The Economic Benefits Of Offshore Drilling To South Carolina

P r e p a r e d b y

Prepared for the Palmetto Agribusiness Council, South Carolina Citizens for Sound Conservation, and South Carolina Energy Forum

C o l u m b i a , S C | J u n e 2 0 1 2

The Economic BenefitsOf Offshore DrillingTo South Carolina

June 2012

T h e E c o n o m i c B e n e f i t s O f O f f s h o r e D r i l l i n g To S o u t h C a r o l i n a

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Table of Contents

1. Executive Summary l Page 2

2. Introduction and Overview l Page 7

3. Economic Impacts of Offshore Drilling l Page 8

4. Summary and Conclusion l Page 14

Methodology l Page 15

Miley & Associates l Page 17

General Limiting Conditions l Page 18

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1. Introduction and Overview

his report provides an overview of the

potential economic benefits to the State of South Carolina’s

economy if offshore drilling were permitted off of the South Atlantic coast. While there are other issues related to offshore drilling such as regulatory, environmental and ecological, this study focuses on the job creation and tax revenue generation potential of offshore drilling.

The estimates provided in this report assume that the Federal and State regulatory agencies have conducted thorough

review and permitting procedures and conclude that offshore drilling will be permitted under Federal and state guidelines. While the time line of this regulatory process is uncertain at this time, these estimates are in constant, inflation adjusted dollars and reflective of the economic benefits in real terms.

The potential levels of resource production from the South Carolina coastal areas incorporated in this analysis are based on the recent research publication: U.S. Supply Forecast and Potential Jobs and Economic Impacts (2012-2030)

by Wood Mackenzie released in September 2011. In that research report, it is estimated that by the year 2030, the projected production will be 52,000 barrels of oil equivalent per day (boed) or 19 million barrels of oil equivalent per year produced within South Carolina territorial waters.

T

E x E c u t i v E S u m m a r y

Schematic cross section showing the continental shelf, slope, and rise. Source: http://www.onr.navy.mil/focus/ocean/regions/oceanfloor2.htm, Office of Naval Research,U.S. Navy, Science & Technology Focus.

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s seen in Table 1, if offshore drilling is permitted in South Carolina and produc-tion levels equal

those as estimated by Wood Mackenzie, there would be substantial economic benefits to the State.

These indirect and induced impacts generated by the direct operations offshore drilling operations will be felt across a wide spectrum of industries – not just in the oil exploration industry.

Impact Type Employment Labor Income Output Direct Effect 1,943 $88,366,897 $1,457,519,303 Indirect Effect 3,433 $181,592,719 $550,015,357 Induced Effect 2,109 $69,985,207 $215,124,604 Total Effect 7,485 $339,944,823 $2,222,659,264

T a b l e 1 Economic Benefits from the Ongoing Operationsof Offshore Drilling In South Carolina in 2030

Economic Benefits from the Ongoing Operations of Offshore Drilling In South Carolina

2. Economic Benefits of Offshore Drilling to South Carolina

In addition to these job and income impacts on the State’s economy, the offshore drilling would have significant benefi-cial impacts to the State’s General Fund. The primary impacts to the General Fund would be through income and sales tax collections. In order to estimate the revenue impacts of offshore drilling, the method-ology utilized by the South Carolina Coordinating Council on Economic Development in their Benefit-Cost Model is used in this study.1

Based on the estimated annual total labor income impacts as indicated in Table 1, there would be over $25.5 million per year generated to the State’s General Fund from sales and income taxes generated by the offshore drilling activities.

In addition to these sales and income taxes that would be generated, it is estimated by Wood Mackenzie that South Carolina would receive $62 million in annual royalty payments from offshore drilling.

Together, these royalties and sales and income taxes would generate an estimated $87.5 million per year for the state of South Carolina.

State Revenue Impacts of Offshore Drilling

A

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In addition to the substantial economic benefits that will be generated directly from the offshore drilling process outlined above, there is also the potential of onshore economic impacts from offshore explora-tion. While the location and timing of these types of facili-ties is uncertain at this time, there is the potential of produc-tion and processing facilities locating near South Carolina’s port areas. For this analysis, the impacts from a recently natural gas processing plant

similar to the one recently announced along the Ohio River in Natrium, West Virginia are estimated.2 The West Virginia facility is estimated to cost $500 million to build and will employ 40-50 full time employees when opera-tional. These same investment and employment levels are assumed in the estimates for a South Carolina facility.

The impacts of such a facility in South Carolina are estimated below in two phases: the

construction phase and the ongoing, permanent phase. Not included in this analysis are the potential local property taxes that would be generated from a $500 million facility. Depending on the millage rates that exist in the local area, the facility could generate millions of dollars in local government and school taxes.

The construction phase impacts from a new natural gas processing plant similar to the one recently announced along the Ohio River in Natrium, WV would have substantial impacts. The compounding effects of the multiplier support the initial direct employment of 3,339 employees to construct the facility. This direct employ-ment would generate indirect and induced impacts of an additional 1,800 more jobs in the State – for a total of 5,200 jobs supported in during the construction phase.

These jobs will generate substantial labor income. During this construction period, it is estimated that there will be $135.3 million in direct labor income generated by the construction of the facility. This direct labor income will have indirect and induced impacts of another $73 million for a total impact labor income in the State of more than $207 million.

Total direct output (total economic activity) generated by the construction phase of the facility will be $325

million.3 The indirect and induced impacts will generate another $209 million for a total impact on the State’s economy of over $535 million during the construction phase of the facility.

Potential Impacts of a Natural Gas Processing Facility

Construction Impacts of a Processing Facility


(continued)

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Impact Type Employment Labor Income Output Direct Effect 3,339 $135,308,222 $325,000,010 Indirect Effect 597 $29,654,565 $80,381,792 Induced Effect 1,268 $42,205,677 $129,691,092 Total Effect 5,204 $207,168,464 $535,072,895

T a b l e 3 Gas Processing Facility Construction ImpactsOnce construction activity is completed and a facility begins to ramp up its operations, there would be more permanent, ongoing economic impacts generated in the State. There would be an estimated 50 direct jobs at the facility and another 190 jobs supported in the State. These jobs will generate substantial labor income in the State. The direct labor income generated by the operations of the processing facility would be almost $4.8 million a year. This direct labor income will have multi-plied impacts in the State and generate an additional $7.1

Ongoing Permanent Impacts of a Processing facility

million in indirect and induced labor income for a total of $12.0 million in total labor income.

Once the facility is operating, there would be more than $74.0 million in annual direct economic activity generated in the State as a result of the facility. This direct output

of $74.0 million would have indirect and induced impacts of an additional $21.6 million for a total impact on the State of over $98.8 million a year.


(continued)

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ased on this analysis, it is evident that the potential from offshore drilling would have a positive economic

impact on the State’s economy.

It is estimated that almost 7,500 jobs would be supported in South Carolina from offshore drilling operations by the year 2030. More than $339.0 million in labor income will be generated in the State as a result of the offshore operations. The total impacts on the State will

be more than $2.2 billion in economic activity per year.

If onshore facilities are constructed, there would be additional employment and income impacts. One such facility is analyzed in this report and would generate over 5,200 jobs during construction and more than 240 jobs on an ongoing basis. Such a facility would alsogenerate millions of dollars inlocal economic activity on an ongoing basis. And sucha facility would also generate

millions of dollars in localproperty taxes for local govern-ments and school districts.

And finally, the fiscal impacts of offshore drilling operations would have a substantial impact on State government revenues. It is estimated that more than $87.5 million would be generated from sales, income and royalty taxes in South Carolina per year.

B

Notes:1. The Coordinating Council for Economic Development’s Benefit-Cost Model assumes 7.5% of gross income

will be generated in general sales and state income taxes. 2. http://marcellusdrilling.com/2011/08/dominion-to-build-large-natural-gas-processing-plant-on-the-

ohio-river-in-natrium-wv/3. Due to the large amount of equipment and machinery that would be expected in such a processing

facility, the total impacts of the facility are assumed to be 65% of the total $500 million cost of the facility. Equipment and machinery purchased outside of the study area has limited economic impact to the local economy.

3. Summary and Conclusion


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his report provides an overview of the

potential economic benefits to the State of South Carolina’s

economy if offshore drilling were permitted off of the South Atlantic coast. While there are other issues related to offshore drilling such as regulatory, environmental and ecological issues, this study focuses on the job creation and tax revenue generation potential of offshore drilling.

The estimates provided in this report assume that the Federal and State regulatory agencies have conducted

thorough review and permitting procedures and conclude that offshore drilling will be permitted under Federal and state guidelines. While the time line of this regulatory process is uncertain at this time, these estimates are in constant, inflation adjusted dollars and reflective of the economic benefits in real terms.

The potential levels of resource production from the South Carolina coastal areas incorporated in this analysis are based on the recent research publication: U.S. Supply Forecast and Potential Jobs and Economic

Impacts (2012-2030) by Wood Mackenzie released in September 2011. In that research report, it is estimated that by the year 2030, the projected production will be 52,000 barrels of oil equivalent per day (boed) or 19 million barrels of oil equivalent per year produced within South Carolina territorial waters.

1. Introduction and Overview

T

Schematic cross section showing the continental shelf, slope, and rise. Source: http://www.onr.navy.mil/focus/ocean/regions/oceanfloor2.htm, Office of Naval Research,U.S. Navy, Science & Technology Focus.

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The economic benefits from offshore oil and

gas exploration are outlined in this section of the report. This

analysis utilizes impact models generated by the IMPLAN modeling system.1 IMPLAN is a nationally recognized system of local economic models that are specifically designed to represent local economies such as the State of South Carolina. The IMPLAN models are modifications of the national input-output models developed

by the Bureau of Economic Analysis, US Department of Commerce.

The IMPLAN models incor-porate the most recent data available and are generally 2009 unless otherwise noted.2 The estimates are based on constant dollars and assume no inflation during the project’s buildout. This assumption applies to all estimates in this analysis, including: property values, incomes, sales, construction materials, etc. The assumption of constant dollars assumes revenues and costs will increase at similar rates during the period of analysis.

The IMPLAN model calculates how offshore drilling invest-ment dollars impact the local economy. The IMPLAN program uses data from a number of sources, including County Business Patterns, Bureau of Labor Statistics (BLS) Current Employment and Wages Program (CEW), and the Bureau of Economic Analysis (BEA) among others. IMPLAN uses national data and adjusts that data for smaller geographic regions using a methodology developed by the USDA Forest Service.

These data are then manipulated using propri-etary software developed by Minnesota IMPLAN Group (MIG). Input-output (IO) software answers this question: “If demands of the exogenous sectors were forecast to be some specific amounts next year, how much output from each of the sectors would be necessary to supply these final demands?” In other words, when we invest in offshore oil drilling, what happens to other labor, industries and governments to meet this new demand? It also answers the question: “If the offshore oil drilling produces “x” barrels of oil per year, what is the impact on the industries that supply goods, services and labor to the offshore oil drilling industry.” This is calculated using the Leonfief production functions (Miller & Blair, 2009).

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IMPLAN applies local data (industry, employment and tax – Local Mix) and calculates the effects in a defined study region (in this study, the entire state of South Carolina).

The local analysis again focuses on the importance of the high-quality local labor needed to operate the offshore oil drilling, and spin-off employment from vendors who will work with and supply the offshore oil drilling. Locally these include fuel, truck trans-portation, energy, wholesales trade and consultants. All of these industries are available in the study region. (See Top 10 Industry Impacts in Table 2.).

The process described above produces direct, indirect and induced impacts based on specific and empirical data regarding how wage earners, owners, industries and govern-ments spend resources when there is an economic change.

As the operating and other expenditure dollars are spent and re-spent in the state, additional economic activity is created for those companies and individuals that supply goods and services to the exploration industry. The

recipients of this income will spend this income on other goods and services.

Each time, some of the purchases will be for goods and services in the state and some will be for goods and services from outside the area (referred to as “leakages”). The well-known “multiplier effect” estimates the aggregate amount of local buying and selling that occurs.

The multipliers used in this analysis estimate three compo-nents of total change within the local area:

* Direct effects represent the initial change in the industry in question.

* Indirect effects are changes in inter-industry transac-tions as supplying industries

respond to increased demands from the directly affected industries.

* Induced effects reflect changes in local spending that result from income changes in the directly and indirectly affected industry sectors.

This cycle of spending continues until leakages from the region (spending on goods and services outside the area) stop the cycle. Due to these multiplier effects, the initial, direct investment results in indirect and induced impacts of many more dollars.


(continued)

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As seen in Table 1, if offshore drilling is permitted in South Carolina and production levels equal those as estimated by Wood Mackenzie, there would be substantial economic benefits to the State. As seen in Table 1, it is estimated that there would be almost 2,000 jobs directly created by the exploration activities. These jobs would have a multiplied impact on the State’s economy with indirect and induced impacts. It is estimated that there would be an additional 5,500 jobs supported in the State due to the direct explo-ration activities for a total employment impact of almost 7,500 jobs by the year 2030.

Impact Type Employment Labor Income Output Direct Effect 1,943 $88,366,897 $1,457,519,303 Indirect Effect 3,433 $181,592,719 $550,015,357 Induced Effect 2,109 $69,985,207 $215,124,604 Total Effect 7,485 $339,944,823 $2,222,659,264

T a b l e 1 Economic Benefits from the Ongoing Operationsof Offshore Drilling In South Carolina in 2030

These jobs would generate labor income within the State as well. Direct Labor Income of over $88 million would be generated by the year 2030. This direct income would in turn be multi-plied across the State and result in a total of almost $340 million in labor income per year in South Carolina.

When viewed in total output measures, offshore drilling

would have more than a $2 billion annual impact on the South Carolina economy.

Economic Benefits from the Ongoing Operations of Offshore Drilling In South Carolina


(continued)

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These indirect and induced impacts generated by the direct operations offshore drilling will be felt across a wide spectrum of industries – not just in the oil exploration industry. As seen in Table 2, there will be additional industries impacted by the

operations of the offshore drilling. While the impacts will be felt across dozens of industries, the ones that will be impacted the most are highlighted in Table 2. For example, the opera-tions of offshore drilling can be expected to support an

additional 496 jobs in the architectural and engineering sectors. Likewise, the offshore oil drilling’s operations will support an estimated 413 additional jobs in the whole trade sector and 300 in the food services sector.

“...royalties and sales and income taxes would generate an estimated $87.5 million per year for the State of South Carolina.”

T a b l e 2 Top Ten Industries Impacted In South Carolina

In addition to these job and income impacts on the State’s economy, the offshore drilling would have significant benefi-cial impacts to the State’s General Fund. The primary impacts to the General Fund would be through income and sales tax collections. In order to estimate the revenue impacts of offshore drilling, the method-ology utilized by the South Carolina Coordinating Council on Economic Development in their Benefit-Cost Model is used in this study.3

Based on the estimated annual total labor income impacts as indicated in Table 1, there would be over $25.5 million per year generated to the State’s General Fund from sales and income taxes generated by the offshore drilling activities.

In addition to these sales and income taxes that would be generated, it is estimated by Wood Mackenzie that South Carolina would receive $62 million in annual royalty payments from offshore drilling.

Together, these royalties and sales and income taxes would generate an estimated $87.5 million for the State of South Carolina.

State Revenue Impacts of Offshore Drilling

Top 10 Industries Impacted Total Jobs Supported Drilling oil and gas wells 1,943 Architectural, engineering, and related services 496 Wholesale trade businesses 413 Real estate establishments 346 Legal services 308 Food services and drinking places 300 Transport by truck 278 Private household operations 210 Management of companies and enterprises 181 Employment services 142


(continued)

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In addition to the substantial economic benefits that will be generated directly from the offshore drilling outlined above, there is also the potential of onshore economic impacts from offshore explora-tion. While the location and timing of these types of facili-ties is uncertain at this time, there is the potential of produc-tion and processing facilities locating near South Carolina’s port areas. For this analysis, the impacts from a recently natural gas processing plant similar to the one recently

announced along the Ohio River in Natrium, West Virginia are estimated.4 The West Virginia facility is estimated to cost $500 million to build and will employ 40-50 full time employees when opera-tional. These same investment and employment levels are assumed in the estimates for a South Carolina facility.

The impacts of such a facility in South Carolina are estimated below in two phases: the construction phase and the ongoing, permanent phase.

Not included in this analysis are the potential local property taxes that would be generated from a $500 million facility. Depending on the millage rates that exist in the local area, the facility could generate millions of dollars in local government and school taxes.

The construction phase impacts from a new natural gas processing plant similar to the one recently announced along the Ohio River in Natrium, WV would have substantial impacts. As seen in Table 3, the compounding effects of the multiplier support the initial direct employment of 3,339 employees to construct the facility. This direct employ-ment would generate indirect and induced impacts of an additional 1,800 more jobs in the State – for a total of 5,200 jobs supported in during the construction phase. These jobs will generate substantial labor

income. During this construc-tion period, it is estimated that there will be $135.3 million in direct labor income generated by the construction of the facility. This direct labor income will have indirect and induced impacts of another $73 million for a total impact labor income in the State of more than $207 million.

Total direct output (total economic activity) generated by the construction phase of the facility will be $325 million.5 The indirect and induced impacts will generate another $209 million for a

total impact on the State’s economy of over $535 million during the construction phase of the facility.

Potential Impacts of a Natural Gas Processing Facility

Construction Impacts of a Processing Facility

“The impacts of such a facility in South Carolina are estimated below in two phases: the construction phase and the ongoing, permanent phase. Not included in this analysis are the potential local property taxes that would be gener-ated from a $500 million facility. Depending on the millage rates that exist in the local area, the facility could generate millions of dollars in local govern-ment and school taxes”


(continued)

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“Once the facility is operating, there would be more than $74.0 million in annual direct economic activity…..and induced impacts of an additional $21.6 million for a total impact on the State of over $98.8 million a year.“

Impact Type Employment Labor Income Output Direct Effect 3,339 $135,308,222 $325,000,010 Indirect Effect 597 $29,654,565 $80,381,792 Induced Effect 1,268 $42,205,677 $129,691,092 Total Effect 5,204 $207,168,464 $535,072,895

T a b l e 3 Gas Processing Facility Construction ImpactsOnce construction activity is completed and a facility begins to ramp up its operations, there would be more permanent, ongoing economic impacts generated in the State.

Table 4 summarizes the impacts that could be expected once the facility is in operation. As seen in Table 4, there would be 50 direct jobs at the facility and another 190 jobs supported in the State. These jobs will generate substantial labor income in the State. As seen in Table 4, the direct labor income generated by the operations of the processing

Ongoing Permanent Impacts of a Processing facility

facility would be almost $4.8 million a year. This direct labor income will have multi-plied impacts in the State and generate an additional $7.1 million in indirect and induced labor income for a total of $12.0 million in total labor income.

Once the facility is operating,

there would be more than $74.0 million in annual direct economic activity generated in the State as a result of the facility. This direct output of $74.0 million would have indirect and induced impacts of an additional $21.6 million for a total impact on the State of over $98.8 million a year.


(continued)

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“The total impacts on the State will be more than $2.2 billion in economic activity per year.“

Impact Type Employment Labor Income Output Direct Effect 50 $4,793,386 $74,089,119 Indirect Effect 118 $4,756,227 $17,248,365 Induced Effect 73 $2,418,074 $7,428,295 Total Effect 241 $11,967,687 $98,765,780

T a b l e 4 Ongoing Permanent Impacts Of Gas Processing Facility

ased on this analysis, it is evident that the potential from offshore drilling would have a positive economic

impact on the State’s economy.

It is estimated that almost 7,500 jobs would be supported in South Carolina from offshore drilling operations by the year 2030. More than $339.0 million in labor income will be generated in the State as a result of the offshore operations. The total impacts on the State will be more than $2.2 billion in economic activity per year.

If onshore facilities are constructed, there would be additional employment and income impacts. One such facility is analyzed in this report and would generate over 5,200 jobs during construction and more than 240 jobs on an ongoing basis. Such a facility would also generate millions on

dollars in local on an ongoing basis. Such a facility would alsogenerate millions of dollars inlocal economic activity on an ongoing basis. And sucha facility would also generatemillions of dollars in localproperty taxes for local govern-ments and school districts.

And finally, the fiscal impacts of offshore drilling operations would have a substantial impact on State government revenues. It is estimated that more than $87.5 million would be generated from sales, income and royalty taxes in South Carolina per year.

B

Notes:1. IMPLAN is regional modeling system developed by MIG, Inc., Stillwater, MN.2. The latest data available for the IMPLAN modeling system are for the 2009 calendar year. However, the

final dollar impacts estimated in this analysis reflect 2011 prices.3. The Coordinating Council for Economic Development’s Benefit-Cost Model assumes 7.5% of gross income

will be generated in general sales and state income taxes. 4. http://marcellusdrilling.com/2011/08/dominion-to-build-large-natural-gas-processing-plant-on-the-

ohio-river-in-natrium-wv/5. Due to the large amount of equipment and machinery that would be expected in such a processing

facility, the total impacts of the facility are assumed to be 65% of the total $500 million cost of the facility. Equipment and machinery purchased outside of the study area has limited economic impact to the local economy.

3. Summary and Conclusion

June 2012


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his study estimates the economic impacts on the

economy of South Carolina of the a proposed offshore oil and gas exploration off the coast of South Carolina.

The impact methodology used in this study is the IMPLAN regional input-output modeling system developed by MIG, Inc. of Stillwater, Minnesota. The most recent data available was used in this analysis – 2009 data. No inflation is incorporated in this analysis. IMPLAN was developed by MIG, Inc. as a cost-effective means to develop regional input-output models. The IMPLAN accounts closely follow the accounting conventions used in the “Input-Output Study of the US Economy” by the Bureau of Economic

Analysis (1980) and the rectangular format recommended by the United Nations. The IMPLAN Input-Output Model mathematically describes commodity flows from producers to intermediate and final consumers. Purchases for final use (final demand) drive the model. Industries producing goods and services for final demand also purchase goods and services from other producers. These other producers, in turn, purchase goods and services. This buying of goods and services (indirect purchases) continues. Leakages from the region eventually stop the cycle. The IMPLAN input-output model mathematically derives the indirect

and induced effects. The resulting multipliers describe the change in output for every regional industry caused by a one-dollar change in final demand for any given industry. The notion of a multiplier rests upon the difference between the initial effect of a change in final demand and the total effects of that change. Total effects are the direct effects plus indirect effects, plus induced effects. Direct effects are the production changes associated with initial final demand changes. Indirect effects are produc-tion changes in backward- linked industries caused by the changing input needs of directly effected industries. Induced effects result from the household expenditures from the directly or indirectly generated labor income.

TMethodology

June 2012


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In essence, the multipliers estimated by this methodology represent the consecutive rounds of buying and selling that ripple through an economy. To produce one dollar of new product, employees must be hired and paid. The wages paid to these workers will then be spent on goods and services, such as food, gasoline, clothes, housing, etc. within the region and outside the region. As these cents are spent, they become income to the recipient, and the spending continues over and over again. The induced effect is the cumulative amount of spending.

The economic activity of the project also requires intermediate inputs to be purchased such as electricity, raw materials, transportation services, labor etc. These expenditures become income to the recipient and pay for the purchases of raw materials, labor, etc. They, in turn, are then spent over and over again in the economy. Purchases made from outside the region are considered “leakages” from the economy. The consecutive rounds of selling goods and services continues until these leakages from the region end the cycle. The indirect effect is the cumulative amount of such spending.

The IMPLAN databases consist of two major parts: national-level matrices and tables and economic and physical data at the county and/or state level. The national matrices are used with regional data to create a regional model. The following national-level matrices are included with each IMPLAN database.

1. The National Absorption Table is a coefficient form of the National Use Table derived by dividing each element of the Use Table by the respective industry’s total dollar output. The resulting Absorption Table shows how an industry spends each dollar of outlay on goods and services to produce a dollar of output. Each column is an industry’s production function reflecting the proportions of commodities used to produce one dollar of output.

2. The National Byproducts Table is a coefficient form of the National Make Table derived by dividing each element by the Make Table row (industry) totals. Each industry can produce more than one commodity. The Byproducts

Tables shows what percentage of an industry’s total output each commodity represents.

3. Deflators are used to adjust values from one time period to another.

4. Margins split a purchaser price into the appropriate producer values.

The local economic data in an IMPLAN database include Industry Output, Employment, Value Added and Final Demands. The value-added compo-nents are employee compensation, proprietors’ income, other property type income, and indirect business taxes. The final demands components in the initial Final Demands Table are personal consumption expendi-tures, state and local education and non-education purchases, federal military and non-military purchases, inventory purchases and capital formation. Regional data is applied to the national matrices to create a set of regional accounts.

Methodology(continued)

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iley & Associates is one of the Southeast’s leading economic and financial consulting firms. The firm special-

izes in economic impact analyses, fiscal impact analyses, feasibility reports, impact fee studies and benefit/cost modeling. Our clients include national and prominent local real estate developers, school districts, local governments, regional development agencies, and other private sector development firms. Miley & Associates partners appear regularly before deci-sion-makers at all levels of government and understand the values, needs and desires of the clients they represent. With offices located in Columbia, South Carolina, the firm is well positioned to provide clients with hands-on service for projects throughout the entire Southeast region.

Miley & Associates appreciates that every research project is unique and deserves a custom solution. Public

policy decisions are not made over-night, and we excel at providing advice and counsel along the way. We represent our clients. Our business plan is simple: we focus on exceeding our client’s expectations and building long-term relationships.

Miley & Associates, Inc. was founded in 1993 by Harry W. Miley, Jr. Ph. D. The Company is an economic and finan-cial consulting firm providing a range of analytical services to public and private sector clients. Miley & Associ-ates conducts fiscal and economic impact analyses of proposed new developments and has extensive expe-rience in assisting clients with their economic development and commu-nity revitalization projects.

Dr. Miley served as Chairman of the South Carolina Board of Economic Advisors (BEA) under two Governors. The BEA is responsible for estimating the State’s revenues for the Governor and the General Assembly to use in

formulating the State’s annual budget. Dr. Miley was originally appointed as Chairman by Governor Carroll Campbell and continued to serve as Chairman for Governor David Beasley.

Dr. Miley was the Senior Executive Assistant for Economic Development to Governor Campbell from 1987 to 1989. Dr. Miley served as principal advisor to Governor Carroll Campbell on the state’s policies for economic develop-ment, employment and training, work force and adult illiteracy, technical education and transportation issues.

Prior to joining the Governor’s Office, Dr. Miley was on the faculty of the Moore School of Business at the University of South Carolina and Associate Director of the Division of Research at the School.

MMiley & Associates

June 2012


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his feasibility analysis is not a budget or forecasting

document and is not intended to depict a definitive course of action. Moreover, feasibility

analysis is not designed as a space or facility-planning document. Many assumptions underlying feasibility analyses are based on policy decisions which, if modified, would affect the overall results.

This study is based on estimates, assumptions and other information developed by Miley & Associates, Inc. from its independent research effort, consultations with the client and its representatives, and primary and secondary sources. We have utilized sources that are deemed to be reliable but cannot guarantee their accuracy. Moreover, estimates and analysis are based on trends and assumptions and, therefore, there will usually be differ-

ences between projected and actual results because events and circum-stances frequently do not occur as expected, and those differences may be material. No responsibility is assumed for inaccuracies in reporting by the client, the client’s agent and represent-atives or any other data source used in preparing this study.

This report is based on information that was current as of December 2011 and Miley & Associates, Inc. has not undertaken any update of its research effort since that date. We have no obli-gation, unless subsequently engaged, to update this report or revise this analysis as presented due to events or conditions occurring after the date of this report.

Possession of this study does not carry with it the right of publication thereof or to use the name of “Miley & Associ-

ates, Inc.” in any manner without first obtaining the prior written consent of Miley & Associates, Inc. No abstracting, excerpting or summarization of this study may be made without first obtaining the prior written consent of Miley & Associates, Inc. This report is not to be used in conjunction with any public or private offering of securities or other similar purpose. This study may not be used for purposes other than that for which it is prepared or for which prior written consent has first been obtained from Miley & Associates, Inc.

This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions and considerations.

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This study was made possible by a grant from the American Petroleum Institute.

Marketing and distribution of this study provided by McMullen Public Affairs, Columbia, SC.

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TGeneral Limiting Conditions

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The Economic Benefits Of Offshore Drilling To South Carolina

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