1. Economic Analysis of Future Offshore Oil & Gas Development: Beaufort Sea, Chukchi Sea, and North Aleutian Basin A study to describe and quantify potential economic benefits to the State of Alaska from development of oil and gas resources in the Alaska Outer Continental Shelf areas. Developed by: Northern Economics Institute of Social and Economic Research, University of Alaska

2. Trans-AlaskaPipeline Shell In Alaska Today 160 Beaufort Leases 275 Chukchi Leases Spent more than $84 Million on Beaufort Leases Spent over $2 Billion on Chukchi Leases Hundreds of millions with Alaska contractors Beaufort Sea 160 Leases Chukchi Sea 275 Leases

3. Alaska’s Future with OCS: Major Findings Creates 35,000 jobs on an average annual basis 6,000 direct jobs Provides $5.8 billion direct to State and local governments Total benefit of $15.3 billion to State Net benefit of $6.6 billion after state expenditures Extends the life of the TAPS Reduces pipeline tariffs for onshore production and enables development of marginal oil and gas fields Underpin success of the natural gas pipeline project

4. Oil Production with OCS

5. North Slope Oil Production without OCS

6. Alaska’s Future Without OCS: Summary Slowing Job Growth after Gas Line Construction Petroleum industry jobs slowly decline Other resource industry growth replaces oil and gas Wage rates lower and more seasonal employment Population Growth Decelerates State and Local Government Fiscal Capacity Falls Petroleum revenues fall with drop in oil production Gas revenues insufficient to replace oil Public spending squeeze New revenue sources—income tax and permanent fund earnings Household Income Growth Slows

7. OCS Scenarios Beaufort Sea 7 major fields, 7 platforms, 6.3 BBO, 7.0 TCF produced Chukchi Sea 4 major fields, 4 platforms, 6.2 BBO, 7.8 TCF produced Pipelines across the NPRA to connect to TAPS and gas line North Aleutian Basin 2 major fields, 2 platforms, 1.3 BBO, 5.1 TCF produced Pipelines across the Alaska Peninsula with LNG plant and oil terminal on Gulf of Alaska side of the peninsula Total production during study period is 10.2 BBO and 19.8 TCF

8. Gas Production with OCS

9. Direct Employment

10. Direct Employment by Basin

11. Total Employment

12. Employment by Place

13. State of Alaska Fiscal Effects

14. Direct Revenues

15. Questions & Comments Economic Study Report can be viewed at: www.shell.com/us/alaska

17. Major Findings OCS development could generate an annual average of 35,000 jobs over the next 50 years. These jobs represent a total payroll of $72 billion (2007$) over the 50-year period. OCS-related employment growth could great a generation of jobs in Alaska. Opportunities would be created throughout the state in both high paying, long-term, year-round jobs and in seasonal and short-term jobs. Of the 6,000 oil and gas sector jobs, about 3,900 would be long-term, year-round jobs. The growth in jobs resulting from OCS development would lead to a five percent increase in statewide population. Most of the growth would be concentrated in Alaska’s population centers, but directly impacted regions would experience a much greater percent increase The potential cumulative direct petroleum revenues to Alaska would be $5.8 billion (2007$) with most revenues going to directly impacted local governments from property taxes on onshore petroleum facilities.