 2014).

This region boasts the birthplace of ―Carolina Style‖ boat building, a style which originated to withstand the incomparable Oregon Inlet waters and rough seas offshore of Bodie and Pea Islands. Local boat builders are directly dependent on Oregon Inlet, as the valuable reputation of the boats for strength and durability is maintained by continuous research and testing in the uniquely rough waters offshore. Based on the field interviews, if Oregon Inlet were to close,

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT these businesses would close as well or relocate to places like South Carolina, Florida, and Mexico.

Recent Conditions Oregon Inlet dependent boat building and support services currently provide a total annual economic impact of 532 jobs and $94.6 million to Dare County, 588 jobs and $99.6 million to the surrounding region (including Dare County), and 786 jobs and $134.7 million to the state of North Carolina (including Dare County and the surrounding region).

Fully Open Conditions Oregon Inlet dependent boat building and support services could potentially provide a total annual economic impact of 887 jobs and $157.6 million to Dare County, 979 jobs and $166.1 million to the surrounding region (including Dare County), and 1,048 jobs and $179.7 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $198.7 million in Dare County, $209.3 million in the surrounding region (including Dare County), and $226.5 million in state of North Carolina (including Dare County and the surrounding region).

Essentially Closed Conditions Oregon Inlet dependent boat building and support services may only provide a total annual economic impact of 109 jobs and $19.4 million to Dare County, 121 jobs and $20.4 million to the surrounding region (including Dare County), and 286 jobs and $49.1 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

Comparison to 2006 Study Results In the 2006 study, we assumed $75 million in Dare county boat builder sales under baseline (2004-2005) inlet conditions. In 2014, Dare county boat builder sales are depressed for two reasons: a bad economy in recent years (2011-2013) relative to 2004-2005, and bad inlet conditions in recent years (2011-2013). The value of Dare county boat builder sales under baseline (recent inlet) conditions used in the 2014 study is $59.5 million.

Recreational Fishing and Tourism

The area offshore of the northern is considered one of the prime sportfishing regions along the East Coast due to its close proximity to the Gulf Stream and extended seasons of abundant fishing opportunities (e.g. , tuna). The recreational sport fishery is vast and varied, including large ―headboat‖ recreational fishing vessels, smaller ―for-hire‖ charter fishing vessels, and private fishing boats.

A significant number of jobs in the tourism industry are related to sport fishing, which is dependent on the inlet for access to the ocean fishing grounds which contain the fish species prized by sport fishermen.

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Recent Conditions Oregon Inlet dependent recreational fishing and tourism currently provide a total annual economic impact of 1,997 jobs and $247.7 million to Dare County, 2,157 jobs and $257.5 million to the surrounding region (including Dare County), and 2,530 jobs and $318.3 million to the state of North Carolina (including Dare County and the surrounding region).

Fully Open Conditions Oregon Inlet dependent recreational fishing and tourism could potentially provide a total annual economic impact of 2,397 jobs and $297.2 million to Dare County, 2,588 jobs and $309.0 million to the surrounding region (including Dare County), and 2,889 jobs and $362.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. In addition to these impacts, a fully open inlet would support an additional $1.3 million in consumer surplus per year. If economic conditions improved to levels seen in 2005- 2006, the total annual economic impact could reach up to $520.6 million in Dare County, $541.2 million in the surrounding region (including Dare County), and $635.5 million in state of North Carolina (including Dare County and the surrounding region).

Essentially Closed Conditions Oregon Inlet dependent recreational fishing and tourism may only provide a total annual economic impact of 429 jobs and $55.6 million to Dare County, 465 jobs and $57.8 million to the surrounding region (including Dare County), and 1,550 jobs and $197.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed. In addition to these impacts, an essentially closed inlet would produce a loss of $25.7 million in consumer surplus per year.

Comparison to 2006 Study Results In the 2006 study, we assumed 35,739 charter trips per year and 539,890 private boat trips per year. In the 2014 study, we assume 93,000 charter trips per year (more than the 2006 study) and 169,000 private trips per year (less than the 2006 study). The difference in trip numbers is a result of a change in boating trends from 2006 to 2014 as well as a change in the NMFS data weighting scheme to convert its survey sample data to estimates of total trips. The expenditures per charter trip are higher for restaurants, groceries and boat fuel in 2014, compared to 2006. Expenditures per private boat trip are smaller for auto gasoline, restaurants and groceries, but larger for boat fuel, in 2014, compared to 2006. Other expenditures per trip are similar between 2006 and 2014, for both charter and private boat trips.

Tournament Fishing

In addition to general recreational fishing, sportfishing tournaments are important to the Oregon Inlet region. The Outer Banks is called "The Billfish Capital of the World," and for good reason. Hundreds of blue marlin, white marlin and sailfish are caught and released in our waters every year. The billfish season is long, with the peak for blue marlin in June and white marlin and sailfish most plentiful in August and September. All are caught consistently from late spring to early fall. Another big draw are yellowfin tuna, which are caught year-round. (Source: https://www.outerbanks.org/outerbanks-fishing/). Approximately 5 known tournaments take

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT place annually in the County originating mainly at Pirates Cove marina, in Manteo (down from 9 in 2006). In summary, more than 173 boats annually are expected to participate in sportfishing tournaments dependent on passage through Oregon Inlet. These tournaments draw significant economic impacts to the County ranging from expenditures on fishing gear, lodging, food, retail to custom boat sales, marine maintenance, and/or boat storage. These recreational fishing activities generate additional economic impacts for the region, in particular for the tourism industry.

Recent Conditions Oregon Inlet dependent tournament fishing currently provides a total annual economic impact of 36 jobs and $4.6 million to Dare County, 41 jobs and $4.8 million to the surrounding region (including Dare County), and 60 jobs and $7.0 million to the state of North Carolina (including Dare County and the surrounding region).

Fully Open Conditions Oregon Inlet dependent tournament fishing could potentially provide a total annual economic impact of 67 jobs and $8.4 million to Dare County, 76 jobs and $8.9 million to the surrounding region (including Dare County), and 76 jobs and $8.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $24.6 million in Dare County, $25.8 million in the surrounding region (including Dare County), and $25.5 million in state of North Carolina (including Dare County and the surrounding region).

Essentially Closed Conditions Oregon Inlet dependent tournament fishing may only provide a total annual economic impact of 1 job and $85.3 thousand to Dare County, 1 job and $89.7 thousand to the surrounding region (including Dare County), and 42 jobs and $4.9 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

Comparison to 2006 Study Results The 2006 study listed 9 fishing tournaments in Dare County. The tournaments considered in the 2006 study supported a total of 970 boat-days and $14.4 million in direct impacts for sales/output within Dare County. The 2014 study is based on the 4 tournaments from the 2006 study that have a solid track record of occurring over multiple years plus an additional tournament that is statewide but that includes participants who use Oregon Inlet, for a total of 5 tournaments. The 5 tournaments considered in the 2014 study supported a total of 333 boat- days under fully open inlet conditions and $5.2 million in direct impacts for sales/output within Dare County.

Offshore Drilling

Although there are currently no active leases in the Mid-Atlantic Region of the OCS, oil or natural gas drilling might occur in the future. An estimated 0.95 billion barrels of oil and 9.72 trillion cubic feet of natural gas may be economically recoverable in the Mid-Atlantic Region. The location of Oregon Inlet could potentially lend itself to be useful should offshore drilling be

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT developed in the future. While the shallow draft navigation channel limits the types and sizes of ocean vessels that can safely traverse the inlet, it could be useful for crew and maintenance boats which need to travel back and forth between land and ocean facilities. Based on conversations with industry experts, the authorized depth of the channel would have to be significantly deepened to allow construction equipment and supply vessels. However, operation and maintenance of these facilities would be expected to increase employment, economic output / business activity, and government revenues collected in Dare County and perhaps nearby counties hosting commuting employees.

Offshore drilling could potentially provide a total annual economic impact of 3,983 jobs and $203.0 million to Dare County, 4,102 jobs and $210.2 million to the surrounding region (including Dare County), and 4,990 jobs and $348.7 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. Impacts were only calculated for a fully open scenario since the recent conditions of Oregon Inlet or an essentially closed inlet would preclude any use of the inlet for offshore drilling purposes. Please note that these impact estimates are based on limited data and are highly speculative.

Offshore Wind Energy

A study by the University of North Carolina (2009) finds that there is sufficient potential for offshore wind development in Federal waters off the coast of North Carolina. Examining wind potential, engineering and economic feasibility, as well as social, political, and environmental constraints, the study concludes that there are 190 BOEM lease blocks with wind power capacity in excess of 35%. Focusing on waters less than 50 m deep and within 50 miles of the coastline, there are more than 2800 square miles of potential development area off the North Carolina coast, a significant proportion of which is located adjacent to Dare and Currituck Counties.

In the wake of a series of North Carolina Department of Commerce stakeholder meetings in August 2010, five renewable energy firms expressed interest in obtaining commercial leases for wind energy projects (BOEM, 2013d). There is considerable interest in areas of the coast of Dare County, North Carolina (BOEM, 2013d). The location of Oregon Inlet could potentially lend itself to be useful should offshore wind energy be developed in the future given the high wind capacity potential offshore of the inlet. While the shallow draft navigation channel limits the types and sizes of ocean vessels that can safely traverse the inlet, it could be useful for crew and maintenance boats which need to travel back and forth between land and ocean facilities. Operation and maintenance would be expected to increase employment, economic output / business activity, and government revenues collected in Dare County and perhaps nearby counties hosting commuting employees.

Offshore wind could potentially provide a total annual economic impact of 295 jobs and $15.0 million to Dare County, 303 jobs and $15.5 million to the surrounding region (including Dare County), and 369 jobs and $25.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. Impacts were only calculated for a fully open scenario since the recent conditions of Oregon Inlet or an essentially closed inlet would preclude any use of the inlet for offshore wind development purposes. Please note that these impact estimates are based on limited data and are highly speculative.

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Soundside Flooding

In recent years there have been some anecdotal observations of elevated water levels of 6 – 10 inches within the sounds behind Oregon Inlet. One theory as to the cause of the elevated water levels is that Oregon Inlet shoaling is not allowing adequate water exchange, especially on falling tides. It is posited that water has not been able to flush out of the inlet in a timely manner, leaving the soundside coastline of portions of the Outer Banks and mainland Dare and other Counties susceptible to flooding, affecting waterfront property containing residential homes and commercial (agricultural) property.

Based on NOAA measurements at Oregon Inlet Marina, it appears that water levels at this station (on the soundside of Oregon Inlet) have seen an average increase in water levels since 2010 of approximately 0.075 m (~3 inches). This period of elevated water levels is similar to one that occurred in the late 1990s. In both cases, USACE records indicate reduced dredging during these time periods as compared to the time period in between which showed increased dredging and lower water levels. It is possible that these increased water levels may be a result of a combination of reduced dredging and other meteorological forcing functions.

Based on previous studies by Bin et al. 2007, a fully navigable inlet could save between $55.5 million and $106 million of lost property value in Dare and Bertie Counties (only ones studied) due to elevated water levels between 3 in and 10 in, respectively.

Overall Summary of Economic Impacts

The economic impact of Oregon Inlet to Dare County is very significant and far outweighs the costs necessary to keep the inlet passable through dredging. In fact, the annual economic impact to the Federal Government alone greatly exceeds the recent and historical annual expenditures for dredging. The following tables show the overall total annual economic impact of Oregon Inlet to Dare County, the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), and the state of North Carolina, given the three different inlet condition scenarios and five main study sectors (commercial fishing, seafood packing & processing, boat building & support services, recreational fishing & tourism, and tournament fishing).

Recent Conditions Scenario Summary Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Locale Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Total Direct Effect $236,921,456 1,826 $65,397,435 $28,829,456 ------Dare County Total Effect $403,490,444 3,319 $120,680,591 $81,874,461 $16,510,699 $22,235,073 Total Direct Effect Region $236,921,456 1,877 $65,464,102 $28,349,810 ------Total Effect (Incl. Dare Co.) $423,321,308 3,601 $128,623,027 $87,147,691 $18,869,801 $23,940,286 Total Direct Effect State of NC $237,094,330 1,949 $65,068,455 $28,679,967 ------Total Effect (Incl. Dare Co.) $548,412,578 4,348 $178,077,340 $109,174,056 $23,243,574 $33,723,522 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

May 2014 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Fully Open Scenario Summary Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Locale Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Total Direct Effect $389,230,080 2,879 $93,925,951 $41,590,156 ------Dare County Total Effect $642,176,331 5,120 $177,848,044 $122,125,581 $24,550,271 $33,215,776 Total Direct Effect Region $389,230,080 2,952 $96,056,812 $40,318,466 ------Total Effect (Incl. Dare Co.) $678,444,866 5,590 $193,425,775 $130,972,130 $28,346,500 $36,435,323 Total Direct Effect State of NC $308,143,490 2,385 $79,096,948 $34,992,516 ------Total Effect (Incl. Dare Co.) $693,048,179 5,397 $221,611,915 $136,249,886 $28,983,477 $42,194,327 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $952.7 million in Dare County, $1.0 billion in the surrounding region (including Dare County), and $1.1 billion in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Essentially Closed Scenario Summary Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Locale Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Total Direct Effect $55,392,213 367 $12,162,678 $6,175,712 ------Dare County Total Effect $89,251,037 670 $23,452,069 $16,922,579 $3,430,440 $4,607,262 Total Direct Effect Region $55,392,213 377 $12,218,813 $6,106,514 ------Total Effect (Incl. Dare Co.) $93,698,385 731 $25,237,241 $18,122,705 $3,934,663 $4,992,868 Total Direct Effect State of NC $135,851,370 991 $33,629,789 $15,838,904 ------Total Effect (Incl. Dare Co.) $294,635,106 2,273 $93,391,284 $58,363,002 $12,588,360 $17,925,814 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The following tables show both the potential additional annual economic impacts that may be realized if the inlet were maintained to fully open conditions and the potential annual economic impacts that may be lost if the inlet were not maintained and became essentially closed for the five main study sectors. The comparison, in both cases, was made to the recent conditions scenario.

Potential Gained Impacts - Fully Open Scenario Compared to Recent Conditions Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Locale Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Total Direct Effect $152,308,624 1,053 $28,528,516 $12,760,700 ------Dare County Total Effect $238,685,887 1,802 $57,167,453 $40,251,120 $8,039,572 $10,980,703 Total Direct Effect Region $152,308,624 1,075 $30,592,710 $11,968,656 ------Total Effect (Incl. Dare Co.) $255,123,558 1,989 $64,802,748 $43,824,439 $9,476,699 $12,495,037 Total Direct Effect State of NC $71,049,160 436 $14,028,493 $6,312,549 ------Total Effect (Incl. Dare Co.) $144,635,601 1,050 $43,534,575 $27,075,830 $5,739,903 $8,470,805 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the potential additional annual economic impacts that may be realized could reach up to $549.2 million in Dare County, $580.0 million in the surrounding region (including Dare County), and $504.8 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

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Potential Lost Impacts - Essentially Closed Scenario Compared to Recent Conditions Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Locale Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Total Direct Effect -$181,529,243 -1,459 -$53,234,757 -$22,653,744 ------Dare County Total Effect -$314,239,407 -2,648 -$97,228,522 -$64,951,882 -$13,080,259 -$17,627,811 Total Direct Effect Region -$181,529,243 -1,501 -$53,245,289 -$22,243,296 ------Total Effect (Incl. Dare Co.) -$329,622,923 -2,870 -$103,385,786 -$69,024,986 -$14,935,138 -$18,947,418 Total Direct Effect State of NC -$101,242,960 -958 -$31,438,666 -$12,841,063 ------Total Effect (Incl. Dare Co.) -$253,777,472 -2,075 -$84,686,056 -$50,811,054 -$10,655,214 -$15,797,708 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The five main study sectors currently provide a total annual economic impact of 3,319 jobs and $403.5 million to Dare County, 3,601 jobs and $423.3 million to the surrounding region (including Dare County), and 4,348 jobs and $548.4 million to the state of North Carolina (including Dare County and the surrounding region).

They could potentially provide a total annual economic impact of 5,120 jobs and $642.2 million to Dare County, 5,590 jobs and $678.4 million to the surrounding region (including Dare County), and 5,397 jobs and $693.0 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $952.7 million in Dare County, $1.0 billion in the surrounding region (including Dare County), and $1.1 billion in state of North Carolina (including Dare County and the surrounding region) for fully open conditions. Local interests feel that the impacts may be even higher (over and above what could be modeled/justified with historical conditions) once industries understand that Oregon Inlet will be fully open and maintained and its reputation of uncertainty is changed. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Conversely the economic sectors may only provide a total annual economic impact of 670 jobs and $89.3 million to Dare County, 731 jobs and $93.7 million to the surrounding region (including Dare County), and 2,273 jobs and $294.6 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

In addition to these sectors, the inlet could be a valuable resource to the offshore energy industry (wind and drilling) if it were fully navigable. Offshore drilling could potentially provide a total annual economic impact of 3,983 jobs and $203.0 million to Dare County, 4,102 jobs and $210.2 million to the surrounding region (including Dare County), and 4,990 jobs and $348.7 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. However, please note that the impact estimates for this sector are based on limited data and are highly speculative.

Offshore wind could potentially provide a total annual economic impact of 295 jobs and $15.0 million to Dare County, 303 jobs and $15.5 million to the surrounding region

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(including Dare County), and 369 jobs and $25.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. However, please note that the impact estimates for this sector are based on limited data and are highly speculative.

Based on previous studies, a fully navigable inlet could save between $55.5 million and $106 million of lost property value in Dare and Bertie Counties (only ones studied) due to elevated water levels between 3 in and 10 in, respectively.

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TABLE OF CONTENTS

I. INTRODUCTION & STUDY OVERVIEW...... 1 A. INTRODUCTION ...... 1 B. STUDY AREA & ECONOMIC SETTING ...... 1 C. STUDY OBJECTIVE ...... 3

II. STUDY METHODOLOGY ...... 5 A. DATA COLLECTION & LITERATURE REVIEW ...... 5 B. FIELD SURVEYS & INTERVIEWS ...... 5 C. ECONOMIC ANALYSIS METHODS ...... 6

III. PREVIOUS ECONOMIC STUDIES ...... 11 A. PREVIOUS STUDIES RELATED TO OREGON INLET ...... 11 1. USACE Studies ...... 11 2. Dare County Economic Commission (1985) ...... 11 3. The Horizon Planning Group (1995) ...... 11 4. Moffatt & Nichol and Dr. Chris Dumas, Dr. John Whitehead, and Dr. Woody Hall (2006) ...... 12 B. OTHER/REGIONAL ECONOMIC STUDIES ...... 12 1. Economic Study of Wanchese Seafood Industrial Park (2005) ...... 12 2. Economic Study of Wanchese Seafood Industrial Park (2011) ...... 13 3. Economic Study of ‘s Cove Big Game Tournaments (1999) ...... 13 4. Economic Study of Offshore Recreational Fishing Region (2002) ...... 14 5. North Carolina Sea Grant Study (2009)...... 14 C. TOURISM STUDIES ...... 15 1. Outer Banks Visitors Bureau ―Wave‖ Studies (2006) ...... 15 2. Dare County Transient Boating Study (1995) ...... 16 D. SUMMARY ...... 16

IV. COMMERICIAL FISHING ...... 17 A. COMMERCIAL FISHING SURVEYS & INTERVIEWS ...... 17 B. ECONOMIC MODELING & RESULTS – COMMERCIAL FISHING...... 18 1. IMPLAN Modeling Analysis ...... 24

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a) Dare County Economic Impacts ...... 24 b) Regional Economic Impacts ...... 27 c) Statewide Economic Impacts ...... 29 2. Economic Impacts Summary ...... 34 3. Comparison to 2006 Economic Study (M&N, 2006) ...... 37

V. SEAFOOD PACKING & PROCESSING ...... 39 A. SEAFOOD PACKING AND PROCESSING SURVEYS & INTERVIEWS ..... 39 B. ECONOMIC MODELING & RESULTS – SEAFOOD PACKING & PROCESSING ...... 39 1. IMPLAN Modeling Analysis ...... 41 a) Dare County Economic Impacts ...... 42 b) Regional Economic Impacts ...... 45 c) Statewide Economic Impacts ...... 48 2. Economic Impacts Summary ...... 51 3. Comparison to 2006 Economic Study (M&N, 2006) ...... 54

VI. BOAT BUILDING & SUPPORT SERVICES ...... 57 A. BOAT BUILDING AND SUPPORT SERVICE SURVEYS & INTERVIEWS . 57 B. ECONOMIC MODELING & RESULTS – BOAT BUILDING & SUPPORT SERVICES ...... 58 1. IMPLAN Modeling Analysis ...... 59 a) Dare County Economic Impacts ...... 59 b) Regional Economic Impacts ...... 62 c) Statewide Economic Impacts ...... 64 2. Economic Impacts Summary ...... 68 3. Comparison to 2006 Economic Study (M&N, 2006) ...... 71

VII. RECREATIONAL FISHING & TOURISM ...... 73 A. RECREATIONAL FISHING AND TOURISM SURVEYS & INTERVIEWS .. 73 B. ECONOMIC MODELING & RESULTS – RECREATIONAL FISHING & TOURISM...... 74 1. IMPLAN Modeling Analysis ...... 78 a) Dare County Economic Impacts ...... 78 b) Regional Economic Impacts ...... 81

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c) Statewide Economic Impacts ...... 83 2. Economic Impacts Summary ...... 87 3. Consumer Surplus ...... 89 4. Comparison to 2006 Economic Study (M&N, 2006) ...... 92

VIII. TOURNAMENT FISHING ...... 93 A. TOURNAMENT FISHING SURVEYS & INTERVIEWS ...... 93 B. ECONOMIC MODELING & RESULTS – TOURNAMENT FISHING ...... 93 1. IMPLAN Model Analysis ...... 98 a) Dare County Economic Impacts ...... 98 b) Regional Economic Impacts ...... 101 c) Statewide Economic Impacts ...... 104 2. Economic Impacts Summary ...... 107 3. Comparison to 2006 Economic Study (M&N, 2006) ...... 110

IX. OFFSHORE DRILLING ...... 113 A. OFFSHORE DRILLING SURVEYS & INTERVIEWS ...... 114 B. ECONOMIC MODELING & RESULTS – OFFSHORE DRILLING ...... 115 1. IMPLAN Modeling Analysis ...... 117 a) Dare County Economic Impacts - Oregon Inlet Fully Open Conditions ...... 118 b) Regional Economic Impacts - Oregon Inlet Fully Open Conditions …………………………………………………………………..118 c) Statewide Economic Impacts - Oregon Inlet Fully Open Conditions …………………………………………………………………..119

X. OFFSHORE WIND ENERGY ...... 121 A. OFFSHORE WIND ENERGY SURVEYS & INTERVIEWS ...... 122 B. ECONOMIC MODELING & RESULTS – OFFSHORE WIND ENERGY ..... 123 1. IMPLAN Modeling Analysis ...... 125 a) Dare County Economic Impacts – Oregon Inlet Fully Open Conditions ...... 125 b) Regional Economic Impacts – Oregon Inlet Fully Open Conditions …………………………………………………………………..126

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c) Statewide Economic Impacts – Oregon Inlet Fully Open Conditions ...... 127

XI. SOUNDSIDE FLOODING ...... 129 A. SOUNDSIDE FLOODING SURVEYS & INTERVIEWS ...... 129 B. DATA COLLECTION AND LITERATURE REVIEW RESULTS – SOUNDSIDE FLOODING ...... 129

XII. STUDY FINDINGS...... 135

XIII. REFERENCES ...... 147

APPENDIX A Field Surveys & Interviews 1) Contacts 2) Questionnaires

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LIST OF FIGURES

Figure I-1. Location Map ...... 2 Figure IV-1. Nominal and Real (2010 dollars) Value of North Carolina Commercial Fishery Landings Dependent on Oregon Inlet, 1994-2012 ...... 21 Figure IX-1. Outer Continental Shelf Regions ...... 114 Figure X-1. The Estimated Spatial Distribution of Capacity Factor For A Typical 3-3.6 MW Wind Turbine (UNC, 2009) ...... 122 Figure XI-1. Interannual Variation Since 1990 8652587 Oregon Inlet Marina, North Carolina ...... 130 Figure XI-2. Location of Counties Analyzed for Property Impacts in Bin et al (2007) ...... 131 Figure XI-3. Example of Data Used in Bin et al. (2007) Property Value Study ...... 133

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LIST OF TABLES

Table II-1. Field Survey and Interview Summary ...... 6 Table III-1. 2006 Oregon Inlet Economic Study Summary ...... 12 Table III-2. Statistics from Economic Study of Pirates Cove Big Game Tournaments (Ditton, 2000) ...... 14 Table III-3. Outer Banks Visitor Profile Findings ...... 16 Table IV-1. Dare County Commercial Fishery Landings and Dockside (Ex-Vessel) Value, 1994- 2012 (NCDMF, 2013) ...... 18 Table IV-2. Ports with Oregon Inlet-Dependent Landings ...... 19 Table IV-3. Oregon Inlet-Dependent Commercial Fishing Landings and Dockside Value, 1994- 2012 (Bianchi, 2014) ...... 20 Table IV-4. Ocean Fishing Participation by NC Ocean Commercial Fishermen (NCDMF, 2009) ...... 22 Table IV-5. Vessel Characteristics for NC Ocean Commercial Fishing Vessels (NCDMF, 2009) ...... 23 Table IV-6. Top Target Species of Commercial Fishing Questionnaire Respondents ...... 23 Table IV-7. Most Commonly Caught Fish Species In Ocean North of in 2012 (All Ports) (NCDMF, 2013) ...... 24 Table IV-8. Annual Economic Impacts of Commercial Fishery in Dare County, Oregon Inlet Recent Conditions ...... 25 Table IV-9. Annual Economic Impacts of Commercial Fishery in Dare County, Oregon Inlet Fully Open Conditions ...... 26 Table IV-10. Annual Economic Impacts of Commercial Fishery in Dare County, Oregon Inlet Essentially Closed Conditions ...... 27 Table IV-11. Annual Economic Impacts of Commercial Fishery in Oregon Inlet Region, Oregon Inlet Recent Conditions...... 28 Table IV-12. Annual Economic Impacts of Commercial Fishery in Oregon Inlet Region, Oregon Inlet Fully Open Conditions...... 28 Table IV-13. Annual Economic Impacts of Commercial Fishery in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions ...... 29 Table IV-14. Statewide Annual Economic Impacts of Commercial Fishery Using Oregon Inlet, Oregon Inlet Recent Conditions...... 30 Table IV-15. Statewide Annual Economic Impacts of Commercial Fishery Using Oregon Inlet, Oregon Inlet Fully Open Conditions...... 32

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Table IV-16. Statewide Annual Economic Impacts of Commercial Fishery that Had Been Using Oregon Inlet, Oregon Inlet Essentially Closed Conditions ...... 34 Table IV-17. Summary of Annual Oregon Inlet-Dependent Commercial Fishing Economic Impacts For Recent Conditions Scenario ...... 35 Table IV-18. Summary of Annual Oregon Inlet-Dependent Commercial Fishing Economic Impacts For Fully Open Scenario ...... 35 Table IV-19. Summary of Potentially Gained Annual Economic Impacts from Commercial Fishing for Oregon Inlet Fully Open Scenario ...... 36 Table IV-20. Summary of Annual Oregon Inlet-Dependent Commercial Fishing Economic Impacts For Essentially Closed Scenario ...... 36 Table IV-21. Summary of Potentially Lost Annual Economic Impacts from Commercial Fishing for Oregon Inlet Essentially Closed Scenario ...... 37 Table V-1. Average Annual Expenditures of North Carolina Seafood Dealers (2009) (NCDMF, 2010) ...... 40 Table V-2. Seafood Dealers Servicing Oregon Inlet-dependent Commercial Fishing Landings, 1992-2012 ...... 42 Table V-3. Annual Economic Impacts of Seafood Processing and Packing in Dare County, Oregon Inlet Recent Condition ...... 43 Table V-4. Annual Economic Impacts of Seafood Processing and Packing in Dare County, Oregon Inlet Fully Open Conditions...... 44 Table V-5. Annual Economic Impacts of Seafood Processing and Packing in Dare County, Oregon Inlet Essentially Closed Conditions ...... 45 Table V-6. Annual Economic Impacts of Seafood Processing and Packing in Oregon Inlet Region, Oregon Inlet Recent Conditions ...... 46 Table V-7. Annual Economic Impacts of Seafood Processing and Packing in Oregon Inlet Region, Oregon Inlet Fully Open Conditions ...... 47 Table V-8. Annual Economic Impacts of Seafood Processing and Packing in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions ...... 48 Table V-9. Statewide Annual Economic Impacts of Seafood Processing and Packing, Oregon Inlet Recent Conditions...... 49 Table V-10. Statewide Annual Economic Impacts of Seafood Processing and Packing, Oregon Inlet Fully Open Conditions...... 50 Table V-11. Statewide Annual Economic Impacts of Seafood Processing and Packing, Oregon Inlet Essentially Closed Conditions ...... 51 Table V-12. Summary of Annual Oregon Inlet-Dependent Seafood Packing/Processing Economic Impacts For Recent Conditions Scenario ...... 52 Table V-13. Summary of Annual Oregon Inlet-Dependent Seafood Packing/Processing Economic Impacts For Fully Open Scenario ...... 52

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Table V-14. Summary of Potentially Gained Annual Economic Impacts from Seafood Packing/Processing for Oregon Inlet Fully Open Scenario ...... 53 Table V-15. Summary of Annual Oregon Inlet-Dependent Seafood Packing/Processing Economic Impacts For Essentially Closed Scenario ...... 53 Table V-16. Summary of Potentially Lost Annual Economic Impacts from Seafood Packing/Processing for Oregon Inlet Essentially Closed Scenario ...... 54 Table VI-1. Boat Builders Located in Oregon Inlet Region, NC, 2014 ...... 57 Table VI-2. Annual Economic Impacts of Boat Building in Dare County, Oregon Inlet Recent Conditions ...... 60 Table VI-3. Annual Economic Impacts of Boat Building in Dare County, Oregon Inlet Fully Open Conditions ...... 60 Table VI-4. Annual Economic Impacts of Boat Building in Dare County, Oregon Inlet Essentially Closed Conditions ...... 62 Table VI-5. Annual Economic Impacts of Boat Building in Oregon Inlet Region, Oregon Inlet Recent Conditions ...... 63 Table VI-6. Annual Economic Impacts of Boat Building in Oregon Inlet Region, Oregon Inlet Fully Open Conditions ...... 63 Table VI-7. Annual Economic Impacts of Boat Building in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions ...... 64 Table VI-8. Statewide Annual Economic Impacts of Dare County Boat Building, Oregon Inlet Recent Conditions ...... 65 Table VI-9. Statewide Annual Economic Impacts of Dare County Boat Building, Oregon Inlet Fully Open Conditions ...... 66 Table VI-10. Statewide Annual Economic Impacts of Dare County Boat Building, Oregon Inlet Essentially Closed Conditions ...... 68 Table VI-11. Summary of Annual Oregon Inlet-Dependent Boat Building and Support Services Economic Impacts For Recent Conditions Scenario ...... 68 Table VI-12. Summary of Annual Oregon Inlet-Dependent Boat Building and Support Services Economic Impacts For Fully Open Scenario ...... 69 Table VI-13. Summary of Potentially Gained Annual Economic Impacts from Boat Building and Support Services for Oregon Inlet Fully Open Scenario ...... 70 Table VI-14. Summary of Annual Oregon Inlet-Dependent Boat Building and Support Services Economic Impacts For Essentially Closed Scenario ...... 70 Table VI-15. Summary of Potentially Lost Annual Economic Impacts from Boat Building and Support Services for Oregon Inlet Essentially Closed Scenario ...... 71 Table VII-1. North Carolina Resident and Non-Resident Fishing Trips (Angler Days) ...... 75

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Table VII-2. North Carolina Expenditures Per Angler, Per Fishing Day, Oregon Inlet Ocean Fishing Trips, 2012 ...... 77 Table VII-3. Annual Economic Impacts of For-Hire and Private Boat Fishing in Dare County, Oregon Inlet Recent Conditions...... 79 Table VII-4. Annual Economic Impacts of For-Hire and Private Boat Fishing in Dare County, Oregon Inlet Fully Open Conditions...... 79 Table VII-5. Annual Economic Impacts of For-Hire and Private Boat Fishing in Dare County, Oregon Inlet Essentially Closed Conditions ...... 80 Table VII-6. Annual Economic Impacts of For-Hire and Private Boat Fishing in Oregon Inlet Region, Oregon Inlet Recent Conditions ...... 81 Table VII-7. Annual Economic Impacts of For-Hire and Private Boat Fishing in Oregon Inlet Region, Oregon Inlet Fully Open Conditions ...... 82 Table VII-8. Annual Economic Impacts of For-Hire and Private Boat Fishing in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions ...... 83 Table VII-9. Statewide Annual Economic Impacts of For-Hire and Private Boat Fishing Using Oregon Inlet, Oregon Inlet Recent Conditions ...... 84 Table VII-10. Statewide Annual Economic Impacts of For-Hire and Private Boat Fishing Using Oregon Inlet, Oregon Inlet Fully Open Conditions ...... 85 Table VII-11. Statewide Annual Economic Impacts of For-Hire and Private Boat Fishing Using Oregon Inlet, Oregon Inlet Essentially Closed Conditions ...... 86 Table VII-12. Summary of Annual Oregon Inlet-Dependent Recreational Charter Fishing and Private Boating Economic Impacts For Recent Conditions Scenario ...... 87 Table VII-13. Summary of Annual Oregon Inlet-Dependent Recreational Charter Fishing and Private Boating Economic Impacts For Fully Open Scenario ...... 87 Table VII-14. Summary of Potentially Gained Annual Economic Impacts from Recreational Fishing and Tourism for Oregon Inlet Fully Open Scenario ...... 88 Table VII-15. Summary of Annual Oregon Inlet-Dependent Recreational Charter Fishing and Private Boating Economic Impacts For Essentially Closed Scenario ...... 88 Table VII-16. Summary of Potentially Lost Annual Economic Impacts from Recreational Fishing and Tourism for Oregon Inlet Essentially Closed Scenario...... 89 Table VII-17. Nested RUM Fishing Trip Demand Model ...... 91 Table VIII-1. Annual Fishing Tournaments Dependent on Oregon Inlet ...... 95 Table VIII-2. Dare County Tournament Fishing Fees and Expenditures, Recent Oregon Inlet Conditions ...... 96 Table VIII-3. Annual Economic Impacts of Tournament Fishing in Dare County, Oregon Inlet Recent Conditions ...... 99

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Table VIII-4. Annual Economic Impacts of Tournament Fishing in Dare County, Oregon Inlet Fully Open Conditions ...... 100 Table VIII-5. Annual Economic Impacts of Tournament Fishing in Dare County, Oregon Inlet Essentially Closed Conditions ...... 101 Table VIII-6. Annual Economic Impacts of Tournament Fishing in Oregon Inlet Region, Oregon Inlet Recent Conditions...... 102 Table VIII-7. Annual Economic Impacts of Tournament Fishing in Oregon Inlet Region, Oregon Inlet Fully Open Conditions...... 103 Table VIII-8. Annual Economic Impacts of Tournament Fishing in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions ...... 104 Table VIII-9. Statewide Annual Economic Impacts of Tournament Fishing Using Oregon Inlet, Oregon Inlet Recent Conditions...... 105 Table VIII-10. Statewide Annual Economic Impacts of Tournament Fishing Using Oregon Inlet, Oregon Inlet Fully Open Conditions...... 106 Table VIII-11. Statewide Annual Economic Impacts of Tournament Fishing Using Oregon Inlet, Oregon Inlet Essentially Closed Conditions ...... 107 Table VIII-12. Summary of Annual Oregon Inlet-Dependent Tournament Fishing Economic Impacts For Recent Conditions Scenario ...... 108 Table VIII-13. Summary of Annual Oregon Inlet-Dependent Tournament Fishing Economic Impacts For Fully Open Scenario ...... 108 Table VIII-14. Summary of Potentially Gained Annual Economic Impacts from Tournament Fishing for Oregon Inlet Fully Open Scenario ...... 109 Table VIII-15. Summary of Annual Oregon Inlet-Dependent Tournament Fishing Economic Impacts For Essentially Closed Scenario ...... 109 Table VIII-16. Summary of Potentially Lost Annual Economic Impacts from Tournament Fishing for Oregon Inlet Essentially Closed Scenario ...... 110 Table IX-1. May 2013 National Industry Specific Occupational Employment and Wage Estimates ...... 116 Table IX-2. Scenarios for Oil & Gas Development in Hatteras Bay ...... 117 Table IX-3. Annual Economic Impacts of Offshore Oil Development in Dare County - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions ...... 118 Table IX-4. Annual Economic Impacts of Offshore Oil Development in Oregon Inlet Region - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions ...... 119 Table IX-5. Statewide Annual Economic Impacts of Offshore Oil Development - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions ...... 120 Table X-1. May 2013 National Industry-Specific Occupational Employment and Wage Estimates ...... 124

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Table X-2. Scenarios for Offshore Wind Development in Hatteras Bay (3.6 MW turbines) .... 125 Table X-3. Annual Economic Impacts of Offshore Wind Development in Dare County - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions ...... 126 Table X-4. Annual Economic Impacts of Offshore Wind Development in the Oregon Inlet Region - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions 127 Table X-5. Statewide Annual Economic Impacts of Offshore Wind Development - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions ...... 127 Table XI-1. Summary of Sea Level (Water Level) Rise Scenarios ...... 131

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I. INTRODUCTION & STUDY OVERVIEW

A. INTRODUCTION This report was prepared for Dare County and details the final results of a study examining economic impacts of Oregon Inlet to the economy of Dare County, the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), and the state of North Carolina. This study was commissioned in December 2013, with the expectation that the economic findings could be used to assist lobbying efforts for inlet dredging on both state and national levels.

Dredging is vital to the maintenance of transportation routes through state waterways and for providing safe, reliable access to the Atlantic Ocean along the coast. Without the clearing of shoals from navigation channels by dredging, mariners would face serious problems in navigation along the North Carolina coast. Authorized shallow draft navigation channels in North Carolina include many inlets and inlet crossings (including Oregon Inlet), sound and river channels, the Atlantic (AIWW), and numerous small harbors. While the duty and cost of maintaining these shallow draft waterways has traditionally been undertaken by the United States Army Corps of Engineers (USACE) as part of the maintenance of federal channels, it is becoming apparent that the funding for such efforts is declining. In fact, in recent years, initial federal budgets have had little to no funding allotted to shallow draft navigation projects, including Oregon Inlet.

B. STUDY AREA & ECONOMIC SETTING Dare County is located in northeastern North Carolina along the Atlantic seaboard. The County contains much of North Carolina‘s island ―Outer Banks‖ beach resort and vacation area. Although the County covers 800 square miles, only 391 square miles is land; the remainder is bay, waterway and . Of the County‘s 250,200 acres, only a small proportion, approximately 16,000 acres, located primarily on , and (situated just behind the Outer Banks islands), are available for development. The County has no rail service, no interstate highway service, and only a small regional airport providing general aviation service (the closest airport providing commercial air service is Norfolk (Virginia) International Airport, approximately 100 miles away). These factors limit the ability of the region to attract general industry and employers who do not require access to beaches or the ocean. It is not surprising that coastal recreation and tourism is the leading service industry in the region, and boat building is the leading manufacturing industry.

Dare County‘s permanent resident population is approximately 33,900. In the summer tourist season, the population swells to an estimated 225,000 to 300,000. County unemployment is lower during the summer tourist season but is much higher in the winter season, alternating between 7.5% in the summer and 20% in the winter during recent years. Because Oregon Inlet- dependent commercial fishing occurs primarily in the winter season, and boat building is a year- round business, these industries are very important regional employers in the winter off season.

Oregon Inlet was formed in 1846 and is the only barrier island break in the northern part of the Outer Banks (~100 miles of coastline), providing access to boats between the Atlantic Ocean and

May 2014 1 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT the Albemarle- (Figure I-1). Many marine-related sectors help to build the economy of Dare County and, in doing so, rely on safe and navigable passage through Oregon Inlet.

Figure I-1. Location Map

Oregon Inlet is considered one of the most commercially vital inlets along coastal North Carolina. Commercial fishermen from the communities of Wanchese, Manteo, Manns Harbor, and Stumpy Point in Dare County and communities in other coastal counties (e.g. Hyde, Pamlico) have been using Oregon Inlet for generations to access the rich fishing grounds off the coast of the Outer Banks. In addition to the commercial fishing operations, a number of support businesses have located in the county to service and supply the commercial fishing vessels. Once the fish are landed, seafood packing and processing businesses prepare the catch for market. All of these activities generate jobs, wages, and profits for local workers and business owners, as well as tax revenues to support local government services.

Along with commercial traffic, Oregon Inlet receives significant boat traffic from recreational boaters who are drawn to the region‘s unique and abundant sportfishing opportunities including world renowned fishing tournaments. The recreational sport fishery is vast and varied, including large ―headboat‖ recreational fishing vessels, smaller ―for-hire‖ charter fishing vessels, and private fishing boats. Many tourists who visit the beaches on the Outer Banks islands of Dare

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County include a recreational fishing trip through Oregon Inlet on their vacation itinerary. Dare County also hosts world famous sport fishing tournaments that draw still more visitors to the region. These recreational fishing activities generate additional economic impacts for the region in the form of expenditures on fishing gear, lodging, food, retail to custom boat sales, marine maintenance, and/or boat storage. In addition, a significant number of jobs in the industry are related to sport fishing, which is dependent on the inlet for access to the ocean fishing grounds which contain the fish species prized by sport fishermen.

The boat building business is a significant industry in the Oregon Inlet region and especially in Dare County. Dare County boat builders represent a substantial portion of the manufacturing businesses in the County. Boat building employment accounted for over half of the manufacturing jobs in Dare County in 2013. Boat building jobs are relatively high-paying, with an average weekly wage of $744 in 2012, compared to the County average weekly wage for private industry of $517. This region boasts the birthplace of ―Carolina Style‖ boat building, a style which originated to withstand the incomparable Oregon Inlet waters and rough seas offshore of Bodie and Pea Islands. Numerous local boat builders are directly dependent on Oregon Inlet, as the valuable reputation of the boats for strength and durability is maintained by continuous research and testing in the uniquely-rough waters offshore. These boat builders provide jobs and purchase supplies from local and regional marine supply businesses.

C. STUDY OBJECTIVE The objective of this study was to examine the economic impacts of Oregon Inlet navigability to Dare County, the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), and the state of North Carolina. This study involved a thorough literature review and data collection effort, on-site interviews with individuals knowledgeable of inlet usage and related economic impacts, and detailed economic modeling and analyses. Various economic sectors including commercial fishing, recreational fishing, tournament fishing, marine trades industries, and tourism industries were considered in the economic analyses. In addition, the potential sectors of offshore wind and offshore drilling were examined as well as the occurrence of soundside flooding. The economic modeling and analyses organized economic sectors to appropriately reflect inter-connected economic groups. For example, tourism impacts were considered as those derived from recreational sport-fishing dependent on Oregon Inlet. Following a discussion of methodologies (Chapter 0) and previous related studies (Chapter 0), subsequent chapters will present economic analyses and associated data for the following sectors:

 Commercial Fishing  Seafood Packing/Processing  Boat Building and Support Services  Recreational Fishing (Charter and Private) and Tourism  Tournament Fishing  Offshore Drilling  Offshore Wind Energy  Soundside Flooding

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II. STUDY METHODOLOGY The study was completed by Moffatt & Nichol who was responsible for overall project management, interview/questionnaire coordination, and compilation of the final report. Moffatt & Nichol was supported by Dr. Chris Dumas (UNCW), Dr. John Whitehead (Appalachian State), and Dr. Craig Landry (ECU) who completed all the economic impact analysis. This study involved a significant literature review and data collection effort, on-site interviews with individuals knowledgeable of inlet usage and related economic impacts, and detailed economic modeling and analyses. The following details the methodologies employed in each portion of this study.

A. DATA COLLECTION & LITERATURE REVIEW A significant data and literature review was conducted to identify existing data and reports describing the economic impact of Oregon Inlet to Dare County. Many historical economic studies of Oregon Inlet have been completed by the USACE, Dare County, and others. In July 2006, Moffatt & Nichol (M&N) along with Dr. Chris Dumas and others evaluated the economic impact of Oregon Inlet to Dare County and the surrounding region. For this study, extensive data and information was obtained for key economic sectors, namely commercial fishing, seafood packing and processing, recreational fishing/boating, marine trades (boat building and support services), and tourism. Previous studies are summarized in Chapter 0, and data obtained and utilized in the economic analyses are presented in subsequent chapters for each economic sector analyzed.

B. FIELD SURVEYS & INTERVIEWS As part of the data collection effort, field surveys and interviews were conducted with individuals knowledgeable of the economic significance of Oregon Inlet to the County or region. An initial list of interview contacts was made following the project kickoff meeting through coordination with Commission members and others involved on this study. Contacts were provided for key economic sectors and included commercial fishermen, boat-builders, charter boat captains, marina operators, other business officers and local tourism offices. Survey questionnaires were developed for various sectors seeking to obtain information on inlet usage and related economic indicators (e.g. sales, expenditures). All contacts and questionnaires for the various sectors included in this study are presented in Appendix A. Table II-1 shows the number of contacts and number of responses received for each sector.

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Table II-1. Field Survey and Interview Summary Economic Sector # Contacts # Responses Commercial Fishing 15 8 Seafood Packing & Processing 7 4 Boat Building & Support Services 25 17 Recreational For Hire Fishing 14 8 Recreational Private Fishing 6 3 Other Recreational Fishing 3 3 General Tourism 26 12 Tournament Fishing 3 2 Offshore Wind 8 0 Offshore Drilling 14 0 Soundside Flooding 14 0 TOTAL 135 57

The field interviews attempted to cover a large geographic area, to develop a better understanding of inlet usage from various geographic regions. Along with providing modeling assumptions and supporting existing data used in the economic analyses, the field interviews were used to gain personal insight and perspective on how the declining condition of Oregon Inlet has impacted individuals and businesses and the expected repercussions of potential inlet closure or future maintenance to fully open conditions. Information and insight gained from these interviews are discussed in subsequent chapters for each economic sector analyzed.

C. ECONOMIC ANALYSIS METHODS The following describes methodologies and assumptions employed in the economic impact modeling and analyses. As discussed previously, for the purposes of the economic impacts analysis, the economic impacts associated with Oregon Inlet navigability were classified into the following categories:

 Commercial Fishing and Support Services (fuel, nets, repair, dry dock, etc.)  Seafood Packing/Processing and Support Services  Boat Building and Support Services (materials, maintenance, etc.)  Recreational Fishing (charter and private) and Tourism (lodging, food service, fuel, etc.)  Tournament Fishing  Offshore Wind  Offshore Drilling  Soundside Flooding

For each economic sector listed above (except soundside flooding), several measures of economic impacts were calculated:

 Employment  Economic output / business activity  Wages/salaries/sole proprietor income/partnership income

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 Dividend, rent, and interest income  Government tax revenues

For each of the economic impact measures listed above, impacts are sub-divided into several sub-categories:

 Direct Impacts (the direct impacts of the activity itself) – listed in report tables  Indirect Impacts (the impacts associated with business activities supporting the direct activity) – not listed in report tables  Induced Impacts (impacts associated with additional household spending by employees and business owners who receive additional wages and profits due to the direct and indirect impacts) – not listed in report tables  Total Impacts (the total of the direct, indirect, and induced impacts) - listed in report tables

The direct impact component measures the immediate impacts of an initial change in the economy, for example, a decrease in sales by a particular industry, or an increase in employment. The indirect impact component measures the economic ―ripple effects‖ on industries that supply/service the directly-impacted industries. The induced impact component measures ―household spending feedback effects‖ which are changes in household spending by the employees and owners of the businesses affected by the direct and indirect impacts. Together, the indirect and induced impacts are often called ―economic multiplier effects‖. Multiplier effects track the ―trickle down‖ effect of direct impact activities in the regional economy. Multiplier effects are calculated using the widely accepted industry standard economic input- output model methodology. The term ―total economic impact‖ refers to the total of the direct, indirect and induced impact components. The impacts reported in this study are ―total economic impacts‖, including all multiplier effects.

Input-output analysis is commonly used by economists to estimate economic multiplier effects. Input-output analysis is an economic modeling methodology used to estimate the full economic impacts of a given, initial change in spending in a regional economy. Input-output analysis tracks the flow of dollars between and among businesses, consumers, workers, and government agencies in a study region. (See Miller and Blair (1985) for additional information on input- output analysis.)

IMPLAN Professional® Input-Output Analysis computer software (IMPLAN Group LLC. 2014) was used in this study to conduct the input-output analysis. IMPLAN is a leading input-output modeling software package used by university researchers, government agencies, and consultants nationwide. The IMPLAN software tracks over five hundred industry sectors, and local, state and Federal government sectors, on a county-by-county basis.

In addition to the economic impacts described above, another economic impact calculated by using other methods is the value that recreational sport fishermen receive from the experience of Oregon Inlet-related sport fishing, value beyond what is spent on goods and services needed to make the trip. This ―value of the sport fishing experience‖ is the difference between what a fisherman would be willing to pay to take the fishing trip and what he actually paid to take the

May 2014 7 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT trip. This difference is known as ―consumer surplus‖ value, because it measures the surplus value consumers receive from an experience beyond what is actually paid for the experience. This value is real and arises in many economic situations. The amount that a sport fisherman would be willing to pay for an Oregon Inlet-related fishing trip is limited by the opportunity to take other, though perhaps less satisfying, substitute trips to alternative fishing destinations. For example, although a sport fisherman might be willing to pay more for an Oregon Inlet-related sport fishing trip, due to the Oregon Inlet sport fishery‘s unique characteristics, the sport fisherman would not be willing to pay an infinite amount more, due to the availability of substitute fishing opportunities. This study develops an estimate of the loss in consumer surplus value of recreational sportfishing that would occur with the loss of Oregon Inlet navigability.

To avoid potential confusion about the report analysis and findings it is prudent to discuss the difference between economic impacts versus economic benefits. To avoid potential confusion about the report analysis and findings it is prudent to discuss the difference between economic impacts versus economic benefits. The term ―economic impacts‖ refers to changes in economic activity in a specified geographic area. For example, if a change in the economy causes sales to increase by $100 in Dare County, that is an economic impact. However, the increase in sales does not measure the net gain to the economy. All relevant costs must be subtracted from the sales before we arrive at the net gain. The term ―economic benefit‖ refers to net economic gains. Economic benefits can be measured using the concepts of consumer surplus and producer surplus; however, such measurements involve a more detailed analysis and require more data. As is typical for regional economic studies, this report presents primarily economic impacts, not economic benefits.

Economic impacts can be positive or negative. For example, an increase in sales is a positive economic impact, and a decrease in sales is a negative economic impact. Economic impacts that are positive at one geographic scale (e.g., at the county level) may be cancelled out by negative economic impacts at larger geographic scales. For example, if sales were to increase by $100 in Dare County and to decrease by $100 in Carteret County, then there is a positive economic impact in Dare County and a negative economic impact in Carteret County. However, at the state level, the two impacts would cancel out, leaving a net economic impact of zero at the state level. Similarly, for employment, if Dare County gains 100 jobs and Carteret County loses 100 jobs, there is a positive economic impact in Dare and an negative economic impact in Carteret, but no net economic impact in jobs at the state level. Similarly, but at an even larger geographic scale, if sales were to increase by $100 in North Carolina and to decrease by $100 in Virginia, there is a positive economic impact in NC and a negative economic impact in VA, but no net economic impact at the national level. Economic impacts are reported at three geographic scales—county, region, and state—in this report to capture any ―cancelling out‖ of economic impacts that occur at the county and regional levels.

All of the economic measures mentioned were calculated for three different inlet condition scenarios (for the five main study sectors of commercial fishing, seafood packing & processing, boat building & support services, recreational fishing & tourism, and tournament fishing) as decided on by the project team and the Dare County stakeholders and were based on historical USACE survey data of the inlet:

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(1) Recent Conditions – assumes a depth of 6 feet or greater in the navigation channel only 40% of the time (based on an average over the last 3 years) (2) Fully Open – assumes a depth of 14 feet or greater 85-100% of the time (14 feet is the current federally authorized depth for the navigation channel) (3) Essentially Closed – assumes a depth of 6 feet or greater only 5% of the time.

Economic measures for offshore drilling and offshore wind were only calculated for fully open conditions since uncertain recent conditions or essentially closed conditions would preclude any offshore energy development from using Oregon Inlet.

The reason for these separate analysis is that it is important to not only note the current economic impact that Oregon Inlet brings to Dare County, the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), and the state of North Carolina but also the potential economic impact it could bring if the inlet were to be fully maintained to its authorized depth or the potential economic impact that could be lost if the channel were not maintained.

Following Chapter 0, which discusses previous related studies, succeeding chapters of the report provide detailed descriptions of the study methodology and impact estimate results for the commercial fisheries, seafood packing/processing, boat building, recreational fishing (charter and private), and tournament fishing sectors of the economy using the analysis procedures outlined above. In addition, the potential sectors of offshore wind and offshore drilling as well as the occurrence of soundside flooding are also examined with respect to their Oregon Inlet dependent financial impact on Dare County.

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III. PREVIOUS ECONOMIC STUDIES

A. PREVIOUS STUDIES RELATED TO OREGON INLET As stated before, numerous studies have evaluated the economic impact of Oregon Inlet to Dare County or other regions. In particular, a majority of historical studies attempted to reconcile complex economic issues related to the proposed navigation channel and jetties, part of a project which was authorized by Congress in 1970 and later vetoed (2003). Summaries of pertinent previous work which includes studies done by USACE, Dare County, and private consultants are discussed herein.

1. USACE Studies USACE studies of Oregon Inlet have been ongoing between 1970 – 2001, including various project designs for the proposed navigation channel and jetties, four environmental impact

statements, and at least four updates of the District‘s economic analyses. Opposition to the DETAILED STUDY OF 800 BLOCK HOTSPOT project has revolved around environmental concerns from Federal agencies. The Department of the Interior (DOI) denied special use permits for the proposed project citing that it would be incompatible with the existing management philosophy and guidelines for their lands adjacent to the inlet. Economic impact studies were repeatedly reanalyzed due to questioning of the viability of data utilized and key assumptions made for the cost-benefit analyses. Key limitations noted in the economic analyses included 1) data used was outdated and incomplete, 2) analyses did not adequately examine inherent risk and uncertainty in key variables, and 3) certain assumptions did not have adequate support. The estimated average annual benefits of the proposed project were determined to be $7.2 million, yielding a benefit-to-cost ratio of 1.6. In 2003, plans to stabilize the inlet with the proposed jetties and dredging, were laid to rest from a federal perspective through a joint agreement between the USACE, National Park Service (NPS),

FINAL REPORT and U.S. Fish and Wildlife Service (USFWS).

2. Dare County Economic Commission (1985) In 1985, a study was completed by the Dare County Economic Commission evaluating the impact of Oregon Inlet to the Pamlico Sound region by comparing the current value of the inlet

to a future projected value with jetty construction. Economic sectors considered included commercial fishing, fish packing, and recreational fishing (including charter fishing). At the time of the study, it was noted that approximately 401 commercial boats used Oregon Inlet on an annual basis, including 289 transient boats and 112 full-time boats. The economic value of the inlet based on these factors and all of the related businesses was estimated to be $30 million at that time. The study then evaluated how much economic value would be added if the inlet were jettied, which was estimated at $70 million (in addition to the existing benefit of $30 million). Additionally, the report noted economic impacts which occurred during 1982-1983, when Oregon Inlet closed to navigation due to poor conditions. During this time, it was noted that six businesses closed, unemployment during the winter rose from 20% to 42%, packing houses reduced operations, and local ice companies laid off workers.

3. The Horizon Planning Group (1995) An additional economic assessment was performed in 1995 by The Horizon Planning Group, evaluating the regional economic benefits of the Oregon Inlet stabilization project. This study

May 2014 11 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT updated a previous USACE study (1990), describing expected economic benefits derived from commercial and recreational fishing with the proposed stabilization project in place. Key findings included that approximately 50% of the 312 commercial fishing vessels which previously used Oregon Inlet were landing their harvests in the Hampton Roads, Virginia area. The study noted other related impacts such as loss of packing house jobs and truck driving jobs due to regional shifts in the commercial fishing industry. The study determined that the proposed stabilization project would have a benefit-to-cost ratio of 1.7. With the stabilization project in place, numerous national, state, and regional benefits were also described, such as increasing inlet usage, local jobs, and providing a safe and reliable access to harbors of refuge.

4. Moffatt & Nichol and Dr. Chris Dumas, Dr. John Whitehead, and Dr. Woody Hall (2006) In 2006, Moffatt & Nichol completed the initial study on the economic impacts of Oregon Inlet to the economy of Dare County and the surrounding region. The economic sectors of commercial fishing, seafood packing & processing, boat building and support services, and recreational fishing and tourism were evaluated with respect to Oregon Inlet. The economic impact of Oregon Inlet to Dare County and the surrounding region is very significant and far outweighs the costs necessary to keep the inlet passable through dredging. In fact, the economic impact to the Federal Government alone would more than 6 times pay the recent annual expenditures for dredging. Table III-1 shows the overall total economic impact of Oregon Inlet to Dare County and the surrounding region.

Table III-1. 2006 Oregon Inlet Economic Study Summary Commercial Seafood Packing Boat Building & Recreational Impact Category Total Impact Fishing & Processing Support Services Fishing & Tourism Output1 $7,152,357 $33,425,367 $139,841,563 $502,286,350 $682,705,637 Employment2 90 238 1,235 8,288 9,851 Wages/Salaries/ Proprietor Profits3 $2,720,657 $7,112,340 $45,669,308 $209,700,831 $265,203,136 Rent/Corp Profits4 $1,344,828 $1,384,746 $22,434,526 $69,375,235 $94,539,335 Federal Government5 $895,555 $2,149,376 $7,441,012 $34,978,165 $45,464,108 State/Local Government5 $488,250 $890,092 $4,806,248 $37,460,831 $43,645,421 1 Output/Business Activity Impacts (2005 $‘s). 2All jobs, full-time and part-time. 3 Wages/Salaries/Sole Proprietorship/Partnership Income Impacts (2005 $‘s). 4 Rental Income and Corporation Income Impacts (2005 $‘s). 5 Government Tax and Fee Revenue Impacts (2005 $‘s).

The four study sectors provide a total economic impact of 9,851 jobs and $682.7 million to Dare County and the surrounding region.

B. OTHER/REGIONAL ECONOMIC STUDIES Numerous other studies, while not directly related to Oregon Inlet, are notable. Summaries are presented herein.

1. Economic Study of Wanchese Seafood Industrial Park (2005) In July 2005, a detailed economic study of the Wanchese Seafood Industrial Park was completed by Miley, Gallo & Associates, LLC. The purpose of the study was to develop a better understanding of the business environment in the Park and to determine the economic impact of

May 2014 12 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT the Park on three regions. The regions analyzed included Dare County, the area comprised within the Northeast Regional Partnership (16 counties in northeastern North Carolina), and the State. The study evaluated the economic activity impact, or the impact upon the respective region from the current levels of employment and production occurring in the Park.

Findings of the study defined six primary categories of businesses in the Park, including:

 Boatbuilding and Related Companies  Marinas and Related Companies  Charter Fishing  Fish Packing  Broadcasting  Regulation and Administration

The study employed the IMPLAN (Impact Analysis for Planning) to generate a set of balanced economic/social accounts and multipliers. The analysis evaluated the direct, indirect, and induced economic effects. The economic impact of the Park was determined to be $98 million for Dare County, $101 million for the Northeast region, and $113 million to the State.

2. Economic Study of Wanchese Seafood Industrial Park (2011) In April 2011, an update to the 2005 economic study of the Wanchese Seafood Industrial Park was completed by the East Carolina Bureau of Business Research. The purpose of the study was to note the changes that had taken place since 2005 due to the downturn in the economy.

The study employed the IMPLAN (Impact Analysis for Planning) to generate a set of balanced economic/social accounts and multipliers. The analysis evaluated the direct, indirect, and induced economic effects. The economic impact of the Park was determined to be $38.5 million for Dare County, $39.2 million for the Northeast region, and $48.6 million to the State.

3. Economic Study of Pirate’s Cove Big Game Tournaments (1999) In 1999, a comprehensive study of the Pirate‘s Cove Big Game Tournaments near Oregon Inlet, Dare County (Ditton, 2000) was conducted under a research contract with North Carolina Sea Grant and Texas A&M University. The study focused on two tournament events, namely the Pirate‘s Cove Billfish Tournament (PCBT) and the Alice Kelly Ladies Only Memorial Billfish Tournament (AKMBT). The goals of the study were to develop a better knowledge of angler expenditures and associated economic impacts on the local area. Expenditures for tournament participants from Dare County were separated from non-resident participants, in order to derive only new monies coming into Dare County. Likewise, expenditures of North Carolina residents were separated from out-of-state participants to evaluate state level impacts. A summary of pertinent statistics derived from the study are presented in Table III-2. Results presented represent direct economic impacts. Additionally, the study considered secondary or indirect economic impacts from the tournaments, resulting from additional demands for goods and services. These analyses were based on economic multipliers which in summary, determined approximately $3 million in total economic output from the tournaments. In 1999, tournament participants were 21% Dare co residents, 29% other NC, 50% out of state. In 1999, 76% of tournament participants said that fishing was most important activity on trip to Dare County.

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Table III-2. Statistics from Economic Study of Pirates Cove Big Game Tournaments (Ditton, 2000) Statistic PCBT AKMBT Number of registered anglers 655 540 Percentage of anglers from locations outside of 79% 51% Dare County Number of days fished 86% fished 3-4 days 97% fished 1 day Average number of nights staying in area 10 nights 3 nights Lodging, charter fees, gas and oil for boat – Charter fees – 26% of total direct Major categories of expense 59% of total direct purchases purchases Total expenditures spent in Dare County by non- $1.6 million $189,949 Dare County residents 4. Economic Study of Offshore Recreational Fishing Region (2002) Finally, in 2002, a study of a prime recreational fishing area northeast of Cape Hatteras, known as ―The Point‖ was performed to evaluate economic impacts that would result from the proposed construction of exploratory wells for potential oil and gas production by Chevron Corporation. Although not directly related to Oregon Inlet, the goals of the study included providing information on the value of recreational fishing at ―The Point‖, and estimating the potential losses to recreational fishing if an oil spill were to occur in this area. Given the location of ―The Point‖, it is likely a large percentage of anglers fishing in this area come from Dare County through Oregon Inlet. The study used MRFSS data from 1990 and NMFS statistics on trip numbers to estimate losses, in dollars, to recreational anglers due to various closure scenarios. The total number of trips involving private and charter boats originating in Dare County and traveling to a location greater than 3 miles offshore was estimated at approximately 97,800 for 1990. Determined economic losses from various scenarios involving closure of the site and for some scenarios prolonged reduction in available catch (e.g. 50% reduction in probability of success for a 6-month period) ranged from as low as $1300 for off-season periods to $460,000 for peak periods and worst-case scenarios.

Based on the available recreational fishing data and information described in this section, the goals for the field survey interviews and economic analyses were defined. The MRFSS data formed the basis of the economic analysis. In support of the MRFSS data, field interviews targeted major marinas and recreational fishing centers and attempted to determine usage of Oregon Inlet from areas both North and South of the inlet. Furthermore, the field surveys targeted the significance of local sportfishing tournaments and typical expenditures for recreational anglers either fishing independently or in local tournaments.

5. North Carolina Sea Grant Study (2009) North Carolina Sea Grant sponsored a study of the economics of the North Carolina for-hire ocean fishery. The data for this study came from two sources, 2007-2008 vessel data from the North Carolina Division of Marine Fisheries (NCDMF), and new survey data collected in 2007- 2008 specifically for this study. A field/mail survey of captains produced 158 completed surveys (150 charter boat surveys and 8 head boat surveys). A dockside field survey of passengers produced 1,317 completed surveys, and a telephone follow-up survey of passengers produced 296 additional surveys. The study found that approximately 750 charter boat vessels and head boat vessels operate year-round along the coast of North Carolina and target a succession of fish

May 2014 14 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT species depending on seasonal fish abundances and economic conditions. Coast-wide, about 70,000 for-hire vessel trips (not passenger trips) occur annually, split between about 66,000 charter trips and 3,780 head boat trips. Coast-wide, an estimated 431,000 passengers are serviced annually by the North Carolina for-hire fleet. Approximately 303,000 of these passengers take charter trips, and 128,000 take head boat trips. There are an estimated 1,445 for- hire captain and crew jobs in North Carolina. The North Carolina for-hire fishery receives approximately $65 million annually in fishing fees paid by passengers, with about $55 million received by charter vessels and $10 million received by head boat vessels. An additional $3.3 million in revenue is received for items sold to passengers. Tips paid by passengers to crewmembers bring in an additional $5.8 million per year. In total, for-hire fishing passengers spend about $380.0 million per year, including both on- and off-vessel spending, in coastal North Carolina. In the Northern region of the state (which includes the Oregon Inlet region), 45-55% of charter boat passengers say that for-hire fishing was the primary reason for their visit to the NC coast, 60-85% of charter passengers are from out of state, and almost all 98-100% of charter passengers spend at least one night in a coastal county as part of their visit to the coast. Only about 20% of head boat passengers report that for-hire fishing was their primary reason for visiting the NC coast, about 80% of head boat passengers are from out of state, and about 95% of head boat passengers in this region spend at least one night in a coastal county as part of their visit. "Consumer surplus" is the economic value of the fishing experience to the passenger beyond the expenditures necessary to take the trip. On average, consumer surplus for a charter boat trip averaged $624 per fisher per trip.

C. TOURISM STUDIES Finally, studies of the economic impact of tourism to Dare County have also been completed. In particular, these studies provide valuable information revealing the significance of fishing and boating opportunities to the tourism industry and the overall economy of Dare County.

1. Outer Banks Visitors Bureau “Wave” Studies (2006) The Outer Banks Visitors Bureau, located in Manteo, initiated a year-long study detailing visitors and their experiences on the Outer Banks, in an effort to aid in marketing of the area and increase visitation. The study analyzed seasonal differences. Findings for the 2005 summer and fall season were published in January 2006. This research, while regionally focused, has significant findings, including percentage of visitors pursuing recreational boating activities, and trip specifics (e.g. duration of stay, expenditures, etc.). The study involved surveying approximately 4100 visitors, yielding an accuracy of ±3.2%. First, when asked about various motivations to travel to the Outer Banks, approximately 5% of visitors noted fishing opportunities as the most important factor for both the summer and fall seasons. Additionally, the findings reported that 36% and 25%, of visitors reported that one of the activities during their stay was to ―go fishing‖, during summer and fall, respectively. A significant percentage, 11% in summer and 4% in fall, reported that they went charter fishing during their stay. Table III-3 details trip specifics including length of stay, party sizes, and typical expenditures either taken directly or computed from results given in the report. While not specific to Oregon Inlet users, these data may prove useful in determining related tourism impacts from recreational boating.

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Table III-3. Outer Banks Visitor Profile Findings Finding Summer Fall Average length of trip 6 nights 5.4 nights Average party size 7 people 5 people Percentage of Visitors Staying in Dare County North 63% 69% of Oregon Inlet Percentage of Visitors Staying in Dare County South 30% 27% of Oregon Inlet Average total expenditures per party per trip $2,691 $1,641 Average expenditures per person per day $61 $61 Expenditures on lodging per party per trip $1,468 $827 Expenditures on meals per party per trip $471 $340 Expenditures on entertainment per party per trip $57 $23 Expenditures on shopping per party per trip $284 $228 Expenditures on transportation per party per trip $253 $139 2. Dare County Transient Boating Study (1995) In 1995, Dare County initiated a study geared at understanding transient boater trends through the area in an effort to attract more boaters to Dare County ports (Professional Management Group, Inc, 1995). In the context of the study, transient boaters were defined as those using the Atlantic Intracoastal Waterway (AIWW) to travel between Northern and Southern states. Since the AIWW is within a few hours by boat to Dare County ports, the goal of the study was to profile transient boaters and determine strategies to attract boaters along an alternative route through the Pamlico Sound. The study profiled various marinas throughout NC and in other States for comparison and surveyed boaters themselves, collecting data on boaters‘ perceptions and typical expenditures. On average, boaters surveyed indicated average expenditures of $340 per day. For power boaters only, 40% stated they spent $500 to $700 per day including fuel and dockage while approximately 25% indicated they spent $100 to $200 per day. Of those surveyed, only 6-8% indicated they had docked previously at either Roanoke Island or Hatteras. Finally, the economic analysis portion of the study summarized previous work including a 1994 study of the Pirates Cove Big Game tournaments looked at visitor expenditures on fuel, supplies, lodging, meals, shopping, and entertainment. For the summer tournaments, it was determined that average expenditures per boat per day ranged from $1,100 to $1,500. There were on average 6 people per boat. For the Fall tournaments, expenses per boat per day ranged from $750 to $1,000.

D. SUMMARY As can be seen from the above studies, the local economy of Dare County is very dependent on tourism, recreational and commercial fishing, and boat building. Please note that various items from the above studies were used within this study to supplement field interviews and survey questionnaires when needed.

May 2014 16 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

IV. COMMERICIAL FISHING Commercial fishing is a prominent sector of the North Carolina coastal economy. In 2012, there were approximately 5,600 commercial fishing vessels, 3,200 commercial fishermen, and 629 fish dealers in the State, landing seafood worth $72 million in dockside value (NCDMF, 2013). Oregon Inlet is considered one of the most commercially vital inlets along coastal NC with fishermen from the communities of Wanchese, Manteo, Manns Harbor, and Stumpy Point in Dare County and communities in other coastal counties (e.g. Hyde, Pamlico) using the inlet. It was noted that in the 1960s there were approximately 40-50 different commercial seafood businesses in Dare County. However, presently there are approximately only 15-20 in Dare County. Of these businesses, most landings are handled by the 4-5 largest dealers. First, this chapter presents pertinent information and perspectives gained from field interviews conducted with commercial fishermen. Then the modeling methodology and analysis results for Oregon Inlet-dependent commercial fishing and support services are presented.

A. COMMERCIAL FISHING SURVEYS & INTERVIEWS Surveys were sent out to approximately 14 individuals and/or companies who currently work in the commercial fishing industry. M&N received 7 survey responses from individuals and/or companies in Wanchese, Manteo, and Engelhard. Overall the survey responses indicated that business had decreased since the 2006 study was performed, mostly due to inlet navigation problems. In particular, sea scallop fishing has decreased significantly over the past two years. Responses indicated that smaller boats, requiring only 5-6 foot draft, are still able to navigate through the inlet and thus would not see much of a change in business by having a fully open inlet. However, they would likely lose business if the inlet were to be essentially closed. Larger trawlers and scallop vessels have not been able to navigate the inlet very successfully in recent years and would see a large increase in business (on the order of double to triple the business) if the inlet were to become fully open. These boats, which currently have trouble passing through the inlet, have since gone to places like Morehead City, New Bern, or Virginia and would not be able to return if the inlet were to essentially close.

M&N also conducted a phone interview with 1 individual who has been in the commercial fishing industry as a fisherman and consultant for decades. He indicated that many commercial fisherman have left North Carolina because of Oregon Inlet navigation issues (on the order of 25-35 fisherman). Those that have left either continued to fish, landing in places like Virginia, Connecticut, and New York or they have sold their boats completely. This had caused a major economic loss to North Carolina because many of the boats that left fished for sea scallops. Each boat with a permit brought in approximately $1-$1.5 million per year which equates to approximately $25-$35 million loss to North Carolina. It was this individual‘s opinion that it would take jetties to get the fisherman to come back to North Carolina and fish out of Oregon Inlet. Other issues that he mentioned include water flow in and out of the inlet that could potentially support an aquaculture industry if the inlet opening were stabilized and flow was free to move in and out of the inlet. Additionally, the poor navigability of the inlet has produced issues with insurance premiums which are higher if passing through Oregon Inlet.

The survey contacts and questions for commercial fishing can be found in Appendix A. Overall trends or business costs provided by the interviewees were used in the economic modeling and

May 2014 17 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT analyses to not only determine the current economic value of Oregon Inlet but how that value would change if the inlet were fully open or essentially closed.

B. ECONOMIC MODELING & RESULTS – COMMERCIAL FISHING The North Carolina Division of Marine Fisheries (NCDMF, 2014) provided data on commercial fishing trips, vessels, landings and value for Dare County and the town of Engelhard (in Hyde County), North Carolina, and for that portion of commercial fishing activity that used Oregon Inlet to access the ocean. In addition, a recent study by the North Carolina Division of Marine Fisheries provided additional information on ocean commercial fishing in North Carolina (NCDMF 2009). This information was supplemented by personal interviews (conducted as part of the present study) of ocean commercial fishing vessel owners in Dare County and Engelhard (Hyde County), North Carolina. Owners of representative ocean fishing vessels were identified and interviewed in January and February 2014. The personal interviews provided information on how various types of ocean commercial fishing vessels might alter their activities depending on navigability conditions in Oregon Inlet.

Table IV-1 presents data on the commercial fishery landings (pounds per year) and dockside value of the landings (dollars per year) for years 1994-2012 (NCDMF, 2013). Dockside value is presented in both nominal (not adjusted for inflation) and real (adjusted for inflation) terms. The GDP price deflator was used to adjust for inflation. The real dockside values are presented in year 2012-equivalent dollars.

Table IV-1. Dare County Commercial Fishery Landings and Dockside (Ex-Vessel) Value, 1994-2012 (NCDMF, 2013) Real Pounds Nominal Year Dockside Value Landed Dockside Value (2012 dollars) 1994 38,183,420 $21,336,701 $30,330,959 1995 38,983,539 $27,251,217 $37,947,011 1996 43,052,953 $23,479,634 $32,108,781 1997 37,965,834 $24,148,242 $32,467,908 1998 36,570,105 $23,468,050 $31,214,433 1999 33,693,109 $22,667,632 $29,725,452 2000 33,330,693 $26,351,359 $33,788,150 2001 31,515,245 $24,829,692 $31,124,410 2002 28,885,154 $23,012,023 $28,409,110 2003 32,531,807 $20,075,541 $24,298,268 2004 31,185,781 $20,518,618 $24,171,969 2005 27,042,154 $20,870,854 $23,822,781 2006 26,592,842 $22,810,479 $25,260,456 2007 22,379,838 $23,136,322 $24,958,752 2008 22,712,673 $23,004,823 $24,341,493 2009 25,447,498 $21,932,064 $23,029,106 2010 25,613,532 $22,016,774 $22,841,443 2011 24,598,213 $22,466,359 $22,858,871 2012 16,748,284 $21,065,800 $21,065,800 Average 30,370,141 $22,865,378 $27,566,587 (1994-2012)

May 2014 18 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Not all of these commercial fishery landings are dependent on Oregon Inlet navigability. A large blue crab fishery operates on the sound side of the inlet, and other commercial catch also occurs on the sound side of the inlet. On the other hand, some commercial fishermen based in Engelhard in neighboring Hyde County use Oregon Inlet to access the ocean. For the purposes of this study, we defined ―Oregon Inlet-dependent‖ commercial fishery landings to be those that meet the following criteria:

 The fish/seafood had to be caught in the ocean (rather than in Pamlico or Albemarle sounds)  The vessel had to land the catch using ocean fish gear (trawl, longline, troll, gill net, fish pot, sea scallop dredge or rod-and-reel)  Vessel landings had to occur in Dare County ports, or Engelhard (all ports in Hyde County south of Engelhard are assumed to depend on Hatteras or Ocracoke inlets for ocean access)  For the port of Engelhard, only ½ of landings and value are assumed to depend on Oregon Inlet, with the remainder assumed to depend on or other inlets.

Landings meeting the criteria above occurred in the ports listed in Table IV-2.

Table IV-2. Ports with Oregon Inlet-Dependent Landings County Port Dare Kill Devil Hills Dare Kitty Hawk Dare Manns Harbor Dare Manteo Dare Nags Head Dare Rodanthe Dare Salvo Dare Stumpy Point Dare Wanchese Hyde Engelhard

Oregon Inlet-Depending landings and dockside (ex-vessel) value meeting the criteria above and occurring in the ports listed above are presented in Table IV-3. Table IV-3 also presents data on the number of commercial fishing trips and commercial vessels that landed Oregon Inlet- dependent catch, and the number of seafood dealers who purchased Oregon Inlet-dependent catch. Figure IV-1 presents the nominal and real dockside values for Oregon Inlet-dependent commercial fishing landings from 1994-2012.

May 2014 19 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table IV-3. Oregon Inlet-Dependent Commercial Fishing Landings and Dockside Value, 1994-2012 (Bianchi, 2014) Nominal GDP Price Real Commercial Pounds Year Vessels Dealers Dockside Deflator Dockside Value Trips Landed Value (Year 2012=1001) (2012 dollars) 1994 3453 271 21 17,659,564 $8,556,505 70.34628 $12,163,408 1995 3509 299 31 16,820,517 $11,129,902 71.81387 $15,498,263 1996 3803 286 32 18,376,320 $8,893,771 73.12527 $12,162,377 1997 3872 284 25 17,333,315 $8,391,674 74.37573 $11,282,812 1998 3625 325 29 14,541,486 $8,472,395 75.18333 $11,268,980 1999 3713 389 31 16,368,681 $9,316,364 76.25664 $12,217,118 2000 3176 306 30 18,168,801 $11,105,833 77.98994 $14,240,084 2001 3497 415 27 17,214,210 $10,917,272 79.77562 $13,684,972 2002 3059 346 23 16,748,310 $11,481,372 81.00227 $14,174,137 2003 2871 323 25 20,857,071 $10,174,576 82.62128 $12,314,715 2004 3078 385 22 21,493,106 $12,000,464 84.886 $14,137,153 2005 2890 345 20 18,681,530 $11,766,613 87.60881 $13,430,856 2006 2801 263 20 18,897,632 $15,118,451 90.30114 $16,742,260 2007 3614 408 22 14,119,381 $13,506,116 92.69823 $14,569,982 2008 2649 345 19 11,128,654 $11,258,168 94.50868 $11,912,312 2009 2973 295 20 14,583,673 $11,545,991 95.23628 $12,123,521 2010 2515 249 20 14,419,564 $11,672,197 96.38959 $12,109,396 2011 2452 301 20 11,528,024 $10,761,456 98.28289 $10,949,470 2012 2259 238 18 6,522,985 $9,875,702 100 $9,875,702 Average 3148 320 24 16,076,991 $10,839,201 84.337 $12,887,238 (1994-2012) 1 Source: USDC-BEA, 2014

May 2014 20 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Value of North Carolina Commercial Fishery Landings Dependent on Oregon Inlet, 1994-2012 $18,000,000

$16,000,000

$14,000,000

$12,000,000

$10,000,000

$8,000,000 Value (dollars)

$6,000,000

$4,000,000

$2,000,000

$0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year

Nominal Dockside Value Real Dockside Value (2010 dollars)

Figure IV-1. Nominal and Real (2010 dollars) Value of North Carolina Commercial Fishery Landings Dependent on Oregon Inlet, 1994-2012

From 1994 to 2012, an average of 24 commercial fishing dealers and 320 commercial vessels made an average of 3148 commercial fishing trips per year that landed catch in Dare County and used Oregon Inlet. Over the most recent three years of data (2010-2012), the average number of commercial fishing vessels landing catch in Dare County and using Oregon Inlet declined to 19, the number of commercial fishermen declined to 263, and the number of trips per year declined to 2409.

From 1994 to 2012, Oregon Inlet-dependent landings averaged 16.1 million pounds per year. Over the most recent three years of data (2010-2012), Oregon Inlet-dependent landings averaged 10.8 million pounds per year—this is equal to approximately half of all seafood landings in Dare County.

On average, the real value of Oregon Inlet-dependent landings from 1994 through 2012 was $12.9 million per year in 2012-equivalent dollars. The real value of landings over the most recent three years of data, from 2010 to 2012, averaged less, $11.0 million per year. Oregon Inlet-dependent landings account for approximately half of the value of all seafood landings in Dare County. From 1994 to 2012, the percentage of commercial fishing dockside value

May 2014 21 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT supported by Oregon inlet in a given year has ranged as high as 66 percent and has been no lower than 35 percent.

The NCDMF study of ocean commercial fishing in North Carolina found that most (85%) of the oceangoing fishermen run their businesses as the sole proprietorship. Twelve percent (12%) work as part of a corporation, mostly in Wanchese. Fifty-seven percent (57%) worked ocean waters year-round. Table IV-4 shows the fishing participation by month for the fishermen in this study.

Table IV-4. Ocean Fishing Participation by NC Ocean Commercial Fishermen (NCDMF, 2009) Month Frequency Percent January 142 80% February 125 71% March 122 69% April 126 71% May 135 76% June 127 72% July 125 71% August 126 71% September 136 77% October 144 81% November 155 88% December 149 84%

October through January were the months of highest ocean fishing participation with over 80% spending some time on the water, and summer was the slowest time. Again, these are different peaks than for estuarine fishermen, who seldom work the water during the winter at all except to oyster.

Table IV-5 presents a summary of ocean commercial fishing vessel characteristics from the NCDMF study by vessel size. The numbers in the table are based on ocean commercial fishing vessels based along the entire North Carolina coast, not just those based in Oregon Inlet. Vessel value includes the value of gear used on that boat. Vessel size ranged from 40 feet to 165 feet in the questionnaire responses collected for the present study, corresponding to vessels in the medium and large categories of the NCDMF study. Vessel age ranged from 8 years to 35 years in the questionnaire.

May 2014 22 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table IV-5. Vessel Characteristics for NC Ocean Commercial Fishing Vessels (NCDMF, 2009) Small Medium Large (n=7) (n=127) (n=82) Average 17 29 55 Length (ft) Years 11 8 14 Owned

Vessel Value $5,000 $81,664 $240,743

The NCDMF study found that ocean fishing vessels may be docked at the owner‘s home (28%), at fish houses (21%), or at a rented slip (45%). Rented slips cost an average of $3,234 per year.

The NCDMF study found that household incomes for the oceangoing fishermen were much higher overall than those of estuarine fishermen. Over half of the these fishermen reported household incomes of over $50,000/year, more than double the rate of the fishermen working estuarine areas.

Table IV-6 presents a list of the top target species for each commercial fishermen responding to our commercial fishing questionnaire.

Table IV-6. Top Target Species of Commercial Fishing Questionnaire Respondents Croaker, Atlantic Conger Eel Sharks, Dogfishes Mahi (Dolphin fish) Flounder, Summer Monkfish Tunas Ribbon Fish Tilefishes Sea Scallop Sharks, Other Bluefish Squid Black Sea Bass Swordfish

Table IV-7 presents the most commonly caught fish species north of Cape Hatteras in 2012 (NCDMF 2013). Comparing the target species listed by our commercial fishing questionnaire respondents with the species listed in Table IV-6, it appears that the questionnaire responses reflect the range of commonly-caught species in the ocean waters off Oregon Inlet.

May 2014 23 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table IV-7. Most Commonly Caught Fish Species In Ocean North of Cape Hatteras in 2012 (All Ports) (NCDMF, 2013) Species Pounds Landed Croaker, Atlantic 2,416,348 Sharks, Dogfishes 1,274,042 Flounder, Summer 1,086,281 Tunas 1,069,206 Tilefishes 342,211 Sharks, Other 115,660 Mackerel, Spanish 101,959 Bluefish 74,518 1. IMPLAN Modeling Analysis The economic impacts of Oregon Inlet-dependent commercial fishing are calculated for three geographic areas: Dare County, the Oregon Inlet region, and the State of North Carolina as a whole. For each geographic region, three navigability scenarios are considered: Oregon Inlet recent conditions, Oregon Inlet fully open, and Oregon Inlet closed.

The economic impact numbers reflect commercial fishing activity only; recreational and tournament fishing activity are considered in other sections of this report. The economic impact numbers reflect Oregon Inlet-dependent (i.e., ocean) commercial fishing only; the estuarine crab and trawl fisheries are not considered. For the purposes of the present study, it is assumed that estuarine commercial fishing is unaffected by Oregon Inlet conditions.

The impacts are intended to reflect average economic conditions and average weather conditions—the purpose of the study is to examine the impacts of changing navigability conditions under average economic and weather conditions. All dollar values are report in real (inflation adjusted) 2012-year dollars. Employment numbers are the total of full-time and part- time jobs (not ―full-time equivalent‖ jobs). The impacts of changing Oregon Inlet navigability conditions are calculated by finding the differences between impacts across navigability scenarios. a) Dare County Economic Impacts

(i) Oregon Inlet Recent Conditions The direct economic impacts of commercial fishing under recent inlet conditions (2010-2012) include the average of the last three years (2010-2012) of Oregon Inlet-dependent commercial fishery Dare County landings value for trawl, longline, troll, gill net, fish pot, and rod-and-reel vessels fishing in the ocean plus one-half of the value of similar Engelhard landings, a total of $10.442 million. In addition, the direct economic impacts include scallop vessel landings in Dare County plus one-half the value of scallop landings in Engelhard, a total of $58,000. In addition to these direct economic impacts, the scallop vessels based in Dare County that land their scallops in Virginia before returning to their home port in Dare County contribute to the multiplier effects in Dare County when they spend money in Dare County for repairs and fishing

May 2014 24 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT gear switch-out, and when the crews and their families (who live in Dare County) spend their wages in the County. It is assumed that the scallop vessels landing their catch in Virginia buy fuel and groceries in Virginia, so expenditures for these items for these vessels are not included in the Dare County impacts.

The annual economic impacts of commercial fishery are presented in Table IV-8 (combined impacts of Dare landings and VA scallop landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, dockside sales of $10.5 million in Dare County generate an additional $14.59 million in economic multiplier effects, for a total economic impact of $25.1 million in output (sales) sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way. The Total Effects listed in the table include the multiplier effects of the Dare County-based scallop vessels that land scallops in Virginia (less the multiplier effects of fuel and grocery purchases, which are assumed to occur in Virginia). Notice that the estimated number of commercial fishermen supported by Oregon Inlet landings is consistent with the number of fishing vessels reporting Oregon Inlet landings (250 to 300 vessels) in the NCDMF data, assuming a few fishermen per vessel, on average. Remember that not all of the estimated direct employment is full time, some of the employment reflects only part-time jobs or fishermen who fish part-time using Oregon Inlet and part-time in the sounds/estuary.

Table IV-8. Annual Economic Impacts of Commercial Fishery in Dare County, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $10,500,000 466 $8,957,670 $1,310,669 ------Total Effect $25,085,701 604 $13,866,903 $5,786,998 $1,109,822 $2,039,704 (ii) Oregon Inlet Fully Open Conditions In terms of the commercial fishery, Oregon Inlet conditions affect primarily larger trawl, longline, troll, gill net, fish pot, and rod-and-reel and scallop vessels that fish in the ocean. With better navigability conditions in Oregon Inlet, larger vessels can make more trips per year, and some additional, larger vessels may be attracted to switch their home port to Dare County from other ports both inside and outside North Carolina.

The direct economic impacts of commercial fishing in Dare County under fully open inlet conditions are based on the average value of Dare County non-scallop vessel landings over the last three years $10.442 million, adjusted for a 30% increase in vessels, and a 30% increase in trips per year for all vessels, yielding total Dare County non-scallop vessel landings value of $17.65 million ($10.442M*1.3*1.3 = $17.65M). In addition, fisheries agency data indicate that North Carolina scallop vessels based in Dare County have landed about $10 million in scallops per year in Virginia. We assume that 50%, $5 million, of these scallop landings return to Dare County. It is assumed that half the value of the scallops currently landed in Virginia, or $5 million, remains in Virginia, because a scallop processing plant located in Virginia that is owned by a Dare county processor would likely support continued scallop landings in Virginia. For the scallops that continue to be landed in Virginia, Dare County receives the multiplier effects of

May 2014 25 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT these landings (but not the direct effects), as the vessels making these landings return to Dare County for repair and gear switch-out, and the crews of these vessels and their families live in Dare County (however, the economic impacts of fuel and grocery purchases made in Virginia do not impact Dare County). Furthermore, it is assumed that 50% of the recent (2009-2011, 2012 data not available) scallop landings made elsewhere in North Carolina south of Dare County (50% of about $29 million per year, or $14.5 million per year) return to Dare County as a home port, as Dare County is much closer to the scallop fishing grounds that are off the coasts of Virginia and other states farther north.

The annual economic impacts of commercial fishery are presented in Table IV-9 (combined impacts of Dare landings and VA scallop landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, dockside sales of $37.2 million in Dare County generate an additional $29.8 million in economic multiplier effects, for a total economic impact of $67.0 million in output (sales) sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way. The Total Effects listed in the table include the multiplier effects of the Dare County-based scallop vessels that land scallops in Virginia (less the multiplier effects of fuel and grocery purchases, which are assumed to occur in Virginia).

The economic impacts do not include the lower insurance premiums paid by commercial fishermen using a safer, fully open, Oregon Inlet. Nor do the economic impacts include any savings in fuel costs on fishing trips made through Oregon Inlet that otherwise would have used more distant inlets to the south. These effects are likely minor relative to the effects included in the analysis. In any event, the omission of these effects makes the estimated impacts of a fully open inlet more conservative.

Table IV-9. Annual Economic Impacts of Commercial Fishery in Dare County, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $37,204,980 959 $18,416,524 $2,694,669 ------Total Effect $66,966,128 1,243 $28,614,947 $11,808,271 $2,262,162 $4,203,544

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $79.7 million in Dare County for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in Dare County. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions Under ―essentially closed‖ navigability conditions, larger vessels could not navigate Oregon Inlet. Most of these larger vessels would shift to other homeports, likely more southern ports in North Carolina (e.g., /Morehead City) and Hampton, Virginia. Questionnaire responses

May 2014 26 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT indicate that all scallop vessels would leave Dare County for other NC ports (New Bern, Beaufort/Morehead City, etc.) and Virginia. However, based on questionnaire responses, some smaller (less than 50 feet in length) non-scallop vessels could continue to navigate Oregon Inlet, but with reduced trip frequency. For the purpose of this study, we assume that these remaining, smaller vessels would land catch with a value of no more than $3 million per year.

The annual economic impacts of commercial fishery are presented in Table IV-10 (combined impacts of Dare landings and VA scallop landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, dockside sales of $3 million in Dare County generate an additional $2.1 million in economic multiplier effects, for a total economic impact of $5.1 million in output (sales) sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table IV-10. Annual Economic Impacts of Commercial Fishery in Dare County, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $3,000,000 68 $1,310,879 $191,805 ------Total Effect $5,118,661 88 $2,039,205 $838,459 $160,572 $299,435 b) Regional Economic Impacts The Oregon Inlet region is defined as the counties surrounding Oregon Inlet and its tributaries: Camden, Currituck, Dare, Hyde, Pasquotank, Perquimans and Tyrrell counties. The economic impact results presented in this section include the direct impacts of Oregon Inlet-dependent commercial fishing activity in Dare County and its multiplier effects in Dare County and the other counties in the Oregon Inlet region. The results in this section do not include the economic impacts supported by any commercial fishing activity occurring outside Dare County. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the only direct impacts in the region considered here are those that occur in Dare County.

(i) Oregon Inlet Recent Conditions The Oregon Inlet Region economic impacts for the Oregon Inlet Recent Conditions scenario are presented in Table IV-11 (combined impacts of Dare landings and VA landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table.

For example, dockside sales of $10.5 million in Dare County generate an additional $15.69 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $26.2 million in output (sales) sales throughout the Oregon Inlet Region (including Dare County). (Recall that the reason why the multiplier effects are so large relative to the direct effects is that the multiplier effects include the indirect and induced impacts of Dare County-based scallop vessels landing their catches in Virginia, whereas

May 2014 27 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT the direct effects of these scallop vessel landings in Virginia are not included in the direct impacts in Dare County or the state of North Carolina.)

Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the region are $1.1 million larger, resulting in $1.1 million larger total impacts for sales, relative to the Dare County-only total impacts for sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table IV-11. Annual Economic Impacts of Commercial Fishery in Oregon Inlet Region, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $10,500,000 486 $9,249,848 $591,661 ------Total Effect $26,205,108 640 $14,686,464 $5,479,768 $1,266,227 $2,162,937 (ii) Oregon Inlet Fully Open Conditions The Oregon Inlet Region economic impacts for the Oregon Inlet Fully Open Conditions scenario are presented in Table IV-12 (combined impacts of Dare landings and VA landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, dockside sales of $37.2 million in Dare County generate an additional $32.6 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $69.8 million in output (sales) sales throughout the Oregon Inlet Region (including Dare County). Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the Oregon Inlet region are $2.8 million larger, resulting in $2.8 million larger total impacts for sales, relative to the Dare County-only total impacts for sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table IV-12. Annual Economic Impacts of Commercial Fishery in Oregon Inlet Region, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $37,204,980 999 $19,017,236 $1,216,429 ------Total Effect $69,828,252 1,323 $30,564,958 $11,313,536 $2,606,505 $4,511,726

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $83.1 million in Dare County and the surrounding region for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in the surrounding region (including Dare County). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

May 2014 28 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

(iii) Oregon Inlet Essentially Closed Conditions Under ―essentially closed‖ navigability conditions, larger vessels could not navigate Oregon Inlet. Most of these larger vessels would shift to other homeports, likely more southern ports in North Carolina (e.g., Beaufort/Morehead City) and Hampton, Virginia. Questionnaire responses indicate that all scallop vessels would leave Dare County for other NC ports (New Bern, Beaufort/Morehead City, etc.) and Virginia. However, based on questionnaire responses, some smaller (less than 50 feet in length) non-scallop vessels could continue to navigate Oregon Inlet, but with reduced trip frequency. For the purpose of this study, we assume that these remaining, smaller vessels would land catch with a value of no more than $3 million per year.

The Oregon Inlet Region economic impacts for the Oregon Inlet Closed Conditions scenario are presented in Table IV-13 (impacts of Dare landings, no VA landings supported by Dare-based vessels under closed inlet conditions). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, dockside sales of $3 million in Dare County generate an additional $2.34 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $5.34 million in output (sales) sales throughout the Oregon Inlet Region (including Dare County). Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the region are $0.24 million larger, resulting in $0.24 million larger total impacts for sales, relative to the Dare County-only total impacts for sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table IV-13. Annual Economic Impacts of Commercial Fishery in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $3,000,000 71 $1,353,636 $86,585 ------Total Effect $5,335,206 94 $2,184,066 $806,376 $185,603 $322,625 c) Statewide Economic Impacts The economic impact results presented in this section include the direct impacts of Oregon Inlet- dependent commercial fishing activity in Dare County and its multiplier effects throughout the state of North Carolina. Typically, when a larger geographic region is considered, multiplier effects are larger, and so the total economic impacts of a given economic change are also larger. However, some economic changes that result in net economic impacts at the county or regional levels do not result in net economic changes at the state level. For example, a movement in commercial fishing activity from a port outside Dare County, but inside North Carolina, such as Beaufort, NC, to a port inside Dare County, such as Wanchese, NC, results in net economic changes in Dare County but not at the state level. At the state level, there is simply a transfer of economic activity from one location to another within the state. As a result, the answer to the question of whether economic impacts will increase as larger geographic areas are considered depends on the combined effects of (1) larger economic multiplier effects as we consider larger geographic areas and (2) smaller direct effects as we consider larger geographic areas because more economic changes are classified as transfers within a larger area. Therefore, the total impacts in some impact categories may increase as we move from the consideration of county

May 2014 29 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT and regional-level impacts to statewide impacts, but total impacts in other impact categories may decrease.

(i) Oregon Inlet Recent Conditions For the Oregon Inlet Recent Conditions scenario, there are no transfers of commercial fishing economic activity between regions within the state, and so the direct economic impacts of Oregon Inlet-using commercial fishing activity at the state level are the same as those at the county and regional levels. However, the multiplier effects of this commercial fishing activity will be larger, because the purchases of Oregon Inlet-using Dare County commercial fishermen and their families that are made statewide are now considered in the analysis, rather than the purchases made only within the County or within the Oregon Inlet region.

The statewide economic impacts for the Oregon Inlet Recent Conditions scenario are presented in Table IV-14 (combined impacts of Dare landings and VA landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, dockside sales of $10.5 million in Dare County generate an additional $35.2 million in economic multiplier effects statewide (including the Dare County and Oregon Inlet region effects), for a total economic impact of $45.7 million in output (sales) sales statewide. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects for sales (output), for example, occurring statewide are $20.6 million larger, resulting in $20.6 million larger total impacts for sales at the state level, relative to the Dare County-only total impacts for sales.

Economic multiplier effects are larger at the state level than at the county or regional levels. Under recent inlet conditions, every dollar of direct impact sales, for example, results in $1.39 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $3.35 of multiplier effects at the state level. (Recall that the reason why the multiplier effects are so large relative to the direct effects is that the multiplier effects include the indirect and induced impacts of Dare County-based scallop vessels landing their catches in Virginia, whereas the direct effects of these scallop vessel landings in Virginia are not included in the direct impacts in North Carolina.)

Table IV-14. Statewide Annual Economic Impacts of Commercial Fishery Using Oregon Inlet, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $10,500,000 536 $7,653,236 $1,074,595 ------Total Effect $45,695,883 748 $17,331,441 $7,695,111 $1,633,759 $2,861,941 (ii) Oregon Inlet Fully Open Conditions In terms of commercial fishery activity, Oregon Inlet conditions affect primarily larger vessels. With better navigability conditions in Oregon Inlet, larger vessels can make more trips per year,

May 2014 30 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT and some additional, larger vessels may be attracted to switch their home port to Dare County from other ports both inside and outside North Carolina (primarily Virginia).

The direct economic impacts at the state level of commercial fishing in Dare County under fully open inlet conditions are based on the average value of Dare County non-scallop vessel landings over the last three years $10.442 million, adjusted for a 30% increase in vessels, and a 30% increase in trips per year for all vessels. However, at the state level, only half of the 30% increase in vessels is assumed to come from other states, the other half is assumed to be a transfer of vessels from other North Carolina ports (Beaufort/Morehead, New Bern, etc.) to Dare county ports, and the economic impacts of these vessels that transfer home ports within the state are not considered to be net gains from the perspective of the state. As a result, the direct effects at the state level of the Dare County ocean non-scallop vessel landings under the fully open inlet scenario are $15.61 million ($10.442M*1.15*1.3 = $15.61M), a bit less than the $17.65 million in direct effects at the Dare county level, because a transfer of landings from Beaufort, NC, to Dare county is a net gain from Dare county‘s perspective, but it is not a net gain from the state‘s perspective.

Turning to scallop vessels, fisheries agency data indicate that North Carolina scallop vessels based in Dare County have landed about $10 million in scallops per year in Virginia. We continue to assume that 50%, $5 million, of these scallop landings return to Dare County. Because these landings are coming to Dare County from another state, they are considered a net gain to the state. It is assumed that half the value of the scallops currently landed in Virginia, or $5 million, remains in Virginia, because a scallop processing plant owned by a Dare County processor is located in Virginia and would likely support some continued scallop landings in Virginia. For the scallops that continue to be landed in Virginia, Dare County (and, therefore, the state) receives the multiplier effects of these landings (but not the direct effects), as the vessels making these landings return to Dare County for repair and gear switch-out, and the crews of these vessels and their families live in Dare County (however, the economic impacts of fuel and grocery purchases made in Virginia do not impact Dare County or the state of North Carolina).

Furthermore, it is assumed that 50% of the recent (2009-2011, 2012 data not available) scallop landings made elsewhere in North Carolina south of Dare County (50% of about $29 million per year, or $19.5 million per year) return to Dare County as a home port. Although the economic impacts of these transferred landings are a net gain to Dare County, they are simply a transfer and not a net gain from the perspective of the state. As a result, the value of these landings that are simply transferred from one port to another within the state are not considered part of the direct impact of a fully open Oregon Inlet at the state level.

The statewide impacts of the Oregon Inlet Fully Open Conditions scenario are presented in Table IV-15 (combined impacts of Dare landings and VA landings supported by Dare-based vessels, net of transfers to Dare from other NC counties). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, Oregon Inlet- dependent dockside sales of $20.7 million in Dare County (not including the value of landings transferred from other ports within the state to Dare County, which are not considered a net gain to the state) under the Fully Open inlet scenario generate an additional $37.3 million in economic

May 2014 31 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $58 million in output (sales) sales throughout the state (again, including Dare County and the Oregon Inlet region). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Comparing the economic impacts at the state level with those that occur at the county level and regional levels, the direct effects of a fully open Oregon Inlet at the state level are smaller than those at the county and regional levels, because although transfers of economic activity from other North Carolina ports to Dare County ports as a result of a fully open inlet are additions to the direct economic effects in Dare County and the surrounding region, these transfers do not add to the direct economic effects at the state level—they are simply transfers within the state. However, in contrast to direct effects, multiplier effects are larger at the state level compared to multiplier effects at the county or regional levels. For example, the multiplier effects for sales in the Fully Open inlet scenario are $1.81 per dollar of sales at the state level, whereas the multiplier effects are only $0.80 per dollar of sales at the county level.

Table IV-15. Statewide Annual Economic Impacts of Commercial Fishery Using Oregon Inlet, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $20,668,790 670 $9,561,319 $1,342,510 ------Total Effect $58,001,057 947 $22,141,591 $9,774,373 $2,077,203 $3,666,141

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $69.0 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions Under ―essentially closed‖ navigability conditions, larger vessels could not navigate Oregon Inlet. However, based on questionnaire responses, some smaller (less than 50 feet in length) vessels could continue to navigate Oregon Inlet, but with reduced trip frequency. For the purpose of this study, we assume that these remaining, smaller vessels would land catch with a value of no more than $3 million per year.

Most of the larger non-scallop vessels would shift their operations to other homeports, most likely the more southern ports in North Carolina (e.g., Beaufort/Morehead City) and Hampton, Virginia. For the purposes of this study, we assume that half of the reduction in the value of non-scallop vessel landings (0.5*($10,442,000 - $3,000,000)= $3,721,000) is simply a transfer to other, more southern ports in North Carolina, and half of the reduction in landings value is the result of vessels either transferring to out-of-state homeports or leaving the fishing industry

May 2014 32 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT altogether. From the state‘s perspective, vessels transferring their homeport out of state or leaving the fishing industry altogether results in a loss of economic impacts to the state. However, from the state‘s perspective, those vessels transferring their home port within the state do not result in a loss of economic impacts to the state; instead, the economic impacts of these vessels are simply transferred from one location to another within the state. As a result, the economic impacts of the vessels that transfer home ports within the state as a result of closed conditions in Oregon Inlet remain part of state-level economic impacts.

Questionnaire responses indicate that all scallop vessels would leave Dare County for other NC ports (New Bern, Beaufort/Morehead City, etc.) and Virginia. For the purposes of this study, under closed inlet conditions it is assumed that half of the value of scallops landed in Dare County under recent inlet conditions (0.50*$58,000 = $29,000), and half of the value of scallops landed in Virginia but supported by vessels with homeports in Dare County (0.50*$10,000,000 = $5,000,000), will transfer to other, more southerly North Carolina ports such as Beaufort/Morehead or New Bern. The other half of these landings are assumed to leave the state altogether as their vessels move to out of state homeports. The economic impacts of the scallop vessels transferring their homeport from Dare County to another port within North Carolina are simply transferred from one location to another within the state and remain part of the state-level economic impacts. The economic impacts of the vessels transferring their homeports out of state are lost to the state of North Carolina.

The statewide economic impacts for the Oregon Inlet Closed Conditions scenario are presented in Table IV-16 (combined impacts of NC landings made in Dare County or formerly made in Dare County, and VA landings supported by NC-based vessels formerly based in Dare County). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, dockside sales of $6.75 million made in North Carolina by commercial fishing vessels formerly based in Dare County generate an additional $8.70 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $15.45 million in output (sales) sales throughout the state (again, including Dare County and the Oregon Inlet region). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Comparing the county-level direct impacts with state-level direct impacts for the Oregon Inlet Closed scenario, the direct impacts are smaller at the county level ($3 million) and larger at the state level ($6.75 million), because the impacts of the vessels that transfer their operations from Dare County to another port within North Carolina as a result of closed conditions in Oregon Inlet are a loss when viewed from the County‘s perspective but are simply a transfer from one port to another within the state, resulting in no net loss, from the state‘s perspective.

Economic multiplier effects are larger at the state level than at the county or regional levels. Under closed inlet conditions, every dollar of direct impact sales, for example, results in $0.71 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $1.29 of multiplier effects at the state level.

May 2014 33 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table IV-16. Statewide Annual Economic Impacts of Commercial Fishery that Had Been Using Oregon Inlet, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, and Sole State and Local Impact Type Sales (Output) Employment and Interest Federal Taxes Proprietorship Taxes Income Income Direct Effect $6,750,000 177 $2,519,968 $353,830 ------Total Effect $15,447,140 252 $5,921,628 $2,604,389 $553,818 $982,188 2. Economic Impacts Summary If the navigability of Oregon Inlet is not maintained, then interview responses indicate that most commercial fishing vessels would choose to remain in the fishing business but would relocate their fishing operations to other ports, most likely located in Virginia. If the fishermen were to relocate due to a loss of navigability in Oregon Inlet, Dare County would lose the employment, wages, and profits of the crew, skippers and vessel owners. Other Dare County employees and businesses owners would also suffer reductions in employment, wages, rents and profits due to economic multiplier effects. These impacts can also be felt by the surrounding region and entire state of North Carolina.

In terms of impacts on government tax and fee revenues, only the total impacts are presented, as the IMPLAN modeling software produces estimates of total impacts only for taxes and fees. If we assume that the Federal government would receive similar revenues and fees if the vessels relocate to another state, then the Federal government portion of the impacts should not be included in the overall impact estimate. However, should vessels relocate, the Dare County and State of North Carolina governments would face reductions in tax collections and revenues. The economic impacts on the Dare County and North Carolina state governments are given by the ―State and Local Taxes‖ values only.

Table IV-17 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent commercial fishing vessels for recent conditions. As mentioned previously, recent conditions is based on an average of conditions over the last 3 years (a depth of 6 ft or greater only 40% of the time). Landings in Dare County plus half of the landings in Engelhard were considered. For scallops landed in Virginia, the Dare County region only received the multiplier effects for everything (except fuel, groceries, restaurant, and hotel which occur while in Virginia), not the direct effect (the direct effect goes to Virginia).

May 2014 34 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table IV-17. Summary of Annual Oregon Inlet-Dependent Commercial Fishing Economic Impacts For Recent Conditions Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $10,500,000 466 $8,957,670 $1,310,669 ------Dare County Total Effect $25,085,701 604 $13,866,903 $5,786,998 $1,109,822 $2,039,704 Region Direct Effect $10,500,000 486 $9,249,848 $591,661 ------(Incl. Dare Co.) Total Effect $26,205,108 640 $14,686,464 $5,479,768 $1,266,227 $2,162,937 State of NC Direct Effect $10,500,000 536 $7,653,236 $1,074,595 ------(Incl. Dare Co.) Total Effect $45,695,883 748 $17,331,441 $7,695,111 $1,633,759 $2,861,941 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Table IV-18 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent commercial fishing vessels for fully open conditions. As mentioned previously, fully open conditions are considered to be dredged to a depth of 14 ft or greater 85-100% of the time. Fully open inlet conditions would affect primarily trawlers and scallop vessels. There would be an increase in trawler trips per year plus some additional larger size category trawlers would be attracted to the region. There would be a large increase in scallop activity due to scallop vessels returning, a large increase in scallop population due to restoration efforts, and a large increase in scallop prices. However, it is likely that much of the scallop landings would still occur in Virginia as they have in the past when Oregon Inlet were healthier.

Table IV-18. Summary of Annual Oregon Inlet-Dependent Commercial Fishing Economic Impacts For Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $37,204,980 959 $18,416,524 $2,694,669 ------Dare County Total Effect $66,966,128 1,243 $28,614,947 $11,808,271 $2,262,162 $4,203,544 Region Direct Effect $37,204,980 999 $19,017,236 $1,216,429 ------(Incl. Dare Co.) Total Effect $69,828,252 1,323 $30,564,958 $11,313,536 $2,606,505 $4,511,726 State of NC Direct Effect $20,668,790 670 $9,561,319 $1,342,510 ------(Incl. Dare Co.) Total Effect $58,001,057 947 $22,141,591 $9,774,373 $2,077,203 $3,666,141 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The impacts in Table IV-18 reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $79.7 million in Dare County, $83.1 million in the surrounding region (including Dare County), and $69.0 million in state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. Again, these numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in each of the three geographic settings – Dare County, the surrounding region (including Dare County), and the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if

May 2014 35 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table IV-19 presents the potential additional economic impacts from commercial fishing that may be realized if Oregon Inlet were maintained to fully open conditions. The results are equivalent to the difference between Table IV-18 (fully open inlet scenario) and Table IV-17 (recent conditions scenario).

Table IV-19. Summary of Potentially Gained Annual Economic Impacts from Commercial Fishing for Oregon Inlet Fully Open Scenario Wage, Salary, Dividend, and Sole Rent, and State and Federal Locale Impact Type Sales (Output) Employment Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $26,704,980 492 $9,458,854 $1,384,000 ------Dare County Total Effect $41,880,427 639 $14,748,044 $6,021,273 $1,152,340 $2,163,840 Region Direct Effect $26,704,980 513 $9,767,388 $624,768 ------(Incl. Dare Co.) Total Effect $43,623,144 684 $15,878,494 $5,833,768 $1,340,278 $2,348,789 State of NC Direct Effect $10,168,790 134 $1,908,083 $267,915 ------(Incl. Dare Co.) Total Effect $12,305,174 198 $4,810,150 $2,079,262 $443,444 $804,200 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005- 2006, the potential additional annual economic impacts could reach up to $54.6 million in Dare County, $56.9 million in the surrounding region (including Dare County), and $23.4 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table IV-20 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent commercial fishing vessels for essentially closed conditions. As mentioned previously, essentially closed conditions are considered to be dredged to a depth of 6 ft or greater only 5% of the time. These conditions would affect primarily larger trawlers and scallop vessels. Smaller trawlers and longliners (<50 ft in length) would still be able to pass through the inlet at certain times. There would be a large loss of landings from trawlers that would move to Morehead City or Virginia. There would likely be no scallop vessels at all. They would likely go to Morehead City, Virginia, or New Bern.

Table IV-20. Summary of Annual Oregon Inlet-Dependent Commercial Fishing Economic Impacts For Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $3,000,000 68 $1,310,879 $191,805 ------Dare County Total Effect $5,118,661 88 $2,039,205 $838,459 $160,572 $299,435 Region Direct Effect $3,000,000 71 $1,353,636 $86,585 ------(Incl. Dare Co.) Total Effect $5,335,206 94 $2,184,066 $806,376 $185,603 $322,625 State of NC Direct Effect $6,750,000 177 $2,519,968 $353,830 ------(Incl. Dare Co.) Total Effect $15,447,140 252 $5,921,628 $2,604,389 $553,818 $982,188 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

May 2014 36 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table IV-21 presents the potential loss of economic impacts from commercial fishing that may be realized if Oregon Inlet were allowed to essentially close. The results are equivalent to the difference between Table IV-17 (recent conditions scenario) and Table IV-20 (essentially closed inlet scenario).

Table IV-21. Summary of Potentially Lost Annual Economic Impacts from Commercial Fishing for Oregon Inlet Essentially Closed Scenario Wage, Salary, Dividend, and Sole Rent, and State and Federal Locale Impact Type Sales (Output) Employment Proprietorship Interest Local Taxes Taxes Income Income Direct Effect -$7,500,000 -398 -$7,646,791 -$1,118,864 ------Dare County Total Effect -$19,967,040 -516 -$11,827,698 -$4,948,539 -$949,250 -$1,740,269 Region Direct Effect -$7,500,000 -415 -$7,896,212 -$505,076 ------(Incl. Dare Co.) Total Effect -$20,869,902 -545 -$12,502,398 -$4,673,392 -$1,080,624 -$1,840,312 State of NC Direct Effect -$3,750,000 -360 -$5,133,268 -$720,765 ------(Incl. Dare Co.) Total Effect -$30,248,743 -497 -$11,409,813 -$5,090,722 -$1,079,941 -$1,879,753 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents 3. Comparison to 2006 Economic Study (M&N, 2006) Over the period 1994-2012 (the NCDMF changed its methodology in 1994, so earlier years are not comparable), the value of Oregon Inlet-dependent commercial fishery landings has ranged from $9.9 million in 2012 to $16.7 million in 2006, in inflation-adjusted 2012-year dollars. The value of landings varies from year to year, depending upon inlet conditions, economic conditions (including fish prices, and fuel prices, which effect landings by affecting the number of trips taken), the availability of imported seafood products, natural fish abundance in the sea, and fishing regulations. The value of ocean commercial fishery landings used in the 2006 was $12.5 million, based on data from 1994 to 2005 (data for 2006 were not yet available when the 2006 study was completed). It should be noted that in the 2006 report, the economic impacts of commercial fishing were calculated in two parts: the impacts of goods and services purchased by the commercial fishing industry, and the impacts of commercial fishing captain and crew labor income. The two parts were to be added together and then presented as a table (Table IV-9) in the report. Unfortunately, due to an oversight, only the impacts of captain and crew labor income were included in Table IV-9. The correct, combined direct impact for output (sales) reported in Table IV-9 should have been $12.5 million, and total impact for output (sales) roughly $25 million. The value of Oregon Inlet-dependent landings used in the present (2014) study for the "Recent Inlet Conditions" scenario (years 2011-2013) is $10.5 million. This average assumes a value of landings of $9 million for 2013, because data for 2013 were not yet available from NCDMF, and commercial fishermen interviewed for the study said that inlet conditions were limiting trips in 2013, so a relatively low landings value was assumed for 2013. If conditions (inlet, economic, biological, regulatory, etc.) in the future are similar to those in year 2006 (the best year in the 1994-2012 period; again, note that year 2006 was not included in the 2006 study, because data for 2006 were not available at the time that the 2006 study was written), then commercial fishery landings and value would be larger than the values reported in the present study under conditions similar to those that prevailed in 2006. On the other hand, if non-inlet-related conditions (economic, biological, regulatory, etc.) become worse in the future, then commercial fishery landings and value would be smaller than those presented in the 2014

May 2014 37 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT study, and the value of inlet improvements would be smaller than that presented in the 2014 study.

Comparing tax revenue impacts from the 2006 study with those from the 2014 study, for commercial fishing the percentage of each dollar of output collected in state and local taxes was similar across the two studies. The percentage of each dollar of output collected in federal taxes was also similar across the two studies.

May 2014 38 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

V. SEAFOOD PACKING & PROCESSING A number of support businesses have located in Dare County to service and supply the commercial fishing vessels. Once fish are landed, seafood packing and processing businesses prepare the catch for market. In fact, several commercial fishermen also have packing and processing operations within their businesses. All of these activities generate jobs, wages, and profits for local workers and business owners, as well as tax revenues to support local government services. For example, five days a week, Wanchese Fish Company‘s mauve trucks deliver seafood caught by their boats and other North Carolina companies across the East Coast. The trucks go to Boston, Baltimore, Philadelphia and New York markets. They send at least five trucks a week to New York and sometimes as many as 10 to 15. This chapter presents detailed information on modeling methodology and analysis results for the Oregon Inlet-dependent seafood packing and processing sector of the Dare County economy.

A. SEAFOOD PACKING AND PROCESSING SURVEYS & INTERVIEWS Surveys were sent out to approximately 7 individuals and/or companies who currently work in the commercial fishing industry. M&N received 4 survey responses from individuals and/or companies in Wanchese and Columbia. Much like the commercial fishing response, the seafood packing and processing surveys indicated that business had decreased since the 2006 study was performed, mostly due to inlet navigation problems. In particular, sea scallop landings have decreased significantly over the past two years. Responses indicated that they would see a large increase in business (on the order of double to triple the business) if the inlet were to become fully open due to the increase in the number and size of commercial fishing boats which could safely traverse through the inlet. If the inlet were to essentially close, even the smaller trawlers, which can currently navigate the inlet, would be forced to leave the area and the seafood packing and processing business would likely die out as it is directly tied to the ability of commercial fisherman to be able to travel through the inlet.

The survey contacts and questions for seafood packing and processing can be found in Appendix A. Overall trends or business costs provided by the interviewees were used in the economic modeling and analyses to not only determine the current economic value of Oregon Inlet but how that value would change if the inlet were fully open or essentially closed.

B. ECONOMIC MODELING & RESULTS – SEAFOOD PACKING & PROCESSING In 2010, the NCDMF conducted a study that examined the expenditures and business profiles of North Carolina seafood dealers in 2009 (NCDMF, 2010). In 2009, there were 683 licensed dealers in North Carolina. The majority of the seafood dealers in the state are small single or family owned businesses. A list of 298 seafood dealer license holders with more than $10,000 in annual seafood sales in 2008 was extracted from the NCDMF license and trip ticket data base. The $10,000 sales criterion was added to select seafood dealers with significant seafood sales. To fit within the NCDMF study budget constraints, 109 of the 298 seafood dealers were contacted to participate in a survey. Out of the 109 dealers contacted, 72 seafood dealers agreed to take the NCDMF survey, for an overall response rate of 66%.

May 2014 39 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

The NCDMF study found that seafood dealers vary greatly in size from small single owner businesses that sell solely to their local community to large dealers that provide seafood to customers on a state, national, and world-wide scale. Businesses considered seafood dealers in North Carolina can include commercial fishermen holding a dealer license, wholesalers, distributors, processors, bait and tackle shops, retail seafood shops, and restaurants. Any person or business holding a dealer license is considered a seafood dealer. All wild caught seafood that is landed in North Carolina must initially be sold through a licensed seafood dealer.

Among the surveyed dealers, total gross sales for 2009 ranged from $7,000 to $7.2 million dollars per year per dealer. Twenty-two percent of the dealers had total sales of more than $1 million per year. The number of full time employees indicated by the study participants ranged from 0 to 38 individuals and the number of seasonal employees ranged from 0 to 75. In addition to the business owner, the average seafood dealer in the survey had 3 year-round employees and 6 seasonal employees. Some seafood dealers also indicated that family members would work for the business without a regular wage or salary.

Business expense categories and average annual expenditures for each category are presented in Table V-1 for the 72 seafood dealers that participated in the 2009 NCDMF survey:

Table V-1. Average Annual Expenditures of North Carolina Seafood Dealers (2009) (NCDMF, 2010) Average Annual Percent of Annual Business Expense Category Expenditure Expenditure Purchases From Other NC $322,692 44.13% Fishermen Purchases From Other NC Seafood $103,555 14.16% Dealers Purchases of Seafood From Out of $72,909 9.97% State Wages and Payroll $69,481 9.50% Transportation and Shipping $30,881 4.22% Mortgage, Loan, or Banking Cost $29,212 4.00% Shipping Containers $26,275 3.59% Building Repair and Maintenance $13,385 1.83% Insurance $11,816 1.62% Non-seafood Products Sold $11,649 1.59% Electricity $11,504 1.57% Spoilage $6,900 0.94% Rent $6,587 0.90% Telephone $2,944 0.40% Office Supplies $1,952 0.27% Water $1,152 0.16% Other $12,969 1.77% Total $735,863 100%

May 2014 40 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Note that raw fish/seafood accounts for more than half (58.29%) of mean business expenses in the NCDMF (2010 study), and the majority of the raw fish/seafood input was bought from North Carolina commercial fishermen. The IMPLAN database provides average cost and earnings information for the North Carolina seafood processing sector in 2012. On average, the cost of raw fish alone accounts for $0.48436 of every sales dollar. Trow (1985) found that the cost of raw fish accounted for $0.73 of every sales dollar for fish packing houses in Dare County in the early 1980s, where fish were simply weighed, separated by species, graded by size, iced down, and packaged in cartons. The National Fisheries Education and Research Foundation (NFERF, 1989) found that raw fish accounted for $0.42 to $0.52 of every sales dollar for whole flounder, filleted flounder, and scallop seafood processors in the South Atlantic region of the U.S. in the late 1980s. For the purposes of this study, the IMPLAN value of $0.48436 was used as the average cost of raw fish per dollar of seafood dealer/processor /packer sales revenue, as this value is based on the most recent data available.

The NCDMF study found that the estimated output (sales) of the North Carolina seafood industry in 2009 was $150 million, which supported economic multiplier effects within the state of $105 million, for a total economic impact of $255 million (NCDMF 2010). Of the $105 million in multiplier effects, $58.8 million was due to the commercial fishing activities that provided the raw seafood inputs, and $46.2 million was due to seafood dealer activities (processing, packing, marketing, distribution, etc.) Based on the NCDMF (2010) values for 2009, every dollar of seafood dealer sales supported $0.31 ($46.2M/$150M = $0.31) in non-fish- related multiplier effects (multiplier effects not attributable to the commercial fishing activities supporting the raw fish inputs).

1. IMPLAN Modeling Analysis The economic impacts of Oregon Inlet-dependent seafood packing and processing are calculated for three geographic areas: Dare County, the Oregon Inlet region, and the State of North Carolina as a whole. For each geographic region, three navigability scenarios are considered: Oregon Inlet recent conditions, Oregon Inlet fully open, and Oregon Inlet closed.

The economic impact numbers reflect seafood packing and processing related to Oregon Inlet- dependent (i.e., ocean) commercial fishing only; any packing and processing related to the estuarine crab and trawl fisheries are not considered here. For the purposes of the present study, it is assumed that estuarine-dependent seafood packing and processing is unaffected by Oregon Inlet conditions.

The impacts are intended to reflect average economic conditions and average weather conditions—the purpose of the study is to examine the impacts of changing navigability conditions under average economic and weather conditions. All dollar values are report in real (inflation adjusted) 2012-year dollars. Employment numbers are the total of full-time and part- time jobs (not ―full-time equivalent‖ jobs). The impacts of changing Oregon Inlet navigability conditions are calculated by finding the differences between impacts across navigability scenarios.

May 2014 41 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT a) Dare County Economic Impacts

(i) Oregon Inlet Recent Conditions A number of support businesses have located in Dare County to service and supply the commercial fishing vessels. Once fish are landed, seafood packing and processing businesses prepare the catch for market. In fact, several commercial fishermen also have packing and processing operations within their businesses. All of these activities generate jobs, wages, and profits for local workers and business owners, as well as tax revenues. For example, five days a week, Wanchese Fish Company‘s trucks deliver seafood caught by their boats and other North Carolina companies across the East Coast. Their trucks go to Boston, Baltimore, Philadelphia and New York markets. They send at least five trucks a week to New York and sometimes as many as 10 to 15.

In 2012, there were approximately 629 fish dealers North Carolina (NCDMF, 2013). However, many of these are commercial fishermen who occasionally sell some of their catch directly to the public. In addition, many of the 629 dealers are located outside the Oregon Inlet region in other areas of the state. Table V-2 presents data on the number of seafood dealer-processors servicing Oregon Inlet-dependent commercial fishery landings from 1992 to 2012 (NCDMF, 2014).

Table V-2. Seafood Dealers Servicing Oregon Inlet-dependent Commercial Fishing Landings, 1992-2012 Year Dealer-Processors 1994 21 1995 31 1996 32 1997 25 1998 29 1999 31 2000 30 2001 27 2002 23 2003 25 2004 22 2005 20 2006 20 2007 22 2008 19 2009 20 2010 20 2011 20 2012 18

May 2014 42 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. Assuming that (1) $10,500,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under recent (2009-20010 Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $21,678,000 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

The economic impacts are presented in Table V-3 (combined impacts of Dare landings and VA scallop landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, seafood dealer/processor sales of $21.7 million in Dare County generate an additional $9.9 million in economic multiplier effects, for a total economic impact of $31.6 million in output (sales) sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way. The estimated direct employment of these seafood dealer/processors, 63 employees, is consistent with the 61 employees reported by NC-EDIS (2014) for the ―Fish and Seafood Merchant Wholesalers‖ industry (i.e., seafood dealer/processors) in Dare County for 2012.

Each dollar of seafood dealer sales supported $0.46 ($9.9M/$21.7M = $0.46) in non-fish-related multiplier effects (multiplier effects not attributable to the commercial fishing activities supporting the raw fish inputs). This is somewhat higher than the $0.31 in non-fish-related multiplier effects per dollar of seafood dealer sales found in the NCDMF (2010) study of all North Carolina seafood dealers. However, the lower average value for all North Carolina seafood dealers reflects a larger proportion of smaller, fisherman/dealers in the statewide population of dealers. These smaller dealers do little processing, and therefore raw fish constitutes a larger proportion of their expenses and is responsible for a larger proportion of the multiplier effects arising from their activities. This leaves a smaller proportion of the multiplier effects attributable to non-fish-related inputs for the statewide population of dealers.

Table V-3. Annual Economic Impacts of Seafood Processing and Packing in Dare County, Oregon Inlet Recent Condition Wage, Salary, Dividend, Sales State and Federal Impact Type Employment and Sole Rent, and (Output) Local Taxes Taxes Proprietorship Interest Direct Effect $21,678,000 63 $1,097,434Income $1,081,523Income ------Total Effect $31,644,092 149 $4,296,036 $4,306,368 $963,787 $1,020,826 (ii) Oregon Inlet Fully Open Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial

May 2014 43 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Fishing section of this report. Assuming that (1) $37,205,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under fully open Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $76,693,000 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

The economic impacts are presented in Table V-4 (combined impacts of Dare landings and VA scallop landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, seafood dealer/processor sales of $76.7 million in Dare County generate an additional $35.3 million in economic multiplier effects, for a total economic impact of $112.0 million in output (sales) sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table V-4. Annual Economic Impacts of Seafood Processing and Packing in Dare County, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $76,693,000 224 $3,882,532 $3,826,241 ------Total Effect $111,951,642 526 $15,198,766 $15,235,237 $3,409,724 $3,611,528

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $129.1 million in Dare County for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in Dare County. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. Assuming that (1) $3,000,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under essentially closed Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $6,194,000 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the

May 2014 44 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

The economic impacts are presented in Table V-5 (combined impacts of Dare landings and VA scallop landings supported by Dare-based vessels). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, seafood dealer/processor sales of $6.2 million in Dare County generate an additional $2.8 million in economic multiplier effects, for a total economic impact of $9.0 million in output (sales) sales. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way. The decrease in Direct Effects from $21.7 million under recent Oregon Inlet conditions to $6.2 million under closed Oregon Inlet conditions (a reduction of 71%) is consistent with the estimated reduction in sales of 67-75% from recent to closed inlet conditions reported by the Dare County seafood processors interviewed for this study.

Table V-5. Annual Economic Impacts of Seafood Processing and Packing in Dare County, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $6,194,000 18 $313,567 $309,021 ------Total Effect $9,041,823 43 $1,227,589 $1,230,487 $275,388 $291,693 b) Regional Economic Impacts The Oregon Inlet region is defined as the counties surrounding Oregon Inlet and its tributaries: Camden, Currituck, Dare, Hyde, Pasquotank, Perquimans and Tyrrell counties. The economic impact results presented in this section include the direct impacts of Oregon Inlet-dependent seafood dealer/processor/packer activity in Dare County and its multiplier effects in Dare County and the other counties in the Oregon Inlet region. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the only direct impacts considered here are those that occur in Dare County.

(i) Oregon Inlet Recent Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. Assuming that (1) $10,500,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under recent Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $21,678,000 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

May 2014 45 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

The Oregon Inlet Region economic impacts of seafood dealer/processor/packer sales for the Oregon Inlet Recent Conditions scenario are presented in Table V-6 (combined impacts of Dare landings and VA landings supported by Dare-based vessels). For example, dealer sales of $21.7 million in Dare County generate an additional $13.6 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $35.3 million in output (sales) sales throughout the Oregon Inlet Region (including Dare County). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the region under recent Oregon Inlet conditions are $3.7 million larger, resulting in $3.7 million larger total impacts for sales, relative to the Dare County-only total impacts for sales.

Table V-6. Annual Economic Impacts of Seafood Processing and Packing in Oregon Inlet Region, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $21,678,000 61 $1,868,678 $1,040,994 ------Total Effect $35,254,270 176 $6,068,833 $5,107,509 $1,200,001 $1,356,748 (ii) Oregon Inlet Fully Open Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. Assuming that (1) $37,205,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under fully open Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $76,693,000 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

The Oregon Inlet Region economic impacts of seafood dealer/processor/packer sales for the Oregon Inlet Fully Open Conditions scenario are presented in Table VI-7 (combined impacts of Dare landings and VA landings supported by Dare-based vessels). For example, dealer sales of $76.7 million in Dare County generate an additional $48 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $124.7 million in output (sales) sales throughout the Oregon Inlet Region (including Dare County). Economic multiplier effects are the difference between the Direct Effects and the Total

May 2014 46 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Effects listed in the table. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the region under fully open Oregon Inlet conditions are $12.7 million larger, resulting in $12.7 million larger total impacts for sales, relative to the Dare County-only total impacts for sales.

Table V-7. Annual Economic Impacts of Seafood Processing and Packing in Oregon Inlet Region, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $76,693,000 216 $6,611,058 $3,682,856 ------Total Effect $124,723,485 624 $21,470,479 $18,069,480 $4,245,395 $4,799,937

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $143.8 million in Dare County and the surrounding region for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in the surrounding region (including Dare County). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. Assuming that (1) $3,000,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under closed Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $6,194,000 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

The Oregon Inlet Region economic impacts of seafood dealer/processor/packer sales for the Oregon Inlet Closed Conditions scenario are presented in Table V-8 (combined impacts of Dare landings and VA landings supported by Dare-based vessels). For example, dealer sales of $6.2 million in Dare County generate an additional $3.9 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $10.1 million in output (sales) sales throughout the Oregon Inlet Region (including Dare

May 2014 47 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

County). Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the region under closed Oregon Inlet conditions are $1.1 million larger, resulting in $1.1 million larger total impacts for regional sales, relative to the Dare County-only total impacts for sales.

Table V-8. Annual Economic Impacts of Seafood Processing and Packing in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $6,194,000 17 $533,933 $297,440 ------Total Effect $10,073,113 50 $1,734,032 $1,459,356 $342,872 $387,660 c) Statewide Economic Impacts The economic impact results presented in this section include the direct impacts of Oregon Inlet- dependent seafood dealer/processor/packer activity in Dare County and its multiplier effects throughout the state of North Carolina. Typically, when a larger geographic region is considered, multiplier effects are larger, and so the total economic impacts of a given economic change are also larger. However, some economic changes that result in net economic impacts at the county or regional levels do not result in net economic changes at the state level. For example, a movement in seafood processor activity from a port outside Dare County, but inside North Carolina, such as Beaufort, NC, to a port inside Dare County, such as Wanchese, NC, results in net economic changes in Dare County but not at the state level. At the state level, there is simply a transfer of economic activity from one location to another within the state.

(i) Oregon Inlet Recent Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. For the Oregon Inlet Recent Conditions scenario, there are no transfers of commercial fishing economic activity between regions within the state, and so the direct economic impacts of Oregon Inlet-using commercial fishing activity at the state level are the same as those at the county and regional levels. However, the multiplier effects of this commercial fishing activity will be larger, because the purchases of Oregon Inlet-using Dare County commercial fishermen and their families that are made statewide are now considered in the analysis, rather than the purchases made only within the county or within the Oregon Inlet region.

Assuming that (1) $10,500,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under recent Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $21,678,000 is derived for annual Oregon Inlet-dependent seafood

May 2014 48 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

The statewide economic impacts of seafood dealer/processor/packer sales for the Oregon Inlet Recent Conditions scenario are presented in Table V-9 (combined impacts of Dare landings and VA landings supported by Dare-based vessels). For example, dealer sales of $21.7 million in Dare County generate an additional $21 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $42.7 million in output (sales) sales statewide. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Economic multiplier effects are larger at the state level than at the county or regional levels. Under fully open inlet conditions, every dollar of direct impact sales, for example, results in $0.46 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.97 of multiplier effects at the state level.

Table V-9. Statewide Annual Economic Impacts of Seafood Processing and Packing, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $21,678,000 62 $1,659,221 $1,052,001 ------Total Effect $42,678,573 223 $9,457,846 $6,596,656 $1,511,314 $2,026,397 (ii) Oregon Inlet Fully Open Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. Assuming that (1) $20,669,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under fully open Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $42,672,372 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

The statewide economic impacts of seafood dealer/processor/packer sales for the Oregon Inlet Fully Open Conditions scenario are presented in Table V-10 (combined impacts of Dare landings

May 2014 49 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT and VA landings supported by Dare-based vessels, net of transfers to Dare from other NC counties). For example, dealer sales of $42.7 million in Dare County generate an additional $41.1 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $83.8 million in output (sales) sales statewide. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Economic multiplier effects are larger at the state level than at the county or regional levels. Under fully open inlet conditions, every dollar of direct impact sales, for example, results in $0.46 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.96 of multiplier effects at the state level.

Table V-10. Statewide Annual Economic Impacts of Seafood Processing and Packing, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $42,672,372 121 $3,256,981 $2,065,033 ------Total Effect $83,776,239 437 $18,565,353 $12,948,957 $2,966,645 $3,977,733

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $96.6 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions The economic analysis of Oregon Inlet-dependent seafood dealers/processors/packers is based on the estimates of Oregon Inlet-dependent commercial fishery landings detailed in the Commercial Fishing section of this report. Assuming that (1) $6,750,000 in Oregon Inlet-dependent commercial fishery landings are purchased by Dare County seafood processors as raw fish input under closed Oregon Inlet navigability conditions, and (2) $0.48436 in raw fish input is purchased for every dollar of sales revenue, an estimate of $13,936,000 is derived for annual Oregon Inlet-dependent seafood packing/processing sales in Dare County. (2012-year dollars). The multiplier effects of the seafood processing sales revenue beyond those attributable to the commercial fishing activity supporting the raw fish/seafood inputs are calculated by adjusting the model settings within IMPLAN such that all raw fish input is imported from outside the region (this assumption ensures that IMPLAN does not double-count the regional multiplier effects of the raw fish input, reported in the commercial fishing section of this study).

May 2014 50 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

The statewide economic impacts of seafood dealer/processor/packer sales for the Oregon Inlet Closed Conditions scenario are presented in Table V-11 (combined impacts of NC landings made in Dare County or formerly made in Dare County, and VA landings supported by NC- based vessels formerly based in Dare County). For example, dealer sales of $13.9 million in Dare County generate an additional $13.5 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $27.4 million in output (sales) sales statewide. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Economic multiplier effects are larger at the state level than at the county or regional levels. Under fully open inlet conditions, every dollar of direct impact sales, for example, results in $0.45 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.97 of multiplier effects at the state level.

Table V-11. Statewide Annual Economic Impacts of Seafood Processing and Packing, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $13,936,000 40 $1,066,653 $676,293 ------Total Effect $27,436,506 143 $6,080,106 $4,240,751 $971,569 $1,302,697 2. Economic Impacts Summary Once fish are landed, seafood packing and processing businesses prepare the catch for market. Several commercial fishermen also have packing and processing operations within their businesses. There were an estimated 18 commercial seafood packing and processing businesses dependant on Oregon Inlet in 2012. In addition, a number of support businesses which service and supply the commercial fishing vessels are located in Dare County.

Table V-12 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent seafood packing and processing for recent conditions. As mentioned previously, recent conditions is based on an average of conditions over the last 3 years (a depth of 6 ft or greater only 40% of the time). Landings in Dare County plus half of the landings in Engelhard were considered. Annual processor sales supported by Oregon Inlet dependent seafood assumes the raw seafood cost of $0.48 per dollar of processor sales from the Moffatt & Nichol 2006 study. Multiplier effects do not include the multiplier effects of raw seafood purchased from fishermen. These are included under the commercial fishing multiplier effects.

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Table V-12. Summary of Annual Oregon Inlet-Dependent Seafood Packing/Processing Economic Impacts For Recent Conditions Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $21,678,000 63 $1,097,434 $1,081,523 ------Dare County Total Effect $31,644,092 149 $4,296,036 $4,306,368 $963,787 $1,020,826 Region Direct Effect $21,678,000 61 $1,868,678 $1,040,994 ------(Incl. Dare Co.) Total Effect $35,254,270 176 $6,068,833 $5,107,509 $1,200,001 $1,356,748 State of NC Direct Effect $21,678,000 62 $1,659,221 $1,052,001 ------(Incl. Dare Co.) Total Effect $42,678,573 223 $9,457,846 $6,596,656 $1,511,314 $2,026,397 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Table V-13 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent seafood packing and processing for fully open conditions. As mentioned previously, fully open conditions are considered to be dredged to a depth of 14 ft or greater 85-100% of the time. Fully open inlet conditions would affect primarily trawlers and scallop vessels. There would be an increase in trawler trips per year plus some additional larger size category trawlers would be attracted to the region. There would be a large increase in scallop activity due to scallop vessels returning, a large increase in scallop population due to restoration efforts, and a large increase in scallop prices. However, it is likely that much of the scallop landings would still occur in Virginia as they have in the past when Oregon Inlet were healthier.

Table V-13. Summary of Annual Oregon Inlet-Dependent Seafood Packing/Processing Economic Impacts For Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $76,693,000 224 $3,882,532 $3,826,241 ------Dare County Total Effect $111,951,642 526 $15,198,766 $15,235,237 $3,409,724 $3,611,528 Region Direct Effect $76,693,000 216 $6,611,058 $3,682,856 ------(Incl. Dare Co.) Total Effect $124,723,485 624 $21,470,479 $18,069,480 $4,245,395 $4,799,937 State of NC Direct Effect $42,672,372 121 $3,256,981 $2,065,033 ------(Incl. Dare Co.) Total Effect $83,776,239 437 $18,565,353 $12,948,957 $2,966,645 $3,977,733 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The impacts in Table V-13 reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $129.1 million in Dare County, $143.8 million in the surrounding region (including Dare County), and $96.6 million in state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. Again, these numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in each of the three geographic settings – Dare County, the surrounding region (including Dare County), and the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if

May 2014 52 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table V-14 presents the potential additional economic impacts from seafood packing and processing that may be realized if Oregon Inlet were maintained to fully open conditions. The results are equivalent to the difference between Table V-13 (fully open inlet scenario) and Table V-12 (recent conditions scenario).

Table V-14. Summary of Potentially Gained Annual Economic Impacts from Seafood Packing/Processing for Oregon Inlet Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $55,015,000 161 $2,785,098 $2,744,718 ------Dare County Total Effect $80,307,550 377 $10,902,730 $10,928,869 $2,445,937 $2,590,702 Region Direct Effect $55,015,000 155 $4,742,380 $2,641,862 ------(Incl. Dare Co.) Total Effect $89,469,215 447 $15,401,646 $12,961,971 $3,045,394 $3,443,189 State of NC Direct Effect $20,994,372 59 $1,597,760 $1,013,032 ------(Incl. Dare Co.) Total Effect $41,097,666 215 $9,107,507 $6,352,301 $1,455,331 $1,951,336 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005- 2006, the potential additional annual economic impacts could reach up to $97.5 million in Dare County, $108.6 million in the surrounding region (including Dare County), and $53.9 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table V-15 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent seafood packing and processing for essentially closed conditions. As mentioned previously, essentially closed conditions are considered to be dredged to a depth of 6 ft or greater only 5% of the time. These conditions would affect primarily larger trawlers and scallop vessels. Smaller trawlers and longliners (<50 ft in length) would still be able to pass through the inlet at certain times. There would be a large loss of landings from trawlers that would move to Morehead City or Virginia. There would likely be no scallop vessels at all. They would likely go to Morehead City, Virginia, or New Bern.

Table V-15. Summary of Annual Oregon Inlet-Dependent Seafood Packing/Processing Economic Impacts For Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $6,194,000 18 $313,567 $309,021 ------Dare County Total Effect $9,041,823 43 $1,227,589 $1,230,487 $275,388 $291,693 Region Direct Effect $6,194,000 17 $533,933 $297,440 ------(Incl. Dare Co.) Total Effect $10,073,113 50 $1,734,032 $1,459,356 $342,872 $387,660 State of NC Direct Effect $13,936,000 40 $1,066,653 $676,293 ------(Incl. Dare Co.) Total Effect $27,436,506 143 $6,080,106 $4,240,751 $971,569 $1,302,697 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

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Table V-16 presents the potential loss of economic impacts from seafood packing and processing that may be realized if Oregon Inlet were allowed to essentially close. The results are equivalent to the difference between Table V-12 (recent conditions scenario) and Table V-15 (essentially closed inlet scenario).

Table V-16. Summary of Potentially Lost Annual Economic Impacts from Seafood Packing/Processing for Oregon Inlet Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect -$15,484,000 -45 -$783,867 -$772,502 ------Dare County Total Effect -$22,602,269 -106 -$3,068,447 -$3,075,881 -$688,399 -$729,133 Region Direct Effect -$15,484,000 -44 -$1,334,745 -$743,554 ------(Incl. Dare Co.) Total Effect -$25,181,157 -126 -$4,334,801 -$3,648,153 -$857,129 -$969,088 State of NC Direct Effect -$7,742,000 -22 -$592,568 -$375,708 ------(Incl. Dare Co.) Total Effect -$15,242,067 -80 -$3,377,740 -$2,355,905 -$539,745 -$723,700 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents 3. Comparison to 2006 Economic Study (M&N, 2006) The value of Oregon Inlet-dependent seafood processing and packing depends on the level of Oregon Inlet-dependent commercial fishery landings. Over the period 1994-2012 (the NCDMF changed its methodology in 1994, so earlier years are not comparable), the value of Oregon Inlet-dependent commercial fishery landings has ranged from $9.9 million in 2012 to $16.7 million in 2006, in inflation-adjusted 2012-year dollars. The value of landings varies from year to year, depending upon inlet conditions, economic conditions (including fish prices, and fuel prices, which effect landings by affecting the number of trips taken), the availability of imported seafood products, natural fish abundance in the sea, and fishing regulations. The value of ocean commercial fishery landings used in the 2006 was $12.5 million, based on data from 1994 to 2005 (data for 2006 were not yet available when the 2006 study was completed). The value of Oregon Inlet-dependent landings used in the present (2014) study for the "Recent Inlet Conditions" scenario (years 2011-2013) is $10.5 million. This average assumes a value of landings of $9 million for 2013, because data for 2013 were not yet available from NCDMF, and commercial fishermen interviewed for the study said that inlet conditions were limiting trips in 2013, so a relatively low landings value was assumed for 2013.

The number of direct jobs supported by the Seafood Processing and Packing industry is based on three sources: the number of jobs for this industry as reported by the North Carolina EDIS database, the number of jobs for this industry as reported by the IMPLAN database, and the number of jobs for each of several large seafood processors in Dare county, as reported by the processors in interviews conducted for the present (2014) study. All three sources produced similar estimates of the number of direct jobs. The number of jobs supported per dollar of sales by the Seafood Processing and Packing industry in 2014 is lower than the number of jobs supported per dollar of sales in 2006. This could be due to several factors, including: (1) improvements in production efficiency, which lower the number of jobs required to produce a given amount of sales, (2) increases in sales dollars received per pound of seafood processed, (3) a change in the mix of workers from a larger number of part-time workers to fewer, full-time

May 2014 54 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT workers, or some combination of these, or other, factors. In both studies, the best available data were used to estimate the number of jobs.

If conditions (inlet, economic, biological, regulatory, etc.) in the future are similar to those in 2006, then commercial fishery landings and value would be larger than the values reported in the present 2014 study under conditions similar to those that prevailed in 2006. On the other hand, if non-inlet-related conditions (economic, biological, regulatory, etc.) become worse in the future, then commercial fishery landings and value would be smaller than those presented in the 2014 study, and the value of inlet improvements would be smaller than that presented in the 2014 study. We would expect the value of Oregon Inlet-dependent seafood processing and packing to be roughly proportional to commercial fishery landings (assuming the mix of fishing vessel types remained similar to those assumed in the commercial fishing analysis section of the report), such that if commercial fishery landings were to increase for a given inlet conditions scenario, then the value of seafood processing and packing would also likely increase by a similar proportion under the same inlet conditions scenario. For example, the direct impacts of seafood processing and packing in the 2006 report were $25,000,000, based on commercial fishery landings of $12,500,000.

Comparing tax revenue impacts from the 2006 study with those from the 2014 study, for seafood processing and packing the percentage of each dollar of output collected in state and local taxes was similar across the two studies. The percentage of each dollar of output collected in federal taxes was about twice as large in 2006 compared with 2014. The reason is that seafood processors employed more workers per million dollars of sales in 2006 (5.28 workers per $1 million sales) than in 2014 (2.92 workers per $1 million sales), and having a larger number of workers per million dollars of sales results in higher overall federal taxes paid per dollar of sales (output) in 2006 relative to 2014.

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May 2014 56 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

VI. BOAT BUILDING & SUPPORT SERVICES The boat building business is a significant industry in the Oregon Inlet region and especially in Dare County. NCWaterways.com, North Carolina‘s boating industry and marine trades information website, lists 19 boat builders in the Oregon Inlet region in 2014 (see Table VI-1) (NCWaterways.com, 2014). Of these, 15 are located in Dare County and represent a substantial portion of the manufacturing business in the County (NCDC, 2014).

Table VI-1. Boat Builders Located in Oregon Inlet Region, NC, 2014 Boat Builder County Town HML Boatworks Camden Shiloh Sullivan Boatworks Currituck Point Harbor Paul Mann Custom Boats Dare Manns Harbor B & B Boats, Inc. Dare Manteo Harrison Boatworks, LLC Dare Manteo Bayliss Boatworks Dare Wanchese Blackwell Boatworks Dare Wanchese Bradley Custom Boats Dare Wanchese Briggs Boatworks Inc. Dare Wanchese Briglia Boatworks, L.L.C Dare Wanchese Carolina Custom Marine Dare Wanchese Carolina Marine Group - Ritchie Howell Boats Dare Wanchese Carolina Yacht Enterprises Dare Wanchese Guthrie Boatworks Dare Wanchese Johnson Boat Works Dare Wanchese Scarborough Boat Works Dare Wanchese Spencer Yachts Dare Wanchese Foster Boats Hyde Hatteras Laurel Point Boat Works Tyrell Columbia

This region boasts the birthplace of ―Carolina Style‖ boat building, a style which originated to withstand the incomparable Oregon Inlet waters and rough seas offshore of Bodie and Pea Islands. Local boat builders are directly dependent on Oregon Inlet, as the valuable reputation of the boats for strength and durability is maintained by continuous research and testing in the uniquely rough waters offshore.

This chapter will present pertinent information and perspectives gained from field interviews conducted with several local boat-builders followed by modeling methodology and analysis results for Oregon Inlet-dependent boat building and support services.

A. BOAT BUILDING AND SUPPORT SERVICE SURVEYS & INTERVIEWS Surveys were sent out to approximately 25 individuals and/or companies who currently work in the boat building and support services industries. M&N received 15 survey responses from

May 2014 57 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT individuals and/or companies in Wanchese and Manns Harbor. The boat builders indicated that while they have maintained a steady supply of business over the recent years, more of their supplies are being bought outside of Dare County and North Carolina due to shutdown of businesses. If the inlet were to fully open, they estimated that their business would increase on the order of 50%-100%. If Oregon Inlet were to essentially close, approximately half of the boat builders could continue operations with a 10%-50% reduction in sales. The other half would likely move their businesses to places like South Carolina and Florida or they would shut down completely. The support service businesses would see a similar increase in business to the boat builders if Oregon Inlet were to be fully open and a similar decrease in business to the boat builders if the inlet were to essentially closed. Most of the support service businesses indicated that they would not relocate if the inlet were to close, but just continue to operate with the loss of business.

M&N also conducted in person interviews with 2 individuals who are involved in the boat building and support services industries. One of the individuals was a boat builder who indicated that while his boat building business could continue, although downsized, if the inlet were to close, the service yard operating within his business would go out of business. Many of the boat builders in the area would have the same issue. They could continue to build boats, using Beaufort Inlet. However, they would lose revenue due to the service yards going out of business. He also indicated that he currently had the money to build another building to expand his business but was not willing to do it unless he knows the inlet will be maintained. Otherwise, he is currently looking at downsizing his business in Wanchese and relocating a majority of it to South Carolina.

The survey contacts and questions for boat building and support services (marine trades) can be found in Appendix A. Overall trends or business costs provided by the interviewees were used in the economic modeling and analyses to not only determine the current economic value of Oregon Inlet but how that value would change if the inlet were fully open or essentially closed.

B. ECONOMIC MODELING & RESULTS – BOAT BUILDING & SUPPORT SERVICES The 15 boat builders located in Dare County represent a substantial portion of the 47 manufacturing businesses in the County (NCDC, 2014), directly employing 274 workers in 2012, who earned $10.6 million in wages. Boat building accounted for approximately 274 of the 480 manufacturing jobs in Dare County in 2013 (NC-EDIS, 2014). Indeed, Spencer Yachts, Inc., is one of the top 25 employers in the County and is the largest manufacturing employer. Boat building jobs are relatively high-paying, with an average weekly wage of $744 in 2012, compared to the County average weekly wage for private industry of $517 (NC-EDIS, 2014, NCDC, 2014). Dare County boat builders buy some of their materials locally, including glass, electronics, fuel and water tanks, and miscellaneous small tools and hardware items. For example, Harbor Welding provides fuel tanks and water tanks to boat builders. Many other production inputs are purchased from vendors located outside Dare County, mostly in North Carolina and Virginia.

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1. IMPLAN Modeling Analysis The economic impacts of Oregon Inlet-dependent boat building are calculated for three geographic areas: Dare County, the Oregon Inlet region, and the State of North Carolina as a whole. For each geographic region, three navigability scenarios are considered: Oregon Inlet recent conditions, Oregon Inlet fully open, and Oregon Inlet closed.

The economic impact numbers reflect Oregon Inlet-using boat builders only. The impacts do not include the effects of Oregon Inlet navigability on boat builders located outside the Oregon Inlet region, such as builders located in Beaufort/Morehead City, NC.

The impacts are intended to reflect average economic conditions and average weather conditions—the purpose of the study is to examine the impacts of changing navigability conditions under average economic and weather conditions. All dollar values are report in real (inflation adjusted) 2012-year dollars. Employment numbers are the total of full-time and part- time jobs (not ―full-time equivalent‖ jobs). The impacts of changing Oregon Inlet navigability conditions are calculated by finding the differences between impacts across navigability scenarios. a) Dare County Economic Impacts

(i) Oregon Inlet Recent Conditions Information on recent sales of the boat building industry in Dare County come from three sources. First, the five boat builders located in Dare County who were interviewed for the present study report approximately $39 million in sales for 2012-2013; however, this figure does not include the sales of all boat builders in the County. Second, the IMPLAN database for the County reports $59.5 million in boat sales for the industry in 2012. Third, the NC-EDIS data indicate that $10.6 million in wages were paid to boat building employees in Dare County in 2012, and direct employment in the boat building industry was 274; these figures are consistent with annual sales figures as reported in the IMPLAN database when the sales per employee and sales per wage dollar conversion factors in IMPLAN are used to convert the NC-EDIS wages and employment figures to annual sale equivalents. Based on this information, for the purposes of this study we assume a figure of $59.5 million for annual boat building industry sales in Dare County under recent (2010-2012) conditions.

Based on $59.5 million per year in direct sales for the Dare County boat building industry, economic impacts are calculated using IMPLAN and are presented in Table VI-2. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the Dare County businesses that supply and service the boat building industry, as well as the economic effects within Dare County of the spending done by boat builder employees and their families within the County. In Table VI-2, boat sales of $59.5 million in Dare County generate an additional $35.1 million in economic multiplier effects, for a total economic impact of $94.6 million in sales (output). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

May 2014 59 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VI-2. Annual Economic Impacts of Boat Building in Dare County, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $59,500,000 274 $10,078,571 $6,702,212 ------Total Effect $94,550,051 532 $21,684,229 $17,909,579 $3,059,496 $4,769,732 (ii) Oregon Inlet Fully Open Conditions The five Dare County boat builders interviewed for this study estimate that their combined annual sales would increase from $39 million under recent Oregon Inlet conditions to $65 million under Fully Open Oregon Inlet conditions, an increase of 67%. This percentage increase is applied to the $59.5 million annual direct sales figure for all Dare County boat builders to obtain an estimate of $99.2 million in annual direct sales for the Dare County boat building industry under Fully Open Oregon Inlet conditions.

Based on an estimate of $99.2 million per year in direct sales for the Dare County boat building industry under fully open Oregon Inlet conditions, economic impacts are calculated using IMPLAN and are presented in Table VI-3. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the Dare County businesses that supply and service the boat building industry, as well as the economic effects within Dare County of the spending done by boat builder employees and their families within the County. In Table VI-3, boat sales of $99.2 million in Dare County generate an additional $58.4 million in economic multiplier effects, for a total economic impact of $157.6 million in sales (output). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table VI-3. Annual Economic Impacts of Boat Building in Dare County, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $99,200,000 457 $16,803,264 $11,174,109 ------Total Effect $157,636,387 887 $36,152,529 $29,859,333 $5,100,875 $7,952,225

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $198.7 million in Dare County for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in Dare County. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

May 2014 60 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

(iii) Oregon Inlet Essentially Closed Conditions Under ―essentially closed‖ Oregon Inlet conditions, Dare County boat builders interviewed for this study report that Dare County location would be a much less attractive location for their operations, because they could not easily access the ocean to conduct ―sea trials‖ of their boat designs, and the passive, but very substantial, marketing exposure they get from the many boaters who come to the Oregon Inlet region to fish would be greatly diminished. In addition, many boat builders also service and repair the charter and private boats using Oregon Inlet, and this service and repair business would be greatly diminished if the ocean were not accessible via Oregon Inlet.

Of the five Dare County boat builders interviewed for this study, two said that they would continue operations in Dare County under closed inlet conditions, but with a 10% to 50% reduction in sales. Two of the five builders would move their business to a location outside North Carolina (one to South Carolina, and one to Florida). The remaining boat builder would close his business and cease boat building altogether. Of the $39 million in annual boat sales attributable to these five builders under recent Oregon Inlet conditions, the builders estimate that only $8 million would remain in Dare County under closed Oregon Inlet conditions, a decrease in sales of 79%. This percentage decrease in sales is applied to the $59.5 million in annual sales by the Dare County boat building industry under recent Oregon Inlet conditions to obtain an estimate of $12.2 million in annual boat sales in Dare County under closed Oregon Inlet conditions.

Other North Carolina boat builders located outside the Dare County region could also suffer reduced sales under closed conditions in Oregon Inlet. One large boat builder located in Beaufort, NC, estimates that 50% of its customers use Oregon Inlet, and if the inlet were closed, the builder estimates that his sales would decrease by one-third. This one-third decrease in sales is the builder‘s estimate of the combined (net) effect of (1) increased sales due to some former customers of Dare County builders buying from him instead and (2) decreased sales from his own customers not having access to Oregon Inlet as the primary access point to world-class fishing grounds. However, for the purposes of this study, it is assumed that existing boat builders located outside the Dare County region would suffer no losses in sales from essentially closed conditions in Oregon Inlet. This assumption makes the impact estimates more conservative.

Based on an estimate of $12.2 million per year in direct sales for the Dare County boat building industry under closed Oregon Inlet conditions, economic impacts are calculated using IMPLAN and are presented in Table VI-4. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the Dare County businesses that supply and service the boat building industry, as well as the economic effects within Dare County of the spending done by boat builder employees and their families within the County. In Table VI-4, boat sales of $12.2 million in Dare County generate an additional $7.2 million in economic multiplier effects, for a total economic impact of $19.4 million in sales (output). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

May 2014 61 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VI-4. Annual Economic Impacts of Boat Building in Dare County, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $12,200,000 56 $2,066,530 $1,374,236 ------Total Effect $19,386,733 109 $4,446,178 $3,672,216 $627,326 $977,996 b) Regional Economic Impacts The Oregon Inlet region is defined as the counties surrounding Oregon Inlet and its tributaries: Camden, Currituck, Dare, Hyde, Pasquotank, Perquimans and Tyrrell counties. The economic impact results presented in this section include the direct impacts of Oregon Inlet-dependent boat builders that occur within Dare County, the economic multiplier effects that occur within Dare County, and the economic multiplier effects that occur in the other counties of the Oregon Inlet region. The results in this section do not include the economic impacts of any direct boat building activity occurring outside Dare County. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the only direct impacts in the region considered here are those that occur in Dare County.

(i) Oregon Inlet Recent Conditions The Oregon Inlet Region economic impacts for the Oregon Inlet Recent Conditions scenario are presented in Table VI-5. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the Oregon Inlet region businesses that supply and service the boat building industry in Dare County, as well as the economic effects within the Oregon Inlet region of the spending done by boat builder employees and their families within the region. In Table VI-5, boat sales of $59.5 million in Dare County generate an additional $40.1 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $99.6 million in sales (output) throughout the Oregon Inlet Region (including Dare County). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the Oregon Inlet region are $5 million larger, resulting in $5 million larger total impacts for sales, relative to the Dare County-only total impacts for sales.

May 2014 62 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VI-5. Annual Economic Impacts of Boat Building in Oregon Inlet Region, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $59,500,000 274 $10,078,571 $6,702,212 ------Total Effect $99,596,745 588 $23,552,604 $19,431,044 $3,560,704 $5,224,739 (ii) Oregon Inlet Fully Open Conditions The Oregon Inlet Region economic impacts for the Oregon Inlet Fully Open Conditions scenario are presented in Table VI-6. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the Oregon Inlet region businesses that supply and service the boat building industry in Dare County, as well as the economic effects within the Oregon Inlet region of the spending done by boat builder employees and their families within the region. In Table VI-6, boat sales of $99.2 million in Dare County generate an additional $66.8 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $166 million in sales (output) throughout the Oregon Inlet Region (including Dare County). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the Oregon Inlet region are $8.4 million larger, resulting in $8.4 million larger total impacts for sales, relative to the Dare County-only total impacts for sales.

Table VI-6. Annual Economic Impacts of Boat Building in Oregon Inlet Region, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $99,200,000 457 $16,803,264 $11,174,109 ------Total Effect $166,050,373 979 $39,267,534 $32,395,960 $5,936,501 $8,710,824

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $209.3 million in Dare County and the surrounding region for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in the surrounding region (including Dare County). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

May 2014 63 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

(iii) Oregon Inlet Essentially Closed Conditions The Oregon Inlet Region economic impacts for the Oregon Inlet Closed Conditions scenario are presented in Table VI-7. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the Oregon Inlet region businesses that supply and service the boat building industry in Dare County, as well as the economic effects within the Oregon Inlet region of the spending done by boat builder employees and their families within the region. In Table VI-7, boat sales of $12.2 million in Dare County generate an additional $8.2 million in economic multiplier effects throughout the Oregon Inlet Region (including Dare County), for a total economic impact of $20.4 million in sales (output) throughout the Oregon Inlet Region (including Dare County). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the results for Dare County only, the multiplier effects for sales, for example, occurring in the Oregon Inlet region are $1 million larger, resulting in $1 million larger total impacts for sales, relative to the Dare County-only total impacts for sales.

Table VI-7. Annual Economic Impacts of Boat Building in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $12,200,000 56 $2,066,530 $1,374,236 ------Total Effect $20,421,517 121 $4,829,273 $3,984,181 $730,094 $1,071,290 c) Statewide Economic Impacts The economic impact results presented in this section include the direct impacts of Oregon Inlet- dependent boat building in Dare County and its multiplier effects throughout the state of North Carolina. Typically, when a larger geographic region is considered, multiplier effects are larger, and so the total economic impacts of a given economic change are also larger. However, some economic changes that result in net economic impacts at the county or regional levels do not result in net economic changes at the state level. For example, a movement in boat building activity from a location outside Dare County, but inside North Carolina, such as Beaufort, NC, to Dare County results in net economic changes in Dare County and the Oregon Inlet region but not at the state level. At the state level, there is simply a transfer of economic activity from one location to another within the state. As a result, the answer to the question of whether economic impacts will increase as larger geographic areas are considered depends on the combined effects of (1) larger economic multiplier effects as we consider larger geographic areas and (2) smaller direct effects as we consider larger geographic areas because more economic changes are classified as transfers within a larger area. Therefore, the total impacts in some impact categories may increase as we move from the consideration of county and regional-level impacts to statewide impacts, but total impacts in other impact categories may decrease.

May 2014 64 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

(i) Oregon Inlet Recent Conditions For the Oregon Inlet Recent Conditions scenario, there are no transfers of boat building activity between regions within the state, and so the direct economic impacts of boat building activity at the state level are the same as those at the county and regional levels. However, the multiplier effects of this boat building activity will be larger, because the statewide purchases of Dare County boat builders, their employees and their families are now considered in the analysis, rather than the purchases made only within the County or within the Oregon Inlet region.

The statewide economic impacts of Dare County boat building for the Oregon Inlet Recent Conditions scenario are presented in Table VI-8. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the statewide businesses that supply and service the boat building industry in Dare County, as well as the economic effects statewide of the spending done by boat builder employees and their families. For example, boat sales of $59.5 million in Dare County generate an additional $75.2 million in economic multiplier effects statewide (including the Dare County and Oregon Inlet region effects), for a total economic impact of $134.7 million in sales (output) statewide. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects for sales (output), for example, occurring statewide are $40.1 million larger, resulting in $40.1 million larger total impacts for sales at the state level, relative to the Dare County-only total impacts for sales. Under recent inlet conditions, every dollar of direct impact sales, for example, results in $0.59 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $1.26 of multiplier effects at the state level.

Table VI-8. Statewide Annual Economic Impacts of Dare County Boat Building, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $59,500,000 274 $11,436,303 $6,518,086 ------Total Effect $134,743,983 786 $38,954,238 $25,833,107 $4,905,638 $8,172,590 (ii) Oregon Inlet Fully Open Conditions The statewide direct economic impacts of boat building activity in Dare County under fully open inlet conditions are based on the assumption that 50% of the increase in Dare County boat sales from recent inlet conditions to fully open conditions is simply a transfer of existing boat building activity from other areas within North Carolina (Beaufort/Morehead, Washington, NC, etc.) to Dare County. The economic impacts of this boat building activity that transfers to Dare County from other locations within the state is not considered to be a net gain from the perspective of the state. As a result, the direct effects at the state level of Dare County boat building under the fully open inlet scenario are $79.4 million ($59.5M + 0.50($99.2M - $59.5M) = $79.4M), somewhat less than the $99.2 million in direct effects at the Dare County level under the fully open inlet

May 2014 65 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT scenario, because a transfer of boat building from Beaufort, NC, for example, to Dare County is a net gain from Dare County‘s perspective, but it is not a net gain from the state‘s perspective.

The statewide impacts of the Oregon Inlet Fully Open Conditions scenario are presented in Table VI-9 below. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the statewide businesses that supply and service the boat building industry in Dare County, as well as the economic effects statewide of the spending done by boat builder employees and their families. For example, Dare County boat sales of $79.3 million (not including the value of boat building activity transferred from other locations within the state to Dare County, which are not considered a net gain to the state) under the Fully Open inlet scenario generate an additional $100.3 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $179.7 million in sales (output) statewide (again, including Dare County and the Oregon Inlet region). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Comparing the economic impacts at the state level with those that occur at the county and regional levels, the direct effects of a fully open Oregon Inlet at the state level ($79.4M) are smaller than those at the county and regional levels ($99.2M) , because although transfers of economic activity from other North Carolina locations to Dare County ports as a result of a fully open inlet are additions to the direct economic effects in Dare County and the surrounding region, these transfers to not add to the direct economic effects at the state level—they are simply transfers within the state. However, in contrast to direct effects, multiplier effects are larger at the state level compared to multiplier effects at the county or regional levels. For example, the multiplier effects for sales at the state level in the Fully Open inlet scenario are $1.26 per dollar of sales, whereas the multiplier effects are only $0.59 per dollar of sales at the county level.

Table VI-9. Statewide Annual Economic Impacts of Dare County Boat Building, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $79,350,000 365 $15,251,607 $8,692,607 ------Total Effect $179,696,388 1,048 $51,949,895 $34,451,380 $6,542,226 $10,899,077

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $226.5 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

May 2014 66 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

(iii) Oregon Inlet Essentially Closed Conditions Although none of the five Dare County boat builders interviewed for this study indicated that they would move their boat building activities to another location within North Carolina in the event that Oregon Inlet were closed, it seems reasonable that at least some of the other boat builders would move some of their operations elsewhere in NC, as other locations in the state currently host (e.g., Beaufort/Morehead City, NC), or recently hosted (Brunswick County, NC), boat building activities. For the purpose of this study, it is assumed that 20% of the decrease in Dare County boat sales resulting from closed conditions in Oregon Inlet, or $9.46 million (0.20*[$59.5M - $12.2M] = $9.46M) is simply a transfer of boat building activity to other locations within the state, so this portion of the original Dare County boat sales under recent Oregon Inlet conditions remains part of the boat sales direct effect when calculating the statewide impacts. The remainder of the estimated decrease in Dare County boat sales is assumed to reflect--as indicated by the interviews with Dare County boat builders--reductions in sales of boat builders that remain active in Dare County, transfers of boat building activity from Dare County to locations outside the state, or the complete shut-down of some boat builders currently active in Dare County.

The statewide economic impacts for the Oregon Inlet Closed Conditions scenario are presented in Table VI-10. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. The multiplier effects include the sales of the statewide businesses that supply and service the boat building industry in (or formerly in, but now located elsewhere in NC) Dare County, as well as the economic effects statewide of the spending done by Dare County boat builder employees and their families. For example, boat sales of $21.7 million made in North Carolina by boat builders remaining in Dare County (or formerly based in Dare County) generate an additional $27.4 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $49.1 million in sales (output) throughout the state (again, including Dare County and the Oregon Inlet region). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Comparing the county-level direct impacts with state-level direct impacts for the Oregon Inlet Closed scenario, the direct impacts are smaller at the county level ($12.2 million) and larger at the state level ($21.7 million), because the impacts of the boat building activity that transfers from Dare County to other locations within North Carolina as a result of closed conditions in Oregon Inlet are a loss when viewed from the County‘s perspective but are simply a transfer from one port to another within the state, resulting in no net loss, from the state‘s perspective. In contrast to direct impacts, economic multiplier effects are larger at the state level than at the county or regional levels. Under closed inlet conditions, every dollar of direct impact sales, for example, results in $0.59 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $1.26 of multiplier effects at the state level.

May 2014 67 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VI-10. Statewide Annual Economic Impacts of Dare County Boat Building, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $21,660,000 100 $4,163,199 $2,372,802 ------Total Effect $49,051,338 286 $14,180,652 $9,404,119 $1,785,818 $2,975,097 2. Economic Impacts Summary If the navigability of Oregon Inlet is not maintained, then interview responses indicate that some businesses would remain open with a decrease in business while others would relocate outside of North Carolina or close altogether. If the boat builders were to relocate or cease operation due to a loss of navigability in Oregon Inlet, Dare County would lose not only the boat building employment, wages, and profits but also those of the immediate support businesses. Other Dare County employees and businesses owners would also suffer reductions in employment, wages, rents and profits due to economic multiplier effects. These impacts can also be felt by the surrounding region and entire state of North Carolina.

In terms of impacts on government tax and fee revenues, only the total impacts are presented, as the IMPLAN modeling software produces estimates of total impacts only for taxes and fees. If we assume that the Federal government would receive similar revenues and fees if the businesses relocate to another state, then the Federal government portion of the impacts should not be included in the overall impact estimate. However, should businesses relocate, the Dare County and State of North Carolina governments would face reductions in tax collections and revenues. The economic impacts on the Dare County and North Carolina state governments are given by the ―State and Local Taxes‖ values only.

Table VI-11 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent boat building and support services for recent conditions. As mentioned previously, recent conditions is based on an average of conditions over the last 3 years (a depth of 6 ft or greater only 40% of the time).

Table VI-11. Summary of Annual Oregon Inlet-Dependent Boat Building and Support Services Economic Impacts For Recent Conditions Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $59,500,000 274 $10,078,571 $6,702,212 ------Dare County Total Effect $94,550,051 532 $21,684,229 $17,909,579 $3,059,496 $4,769,732 Region Direct Effect $59,500,000 274 $10,078,571 $6,702,212 ------(Incl. Dare Co.) Total Effect $99,596,745 588 $23,552,604 $19,431,044 $3,560,704 $5,224,739 State of NC Direct Effect $59,500,000 274 $11,436,303 $6,518,086 ------(Incl. Dare Co.) Total Effect $134,743,983 786 $38,954,238 $25,833,107 $4,905,638 $8,172,590 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

May 2014 68 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VI-12 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent boat building and support services for fully open conditions. As mentioned previously, fully open conditions are considered to be dredged to a depth of 14 ft or greater 85-100% of the time.

Table VI-12. Summary of Annual Oregon Inlet-Dependent Boat Building and Support Services Economic Impacts For Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $99,200,000 457 $16,803,264 $11,174,109 ------Dare County Total Effect $157,636,387 887 $36,152,529 $29,859,333 $5,100,875 $7,952,225 Region Direct Effect $99,200,000 457 $16,803,264 $11,174,109 ------(Incl. Dare Co.) Total Effect $166,050,373 979 $39,267,534 $32,395,960 $5,936,501 $8,710,824 State of NC Direct Effect $79,350,000 365 $15,251,607 $8,692,607 ------(Incl. Dare Co.) Total Effect $179,696,388 1,048 $51,949,895 $34,451,380 $6,542,226 $10,899,077 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The impacts in Table VI-12 reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $198.7 million in Dare County, $209.3 million in the surrounding region (including Dare County), and $226.5 million in state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. Again, these numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts and applying that ratio to the total impacts for fully open conditions in each of the three geographic settings – Dare County, the surrounding region (including Dare County), and the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table VI-13 presents the potential additional economic impacts from boat building and support services that may be realized if Oregon Inlet were maintained to fully open conditions. The results are equivalent to the difference between Table VI-12 (fully open inlet scenario) and Table VI-11 (recent conditions scenario).

May 2014 69 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VI-13. Summary of Potentially Gained Annual Economic Impacts from Boat Building and Support Services for Oregon Inlet Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $39,700,000 183 $6,724,693 $4,471,897 ------Dare County Total Effect $63,086,336 355 $14,468,300 $11,949,754 $2,041,379 $3,182,493 Region Direct Effect $39,700,000 183 $6,724,693 $4,471,897 ------(Incl. Dare Co.) Total Effect $66,453,628 392 $15,714,930 $12,964,916 $2,375,797 $3,486,085 State of NC Direct Effect $19,850,000 91 $3,815,304 $2,174,521 ------(Incl. Dare Co.) Total Effect $44,952,405 262 $12,995,657 $8,618,273 $1,636,588 $2,726,487 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005- 2006, the potential additional annual economic impacts could reach up to $104.2 million in Dare County, $109.7 million in the surrounding region (including Dare County), and $91.8 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table VI-14 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent boat building and support services for essentially closed conditions. As mentioned previously, essentially closed conditions are considered to be dredged to a depth of 6 ft or greater only 5% of the time. Based on the boat building field interviews, some boat builders would continue operations but with a 10% to 50% drop in sales while others would either relocate to South Carolina or Florida or shut down the business completely.

Table VI-14. Summary of Annual Oregon Inlet-Dependent Boat Building and Support Services Economic Impacts For Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $12,200,000 56 $2,066,530 $1,374,236 ------Dare County Total Effect $19,386,733 109 $4,446,178 $3,672,216 $627,326 $977,996 Region Direct Effect $12,200,000 56 $2,066,530 $1,374,236 ------(Incl. Dare Co.) Total Effect $20,421,517 121 $4,829,273 $3,984,181 $730,094 $1,071,290 State of NC Direct Effect $21,660,000 100 $4,163,199 $2,372,802 ------(Incl. Dare Co.) Total Effect $49,051,338 286 $14,180,652 $9,404,119 $1,785,818 $2,975,097 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Table VI-15 presents the potential loss of economic impacts from boat building and support services that may be realized if Oregon Inlet were allowed to essentially close. The results are equivalent to the difference between Table VI-11 (recent conditions scenario) and Table VI-14 (essentially closed inlet scenario).

May 2014 70 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VI-15. Summary of Potentially Lost Annual Economic Impacts from Boat Building and Support Services for Oregon Inlet Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect -$47,300,000 -218 -$8,012,041 -$5,327,976 ------Dare County Total Effect -$75,163,318 -423 -$17,238,051 -$14,237,363 -$2,432,170 -$3,791,736 Region Direct Effect -$47,300,000 -218 -$8,012,041 -$5,327,976 ------(Incl. Dare Co.) Total Effect -$79,175,228 -467 -$18,723,331 -$15,446,863 -$2,830,610 -$4,153,449 State of NC Direct Effect -$37,840,000 -174 -$7,273,104 -$4,145,284 ------(Incl. Dare Co.) Total Effect -$85,692,645 -500 -$24,773,586 -$16,428,988 -$3,119,820 -$5,197,493 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents 3. Comparison to 2006 Economic Study (M&N, 2006) In the 2006 study, we assumed $75 million in Dare County boat builder sales under baseline (2004-2005) inlet conditions. In 2014, Dare County boat builder sales are depressed for two reasons: a bad economy in recent years (2011-2013) relative to 2004-2005, and bad inlet conditions in recent years (2011-2013). Data on inboard boat sales for the United States as a whole (unaffected by Oregon Inlet conditions) from the National Marine Manufacturers Association show that years 2004-2005 were among the best years for US boat sales in the period 1980-2012. While 20,000 inboard boats were sold per year in 2004-2005, over the period 1980-2012 only 15,000 inboard boats were sold per year over, on average. Hence, boats sold in an average year are about 25% less than boats sold per year in the 2004-2005 period. The value of Dare County boat builder sales under baseline (recent inlet) conditions used in the 2014 study is $59.5 million; this value is about 21% less than the $75 million value used in the 2006 study. As a result, we feel that Dare County boat sales under recent inlet conditions as given in the 2014 study are close to what sales would be under average economic conditions (which are assumed in the 2014 study), and sales in 2004-2005 should not be used as a baseline, as they represent years with above-average economic conditions. However, if general economic conditions improve such that they are similar to the conditions that existed in 2004-2005, and inlet conditions were similar to inlet conditions in 2004-2005, then Dare County boat sales would likely be larger, perhaps $75 million. (The increase in sales could be due to existing boat builders selling more boats, or existing boat builders selling larger or more expensive boats, or new boat builders beginning new businesses, or existing boat builders moving to Dare County from locations outside North Carolina, or any combination of these factors.) In this case, any further improvement in inlet conditions (beyond conditions in 2004-2005) might improve boat sales such that they would reach a level higher than $75 million. On the other hand, were economic conditions to deteriorate, boat sales under recent inlet conditions could be less than those presented in this study, and improvements in inlet conditions would result in smaller increases in boat sales (due to worse economic conditions).

Comparing tax revenue impacts from the 2006 study with those from the 2014 study, for boat building the percentage of each dollar of output collected in state and local taxes was similar across the two studies. The percentage of each dollar of output collected in federal taxes was also similar across the two studies.

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VII. RECREATIONAL FISHING & TOURISM The area offshore of the northern Outer Banks is considered one of the prime sportfishing regions along the East Coast due to its close proximity to the Gulf Stream and extended seasons of abundant fishing opportunities (e.g. marlin, tuna). The Outer Banks is called "The Billfish Capital of the World," and for good reason. Hundreds of blue marlin, white marlin and sailfish are caught and released in our waters every year. The billfish season is long, with the peak for blue marlin in June and white marlin and sailfish most plentiful in August and September. All are caught consistently from late spring to early fall. Another big draw are yellowfin tuna, which are caught year-round. The recreational sport fishery is vast and varied, including large ―headboat‖ recreational fishing vessels, smaller ―for-hire‖ charter fishing vessels, and private fishing boats. Many tourists who visit the beaches on the Outer Banks islands of Dare County include a recreational fishing trip through Oregon Inlet on their vacation itinerary.

These recreational fishing activities generate additional economic impacts for the region, in particular for the tourism industry. Although many of these jobs are related to beach tourism and recreation, which is not dependent on Oregon Inlet navigability, a significant number of jobs in the industry are related to sport fishing, which is dependent on the inlet for access to the ocean fishing grounds which contain the fish species prized by sport fishermen.

A. RECREATIONAL FISHING AND TOURISM SURVEYS & INTERVIEWS The recreational fishing sector includes both for-hire (charter) fishing and private boating. Surveys were sent to approximately 14 individuals who work in the charter boat industry. M&N received 8 responses from charter boat operators. They indicated that if the inlet were to fully open, the number of trips they take would increase around 10%-25%. Approximately half of the respondents would not operate their business anymore if Oregon Inlet were to essentially close. Others indicated they would move their business in state (i.e. Hatteras), out of state (i.e. Virginia), or out of country (i.e. Mexico). A few would close their business and find other means of employment.

Surveys were sent to 6 individuals and/or businesses that operate in the private boating industry. M&N received 2 responses from marinas which house private boats and 1 response from a recreational fisherman. Both marinas indicated that they would not continue to operate if Oregon Inlet were to essentially close. One of the marinas indicated that business would double if Oregon Inlet were to be fully open while the other indicated that business would not change.

In addition to those active in the charter and private boating industries, interviews were conducted with 3 members of the USCG and USACE who deal with the surveying and safety of the inlet on a daily basis. The recreational fishermen, as well as commercial fishermen, rely on the efforts of the Coast Guard and USACE in order to be able to traverse the inlet. The USACE surveys the worst parts of the navigation channel on a weekly basis. They freely hand out the survey information to fishermen who need to know how the location of deep water has changed each week. The USACE surveys the entire navigation channel approximately once a month. They are also in charge of the dredging that occurs. Unfortunately funding for maintenance dredging has decreased from approximately $8 million per year to $1 million per year, allowing for little maintenance to occur. Meanwhile, based on the USACE surveys, the Coast Guard is

May 2014 73 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT responsible for placing and maintaining the buoys that highlight the navigation channel. Unfortunately, the navigation channel moves so quickly that the buoys are often out of place. Not only is this an issue for the fishermen, but also for search and rescue vessels should there be an accident.

The recreational fishing industry, whether it be charter or private boating, lends itself to the general tourism of Dare County. Approximately 26 individuals and/or businesses were sent questionnaires regarding general tourism (restaurants, lodging, tackle shops, etc.). M&N received 12 responses from various businesses in the area. Restaurants indicated that they would probably have slight increases (10%) if Oregon Inlet were fully open and slight decreases (10%) if it were fully closed. The surveys indicated that tackle shops would be the most susceptible to the conditions of Oregon Inlet with large increases (50%) in business if the inlet were to be fully open and large decreases (50%) or go out of business if the inlet were to essentially close. Some lodging entities did not feel like they would be affected by the condition of the inlet although less expensive areas like campgrounds and possibly motels may see an impact because that is where visiting fisherman often stay.

The survey contacts and questions for recreational fishing, both charter (for-hire fishing) and private boating (marine trades), and general tourism can be found in Appendix A. Overall trends or business costs provided by the interviewees were used in the economic modeling and analyses to not only determine the current economic value of Oregon Inlet but how that value would change if the inlet were fully open or essentially closed.

B. ECONOMIC MODELING & RESULTS – RECREATIONAL FISHING & TOURISM A study of the For-Hire Recreational Fishing Industry in North Carolina in 2008 conducted by Dumas et al. (2009) found that there were 166 for-hire recreational fishing vessels (160 charter vessels and 6 headboat vessels) based in Dare County north of Oregon Inlet. Most of these vessels have a captain and one or two additional crewmembers. The Dumas study found that 309 individuals are directly employed as for-hire recreational fishermen, 289 aboard charter boats, and 20 aboard headboats. Of these fishermen, a few work on vessels that may fish in sound/estuary waters, so approximately 300 individuals work on for-hire fishing vessels that access ocean waters via Oregon Inlet. The Dumas study found that charter vessels based in the northern coastal region of North Carolina make an average of 120 one-day fishing trips per year (Dumas at al. 2009). Each charter vessel carries 6 angler passengers. A rough estimate of the number of charter fishing angler days per year is 160 charter vessels * 6 passengers per vessel * 120 fishing days per year = 115,200 charter fishing angler days per year. The Dumas study found that 55% of anglers taking charter vessel trips in the northern coastal region of the state said that charter fishing was the primary purpose of their visit to the North Carolina coast. Ninety-eight percent of these charter boat anglers made overnight trips to the North Carolina coast, rather than day trips, and 85% were from out of state.

The National Marine Fisheries Service (NMFS 2011) periodically conducts a nationwide survey of saltwater recreational fishermen, the Marine Recreational Information Program (MRIP). The 2011 MRIP survey data are used to estimate the number of for-hire (primarily charter) and private boat recreational fishing trips that access the ocean via Oregon Inlet. A recreational

May 2014 74 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT fishing trip is defined in the MRIP data as an angler-day: one angler spending one day fishing. (Thus, one charter boat carrying 6 anglers for one day of fishing would be counted as 6 trips.) The 2011 data are chosen since they are the most recent with an economic expenditure add-on survey. The 2011 MRIP dataset contains surveys from 20,634 hook and line trips that took place in seven North Carolina counties; these 20,634 surveys represent the estimated 4.85 million total hook and line trips taken in 2011 in these counties. The seven counties are Dare, Hyde, Carteret, Onslow, Pender, New Hanover and Brunswick.

Thirty-seven percent of all North Carolina saltwater fishing trips occur in Dare County. Twenty percent occur in Carteret County, 14% in New Hanover County and 11% in Brunswick County. Seventeen percent of trips occur in Onslow (8%), Pender (6%) and Hyde (2%) counties.

Of the 1.8 million Dare County saltwater hook and line fishing trips, 86% are ocean fishing trips and 14% are inland (sound/estuary) trips. Seventy-one percent of all Dare County saltwater fishing trips are shore fishing trips, 8% are for-hire trips and 21% are private boat trips. Thirty- five percent of Dare County saltwater fishing trips are made by North Carolina residents and 65% are made by non-residents.

Since almost all of Dare County ocean fishing trips in the MRIP dataset reach the ocean through Oregon Inlet we consider each of these as Oregon Inlet fishing trips. (Dare County ocean fishing trips that enter the ocean through Hatteras Inlet are reclassified as Hyde County trips for modeling purposes.)

Based on the MRIP data, an estimated 93,000 charter trips and an additional 169,000 private boat trips reach the ocean through Oregon Inlet each year. (The estimate of 93,000 charter trips per year for 2011 based on the MRIP data compares well with the 115,200 charter trips per year estimate for 2008 (presented above) based on the Dumas et al. (2009) study, assuming a moderate decrease in charter fishing trips per year from 2008 to 2011 due to deteriorating inlet conditions. Boat fuel prices were similar in the two years.) An estimated 109,000 Oregon Inlet fishing trips per year are taken by North Carolina residents, and an additional 153,000 trips are taken by non-residents (Table VII-1).

Table VII-1. North Carolina Resident and Non-Resident Fishing Trips (Angler Days) Trip Mode Resident Non-Resident Total Oregon Inlet Charter Boat 15,000 78,000 93,000 Trips/Year Oregon Inlet Private Boat 94,000 75,000 169,000 Trips/Year Total 109,000 153,000 262,000

The expenditures made by For-Hire and Private Boat fisherpersons accessing the ocean via Oregon Inlet are based on two sources. Lovell, Steinbeck and Hilger (2013) present average trip-related expenditures by fishing mode (for-hire boat, private boat, or shore) and resident status in North Carolina. The Lovell study presents expenditure estimates on a ―per angler, per fishing day‖ basis, and includes expenditures made by the angler for him/herself and any non-

May 2014 75 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT fishing family/friends accompanying the angler on the trip to the coast (but not accompanying the angler when surveyed). The Lovell study considers only those trip expenditures made inside North Carolina; however, the Lovell study report presents values that are averages across all North Carolina saltwater fishing locations. A study by Dumas, Whitehead, Landry and Herstine (2009) collected data on the expenditures made by North Carolina for-hire vessels and anglers by county and region in North Carolina. The Dumas study data show that expenditures made by Dare County ocean fishing anglers are higher than those made by ocean fishing anglers in other areas of North Carolina. Like the Lovell study, the Dumas study includes expenditures made by the angler for him/herself and any non-fishing family/friends accompanying the angler on the trip to the coast (but not accompanying the angler when surveyed).

Data from both the Lovell study and the Dumas study are used to estimate the average expenditures (2012-year dollars) per angler, per fishing day, for ocean for-hire and private boat trips using Oregon Inlet, presented in Table VII-2. For example, to estimate the expenditures made by the anglers aboard a typical 6-passenger charter boat, multiply the figures in the For- Hire Trip column of Table VII-2 by six. In Table VII-2, any expenditures made for charter or headboat fees have been distributed to the various expenditure categories based on vessel expenditure and returns data in Dumas (2009).

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Table VII-2. North Carolina Expenditures Per Angler, Per Fishing Day, Oregon Inlet Ocean Fishing Trips, 2012 For-Hire Trip Private Boat Trip NC Expenditures NC Expenditures Expenditure Category IMPLAN Model Sector Per Angler Per Angler Per Fishing Day Per Fishing Day Fuel for car/truck $110.51 $20.02 gas stations 326 Car/truck Rental $14.92 $0.00 rental car 362 Fuel for Boat $94.00 $94.00 gas stations 326 Slip/Dock/Ramp/Parking Fees $5.92 $10.62 transport by water 334 Bait $7.50 $7.50 commercial fishing 17 Fishing Tackle $4.97 $4.97 sporting goods 328 Boat repairs $17.18 $17.18 boat building & repairing 291 Lodging $367.59 $66.36 hotels 411 Restaurants $91.42 $34.32 restaurants 413 Groceries $123.82 $76.52 grocery stores 324 Ice $3.83 $3.83 ice manufacturing 70 Charter Crew Wages & Tips (Note 1) $57.83 $0.00 household expenditures direct labor income Boat insurance $10.77 $10.77 Insurance carriers 357 Interest on Boat Loan $6.65 $6.65 Commercial Banking 354 Other (Producer Services) $7.46 $0.00 advertising 377 Other (Consumer Retail) (Note 2) $25.41 $0.13 retail--general merchandise 329 Return to Charter Vessel Owner/Captain $108.17 $0.00 household expenditures direct labor income Sources: Lovell et al. 2013. Dumas et al. 2009. Note: Assumes charter vessels based in the northern coastal region of North Carolina make an average of 120 one-day fishing trips per year (Dumas at al. 2009). Note: Expenditures include that made by the angler for him/herself and any non-fishing family/friends accompanying the angler on the trip to the coast (but not accompanying the angler on the boat on the day of the survey). Note: Any charter or headboat fees have been distributed to the various expenditure categories. Note 1: Assumes half of charter tips go to crew, and half go to captain/owner. Note 2: This expenditure reflects spending by tournament participants and their families at retail stores in Dare County during the tournament (based on Ditton 2000).

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1. IMPLAN Modeling Analysis Economic impacts are presented below for Dare County, the Oregon Inlet Region, and the state of North Carolina as a whole. For each geographic region, impacts are provided for three Oregon Inlet navigability scenarios: Oregon Inlet Recent Conditions, Oregon Inlet Fully Open, and Oregon Inlet closed.

The economic impact numbers reflect for-hire and private boat fishing activity only; commercial fishing activity, and tournament fishing activity, are considered in other sections of this report. The economic impact numbers reflect Oregon Inlet-dependent (i.e., ocean) fishing only; any fishing inside the sounds or is not considered. For the purposes of the present study, it is assumed that any sound or estuarine tournament fishing is unaffected by Oregon Inlet conditions.

The impacts are intended to reflect average economic conditions and average weather conditions—the purpose of the study is to examine the impacts of changing navigability conditions under average economic and weather conditions. All dollar values are report in real (inflation adjusted) 2012-year dollars. Employment numbers are the total of full-time and part- time jobs (not ―full-time equivalent‖ jobs). The impacts of changing Oregon Inlet navigability conditions are calculated by finding the differences between impacts across navigability scenarios. a) Dare County Economic Impacts

(i) Oregon Inlet Recent Conditions The numbers of fishing trips occurring by fishing mode (for-hire boat vs. private boat) in Table VII-1 are multiplied by the respective expenditure values in Table VII-2 to calculate the annual direct economic impacts of for-hire and private boat fishing in Dare County for the ―Recent Conditions‖ Oregon Inlet navigability scenario.1

The economic impacts are presented in Table VII-3. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $142 million in Dare County generate an additional $105 million in economic multiplier effects within the County, for a total economic impact of $248 million in output (sales) sales within the County. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

1 For the purpose of calculating economic multiplier effects, the for-hire expenditures are grouped into two spending classes, direct labor income (crew wages and tips, and the returns to the vessel owners/captains) and direct expenditures on goods and services (all other expenditures). It is assumed that direct labor income is spent according to a household expenditure pattern typical of households with income of $50,000 to $75,000 per year.

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Table VII-3. Annual Economic Impacts of For-Hire and Private Boat Fishing in Dare County, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $142,423,427 1,002 $44,486,518 $19,408,480 ------Total Effect $247,659,426 1,997 $79,482,082 $52,987,290 $11,186,935 $14,155,440 (ii) Oregon Inlet Fully Open Conditions For the Oregon Inlet Fully Open scenario, Dare County charter fishermen interviewed for this study anticipate a 20% increase in the number of Dare County-based charter fishing trips using Oregon Inlet. These are charter fishing trips that would not have been made, or that would have been made outside Dare County, if Oregon Inlet were not fully open.

In the absence of other information, we assume that the percentage increase in private boat fishing trips using Oregon Inlet under Fully Open conditions would be similar to the percentage increase in charter fishing trips, or 20%. This increase represents private boat fishing trips that would not have been made, or that would have been made outside Dare County, if Oregon Inlet were not fully open.

The economic impacts are presented in Table VII-4. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $171 million in Dare County generate an additional $126 million in economic multiplier effects within the County, for a total economic impact of $297 million in output (sales) sales within the County. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table VII-4. Annual Economic Impacts of For-Hire and Private Boat Fishing in Dare County, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $170,908,112 1,203 $53,383,822 $23,290,176 ------Total Effect $297,191,311 2,397 $95,378,498 $63,584,748 $13,424,322 $16,986,528

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $520.6 million in Dare County for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts (weighted by charter and private boating trips) and applying that ratio to the total impacts for fully open conditions in Dare County. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

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(iii) Oregon Inlet Essentially Closed Conditions For the Oregon Inlet Closed Conditions scenario, we assume that zero charter trips would be made through Oregon Inlet, based on interviews of charter captains conducted for this study. However, Dumas et al. (2009) found that only 55% of anglers taking charter vessel trips in the northern coastal region of North Carolina stated that charter fishing was the primary purpose of their visit to the North Carolina coast. With Oregon Inlet closed, we assume that 55% of the charter boat anglers decide to take charter fishing trips elsewhere, outside Dare County. We assume that the remaining 45% of (former) charter boat anglers decide to visit Dare County even when Oregon Inlet is closed and engage in ocean shore fishing rather than charter boat fishing. The Lovell et al. (2013) study found that ocean shore fishing expenditures per angler day in North Carolina were 73% less than charter boat fishing expenditures per angler day. Therefore, we assume that expenditures made in Dare County by visitors who formerly made charter fishing trips in the County are 88% less (0.55 + 0.45*0.73 = 0.8785) than the expenditures made when charter trips were taken under recent Oregon Inlet conditions.

Based on the MRIP data (Table VII-1), 55% of the Oregon Inlet private boat trips are made by North Carolina residents and 45% are made by non-residents. The MRIP data also show that only 5% of all Oregon Inlet private boat trips are made in boats greater than 40 feet in length. For the 5% of private boat trips using boats greater than 40 feet in length, we assume that zero Oregon Inlet fishing trips are made; we assume that private boat trips (in boats greater than 40 feet) made by North Carolina residents shift to other North Carolina inlets, and we assume that half of the private boat trips (in boats greater than 40 feet) made by non-residents shift to other NC inlets and half shift to locations outside North Carolina. For the 95% of private boats trips made using boats less than 40 feet, we assume that of the 55% NC residents, half still come to Dare County and boat in the sound/estuary, and half go elsewhere in North Carolina. Of the 45% non-NC residents, we assume one-third still come to Dare County and boat in the sound/estuary, one-third shift to other NC inlets, and one-third shift to locations outside North Carolina.

The economic impacts are presented in Table VII-5. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $34 million in Dare County generate an additional $22 million in economic multiplier effects within the County, for a total economic impact of $56 million in output (sales) sales within the County. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table VII-5. Annual Economic Impacts of For-Hire and Private Boat Fishing in Dare County, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $33,945,379 225 $8,457,140 $4,294,532 ------Total Effect $55,618,552 429 $15,713,779 $11,164,851 $2,363,582 $3,033,466

May 2014 80 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT b) Regional Economic Impacts The Oregon Inlet region is defined as the counties surrounding Oregon Inlet and its tributaries: Camden, Currituck, Dare, Hyde, Pasquotank, Perquimans and Tyrrell counties. The economic impact results presented in this section include the direct impacts of Oregon Inlet-dependent for- hire and private boat fishing that occurs within Dare County, the economic multiplier effects that occur within Dare County, and the economic multiplier effects that occur in the other counties of the Oregon Inlet region. The results in this section do not include the economic impacts of any fishing activity occurring outside Dare County. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same (i.e., the only direct impacts in the region considered here are those that occur in Dare County).

(i) Oregon Inlet Recent Conditions The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same.

The economic impacts for the Oregon Inlet Region for the Recent Conditions inlet scenario are presented in Table VII-6. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $142 million in the Oregon Inlet region generate an additional $115 million in economic multiplier effects within the region (including Dare County), for a total economic impact of $257 million in output (sales) sales within the region (including Dare County). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur throughout the Oregon Inlet region are larger. For example, every dollar of direct impact sales, for example, results in $0.75 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.81 of multiplier effects at the regional level.

Table VII-6. Annual Economic Impacts of For-Hire and Private Boat Fishing in Oregon Inlet Region, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $142,423,427 1,034 $43,493,243 $19,666,812 ------Total Effect $257,476,326 2,157 $82,867,291 $56,151,669 $12,618,095 $14,923,351 (ii) Oregon Inlet Fully Open Conditions The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same.

The economic impacts for the Oregon Inlet Region for the Fully Open inlet scenario are presented in Table VII-7. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $171 million in the Oregon Inlet region generate an additional $138 million in economic multiplier effects within

May 2014 81 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT the region (including Dare County), for a total economic impact of $309 million in output (sales) sales within the region (including Dare County). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur throughout the Oregon Inlet region are larger. For example, every dollar of direct impact sales, for example, results in $0.74 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.80 of multiplier effects at the regional level.

Table VII-7. Annual Economic Impacts of For-Hire and Private Boat Fishing in Oregon Inlet Region, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $170,908,112 1,241 $52,191,892 $23,600,174 ------Total Effect $308,971,591 2,588 $99,440,749 $67,382,003 $15,141,714 $17,908,021

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $541.2 million in Dare County and the surrounding region for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts (weighted by charter and private boating trips) and applying that ratio to the total impacts for fully open conditions in the surrounding region (including Dare County). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same.

The economic impacts for the Oregon Inlet Region for the Closed inlet scenario are presented in Table VII-8. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $34 million in the Oregon Inlet region generate an additional $24 million in economic multiplier effects within the region (including Dare County), for a total economic impact of $58 million in output (sales) sales within the region (including Dare County). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur throughout the Oregon Inlet region are larger. For example, every dollar of direct impact sales, for example, results in $0.65 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.71 of multiplier effects at the regional level.

May 2014 82 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VII-8. Annual Economic Impacts of For-Hire and Private Boat Fishing in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $33,945,379 232 $8,250,217 $4,341,731 ------Total Effect $57,778,828 465 $16,462,744 $11,854,474 $2,671,883 $3,206,187 c) Statewide Economic Impacts The economic impact results presented in this section include the direct impacts of Oregon Inlet- dependent for-hire and private boat fishing in Dare County and its multiplier effects throughout the state of North Carolina. Typically, when a larger geographic region is considered, multiplier effects are larger, and so the total economic impacts of a given economic change are also larger. However, some economic changes that result in net economic impacts at the county or regional levels do not result in net economic changes at the state level. For example, a movement in for- hire and private boat fishing activity from a location outside Dare County, but inside North Carolina, such as Morehead City, NC, to Dare County results in net economic changes in Dare County and the Oregon Inlet region but not at the state level. At the state level, there is simply a transfer of economic activity from one location to another within the state. As a result, the answer to the question of whether economic impacts will increase as larger geographic areas are considered depends on the combined effects of (1) larger economic multiplier effects as we consider larger geographic areas and (2) smaller direct effects as we consider larger geographic areas because more economic changes are classified as transfers within a larger area.

(i) Oregon Inlet Recent Conditions The statewide impacts of charter and private boat fishing via Oregon Inlet differ from those presented for Dare County and the Oregon Inlet Region only in the multiplier effects and total impacts—the direct impacts are the same.

The statewide economic impacts for the Recent Conditions inlet scenario are presented in Table VII-9. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $142 million in Dare County generate an additional $176 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a statewide total economic impact of $318 million in output (sales) sales (including Dare County and the Oregon Inlet region). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County or the Oregon Inlet region, the statewide multiplier effects are larger. For example, whereas every dollar of direct impact sales results in $0.75 of multiplier effects at the county level (or $0.81 of multiplier effects at the regional level, every dollar of direct impact sales results in $1.24 of multiplier effects statewide.

May 2014 83 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VII-9. Statewide Annual Economic Impacts of For-Hire and Private Boat Fishing Using Oregon Inlet, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $142,423,427 1,050 $43,222,542 $19,636,251 ------Total Effect $318,323,866 2,530 $109,735,743 $67,558,971 $14,858,147 $20,197,848 (ii) Oregon Inlet Fully Open Conditions For the Oregon Inlet Fully Open scenario, Dare County charter fishermen interviewed for this study anticipate a 20% increase in the number of Dare County-based charter fishing trips using Oregon Inlet. We assume these charter fishing trips would be made elsewhere if Oregon Inlet were not fully open. We assume that the origin of the new trips is similar to that of recent charter trips (based on trip numbers in Table VII-1): 16% of the trips would be made by NC residents, and 84% by non-NC residents. The new trips to Oregon Inlet made by NC residents do not increase economic impacts at the state level, because these trips are simply transfers of economic activity within the state, rather than a net gain to the state. The new trips to Oregon Inlet made by non-NC residents do increase economic impacts at the state level.

In the absence of other information, we assume that the percentage increase in private boat fishing trips using Oregon Inlet under Fully Open conditions would be similar to the percentage increase in charter fishing trips, or a 20% increase. We assume these private boat fishing trips would be made elsewhere if Oregon Inlet were not fully open. We assume that the origin of the new trips is similar to that of recent private boat trips (based on trip numbers in Table VII-1): 55% NC residents, and 45% non-NC residents. The new trips to Oregon Inlet made by NC residents do not increase economic impacts at the state level, because these trips are simply transfers of economic activity within the state, rather than a net gain to the state. The new trips to Oregon Inlet made by non-NC residents do increase economic impacts at the state level.

The statewide economic impacts for the Fully Open Oregon Inlet scenario are presented in Table VII-10. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $162 million in Dare County (not including the expenditures from trips shifted into Dare County from other inlets within the state) generate an additional $201 million in economic multiplier effects statewide (including Dare County and the Oregon Inlet region), for a total economic impact of $363 million in output (sales) statewide (including Dare County and the Oregon Inlet region). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County or the Oregon Inlet region, the statewide multiplier effects are larger. For example, whereas every dollar of direct impact sales results in $0.74 of multiplier effects at the county level (or $0.80 of multiplier effects at the regional level), every dollar of direct impact sales results in $1.24 of multiplier effects statewide.

May 2014 84 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Table VII-10. Statewide Annual Economic Impacts of For-Hire and Private Boat Fishing Using Oregon Inlet, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $161,694,027 1,196 $49,649,305 $22,391,284 ------Total Effect $362,821,660 2,889 $125,692,579 $77,203,862 $16,977,087 $23,067,777

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $635.5 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts (weighted by charter and private boating trips) and applying that ratio to the total impacts for fully open conditions in the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions For the Oregon Inlet Closed Conditions scenario, we assume that zero charter trips would be made through Oregon Inlet, based on interviews of charter captains conducted for this study. However, Dumas et al. (2009) found that only 55% of anglers taking charter vessel trips in the northern coastal region of North Carolina stated that charter fishing was the primary purpose of their visit to the North Carolina coast. With Oregon Inlet closed, we assume that 55% of the charter boat anglers decide to take charter fishing trips elsewhere, outside Dare County, but the remaining 45% decide to visit Dare County (even though Oregon Inlet is closed) and engage in ocean shore fishing.

Of the 55% of (former) Oregon Inlet charter boat anglers who decide to take charter fishing trips outside Dare County, 16% are North Carolina residents and 84% are non-NC residents (based on trip numbers in Table VII-1). We assume that the NC residents shift their charter trips to other inlets within North Carolina, resulting in no reduction in statewide economic impacts. However, of the non-NC residents, we assume that half shift their charter trips to other NC inlets (resulting in no reduction in statewide economic impacts), but the other half shift their charter trips out of state, resulting in a reduction in statewide economic impacts.

The remaining 45% of (former) Oregon Inlet charter boat anglers decide to visit Dare County (even though Oregon Inlet is closed) and engage in ocean shore fishing rather than charter boat fishing. Of these, 16% are North Carolina residents and 84% are non-NC residents (based on trip numbers in Table VII-1). The Lovell et al. (2013) study found that ocean shore fishing expenditures per angler day in North Carolina were 73% less than charter boat fishing expenditures per angler day. We assume that although NC residents may spend less on their shore fishing trip to Dare County than they would have spent on a charter fishing trip to Dare County, the difference in trip expenditures would still be spent (on something else, maybe restaurants or movies back home) within North Carolina, resulting in little reduction in statewide

May 2014 85 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT economic impacts. However, for the non-NC residents, the difference in expenditures between a shore fishing trip and a charter fishing trip is spent in their state of residence, outside North Carolina, resulting in a reduction in economic impacts within North Carolina.

Based on the MRIP trip data (Table VII-1), 55% of the Oregon Inlet private boat trips are made by North Carolina residents and 45% are made by non-residents. The MRIP data also show that only 5% of all Oregon Inlet private boat trips are made in boats greater than 40 feet in length.

For the 5% of private boat trips using boats greater than 40 feet in length, we assume that zero Oregon Inlet fishing trips are made. We assume that private boat trips (in boats greater than 40 feet) made by North Carolina residents shift to other North Carolina inlets, resulting in no reduction in statewide economic impacts. For non-NC residents, we assume that half of the private boat trips (in boats greater than 40 feet) shift to other NC inlets and half shift to locations outside North Carolina. The trips that shift to locations outside North Carolina result in a reduction in economic impacts within the state.

For the 95% of private boats trips made using boats less than 40 feet, we assume that of the 55% NC residents, half still come to Dare County and boat in the sound/estuary, and half go elsewhere in North Carolina. Because these trips made by NC residents still occur within the state, they cause no reduction in statewide economic impacts. Of the 45% non-NC residents, we assume that one-third still come to Dare County and boat in the sound/estuary, one-third shift to other NC inlets, and one-third shift to locations outside North Carolina. The trips that shift to locations outside North Carolina result in a reduction in economic impacts within the state.

The statewide economic impacts for the Closed Oregon Inlet scenario are presented in Table VII-11. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales (output) of $91 million in Dare County (or elsewhere in NC due to fishing trips shifted from Oregon Inlet to other inlets in NC) generate an additional $107 million in economic multiplier effects statewide (including Dare County and the Oregon Inlet region), for a total economic impact of $198 million in output (sales) statewide (including Dare County and the Oregon Inlet region). The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County or the Oregon Inlet region, the statewide multiplier effects are larger. For example, whereas every dollar of direct impact sales results in $0.65 of multiplier effects at the county level (or $0.71 of multiplier effects at the regional level), every dollar of direct impact sales results in $1.18 of multiplier effects statewide.

Table VII-11. Statewide Annual Economic Impacts of For-Hire and Private Boat Fishing Using Oregon Inlet, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $91,393,516 656 $25,105,795 $12,154,412 ------Total Effect $197,781,754 1,550 $65,375,645 $41,062,219 $9,040,972 $12,337,898

May 2014 86 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

2. Economic Impacts Summary An estimated 109,000 Oregon Inlet fishing trips per year are taken by North Carolina residents, and an additional 153,000 trips are taken by non-residents. Expenditures on transportation (cars and boats), fishing supplies, lodging, and food make the recreational fishing and tourism sector the largest contributor to the economic impact of Oregon Inlet of the five main sectors studied.

Table VII-12 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent recreational (charter and private) fishing for recent conditions. As mentioned previously, the recent condition is based on an average of conditions over the last 3 years (a depth of 6 ft or greater only 40% of the time).

Table VII-12. Summary of Annual Oregon Inlet-Dependent Recreational Charter Fishing and Private Boating Economic Impacts For Recent Conditions Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Locale Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $142,423,427 1,002 $44,486,518 $19,408,480 ------Dare County Total Effect $247,659,426 1,997 $79,482,082 $52,987,290 $11,186,935 $14,155,440 Region Direct Effect $142,423,427 1,034 $43,493,243 $19,666,812 ------(Incl. Dare Co.) Total Effect $257,476,326 2,157 $82,867,291 $56,151,669 $12,618,095 $14,923,351 State of NC Direct Effect $142,423,427 1,050 $43,222,542 $19,636,251 ------(Incl. Dare Co.) Total Effect $318,323,866 2,530 $109,735,743 $67,558,971 $14,858,147 $20,197,848 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Table VII-13 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent recreational (charter and private) fishing for fully open conditions. As mentioned previously, fully open conditions are considered to be dredged to a depth of 14 ft or greater 85-100% of the time.

Table VII-13. Summary of Annual Oregon Inlet-Dependent Recreational Charter Fishing and Private Boating Economic Impacts For Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Locale Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $170,908,112 1,203 $53,383,822 $23,290,176 ------Dare County Total Effect $297,191,311 2,397 $95,378,498 $63,584,748 $13,424,322 $16,986,528 Region Direct Effect $170,908,112 1,241 $52,191,892 $23,600,174 ------(Incl. Dare Co.) Total Effect $308,971,591 2,588 $99,440,749 $67,382,003 $15,141,714 $17,908,021 State of NC Direct Effect $161,694,027 1,196 $49,649,305 $22,391,284 ------(Incl. Dare Co.) Total Effect $362,821,660 2,889 $125,692,579 $77,203,862 $16,977,087 $23,067,777 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The impacts in Table VII-13 reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $520.6 million in Dare County, $541.2 million in the surrounding region (including Dare County), and $635.5 million in state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. Again, these numbers were estimated by determining the ratio between the 2014 and 2006 regional direct impacts (weighted by charter

May 2014 87 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT and private boating trips) and applying that ratio to the total impacts for fully open conditions in each of the three geographic settings – Dare County, the surrounding region (including Dare County), and the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table VII-14 presents the potential additional economic impacts from recreational fishing and tourism that may be realized if Oregon Inlet were maintained to fully open conditions. The results are equivalent to the difference between Table VII-13 (fully open inlet scenario) and Table VII-12 (recent conditions scenario).

Table VII-14. Summary of Potentially Gained Annual Economic Impacts from Recreational Fishing and Tourism for Oregon Inlet Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $28,484,685 201 $8,897,304 $3,881,696 ------Dare County Total Effect $49,531,885 400 $15,896,416 $10,597,458 $2,237,387 $2,831,088 Region Direct Effect $28,484,685 207 $8,698,649 $3,933,362 ------(Incl. Dare Co.) Total Effect $51,495,265 431 $16,573,458 $11,230,334 $2,523,619 $2,984,670 State of NC Direct Effect $19,270,600 146 $6,426,763 $2,755,033 ------(Incl. Dare Co.) Total Effect $44,497,794 359 $15,956,836 $9,644,891 $2,118,940 $2,869,929 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the potential additional annual economic impacts could reach up to $272.9 million in Dare County, $283.7 million in the surrounding region (including Dare County), and $317.2 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table VII-15 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent recreational (charter and private) fishing for essentially closed conditions. As mentioned previously, essentially closed conditions are considered to be dredged to a depth of 6 ft or greater only 5% of the time.

Table VII-15. Summary of Annual Oregon Inlet-Dependent Recreational Charter Fishing and Private Boating Economic Impacts For Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Locale Impact Type Employment Federal Taxes (Output) Proprietorship Interest Local Taxes Income Income Direct Effect $33,945,379 225 $8,457,140 $4,294,532 ------Dare County Total Effect $55,618,552 429 $15,713,779 $11,164,851 $2,363,582 $3,033,466 Region Direct Effect $33,945,379 232 $8,250,217 $4,341,731 ------(Incl. Dare Co.) Total Effect $57,778,828 465 $16,462,744 $11,854,474 $2,671,883 $3,206,187 State of NC Direct Effect $91,393,516 656 $25,105,795 $12,154,412 ------(Incl. Dare Co.) Total Effect $197,781,754 1,550 $65,375,645 $41,062,219 $9,040,972 $12,337,898 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Table VII-16 presents the potential loss of economic impacts from recreational fishing and tourism that may be realized if Oregon Inlet were allowed to essentially close. The results are

May 2014 88 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT equivalent to the difference between Table VII-12 (recent conditions scenario) and Table VII-15 (essentially closed inlet scenario).

Table VII-16. Summary of Potentially Lost Annual Economic Impacts from Recreational Fishing and Tourism for Oregon Inlet Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect -$108,478,048 -777 -$36,029,378 -$15,113,948 ------Dare County Total Effect -$192,040,874 -1,568 -$63,768,303 -$41,822,439 -$8,823,353 -$11,121,974 Region Direct Effect -$108,478,048 -802 -$35,243,026 -$15,325,081 ------(Incl. Dare Co.) Total Effect -$199,697,498 -1,692 -$66,404,547 -$44,297,195 -$9,946,212 -$11,717,164 State of NC Direct Effect -$51,029,911 -394 -$18,116,747 -$7,481,839 ------(Incl. Dare Co.) Total Effect -$120,542,112 -980 -$44,360,098 -$26,496,752 -$5,817,175 -$7,859,950 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents 3. Consumer Surplus In addition to the economic impacts described above, recreational sport fishermen receive value from the experience of Oregon Inlet-related sport fishing. This value―value of the sport fishing experience--is the difference between what a fisherman would be willing to pay to take the fishing trip and what he actually paid to take the trip. This difference is known as ―consumer surplus‖ value, because it measures the surplus value consumers receive from an experience beyond what is actually paid for the experience. This value is real and arises in many economic situations. The amount that a sport fisherman would be willing to pay for an Oregon Inlet- related fishing trip is limited by the opportunity to take other, though perhaps less satisfying, substitute trips to alternative fishing destinations. For example, although a sport fisherman might be willing to pay more for an Oregon Inlet-related sport fishing trip, due to the Oregon Inlet sport fishery‗s unique characteristics, the sport fisherman would not be willing to pay an infinite amount more, due to the availability of substitute fishing opportunities, such as sport fishing via Hatteras Inlet, NC.

The travel cost method is used to provide an estimate of the consumer surplus loss associated with the lost navigability of Oregon Inlet. In the case of a loss of Oregon Inlet navigability, consumer surplus is the angler‗s willingness to pay to avoid the loss of access to the inlet. For example, a boater who could not travel to the ocean via Oregon Inlet would spend time and money boating or driving to Hyde County to make the trip via Hatteras Inlet. This angler would be willing to pay some amount of additional money in order to avoid closure of Oregon Inlet in order to avoid the additional time and expense associated with using Hatteras Inlet. Consumer surplus is an economic effect that is separate from the economic impact estimates presented above.

A ―random utility model‖ (RUM) uses information from multiple recreation sites to explain the recreation site selection decision. A RUM exploits the empirical observation that anglers tend to choose fishing sites with relatively low travel costs and relatively high chances of fishing success. Individuals choose a recreation site based on differences in trip costs and site characteristics between the alternative sites. Statistical analysis of the relationship between site characteristics and anglers site choices using logistic regression allows estimation of changes in

May 2014 89 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT consumer surplus arising from many changes in site availability or site characteristics (Haab and McConnell, 2002).

Nested random utility models (NRUM) allow for sequential choices required for the analysis. For example, in the standard NMFS travel cost marine recreational fishing model anglers are assumed to choose (1) target species and fishing mode and (2) fishing sites based on their attributes, including the potential cost of travelling to each site (Haab, Whitehead and McConnell, 2000).

The mode-site choice NRUM developed here is based on the standard NMFS model. First, the angler chooses among three fishing modes (shore, charter boat, and private boat fishing). Conditional on the mode choice from the first stage decision, the angler chooses the fishing site. We estimate a NRUM model of recreational fishing trip demand using day trip anglers who have valid zip code and fishing days data2 and who would travel no more than 300 miles (one-way) to at-least one fishing site (Haab and McConnell 2012). (The consumer surplus estimates are applicable to all anglers, not just those taking day trips.) With this subsample, 10,141 MRIP interviews represent 2.5 million trips.

We consider 37 fishing alternatives in the model: seven county level sites, two fishing areas (ocean and sounds) and three fishing modes. Some of the fishing alternatives have no interview data in the database; these alternatives drop out of the model3. We add one additional alternative to separately account for Carolina Beach Inlet in New Hanover County.

The travel cost variable is constructed from the round trip distance the angler would travel to the centroid of each county. We use the $0.20 cost per mile estimate from the AAA North Carolina for 2011. We value time costs at one-third of the zip code level household income hourly wage rate. For-hire trip costs include $267 and $355 for in-state and out-of-state anglers.

The other independent variables in the nested logit model are site characteristics variables. The number of parking spaces, boat slips, charter boats, head boats, boat ramps and piers and bridges for each fishing alternative are included. In a typical National Marine Fisheries Service (NMFS) demand model (e.g., Haab et al. 2012) the natural log of the number of interview sites from the MRIP Site Register4 is included to account for interview pressure. Instead, we use the aggregation of characteristics of these fishing sites found at the Site Register to take account of site heterogeneity. We also include alternative specific constants for each of the alternatives that are not linear combinations of the alternative specific characteristics.

The demand model is set up with the assumption that anglers first choose fishing mode and then choose fishing site and area combinations. We weight the demand model so that the parameter

2 We delete anglers who report more than 61 two-month wave and 361 annual fishing days.

3 The missing alternatives are the inland for-hire mode in Hyde, Carteret, Onslow, Pender and Brunswick Counties. The ocean for-hire mode is missing in Pender County.

4 https://www.st.nmfs.noaa.gov/siteregister/html/siteRegister.jsp

May 2014 90 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT estimates represent a typical trip. The model behaves as expected. The travel cost has a negative effect on fishing choice. The natural log of total interview site parking spaces (LNCARS) and boat slips (LNSLIPS) has a positive effect on fishing alternative choice. The natural log of total interview site piers and bridges (LNPIERS) and boat ramps (LNRAMPS) has a negative effect on alterative choice. The inclusive values are statistically different from zero and one indicating that the nesting structure is appropriate (Table VII-17).

Table VII-17. Nested RUM Fishing Trip Demand Model Variable Coefficient Standard Error z Travel Cost -0.059 0.00085 -69.27 LNCARS 1.58 0.0802 19.72 LNSLIPS 0.76 0.05433 13.98 LNHIRE 0.45 0.26167 1.72 LNPIERS -1.06 0.08964 -11.84 LNRAMPS -1.23 0.08449 -14.57 IV parameters SHORE 0.42 0.0227 18.59 FORHIRE 0.21 0.01769 11.6 PRIVATE 0.54 0.02387 22.65

Consumer surplus changes resulting from the closure of Oregon Inlet are estimated using the results from the NRUM demand model according to the standard formula given in Haab and McConnell (page 228, 2012). The consumer surplus loss is $2.83 per charter angler day and $2.46 per private angler day, on average, for all 4.85 million NC saltwater angler days (shore fishing, charter fishing and private boat fishing combined) represented by the interviews in the MRIP database, or $25.7 million in total consumer surplus loss. This measures the loss in satisfaction associated with taking a fishing trip in a less-preferred mode (for example, a shore fishing trip rather than a charter fishing grip) or at a less preferred location (Morehead City rather than Oregon Inlet) as a result of Oregon Inlet closure. These changes in consumer surplus are separate from (and not included in) the economic impact estimates presented elsewhere in this study.

As a check on the consumer surplus estimates for charter trips, the consumer surplus losses equate to an average loss of $27 in consumer surplus per angler per day for the Oregon Inlet charter boat fishing trips that occurred under recent Oregon Inlet conditions. The $27 loss in consumer surplus per angler trip measures the loss in satisfaction associated with taking a charter trip at a less preferred location rather than the preferred Oregon Inlet location. The Dumas et al. (2009, p.100) study of for-hire fishing in North Carolina found that consumer surplus averaged a comparable $17.45-$28.04 (2012-year dollars) per angler per day of for-hire fishing in the Outer Banks. (The Dumas study did not consider private boat trips.)

If we assume similar marginal changes in consumer surplus per additional day of charter fishing resulting from a fully open Oregon Inlet, the estimated 20 % increase in angler days (an additional 93,000*0.20 = 18,600 charter angler days per year) under the Fully Open Oregon Inlet scenario would support an additional $502,000 in consumer surplus per year (18,600 additional

May 2014 91 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT charter days * $27 per day = $502,000). If we assume that the ratio of private boat consumer surplus to charter boat consumer surplus from additional days of Oregon Inlet fishing is the same as the consumer surplus ratio for lost fishing days (i.e., $2.46/$2.83 = 0.87), then the 20% increase in private boat fishing days (169,000*0.20 = 33,800 additional private boat fishing days per year) under the Fully Open Oregon Inlet scenario would support an additional $794,000 in consumer surplus per year (33,800 additional private boat days * $27 per day * 0.87 = $794,000). In summary, we estimate that consumer surplus would increase about $1.30 million if inlet navigability were to improve from recent conditions to fully open conditions.

4. Comparison to 2006 Economic Study (M&N, 2006) In the 2006 study, we assumed 35,739 charter trips per year and 539,890 private boat trips per year (a trip is defined as one angler fishing one day; so, one charter boat full of six anglers fishing one day counts as six trips). In the 2014 study, we assume 93,000 charter trips per year (more than the 2006 study) and 169,000 private trips per year (less than the 2006 study).

The number of private boat trips is lower in 2014 than in 2006 because the number of private boat trips in North Carolina, in general, is much lower in 2014 than it was in 2006. A second reason for the difference in private boat trips is that the National Marine Fishery Service used a different weighting scheme in 2006 to convert its survey sample data to estimates of total trips. In 2006, the weighting scheme over-weighted private boat trips and under-weighted charter boat trips.

The number of charter boat trips is higher in 2014 than in 2006 because, even though the overall number of charter trips declined in North Carolina from 2006 to 2014, the NMFS data weighting scheme under-weighted charter trips in 2006. Using the correct weights, the number of charter trips in 2006 would have been higher, and the number of estimated charter trips would have declined from 2006 to 2014.

The expenditures per charter trip are higher for restaurants, groceries and boat fuel in 2014, compared to 2006. Expenditures per private boat trip are smaller for auto gasoline, restaurants and groceries, but larger for boat fuel, in 2014, compared to 2006. Other expenditures per trip are similar between 2006 and 2014, for both charter and private boat trips.

Comparing tax revenue impacts from the 2006 study with those from the 2014 study, for charter and private boat fishing the percentage of each dollar of output collected in state and local taxes was about 1/2 lower in 2014. The percentage of each dollar of output collected in federal taxes was about 1/3rd lower in 2014. The difference is caused by shifts in spending across spending categories. In 2014, private boaters spent less on auto fuel, less on restaurants and groceries, and more for boat fuel. In 2014, charter boaters spent more on restaurants and groceries and more for boat fuel. Because tax rates are different on different spending categories, the average taxes collected per dollar of output changed.

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VIII. TOURNAMENT FISHING In addition to general recreational fishing, sportfishing tournaments are important within the Oregon Inlet region. Approximately 5 known tournaments take place annually in the County (down from 9 tournaments in 2006), originating mainly at Pirates Cove marina, in Manteo or at various locations in Hatteras Village. Table VIII-1 contains a list of these tournaments and estimates of the length of each tournament (days) and the number of participants. In summary, more than 173 boats annually are expected to participate in sportfishing tournaments dependent on passage through Oregon Inlet. These tournaments draw significant economic benefits to the County ranging from expenditures on fishing gear, lodging, food, retail to custom boat sales, marine maintenance, and/or boat storage.

A. TOURNAMENT FISHING SURVEYS & INTERVIEWS Surveys were sent to 3 individuals and/or organizations that run fishing tournaments that use Oregon Inlet. M&N received 2 responses incorporating 3 of the fishing tournaments which take place annually. The surveys indicated that the tournament participation would increase 30%- 50% if the inlet were to be fully open. Two of the tournaments would cease to exist if the inlet closed. The remaining tournament could still operate but only at 10% of its original participation.

A follow up in person interview was done with one of the respondents who indicated that the previous year there had been an accident in the inlet one week prior to a tournament and approximately 15 boats pulled out of the tournament at the last minute due to the poor conditions.

The survey contacts and questions for tournament fishing can be found in Appendix A. Overall trends or business costs provided by the interviewees were used in the economic modeling and analyses to not only determine the current economic value of Oregon Inlet but how that value would change if the inlet were fully open or essentially closed.

B. ECONOMIC MODELING & RESULTS – TOURNAMENT FISHING The MRFSS database does not include sportfishing tournament trips. These tournaments are dependent on Oregon Inlet because vessels fishing in the tournaments must use Oregon Inlet to access offshore ocean waters where trophy fish species, such as the billfish species, are located.

Over 100 saltwater fishing tournaments occurring in North Carolina (and locations in South Carolina adjacent to North Carolina) between October 2013 and September 2014 are listed on the Tournament List of the FishermansPost.com fishing information website located in Wilmington, NC. (Source: http://www.fishermanspost.com/tournament-list) However, not all of these tournaments would be close substitutes for the offshore ocean fishing tournaments in Dare County that are Oregon Inlet-dependent. For example, some of the tournaments focus on target species different from the larger, offshore species targeted by Oregon Inlet-dependent tournaments. Other tournaments focus of fishing locations, such as rivers, sounds, beaches, or piers, that don‘t require access via an inlet. Still other tournaments focus on vessels, such as kayaks, that are very different from the large, charter and private trolling vessels used the OI- dependent tournaments. Finally, all of the North Carolina fishing tournaments, with the possible

May 2014 93 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT exception of the tournaments using Hatteras inlet, are farther from the prime Gulf Stream fishing area than Oregon Inlet, requiring longer boat rides to reach the prime fishing areas, leaving less time for actual fishing. Even Hatteras tournaments are a different recreational experience relative to Oregon Inlet tournaments in that Hatteras is a more remote location geographically, and the available amenities (hotels, restaurants, shopping, etc.) are much more limited, which can make for a less enjoyable time spent on shore for some fishermen and their families. Additionally, it should be noted that interviewees in the boat-building industry commented that a large percentage of their sales came from fishing tournament participants drawn to the area‘s unique sport-fishing yachts and that many of these sales were from repeat customers.

There are currently five fishing tournaments located in Dare County that focus on offshore fishing that requires access to Oregon Inlet (Table VIII-1). Average expenditures per boat day are listed separately for charter boats and private boats in Table VIII-2. Although the tournaments are relatively short in duration, from one to four days in length, they occur throughout the summer and fall fishing season, from May through November. Other fishing tournaments are held in Dare County, but these other tournaments focus on target species, fishing locations, or fishing vessels that would not require Oregon Inlet access. It should be noted that, in the past, several more offshore fishing tournaments requiring Oregon Inlet access were held each year (9 different tournaments were noted in the 2006 Oregon Inlet Impacts Study), so it is possible that more tournaments could occur if Oregon Inlet navigability conditions were to improve. Table VIII-1 also provides estimates of the number of participating boats under the Fully Open and Essentially Closed scenarios. These estimates were provided by tournament organizers interviewed for this study.

The tournaments listed in Table VIII-1 are dependent on Oregon Inlet because vessels fishing in the tournaments must use Oregon Inlet to access offshore ocean waters where trophy fish species, such as the billfish species, are located. In terms of inlet usage, ocean fishing tournaments originating from Pirates Cove are usually required under tournament regulations to use Oregon Inlet for ocean access. During one recent tournament, however, tournament participants were re-routed to Hatteras Inlet due to bad weather and dangerous inlet conditions at Oregon Inlet. While tournament participation was generally high for all tournaments, it was noted that the big Billfish tournament dropped in participants from 2004 to 2005 due to perceived inlet conditions. Additionally, 32 boats ran aground in Oregon Inlet during the 2005 Billfish tournament. Of these, 3 boats were replaced because damages caused by running aground were too severe to continue in the tournament. Additionally, approximately 15 boats pulled out of a 2013 tournament due to an incident in the inlet 1 week before the tournament.

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Table VIII-1. Annual Fishing Tournaments Dependent on Oregon Inlet Number Number of Boats and Percentage using Number of Boat-Days of Out of State Oregon Inlet Tournament Name and Date Fishing Participants Recent Essentially Recent Fully Essentially Fully Open Days Average Closed Average Open Closed North Carolina Offshore Challenge 4 (100%) 8 (100%) 0 (100%) 2 unknown 8 16 0 Dolphinfish Tournament (May 16-18) (see Note 1) (see Note 1) (see Note 1) Dare County Boat Builders Tournament 3 unknown 20 (100%) 30 (100%) 0 (100%) 60 90 0 (July 24-27) Alice Kelly Ladies Tournament 1 30% 55-65 (100%) 90 (100%) 0 (0%) 60 90 0 August (9-10) Pirates’ Cove Billfish Tournament 4 30% 70 (100%) 130 (100%) 0 (0%) 280 520 0 (August 11-15) Manteo Rotary Rockfish Rodeo 1 5% 75 (25%) 75 (100%) 75 (10%) 19 75 8 (November 22) TOTALS 173 333 8 427 791 8 Note 1.: Estimated number of boats using OI out of an unknown number of boats participating in tournament statewide.

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Table VIII-2. Dare County Tournament Fishing Fees and Expenditures, Recent Oregon Inlet Conditions Average Percentage of Annual Direct Annual Direct Expenditure in NC NC Assigned Expenditures Expenditures (Note 3) Per Boat PER Expenditures IMPLAN Sector in NC in Dare County TOURNAMENT Spent in Dare Description (2012 $'s) (2012 $'s) DAY (2012 $'s) Co (Note 7) Charter Private ------Boat Boat Percentage of Tournament Boats (Note 6) 0.23 0.77 ------Charter fees (Note 4) $2,100 $0 (Note 4) 99% (Note 4) Expenditures (Note 5) Tourn Entry Fee (Note 1) (Note 9) $44,809 100% $44,809 advertising $1,750 $1,750 Tourn Entry Fee (Note 12) $351,002 42% $147,421 household expenditures Auto Transport in NC $152 $152 $65,039 76% $49,662 gas stations Other Transport in NC (Note 11) $674 $674 $0 91% $0 gas stations Fuel for boat (Note 2) $1,250 $1,250 $533,438 95% $506,811 gas stations Slip/Dock fees (Note 2) $150 $150 $64,013 97% $62,242 transport by water Bait $48 $48 $20,320 86% $17,526 commercial fishing Fishing Tackle $76 $255 $91,410 99% $90,837 sporting goods Boat repairs $138 $138 $59,023 99% $58,653 boat building & repairing Lodging $1,424 $1,424 $607,533 98% $596,176 hotels Restaurants $768 $768 $327,615 95% $311,959 restaurants Groceries $552 $552 $235,705 91% $214,149 grocery stores Ice $24 $24 $10,386 89% $9,210 ice manufacturing Charter Crew Wages & Tips (Note 8) $270 $0 $26,546 100% $26,546 household expenditures Boat insurance $67 $67 $28,683 21% $6,023 Insurance carriers Interest on Boat Loan $42 $42 $17,721 21% $3,721 Commercial Banking Other (Producer Services) $76 $76 $32,540 96% $31,111 Business support services Other (Consumer Retail) (Note 10) $2,003 $2,003 $854,671 96% $817,140 Retail--General Merchandise Return to Charter Vessel Owner $243 $0 $23,837 100% $23,837 household expenditures *See next page for notes

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Table VIII-2 Notes: Note 1. Tournament entry fee based on Pirates Cove Big Game Tournament fee schedule 2013. 2013 tournament entry fees ranged from $5000 to $15,000 per boat; assume an average of $7000 per boat. Note 2: Personal communication (April 2014) with Mr. Jim Tobin, Pirates Cove Marina: Aver Charter fee per full day trip 2013: $2,100 Dock fees per tourn week 2013: $1,200 (but, not all boats use commercial dock, so assume an average of $600 per boat) Ave fuel cost per tournament, per boat, 2013: $5,000 Note 3: All prices from 1999 Ditton data were deflated from 1999 to 2012 using GDP deflator EXCEPT fuel cost. Dollar values deflated using GDP implicit price deflator for 1999 to 2012 = 76.25664 Fuel cost deflated using relative nominal price of gas (USEIA 2014). Date Gas price $/gal 1999 1st week of Aug $1.195 2012 1st week of August $3.645 Note 4: Charter fees are distributed across the expenditure categories based on charter boat costs and returns data in Ditton (2000) and Dumas et al. (2009). Note 5. Expenditure values in Ditton (2000) are given in units of dollars per angler. These values are adjusted to dollars per boat by assuming 6 anglers per boat. Note 6: Dare County tournament boats included a mix of 23% charter anglers and 77% private boat anglers in 1999 (Ditton 2000). Assume charter/private mix same in 2012. Note 7: Percentage of NC expenditures made in Dare County by expenditure category based on Ditton (2000). Note 8: Assumes half of charter tips go to crew, and half go to captain/owner. Note 9: Assumes 6% of tournament fees are retained by the tournament organizer and spent in Dare County on advertising. Note 10: This expenditure reflects spending by tournament participants and their families at retail stores in Dare County during the tournament (based on Ditton 2000). Note 11: Other transport includes primarily airline travel. Assume this is purchased outside NC and has no economic impact on NC or Dare County. Note 12: Assumes that of the 94% of tournament fees paid in prizes to the tournament participants, 21% is spent inside Dare County, an additional 29% is spent within NC, and the remaining 50% is spent out of state, based on 1999 data from Ditton (2000) Assumes prize money is spent according to typical household expenditure patterns for geographic region.

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1. IMPLAN Model Analysis Economic impacts are presented below for Dare County, the Oregon Inlet Region, and the state of North Carolina as a whole. For each geographic region, impacts are provided for three Oregon Inlet navigability scenarios: Oregon Inlet Recent Conditions, Oregon Inlet Fully Open, and Oregon Inlet closed.

The economic impact numbers reflect tournament fishing activity only; commercial fishing activity, and non-tournament recreational fishing activity, are considered in other sections of this report. The economic impact numbers reflect Oregon Inlet-dependent (i.e., ocean) tournament fishing only; any tournament fishing inside the sounds or estuaries is not considered. For the purposes of the present study, it is assumed that any sound or estuarine tournament fishing is unaffected by Oregon Inlet conditions.

The impacts are intended to reflect average economic conditions and average weather conditions—the purpose of the study is to examine the impacts of changing navigability conditions under average economic and weather conditions. All dollar values are report in real (inflation adjusted) 2012-year dollars. Employment numbers are the total of full-time and part- time jobs (not ―full-time equivalent‖ jobs). The impacts of changing Oregon Inlet navigability conditions are calculated by finding the differences between impacts across navigability scenarios. a) Dare County Economic Impacts

(i) Oregon Inlet Recent Conditions To calculate the direct economic impacts of tournament fishing in Dare County for the ―Recent Conditions‖ Oregon Inlet navigability scenario, the number of tournament boat-days per year for the Oregon Inlet Recent Conditions scenario, or 427 boat days (Table VIII-1, bottom row), is first multiplied by the percentage of boats that are charter boats (Table VIII-2, top row), and then multiplied by the expenditure values per charter boat, per tournament day, given in Table VIII-2, to find the annual expenditures made by Oregon Inlet-using charter tournament boats in North Carolina. A similar calculation is done to obtain the annual expenditures made by Oregon Inlet- using private tournament boats in North Carolina. These two sets of expenditures, one for charter boats, and one for private boats, are added together to obtain the expenditures listed in Table VIII-2, column 3. The expenditure values in Table VIII-2, column 3, are then multiplied by the percentage of expenditure that occurs in Dare County for each expenditure category, Table VIII-2, column 4, to find the expenditures made within Dare County in each expenditure category, Table VIII-2, column 5.

The expenditures in Table VIII-2, column 5, are then separated into two categories, direct labor income, and direct expenditures on goods and services. The expenditures for the portion of the tournament entry fee paid as prizes ($147,421), charter crew wages and tips ($26,546) and returns to charter vessel owners ($23,837), for a total of $197,804, is categorized as direct labor income. The prize money spent in Dare County ($147,421) is assumed to be spent by households with a spending pattern typical of households with an annual household income

May 2014 98 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT greater than $150,000 (i.e., it is assumed that relatively wealthy households can afford to pay the tournament entry fees, and charter fees or private boat expenses). The charter crew and vessel owner labor income ($26,546 + $23,837 = $50,383) is assumed to be spent by households with a spending pattern typical of those with annual household incomes of $50,000 to $75,000, on average (of course, some crew may have household incomes less than $50,000/year, and some vessel owners may have household incomes greater than $75,000/year; the range $50,000 to $75,000 is used as an average).

The remaining expenditures in Table VIII-2, column 5, or $2,820,029 are classified as direct expenditures on goods and services.

The economic impacts are presented in Table VIII-3. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $2.8 million in Dare County generate an additional $1.7 million in economic multiplier effects within the County, for a total economic impact of $4.6 million in output (sales) sales within the County. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table VIII-3. Annual Economic Impacts of Tournament Fishing in Dare County, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $2,820,029 20 $777,242 $326,572 ------Total Effect $4,551,174 36 $1,351,341 $884,226 $190,659 $249,371 (ii) Oregon Inlet Fully Open Conditions To calculate the direct economic impacts of tournament fishing in Dare County for the ―Fully Open‖ Oregon Inlet navigability scenario, a method similar to that used for the ―Recent Conditions‖ Oregon Inlet navigability scenario is used, but with a larger number of tournament boat days (Table VIII-1, bottom row). The larger number of tournament boat days possible under ―Fully Open‖ inlet conditions is based on estimates provided by tournament organizers interviewed for the present study.

The number of tournament boat-days per year for the Oregon Inlet ―Fully Open‖ Conditions scenario, or 791 boat days (Table VIII-1, bottom row), is first multiplied by the percentage of boats that are charter boats (Table VIII-2, top row), and then multiplied by the expenditure values per charter boat, per tournament day, given in Table VIII-2, to find the annual expenditures made by Oregon Inlet-using charter tournament boats in North Carolina. A similar calculation is done to obtain the annual expenditures made by Oregon Inlet-using private tournament boats in North Carolina. These two sets of expenditures, one for charter boats, and one for private boats, are added together. The expenditure values are then multiplied by the percentage of expenditure that occurs in Dare County for each expenditure category to find the expenditures made within Dare County in each expenditure category.

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The expenditures are then separated into two categories, direct labor income, and direct expenditures on goods and services. The expenditures for the portion of the tournament entry fee paid as prizes, charter crew wages and tips, and returns to charter vessel owners is categorized as direct labor income. The prize money spent in Dare County is assumed to be spent by households with a spending pattern typical of households with an annual household income greater than $150,000. The charter crew and vessel owner labor income is assumed to be spent by households with a spending pattern typical of those with annual household incomes of $50,000 to $75,000, on average.

The second category of expenditures, direct expenditures on goods and services, total $5,223,988 under the Fully Open navigability scenario.

The combined economic impacts of the direct labor income and the direct expenditures on goods and services are presented in Table VIII-4 below. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $5.2 million in Dare County generate an additional $3.2 million in economic multiplier effects within the County, for a total economic impact of $8.4 million in output (sales) sales within the County. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table VIII-4. Annual Economic Impacts of Tournament Fishing in Dare County, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $5,223,988 36 $1,439,809 $604,961 ------Total Effect $8,430,863 67 $2,503,304 $1,637,992 $353,188 $461,950

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $24.6 million in Dare County for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 tournament boat days (a ―boat-day‖ is one boat, fishing for one day, in a tournament) and applying that ratio to the total impacts for fully open conditions in Dare County. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions To calculate the direct economic impacts of tournament fishing in Dare County for the ―Closed‖ Oregon Inlet navigability scenario, a method similar to that used for the ―Recent Conditions‖ Oregon Inlet navigability scenario is used, but with a smaller number of tournament boat days (Table VIII-1, bottom row). The smaller number of tournament boat days possible under ―Closed‖ inlet conditions is based on estimates provided by tournament organizers interviewed for the present study.

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The number of tournament boat-days per year for the Oregon Inlet ―Closed‖ Conditions scenario, or 8 boat days (Table VIII-1, bottom row), is first multiplied by the percentage of boats that are charter boats (Table VIII-2, top row), and then multiplied by the expenditure values per charter boat, per tournament day, given in Table VIII-2, to find the annual expenditures made by Oregon Inlet-using charter tournament boats in North Carolina. A similar calculation is done to obtain the annual expenditures made by Oregon Inlet-using private tournament boats in North Carolina. These two sets of expenditures, one for charter boats, and one for private boats, are added together. The expenditure values are then multiplied by the percentage of expenditure that occurs in Dare County for each expenditure category to find the expenditures made within Dare County in each expenditure category.

The expenditures are then separated into two categories, direct labor income, and direct expenditures on goods and services. The expenditures for the portion of the tournament entry fee paid as prizes, charter crew wages and tips, and returns to charter vessel owners is categorized as direct labor income. The prize money spent in Dare County is assumed to be spent by households with a spending pattern typical of households with an annual household income greater than $150,000. The charter crew and vessel owner labor income is assumed to be spent by households with a spending pattern typical of those with annual household incomes of $50,000 to $75,000, on average.

The second category of expenditures, direct expenditures on goods and services, total $52,834 under the closed navigability scenario.

The combined economic impacts of the direct labor income and the direct expenditures on goods and services are presented in Table VIII-5. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $53,000 in Dare County generate an additional $33,000 in economic multiplier effects within the County, for a total economic impact of $85,000 in output (sales) sales within the County. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Table VIII-5. Annual Economic Impacts of Tournament Fishing in Dare County, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $52,834 0 $14,562 $6,118 ------Total Effect $85,268 1 $25,318 $16,566 $3,572 $4,672 b) Regional Economic Impacts The Oregon Inlet region is defined as the counties surrounding Oregon Inlet and its tributaries: Camden, Currituck, Dare, Hyde, Pasquotank, Perquimans and Tyrrell counties. The economic impact results presented in this section include the direct impacts of Oregon Inlet-dependent tournament fishing that occurs within Dare County, the economic multiplier effects that occur within Dare County, and the economic multiplier effects that occur in the other counties of the

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Oregon Inlet region. The results in this section do not include the economic impacts of any tournament fishing activity occurring outside Dare County. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same (i.e., the only direct impacts in the region considered here are those that occur in Dare County).

(i) Oregon Inlet Recent Conditions To calculate the direct economic impacts of tournament fishing in the Oregon Inlet region for the ―Recent Conditions‖ Oregon Inlet navigability scenario, the number of tournament boat-days per year for the Oregon Inlet Recent Conditions scenario, or 427 boat days (Table VIII-1, bottom row), is used together with the method described above in the ―Recent Conditions‖ Oregon Inlet navigability scenario for Dare County. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same.

The economic impacts are presented in Table VIII-6. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $2.8 million in Dare County generate an additional $2.0 million in economic multiplier effects throughout the Oregon Inlet region, for a total economic impact of $4.8 million in output (sales) sales throughout the Oregon Inlet region. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur throughout the Oregon Inlet region are larger. For example, every dollar of direct impact sales, for example, results in $0.61 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.71 of multiplier effects at the regional level.

Table VIII-6. Annual Economic Impacts of Tournament Fishing in Oregon Inlet Region, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $2,820,029 22 $773,762 $348,131 ------Total Effect $4,788,859 41 $1,447,835 $977,701 $224,774 $272,511 (ii) Oregon Inlet Fully Open Conditions To calculate the direct economic impacts of tournament fishing in the Oregon Inlet region for the ―Fully Open‖ Oregon Inlet navigability scenario, the number of tournament boat-days per year for the Oregon Inlet ―Fully Open‖ scenario, or 791 boat days (Table VIII-1, bottom row), is used together with the method described above in the ―Fully Open‖ Oregon Inlet navigability scenario for Dare County. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same.

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The economic impacts are presented in Table VIII-7. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $5.2 million in Dare County generate an additional $3.7 million in economic multiplier effects throughout the Oregon Inlet region, for a total economic impact of $8.9 million in output (sales) sales throughout the Oregon Inlet region. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur throughout the Oregon Inlet region are larger. For example, every dollar of direct impact sales, for example, results in $0.61 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.71 of multiplier effects at the regional level.

Table VIII-7. Annual Economic Impacts of Tournament Fishing in Oregon Inlet Region, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $5,223,988 40 $1,433,362 $644,898 ------Total Effect $8,871,165 76 $2,682,055 $1,811,151 $416,385 $504,815

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $25.8 million in Dare County and the surrounding region for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 tournament boat days (a ―boat-day‖ is one boat, fishing for one day, in a tournament) and applying that ratio to the total impacts for fully open conditions in the surrounding region (including Dare County). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions To calculate the direct economic impacts of tournament fishing in the Oregon Inlet region for the ―Closed‖ Oregon Inlet navigability scenario, the number of tournament boat-days per year for the Oregon Inlet ―Closed‖ scenario, or 8 boat days (Table VIII-1, bottom row), is used together with the method described above in the ―Closed‖ Oregon Inlet navigability scenario for Dare County. The results presented here for the Oregon Inlet Region differ from those presented for Dare County only in the multiplier effects and total impacts—the direct impacts are the same.

The economic impacts are presented in Table VIII-8. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $53,000 in Dare County generate an additional $37,000 in economic multiplier effects throughout the Oregon Inlet region, for a total economic impact of $90,000 in output (sales) sales throughout the Oregon Inlet region. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

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Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur throughout the Oregon Inlet region are larger. For example, every dollar of direct impact sales, for example, results in $0.61 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $0.71 of multiplier effects at the regional level.

Table VIII-8. Annual Economic Impacts of Tournament Fishing in Oregon Inlet Region, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $52,834 0 $14,497 $6,522 ------Total Effect $89,721 1 $27,126 $18,318 $4,211 $5,106 c) Statewide Economic Impacts The economic impact results presented in this section include the direct impacts of Oregon Inlet- dependent tournament fishing in Dare County and its multiplier effects throughout the state of North Carolina. Typically, when a larger geographic region is considered, multiplier effects are larger, and so the total economic impacts of a given economic change are also larger. However, some economic changes that result in net economic impacts at the county or regional levels do not result in net economic changes at the state level. For example, a movement in tournament fishing activity from a location outside Dare County, but inside North Carolina, such as Morehead City, NC, to Dare County results in net economic changes in Dare County and the Oregon Inlet region but not at the state level. At the state level, there is simply a transfer of economic activity from one location to another within the state. As a result, the answer to the question of whether economic impacts will increase as larger geographic areas are considered depends on the combined effects of (1) larger economic multiplier effects as we consider larger geographic areas and (2) smaller direct effects as we consider larger geographic areas because more economic changes are classified as transfers within a larger area. Therefore, the total impacts in some impact categories may increase as we move from the consideration of county and regional-level impacts to statewide impacts, but total impacts in other impact categories may decrease.

(i) Oregon Inlet Recent Conditions To calculate the statewide direct economic impacts of tournament fishing for the ―Recent Conditions‖ Oregon Inlet navigability scenario, the number of tournament boat-days per year for the Oregon Inlet Recent Conditions scenario, or 427 boat days (Table VIII-1, bottom row), is used together with the method described above in the ―Recent Conditions‖ Oregon Inlet navigability scenario for Dare County, except that statewide expenditures (Table VIII-2, column 3) are used instead of expenditures occurring only within Dare County (Table VIII-2, column 5).

The economic impacts are presented in Table VIII-9. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $2.99 million in Dare County generate an additional $3.98 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total

May 2014 104 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT economic impact of $6.97 million in output (sales) sales throughout the state. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur at the state level are larger. For example, every dollar of direct impact sales, for example, results in $0.61 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $1.33 of multiplier effects at the state level.

Table VIII-9. Statewide Annual Economic Impacts of Tournament Fishing Using Oregon Inlet, Oregon Inlet Recent Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $2,992,903 27 $1,097,153 $399,034 ------Total Effect $6,970,273 60 $2,598,072 $1,490,211 $334,716 $464,746 (ii) Oregon Inlet Fully Open Conditions To calculate the statewide direct economic impacts of tournament fishing for the ―Fully Open‖ Oregon Inlet navigability scenario, the number of tournament boat-days per year for the Oregon Inlet Fully Open Conditions scenario, or 791 boat days (Table VIII-1, bottom row), is used together with the method described above in the ―Fully Open Conditions‖ Oregon Inlet navigability scenario for Dare County, with two exceptions:

 Statewide expenditures (Table VIII-2, column 3) are used instead of those expenditures occurring only within Dare County (Table VIII-2, column 5).

 Only 30 percent of the increase in tournament boat days due to Fully Open Oregon Inlet conditions is attributable to out-of-state tournament participants, while 70 percent of the increase is due to North Carolina residents shifting their tournament participation from other tournaments in the state to Dare County-based tournaments (this is based on interviews with Dare County tournament organizers who report that 30 percent of tournament participants, on average, are from out of state). The 70 percent of the increase in tournament boat days that represents a shift to Dare County from other tournaments within the state is not considered a net gain to the state and is not included in the statewide economic impact.

The economic impacts are presented in Table VIII-10. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $3.8 million in Dare County generate an additional $5.0 million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $8.8 million in output (sales) sales throughout the state. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur at the state level are larger. For example, every dollar of direct impact sales, for example,

May 2014 105 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT results in $0.61 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $1.32 of multiplier effects at the state level.

Table VIII-10. Statewide Annual Economic Impacts of Tournament Fishing Using Oregon Inlet, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $3,758,301 33 $1,377,736 $501,082 ------Total Effect $8,752,835 76 $3,262,497 $1,871,314 $420,316 $583,599

The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $25.5 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. These numbers were estimated by determining the ratio between the 2014 and 2006 tournament boat days (a ―boat-day‖ is one boat, fishing for one day, in a tournament) and applying that ratio to the total impacts for fully open conditions in the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

(iii) Oregon Inlet Essentially Closed Conditions To calculate the statewide direct economic impacts of tournament fishing for the ―Closed‖ Oregon Inlet navigability scenario, the number of tournament boat-days per year for the Oregon Inlet Closed Conditions scenario, or 8 boat days (Table VIII-1, bottom row), is used together with the method described above in the ―Closed Conditions‖ Oregon Inlet navigability scenario for Dare County, with two exceptions:

 Statewide expenditures (Table VIII-2, column 3) are used instead of those expenditures occurring only within Dare County (Table VIII-2, column 5).

 Only 30 percent of the decrease in tournament boat days due to Closed Oregon Inlet conditions is attributable to out-of-state tournament participants, while 70 percent of the decrease is due to North Carolina residents shifting their tournament participation from Dare County tournaments to other tournaments within the state (this is based on interviews with Dare County tournament organizers who report that 30 percent of tournament participants, on average, are from out of state). The 70 percent of the decrease in tournament boat days that represents a shift from Dare County from other tournaments within the state is not considered a net loss to the state and is not included in the statewide economic impact.

The economic impacts are presented in Table VIII-11. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, sales of $2.1 million in Dare County and elsewhere in the state as a result of tournament boats shifting their activities from Dare County to other tournaments in the state generate an additional $2.8

May 2014 106 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT million in economic multiplier effects throughout the state (including Dare County and the Oregon Inlet region), for a total economic impact of $4.9 million in output (sales) sales throughout the state. The Direct Effects and Total Effects listed in the remaining columns of the table are interpreted in a similar way.

Compared to the multiplier effects occurring within Dare County only, the multiplier effects that occur at the state level are larger. For example, every dollar of direct impact sales, for example, results in $0.61 of multiplier effects at the county level, whereas every dollar of direct impact sales results in $1.33 of multiplier effects at the state level.

Table VIII-11. Statewide Annual Economic Impacts of Tournament Fishing Using Oregon Inlet, Oregon Inlet Essentially Closed Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Impact Type Employment and Interest Federal Taxes (Output) Proprietorship Local Taxes Income Income Direct Effect $2,111,854 19 $774,174 $281,567 ------Total Effect $4,918,368 42 $1,833,253 $1,051,524 $236,183 $327,934 2. Economic Impacts Summary There are currently five fishing tournaments (down from nine in 2006) located in Dare County that focus on offshore fishing that requires access to Oregon Inlet. More than 173 boats annually are expected to participate in sportfishing tournaments dependent on passage through Oregon Inlet. Although the tournaments are relatively short in duration, from one to four days in length, they occur throughout the summer and fall fishing season, from May through November. The tournaments are dependent on Oregon Inlet because vessels fishing in the tournaments must use Oregon Inlet to access offshore ocean waters where trophy fish species, such as the billfish species, are located. Fees and expenditures from these tournaments also generate a large economic impact to Dare County in the form of lodging, restaurants, tackle, fuel, and crew wages.

Table VIII-12 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent tournament fishing for recent conditions. As mentioned previously, the recent condition is based on an average of conditions over the last 3 years (a depth of 6 ft or greater only 40% of the time).

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Table VIII-12. Summary of Annual Oregon Inlet-Dependent Tournament Fishing Economic Impacts For Recent Conditions Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $2,820,029 20 $777,242 $326,572 ------Dare County Total Effect $4,551,174 36 $1,351,341 $884,226 $190,659 $249,371 Region Direct Effect $2,820,029 22 $773,762 $348,131 ------(Incl. Dare Co.) Total Effect $4,788,859 41 $1,447,835 $977,701 $224,774 $272,511 State of NC Direct Effect $2,992,903 27 $1,097,153 $399,034 ------(Incl. Dare Co.) Total Effect $6,970,273 60 $2,598,072 $1,490,211 $334,716 $464,746 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Table VIII-13 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent tournament fishing for fully open conditions. As mentioned previously, fully open conditions are considered to be dredged to a depth of 14 ft or greater 85-100% of the time.

Table VIII-13. Summary of Annual Oregon Inlet-Dependent Tournament Fishing Economic Impacts For Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $5,223,988 36 $1,439,809 $604,961 ------Dare County Total Effect $8,430,863 67 $2,503,304 $1,637,992 $353,188 $461,950 Region Direct Effect $5,223,988 40 $1,433,362 $644,898 ------(Incl. Dare Co.) Total Effect $8,871,165 76 $2,682,055 $1,811,151 $416,385 $504,815 State of NC Direct Effect $3,758,301 33 $1,377,736 $501,082 ------(Incl. Dare Co.) Total Effect $8,752,835 76 $3,262,497 $1,871,314 $420,316 $583,599 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The impacts in Table VIII-13 reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $24.6 million in Dare County, $25.8 million in the surrounding region (including Dare County), and $25.5 million in state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. Again, these numbers were estimated by determining the ratio between the 2014 and 2006 tournament boat days and applying that ratio to the total impacts for fully open conditions in each of the three geographic settings – Dare County, the surrounding region (including Dare County), and the state of North Carolina (including Dare County and the surrounding region). However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table VIII-14 presents the potential additional economic impacts from tournament fishing that may be realized if Oregon Inlet were maintained to fully open conditions. The results are equivalent to the difference between Table VIII-13 (fully open inlet scenario) and Table VIII-12 (recent conditions scenario).

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Table VIII-14. Summary of Potentially Gained Annual Economic Impacts from Tournament Fishing for Oregon Inlet Fully Open Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $2,403,959 16 $662,567 $278,389 ------Dare County Total Effect $3,879,689 31 $1,151,963 $753,766 $162,529 $212,579 Region Direct Effect $2,403,959 18 $659,600 $296,767 ------(Incl. Dare Co.) Total Effect $4,082,306 35 $1,234,220 $833,450 $191,611 $232,304 State of NC Direct Effect $765,398 6 $280,583 $102,048 ------(Incl. Dare Co.) Total Effect $1,782,562 16 $664,425 $381,103 $85,600 $118,853 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005- 2006, the potential additional annual economic impacts could reach up to $20.0 million in Dare County, $21.1 million in the surrounding region (including Dare County), and $18.5 million in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Table VIII-15 presents the direct and total economic impacts on Dare County, the surrounding region, and the State for Oregon Inlet dependent tournament fishing for essentially closed conditions. As mentioned previously, essentially closed conditions are considered to be dredged to a depth of 6 ft or greater only 5% of the time.

Table VIII-15. Summary of Annual Oregon Inlet-Dependent Tournament Fishing Economic Impacts For Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect $52,834 0 $14,562 $6,118 ------Dare County Total Effect $85,268 1 $25,318 $16,566 $3,572 $4,672 Region Direct Effect $52,834 0 $14,497 $6,522 ------(Incl. Dare Co.) Total Effect $89,721 1 $27,126 $18,318 $4,211 $5,106 State of NC Direct Effect $2,111,854 19 $774,174 $281,567 ------(Incl. Dare Co.) Total Effect $4,918,368 42 $1,833,253 $1,051,524 $236,183 $327,934 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Table VIII-16 presents the potential loss of economic impacts from tournament fishing that may be realized if Oregon Inlet were allowed to essentially close. The results are equivalent to the difference between Table VIII-12 (recent conditions scenario) and Table VIII-15 (essentially closed inlet scenario).

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Table VIII-16. Summary of Potentially Lost Annual Economic Impacts from Tournament Fishing for Oregon Inlet Essentially Closed Scenario Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Locale Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect -$2,767,195 -20 -$762,680 -$320,454 ------Dare County Total Effect -$4,465,906 -35 -$1,326,023 -$867,660 -$187,087 -$244,699 Region Direct Effect -$2,767,195 -22 -$759,265 -$341,609 ------(Incl. Dare Co.) Total Effect -$4,699,138 -40 -$1,420,709 -$959,383 -$220,563 -$267,405 State of NC Direct Effect -$881,049 -8 -$322,979 -$117,467 ------(Incl. Dare Co.) Total Effect -$2,051,905 -18 -$764,819 -$438,687 -$98,533 -$136,812 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents 3. Comparison to 2006 Economic Study (M&N, 2006) The 2006 study listed 9 fishing tournaments in Dare County. Also, the Rockfish tournament concerns mainly small vessels that may be able to navigate Oregon Inlet under most conditions. In addition, several of the tournaments are no longer held, and apparently were only held for one or two years.

The 2014 study is based on the 4 tournaments from the 2006 study that have a solid track record of occurring over multiple years, Pirates‘ Cove Billfish Tournament (August 11-15), Alice Kelly Ladies Tournament (August 9-10), Dare County Boat Builders Tournament (July 24-27), and the Manteo Rotary Rockfish Rodeo (November 22), plus an additional tournament that is statewide but that includes participants who use Oregon Inlet, the North Carolina Offshore Challenge Dolphinfish Tournament (May 16-18), for a total of 5 tournaments. The other tournaments considered in the 2006 study were held for only one year, or died out over time for reasons not clearly related to inlet navigability conditions, and so they are not included in the 2014 study.

The 9 tournaments considered in the 2006 study supported a total of 970 boat-days (a ―boat-day‖ is one boat, fishing for one day, in a tournament) and $14.4 million in direct impacts for sales/output within Dare County. It is assumed that the inlet conditions in 2004-2005, on which the 2006 study were based, were relatively good inlet conditions. (Perhaps the conditions were not perfect, but apparently they were sufficiently good to support 970 boat-days of tournament fishing.) The economic impacts for tournaments presented in the 2006 study were based on economic conditions in 2004-2005, which were unusually good years for recreational fishing activity (see data from National Marine Manufacturers Association on annual boat sales), due to a good economy and relatively low gas prices ($2.00-$2.25/gallon). These years do not represent the ―average economic conditions‖ considered in the 2014 study.

The 5 tournaments considered in the 2014 study supported a total of 333 boat-days under fully open inlet conditions and $5.2 million in direct impacts for sales/output within Dare County. Compared to the 2006 study results, the 2014 study found about 2/3rds fewer boat days under fully open inlet conditions and about 2/3rds less economic impact. Basing tournament fishing impacts on the 5 tournaments considered in the 2014 study appears reasonable based on interviews with Dare County officials familiar with Dare County fishing tournaments, who mentioned no plans for any new tournaments under improved fishing conditions. The 2014

May 2014 110 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT study allows for additional participation in the existing 5 tournaments under improved inlet conditions. Perhaps additional Dare County tournaments will be organized in the future, but perhaps not. There are currently many other fishing tournaments held in North Carolina (over 100 in 2013-2014), and it‘s not clear that the market would support more tournaments on a sustained basis. Nevertheless, if the economy were to improve such that economic conditions were similar to those in 2004-2005, and inlet conditions were to improve to ―fully open,‖ then economic impacts could perhaps reach the levels presented in the 2006 study (that is, three times the levels presented in the 2014 study). On the other hand, if economic conditions were to deteriorate, then economic impacts under each inlet navigability scenario could be lower than those presented in the 2014 study.

In the 2006 study, tournament fishermen were assumed to spend about $6000 per fisherman, per 4-day tournament. This includes money spent on lodging, restaurants, groceries, gas for cars/trucks, boat fuel, retail shopping, and other things. In the 2014 study, tournament fishermen spent similar amounts per 4-day tournament, $6,874 for tournament anglers using charter boats, and $5,260 for tournament anglers using private boats.

Comparing tax revenue impacts from the 2006 study with those from the 2014 study, for tournament boat fishing the percentage of each dollar of output collected in state and local taxes in 2014 was about half the 2006 percentage. The percentage of each dollar of output collected in federal taxes in 2014 was also about half the 2006 percentage. The difference is caused by shifts in spending across spending categories. In 2014, tournament boaters spent less on boat repairs, dock fees, ice, and bait, but more on lodging, restaurants and groceries. Also, the portion of the charter fishing fee earned by the charter boat owner, after expenses, was lower in 2014. Because tax rates are different on different spending categories, the average taxes collected per dollar of output changed.

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IX. OFFSHORE DRILLING Opening the U.S. Atlantic Outer Continental Shelf (OCS) to offshore oil and natural gas exploration and production could have significant economic impacts, in terms of job creation, U.S. energy security, domestic investment, and revenue to the government (American Petroleum Institute, 2014). North Carolina, in particular, benefits from its proximity to OCS oil and gas resources and its current extensive port infrastructures at both Morehead City and Wilmington. According to the National Ocean Industries Association (NOIA, 2013), North Carolina is predicted to see the highest levels of spending, employment and contributions to the economy if OCS oil and natural gas resources are developed. Within the next decade, offshore oil and natural gas development off of the North Carolina Coast could create an estimated 10,542 jobs and generate over $28 million in revenue (Quest Offshore Resources, 2013). A 2009 study by the American Energy Alliance projects an increase of 30,979 jobs by 2035 from offshore oil and gas recovery operations in North Carolina (Mason, 2009).

Determining the quantity of recoverable resources offshore and their prices are the main factors in determining the economic potential of energy resource development in North Carolina (Walden and Reynolds, 2013). The Bureau of Ocean Energy Management (BOEM) (2013a) estimates that the offshore areas of the United States contain significant quantities of resources in yet-to-be-discovered fields. The Bureau estimates of oil and gas resources in undiscovered fields on the outer continental shelf OCS (2006, mean estimates) total 86 billion barrels of oil and 420 trillion cubic feet of gas. These volumes represent about 60 percent of the oil and 40 percent of the natural gas resources estimated to be contained in remaining undiscovered fields in the United States.

The area offshore of the northern Outer Banks is located in the Mid-Atlantic region of the U.S. Outer Continental Shelf (OCS) shown in Figure IX-1. BOEM conducted an assessment of the total Undiscovered Technically Recoverable Oil and Gas Resources (UTRR) of the OCS in 2011. The estimates of this resource were recorded as a potential minimum (95% probability), mean (50% probability), and maximum (5% probability). The minimum, mean, and maximum UTRR for oil in the Mid-Atlantic OCS region is 0.06, 1.42, and 2.85 billions of barrels (Bbo) respectively (BOEM, 2011). The minimum, mean, and maximum UTRR for gas in the Mid- Atlantic OCS region is 1.01, 19.36, and 38.94 trillion cubic feet of gas (Tcfg) respectively (BOEM, 2011). Of these amounts, an estimated 0.95 billion barrels of oil and 9.72 trillion cubic feet of natural gas would be economically recoverable at a price of $110 per barrel of oil and $7.38 per thousand cubic feet of natural gas.

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Figure IX-1. Outer Continental Shelf Regions

The OCS Oil and Gas Leasing Program for 2012-2017 establishes a schedule that is used as a basis for considering where and when oil and gas leasing might be appropriate over a five-year period (BOEM, 2013b). This five-year program proposes leases off the coast of Alaska and the Gulf of Mexico only; no leases are scheduled for sale off the coasts of states in the Mid-Atlantic Region, including North Carolina. Although there are currently no active leases in the Mid- Atlantic Region of the OCS, oil or natural gas drilling might occur in the future. The location of Oregon Inlet could potentially lend itself to be useful should offshore drilling be developed in the future. While the shallow draft navigation channel limits the types and sizes of ocean vessels that can safely traverse, it could be useful for crew and maintenance boats which need to pass back and forth between land and ocean facilities. Operation and maintenance would be expected to increase employment, economic output / business activity, and government revenues collected in Dare County and perhaps nearby counties hosting commuting employees.

A. OFFSHORE DRILLING SURVEYS & INTERVIEWS Surveys were sent to approximately 8 individuals and/or companies that are familiar with the recent push to explore offshore energy in the Atlantic. None of the individuals contacted were able to provide answers to the survey questions. However, a majority indicated that while offshore drilling in the mid-Atlantic region is a possibility for the future, Oregon Inlet would not

May 2014 114 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT play a large role. The presence of the bridge and the poor conditions of the channel make the inlet not an option for the larger vessels that would be required to build and maintain the offshore infrastructure. However, they did indicate that Oregon Inlet could potentially be used for crew boats.

Since M&N was unable to get survey responses, a literature search was performed to find potential information in other parts of the country and world where this type of infrastructure exists. The North Carolina General Assembly‘s research commission performed a very valuable study on offshore energy exploration in 2010, which included discussion of offshore energy resource availability and the financial impacts on coastal industries and profit sharing. From this study, helpful information from the Minerals Management Service (now known as BOEM) was also obtained which included data on onshore infrastructure and employment necessary for operation of offshore drilling sites. In addition, presenters from the Offshore Energy in the Southeast 2014 Conference were contacted to gain helpful information from speakers about the topic.

The survey contacts and questions for offshore drilling can be found in Appendix A.

B. ECONOMIC MODELING & RESULTS – OFFSHORE DRILLING Utilizing data from The Energy Information Administration (EIA) of the U.S. Department of Energy and the World Bank, Walden and Reynolds (2013) forecast an average oil price between 2013-2035 of $101 per barrel (2012 USD), and an average of $5.21 per 1000 cubic feet of natural gas. Using these predicted prices, this study estimates a quantity of economically recoverable offshore oil in North Carolina of 595 million barrels and 5.1 trillion cubic feet of offshore natural gas. The American Energy Alliance (2009) used data from recent offshore energy projects within varying U.S. regions and calculated annual infrastructure costs of $1.65 (2012 USD) per barrel of oil and $0.30 per 1000 cubic feet of natural gas during the initial construction period.

In the United States, there are two main types of offshore drilling rigs – floating rigs (formally known as semisubmersible or drillships) and jackup rigs. Floating rigs hover above the well construction site and are held in position by anchors or dynamic positioning, while a jackup is a barge with legs that can be adjusted to suit a given location (Kaiser and Snyder, 2013). A 2013 study examining the offshore contract drilling industry, reported a total world fleet of 868 existing offshore drilling rigs, of which 539 are jackup rigs and 329 are floaters. According to RigZone, a leading international online resource for the oil and gas industry, there are currently 88 contracted rigs in the Gulf of Mexico out of a total rig fleet of 226 rigs. Using data acquired by RigLogix, RigZone reported the average daily rate for using a floating rig at $295,833 per day, and a jackup rig costing approximately $96,700 per day (2014 USD).

The amount of crew members required per oil rig varies depending on the type of offshore rig, its location, and the nature of the job the rig is performing. The typical drilling rig crew is comprised of supervisory, specialized, and crew staff members5. On average, the number of

5 Rigs supervisors are responsible for rig maintenance and installation, while specialized staff includes vessel support, drillers, subsea engineers, and electricians. The crew includes entry-level staff, maintenance and IT staff, and mechanics.

May 2014 115 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT drilling contractor employees staffing a jackup rig is estimated at 110 personnel, while floating rigs are estimated to require 170 personnel per rig (Oilpro.com; Tripke, 2014). On average, U.S. employees in the Oil and Gas Industry make an hourly wage of $43.95 and an annual income of $91,410 (U.S. Bureau of Labor Statistics 2013). Broken down further, Table IX-1 describes the average hourly and annual wages for the following industries directly involved with offshore oil and gas: (1) Oil and Gas Extraction, (2) Pipeline Transportation of Crude Oil, (3) Petroleum and Coal Products Manufacturing, and (4) Support Activities for Mining.

Table IX-1. May 2013 National Industry Specific Occupational Employment and Wage Estimates Industry Hourly Wage Annual Income Oil and Gas Extraction: $43.95 $91,410 Pipeline Transportation of Crude Oil: $36.50 $75,920 Petroleum and Coal Products Manufacturing: $33.46 $69,600 Support Activities for Mining: $25.56 $53,160 Source: U.S. Bureau of Labor Statistics; May 2013 National Industry-Specific Occupational Employment and Wage Estimates

A 2012 study completed by IFP Energies Nouvelles, estimated the 2010 rate of offshore oil production at 23.6 million barrels per day (Mbbld), or 30% of global production, and 2.4 billion cubic-meters per day (bcmd) of gas, or 27% of global production. In 2012, the U.S. Energy Information Administration reported the Gulf of Mexico‘s Federal offshore oil production at being 1,252,000 barrels per day. NOAA reported 3858 active oil and gas platforms in the Gulf of Mexico in 2012 (http://oceanexplorer.noaa.gov/explorations/06mexico/background/oil/media /platform_600.html). Combining these two reports, it is estimated that each oil rig has the capability of producing 324.5 barrels of oil per day in the off-shore Gulf of Mexico region. We assume that this average reflects downtime, repairs, and coordination of transportation to and from the drill site to the shoreline. Thus, we employ this average in analyzing oil and gas development in Hatteras Bay off of Currituck and Dare Counties, North Carolina.

Using the Gulf of Mexico average daily output level of 324.5 barrels of oil, we calculate the number of necessary rigs to extract oil and gas resources in Hatteras Bay over a 20 year period. As indicated above, data from US DOE Energy Information Administration indicates that 595 million barrels of oil and 5.1 trillion cubic feet of natural gas could be economically recoverable through 2035. As these numbers are coast-wide and we do not have a detailed spatial breakdown, we make the simple assumption that one-third of the economically recoverable resources (or 198.333 million barrels of oil) is located in the region of Hatteras Bay. Since oil and gas are extracted jointly, we focus only on oil, assuming that natural gas will be a valuable byproduct.

If all of the oil and gas were to be extracted during a 20-year project lifespan (which would run through roughly 2035), approximately 84 offshore rigs would be required. We make this calculation by scaling up the average daily production of rigs in the Gulf-of-Mexico (324.5 barrels of oil/day) to produce a 20 year lifespan estimate of 2.37 million barrels of oil. As we are uncertain what types of offshore rigs would be utilized, we use the average proportion of jack-up

May 2014 116 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT rigs (62%) and floater rigs (38%) in the global fleet. Under Scenario 1, this would entail 52 jack- up rigs and 32 floaters. The 8,840 jack-up rig workers would earn approximately $808 million per year, and the 3,520 floating rig workers would earn about $321.7 million per year, for total income of $1.129 billion per year. Table IX-2 depicts the scenarios mentioned above.

Table IX-2. Scenarios for Oil & Gas Development in Hatteras Bay Scenario Employment Income 84 rigs in Hatteras Bay to extract all 8840 jack-up rig workers $808 million / year (jack-up) 1 economically viable oil & gas 3520 floater rig workers $321.7 million / year (floater) resources $1.129 billion / year (TOTAL) 42 rigs in Hatteras Bay to extract 4420 jack-up rig workers $404 million / year (jack-up) 2 approx. one-half of economically viable 1760 floater rig workers $160.9 million / year (floater) oil & gas resources $565 million / year (TOTAL) 21 rigs in Hatteras Bay to extract 2210 jack-up rig workers $202 million / year (jack-up) 3 approx. one-quarter of economically 880 floater rig workers $80.44 million / year (floater) viable oil & gas resources $282.5 million / year (TOTAL)

Since this level of oil and gas development might not be feasible in the near to middle term, we also consider to scenarios that involve lower levels of investment, consisting of one-half and one-quarter the level of development in scenario number one. Total employment is between 3,090 and 6,180 workers, and annual income varies between $282.5 million and $564.9 million. Using the infrastructure cost estimate from the American Energy Alliance (2009) of $1.65 per barrel of oil (2012 USD), we estimate total infrastructure costs for the scenarios as follows: $327.25 million for scenario one; $163.63 million for scenario two; and $81.81 million for scenario three. These numbers do not include projected infrastructure costs for natural gas, and thus can be considered conservative.

1. IMPLAN Modeling Analysis The economic impacts of Oregon Inlet-dependent offshore oil and gas development are calculated for three geographic areas: Dare County, the Oregon Inlet region, and the State of North Carolina as a whole. For each geographic region, only the fully open navigability scenario is considered, as recent navigability conditions would not provide the consistent ocean access required to support such a large capital investment. It is assumed that a closed inlet would support no offshore oil and gas development.

For this study, we consider the middle scenario (scenario 2) in which 42 drilling rigs are located in Hatteras Bay to extract approximately one-half of the economically viable offshore oil and gas resources over a 20-year operational project lifespan. We assume this would require 26 jack-up rigs and 16 floating rigs. The economic impacts of offshore oil and gas development occur in two phases, a construction phase lasting one or two years, and an operations and maintenance phase lasting 20 or more years. It is assumed that offshore construction activities would be supported by the more extensive port and rail facilities located in Norfolk, Virginia, and possibly Morehead City, North Carolina. During the operations and maintenance phase, the jack-up rigs require 4420 workers, earning annual income of $404 million, and the floater rigs require an additional 1760 workers, earning annual income of $160.9 million. It is assumed that one-third

May 2014 117 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT of these workers would be based in Dare County, NC, one-third in Beaufort/Morehead City, NC, and one-third in Norfolk, Virginia.

The impacts are intended to reflect average economic conditions and average weather conditions. All dollar values are report in real (inflation adjusted) 2012-year dollars. Employment numbers are the total of full-time and part-time jobs (not ―full-time equivalent‖ jobs). a) Dare County Economic Impacts - Oregon Inlet Fully Open Conditions The annual economic impacts of the operations and maintenance activities that occur within Dare County are presented in Table IX-3. The operations and maintenance phase lasts 20 years. It is assumed that 2,060 jobs (one-third of 6180) jobs paying a total of $188.3 million (one-third of $565 million) per year will be based in Dare County, NC. It is assumed that, on average, these workers earn $91,408 per year ($188.3 million / 2060 jobs = $91,408). The household spending pattern of these workers is assumed to be similar to that of households with $75,000- $100,000 annual income in the IMPLAN database. It is assumed that the workers find housing in the existing, extensive, Dare County rental housing stock, and it is assumed that any required machine shop, warehouse storage and dock facilities are found from the existing stock of vacant commercial and industrial property in Dare County.

Economic impacts are calculated using IMPLAN and are presented in Table X-3. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, direct labor income of $188.3 million in Dare County generates an additional $66.2 million in labor income within the County due to economic multiplier effects, for a total labor income impact of $254.5 million. This labor income supports an additional 1923 jobs (3983 – 2060 = 1923) in Dare County, and an estimated $203 million in sales (output) in Dare County, $68.5 million in dividends, rents and interest income, $10.7 million in state and local taxes, and $15.3 million in federal taxes.

Table IX-3. Annual Economic Impacts of Offshore Oil Development in Dare County - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect N/A 2,060 $188,333,333 N/A ------Total Effect $203,010,800 3,983 $254,517,135 $68,506,146 $10,657,583 $15,306,411 b) Regional Economic Impacts - Oregon Inlet Fully Open Conditions The Oregon Inlet region is defined as the counties surrounding Oregon Inlet and its tributaries: Camden, Currituck, Dare, Hyde, Pasquotank, Perquimans and Tyrrell counties. The economic impact results presented in this section include the direct economic impacts that occur within Dare County, the economic multiplier effects that occur within Dare County, and the economic multiplier effects that occur in the other counties of the Oregon Inlet region. The results presented here for the Oregon Inlet Region differ from those presented for Dare County in the multiplier effects and total impacts only—the direct effects are the same.

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Economic impacts are calculated using IMPLAN and are presented in Table IX-4. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, direct labor income of $188.3 million in Dare County generates an additional $69.4 million in labor income in the Oregon Inlet region (including Dare County) due to economic multiplier effects, for a total labor income impact in the Oregon Inlet region of $257.5 million. This labor income supports an additional 2042 jobs (4102 – 2060 = 2042) in the Oregon Inlet region (including Dare County), and a total of $210.2 million in sales (output) in the Oregon Inlet region, $71.7 million in dividends, rents and interest income, $12.1 million in state and local taxes, and $16.1 million in federal taxes.

Multiplier effects are typically larger at the regional level, compared to the county level. For example, every dollar of labor income supports $0.35 of labor income multiplier effects at the county level, whereas every dollar of labor income results in $0.37 of labor income multiplier effects in the Oregon Inlet region.

Table IX-4. Annual Economic Impacts of Offshore Oil Development in Oregon Inlet Region - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect N/A 2,060 $188,333,333 N/A ------Total Effect $210,187,400 4,102 $257,675,997 $71,708,549 $12,085,400 $16,110,779 c) Statewide Economic Impacts - Oregon Inlet Fully Open Conditions The economic impact results presented in this section include the direct economic impacts that occur within Dare County and the economic multiplier effects that occur statewide (including Dare County and the Oregon Inlet region). The statewide results presented here differ from those presented for Dare County in the multiplier effects and total impacts only—the direct effects are the same. (The impacts presented here do not include any effects of any direct economic activity (crew jobs) that might occur in Morehead City or elsewhere in North Carolina.)

Economic impacts are calculated using IMPLAN and are presented in Table IX-5. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, direct labor income of $188.3 million in Dare County generates an additional $128.4 million in labor income throughout the state (including Dare County and the Oregon Inlet region) due to economic multiplier effects, for a total labor income impact in the state of $316.7 million. This labor income supports an additional 2930 jobs (4990 – 2060 = 2930) statewide (including Dare County and the Oregon Inlet region), and a total of $348.7 million in sales (output) in the state, $99.8 million in dividends, rents and interest income, $17.9 million in state and local taxes, and $27.8 million in federal taxes.

Multiplier effects are typically larger at the state level, compared to the county or regional level. For example, every dollar of labor income supports $0.35 of labor income multiplier effects at

May 2014 119 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT the county level, whereas every dollar of labor income supports $0.68 of labor income multiplier effects statewide.

Table IX-5. Statewide Annual Economic Impacts of Offshore Oil Development - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Sales and Sole Rent, and State and Federal Impact Type Employment (Output) Proprietorship Interest Local Taxes Taxes Income Income Direct Effect N/A 2,060 $188,333,333 N/A ------Total Effect $348,680,682 4,990 $316,667,622 $99,841,617 $17,934,112 $27,765,277

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X. OFFSHORE WIND ENERGY In the interest of promotion of renewable energy, the US Department of Energy (DOE) has set a goal to develop 54 GW of offshore wind capacity by 2030 (US DOE, 2008). The Bureau of Ocean Energy Management (BOEM) is responsible for managing development of the nation‘s offshore resources, including renewable energy development such as wind energy (BOEMRE, 2013). ―BOEM has seen very strong interest in offshore renewable energy projects on the Outer Continental Shelf (OCS). BOEM is working closely with several states regarding offshore energy development and is in the process of coordinating federal-state task forces in certain coastal states.‖

A study by the University of North Carolina (2009) finds that there is sufficient potential for offshore wind development in Federal waters off the coast of North Carolina. According to the Renewables Program of the North Carolina Energy Office (NCEO, 2013), North Carolina is a desirable location for offshore wind energy production for the following reasons:

 North Carolina has the largest offshore wind resource on the U.S. east coast in shallow water

 North Carolina has strategically located ports that could support offshore wind farm development and operation, and

 North Carolina has a renewable energy manufacturing tax credit (25%) and a low cost of manufacturing.

Examining wind potential, engineering and economic feasibility, as well as social, political, and environmental constraints, the 2009 study concludes that there are 190 BOEM lease blocks with wind power capacity in excess of 35%. Focusing on waters less than 50 m deep and within 50 miles of the coastline, there are more than 2800 square miles of potential development area off the North Carolina coast, a significant proportion of which is located adjacent to Dare and Currituck Counties. UNC (2009) estimates that wind power class 6 is common in these areas and projected costs are on the order of $101 per MWh. Figure X-1 shows the estimated wind power capacity as determined by the 2009 UNC study. Utility transmission infrastructure in eastern North Carolina has some capacity to accommodate offshore generation but upgrades may be required. Existing State law presents significant legal and permitting barriers to development in state waters and few regulatory incentives exist for wind energy. However, significant carbon emission reduction is anticipated as a result of a utility-scale generation facility assuming an offset of fossil fuel power.

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Figure X-1. The Estimated Spatial Distribution of Capacity Factor For A Typical 3-3.6 MW Wind Turbine (UNC, 2009)

In the wake of a series of North Carolina Department of Commerce stakeholder meetings in August 2010, five renewable energy firms expressed interest in obtaining commercial leases for wind energy projects (BOEM, 2013d). There is considerable interest in areas of the coast of Dare County, North Carolina (BOEM, 2013d). BOEM has initiated a review of these parties‘ submissions to assess filing completeness; evaluate legal, technical, and financial qualifications to hold an OCS renewable energy commercial lease; and, determine competitive interest.

The location of Oregon Inlet could potentially lend itself to be useful should offshore wind energy be developed in the future given the high wind capacity potential offshore of the inlet. While the shallow draft navigation channel limits the types and sizes of ocean vessels that can safely traverse, it could be useful for crew and maintenance boats which need to pass back and forth between land and ocean facilities. Operation and maintenance would be expected to increase employment, economic output / business activity, and government revenues collected in Dare County and perhaps nearby counties hosting commuting employees.

A. OFFSHORE WIND ENERGY SURVEYS & INTERVIEWS Surveys were sent to approximately 14 individuals and/or companies that are familiar with the recent push to explore offshore energy in the Atlantic. None of the individuals contacted were able to provide answers to the survey questions. However, a majority indicated that while

May 2014 122 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT offshore wind in the mid-Atlantic region is a possibility for the future, Oregon Inlet would not play a large role. The presence of the bridge and the poor conditions of the channel make the inlet not an option for the larger vessels that would be required to build and maintain the offshore infrastructure. However, they did indicate that Oregon Inlet could potentially be used for crew boats.

Since M&N was unable to get survey responses, a literature search was performed to find potential information in other parts of the country and world where this type of infrastructure exists. The University of North Carolina Coastal Wind Feasibility Study (2009) was a helpful resource to be used, indicating the high wind power capacity offshore of Oregon Inlet. BOEM has also reported on stakeholder meetings held in 2013 for offshore wind energy call areas off of the North Carolina coast, one of which was held in Manteo and discussed, among other topics, the use of Oregon Inlet in the development and operation of offshore wind energy farms. In addition, presenters from the Offshore Energy in the Southeast 2014 Conference were contacted to gain helpful information from speakers about the topic.

The survey contacts and questions for offshore wind energy can be found in Appendix A.

B. ECONOMIC MODELING & RESULTS – OFFSHORE WIND ENERGY A life cycle assessment of wind farm technology reveals that the payback times can be as short as 0.39 years (less than 2% of typical capital investments 20-year service life) for offshore wind (Schleisner 2000). Offshore wind turbines operate with higher efficient due to greater and more uniform wind velocity, which also reduces turbulent stress on turbine hardware (Snyder and Kaiser 2009; Musial, Butterfield and Ram 2006). Consistent and reliable wind implies higher capacity credit and smaller back-up costs (Milborrow 2009). Economic impacts of offshore wind development include creation of short-term construction jobs and long-term operation and maintenance jobs (Strachan and Lal 2004).

The Horns Rev wind project in Denmark - consisting for eighty 2 MW offshore turbines - is predicted to have created over 1700 man-years of local jobs during the construction period and 2000 man-years of jobs maintained over the 20-year life cycle of the project (of which about one-quarter are locally based). The proposed Cape Wind project in Massachusetts - 130 wind turbines with the capacity to produce 420 MW of energy - was predicted to create 50 permanent jobs and 100 indirect jobs, according to Snyder and Kaiser (2009), while the predicted impacts were 600 - 1000 jobs in the region according to Capewind.org (accessed 4 April 2014).

A report on North Carolina wind potential by US DOE (2009) predicts that expected impacts of 1,000 MW of wind power could produce a total of $1.1 billion in economic impacts (over 20 years of operation - 2007 constant dollars), reduce CO2 emissions by 2.9 million tons, and save 1.558 billion gallons of water annually. Direct beneficiaries of offshore wind development include constructions workers (an estimated 1,628 jobs lasting 1 - 2 years), operation and maintenance (O&M) staff (an estimated 243 jobs), and turbine manufacturers and other suppliers (some of which could be in-state). Using the National Renewable Energy Laboratory‘s Jobs & Economic Development Impacts (JEDI) model, they calculate unit construction costs of $1,650 /kW and unit O&M costs of $24.70 / kW.

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Dare County is adjacent to Hatteras bay, which has about 14 miles of shore-perpendicular submarine sand shoals (somewhat less than (30 miles) and (50 miles) to the south). Nonetheless, the criteria employed by the University of North Carolina study group (2009), indicates approximately 120 BOEM lease blocks that were declared potentially developable for offshore wind energy. Hatteras Bay is ―dominated by unconsolidated sediments with substantial amounts of surficial relief‖ within the 50 meter depth contour (UNC 2009). Perhaps the largest barrier to offshore wind development in this region, the Dominion Power transmission system was not designed to accommodate significant power delivery from the offshore region, and would thus require upgrading (UNC 2009). Costs of upgrading the transmission system are highly dependent upon the distance required to reach the transmission system from the offshore turbines.

BOEM lease blocks are 3 miles by 3 miles. We consider 3.6 MW turbines erected on monopole foundations (70 - 100 meters to the nacelle, with 45 meter blades); with a recommended 700 meters between turbines, each BOEM lease block can accommodate 49 turbines. Our baseline development scenario follows the economic analysis contained in the UNC study - the development of 9 BOEM blocks with 441 3.6 MW turbines, for a total installed capacity of 1,588 MW. Using the estimates from US DOE (2009) study, this would create 2586 construction jobs lasting 1 - 2 years and 385 full- time O&M staff jobs over an assumed 20-year project life. Using recent BLS estimates (Table X-1), the construction jobs would create annual income of $165.7 million per year during the construction phase. Assuming a 1:9 ratio for management to operations/maintenance, O&M staff jobs would create annual income of $27.86 million per year over the 20 year lifespan of the project.

Table X-1. May 2013 National Industry-Specific Occupational Employment and Wage Estimates Industry Hourly Wage Annual Income Electric Power Generation - Management: $59.44 $123,640 Electric Power Generation - Maintenance: $32.02 $66,590 Electric Power Generation - Construction: $30.81 $64,080 Source: U.S. Bureau of Labor Statistics; May 2013 National Industry-Specific Occupational Employment and Wage Estimates

In order to assess scenario sensitivity, we also consider a smaller project that fully develops only 4 BOEM lease blocks, as well as a larger scenario that fully develop 18 and lease blocks. The results are depicted in Table X-2, which shows that construction jobs can range from a low of 1150 to a high of 5,169, generating total income of almost $74 million to $331 million per year, respectively. Operations and Maintenance jobs vary from 172 to 772 in our scenarios, generating total income of $12.4 million to almost $56 million per year for each year of operation of the offshore wind project. Construction and infrastructure investment costs are estimated by applying the cost estimate of $1,650 /kW from the National Renewable Energy Laboratory‘s JEDI model (US DOE 2009). For scenario 1 (1,588 MW: 441 turbines within 9 BOEM blocks), this procedure produces an estimate of $2.62 billion. For scenarios 2 (706 MW: 196 turbines within 4 BOEM blocks) and 3 (3,175 MW: 882 turbines within 18 BOEM blocks),

May 2014 124 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT the construction and infrastructure cost estimates are $1.65 billion and $5.24 billion, respectively.

Table X-2. Scenarios for Offshore Wind Development in Hatteras Bay (3.6 MW turbines) Scenario Employment Income 1,588 MW (441 turbines 2,586 construction jobs $165.7 million / year (construction) 1 within 9 BOEM blocks) 385 O&M staff jobs $27.86 million / year (operation) 706 MW (196 turbines 1150 construction jobs $73.7 million / year (construction) 2 within 4 BOEM blocks) 172 O&M staff jobs $12.4 million / year (operation) 3,175 MW (882 turbines 5,169 construction jobs $331.2 million / year (construction) 3 within 18 BOEM blocks) 772 O&M staff jobs $55.8 million / year (operation) 1. IMPLAN Modeling Analysis The economic impacts of Oregon Inlet-dependent offshore wind energy development are calculated for three geographic areas: Dare County, the Oregon Inlet region, and the State of North Carolina as a whole. For each geographic region, only the fully open navigability scenario is considered, as recent navigability conditions would not provide the consistent ocean access required to support such a large capital investment. It is assumed that a closed inlet would support no offshore wind energy development.

For this study, we consider the middle scenario (scenario 1) in which 441 wind turbines are constructed within 9 BOEM blocks. Each turbine is 1,588 MW. The economic impacts of offshore wind energy development occur in two phases, a construction phase lasting one or two years, and an operations and maintenance phase lasting 20 or more years. It is assumed that offshore construction activities would be supported by the more extensive port and rail facilities located in Norfolk, Virginia, and possibly Morehead City, North Carolina. This analysis considers the potential economic impacts of post-construction operations and maintenance activities. Based on the locations off the coast of North Carolina that have been identified for possible wind energy development, it is assumed that one-half of the operations and maintenance activities would be based in Dare County, NC, and one-half would be based in Beaufort/Morehead City, NC.

The impacts are intended to reflect average economic conditions and average weather conditions. All dollar values are report in real (inflation adjusted) 2012-year dollars. Employment numbers are the total of full-time and part-time jobs (not ―full-time equivalent‖ jobs). a) Dare County Economic Impacts – Oregon Inlet Fully Open Conditions The annual economic impacts of the operations and maintenance activities that occur within Dare County are presented in Table X-3. The operations and maintenance phase may last 20 years or longer. It is assumed that 385 jobs earning a total of $27.86 million per year will be required to operate and maintain the offshore wind turbines. It is assumed that one-half of these jobs, or 193 jobs, are based in Dare County, NC (It is assumed that the other half are based in Beaufort/Morehead City, NC.). It is assumed that, on average, workers earn $72,364 per year ($27.86 million / 385 jobs = $72,364). The household spending pattern of these workers is assumed to be similar to that of households with $75,000-$100,000 annual income in the

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IMPLAN database. It is assumed that the workers find housing in the existing, extensive, Dare County rental housing stock, and it is assumed that any required machine shop, warehouse storage and dock facilities are found from the existing stock of vacant commercial and industrial property in Dare County.

Economic impacts are calculated using IMPLAN and are presented in Table X-3. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, direct labor income of $13.93 million in Dare County generates an additional $4.9 million in labor income within the County due to economic multiplier effects, for a total labor income impact of $18.8 million. This labor income supports an estimated $15 million in sales (output) in Dare County, $5.1 million in dividends, rents and interest income, $788,000 in state and local taxes, and $1.1 million in federal taxes.

Table X-3. Annual Economic Impacts of Offshore Wind Development in Dare County - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect N/A 193 $13,930,000 N/A ------Total Effect $15,015,613 295 $18,825,259 $5,067,030 $788,284 $1,132,133 b) Regional Economic Impacts – Oregon Inlet Fully Open Conditions The Oregon Inlet region is defined as the counties surrounding Oregon Inlet and its tributaries: Camden, Currituck, Dare, Hyde, Pasquotank, Perquimans and Tyrrell counties. The economic impact results presented in this section include the direct economic impacts that occur within Dare County, the economic multiplier effects that occur within Dare County, and the economic multiplier effects that occur in the other counties of the Oregon Inlet region. The results presented here for the Oregon Inlet Region differ from those presented for Dare County in the multiplier effects and total impacts only—the direct effects are the same.

Economic impacts are calculated using IMPLAN and are presented in Table X-4. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, direct labor income of $13.93 million in Dare County generates an additional $5.13 million in labor income in the Oregon Inlet region (including Dare County) due to economic multiplier effects, for a total labor income impact in the Oregon Inlet region of $19.06 million. This labor income supports an additional 110 jobs (303 – 193 = 110), and a total of $15.5 million in sales (output) in the Oregon Inlet region, $5.3 million in dividends, rents and interest income, $894,000 in state and local taxes, and $1.2 million in federal taxes.

Multiplier effects are typically larger at the regional level, compared to the county level. For example, every dollar of labor income supports $0.35 of labor income multiplier effects at the county level, whereas every dollar of labor income results in $0.37 of labor income multiplier effects in the Oregon Inlet region.

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Table X-4. Annual Economic Impacts of Offshore Wind Development in the Oregon Inlet Region - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect N/A 193 $13,930,000 N/A ------Total Effect $15,546,427 303 $19,058,903 $5,303,894 $893,892 $1,191,627 c) Statewide Economic Impacts – Oregon Inlet Fully Open Conditions The economic impact results presented in this section include the direct economic impacts that occur within Dare County and the economic multiplier effects that occur statewide (including Dare County and the Oregon Inlet region). The statewide results presented here differ from those presented for Dare County in the multiplier effects and total impacts only—the direct effects are the same. (The impacts presented here do not include any effects of any direct economic activity (crew jobs) that might occur in Morehead City or elsewhere in North Carolina.)

Economic impacts are calculated using IMPLAN and are presented in Table X-5. Economic multiplier effects are the difference between the Direct Effects and the Total Effects listed in the table. For example, direct labor income of $13.93 million in Dare County generates an additional $9.5 million in labor income throughout the state (including Dare County and the Oregon Inlet region) due to economic multiplier effects, for a total labor income impact in the state of $23.42 million. This labor income supports an additional 176 jobs (369 – 193 = 176), and a total of $25.8 million in sales (output) in the state, $7.4 million in dividends, rents and interest income, $1.3 million in state and local taxes, and $2.1 million in federal taxes.

Multiplier effects are typically larger at the state level, compared to the county or regional level. For example, every dollar of labor income supports $0.35 of labor income multiplier effects at the county level, whereas every dollar of labor income supports $0.68 of labor income multiplier effects statewide.

Table X-5. Statewide Annual Economic Impacts of Offshore Wind Development - Operations and Maintenance Activities, Oregon Inlet Fully Open Conditions Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect N/A 193 $13,930,000 N/A ------Total Effect $25,790,028 369 $23,422,195 $7,384,745 $1,326,489 $2,053,648

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XI. SOUNDSIDE FLOODING In recent years there have been some anecdotal observations of elevated water levels of 6 – 10 inches within the sounds behind Oregon Inlet. One theory as to the cause of the elevated water levels is that Oregon Inlet shoaling is not allowing adequate water exchange, especially on falling tides. It is posited that water has not been able to flush out of the inlet in a timely manner, leaving the soundside coastline of portions of the Outer Banks and mainland Dare and Tyrell Counties susceptible to flooding, affecting waterfront property containing residential homes and commercial (agricultural) property.

A. SOUNDSIDE FLOODING SURVEYS & INTERVIEWS Surveys were sent to approximately 14 individuals and/or companies that are familiar with the recent rise in soundside water levels and correlation to the condition of Oregon Inlet. None of the individuals contacted were able to provide answers to the survey questions in order to complete an economic analysis as in other sections of the report. However, a majority indicated that they had noticed an increase in soundside water levels, especially when the condition of Oregon Inlet is at its worst. It appears that water from the sound is not able to drain properly, thus causing trouble amongst waterfront property (both residential and commercial) on the sound.

Since M&N was unable to get survey responses, a data search was performed to find potential information on Dare County concerning elevated water levels.

The survey contacts and questions for soundside flooding can be found in Appendix A.

B. DATA COLLECTION AND LITERATURE REVIEW RESULTS – SOUNDSIDE FLOODING The NOAA website for tides and currents was first reviewed to see if any trends were present in measured water level data. Figure XI-1 shows the interannual variation of monthly mean sea level and the 5-month running average for water levels at Oregon Inlet Marina. The average seasonal cycle and linear sea level trends have been removed. According to the NOAA website, ―interannual variation is caused by irregular fluctuations in coastal ocean temperatures, salinities, winds, atmospheric pressures, and ocean currents.‖

Based on the plot (http://tidesandcurrents.noaa.gov/sltrends/residual1980.shtml?stnid=8652587) , it appears that water levels at this station (on the soundside of Oregon Inlet) have seen an average increase in water levels since 2010 of approximately 0.075 m (~3 inches). At this time it is not possible to know if this elevation is due to meteorological forcing functions (listed above) or a lack of dredging. Nonetheless, a review of the USACE dredging records (http://www.navigationdatacenter.us/dredge/dredge.htm) show that dredging of Oregon Inlet on the order of 500,000 – 1,000,000 cy/yr was completed regularly from 2001-2009 until the time period of 2010-2012 where no dredging (except sidecasting) was completed. Reduced dredging volumes were also noted in early 90s to 2000 dredging records. Therefore, the lack of dredging may also be contributing to this elevated water level in addition to storms and other meteorological forcing functions.

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Figure XI-1. Interannual Variation Since 1990 8652587 Oregon Inlet Marina, North Carolina

As for the potential effects of elevated water levels on property values, the most applicable study found was completed by Bin et al. (2007) which provided parcel-level property value, both residential and commercial, for selected coastal counties examining the impacts of sea level (water level) rise due to climate change on North Carolina coastal resources. The authors estimated the impacts of sea level (water level) rise on coastal real estate markets in New Hanover, Dare, Carteret and Bertie Counties (Figure XI-2). The study area represents a cross- section of the North Carolina coastline in geographical distribution and economic development.

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Figure XI-2. Location of Counties Analyzed for Property Impacts in Bin et al (2007)

Six climate scenarios generated from recent global climate models, consisting of low, medium, and high sea level (water level) rise rates from the present day to 2030 and the present day to 2080 were used to calculate ranges of property loss values, depending on the severity of sea level (water level) rise. Table XI-1 presents the sea level (water level) rise scenarios considered.

Table XI-1. Summary of Sea Level (Water Level) Rise Scenarios Projected Sea Level Year Scenario (Water Level) Rise, (feet) Low 0.36 2030 Mid 0.52 High 0.69 Low 0.85 2080 Mid 1.51 High 2.66

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The loss of property values due to sea level (water level) rise were estimated using a simulation approach based on hedonic property value models (using location, structural, and environmental attributes as value) for the four counties. Data on property values came from the county tax offices. These offices maintain property parcel records that contain assessed values of property as well as lot size, total square footage, the year the structure was built, and other structural characteristics of the property. Other spatial amenities such as property elevation, ocean and sound/estuarine frontage and distance to shoreline were obtained using GIS data (Figure XI-3). Study results indicated that the impacts of sea level (water level) rise on coastal property values vary across the North Carolina coastline. Overall, the northern part of the North Carolina coastline is comparatively more vulnerable to the effect of sea level (water level) rise than the southern part. Low-lying and heavily developed areas along the northern coastline are especially at high risk from sea level (water level) rise. Without discounting, the residential property value loss in Dare County was approximately 2.18% percent of the total residential property value (in 2030, assuming 0.36 ft of sea level (water level) rise from 2004 to 2030). Bertie County showed a relatively small impact with 0.3% loss in residential property value (in 2030, assuming 0.36 feet of sea level (water level) rise from 2004 to 2030).

Since Dare and Bertie Counties would both be affected by elevated water levels soundside of Oregon Inlet, it was determined that these results could be used to develop rough estimates of property value losses with the recent measured water level increases of 3 inches at Oregon Inlet Marina. It should be noted that the estimates outlined below are solely based on the Bin 2007 study and more accurate and complete estimates could be made with a more detailed study. However, the level of study needed to develop accurate estimates would be a significant project unto itself and would also need to include all the counties affected by elevated water levels soundside of Oregon Inlet. Nonetheless, the Bin 2007 study would allow for estimates to at least be made for Dare and Bertie counties.

For Dare County, the total 2014 property value was requested from the tax office and received. The total property tax value for the county is reported to be $12.05B. Once areas that would not be as affected by Oregon Inlet were subtracted (Avon, Buxton, Frisco, and Hatteras – due to another nearby inlet) the total tax value was estimated to be 10.56B. Multiplying this value times 2.18% would show that $230M of property value loss would be realized with a 0.36 ft (4.3 in) water level rise. Assuming linearity, for a 3 in water level rise the property value loss would be $160M. Finally, since these estimates would include both oceanfront and soundfront properties, the oceanfront property value loss would need to be subtracted so that only the soundfront impacts remained. Based on the Bin 2007 study and interviews with the Dare County Tax Office, an assumption was made that 2/3 of the value loss would be to oceanfront properties while 1/3 would be to soundfront. Therefore, the final estimate of property value loss in Dare County for a 3 in water level rise was estimated to be $53.2M.

For Bertie County, the total 2012 property value was requested from the tax office and received. The total property tax value for the county is reported to be $1.107B. Multiplying this value times 0.3% would show that $3.3M of property value loss would be realized with a 0.36 ft (4.3 in) water level rise. Assuming linearity, for a 3 in water level rise the property value loss would be $2.3M. Therefore the final estimate of property value loss in Bertie County for a 3 inch water level rise was estimated to be $2.3M.

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From upper-left: (a) Carteret County shoreline location, (b) LiDAR elevation surface, (c) distance to shoreline, and (d) tax parcel centroids. (a) Shoreline location. Oceanfront and estuarine-front properties were identified for all four counties for current sea level. Attributes were added to these tax parcels indicating what type of shoreline position they currently occupy. (b) LiDAR Elevation. Elevation was sampled and assigned as an attribute to each tax parcel using the centroid. The LIDAR derived DEM was used as the source of elevation data. This DEM has had buildings systematically removed although there may still be errors that are greater than the average +/- 0.25 m. Therefore, it is most likely that the elevation values reported for tax parcels in dense urban areas represent an over-estimate for elevation. (c) Shoreline distance. Distance to shoreline was created for each inundation scenario. We used Euclidean distance to describe the proximity of a tax parcel to the shoreline. Tax parcel centroids were then used to sample the seven distance surfaces (current and 6- scenarios). (d) Tax Parcel centroids. The six inundation grids representing the new shoreline-ocean interface following sea level rise was sampled by the tax parcel centroids. Attributes reflecting whether a tax parcel was inundated were added to each centroid

Figure XI-3. Example of Data Used in Bin et al. (2007) Property Value Study

Therefore, the combined estimated property value loss in Dare and Bertie Counties for a 3 in water level rise would be $55.5M. Completing the same analyses for a 6 in and 10 in water level rise results in property value losses of $90.1M and $106 M respectively for both Dare and Bertie Counties. It is expected that the other counties affected (Tyrell, Washington, Currituck, Camden, Pasquotank, Perquimans and Chowan) would also add to this total but data was not available for these counties. Nonetheless, the above simple analysis does show that elevated water levels within the sound can have a measureable impact on properties and their value.

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XII. STUDY FINDINGS The objective of this study was to examine the economic impacts of Oregon Inlet navigability to Dare County, the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), and the state of North Carolina. The study was completed by Moffatt & Nichol who was responsible for overall project management, interview/questionnaire coordination, and compilation of the final report. Moffatt & Nichol was supported by Dr. Chris Dumas (UNCW), Dr. John Whitehead (Appalachian State), and Dr. Craig Landry (ECU) who completed all the economic impact analysis. This study involved a significant literature review and data collection effort, on-site and telephone interviews with individuals knowledgeable of inlet usage and related economic impacts, and detailed economic modeling and analyses. Various economic sectors were considered in the economic analyses including:

 Commercial Fishing  Seafood Packing/Processing  Boat Building and Support Services  Recreational Fishing (Charter and Private) and Tourism  Tournament Fishing  Offshore Drilling  Offshore Wind Energy  Soundside Flooding

Commercial Fishing

 Oregon Inlet is considered one of the most commercially vital inlets along coastal NC with fishermen from the communities of Wanchese, Manteo, Manns Harbor, and Stumpy Point in Dare County and communities in other coastal counties (e.g. Hyde, Pamlico) using the inlet.

 The commercial fishing industry has seen a decline in the region over the past 30-40 years due to several factors, which includes the declining condition of Oregon Inlet. It was noted that in the 1960s there were approximately 40-50 different commercial seafood businesses in Dare County. However, presently there are approximately only 15-20 in Dare County. However, of these businesses, most landings are handled by the 4-5 largest dealers.

 Present day commercial boats are significantly larger than those used historically. Due to shallow and dangerous inlet conditions, fewer fishermen choose to operate through Oregon Inlet. Potential trips are frequently lost or shortened due to dangerous inlet conditions, resulting in reduced catch. It is important to also note that current Oregon Inlet conditions have caused many smaller commercial drop net boats drafting 4-6 ft to use unmarked and unlighted narrow spans bordered by concrete pillars, outside of the navigation span at the Bonner Bridge, in order to transit Oregon Inlet. This represents a major safety concern and exposes these users and their equipment to extreme risk levels.

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Also, shallow draft conditions force commercial boats to lighten tonnage so that they can pass through the inlet with less chance of grounding the boat or hitting the bridge.

 If the navigability of Oregon Inlet is not maintained, the field interview results indicate that most commercial fishing vessels would choose to remain in the fishing business but would relocate their fishing operations to other ports, most likely located in Southern North Carolina or Virginia.

 Commercial fishing currently provides a total annual economic impact of 604 jobs and $25.0 million to Dare County, 640 jobs and $26.2 million to the surrounding region (including Dare County), and 748 jobs and $45.7 million to the state of North Carolina (including Dare County and the surrounding region).

 Commercial fishing could potentially provide a total annual economic impact of 1,243 jobs and $67.0 million to Dare County, 1,323 jobs and $69.8 million to the surrounding region (including Dare County), and 947 jobs and $58.0 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $79.7 million in Dare County, $83.1 million in the surrounding region (including Dare County), and $69.0 million in state of North Carolina (including Dare County and the surrounding region).

 Commercial fishing may only provide a total annual economic impact of 88 jobs and $5.1 million to Dare County, 94 jobs and $5.3 million to the surrounding region (including Dare County), and 252 jobs and $15.4 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

 The value of landings varies from year to year, depending upon inlet conditions, economic conditions (including fish prices, and fuel prices, which effect landings by affecting the number of trips taken), the availability of imported seafood products, natural fish abundance in the sea, and fishing regulations. The value of ocean commercial fishery landings used in the 2006 was $12.5 million, based on data from 1994 to 2005 (Due to an oversight, this number was incorrectly reported in the 2006 report which solely stated the impact of captain and crew labor income, excluding the impacts of goods and services purchased by the industry which should have been incorporated.). The value of Oregon Inlet-dependent landings used in the present (2014) study for the "Recent Inlet Conditions" scenario (years 2011-2013) is $10.5 million.

Seafood Packing & Processing

 A number of support businesses have located in Dare County to service and supply the commercial fishing vessels.

 Once fish are landed, seafood packing and processing businesses prepare the catch for market. Several commercial fishermen also have packing and processing operations

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within their businesses. There were an estimated 18 commercial seafood packing and processing businesses dependant on Oregon Inlet in 2012.

 It is assumed that if Oregon Inlet is closed, the seafood packer/processors might remain in business, but the economic impacts to the region would be reduced by the amount of Oregon Inlet dependent fishery landings.

 Seafood packing and processing currently provides a total annual economic impact of 149 jobs and $31.6 million to Dare County, 176 jobs and $35.2 million to the surrounding region (including Dare County), and 223 jobs and $42.7 million to the state of North Carolina (including Dare County and the surrounding region) through Oregon Inlet dependent landings.

 Seafood packing and processing could potential provide a total annual economic impact of 526 jobs and $112 million to Dare County, 624 jobs and $124.7 million to the surrounding region (including Dare County), and 437 jobs and $83.8 million to the state of North Carolina (including Dare County and the surrounding region) through Oregon Inlet dependent landings if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $129.1 million in Dare County, $143.8 million in the surrounding region (including Dare County), and $96.6 million in state of North Carolina (including Dare County and the surrounding region).

 Seafood packing and processing may only provide a total annual economic impact of 43 jobs and $9.0 million to Dare County, 50 jobs and $10.1 million to the surrounding region (including Dare County), and 143 jobs and $27.4 million to the state of North Carolina (including Dare County and the surrounding region) through Oregon Inlet dependent landings if the inlet were to be essentially closed.

 The value of Oregon Inlet-dependent seafood processing and packing depends on the level of Oregon Inlet-dependent commercial fishery landings. For example, the direct impacts of seafood processing and packing in the 2006 report were $25,000,000, based on commercial fishery landings of $12,500,000. In 2014, the direct impacts of seafood processing and packing were $21,678,000, based on commercial fishery landings of $10,500,000. The number of jobs supported per dollar of sales by the Seafood Processing and Packing industry in 2014 is lower than the number of jobs supported per dollar of sales in 2006 possibly due to improvements in production efficiency, increases in sales dollars received per pound of seafood processed, or change in the mix of workers from a large number of part time workers to fewer full time workers.

Boat Building & Support Services

 Fifteen boat building companies exist in Dare County producing custom sport fishing yachts. These companies directly employ a total of 274 workers, earning $10.6 million in wages, and represent over half of the 480 manufacturing jobs in the County as of 2013. dollars.

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 Boat building jobs are relatively high-paying, with an average weekly wage of $744 in 2012, compared to the County average weekly wage for private industry of $517.

 This region boasts the birthplace of ―Carolina Style‖ boat building, a style which originated to withstand the incomparable Oregon Inlet waters and rough seas offshore of Bodie and Pea Islands. Local boat builders are directly dependent on Oregon Inlet, as the valuable reputation of the boats for strength and durability is maintained by continuous research and testing in the uniquely rough waters offshore. Based on the field interviews, if Oregon Inlet were to close, these businesses would as well.

 Boat building and support services currently provide a total annual economic impact of 532 jobs and $94.6 million to Dare County, 588 jobs and $99.6 million to the surrounding region (including Dare County), and 786 jobs and $134.7 million to the state of North Carolina (including Dare County and the surrounding region).

 Boat building and support services could potentially provide a total annual economic impact of 887 jobs and $157.6 million to Dare County, 979 jobs and $166.1 million to the surrounding region (including Dare County), and 1,048 jobs and $179.7 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $198.7 million in Dare County, $209.3 million in the surrounding region (including Dare County), and $226.5 million in state of North Carolina (including Dare County and the surrounding region).

 Boat building and support services may only provide a total annual economic impact of 109 jobs and $19.4 million to Dare County, 121 jobs and $20.4 million to the surrounding region (including Dare County), and 286 jobs and $49.1 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

 In the 2006 study, we assumed $75 million in Dare county boat builder sales under baseline (2004-2005) inlet conditions. In 2014, Dare county boat builder sales are depressed for two reasons: a bad economy in recent years (2011-2013) relative to 2004- 2005, and bad inlet conditions in recent years (2011-2013). The value of Dare county boat builder sales under baseline (recent inlet) conditions used in the 2014 study is $59.5 million.

Recreational Fishing & Tourism

 The area offshore of the northern Outer Banks is considered one of the prime sportfishing regions along the East Coast due to its close proximity to the Gulf Stream and extended seasons of abundant fishing opportunities (e.g. marlin, tuna).

 An estimated 109,000 Oregon Inlet fishing trips per year are taken by North Carolina residents, and an additional 153,000 trips are taken by non-residents.

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 Recreational fishing and tourism currently provide a total annual economic impact of 1,997 jobs and $247.7 million to Dare County, 2,157 jobs and $257.5 million to the surrounding region (including Dare County), and 2,530 jobs and $318.3 million to the state of North Carolina (including Dare County and the surrounding region).

 Recreational fishing and tourism could potentially provide a total annual economic impact of 2,397 jobs and $297.2 million to Dare County, 2,588 jobs and $309.0 million to the surrounding region (including Dare County), and 2,889 jobs and $362.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. In addition to these impacts, a fully open inlet would support an additional $1.3 million in consumer surplus per year. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $520.6 million in Dare County, $541.2 million in the surrounding region (including Dare County), and $635.5 million in state of North Carolina (including Dare County and the surrounding region).

 Recreational fishing and tourism may only provide a total annual economic impact of 429 jobs and $55.6 million to Dare County, 465 jobs and $57.8 million to the surrounding region (including Dare County), and 1,550 jobs and $197.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed. In addition to these impacts, an essentially closed inlet would produce a loss of $25.7 million in consumer surplus per year.

 In the 2006 study, we assumed 35,739 charter trips per year and 539,890 private boat trips per year. In the 2014 study, we assume 93,000 charter trips per year (more than the 2006 study) and 169,000 private trips per year (less than the 2006 study). The difference in trip numbers is a result of a change in boating trends from 2006 to 2014 as well as a change in the NMFS data weighting scheme to convert its survey sample data to estimates of total trips. The expenditures per charter trip are higher for restaurants, groceries and boat fuel in 2014, compared to 2006. Expenditures per private boat trip are smaller for auto gasoline, restaurants and groceries, but larger for boat fuel, in 2014, compared to 2006. Other expenditures per trip are similar between 2006 and 2014, for both charter and private boat trips.

Tournament Fishing

 Sportfishing tournaments are also thriving in the Oregon Inlet region. Approximately 5 known tournaments (down from 9 in 2006) take place annually in the County originating mainly at Pirates Cove marina, in Manteo. In summary, more than 173 boats annually are expected to participate in sportfishing tournaments dependent on passage through Oregon Inlet. These tournaments draw significant economic impacts to the County ranging from expenditures on fishing gear, lodging, food, retail to custom boat sales, marine maintenance, and/or boat storage.

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 While tournament participation was generally high for all tournaments, it was noted that the big Billfish tournament dropped in participants from 2004 to 2005 due to ―perceived‖ inlet conditions. Additionally, 32 boats ran aground in Oregon Inlet during the 2005 Billfish tournament. Of these, 3 boats were replaced because damages caused by running aground were too severe to continue in the tournament. In addition, approximately 15 boats pulled out of a 2013 tournament due to an accident in the inlet 1 week prior resulting from poor conditions.

 Interviewees in the boat-building industry commented that a large percentage of their sales came from fishing tournament participants drawn to the area‘s unique sport-fishing yachts and that many of these sales were from repeat customers. Therefore, it is clear the fishing tournament industry alone has a tremendous ripple effect on supporting businesses and the local economy.

 Tournament fishing currently provides a total annual economic impact of 36 jobs and $4.6 million to Dare County, 41 jobs and $4.8 million to the surrounding region (including Dare County), and 60 jobs and $7.0 million to the state of North Carolina (including Dare County and the surrounding region).

 Tournament fishing could potentially provide a total annual economic impact of 67 jobs and $8.4 million to Dare County, 76 jobs and $8.9 million to the surrounding region (including Dare County), and 76 jobs and $8.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $24.6 million in Dare County, $25.8 million in the surrounding region (including Dare County), and $25.5 million in state of North Carolina (including Dare County and the surrounding region).

 Tournament fishing may only provide a total annual economic impact of 1 job and $85.3 thousand to Dare County, 1 job and $89.7 thousand to the surrounding region (including Dare County), and 42 jobs and $4.9 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

 The 2006 study listed 9 fishing tournaments in Dare County. The tournaments considered in the 2006 study supported a total of 970 boat-days and $14.4 million in direct impacts for sales/output within Dare County. The 2014 study is based on the 4 tournaments from the 2006 study that have a solid track record of occurring over multiple years plus an additional tournament that is statewide but that includes participants who use Oregon Inlet, for a total of 5 tournaments. The 5 tournaments considered in the 2014 study supported a total of 333 boat-days under fully open inlet conditions and $5.2 million in direct impacts for sales/output within Dare County.

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Offshore Drilling

 An estimated 0.95 billion barrels of oil and 9.72 trillion cubic feet of natural gas would be economically recoverable in the Mid-Atlantic Region recoverable at a price of $110 per barrel of oil and $7.38 per thousand cubic feet of natural gas.

 The location of Oregon Inlet could potentially lend itself to be useful should offshore drilling be developed in the future. While the shallow draft navigation channel limits the types and sizes of ocean vessels that can pass through, it could be useful for crew and maintenance boats which need to pass back and forth between land and ocean facilities. Operation and maintenance would be expected to increase employment, economic output / business activity, and government revenues collected in Dare County and perhaps nearby counties hosting commuting employees.

 Offshore drilling could potentially provide a total annual economic impact of 3,983 jobs and $203.0 million to Dare County, 4,102 jobs and $210.2 million to the surrounding region (including Dare County), and 4,990 jobs and $348.7 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. Impacts were only calculated for a fully open scenario since the recent conditions of Oregon Inlet or an essentially closed inlet would preclude any use of the inlet for offshore drilling purposes.

Offshore Wind Energy

 Due to a promising wind resource, large areas offshore of the North Carolina coastline are potentially well-suited for wind energy development. Extensive areas off the coast of Dare County, North Carolina, have received either four or five indications of interest wishing to obtain a commercial lease for a wind energy project.

 The location of Oregon Inlet could potentially lend itself to be useful should offshore wind energy be developed in the future given the high wind capacity potential offshore of the inlet. While the shallow draft navigation channel limits the types and sizes of ocean vessels that can pass through, it could be useful for crew and maintenance boats which need to pass back and forth between land and ocean facilities. Operation and maintenance would be expected to increase employment, economic output / business activity, and government revenues collected in Dare County and perhaps nearby counties hosting commuting employees.

 Offshore wind could potentially provide a total annual economic impact of 295 jobs and $15.0 million to Dare County, 303 jobs and $15.5 million to the surrounding region (including Dare County), and 369 jobs and $25.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. Impacts were only calculated for a fully open scenario since the recent conditions of Oregon Inlet or an essentially closed inlet would preclude any use of the inlet for offshore wind development purposes.

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Soundside Flooding

 In recent years there have been some anecdotal observations of elevated water levels of 6 – 10 inches within the sounds behind Oregon Inlet. One theory as to the cause of the elevated water levels is that Oregon Inlet shoaling is not allowing adequate water exchange, especially on falling tides, leaving waterfront property containing residential homes and commercial (agricultural) property susceptible to flooding.

 Based on NOAA measurements at Oregon Inlet Marina, it appears that water levels at this station (on the soundside of Oregon Inlet) have seen an average increase in water levels since 2010 of approximately 0.075 m (~3 inches). This period of elevated water levels is similar to one that occurred in the late 1990s. In both cases, USACE records indicate reduced dredging during these time periods as compared to the time period in between which showed increased dredging and lower water levels. It is possible that these increased water levels may be a result of a combination of reduced dredging and other meteorological forcing functions.

 Based on previous studies by Bin et al. 2007, a fully navigable inlet could save between $55.5 million and $106 million of lost property value in Dare and Bertie Counties (only ones studied) due to elevated water levels between 3 in and 10 in, respectively.

Overall Summary of Economic Impacts

The economic impact of Oregon Inlet to Dare County is very significant and far outweighs the costs necessary to keep the inlet passable through dredging. In fact, the economic benefit to the Federal Government alone greatly exceeds the recent annual expenditures for dredging.

The following tables show the overall total annual economic impact of Oregon Inlet to Dare County, given the three different inlet condition scenarios and five main study sectors (commercial fishing, seafood packing & processing, boat building & support services, recreational fishing & tourism, and tournament fishing).

Recent Conditions Scenario Summary - Dare County Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $10,500,000 466 $8,957,670 $1,310,669 ------Commercial Fishing Total Effect $25,085,701 604 $13,866,903 $5,786,998 $1,109,822 $2,039,704 Direct Effect $21,678,000 63 $1,097,434 $1,081,523 ------Seafood Packing & Processing Total Effect $31,644,092 149 $4,296,036 $4,306,368 $963,787 $1,020,826 Direct Effect $59,500,000 274 $10,078,571 $6,702,212 ------Boat Building & Support Services Total Effect $94,550,051 532 $21,684,229 $17,909,579 $3,059,496 $4,769,732 Direct Effect $142,423,427 1,002 $44,486,518 $19,408,480 ------Recreational Fishing & Tourism Total Effect $247,659,426 1,997 $79,482,082 $52,987,290 $11,186,935 $14,155,440 Direct Effect $2,820,029 20 $777,242 $326,572 ------Tournament Fishing Total Effect $4,551,174 36 $1,351,341 $884,226 $190,659 $249,371 Total Direct Effect $236,921,456 1,826 $65,397,435 $28,829,456 ------Total Effect $403,490,444 3,319 $120,680,591 $81,874,461 $16,510,699 $22,235,073 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

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Fully Open Scenario Summary - Dare County Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $37,204,980 959 $18,416,524 $2,694,669 ------Commercial Fishing Total Effect $66,966,128 1,243 $28,614,947 $11,808,271 $2,262,162 $4,203,544 Direct Effect $76,693,000 224 $3,882,532 $3,826,241 ------Seafood Packing & Processing Total Effect $111,951,642 526 $15,198,766 $15,235,237 $3,409,724 $3,611,528 Direct Effect $99,200,000 457 $16,803,264 $11,174,109 ------Boat Building & Support Services Total Effect $157,636,387 887 $36,152,529 $29,859,333 $5,100,875 $7,952,225 Direct Effect $170,908,112 1,203 $53,383,822 $23,290,176 ------Recreational Fishing & Tourism Total Effect $297,191,311 2,397 $95,378,498 $63,584,748 $13,424,322 $16,986,528 Direct Effect $5,223,988 36 $1,439,809 $604,961 ------Tournament Fishing Total Effect $8,430,863 67 $2,503,304 $1,637,992 $353,188 $461,950 Total Direct Effect $389,230,080 2,879 $93,925,951 $41,590,156 ------Total Effect $642,176,331 5,120 $177,848,044 $122,125,581 $24,550,271 $33,215,776 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total economic impact could reach up to $952.7 million in Dare County for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Essentially Closed Scenario Summary - Dare County Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $3,000,000 68 $1,310,879 $191,805 ------Commercial Fishing Total Effect $5,118,661 88 $2,039,205 $838,459 $160,572 $299,435 Direct Effect $6,194,000 18 $313,567 $309,021 ------Seafood Packing & Processing Total Effect $9,041,823 43 $1,227,589 $1,230,487 $275,388 $291,693 Direct Effect $12,200,000 56 $2,066,530 $1,374,236 ------Boat Building & Support Services Total Effect $19,386,733 109 $4,446,178 $3,672,216 $627,326 $977,996 Direct Effect $33,945,379 225 $8,457,140 $4,294,532 ------Recreational Fishing & Tourism Total Effect $55,618,552 429 $15,713,779 $11,164,851 $2,363,582 $3,033,466 Direct Effect $52,834 0 $14,562 $6,118 ------Tournament Fishing Total Effect $85,268 1 $25,318 $16,566 $3,572 $4,672 Total Direct Effect $55,392,213 367 $12,162,678 $6,175,712 ------Total Effect $89,251,037 670 $23,452,069 $16,922,579 $3,430,440 $4,607,262 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The following tables show the overall total annual economic impact of Oregon Inlet to the surrounding region (Dare, Currituck, Camden, Pasquotank, Perquimans, Tyrell, and Hyde counties), given the three different inlet condition scenarios and five main study sectors (commercial fishing, seafood packing & processing, boat building & support services, recreational fishing & tourism, and tournament fishing).

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Recent Conditions Scenario Summary - Region (Including Dare Co.) Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $10,500,000 486 $9,249,848 $591,661 ------Commercial Fishing Total Effect $26,205,108 640 $14,686,464 $5,479,768 $1,266,227 $2,162,937 Direct Effect $21,678,000 61 $1,868,678 $1,040,994 ------Seafood Packing & Processing Total Effect $35,254,270 176 $6,068,833 $5,107,509 $1,200,001 $1,356,748 Direct Effect $59,500,000 274 $10,078,571 $6,702,212 ------Boat Building & Support Services Total Effect $99,596,745 588 $23,552,604 $19,431,044 $3,560,704 $5,224,739 Direct Effect $142,423,427 1,034 $43,493,243 $19,666,812 ------Recreational Fishing & Tourism Total Effect $257,476,326 2,157 $82,867,291 $56,151,669 $12,618,095 $14,923,351 Direct Effect $2,820,029 22 $773,762 $348,131 ------Tournament Fishing Total Effect $4,788,859 41 $1,447,835 $977,701 $224,774 $272,511 Total Direct Effect $236,921,456 1,877 $65,464,102 $28,349,810 ------Total Effect $423,321,308 3,601 $128,623,027 $87,147,691 $18,869,801 $23,940,286 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Fully Open Scenario Summary - Region (Including Dare Co.) Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $37,204,980 999 $19,017,236 $1,216,429 ------Commercial Fishing Total Effect $69,828,252 1,323 $30,564,958 $11,313,536 $2,606,505 $4,511,726 Direct Effect $76,693,000 216 $6,611,058 $3,682,856 ------Seafood Packing & Processing Total Effect $124,723,485 624 $21,470,479 $18,069,480 $4,245,395 $4,799,937 Direct Effect $99,200,000 457 $16,803,264 $11,174,109 ------Boat Building & Support Services Total Effect $166,050,373 979 $39,267,534 $32,395,960 $5,936,501 $8,710,824 Direct Effect $170,908,112 1,241 $52,191,892 $23,600,174 ------Recreational Fishing & Tourism Total Effect $308,971,591 2,588 $99,440,749 $67,382,003 $15,141,714 $17,908,021 Direct Effect $5,223,988 40 $1,433,362 $644,898 ------Tournament Fishing Total Effect $8,871,165 76 $2,682,055 $1,811,151 $416,385 $504,815 Total Direct Effect $389,230,080 2,952 $96,056,812 $40,318,466 ------Total Effect $678,444,866 5,590 $193,425,775 $130,972,130 $28,346,500 $36,435,323 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total economic impact could reach up to $1.0 billion in Dare County and the surrounding region for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Essentially Closed Scenario Summary - Region (Including Dare Co.) Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $3,000,000 71 $1,353,636 $86,585 ------Commercial Fishing Total Effect $5,335,206 94 $2,184,066 $806,376 $185,603 $322,625 Direct Effect $6,194,000 17 $533,933 $297,440 ------Seafood Packing & Processing Total Effect $10,073,113 50 $1,734,032 $1,459,356 $342,872 $387,660 Direct Effect $12,200,000 56 $2,066,530 $1,374,236 ------Boat Building & Support Services Total Effect $20,421,517 121 $4,829,273 $3,984,181 $730,094 $1,071,290 Direct Effect $33,945,379 232 $8,250,217 $4,341,731 ------Recreational Fishing & Tourism Total Effect $57,778,828 465 $16,462,744 $11,854,474 $2,671,883 $3,206,187 Direct Effect $52,834 0 $14,497 $6,522 ------Tournament Fishing Total Effect $89,721 1 $27,126 $18,318 $4,211 $5,106 Total Direct Effect $55,392,213 377 $12,218,813 $6,106,514 ------Total Effect $93,698,385 731 $25,237,241 $18,122,705 $3,934,663 $4,992,868 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The following tables show the overall total annual economic impact of Oregon Inlet to the State of North Carolina (including Dare County), given the three different inlet condition scenarios and five main study sectors (commercial fishing, seafood packing & processing, boat building & support services, recreational fishing & tourism, and tournament fishing).

May 2014 144 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

Recent Conditions Scenario Summary - State (Including Dare Co.) Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $10,500,000 536 $7,653,236 $1,074,595 ------Commercial Fishing Total Effect $45,695,883 748 $17,331,441 $7,695,111 $1,633,759 $2,861,941 Direct Effect $21,678,000 62 $1,659,221 $1,052,001 ------Seafood Packing & Processing Total Effect $42,678,573 223 $9,457,846 $6,596,656 $1,511,314 $2,026,397 Direct Effect $59,500,000 274 $11,436,303 $6,518,086 ------Boat Building & Support Services Total Effect $134,743,983 786 $38,954,238 $25,833,107 $4,905,638 $8,172,590 Direct Effect $142,423,427 1,050 $43,222,542 $19,636,251 ------Recreational Fishing & Tourism Total Effect $318,323,866 2,530 $109,735,743 $67,558,971 $14,858,147 $20,197,848 Direct Effect $2,992,903 27 $1,097,153 $399,034 ------Tournament Fishing Total Effect $6,970,273 60 $2,598,072 $1,490,211 $334,716 $464,746 Total Direct Effect $237,094,330 1,949 $65,068,455 $28,679,967 ------Total Effect $548,412,578 4,348 $178,077,340 $109,174,056 $23,243,574 $33,723,522 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

Fully Open Scenario Summary - State (Including Dare Co.) Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $20,668,790 670 $9,561,319 $1,342,510 ------Commercial Fishing Total Effect $58,001,057 947 $22,141,591 $9,774,373 $2,077,203 $3,666,141 Direct Effect $42,672,372 121 $3,256,981 $2,065,033 ------Seafood Packing & Processing Total Effect $83,776,239 437 $18,565,353 $12,948,957 $2,966,645 $3,977,733 Direct Effect $79,350,000 365 $15,251,607 $8,692,607 ------Boat Building & Support Services Total Effect $179,696,388 1,048 $51,949,895 $34,451,380 $6,542,226 $10,899,077 Direct Effect $161,694,027 1,196 $49,649,305 $22,391,284 ------Recreational Fishing & Tourism Total Effect $362,821,660 2,889 $125,692,579 $77,203,862 $16,977,087 $23,067,777 Direct Effect $3,758,301 33 $1,377,736 $501,082 ------Tournament Fishing Total Effect $8,752,835 76 $3,262,497 $1,871,314 $420,316 $583,599 Total Direct Effect $308,143,490 2,385 $79,096,948 $34,992,516 ------Total Effect $693,048,179 5,397 $221,611,915 $136,249,886 $28,983,477 $42,194,327 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents *The impacts in the above table reflect recent economic conditions. If economic conditions improved to levels seen in 2005-2006, the total economic impact could reach up to $1.1 billion in the state of North Carolina (including Dare County and the surrounding region) for fully open inlet conditions. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Essentially Closed Scenario Summary - State (Including Dare Co.) Wage, Salary, Dividend, Rent, Sales and Sole State and Federal Economic Sector Impact Type Employment and Interest (Output) Proprietorship Local Taxes Taxes Income Income Direct Effect $6,750,000 177 $2,519,968 $353,830 ------Commercial Fishing Total Effect $15,447,140 252 $5,921,628 $2,604,389 $553,818 $982,188 Direct Effect $13,936,000 40 $1,066,653 $676,293 ------Seafood Packing & Processing Total Effect $27,436,506 143 $6,080,106 $4,240,751 $971,569 $1,302,697 Direct Effect $21,660,000 100 $4,163,199 $2,372,802 ------Boat Building & Support Services Total Effect $49,051,338 286 $14,180,652 $9,404,119 $1,785,818 $2,975,097 Direct Effect $91,393,516 656 $25,105,795 $12,154,412 ------Recreational Fishing & Tourism Total Effect $197,781,754 1,550 $65,375,645 $41,062,219 $9,040,972 $12,337,898 Direct Effect $2,111,854 19 $774,174 $281,567 ------Tournament Fishing Total Effect $4,918,368 42 $1,833,253 $1,051,524 $236,183 $327,934 Total Direct Effect $135,851,370 991 $33,629,789 $15,838,904 ------Total Effect $294,635,106 2,273 $93,391,284 $58,363,002 $12,588,360 $17,925,814 *Dollar Values Are Real (Inflation Adjuested) to Year 2012 Dollar Equivalents

The five main study sectors currently provide a total annual economic impact of 3,319 jobs and $403.5 million to Dare County, 3,601 jobs and $423.3 million to the surrounding region

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(including Dare County), and 4,348 jobs and $548.4 million to the state of North Carolina (including Dare County and the surrounding region).

They could potentially provide a total annual economic impact of 5,120 jobs and $642.2 million to Dare County, 5,590 jobs and $678.4 million to the surrounding region (including Dare County), and 5,397 jobs and $693.0 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be fully open. If economic conditions improved to levels seen in 2005-2006, the total annual economic impact could reach up to $952.7 million in Dare County, $1.0 billion in the surrounding region (including Dare County), and $1.1 billion in state of North Carolina (including Dare County and the surrounding region) for fully open conditions. Local interests feel that the impacts may be even higher (over and above what could be modeled/justified with historical conditions) once industries understand that Oregon Inlet will be fully open and maintained and its reputation of uncertainty is changed. However, it is also possible that these projections could be lower if economic conditions worsen with higher gas prices, higher interest rates, higher unemployment, etc.

Conversely the economic sectors may only provide a total annual economic impact of 670 jobs and $89.3 million to Dare County, 731 jobs and $93.7 million to the surrounding region (including Dare County), and 2,273 jobs and $294.6 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were to be essentially closed.

In addition to these sectors, the inlet could be a valuable resource to the offshore energy industry (wind and drilling) if it were fully navigable. Offshore drilling could potentially provide a total annual economic impact of 3,983 jobs and $203.0 million to Dare County, 4,102 jobs and $210.2 million to the surrounding region (including Dare County), and 4,990 jobs and $348.7 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. However, please note that the impact estimates for this sector are based on limited data and are highly speculative.

Offshore wind could potentially provide a total annual economic impact of 295 jobs and $15.0 million to Dare County, 303 jobs and $15.5 million to the surrounding region (including Dare County), and 369 jobs and $25.8 million to the state of North Carolina (including Dare County and the surrounding region) if the inlet were fully navigable. However, please note that the impact estimates for this sector are based on limited data and are highly speculative.

Based on previous studies, a fully navigable inlet could save between $55.5 million and $106 million of lost property value in Dare and Bertie Counties (only ones studied) due to elevated water levels between 3 in and 10 in, respectively.

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May 2014 150 STUDY OF THE ECONOMIC IMPACTS OF OREGON INLET NAVIGABILITY TO DARE COUNTY, THE SURROUNDING REGION, AND THE STATE OF NORTH CAROLINA FINAL REPORT

U.S. Department of Energy. 2008. "20% Wind Energy by 2030".

U.S. Department of Energy. 2009. ―Economic Benefits, Carbon Dioxide (CO2) Emissions Reductions, and Water Conservation Benefits from 1,000 Megawatts (MW) of New Wind Power in North Carolina‖ DOE/GO-102009-2755.

U.S. Energy Information Administration. 2013. ―Annual Energy Outlook 2013‖. DOE/EIA- 0383ER (2013), December 5, 2012. The oil price is for West Texas intermediate spot crude, and the natural gas price is the Henry Hub value.

Walden, Michael L., and William N. Reynolds. 2013. ―The Economic Potential from Developing North Carolina's On-Shore and Off-Shore Energy Resources‖. Rep. Dept. of Agricultural and Resource Economics North Carolina State University, Apr. 2013. Available: http://ag- econ.ncsu.edu/sites/ag-econ.ncsu.edu/files/faculty/walden/drillingnc.pdf

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APPENDIX A Field Surveys & Interviews 1. Contact List 2. Questionnaires

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1. Contact List

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Commercial Fishing Contacts

 15 Contacts  Received 7 Questionnaire Responses  Conducted 1 Phone Interview

Commercial Fishing Contacts Name Organization Glen Hopkins Commercial Fisherman - Manteo Russell Firth Commercial Fisherman - Wanchese Matt Huth Commercial Fisherman - Wanchese Dewey Hemilwright Commercial Fisherman - Engelhard Robby Midgett Commercial Fisherman - Stumpy Point Sandy Siemens Commercial Fisherman - Stumpy Point Scott Bridges Commercial Fisherman - Colington Donald G. Elliott Commercial Fisherman Mike Daniels Wanchese Fish Company Micah Daniels Wanchese Fish Company Sammy Williams Commercial Fisherman - Engelhard Phillip Carawan Commercial Fisherman - Columbia Rom Whitaker Release Sport Fishing Charters Britt Shackleford Doghouse Sport Fishing Charters James Fletcher Commercial Fisherman/Consultant

Seafood Packing & Processing Contacts

 7 Contacts  Received 4 Questionnaire Responses

Seafood Packing & Processing Contacts Name Organization Micah Daniels Wanchese Fish Company Sammy Williams Williams Seafood Inc. Phillip Carawan Captain Neill's Seafood Rom Whitaker Release Sport Fishing Charters Willy Phillips Full Circle Crab Company Steve George Etheridge Fish Company Benny O'Neal O'Neal's Seafood Harvest

Boat Building & Support Services Contacts

 25 Contacts  Received 15 Questionnaire Responses  Conducted 2 In Person Interviews

Boat Building & Support Services Contacts Name Organization Dean Johnson Dean Johnson Boatworks Wayne Umphlett Harbor Welding Fara Daniels Wanchese Trawl & Supply John Bayliss Bayliss Boatworks Bob Peele NC Commerce - Wanchese Robin Mann Mann Custom Boats Paul Spencer Spencer Yachts Jim Polatty Bluewater Yachts Ritchie Howell Ritchie Howell Custom Carolina Yachts Sunny Briggs Briggs Boatworks Randy Ramsey Jarrett Bay Boatworks Harry Schiffman Towboat U.S. Jed Dixon DOT, Manns Harbor Shipyard Chris Parker Gregory Poole Equipment Company Howard Rock Marine Electronics Lori Polatty Watkins Custom Sewing Debbie Jones The Recovery Shop Russell Phelps Insurance Brant Murray Murray Auto Supply Don Griffin Griffin Marine Kelly Mederios The Welding Shop Craig Blackwell Blackwell Boatworks Ricky Scarborough Jr. Scarborough Boatworks Peter Johnstone Gunboat Hank Rose Crane Service

Recreational Fishing & Tourism Contacts

Recreational For-Hire Fishing

 14 Contacts  Received 8 Questionnaire Responses

Recreational For-Hire Fishing Contacts Name Organization Rom Whitaker Release Sport Fishing Charters Britt Shackleford Doghouse Sport Fishing Charters Ned Ashby Seabreeze Sport Fishing Brian White Wave Runner Gulf Stream Fishing Jamie Reibel Phideaux Charters Adam LaRosa Canyon Runner Jesse Granitzki BI-OP-SEA Fishing Charters Russell Firth Grandpas Charters Allan Foreman Crystal Dawn Headboat, Country Girl Charters Buddy Hooper Hatteras Fever Sportfishing John E. Collins Colington Harbour Association Ted Kramer Recreational Fishing (Private Captain) Jim Tobin Pirates Cove Fishing Center Dean Johnson Sea Era Sportfishing

Recreational Private Fishing

 6 Contacts  Received 3 Questionnaire Responses

Recreational Private Fishing Contacts Name Organization John E. Collins Colington Harbour Association Ted Kramer Recreational Fisherman Jim Tobin Pirates Cove Fishing Center David Wiggington Recreational Fisherman Minta Meekins Oregon Inlet Fishing Center Wayne Umphlett Broad Creek Fishing Center & Marina

Other Recreational Fishing

 Conducted 2 Phone Interviews and 1 In Person Interview

Other Recreational Fishing Contacts Name Organization Steve Shriver USACE Survey Office - Wanchese Paul Bertram USCG Aids To Navigation Team - Wanchese Wayne Gray USCG Oregon Inlet Station - Former Chief

General Tourism

 26 Contacts  Received 12 Questionnaire Responses

General Tourism Contacts Name Organization Lee Nettles Outer Banks Visitors Bureau Karen Brown Outer Banks Chamber of Commerce Angie Brady-Daniels Outer Banks Chamber of Commerce Dave Dawson Cape Hatteras Motel Susan Boncek Sandspur Motel & Cottage Court Ann Wood Surf or Sound Realty Willo Kelly Kelly's Restaurant Ervin Bateman Sugar Creek Restaurant Lionel Shannon Owens Restaurant Vicki Basnight Basnight's Lone Cedar Café Micah Daniels Fisherman's Wharf Restaurant Bill McCaskill Whale Bone Tackle Terry Stewert T.W.'s Tackle Jackie Myers Village Realty Jackie Smanski Quality Inn Anthony Fletcher Midgett Realty Ali Breaux Sun Realty Janice Farr Sun Reatly Peggy Corbell Langley Oasis Suites Ariadna Vucinovic Ramada Plaza Renee Cahoon Cahoon's Cottages Jeanette Straight Camp Hatteras - Leslie Painter Colony Realty Corporation Nancy Scarborough Dolphin Realty Sterling Webster Dare County Tourism Board, Hilton Garden Inn Malcolm Fearing Campground - Manteo Tournament Fishing Contacts

 3 Contacts  Received 2 Questionnaire Responses

Sport Fishing Tournament Contacts Name Organization Rom Whitaker Release Sport Fishing Charters Jim Tobin Alice Kelly Ladies Billfish Tournament, Pirates Cove Big Game Tournament Brent Tomlinson Manteo Rotary Rockfish Rodeo

Offshore Drilling Contacts

 8 Contacts  Received 0 Questionnaire Responses

Offshore Drilling Contacts Name Organization Gary Perry Kitty Hawk, Mayor Billy Edge UNC Coastal Studies Institute Brian O'Hara Southeast Coastal Wind Coalition Rick Palmer Weeks Marine Simon Rich Stevens Towing Dr. Rick Mercier TAMU Offshore Technology Research Center Elmer Danenberger BOEM - Retired David Welch Stone Energy

Offshore Wind Contacts

 14 Contacts  Received 0 Questionnaire Responses

Offshore Wind Power Contacts Name Organization Nancy White UNC Coastal Studies Institute Billy Edge UNC Coastal Studies Institute Jen Culbertson BOEM Brian Hooker BOEM Will Waskes BOEM Calvin Lau Ming Yang Wind Guojian Lin Ming Yang Wind Chandra Yerramalli Ming Yang Wind Simon Yu Ming Yang Wind Gary Perry Kitty Hawk - Mayor Brian O'Hara Southeast Coastal Wind Coalition Rick Palmer Weeks Marine Simon Rich Stevens Towing Stanley White Stanley White Engineering LLC

Soundside Flooding Contacts

 14 Contacts  Received 0 Questionnaire Responses

Soundside Flooding Contacts Name Organization JP Walsh East Carolina University Spencer Rogers North Carolina Sea Grant Stan Riggs East Carolina University Ed Goodwin Eastern Director for Office of Governor McCrory Tommy Everett Tyrrell County Commissioner David Clegg Tyrrell County Manager Ty Flemming Tyrrell County Soil and Water Conservation Director Mark Powell Albemarle RC&D John Spencer Tyrrell County Fire Chief Thomas Spruill Tyrrell County Commissioner Chairman Sandy Sanderson Dare County Emergency Management Earl Pugh Middelton Farms - Engelhard Matt Wood Pasquotank George Wood Environmental Professionals

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2. Questionnaires

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The Economic Impacts of Oregon Inlet Navigability Field Interview Questions

COMMERCIAL FISHING

The main purpose of this interview is to determine how navigability conditions in Oregon Inlet affect your business.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Who is completing this interview (captain, owner, owner/captain, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet: ______Contact information for person interviewed (phone number, email address): ______

Vessel Information

What is your vessel’s age? ______What is your vessel’s overall length? ______What is your vessel’s beam? ______What is your vessel’s hull material (wood, steel, etc.)? ______What is your vessel’s draft light/unloaded? ______What is your vessel’s typical draft loaded? ______What type of engine(s) does your vessel carry? (type, number, and horsepower of engines) ______Besides the captain, how many other full-time crewmembers typically work on the vessel? ______Besides the captain, how many other part-time crewmembers typically work on the vessel? ______Would you say that your fishing operations are similar to, or different from, the fishing operations of other vessels of similar type and size based in Dare County? ______If DIFFERENT FROM, how are your fishing operations different from those of other vessels of similar type and size based in Dare County? ______

Effects of Oregon Inlet Navigability on Fishing Trips

Some fishing vessels participate in several fisheries / fishing seasons (target different species, use different gear, etc.) in different months of the year. The following pages allow you to tell us which fisheries / fishing seasons you participate in and how Oregon Inlet navigability would affect your fishing in each fishery / fishing season.

Complete one of the following pages for each fishery in which you participate.

When completing the following pages, assume that weather conditions and economic conditions are average. The goal is to determine how any changes in Oregon Inlet navigability would affect your business in years when weather and economic conditions are average. Fishing Season / Fishery #1.

Name of Fishing Season / Fishery: ______Which months are included in this Fishing Season / Fishery?: ______Which type of fishing gear do you use in this Fishing Season / Fishery?: ______What are your top three target species in this Fishing Season / Fishery?: ______On average, of your top 3 target species and “other”, how many pounds of sellable catch do you land PER TRIP: Species 1: ______Species 2: ______Species 3: _____ Other Species: ______In this Fishing Season / Fishery, what percentage of the fishing occurs: less than 3 miles from shore _____, between 3 and 200 miles from shore _____, greater than 200 miles from shore_____? “Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

In this Fishing Season/Fishery, and with “Recent Average” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Recent Average” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

In this Fishing Season/Fishery, and with “Fully Open” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Fully Open” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips would involve travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that would not involve travel through Oregon Inlet, where would those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time) Under “Essentially Closed” conditions, would you continue to fish at all in this season? YES or NO If YES, you would continue to fish: In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips would involve travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that would not involve travel through Oregon Inlet, where would those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______If NO, you would not continue to fish, then what would you likely do instead? ______Fishing Season / Fishery #2. (complete this page only if you participate in more than one fishing season)

Name of Fishing Season / Fishery: ______Which months are included in this Fishing Season / Fishery?: ______Which type of fishing gear do you use in this Fishing Season / Fishery?: ______What are your top three target species in this Fishing Season / Fishery?: ______On average, of your top 3 target species and “other”, how many pounds of sellable catch do you land PER TRIP: Species 1: ______Species 2: ______Species 3: _____ Other Species: ______In this Fishing Season / Fishery, what percentage of the fishing occurs: less than 3 miles from shore _____, between 3 and 200 miles from shore _____, greater than 200 miles from shore_____? “Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

In this Fishing Season/Fishery, and with “Recent Average” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Recent Average” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

In this Fishing Season/Fishery, and with “Fully Open” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Fully Open” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time) Under “Essentially Closed” conditions, would you continue to fish at all in this season? YES or NO If YES, you would continue to fish: In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips would involve travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that would not involve travel through Oregon Inlet, where would those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______If NO, you would not continue to fish, then what would you likely do instead? ______

Fishing Season / Fishery #3. (complete this page only if you participate in more than two fishing seasons)

Name of Fishing Season / Fishery: ______Which months are included in this Fishing Season / Fishery?: ______Which type of fishing gear do you use in this Fishing Season / Fishery?: ______What are your top three target species in this Fishing Season / Fishery?: ______On average, of your top 3 target species and “other”, how many pounds of sellable catch do you land PER TRIP: Species 1: ______Species 2: ______Species 3: _____ Other Species: ______In this Fishing Season / Fishery, what percentage of the fishing occurs: less than 3 miles from shore _____, between 3 and 200 miles from shore _____, greater than 200 miles from shore_____? “Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

In this Fishing Season/Fishery, and with “Recent Average” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Recent Average” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

In this Fishing Season/Fishery, and with “Fully Open” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Fully Open” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time) Under “Essentially Closed” conditions, would you continue to fish at all in this season? YES or NO If YES, you would continue to fish: In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips would involve travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that would not involve travel through Oregon Inlet, where would those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______If NO, you would not continue to fish, then what would you likely do instead? ______The Economic Impacts of Oregon Inlet Navigability Field Interview Questions

MARINE TRADES

The main purpose of this interview is to determine how navigability conditions in Oregon Inlet affect your business.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Title of person interviewed (owner, manager, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet / Dare County: ______Contact information for person interviewed (phone number, email address): ______

Business Description

What type of products/services does your company provide? ______What is your target market? (commercial/recreational fishermen, boat builders, etc?) ______

How many employees do you have in each of the following salary categories, and do they live inside or outside Dare County (to the best of your knowledge)?

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

What percentage of your spending on supplies and materials occurs inside North Carolina? ______What percentage of your spending on supplies and materials occurs inside Dare County? ______

Would you say that your business operations are similar to, or different from, the operations of other businesses in your industry that are based in Dare County? ______If DIFFERENT FROM, how are your operations different from those of other businesses in your industry based in Dare County? ______

Effects of Oregon Inlet Navigability on Business Operations

The questions below ask you to assess how changes in Oregon Inlet navigability might affect your business.

When completing the following pages, assume that weather conditions and economic conditions are average.

The goal is to determine how any changes in Oregon Inlet navigability would affect your business in years when weather and economic conditions are average.

“Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

On average, what would be your best estimate of your annual sales in a year with “Recent Average” navigability conditions in Oregon Inlet? ______What percentage of your sales would be made to customers using Oregon Inlet? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

On average, what would be your best estimate of your annual sales in a year with “Fully Open” navigability conditions in Oregon Inlet? ______What percentage of your sales would be made to customers using Oregon Inlet? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time)

Under “Essentially Closed” conditions, would your business continue to operate at all? YES or NO

If YES, you would continue to operate your business: Would you continue to operate the business its present location? ______If you would not continue to operate in the same location, where would you relocate? (city and state) ______On average, what would be your best estimate of your annual sales in a year with “Essentially Closed” navigability conditions in Oregon Inlet? ______What percentage of your sales would be made to customers using Oregon Inlet? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

If NO, you would not continue to operate your business, then what would you likely do instead? ______

The Economic Impacts of Oregon Inlet Navigability Field Interview Questions

FOR-HIRE (CHARTER AND HEADBOAT) FISHING

The main purpose of this interview is to determine how navigability conditions in Oregon Inlet affect your business.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Who is completing this interview (captain, owner, owner/captain, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet: ______Contact information for person interviewed (phone number, email address): ______

Vessel Information

What is your boat’s overall length? ______What is your boat’s typical draft? ______What type of engine(s) does your boat carry? (type, number, and horsepower of engines) ______Where is your vessel docked? (county, town, marina) ______Besides the captain, how many other crewmembers typically work on the vessel? ______Would you say that your fishing operations are similar to, or different from, the fishing operations of other vessels of similar type and size based in Dare County? ______If DIFFERENT FROM, how are your fishing operations different from those of other vessels of similar type and size based in Dare County? ______

Effects of Oregon Inlet Navigability on Fishing Trips

Some fishing vessels participate in several fisheries / fishing seasons (target different species, use different gear, etc.) in different months of the year. The following pages allow you to tell us which fisheries / fishing seasons you participate in and how Oregon Inlet navigability would affect your fishing in each fishery / fishing season.

Complete one of the following pages for each fishery in which you participate.

When completing the following pages, assume that weather conditions and economic conditions are average. The goal is to determine how any changes in Oregon Inlet navigability would affect your business in years when weather and economic conditions are average. Fishing Season / Fishery #1.

Name of Fishing Season / Fishery: ______Which months are included in this Fishing Season / Fishery?: ______In this Fishing Season / Fishery, what percentage of your fishing trips are: charter _____ headboat _____ Which type of fishing gear do you use in this Fishing Season / Fishery?: ______What are your primary target species in this Fishing Season / Fishery?: ______In this Fishing Season / Fishery, what percentage of the fishing occurs: less than 3 miles from shore _____, between 3 and 200 miles from shore _____, greater than 200 miles from shore_____? In this Fishing Season / Fishery, how many paying customers do you typically take per fishing trip?: ______In this Fishing Season / Fishery, what is the average charter/headboat fee PER CUSTOMER? ______In this Fishing Season / Fishery, what percentage of your customers lives outside Dare County? _____ In this Fishing Season / Fishery, what percentage of your customers lives outside North Carolina? _____

“Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time)

Under “Essentially Closed” conditions, would you continue to fish at all in this season? YES or NO

If YES, you would continue to fish: In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips would involve travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that would not involve travel through Oregon Inlet, where would those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

If NO, you would not continue to fish, then what would you likely do instead? ______

Fishing Season / Fishery #2. (complete this page only if you participate in more than one fishing season)

Name of Fishing Season / Fishery: ______Which months are included in this Fishing Season / Fishery?: ______In this Fishing Season / Fishery, what percentage of your fishing trips are: charter _____ headboat _____ Which type of fishing gear do you use in this Fishing Season / Fishery?: ______What are your primary target species in this Fishing Season / Fishery?: ______In this Fishing Season / Fishery, what percentage of the fishing occurs: less than 3 miles from shore _____, between 3 and 200 miles from shore _____, greater than 200 miles from shore_____? In this Fishing Season / Fishery, how many paying customers do you typically take per fishing trip?: ______In this Fishing Season / Fishery, what is the average charter/headboat fee PER CUSTOMER? ______In this Fishing Season / Fishery, what percentage of your customers lives outside Dare County? _____ In this Fishing Season / Fishery, what percentage of your customers lives outside North Carolina? _____

“Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time)

Under “Essentially Closed” conditions, would you continue to fish at all in this season? YES or NO

If YES, you would continue to fish: In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips would involve travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that would not involve travel through Oregon Inlet, where would those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

If NO, you would not continue to fish, then what would you likely do instead? ______

Fishing Season / Fishery #3. (complete this page only if you participate in more than two fishing seasons)

Name of Fishing Season / Fishery: ______Which months are included in this Fishing Season / Fishery?: ______In this Fishing Season / Fishery, what percentage of your fishing trips are: charter _____ headboat _____ Which type of fishing gear do you use in this Fishing Season / Fishery?: ______What are your primary target species in this Fishing Season / Fishery?: ______In this Fishing Season / Fishery, what percentage of the fishing occurs: less than 3 miles from shore _____, between 3 and 200 miles from shore _____, greater than 200 miles from shore_____? In this Fishing Season / Fishery, how many paying customers do you typically take per fishing trip?: ______In this Fishing Season / Fishery, what is the average charter/headboat fee PER CUSTOMER? ______In this Fishing Season / Fishery, what percentage of your customers lives outside Dare County? _____ In this Fishing Season / Fishery, what percentage of your customers lives outside North Carolina? _____

“Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips involves travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that do not involve travel through Oregon Inlet, where do those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time)

Under “Essentially Closed” conditions, would you continue to fish at all in this season? YES or NO

If YES, you would continue to fish: In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you dock your vessel? (state, county/city)? ______In this Fishing Season/Fishery, and with “Essentially Closed” Navigability Conditions in Oregon Inlet, where would you typically land your catch? (state, county/city)? ______How many fishing trips would you typically make in this season (assume average weather and economic conditions)? ______What percentage of fishing trips would involve travel through Oregon Inlet in this season? ____ Costs per trip: Fuel ______, Crew______, Bait______, Other______For any trips that would not involve travel through Oregon Inlet, where would those trips occur (port and inlet used)? ______Costs per trip: Fuel ______, Crew______, Bait______, Other______

If NO, you would not continue to fish, then what would you likely do instead? ______

The Economic Impacts of Oregon Inlet Navigability Field Interview Questions

FISHING TOURNAMENTS

The main purpose of this interview is to determine how navigability conditions in Oregon Inlet affect the tournament fishing business in Dare County.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Who is completing this interview (owner, manager, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet: ______Contact information for person interviewed (phone number, email address): ______

Effects of Oregon Inlet Navigability on Fishing Tournament Business

 The questions on the following pages ask how changes in Oregon Inlet navigability might affect fishing tournament business.

 Complete one of the following pages for each tournament.

 When completing the following pages, assume that weather conditions and economic conditions are average.

 The goal is to determine how any changes in Oregon Inlet navigability would affect tournament business in years when weather and economic conditions are average. Fishing Tournament #1 What is the name of the tournament? ______Where does the tournament occur (county, town, marina(s) )? ______When does the tournament occur (month, days of month?)? ______How many days does the tournament last? ______Do other, similar tournaments occur along the Atlantic Coast anywhere from Virginia to Florida during the same month? YES/NO If so, where?______How about earlier or later during the same season? YES/NO If so, where?______If other tournaments occur during the same month or season, what is unique about the Dare County tournament described here? ______How many employees does the tournament organization itself directly employ in each of the following salary categories, and do the employees live inside or outside Dare County (to the best of your knowledge)? Salary Category Number of Employees Living Inside Dare Co. Number of Employees Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+ What percentage of tournament organization spending on supplies/materials occurs inside North Carolina? _____ What percentage of spending on supplies/materials occurs inside Dare County? ____ Which species are typically targeted by tournament participants? ______What percentage of the fishing occurs: less than 3 miles from shore _____, between 3 and 200 miles from shore _____, greater than 200 miles from shore_____? What is the typical length ______and draft ______of the vessels participating in this tournament? What percentage of the participating vessels is: Charter ______, Headboat _____, Private vessel _____? In addition to the captain, how many crew typically serve per vessel: Charter _____, Headboat ______? How many passengers are carried per vessel (don’t include captain/crew): Charter ______, Headboat _____? How many passengers are typically carried per private boat (including the skipper)? ______Regarding the private vessels, what percentage are local / permanently docked in Dare County ______, and what percentage travels (by trailer or by water) to Dare County just for the tournament ______? For those private vessels that travel to Dare County just for the tournament, what percentage travels to Dare County from other locations in North Carolina ______, and what percentage travels to Dare County from locations out-of-state?____ Assuming average weather and economic conditions, and assuming “Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time), How many vessels would typically participate in this tournament? _____ How many trips would be made during the tournament per vessel: Charter _____, Headboat ____, Private _____? What percentage of the trips would pass through Oregon Inlet: Charter _____, Headboat ____, Private _____? If the tournament were cancelled because Oregon Inlet was not navigable, what percentage of the tournament participants would likely visit Dare County anyway to enjoy the beach, nature, sound-side fishing, etc? ______Assuming average weather and economic conditions, and “Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time), How many vessels would typically participate in this tournament? _____ How many trips would be made during the tournament per vessel: Charter _____, Headboat ____, Private _____? What percentage of the trips would pass through Oregon Inlet: Charter _____, Headboat ____, Private _____? If the tournament were cancelled because Oregon Inlet was not navigable, what percentage of the tournament participants would likely visit Dare County anyway to enjoy the beach, nature, sound-side fishing, etc? ______Assuming average weather and economic conditions, and “Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time), How many vessels would typically participate in this tournament? _____ How many trips would be made during the tournament per vessel: Charter _____, Headboat ____, Private _____? What percentage of the trips would pass through Oregon Inlet: Charter _____, Headboat ____, Private _____? If the tournament were cancelled because Oregon Inlet was not navigable, what percentage of the tournament participants would likely visit Dare County anyway to enjoy the beach, nature, sound-side fishing, etc? ______Economic Impacts of Oregon Inlet Navigability Field Interview Questions

GENERAL TOURISM (LODGING, RESTAURANTS, ETC.)

The main purpose of this interview is to determine how navigability conditions in Oregon Inlet affect your business.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Title of person interviewed (owner, manager, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet / Dare County: ______Contact information for person interviewed (phone number, email address): ______

Business Description

What type of products/services does your company provide? ______How many employees do you have in each of the following salary categories, and do they live inside or outside Dare County (to the best of your knowledge)?

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

What percentage of your spending on supplies and materials occurs inside North Carolina? ______What percentage of your spending on supplies and materials occurs inside Dare County? ______

Would you say that your business operations are similar to, or different from, the operations of other businesses in your industry that are based in Dare County? ______If DIFFERENT FROM, how are your operations different from those of other businesses in your industry based in Dare County? ______

Effects of Oregon Inlet Navigability on Business Operations

The questions below ask you to assess how changes in Oregon Inlet navigability might affect your business.

When completing the following pages, assume that weather conditions and economic conditions are average.

The goal is to determine how any changes in Oregon Inlet navigability would affect your business in years when weather and economic conditions are average.

“Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time)

On average, what would be your best estimate of your annual sales in a year with “Recent Average” navigability conditions in Oregon Inlet? ______What percentage of your sales would be made to customers using Oregon Inlet? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

On average, what would be your best estimate of your annual sales in a year with “Fully Open” navigability conditions in Oregon Inlet? ______What percentage of your sales would be made to customers using Oregon Inlet? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time)

Under “Essentially Closed” conditions, would your business continue to operate at all? YES or NO

If YES, you would continue to operate your business: Would you continue to operate the business its present location? ______If you would not continue to operate in the same location, where would you relocate? (city and state) ______On average, what would be your best estimate of your annual sales in a year with “Essentially Closed” navigability conditions in Oregon Inlet? ______What percentage of your sales would be made to customers using Oregon Inlet? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

If NO, you would not continue to operate your business, then what would you likely do instead? ______

The Economic Impacts of Oregon Inlet Navigability Field Interview Questions

OFFSHORE DRILLING

The main purpose of this interview is to determine how navigability conditions in Oregon Inlet might affect plans for the construction and operation of facilities to support offshore drilling development near Oregon Inlet.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Title of person interviewed (owner, manager, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet / Dare County: ______Number of years’ experience working in the drilling industry: ______Contact information for person interviewed (phone number, email address): ______

Effects of Oregon Inlet Navigability on Facility Construction and Business Operations

The questions below ask you to assess how changes in Oregon Inlet navigability might affect facilities and operations to support offshore drilling near Oregon Inlet. Three navigability scenarios are considered, and the questions ask you to assess likely facility construction and operations under each navigability scenario.

When completing the following pages, assume that weather conditions and economic conditions are average.

The goal is to determine how any changes in Oregon Inlet navigability would affect operations in years when weather and economic conditions are average.

NAVIGABILITY SCENARIO 1: “Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time).

Land Facility Construction

Assuming “Recent Average” Navigability Conditions, estimate the dollar amount to be spent on facility construction ON LAND in the following categories (if physical unit quantities, such as acres of land, square feet of warehouse, etc., are known instead of dollar amounts, please provide these physical quantities):

Facility Type/Activity Dollar Amount or Physical Units

Land Clearing

Road Construction Rail Construction

Water and Sewer Construction Electrical Service Construction Natural Gas Service Construction Gasoline/Diesel Refueling Facility Construction

Warehouse and Storage Facility Construction Manufacturing/Assembly/Repair Facility Construction Oil Refining Facility Construction Marina/Dockyard Facility Construction Office Facility Construction

Other

Would you say that drilling support facilities constructed on land in or near Dare County to support offshore drilling operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Offshore/Ocean Facility Construction

Assuming “Recent Average” Navigability Conditions, estimate the dollar amount to be spent on facility construction OFFSHORE in the following categories (if physical unit quantities, such as numbers of drilling platforms, type/size of platform, miles of pipeline laid, type of pipeline ,etc., are known instead of dollar amounts, please provide these physical quantities):

Activity Dollar Amount or Physical Units

Offshore drilling

Offshore drilling platform installation

Offshore marker (buoy, etc.) installation

Offshore pipeline installation

Other

Would you say that drilling facilities constructed offshore in or near Dare County to support drilling operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Facility Operations (after initial land facility construction and after offshore facility construction)

Assuming “Recent Average” Navigability Conditions, please estimate the number of employees that would be employed by the land facility in each of the following salary categories, and indicate whether they would live inside or outside Dare County (to the best of your knowledge). DO NOT INCLUDE OCEAN VESSEL CREWMEMBERS. (Crewmembers are considered elsewhere below.)

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

Assuming “Recent Average” Navigability Conditions, please estimate ANNUAL EXPENDITURES under normal operations in each category below. For each category, estimate the percentage of expenditures spent on vendors located inside North Carolina and inside Dare County:

Percentage Spent on Percentage Spent Annual Vendors on Vendors Type of Expenditure Expenditure Located Inside North Located Inside Carolina. Dare Co

Water and Sewer Service Electrical Service Natural Gas Service Gasoline/Diesel Refueling (for cars/trucks)

Admin./Managerial/Office Operations Onshore Refining Operations Drilling/Platform Equipment Construction/Repair Marina—Oil/gas offloading/onloading Marina—Refueling of Vessels Marina—Dockyard/Vessel Repair Operations

Service Vessel Trips per Year to Offshore Rig/Platform Sites Percentage of Trips that will utilize Oregon Inlet Crewmembers per Vessel

Other

Sales

Assuming “Recent Average” Navigability Conditions, on average, what would be your best estimate of your annual sales? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

NAVIGABILITY SCENARIO 2: “Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

Land Facility Construction

Assuming “Fully Open” Navigability Conditions, estimate the dollar amount to be spent on facility construction ON LAND in the following categories (if physical unit quantities, such as acres of land, square feet of warehouse, etc., are known instead of dollar amounts, please provide these physical quantities):

Facility Type/Activity Dollar Amount or Physical Units

Land Clearing

Road Construction Rail Construction

Water and Sewer Construction Electrical Service Construction Natural Gas Service Construction Gasoline/Diesel Refueling Facility Construction

Warehouse and Storage Facility Construction Manufacturing/Assembly/Repair Facility Construction Oil Refining Facility Construction Marina/Dockyard Facility Construction Office Facility Construction

Other

Would you say that drilling support facilities constructed on land in or near Dare County to support offshore drilling operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Offshore/Ocean Facility Construction

Assuming “Fully Open” Navigability Conditions, estimate the dollar amount to be spent on facility construction OFFSHORE in the following categories (if physical unit quantities, such as numbers of drilling platforms, type/size of platform, miles of pipeline laid, type of pipeline ,etc., are known instead of dollar amounts, please provide these physical quantities):

Activity Dollar Amount or Physical Units

Offshore drilling

Offshore drilling platform installation

Offshore marker (buoy, etc.) installation

Offshore pipeline installation

Other

Would you say that drilling facilities constructed offshore in or near Dare County to support drilling operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Facility Operations (after initial land facility construction and after offshore facility construction)

Assuming “Fully Open” Navigability Conditions, please estimate the number of employees that would be employed by the land facility in each of the following salary categories, and indicate whether they would live inside or outside Dare County (to the best of your knowledge). DO NOT INCLUDE OCEAN VESSEL CREWMEMBERS. (Crewmembers are considered elsewhere below.)

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

Assuming “Fully Open” Navigability Conditions, please estimate ANNUAL EXPENDITURES under normal operations in each category below. For each category, estimate the percentage of expenditures spent on vendors located inside North Carolina and inside Dare County:

Percentage Spent on Percentage Spent Annual Vendors on Vendors Type of Expenditure Expenditure Located Inside North Located Inside Carolina. Dare Co

Water and Sewer Service Electrical Service Natural Gas Service Gasoline/Diesel Refueling (for cars/trucks)

Admin./Managerial/Office Operations Onshore Refining Operations Drilling/Platform Equipment Construction/Repair Marina—Oil/gas offloading/onloading Marina—Refueling of Vessels Marina—Dockyard/Vessel Repair Operations

Service Vessel Trips per Year to Offshore Rig/Platform Sites Percentage of Trips that will utilize Oregon Inlet Crewmembers per Vessel

Other

Sales

Assuming “Fully Open” Navigability Conditions, on average, what would be your best estimate of your annual sales? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

NAVIGABILITY SCENARIO 3: “Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time)

Under “Essentially Closed” conditions, would the offshore drilling business continue to operate at all in or near Dare County? YES or NO

If NO, you would not continue to operate the offshore drilling business in or near Dare County, then what would likely be done instead? ______

If YES, you would continue to operate the offshore drilling business in or near Dare County, please answer the questions below.

Land Facility Construction

Assuming “Essentially Closed” Navigability Conditions, estimate the dollar amount to be spent on facility construction ON LAND in the following categories (if physical unit quantities, such as acres of land, square feet of warehouse, etc., are known instead of dollar amounts, please provide these physical quantities):

Facility Type/Activity Dollar Amount or Physical Units

Land Clearing

Road Construction Rail Construction

Water and Sewer Construction Electrical Service Construction Natural Gas Service Construction Gasoline/Diesel Refueling Facility Construction

Warehouse and Storage Facility Construction Manufacturing/Assembly/Repair Facility Construction Oil Refining Facility Construction Marina/Dockyard Facility Construction Office Facility Construction

Other

Would you say that drilling support facilities constructed on land in or near Dare County to support offshore drilling operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Offshore/Ocean Facility Construction

Assuming “Essentially Closed” Navigability Conditions, estimate the dollar amount to be spent on facility construction OFFSHORE in the following categories (if physical unit quantities, such as numbers of drilling platforms, type/size of platform, miles of pipeline laid, type of pipeline ,etc., are known instead of dollar amounts, please provide these physical quantities):

Activity Dollar Amount or Physical Units

Offshore drilling

Offshore drilling platform installation

Offshore marker (buoy, etc.) installation

Offshore pipeline installation

Other

Would you say that drilling facilities constructed offshore in or near Dare County to support drilling operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Facility Operations (after initial land facility construction and after offshore facility construction)

Assuming “Essentially Closed” Navigability Conditions, please estimate the number of employees that would be employed by the land facility in each of the following salary categories, and indicate whether they would live inside or outside Dare County (to the best of your knowledge). DO NOT INCLUDE OCEAN VESSEL CREWMEMBERS. (Crewmembers are considered elsewhere below.)

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

Assuming “Essentially Closed” Navigability Conditions, please estimate ANNUAL EXPENDITURES under normal operations in each category below. For each category, estimate the percentage of expenditures spent on vendors located inside North Carolina and inside Dare County:

Percentage Spent on Percentage Spent Annual Vendors on Vendors Type of Expenditure Expenditure Located Inside North Located Inside Carolina. Dare Co

Water and Sewer Service Electrical Service Natural Gas Service Gasoline/Diesel Refueling (for cars/trucks)

Admin./Managerial/Office Operations Onshore Refining Operations Drilling/Platform Equipment Construction/Repair Marina—Oil/gas offloading/onloading Marina—Refueling of Vessels Marina—Dockyard/Vessel Repair Operations

Service Vessel Trips per Year to Offshore Rig/Platform Sites Percentage of Trips that will utilize Oregon Inlet Crewmembers per Vessel

Other

Sales

Assuming “Essentially Closed” Navigability Conditions, on average, what would be your best estimate of your annual sales? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

The Economic Impacts of Oregon Inlet Navigability Field Interview Questions

OFFSHORE WIND POWER

The main purpose of this interview is to determine how navigability conditions in Oregon Inlet might affect plans for the construction and operation of facilities to support offshore wind power development near Oregon Inlet.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Title of person interviewed (owner, manager, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet / Dare County: ______Number of years’ experience working in wind power industry: ______Contact information for person interviewed (phone number, email address): ______

Effects of Oregon Inlet Navigability on Facility Construction and Business Operations

The questions below ask you to assess how changes in Oregon Inlet navigability might affect your business. Three navigability scenarios are considered, and the questions ask you to assess likely facility construction and operations under each navigability scenario.

When completing the following pages, assume that weather conditions and economic conditions are average.

The goal is to determine how any changes in Oregon Inlet navigability would affect your business in years when weather and economic conditions are average.

NAVIGABILITY SCENARIO 1: “Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time).

Land Facility Construction

Assuming “Recent Average” Navigability Conditions, estimate the dollar amount to be spent on facility construction ON LAND in the following categories (if physical unit quantities, such as acres of land, square feet of warehouse, etc., are known instead of dollar amounts, please provide these physical quantities):

Facility Type/Activity Dollar Amount or Physical Units

Land Clearing

Road Construction Rail Construction

Water and Sewer Construction Electrical Service Construction Natural Gas Service Construction Gasoline/Diesel Refueling Facility Construction

Warehouse and Storage Facility Construction Manufacturing/Assembly/Repair Facility Construction Marina/Dockyard Facility Construction Office Facility Construction

Other

Would you say that wind power facilities constructed on land in or near Dare County to support offshore wind operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Offshore/Ocean Facility Construction

Assuming “Recent Average” Navigability Conditions, estimate the dollar amount to be spent on facility construction OFFSHORE in the following categories (if physical unit quantities, such as numbers of wind turbines, type of turbine, miles of cable laid, type of cable, etc., are known instead of dollar amounts, please provide these physical quantities):

Activity Dollar Amount or Physical Units

Offshore wind turbine installation

Offshore marker (buoy, etc.) installation

Offshore cable installation

Offshore electrical switching facility installation

Other

Would you say that wind power facilities constructed offshore in or near Dare County to support offshore wind operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Facility Operations (after initial land facility construction and after offshore facility construction)

Assuming “Recent Average” Navigability Conditions, please estimate the number of employees that will be employed by the land facility in each of the following salary categories, and indicate whether they will live inside or outside Dare County (to the best of your knowledge). DO NOT INCLUDE OCEAN VESSEL CREWMEMBERS. (Crewmembers are considered elsewhere below.)

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

Assuming “Recent Average” Navigability Conditions, please estimate ANNUAL EXPENDITURES under normal operations in each category below. For each category, estimate the percentage of expenditures spent on vendors located inside North Carolina and inside Dare County:

Percentage Spent on Percentage Spent Annual Vendors on Vendors Type of Expenditure Expenditure Located Inside North Located Inside Carolina. Dare Co

Water and Sewer Service Electrical Service Natural Gas Service Gasoline/Diesel Refueling (for cars/trucks)

Admin./Managerial/Office Operations Wind Power Equipment Construction/Repair Marina—Refueling Vessels Marina—Dockyard/Vessel Repair Operations

Service Vessel Trips per Year Percentage of Trips that will utilize Oregon Inlet Crewmembers per Vessel

Other

Sales

Assuming “Recent Average” Navigability Conditions, on average, what would be your best estimate of your annual sales? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

NAVIGABILITY SCENARIO 2: “Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time)

Land Facility Construction

Assuming “Fully Open” Navigability Conditions, estimate the dollar amount to be spent on facility construction ON LAND in the following categories (if physical unit quantities, such as acres of land, square feet of warehouse, etc., are known instead of dollar amounts, please provide these physical quantities):

Facility Type/Activity Dollar Amount or Physical Units

Land Clearing

Road Construction Rail Construction

Water and Sewer Construction Electrical Service Construction Natural Gas Service Construction Gasoline/Diesel Refueling Facility Construction

Warehouse and Storage Facility Construction Manufacturing/Assembly/Repair Facility Construction Marina/Dockyard Facility Construction Office Facility Construction

Other

Would you say that wind power facilities constructed on land in or near Dare County to support offshore wind operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Offshore/Ocean Facility Construction

Assuming “Fully Open” Navigability Conditions, estimate the dollar amount to be spent on facility construction OFFSHORE in the following categories (if physical unit quantities, such as numbers of wind turbines, type of turbine, miles of cable laid, type of cable, etc., are known instead of dollar amounts, please provide these physical quantities):

Activity Dollar Amount or Physical Units

Offshore wind turbine installation

Offshore marker (buoy, etc.) installation

Offshore cable installation

Offshore electrical switching facility installation

Other

Would you say that wind power facilities constructed offshore in or near Dare County to support offshore wind operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Facility Operations (after initial land facility construction and after offshore facility construction)

Assuming “Fully Open” Navigability Conditions, please estimate the number of employees that will be employed by the land facility in each of the following salary categories, and indicate whether they will live inside or outside Dare County (to the best of your knowledge). DO NOT INCLUDE OCEAN VESSEL CREWMEMBERS. (Crewmembers are considered elsewhere below.)

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

Assuming “Fully Open” Navigability Conditions, please estimate ANNUAL EXPENDITURES under normal operations in each category below. For each category, estimate the percentage of expenditures spent on vendors located inside North Carolina and inside Dare County:

Percentage Spent on Percentage Spent Annual Vendors on Vendors Type of Expenditure Expenditure Located Inside North Located Inside Carolina. Dare Co

Water and Sewer Service Electrical Service Natural Gas Service Gasoline/Diesel Refueling (for cars/trucks)

Admin./Managerial/Office Operations Wind Power Equipment Construction/Repair Marina—Refueling Vessels Marina—Dockyard/Vessel Repair Operations

Service Vessel Trips per Year Percentage of Trips that will utilize Oregon Inlet Crewmembers per Vessel

Other

Sales

Assuming “Fully Open” Navigability Conditions, on average, what would be your best estimate of your annual sales? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

NAVIGABILITY SCENARIO 3: “Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time)

Under “Essentially Closed” conditions, would the business continue to operate at all? YES or NO

If NO, you would not continue to operate your business, then what would you likely do instead? ______

If YES, please answer the questions below.

Land Facility Construction

Assuming “Essentially Closed” Navigability Conditions, estimate the dollar amount to be spent on facility construction ON LAND in the following categories (if physical unit quantities, such as acres of land, square feet of warehouse, etc., are known instead of dollar amounts, please provide these physical quantities):

Facility Type/Activity Dollar Amount or Physical Units

Land Clearing

Road Construction Rail Construction

Water and Sewer Construction Electrical Service Construction Natural Gas Service Construction Gasoline/Diesel Refueling Facility Construction

Warehouse and Storage Facility Construction Manufacturing/Assembly/Repair Facility Construction Marina/Dockyard Facility Construction Office Facility Construction

Other

Would you say that wind power facilities constructed on land in or near Dare County to support offshore wind operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Offshore/Ocean Facility Construction

Assuming “Essentially Closed” Navigability Conditions, estimate the dollar amount to be spent on facility construction OFFSHORE in the following categories (if physical unit quantities, such as numbers of wind turbines, type of turbine, miles of cable laid, type of cable, etc., are known instead of dollar amounts, please provide these physical quantities):

Activity Dollar Amount or Physical Units

Offshore wind turbine installation

Offshore marker (buoy, etc.) installation

Offshore cable installation

Offshore electrical switching facility installation

Other

Would you say that wind power facilities constructed offshore in or near Dare County to support offshore wind operations would be similar to, or different from, the operations of other facilities in your industry that are located elsewhere? ______

If DIFFERENT FROM, how would your operations be different from those of other facilities in your industry located elsewhere? ______

Facility Operations (after initial land facility construction and after offshore facility construction)

Assuming “Essentially Closed” Navigability Conditions, please estimate the number of employees that will be employed by the land facility in each of the following salary categories, and indicate whether they will live inside or outside Dare County (to the best of your knowledge). DO NOT INCLUDE OCEAN VESSEL CREWMEMBERS. (Crewmembers are considered elsewhere below.)

Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+

Assuming “Essentially Closed” Navigability Conditions, please estimate ANNUAL EXPENDITURES under normal operations in each category below. For each category, estimate the percentage of expenditures spent on vendors located inside North Carolina and inside Dare County:

Percentage Spent on Percentage Spent Annual Vendors on Vendors Type of Expenditure Expenditure Located Inside North Located Inside Carolina. Dare Co

Water and Sewer Service Electrical Service Natural Gas Service Gasoline/Diesel Refueling (for cars/trucks)

Admin./Managerial/Office Operations Wind Power Equipment Construction/Repair Marina—Refueling Vessels Marina—Dockyard/Vessel Repair Operations

Service Vessel Trips per Year Percentage of Trips that will utilize Oregon Inlet Crewmembers per Vessel

Other

Sales

Assuming “Essentially Closed” Navigability Conditions, on average, what would be your best estimate of your annual sales? ______What percentage of your sales would be made to customers who live in North Carolina? ______What percentage of your sales would be made to customers who live in Dare County? ______

The Economic Impacts of Oregon Inlet Navigability Field Interview Questions

SOUNDSIDE FLOODING

The main purpose of this interview is to determine how Soundside Flooding due to navigability conditions in Oregon Inlet might affect business activity and/or the value of soundside real estate. For the purposes of this interview: Soundside Flooding is defined as flooding resulting from abnormally high water levels in and/or Pamlico Sound due to restricted water flow through Oregon Inlet.

General Interview Information

Date of interview: ______Location of interview (business name (if any), address, city, county):______Name of person interviewed: ______Title of person interviewed (owner, manager, etc.)? ______Number of years’ experience working with/in/around Oregon Inlet / Dare County: ______Contact information for person interviewed (phone number, email address): ______

Business Description and Real Estate Description

Soundside flooding might affect your business activity or the value of your soundside real estate.

Do you own any soundside real estate? If yes, what type of property? ______, how many acres? ______

What type of products/services does your business provide? ______What is your target market? (commercial/recreational fishermen, boat builders, etc?) ______What percentage of your sales are typically made to customers who live in North Carolina? ______What percentage of your sales are typically made to customers who live in Dare County? ______How many employees do you have in each of the following salary categories, and do they live inside or outside Dare County (to the best of your knowledge)? Number of Employees Number of Employees Salary Category Living Inside Dare Co. Living Outside Dare Co. $0 to $34,999 $35,000 to $74,999 $75,000+ What percentage of your spending on supplies and materials occurs inside North Carolina? ______What percentage of your spending on supplies and materials occurs inside Dare County? ______Would you say that your business operations are similar to, or different from, the operations of other businesses in your industry that are based in northeastern North Carolina? ______If DIFFERENT FROM, how are your operations different from those of other businesses in your industry based in northeastern North Carolina? ______

Effects of Soundside Flooding on Real Estate Value and Business Operations

The questions below ask you to assess how changes in Oregon Inlet navigability might affect your business activity or the value of your soundside real estate. When completing the following pages, assume that weather conditions and economic conditions are average. The goal is to determine how any changes in Oregon Inlet navigability would affect your business or real estate value in years when weather and economic conditions are average.

“Recent Average” Navigability Conditions (average over last 3 years) in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 40 percent of the time) Effects on Real Estate Value Has the value of your soundside real estate been affected by Soundside Flooding in a year with “Recent Average” navigability condidtions? YES or NO. If yes, what is your estimate of the value of the property in a year with “Recent Average” navigability conditions? ______Effects on Business Sales and/or Costs Have you lost any business sales due to Soundside Flooding in a year with “Recent Average” navigability conditions in Oregon Inlet? YES or NO. If yes, how much have you lost in sales (dollars per year, on average) due to Soundside Flooding in a year with “Recent Average” navigability conditions?______Aside from any changes in sales, have you suffered any other costs (dollars per year) due to Soundside Flooding in a year with “Recent Average” navigability conditions in Oregon Inlet? YES or NO. If yes, estimate the dollar costs per year ______and briefly describe the costs ______

“Fully Open” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 14 feet or greater in navigation channel 85-100 percent of the time) Effects on Real Estate Value Do you think that your soundside real estate would be affected by Soundside Flooding in a year with “Fully Open” navigability condidtions? YES or NO. If yes, what is your estimate of the value of the property in a year with “Fully Open” navigability conditions? ______Effects on Business Sales and/or Costs Do you think that you would lose any business sales due to Soundside Flooding in a year with “Fully Open” navigability conditions in Oregon Inlet? YES or NO. If yes, how much do you think that you would lose in sales (dollars per year, on average) due to Soundside Flooding in a year with “Fully Open” navigability conditions?______Aside from any changes in sales, do you think that you would suffer any other costs (dollars per year) due to Soundside Flooding in a year with “Fully Open” navigability conditions in Oregon Inlet? YES or NO. If yes, estimate the dollar costs per year ______and briefly describe the costs ______

“Essentially Closed” Navigability Conditions in Oregon Inlet navigation channel (assume a depth of 6 feet or greater in navigation channel only 5 percent of the time) Effects on Real Estate Value Do you think that your soundside real estate would be affected by Soundside Flooding in a year with “Essentially Closed” navigability condidtions? YES or NO. If yes, what is your estimate of the value of the property in a year with “Essentially Closed” navigability conditions? ______Effects on Business Sales and/or Costs Do you think that you would lose any business sales due to Soundside Flooding in a year with “Essentially Closed” navigability conditions in Oregon Inlet? YES or NO. If yes, how much do you think that you would lose in sales (dollars per year, on average) due to Soundside Flooding in a year with “Essentially Closed” navigability conditions?______Aside from any changes in sales, do you think that you would suffer any other costs due to Soundside Flooding in a year with “Essentially Closed” navigability conditions in Oregon Inlet? YES or NO. If yes, estimate the dollar costs per year ______and briefly describe the costs ______Would you completely close your business under “Essentially Closed” navigability conditions? YES or NO. If you would completely close your business, what would you likely do instead? ______

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