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Q GENII 12AL CONCLUSIONS AD ~ O ALTEI2~ATIVE TO ADDITBO~AL STUDIES The general conclusions about He adequacy of scientific and technical information relevant to Me potential environmental consequences of Be lease-sale areas follow. (Refer to each chapter for discipline-specific con- clusions and recommendadons.) This chapter also discusses an alternative to conduchng addidonal studies in a case in which it appears Tat additional information alone Will not permit a resolution of disagreements. GEL CONCLUSIONS Conclusion I: The committee concludes Cat Be environmental informa- tion available for Be Chukchi, Navarin, and Beaufort OCS areas is generally adequate for leasing and exploration decisions, except in Be case of effects on Be human environment (i.e., socioeconomic effects, as defined in Be Outer Continental Shelf Lands Act (OCSLA)~. Prelease and lease-stage effects on the human environment- which can been even before any physical or biological changes take place are a special cate- gory of effects and are discussed in Chapter 6. In general, the informa- tion available for resource geology, Be physical environment, biotic resources, spills, and mitigation and remediation activities adequately reflects Be differences between arctic OCS areas and over U.S. OCS areas where development and production have already occurred. Conclusion 2: There is a considerable range in Be amount of data needed 187

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188 OCSDECISlONS: ALASKA to provide adequate information for decisions regarding development, production, transportation, siting of onshore and offshore facilities, and term~nabon of activities. In general, site-specific studies of biotic resources, especially marine mammals critical to the subsistence economy of Alaska Nadves, of physical conditions, arid of long-term effects on Native and non- Native residents, wall be necessary to determine acceptable risks to human and odler living resources prior to development and production. The proper sites for these studies can be determined only by exploration. They should be carried out to support the various permitting processes following leasing . decisions. Conclusion 3: Information from research programs in other nations with conditions similar to the Alaskan arctic OCS and from the experience base of Alaska Natives has not been fillly exploited. More coordination of government (local, state, federal), industry, and Native information and collaboration among these groups are needed to promote efficiency in study efforts and an improved atmosphere of mutual trust. Conclusion 4: MMS's Environmental Studies Program and oil and gas resource assessment efforts have yielded credible information useful for establishing a general baseline or characterization of the living resources, physical conditions, social and economic setting, and potential of! and gas resources in He arctic OCS. The committee concludes Mat MMS should now concentrate its resources on fewer, longer-term studies of the living resources, social and economic conditions, and physical processes with peer review of results, to develop Be additional information needed for decision making about of} and gas production, transportation, and related develop ment. Conclusion 5: The most controversial of Me potential effects of OCS development in the arctic OCS are of} spills and interference with marine mammals-especially Be bowhead whale critical to Be subsistence economy of Alaska Natives. These issues must be dealt with and Alaska Natives and Weir experts should be substantially involved, overwise plans to develop arctic OCS oil and gas resources could be seriously jeopardized. Conclusion 6: The committee suggests Cat it could be time for Be Office of Management and Budget's (OMB's) criteria to be re-evaluated. OCSLA

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GENERAL CONCLUSIONS 189 explicitly requires that "Subsequent to the leasing and developing of any region, Me Secretary shad conduct such additional studies as he deems necessary and shad monitor Me human, marine, and coastal environments . . . in a manner designed to provide dine-series and data trend information which can be used for comparison with any previously collected data for Me purpose of identifying any significant changes in Me quality and productivity of such environments" (43 U.S.C. 1346(c)) (emphasis added). Although Be committee is aware that MMS has its funding approved by OMB by Be "A2Bl" criteria the committee is concerned that Be criteria could present a significant obstacle that might not have been fully appreci- ated when they were first approved. The need for long-term post-leasing and post~evelopment studies as required by OCSLA cannot be met unless enough money is available to do Be studies. 01 ALT[~ATIVL TO ADDITIONAL STUDIES The traditional approach to facility siting is to use scientific methods to evaluate possible sites wad a view toward potential impacts most often Trough He EIS process-and to employ technical knowledge for avoiding or reducing them. This is more or less the paradigm established by OCSLA and embodied in the Environmental Studies Program and He OCS oil and gas leasing process. However, the committee notes that OCSLA specifi- cally includes a "congressional declaration of policy" that states and affected local governments "are entitled to an opportunity to participate, to the extent consistent with the national interest, in the policy and planning decisions made by the Federal Government relating to exploration for, and develop- ment and production of, minerals of the Outer Continental Shelf' (43 U.S.C. 1332 (43(B)~. The law further calls for the secretary to carry out environmental studies "in full cooperation with" affected states (43 U.S.C. 1346(c)~. It is becoming increasingly difficult to argue that a centralized approach to siting undesirable facilities is in the national interest. The approach is frequently met with almost overwhelming local opposition. Moreover, this approach creates or exacerbates effects, as is reflected in He discussion of environmental gridlock in Chapter 6. Although additional studies could satisfy the OCSLA mandate for studying impacts on the human environ- ment, they will not likely satisfy communities that leasing is in their best

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190 OCS DECISIONS: ALASKA interest, nor will additional studies, in themselves, allow MMS to fulfill the OCSLA mandate to develop the information that wall be used to manage impacts to the human environment. MMS has not yet developed a decision-making process that is broadly acceptable to the communities of northern Alaska. Social scientists have extensively studied processes that are conducive to cooperative solutions (O'Hare et al., 1983; Gregory et al., 1991), arm several of their conclusions appear to be directly applicable. No process can guarantee success, but it is becoming increasingly clear that the federal government's current methods almost guarantee failure to arrive at a cooperative solution. An alternative approach would require a significant change from current ways of doing business. The most important factor for achieving a coopera- tive solution to facility siting is an established basis for trust among the parties, founded largely on three considerations. The first is the most common but least formal, and it is perhaps the least relevant in the present case: Many forms of trust require a track record of experience, during which the parties involved have observed one another's actions over a long enough time to have concluded that everyone involved has behaved in a manner consistently that is deserving of trust. Where no such record is available, or worse, when the participants believe Hey have reason to be actively suspicious of one another, the second and third considerations come into play. The second consideration is that decisions must be based on a process that is viewed as sound, fair, and acceptable to all parties. As stated by Gregory et al. (1991), "If the assessment process is viewed as flawed or biased by political considerations, then no siting agreement will be reach- ed." The third consideration is that the community must have real control over decisions that influence risks. This means that communities must have an active part in the process. If the community believes that its concerns are ignored or discounted, it will almost certainly distrust tile process. Unfortunately, a simplistic approach such as the apparently straightfor- ward exhortation that the various parties involved should seek to use cooperation as a means of dealing with uncertainties tends to work only in cases having the first of the three considerations noted above. This approach would appear, on the basis of past studies, to have little likelihood of success in the present case. Under present circumstances, many of He parties involved tend to view one another with distrust. It is possible for Bust to grow over dine, but the process is almost always slow, and to work

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GENERAL CONCLUSIONS 191 things out cooperatively, trust must be present in advance. As noted by Slovic et al. (1991), Were tends to be an "asymmetry principle" at work: It is far easier to lose trust than it is to gain it. Historical Context for Mistrust Although we do not believe that the current position is completely hopeless, we are not optimistic for several reasons Mat the historical con- text provides a solid basis for trust among the parties. First, Mere appear to be strong feelings among those on the Alaska North Slope Mat the process is flawed and is driven by political considerations. Indeed, this committee has learned that Me MMS program in Alaska shares with many other programs Me problem of a serious credibility deficit, whether or not its environmental studies are credible in an objective sense. Second, the experience wad Me Exxon Chavez oil spill also contributes to a lack of credibility in the potential to clean up spilled oil effectively, even Cough Hat accident did not involve OCS oil and did not physically affect northern Alaska. Major changes have taken place since Be accident, such as stockpiles of cleanup and control equipment, complete revision of Me contingency plans by federal, state, and local government and Alyeska, and many drills and training exercises are conducted wig each company, state and federal agencies, and locals. It is hoped Cat these changes will parlance future response effectiveness. To some extent, it is unreasonable to expect any effort of the magnitude of that cleanup, put into Me field so quickly, to have been more precisely choreographed, despite the slow response and confusion in the earliest stages of the spill. It is just not possible to prevent all impacts from very large spills. The Exxon Valdez spill does, however, reflect tile reality of experience in Alaska, where many residents also remember earlier repeated assertions about safety, preparedness, and even double-hulled tankers, along with over claims that were made in Me heat of political debates over Me Trans- Alaska Pipeline System. These factors lead to an erosion of credibility and trust among Me parties, which aggravates impacts and diminishes Me potential for cooperative solutions. The limitations on our ability to respond immediately and completely successfully to a major accident should be acknowledged.

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192 OCS DECISIONS: ALASKA Negotiation Process Another factor in the historical context is a different kind of asymmetry principle, which deals with differential levels of influence in the negotiating process. In most of the several cases where parties have successfully nego- tiated-even in cases in which the parties involved have been openly antagonistic or hostile toward one another-the parties were able to exercise at least a rough parity in negotiating leverage. This is possible because nei- ther party is required to trust another. In some cases, a negotiated agree- ment can be overseen by a third party that is trusted by both sides, or it might be possible for one side to impose penalties if an agreement fails to be carried out. However, in cases where the distrusted party is a govern- ment agency, few alternatives exist that do not require a genuine and tangible sharing of decision-making power with the affected parties. Several affected parties told the committee that they consider circum- stances to have become relatively polarized and that they do not see MMS as a neutral third party-independent both of the oil industry and of local and environmental concerns. Instead, they see MMS as allied with industrial and developmental interests. These local perceptions can be debated, but they have real consequences, which include the fact Hat MMS is not likely to be trusted as an honest broker. Under the circumstances, the affected parties widely believe their best or only real opportunity to influence the course of development comes before the leasing decision. Once a lease is issued, if commercially valuable quan- tities of gas or of! are discovered, residents are not likely to have significant influence over the course of development. Some MMS personnel with whom the committee discussed this issue disagreed strongly wig this assessment; others largely agreed. None of Hem was able to offer specific examples of cases in which local objections had led the agency to make truly significant changes in development plans where He leases had been offered and commercially significant quantities of oil or gas had been discovered. Workable ~esotIa~on OPIIOnS Where Here is lithe reason to expect success from exhortations Hat one party should simply trust tile ogler, Here appear to be only two remaining

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GENERAL CONCLUSIONS 193 options. One is to continue to perform studies until all of the relevant concerns have been fifty explored. In Me Arctic, unfortunately, this would be prohibitively expensive, even In light of the large quantities of of} that are now believed to lie offshore. The second option is to develop mechanisms Mat do not require one party to answer questions in advance to the complete satisfaction of another that is, Trough cooperative or negotiated statements. This option also does not require the parties to trust one another in advance. For cooperative approaches to work, two additional changes are likely to be needed, in addition to increased attention to the scientific credibility of studies as outlined above. First, there mill need to be a change in the incentive structure currently in place. Under the current system, the parties who have concerns about development have little faith in their ability to alter Me process involved In of} development and production if of} is found. Although the OCS Lands Act provides for cancellation of a lease based on environmental reasons that arise during performance of the lease and compensation for such losses plus interest to the lessee (43 U.S.C. 1334 (a)~2~(c)), Me provision has not been used to date. Thus, those who have concerns about development open conclude Hat Hey should oppose even the initial offering of leases. In such a case, an alternative approach is needed that provides the affected parties with greater control after leases are issued. This would be simi ar to a number of waste-management controversies in which arrange- ments have been made for the community to shut down a site if it deter- mines that He facility is berg operated unsafely. The most efficient course of action available to MMS at this time could be to modify the existing stipulation mechanism that allows formal input from other agencies so that it also includes more effective input from the affected local communities. Therefore, He affected parties wall no longer have to accept on fain that MMS will protect local interests in the long run. Specific stipulations will need to be worked out by He affected parties. Examples could include requirements Hat state and local officials approve continuing activities before Hey can proceed at several points in He development process when exploration plans are filed, when development plans are filed, after the first year of production, after the fifth and twelfth years of producdon, and so on. The stipulations, which should allow some degree of predictability for industry, should be part of He initial offering of leases, so that the companies are fully informed in advance, allowing them to account in their bids for the potential risk of being required to deal with

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194 OCSDECISlONS: ALASKA additional local concerns. This would give all parties an additional incentive to build and maintain cooperative relationships with local leaders. The additional risk of such stipulations to industry should be low if industry can demonstrate Hat development can be carried out in accordance with the highest standards of protection of the human, marine, and coastal environ- ments and that the resultant activities can result in significant, long-term economic benefits for affected populations. Second, even if such stipulations are put into place, a climate of mutual respect will be needed. This will require, in particular, that every effort be made to avoid creating or exacerbating the suspicion that the agency is attempting to dismiss, rawer than to deal with, the concerns that are raised by local critics. ~ Suggested Exam Towhead Whales One of the most controversial aspects of Alaskan OCS of! and gas development concerns Be effect of Lose activities on Be migration patterns of marine mammals, especially bowhead whales. Because hunting bow- heads is so important to North Slope communities, there have been many series of the effects of noise on bowhead behavior and migration. Despite those studies, the question is not resolved and it is not clear whether any amount of research will resolve it. For this reason, the committee believes Mat the best (and perhaps the only) solution is for MMS, the industry, and North Slope residents to attempt to reach agreement on the controversial matters and how they should be adjusted, remedied, or mitigated as specific times and places that various activities occur in lieu of or concur- rent USA additional studies. Such a negotiation does not require any party to give up any rights to other remedies as a condition to begin the negotia- tion, although the assumption must be that a mutual agreement would be exclusive; the agreed-on course of action wait be adhered to unless addi- tional information shows to everyone's satisfaction that it should be modified. If additional studies are conducted, Hey should be cooperatively designed and implemented by all Tree parties. There is no guarantee that dais approach would succeed. Nonetheless, it seems unlikely Hat it could be less successful or more costly Man Be current system of dueling studies and reviews and Heir accompanying delays and ill feelings. The approach should work not only for bowhead

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GENERAL CONCLUSIONS 195 whales, but for many other areas of controversy questions in Alaska and elsewhere (e.g., the effectiveness of causeway breaches in allowing fish migrations. Several practitioners have developed considerable skill in this Me of dispute resolution. Finally, it is of the utmost importance to build effective and thoughtful monitoring programs into any such settlement. Monitoring is essential to evaluate the success of agreements and to provide a basis for facilitating similar agreements elsewhere. Mitigating Lono-Term Socioeconomic Effects Among the long-term non-spill socioeconomic impacts that need to be dealt wad are the potential for cultural erosion and for socioeconomic overadaptation. The potential for overadaptation is exacerbated by the re- gion's remoteness and the limited likelihood! of successful economic diver- sification. Among the obvious possibilities for mitigating those foreseeable effects (as weld as for helping to create more positive effects) would be He creation of trust funds. Working cooperatively with the state and affected local governments (including Northwest Alaska Native Association and the North Slope Borough), MMS should explore the potential for mitigating longer-term effects Trough revenue sharing, as well as through other steps Cat could help mitigate the coming "bust" by building up locally controlled trust funds. If such funds were sufficiently large, they could even help cushion Be impending end of the Pru&oe Bay revenues, with the principal being left intact, and with the annual proceeds being used to fund a signifi- cant fraction of the borough's (or NANA's) current employment and other costs. Revenue sharing should be used for mitigating regional socioeco- nomic effects. It should not be used for mitigating effects that are of national concern.

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