Potential Financial and Employment Impact from the Development of Oil & Gas in the North Aleutian Basin Shell Offshore Inc. Anchorage, Alaska October, 2006 The authors acknowledge the significant contribution of employment multiplier information from Professor Scott Goldsmith of ISER, UAA.

Miles 0 50 What might the project contain? Local Power Sand Point Natural Gas Liquefaction Facility LNG tanker to US West Coast Market LNG tanker to US West Coast Market Offshore Drilling and Production Platform(s) Bristol Bay Pacific Ocean

Bristol Bay Economic Benefits Federal Income Tax ~$12 Billion Royalties ~$7 Billion State & Local Tax ~$850 Million 6.8 TCF sales gas with February 2005 Forward Curve Revenue Sharing?

Jobs: Offshore Operations & Onshore LNG Facility Year 1Year 2Year 3Year 4Year 5 Construction Jobs (excludes indirect jobs) (Pipeline + LNG Plant) Operating Jobs (excludes indirect jobs) (Platform + LNG Plant) Year 1 Year 4 Year 7 Year 10 Year 13 Year 16 Year 19 Year 22Year 25 Platform Maintenance Platform Operations Onshore Facilities LNG Plant 2

Typical Offshore Operations Staffing Profile Two crews on board at all times (12 hour shifts). Four crews per platform.

Typical LNG Plant Personnel

Shell US Operations Workforce Strategy Recruit Talent Community & Technical Colleges and Universities – Partner with scholarships and outreach programs – Participate in Industry Advisory Committees and Organizations (e.g. Center for the Advancement of Process Technology (CAPT), Process Technology Degree Programs – Operations leadership involved with schools Develop Local Source – Focus on schools in areas of operation (Gulf of Mexico, Rockies, Texas, Alaska) – Invest in local schools and programs Seek Diversity – Actively promote our industry in high schools and colleges – Fund and participate in programs to attract local talent

Shell US Operations Workforce Strategy Retain and Develop Talent –Provide rewarding and challenging opportunities –Provide training and development assignments in every area of operation Provide both Supervisory and Technical Career Paths –Technical Operations Professional Program (TOPP), Global Program for Operations Staff Development –20+ TOPP Candidates selected every year form US Ops Operations Training & Shell Robert Training and Conference Center –Industry’s premier training facility with extensive catalogue of industry’s best and most current courses

Offshore Installation Manager Process Team Leader Utilities Team Leader Process Staff Associate Resource Coordinator Marine Supervisor Associate to Bachelors Degree Significant offshore operations experience Continuing Education – In-House courses – Shell / Industry approved CE courses – Shell Leadership Training Pertinent License as required Educational Expectations

Automatic Control Repairman Electrician Electronic Technician Computer Assisted Operations Mechanic Operator Associate to Bachelors Degree Continuing Education –In-House courses –Shell / Industry approved CE courses

Support Positions Catering Crew Helicopter Landing Officer Medical Technician Clerk / Office Administrator Logistics Clerk Comments: These positions are usually contract positions. Education varies for each job and may require special licenses.

The Job Pyramid* For every Oil and Gas Industry worker there are about six positions in the community 1 6 “oil patch” “public revenue” * Scott Goldsmith, (2006) Economic Multiplier for Oil and Gas Activities in Alaska Institute of Social and Economic Research, College of Business and Public Policy University of Alaska Anchorage 3211 Providence Drive Anchorage, Alaska UAA

Oil and Gas Contractors Health, Safety, Environment – Spill Response, Emergency Response Well Services – Drilling, Coring, Logging, Completion, Production, Re- completion, Abandonment Platform Services – Equipment Start-up, Maintenance, Renewal, Removal Logistics handling – Helicopter, Crew Boats, Equipment Barges, etc. Pipe and Materials – Fabrication, Transport, Loading, Installation, Maintenance, Removal

Community Employment Services – Hotels, Restaurants, Transportation – Emergency (Police, Fire Departments) – Infrastructure (Schools, Communications, Power, Transportation, Water and Sewage, Waste Management) – Governmental Agencies – Real Estate, Construction, etc. Goods – Food, Fuel, Homes, Vehicles – Clothing, Household items, Office Products

Employment and Compensation Impact * Scott Goldsmith (ISER) – University of Alaska Anchorage ** Based on Kenai Peninsula data, 2005 – 2006 * **