741 



15 



peak load rather than average demand is required. Given like- 

 ly fluctuations in the (temporary) population, the result is ex- 

 cess capacity after the peak has passed. If this excess capacity 

 is financed from local sources, per capita capital costs incurred 

 by the permanent population must rise. 



The report concludes that Federal funds offer the only real hope for 

 communities to have the necessary financial resources and the proper 

 time: 



Because of the uncertainties associated with the magnitude 

 and timing of future tax receipts generated by the OCS- 

 related economic activities, it is not clear how much and when 

 public investment must be made by both the municipalities 

 (and/or boroughs) and the State. Therefore, Federal fiscal 

 support in the form of bonus and royalty revenue sharing or 

 general or categorical impact funds is necessary. These funds 

 should pay for both the additional capital requirements de- 

 manded, as well as the planning processes which determine 

 their magnitude and allocation in time and space. 



In the Committee's opinion, the latter approach — categorical impact 

 aid, rather than bonus or royalty revenue sharing — is the only way to 

 ensure that the funds will go where they are needed, when they are 

 needed, and will be used for planning for and ameliorating impacts. 



Studies of hypothetical future impacts of an unknown quantity of 

 oil and gas development are, as MSNW acknowledges in its draft 

 report, imperfect tools for forecasting actual events. The MSNW 

 report itemizes the factors which affect the magnitude and duration 

 of the social and economic impacts which Alaskan coastal communities 

 will experience : 



• The intensity of exploration activities. 



• The proven oil and gas reserves discovered. 



• The total quantities and rates at which oil and/or gas will be 

 produced. 



• Whether petroleum is exported in crude form or will be trans- 

 formed prior to shipment. 



• Whether natural gas, when produced, will be exported from 

 Alaska in liquid form or will be further transformed into petro- 

 chemicals. 



• How many coastal communities will become onshore support 

 bases and whether major onshore facilities will be constructed 

 there or in presently uninhabited areas. 



• The rate at which the Alaskan economy can grow in real 

 terms in order to provide the additional goods and services de- 

 manded as a result of the increased economic activities induced 

 by the OCS development. 



• The additional revenues which will accrue to local, regional, 

 and State governments, and the increased induced demand for 

 public services. 



• Finally, and certainly of major importance for determining 

 the types and duration of short- and long-term social and eco- 

 nomic impacts on coastal communities and the rest of Alaska, 

 are the leadtimes, and the human and capital resources available 

 to local, State, and Federal planning bodies and the oil companies. 



