Background
[See Appendix B for a description of the characteristics of the Gulf of Mexico Region and past and present MMS socioeconomic studies in the region.]

Issues

• Understanding Oil and Gas Industry Restructuring
• Understanding the Oil and Gas Industry in Relation to Local Communities
• Making the Most of Data and Methods

Major Issue: Understanding Oil and Gas Industry Restructuring

The general issue raised was: What do we need to know so that in three years we can assess what happened as a result of oil and gas restructuring?

Component Issues:

Defining the Industry
Many participants felt that to pursue questions of restructuring, it is necessary to define the industry in a way that captures its distinctiveness and complexity. Major firms, independents (large and small), suppliers and the full range of enterprises involved in exploration, development and production should be taken into account. The variety here is enormous, ranging from food and janitorial services to boatyards and helicopter rentals. An input/output model of the industry might suggest a suitably complex picture.

Defining Restructuring
Many participants also agreed that a careful definition of restructuring is needed. Restructuring goes beyond mergers and alliances to, on one hand, internal corporate reorganization and, on the other hand, changing international relationships. Specific aspects of restructuring include increasing asset sharing among firms, diversification of corporate holdings, increasing contracting and increasing internationalization of the industry. Internationalization refers not only to individual firms operating in wider spheres but to firms of different national origins engaging in joint ventures. Given the responsibilities of the MMS, the agency will be most interested in dimensions of restructuring that affect the location of factors of production, that is, the allocation of capital and the distribution of employment. It is important to remember that restructuring affects not only the oil industry narrowly defined but also related enterprises both upstream and downstream. Identifying the most salient aspects of restructuring is an important research issue.

Understanding the Industry View
It was observed that understanding how members of the oil and gas industry themselves view restructuring is vitally important. A standard scoping method could be employed to investigate this. Also, MMS representatives could attend industry meetings and conferences. It was also noted that readily available sources of information, such as annual reports, may also be useful.

Understanding Changing Corporate Cultures
Restructuring undoubtedly results in changes in corporate cultures that affect the way corporations behave and, thus, how they affect communities. Different corporations also have different attitudes toward relations with the communities they affect.

Disaggregating the Effects of Restructuring
Some participants argued that any study of oil and gas industry restructuring should try to distinguish general business cycles and economic trends from restructuring itself. Similarly, studies of the effects of restructuring should try to distinguish these from the effects of business cycles and larger economic trends.

Major Issue: Understanding the Oil and Gas Industry in Relation to Local Communities

Of particular concern were questions pertaining to local communities in the eastern Gulf of Mexico that will be affected by upcoming lease activities. Most of the issues raised, however, also have wider relevance.

Component Issues:

Focusing on Communities
In comments on the accomplishments of MMS socioeconomic studies in the region, one participant observed that much has been learned about the effects of oil and gas development on communities and that a synthesis of this was in order. Important questions, however remained, and called for paying special attention to community issues. "To what extent", it was asked, "are communities involved in [shaping] their own futures?" And, he added, to what extent is the MMS addressing issues of community change?

Understanding Frontier Areas in the Eastern Gulf of Mexico
It was suggested that, given the importance of the social issues surrounding upcoming leasing activity in the eastern Gulf, a social scientist be assigned to the Gulf regional outlet office in Pensacola. A comparative study of waterfront uses in Panama City and Pensacola also was suggested. This might draw on Harvey Molotch's comparative study of three California locales, presented on the first day of the conference (see Appendix A). Other studies conducted in California, on such topics as attitudes toward the environment and political-economic aspects of oil and gas development, might also provide models for research in the eastern Gulf. A comparative study of job search strategies in frontier oil development areas and non-frontier areas also was suggested. In addition, questions of community perceptions, stakeholder participation and risk (see below) all have special relevance to the situation in the eastern Gulf frontier.

Assessing Local Perceptions of Oil and Gas Development
Session participants thought it very important to understand public perceptions of oil and gas development as early as possible in the development process. Preparing for impending development in the eastern Gulf frontier was of particular interest. Content analyses of newspapers in the Florida panhandle was suggested as a means of obtaining a picture of the “lay of the land”, although it was cautioned that newspaper coverage of the issues might tend to emphasize well-organized and vocal opposition to development. Small-scale ethnographic studies of communities, decision-making entities and interest groups relevant to oil and gas development were suggested as a means of obtaining valuable insights into the political and cultural climate.

The topic of survey research on perceptions received a great deal of attention. Arguing that many studies of perceptions were inaccurate and useless, some participants called for developing instruments for measuring perceptions that would obtain data of a high level of validity and that could be used in all regions, providing data that were methodologically comparable. It was noted that designing surveys that compensate for such factors as “respondent gaming” (that is, trying to give responses that might influence policy in a desired manner) is costly and time consuming. Government agencies, it was asserted, often do not invest enough in ensuring the validity of instruments for measuring perceptions. Instruments that can provide valid, methodologically comparable data across regions are an attractive prospect. It was observed, however, that experience in Alaska demonstrated that cultural differences in the way people respond to the same questions may complicate things.

Participants noted that public perceptions of the risks of oil and gas development remains a difficult issue. Many perceptions of the hazards, it was argued, still seemed to be based on memories of the Santa Barbara spill in 1969, even though scientific findings indicate that the chances of such an incident occurring again, given advances in technology, are extremely low. It was also noted that people did not seem to connect their desire for ample and inexpensive petroleum products with their fear of the risks of oil and gas development. In light of such issues, it was argued that it was important to expand risk assessment beyond statistical and engineering models to efforts at cultural and ethnographic understanding. Anticipating the problems of dealing with opposition to oil and gas development in the eastern Gulf, it was also suggested that it could be useful to study the history of conflicts between the MMS and opposition groups in other cases, focusing on skepticism toward scientific findings, perceptions of risk and the successes and failures of different strategies for addressing such sources of opposition.

Improving Stakeholder Participation
Participants agreed that efforts to establish or enhance stakeholder participation need to begin well in advance of a project. It would also be useful to better understand the extent of local desire for participation and whether there is any provision for community participation in oil company decision-making. A systematic outreach program should be considered. This could include sharing study results in a more systematic way than is done now and using models, such as GIS and IMPLAN, in community education. The latter would require thinking about how to explain the complexities of the models to the lay public. Some participants, however, thought that providing simplified but adequate explanations of concepts such as multiplier effect was not a great obstacle.

Outreach might also include making analytic tools, such as IMPLAN and GIS, available to stakeholder groups. This is especially pertinent given the growth of “citizen science” with regard to environmental and social impact issues. Some participants suggested that models that could estimate community impacts would be of great interest to local planners and that feedback from local planners or stakeholder groups might even help to refine models. Others observed that such models would have to be specially designed and pointed out the difficulties of doing so. Any models for use by local or regional planners would have to come in a readily transferable format, such as Excel, and come with careful technical documentation. The MMS would also have to provide considerable technical support. (This observation launched a discussion of how the MMS might be able to provide the personnel for an extensive outreach effort.)

Participants also raised questions about providing community impact models. One stated that aggregate data for parishes or counties do not reflect the circumstances of individual communities. Another argued that using quantitative models at the community level was “probably a waste of time” because “you have to have the stories”. That is, qualitative data will be more useful.

Industry Restructuring and Local Communities
There was wide agreement that it is important to understand the effects of industry restructuring on communities and community capacity for coping with them. In addition to shifting the allocation of capital and employment, restructuring in the form of mergers and consolidations may mean that decisions affecting local communities are being made in places and at institutional levels more and more remote from the communities.

Tracing Revenues
How, one participant asked, are royalties collected and how are they used? It is known that there is a great deal of variation among the states, but more investigation is needed. This is an aspect of the larger issue of environmental justice: Are those who experience the impacts of oil and gas development also receiving the benefits?

Major Issue: Making the Most of Data and Methods

Discussion of this issue focused on the importance of assessing and integrating existing databases and analytic models in order to make them more useful and to facilitate new research that builds on what has gone before. One participant argued strongly that future studies should be closely scrutinized to make sure that, to the extent possible, they are using methodologies compatible with other studies, making use of existing databases and generally building on and expanding a common body of work. This said, it was also noted that the differences among the issues confronted in the different regions meant that they would necessarily have different kinds of studies programs. Nevertheless, the studies program as a whole was at a point where it would be appropriate to attempt to synthesize its findings to date. Such an exercise would make it possible to address what were called “major integrative questions.” These included, “to what extent are communities involved in [shaping] their own futures” and how well is the MMS addressing major issues of community change?

Component Issues:

Assessing Databases
Many participants agreed that the accuracy and usefulness of existing databases needs to be assessed. One participant argued that the best way to do this was to use the databases. Also, the potential for integrating existing databases should be explored.

Assessing Models
Participants also thought that an effort should be made to determine the compatibility among the various economic models in use and those that have been commissioned. Short of compatibility, ways in which they may be comparable or complementary should be explored. Questions of modeling are inseparable from questions of data quality. One participant called for improving the quality of data being collected to match the capability of the models the MMS uses.

Using GIS
There was great interest in making better use of GIS. For example, it was pointed out that GIS offers a way of integrating existing data. Several participants also argued that it is important to use geo-coding whenever possible when gathering new data so that they can be integrated with other data using GIS.

Designing New Studies
In contracting for new studies, it was argued, attention should be paid to using methodologies and gathering data that will be compatible with and build on existing bodies of data, models and methods. Yet it is also vital to employ the full range of social science methods in order to take advantage of their respective strengths.