Social and Economic Assessment of Major Oil Spill Litigation Settlement - Final Baseline Report - Prepared for U.S. Department of the Interior Bureau of Ocean Energy, Management, Regulation and Enforcement Contract Number 0103CT72619 by Impact Assessment, Inc. 2166 Avenida de la Playa, Suite F La Jolla, California 92037 [email protected] [email protected] November 2010 Impact Assessment, Inc. 2166 Avenida de la Playa, Suite F La Jolla, California 92037 Ms. Chris Campbell November 15, 2010 Sociocultural Specialist, COTR U.S. Department of the Interior Bureau of Ocean Energy Management, Regulation and Enforcement Alaska OCS Region Dear Ms. Campbell: We are pleased to submit this final baseline technical report for the project titled “Social and Economic Assessment of Major Oil Spill Litigation Settlement.” The report is submitted as specified under Contract Number 0103CT72619, which calls for in-depth and long-term examination of major oil spill litigation and settlement. The attached report describes the rationale used to guide the overall project, the nature of the case study approach on Kodiak Island, and the nature of the database that has been developed to enable long-term monitoring and analysis of litigation and settlement processes associated with the Exxon Valdez oil spill (EVOS). Such research, monitoring, and analysis are in keeping with BOEMRE’s proactive interest in documenting and planning for beneficial and problematic implications of oil and gas development on the nation’s Outer Continental Shelf. The attached final baseline report will be followed by a final project report early in 2011. The final report will include extensive analysis of the effects of the EVOS settlement, and summary information of utility to BOEMRE and other agencies involved in the management of natural resources available along the nation’s Outer Continental Shelf and Exclusive Economic Zone. It has been a great pleasure to participate in this project and to contribute to the BOEMRE mission to further the base of knowledge needed to effectively administer development of oil and gas resources along the Outer Continental Shelf of Alaska and elsewhere in the United States. We wish to express our sincere thanks for your diligent oversight of this important project. Sincerely, Edward W. Glazier, Ph.D. John S. Petterson, Ph.D. Principal Investigator President and Co-Principal Investigator ________________________________________________________________________ This study was funded by the Bureau of Ocean Energy, Management, Regulation and Enforcement, U.S. Department of the Interior, Washington, D.C., under Contract Number 0103CT72619. This report does not, however, necessarily reflect the views or policies of the Bureau, nor does mention of trade names or commercial products constitute endorsement or recommendation for use. i Acknowledgements We wish to thank the many researchers and research participants who contributed their time and energy to this important project. It is our hope that their efforts will enhance understanding and mitigation of any deleterious human effects of oil spills or related litigation and settlement processes as these may affect communities in the United States and around the world. We also thank the following researchers and reviewers for their gracious contributions: Courtney Carothers, Consulting Social Anthropologist, University of Washington; Lee Huskey, Consulting Economist, University of Alaska at Anchorage; William Nebesky, Peer Review Economist, State of Alaska, Division of Oil and Gas; Libby Stevens, Consulting Human Geographer; Stefanie Carlson, Consulting Data Analyst, State of Alaska, Commercial Fisheries Entry Commission; Paulo Morais, Consulting Marine Policy Specialist; Lance Kaufman, Consulting Demographer; Gregory Button, Consulting Public Health Specialist, University of Tennessee; Janet Cohen, Consulting Field Anthropologist, National Park Service; Rachel Mason, Consulting Field Anthropologist, National Park Service. ii Table of Contents 1.0 Introduction ..............................................................................................................................1 1.1 Administrative Background ...........................................................................................1 1.2 Study Background ..........................................................................................................2 1.3 Project Rationale and Parameters of the Settlement Award ..........................................4 1.4 Principle Goal and Objectives .......................................................................................6 1.5 Overview of Research Hypotheses ................................................................................7 1.6 General Methodological Approach ................................................................................8 1.7 Project Phasing and Component Methods ...................................................................10 1.8 Intent and Organization of this Interim Report ............................................................11 2.0 Overview of Study Area ........................................................................................................12 2.1 Physical Environment and Demographic Setting ........................................................12 Overview ................................................................................................................12 Climatic Factors .....................................................................................................14 Oceanography and Indicators of Fisheries Productivity ........................................14 2.2 A Brief Social History of Kodiak Island ......................................................................15 Overview of a Complex Culture ............................................................................15 On The Significance of Alutiiq Heritage ...............................................................16 European and Euro-American Influences through Fishing ...................................17 Evolution of Local Government ............................................................................18 Overview of Land Holdings ...................................................................................18 Historic Disasters ...................................................................................................20 2.3 Overview of Select Conditions and Trends: 1940-Present ..........................................20 General Demographic Trends ................................................................................20 Trends in Marine Fisheries ....................................................................................21 Trends in Fishing Activities among Alaska Natives..............................................23 Transportation Services and the Aerospace Industry .............................................24 The Increasing Importance of Tourism ..................................................................24 Kodiak’s Public Sector ..........................................................................................24 2.4 An Overview of Kodiak and the Exxon Valdez Oil Spill ............................................25 Clean-up and Mitigation ........................................................................................25 Select Commercial Fisheries Effects .....................................................................26 Effects on Subsistence Practices ............................................................................27 Initial and Ongoing Litigation ...............................................................................28 The EVOS Land Trust Process ..............................................................................29 Social Remediation ................................................................................................29 3.0 Overview of the Settlement Baseline and Monitoring Framework ...................................30 3.1 Analytical Focus ..........................................................................................................30 3.2 Rationale and Methodology for Local and Regional Baseline Assessment ................31 Key Economic Principles Used in the Study .........................................................31 Specific Hypotheses ...............................................................................................32 The Export-Base Model .........................................................................................32 Sequence of Approach ...........................................................................................34 iii 3.3 Review of Socioeconomic Conditions for Kodiak Island Borough and its Communities ...34 Principal Formal Economic Sectors and Milestone Events ...................................34 Income....................................................................................................................36 Labor Force and Employment ...............................................................................37 Sources of Income ..................................................................................................39 Additional Key Indicators ......................................................................................41 Assessing Trends in Subsistence Activities ...........................................................43 Summary ................................................................................................................46