1. Project Introduction and Overview Brock Bernstein OPC Meeting June 25, 2010

2. Presentation Overview Approach and key findings Modeling the options

3. Project Approach Evaluate range of potential options Evaluate range of potential options Describe overall regulatory and legal context Describe overall regulatory and legal context Select options for in-depth analysis Select options for in-depth analysis Conduct in-depth analysis Conduct in-depth analysis Focus on choice between options Focus on choice between options Describe and evaluate major sources of impact Describe and evaluate major sources of impact Develop decision model for more detailed examination Develop decision model for more detailed examination Investigate legal and liability issues Investigate legal and liability issues Interact with EAC at key points in the process Interact with EAC at key points in the process

4. Overview of Options Considered

5. Features of the Analysis Many aspects identical across the options Many aspects identical across the options Use available data / information Use available data / information New information on fish production, air emissions, and costs New information on fish production, air emissions, and costs

6. Key Findings Impacts not equally likely or significant Impacts not equally likely or significant Localized and short-term Localized and short-term Benthic communities Benthic communities Birds Birds Marine mammals Marine mammals Water quality Water quality Mix of potentially positive and negative Mix of potentially positive and negative Socioeconomic due to changes in ocean access Socioeconomic due to changes in ocean access Fishing, nonconsumptive, shipping Fishing, nonconsumptive, shipping

7. Key Findings (cont.) Potentially larger impacts Potentially larger impacts Air emissions (Harmony case study) Air emissions (Harmony case study) NOx: 600 tons vs. 89 tons NOx: 600 tons vs. 89 tons CO 2 : 29,400 tons vs. 4,400 tons CO 2 : 29,400 tons vs. 4,400 tons PM 10 : 21 tons vs. 3 tons PM 10 : 21 tons vs. 3 tons Biological communities Biological communities Costs Costs $1.09 billion for complete removal $1.09 billion for complete removal $478 million for partial removal $478 million for partial removal

8. Desired Option Choice of option depends heavily on preferences CompletePartial Ecosystem integrity Air emissions Strict compliance Biological production Clear ocean access Cost / funding Potential liability Recreational fishing Water quality

9. Partial Removal: Legal and Liability Well-defined pathways for ownership transfer Well-defined pathways for ownership transfer Well-developed mechanisms for managing liability Well-developed mechanisms for managing liability Funds available from avoided costs Funds available from avoided costs CA would require new legislation CA would require new legislation Acceptance of ownership of reefs in OCS Acceptance of ownership of reefs in OCS Expanded artificial reef program Expanded artificial reef program Acceptance / management of avoided costs Acceptance / management of avoided costs Liability containment Liability containment

10. Decision Model Value of an interactive model Model features

11. Modeling the Options Choose among and combine options Choose among and combine options Input individual preferences Input individual preferences Work with all data and assessments used in the analysis Work with all data and assessments used in the analysis Integrate quantitative and qualitative factors Integrate quantitative and qualitative factors Examine implications of assumptions and values Examine implications of assumptions and values Identify which factors most influence choice among options Identify which factors most influence choice among options

12. Decision Support Tool Explore management outcomes by adjusting attributes Download model from: http://www.calost.org/Oil_gas.html

13. Overall Scores for Scenarios Combine all factors for an overall comparison