July 4, 2012
From: Rick W. Johnson, M.B.A. '70, Harvard Business School
To: National Academy of Sciences (NAS)
Summary:
This document provides perspective on research concerning socioeconomic impacts within the
National Park Service’s (NPS) Draft Environmental Impact Statement (DEIS). Also provided here is
perspective on the Atkins peer review and the public comment letter from Drakes Bay Oyster
Company’s (DBOC) consultant Environ (Environ). In summary:
•
the DEIS mostly used best available data to analyze socioeconomic impacts. However, it
appears there are several instances where analysis is presented to describe the value/impact of
DBOC, yet the supporting data and science is not provided or doesn’t exist. As we outline
below, the DEIS appears to overstate the socioeconomic value of DBOC and understate or fail
to state the socioeconomic value of marine wilderness designation (i.e. expiration of DBOC
lease). Specifically, the DEIS conclusion of moderate or major adverse socioeconomic impact
resulting from Alternative A is not supported by data and science.
•
Dr. Wilen’s (Atkins’ expert focused on socioeconomics) main criticisms of the socioeconomic
impact section of the DEIS stem from lack of specific data needed to conduct analyses he
suggests. However, it is important to understand that the data requested by Dr. Wilen is
proprietary DBOC data, and to-date, the company has been unwilling to make this data
available for public analysis and use in the DEIS (a public NEPA document). NPS requested
this data from DBOC prior to the release of the DEIS, and re-requested it after the Atkins’ peer
review was released. In both instances and most recently on June 5, 2012, DBOC did not make
this data available for the DEIS.
•
the Environ public comment letter fails to provided supporting data and science in its criticisms
of the DEIS. For example, Environ provides no data or evidence that DBOC shellfish have
unique natural food and health features compared to Tomales Bay shellfish or other West coast
produced shellfish, and provides no evidence or references that Alternative A will increase
prices in the California fresh shellfish market.
In discussing DBOC proprietary data generally, it should be known that this data has not been
independently verified for accuracy. The NPS likely does not have the time and resources to perform
such verification. Given that the available data is sourced from the permit applicant (DBOC) that stands
to financially benefit from the DEIS analysis, it would have been helpful for the DEIS to provide the
public with confidence that this data is accurate and has been verified.
In conclusion, none of these documents - the DEIS, Dr. Wilen's review via Atkins, NAS (2009), or the
Environ comment letter - considers all relevant socioeconomic factors and none of them provides a
reasonable basis upon which to conclude that moderate or major adverse socioeconomic impacts would
result from Alternative A. Additionally, none of these documents considers the data or research on the
beneficial economic value of Alternative A (wilderness designation). Alternative A may well lead on
some important socioeconomic dimensions and lag on other socioeconomic dimensions compared to
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Alternatives B, C and D.
Introduction - need to outline relevant socioeconomic factors
There are important socioeconomic factors that were not considered in the DEIS or by Wilen in the
Atkins review, or by Environ, that are germane to the evaluation of alternatives. NAS (2009) provides
a useful start at listing and identifying types of factors to consider (See section VIII. Human-Use Values
—Economics, Recreation, and Aesthetics A. Background - NAS (2009), pages 61-63). The Final EIS
needs to outline the dimensions of socioeconomic factors that should be considered, and then
consistently summarize conclusions by the same categories. This will help resolve the confusion cited
by Wilen. The Final EIS should state that there are data limitations and uncertainty in estimating the
impacts, and that exact socioeconomic quantitative comparisons are not possible.
In a presentation, Hanemann (2010) states, "valuation of impacts – both market and nonmarket – is
highly uncertain" A corollary perhaps is that obtaining quantitative assessments of socioeconomic
impacts is expensive and time consuming for useful surveys and analysis, probably beyond the
resources available to NPS for this EIS and the time frame for decision. Nonetheless, Hanemann
(2010) urges perseverance “Do it until you get it right.” Fortunately, a socioeconomic impact study
was done for the Channel Island Marine Reserves and that study is a storehouse of literature review,
survey results and analysis that are applicable to the Drakes Estero decision (Leeworthy et al, 2005).
Following is a discussion of more specific comments, starting with direct economic impacts.
Direct economic impacts
Wilen states: "The basic issue appears to be that the data required to conduct an economic impact
analysis has not been gathered. That basic data would include, at minimum, measures of the value of
gross sales and of the costs of labor and other materials for DBOC." NPS has requested this data but
DBOC did not release that information; although the payroll is said to be $1 million (DEIS page 392),
sales and cost records remain confidential. NPS requested this DBOC proprietary data again after
Wilen raised it as a concern, yet DBOC again responded to keep this information confidential, thus
preventing it from being analyzed in the DEIS, a public NEPA document.
Only a portion of the direct economic activity of DBOC should be estimated as a loss in Alternative A,
because DBOC operations consist of production and retail operations. The retail portion of their
operation is likely to be absorbed by other outlets and restaurants in the area and region, as discussed
below.
Regarding Environ, K1, the loss of the 31 jobs is definitely significant for those involved and their
families, friends, and community. Gauging its socioeconomic significance in Marin, regionally and
statewide may be appropriately based on the data summarized in the DEIS. It should be noted that long
term employees have had up to 40 years to prepare for the end of the use permit. When DBOC
acquired the oyster operation, it ramped up activity, and hired additional employees, knowing that in
seven years the SUP expired in 2012. The DBOC business plan should take responsibility for the
transition for the DBOC hired employees when the current or a successor permit expires. Does the
DBOC business plan have a financial reserve for this purpose?
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Production impact
The DEIS gives a wide range of DBOC share of California production. The DEIS states that CDFG
does not include and track all production in California: "Shellfish operations within Humboldt Bay do
not have state water bottom leases; therefore, are not required to report production to CDFG." (DEIS,
p. 223) "CDFG data are not calculated consistently and are not inclusive of all statewide oyster production."
(DEIS, p. 223). "It is true that DFG data has not been calculated consistently and is not inclusive of all statewide
production" (CDFG, DEIS Comments, 2011). CDFG data is not appropriate for informing DBOC share of
California production as outlined in Table 3-7. The DEIS gives the impression of uncertainty in an
estimate when it is more accurate to say that CFDG does not measure total production. The 28 to 34%
percentage shares based on the CDFG total in Table 3-7 are not valid estimates of production shares
and should be ignored in the DEIS.
The DEIS describes how increased production in Humboldt Bay and elsewhere in the US West may
make up DBOC production (p. 395) so the loss of production would be a local event.
Production of oysters in California is not a steady yearly amount. There are fluctuations from year to
year. The California Department of Fish and Game has a series of reports called the "Status of the
Fisheries Report." (http://www.dfg.ca.gov/marine/status/) The series began in 2001 with a large
number of marine resources. Several updates have been done to add species, and the 2008 report is the
first to cover aquaculture. Chapter 21 on Oysters is used as a source here:
21 Culture of Oysters (2008) - Production fluctuates for natural and business reasons
"The level of oyster production within the various bays has fluctuated throughout the years, primarily
because of water quality, each bay’s ability to produce good standing crops of algae on which oysters
feed, the adequacy of selected sites, summer mortality events and the financial viability of the various
oyster operations."
"Reduced production after 1994 directly reflects several industry setbacks, which include financial
restructuring after the 1990s recession, extended bay harvest closures due to sanitary degradation and
oil spills, recurrence of cyclic SMS and most recently a shortage of hatchery produced seed."
"California oyster production is currently centered in six areas: Arcata Bay located in the North
Humboldt Bay complex, Tomales Bay, Drakes Estero, Morro Bay, Santa Barbara offshore waters and
Agua Hedionda Lagoon in Carlsbad. Morro Bay oyster production had declined in recent years;
however a new grower has once again increased production to near former levels."
That last statement could have been written for Drakes Estero, too, but was not. Despite the fact that
the Johnson Oyster Company virtually shut down prior to selling its operation to DBOC in 2005, there
is no mention or highlight of that event in this report as was done for the Morro Bay situation. That
omission may or may not have significance, but it is clear that yearly production in California
fluctuates due to natural and business reasons. (See NAS (2009) FIGURE 6 Drakes Estero Oyster
Planting and Production 1950–2007. JOC production decreased by almost an order of magnitude from
2000 to 2004)
Finally, it is clear that California market demand always exceeds the supply of California production.
CDFG states, "The demand for oyster products far exceeds the state’s production level, and the
majority of shellfish products consumed in the state are imported from the Pacific northwest and the
Atlantic and Gulf states." (CDFG, 2008, 21 Culture of Oysters).
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Market impacts
The DEIS confuses California Market and California Production. For example, DEIS production
estimates from Table 3-7 on page 224 are converted into market estimates on page 393: "Pacific oysters
harvested at DBOC constitute between 16 and 34 percent of the California oyster market and between
13 and 28 percent of the overall shellfish market". Later: "Alternative A could result in long-term
major adverse impacts to California’s shellfish market because the loss of DBOC production would
cause a highly noticeable change in statewide shellfish production." The DEIS seems to use the terms
"production" and "market" interchangeably. Yet, no information is provided in the DEIS showing that
Alternative A will have any effect on statewide shellfish markets. [In addition, as noted above, the high
numbers, 28 and 34%, are also invalid estimates of production share since CDFG does not include total
statewide production in its CDFG totals]
The California shellfish market is not supplied solely by oysters produced in California. Restaurants in
the San Francisco Bay Area that offer fresh oysters, generally offer a range of oyster choices that
includes local, US west coast, and Canadian oysters. The California market for fresh oysters has a
broad geography of origin (based on a scan of local seafood restaurant menus, e.g.
http://www.zunicafe.com/pdfs/zuni_oyster_menu.pdf), in part diversity may be related to marketing for
a specialty, luxury food category. There is no current indication in this market that imports are affected
at all by DBOC production levels as these outlets offer out of state products as one of many choices.
The California fresh shellfish market demands choices.
Dr. Wilen seems to make a similar confusion of California production and market when he states
without references: "DBOC is large enough to impact the overall market and prices, and this impact
should be included in an economic impact analysis." Johnson Oyster Company dramatically reduced
production in 2000-2004 before selling its operation to DBOC, and there is no published report of an
impact on overall market and prices (No mention in CDFG "Status of the Fisheries" (2008) and no
mention found in a search of Google News and Scholar).
Likewise, Environ in K2, "there will be excess demand that can be expected to raise prices." Environ
provides no citations supporting the conclusion.
Oyster prices independent of production levels over broad range of production
Lipton,et. al, 2006, looked at total US production of oysters during a period of declining production:
"the U.S. supply of oysters (including both C. virginica and C. gigas) has fallen by about 50% from
around 80 million pounds of meats in the early 1950’s to less than 40 million pounds in 2003."
"Nominal prices show a steady increase over the 1950-2003 period. However, when adjusting for
inflation, we see a remarkably stable real price of around $3.00 per pound of meats, except for a brief
period of unusually high prices from 1987-1992." "The increase in aggregate oyster prices from 19871992 corresponds with the period of increased production and market share expansion for New
England oysters discussed above. New England oysters are mainly targeted for the higher value half
shell market. In 1986, New England oyster prices rose 40% over the previous year’s level. By 1993,
production in New England hit an all time high for the study period of 8.4 million pounds of meats and
a 22% share of the market by volume. But by 1993, New England oyster prices had dropped back down
to 42% of the 1986 high. As a result, corresponding production fell back down from a peak of over 8
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million pounds of meats to less than half a million. As a parallel to ecological sustainability, it appears
that these higher oyster prices were not sustainable in the marketplace."
To some extent, fresh oysters are a treat, a luxury food. If one compares the cost per gram of protein to
other more typical family foods, fresh oysters are more costly. And, DBOC oysters provide an
insignificant amount of protein to the Bay Area. They are not a regional staple. (Estimates in
Attachment A) As a luxury food, one might assume that it is "a good for which demand increases more
than proportionally as income rises"(Wikipedia). The prices for fresh oysters may be more determined
by demand for various special foods, rather than the local supply of oysters.
Regarding Environ K3, "Natural Food Status Overlooked", "DBOC production ... is not recognized for
its unique attributes". While DBOC probably has loyal customers, Environ provides no proof that
DBOC shellfish have unique natural food or health features compared to Tomales Bay shellfish or other
West coast produced shellfish. And, Environ does not demonstrate that Alternative A creates a deficit
in local healthy, natural foods generally. Attachment A lists many available organic foods that are
affordable, many of which also appeal to the ethnic groups mentioned.
Indirect Contributions
The Seashore is a major economic driver for the local West Marin economy. In 2009, visitors spent almost $86
million during visits to the Seashore and non-local visitor spending supported local 966 jobs and accounted for
$39.3 million in labor income. Park Service employees also contribute a significant amount to the local
economy. In 2009, the Seashore supported 129 National Park Service jobs and the Park’s payroll contributed an
additional $13 million to the local community (NPS 2011d).
Spending and Economic Impacts of National Park Visitors on Local Economies
CY 2009
Point Reyes National Seashore (NPS 2011d)
2009 Recreation Visits
2009 Overnight Stays
2009 All Visitor Spending
2009 Non-Local Visitor Spending
Impacts of Non-Local Visitor spending on Jobs
2170646
41230
$85,751,000
$78,206,000.00
966
Impacts of Non-Local Visitor spending on labor income
$39,334,000.00
Impacts of Non-Local Visitor spending on value added
$66,016,000.00
Wilen, and Environ in K1, request a similar tabulation for exclusive visitors to DBOC, and object to the DEIS
characterizing the value and impact as "small". Wilen states "DBOC reports a significant number of tourist
visits, on the order of 50,000 per year. If we take an extreme assumption that these visits are only associated with
DBOC and not tied to park visits, then clearly there are additional impacts of the DBOC on the region." Carving
out 2.5% as attributable to DBOC seems to be "small", and Wilen and Environ do not demonstrate that these
visitors will not make comparable shopping/picnic trips to local or regional visitor serving facilities for oysters
or alteratives.
Wilen and Environ do not prove but only assume this indirect economic spending activity related to DBOC is
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lost under Alternative A. The DBOC business is not likely to be lost to the local and San Francisco Bay area
economy because there are many substitutions possible. Local customers for oysters can simply go to another
outlet to buy oysters or picnic, for example at Tomales Bay. A more distant trip to the National Seashore
(DBOC) to eat oysters is a consumer discretionary expenditure and the people who can afford to do that will
probably do something comparable; they are not necessarily going to stay home and do nothing. Trips might
even be to Point Reyes National Seashore for a different destination, wildlife viewing or a nature trip. Local and
regional consumer discretionary spending is unlikely to decrease because of the closure of DBOC. Oysters are
available locally at Tomales Bay and restaurants, and if current DBOC trips relate to outdoor experiences, there
are many options for that within West Marin and regionally.
Both Wilen and Environ assume that DBOC-only customers make expensive trips to get to DBOC, generating
indirect economic benefits. Recording an economic impact value of $100 per day (Wilen) to oyster-only trips,
undermines the proposition in Environ K2 that these customers benefit from lower prices of oysters. Oyster
price savings seem trivial compared to $100 per day spent on everything else.
Caution is needed in that the estimate of 50,000 oyster-only trips has not been described in terms of
methodology, data quality, and verification.
Summary of impacts due to ending DBOC production
The loss of DBOC shellfish production may not be replaced locally in Tomales Bay, but may be replaced on the
US West Coast (DEIS, p. 395). If any production economic activity is charged to Alternative A locally, then a
ten year discounted value is attributable to Alternatives B, C, D. The retail portion of DBOC as well as the local
spending of DBOC-only visitors is likely to be absorbed by other businesses within the Bay Area region and
much of it may well be spent locally at other oyster outlets or in alternate purchases and activities.
n the California fresh shellfish market, the lost DBOC production level is likely to be replaced within the US
Pacific region. Total production within California fluctuates for variety of reasons. The loss of DBOC
production will have negligible effects on the California market as demand well exceeds California production
and the market has already absorbed a near total loss of Drakes Estero production during 2000 -2004 with no
reported ill effects. Research indicates that US oyster prices remained stable during a lengthy and large decline
in production, probably because of the nature of the specialty food market and alternate food choices.
Impacts due to Wilderness Implementation (Alternative A)
Regarding, recreation estimates, wilderness recreation and visitation are likely to increase with the Wilderness
designation of the West Coast’s only Federal marine wilderness. Initially the growth is likely to be from the San
Francisco Bay Area by interested people who will want to monitor and see the progress of natural processes,
especially to see how the harbor seals respond. This type of visitation is occurring now to view the
transformation of Giacomini wetlands from pasture to intertidal wetlands. Over time, the unique nature of being
the only Federal marine wilderness on the West Coast will move people to add this site to their trip list. There is
no data or published research that will provide the magnitude of effect, but there are studies that relate quality
improvements to incremental demand. (See Leeworthy et al, 2005, especially Appendix H on Estimated Quality
Elasticities from Marine Recreation Literature).
Non Market and Passive Use valuation
Neither the DEIS nor Wilen discuss non-market valuation. There is certainly ample precedent for considering
these factors which were also mentioned in NAS (2009). Two EIS reports illustrate these factors that affect
National Parks. One is the EIS for dam removals in Olympic National Park and the other is the socioeconomic
analysis for Marine Reserves in the Channel Island National Marine Sanctuary (CINMS). That second study
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provides a good background on relevant dimensions, and because Drakes Estero is designated a marine
wilderness, the latter study is especially helpful. Following is an introduction to the topic from Leeworthy et al,
(2005):
Economists have long recognized a special class of non-market economic values for natural resources
and the environment referred to generally as nonuse or passive use economic value. See Kopp and Smith
(1993) for a detailed discussion. These values are widely accepted as legitimate values to include in
benefit-cost analyses of environmental regulations and in damage assessment cases. The term passive
use, instead of nonuse, has become more popular because it is recognized that for people to have value
for something they must have some knowledge about what they are valuing.
People learn about natural resources or the environment they are asked to value through books,
newspapers, magazines, newsletters, radio, television and other media sources. The people don’t actually
visit the sites and directly use the resources protected themselves, they consume them passively through
the many indirect sources. The values have been referred to in the literature as option value, bequest
value and existence value to clarify people’s underlying motives for their willingness to pay.
For nonconsumptive users and passive users, the conditions of the ecosystem are important for
determining the benefits of marine reserves. Marine reserves are known to change the status of the
habitats protected and often result in changes in community structure and increased biodiversity. Also,
one of the main benefits is the possibility of protecting a different functioning ecosystem (i.e., a more
natural system with minimum influence by man). These may be conditions for which these user groups
would have a willingness to pay.
... "to date there are no known studies that have estimated nonuse or passive use economic values
specifically for the marine reserves in the CINMS or for marine reserves anywhere else. However,
Spurgeon (1992) has offered two sets of identifiable factors, which will dictate the magnitude of nonuse
or passive use economic values. First, nonuse economic values will be positively related to the quality,
condition, and uniqueness of the ecosystem on a national or global scale. Second, the size of population,
standard of education, and environmental perception of people in the country owning or having
jurisdiction over the ecosystem will be positively related to nonuse or passive use economic values.
Thus, nonuse or passive use economic values are determined by both supply and demand conditions.
The existence of many similar sites would reduce the value. Although Spurgeon limits his scope to the
people in the country owning or having jurisdiction over the ecosystem, people from all over the world
may have nonuse or passive use economic values for ecosystem protection in other countries.
Uniqueness is important to valuation
Drakes Estero will be unique as a Federal Marine Wilderness on the US West Coast. After mariculture ends,
Drakes Estero will also be unique within the network of 100 Marine Protected Areas established along the
California Coast. The Science Advisory Team for the California MLPA program places high value on protecting
estuarine environments, places high value on coastal reserves connected to offshore marine reserves which will
be true here and values a network with appropriate spacing between reserves. The Regional Stakeholder
Planning Groups and Blue Ribbon Task force for this region all agreed that Drakes Estero should be elevated to a
no-take State Marine Reserve after the end of mariculture in the estero. Barbier, et al (2011) state "Estuarine
and coastal ecosystems (ECEs) are some of the most heavily used and threatened natural systems globally."
Drakes Estero provides a unique opportunity to allow a natural coastal system to function with a minimum of
human engineered habitat alteration and competition.
Although DBOC also makes a claim to uniqueness, the production and research proposed by DBOC can be done
elsewhere along the US Pacific Coast.
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Estimation of Nonuse Economic Values.
Leeworthy et al, (2005) provide citations, extensive analysis, US and California surveys of marine reserve
support, and and various surveys of willingness to pay for a preserve or protection. Leeworthy et al, (2005)
conclusions are reproduced here:
Given what we know about nonuse economic values, we can develop a range of “conservative” (i.e.,
lower bound) estimates of nonuse or passive use economic values for the marine reserves in the CINMS.
To do this requires the following assumptions and facts:
Assumptions:
1. One (1 to 2) percent of U.S. households would have some positive nonuse or passive economic use
values for a network of marine reserves in the CINMS.
2. The one (1 to 2) percent of U.S. households would be, on average, willing to pay either
$3/household/year, $5/household/year, or $10/household/year for marine reserves in the CINMS.
Fact:
1. As of July 1, 1999, there were 103.9 million households in the U.S.
Using the above assumptions and the number of U.S. households in 1999, we can estimate a probable
lower bound set of estimates for the nonuse or passive use economic values for the network of marine
reserves in the CINMS.
% US Households
$3/household/year
$5/household/year
$10/household/year
Annual Amount (1%)
$3.12 million
$5.19 million
$10.39 million
Annual Amount (2%)
$6.23 million
$10.39 million
$20.78 million
To apply this type of model to Drakes Estero, one could assume that at least initially, the percent awareness will
be lower. One might expect the value to compound over the years as awareness grows. However, a higher
dollar value is appropriate due to the uniqueness factor and the high value in preserving coastal habitat. An
alternate approach would be to assume a reasonable share of the 2.1-2.5 million visitor families will be interested
in supporting the wilderness, and use that to estimate household participation and $ value. Looking at the survey
answers on p 99-102 of Leeworthy et al, (2005) one sees typically a 4 or 5 to 1 ratio favoring protection over
consumptive use for a small portion of our ocean resources, similar to the ratio of DEIS commenters favoring
Alternative A versus B, C, or D. An example from page 101 of Leeworthy et al, (2005):
Overwhelming public support for the Clinton Executive Order on marine reserves (from Feb.,
2001 US Survey)
“Last May, former President Clinton signed an executive order calling on states, local governments
and non-governmental organizations to create a system of protected areas in the oceans off the U.S.
coasts. Do you favor or oppose this executive order to establish a system of marine protected areas in
U.S. waters?”
(Favor-83%, Oppose-16%, Don’t Know-2%)
One set of assumptions of passive use value of the Drakes Estero Marine Wilderness is:
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.1% of US households of 114.2 million households as of 2010
$10/household/year resulting in $1.1 million annually
Another approach would be to assume a net 100,000 households among the 2.4 million visitors favoring the
marine wilderness willing to pay $20 per year. That would lead to an estimate of $2 million per year. Given the
responses to surveys in p 99-102 of Leeworthy et al, (2005), the latter estimate seems conservative.
Economic value of the property
Another way to value the marine wilderness is to consider the large capital investment in acquisition and
protection of Drakes Estero. The leaders who supported the creation of Point Reyes National Seashore showed
great foresight in establishing the park to save and preserve a valuable part of the coast to be protected forever.
It would be virtually impossible to purchase this property today, and developments since 1962 would have
ruined the Drakes Estero environment without federal protections.
$530 million dollars is an estimate of the present cost to purchase and restore a landscape like Drakes Estero and
its watershed in today's dollars. Such a high cost reflects the value of California coastline property and reflects
the human desire to live and develop near coastal bays. “Estuaries are considered the most human-altered
ecosystems on earth, because human population growth, industries, and harbors are often focused on these
productive, sheltered land-sea interfaces.” Kerstin Wasson, UC Santa Cruz. Barbier, et al (2011) state
"Estuarine and coastal ecosystems (ECEs) are some of the most heavily used and threatened natural systems
globally (Lotze et al. 2006, Worm et al. 2006, Halpern et al. 2008)."
The value of the Estero should include not just the acreage, but also the open space nearby, the protected streams
and watershed, potential and existing habitat for a wealth of native, threatened, endangered, and special status
species. A replacement site would have comparable features to Drakes Estero such as:
•
•
•
An estero with limited amounts human structures on adjacent land. Drakes Estero is in a 19,840 acre
watershed within a 172 square mile National Seashore, protected by the National Park Service.
Ocean inlet open year round, near a major headland in the California current, connected to a recently
created nine square mile State Marine Reserve, and additional offshore State Marine Conservation Area
A salmonid stream with federally protected Steelhead and a potential for Coho. At Drakes Estero, East
Schooner Creek is a such a protected stream, and its road crossings were recently improved by the
National Park Service.
It would be a formidable task to acquire, gain approvals, and restore a replacement site because estuaries have
attracted human developments for water front property, docks, mariculture, motor boats, fishing and hunting, and
near-by communities among other uses.
Our belief is that the full present value of the Estero and its protected watershed should be charged to the DBOC
project because the value of the public investment culminates in the ability to implement a marine wilderness in
Drakes Estero. There are two ways to apply this economic valuation in the EIS. One is to attribute a cap rate of
6% per year to DBOC for use of the Estero and its protected watershed. Alternatively, there is a strong argument
for charging the project the full cost since some risky invasive species impacts could happen or seeds be set
during the ten year permit period. Furthermore, if DBOC is successful in gaining a new permit now, there is no
reason to expect them to be unsuccessful in gaining ongoing extensions.
Value of ecosystem services
Environ requests valuing ecosystem services in the socioeconomic section of the DEIS (Environ K4). There are
multiple problems in applying the source they cite, Burke (2009). In the first place, there is no demonstrated and
measured need for supplementary services of human engineered aquaculture to sequester nitrogen (N) and
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phosphorous (P) in Drakes Estero. Oysters are not raised in the upper sections of bays where the cattle problem
exists. Tidal mixing and the probably large processing capacity of native organisms in the Estero may be
satisfactory to the needs of Drakes Estero. Burke (2009) calculate N and P removal by shellfish as an alternative
to increasing nitrogen removal capacity for a waste water plant handling 4 million gallons per day in Oakland
Bay, Washington. Drakes Estero does not have that type of need. Any excess "service" by cultivated oysters in
Drakes Estero actually detracts from the natural ecosystem function and should be scored as a detriment for
Alternatives B, C and D.
Curiously, Environ also suggests on Page 74 that the shellfish in Drakes Estero are in the best possible position
to control "other terrestrial input sources (e.g., the 2.4 million visitors to the national park every year)." Surely,
they did not mean all the waste water of all the 2.4 million visitors.
Native clams and other native organisms in Drakes Estero may provide a sufficient contribution to material
processes in Drakes Estero. In parts of Drakes Estero near where oysters are cultivated in bags on the tidal flats,
native clams can be found in high densities - up to 250 per square meter (Press 2005). "The contribution of
cultured bivalves to clearance is further obscured when they represent an unknown fraction of all suspensionfeeders." (Dumbauld et al. 2009) In short, Environ fails to prove a benefit to Drakes Estero from cultivated
shellfish.
NAS (2009) stated: as noted in Anima (1991) that “it seems unlikely that surface nutrient inputs to Drakes Estero
are of concern.” NAS (2009) concluded that "The relatively small, low-flow watershed and high-energy
hydrography of Drakes Estero, dominated by strong tidal flux (Anima, 1991; John Largier, unpublished data),
appears to be sufficient to produce low risk of eutrophication in most of Drakes Estero." (NAS 2009, p 27).
[Note that areas where there may be risks in the upper bays are closed to shellfish cultivation] Similarly,
Dumbauld et al. (2009) state "many aquaculture areas on the West Coast of North America remain relatively
pristine, that is, they have experienced low levels of cultural eutrophication." "We suggest that water clarity
improvement will be more important in areas experiencing cultural eutrophication." [Places such as Oakland
Bay discussed in Burke (2009)]
Barbier, et al (2011) describe other important ecosystem service such as "Seagrasses also generate value as
habitat for ecologically and economically important species such as scallops, shrimp, crabs, and juvenile fish.
Seagrasses protect these species from predators and provide food in the form of leaves, detritus, and epiphytes."
Similar potential values for Dungeness Crab, halibut, salmonids, and the marine food web were recognized by
Regional Stakeholders for California MPA planning in the region who recommended no-take reserve status when
mariculture ends.
Alternative A provides a unique opportunity to better protect natural functioning and natural ecosystem services
in Drakes Estero, a representative coastal bay. There is no illusion that Drakes Estero or any other coastal body
of water can be restored to pristine conditions, but what is possible in this case is to remove human engineered
habitat, and to allow natural processes to operate without mariculture effects. Alternatives B, C and D offer
mixed use mariculture which is well represented in many other coastal bays.
Because of its unique ability to protect natural systems, Alternative A should score higher in ecosystem service
benefits than the mariculture alternatives, and Alternative A does not carry ecosystem risks of invasive species
and operational disturbance that occur with mariculture alternatives. Putting a precise economic value on the net
ecosystem benefits may not be possible for this EIS. Barbier, et al (2011) provide Table 2 to list ecosystem
services for seagrasses and in the column for Ecosystem service value examples state "estimate unavailable" in
all categories except one that does not seem applicable to Drake Estero.
California undertook a Marine Protected Area process confident there are ecosystem benefits to protection
without a precise quantification of those benefits. That required removing some areas from consumptive use in
10
order to help sustain both consumptive and non consumptive uses over the long haul. From the Act:
The Legislature finds and declares that there is a need to reexamine and redesign California's MPA
system to increase its coherence and its effectiveness at protecting the state's marine life, habitat, and
ecosystems.
From the Goals:
To protect the natural diversity and abundance of marine life, and the structure, function, and integrity of
marine ecosystems.
To help sustain, conserve, and protect marine life populations, including those of economic value, and
rebuild those that are depleted.
To protect marine natural heritage, including protection of representative and unique marine life habitats
in California waters for their intrinsic value.
Lubchenco et al (2003) stated "Marine reserves may provide multiple benefits including: protection of habitat;
conservation of biodiversity; protection or enhancement of ecosystem services; recovery of depleted stocks of
exploited species; export of individuals to fished areas; insurance against environmental or management
uncertainty; and sites for scientific investigation, baseline information, education, recreation, and inspiration
(Allison et al. 1998, NRC 2000a).
Recently while commenting on a new project to the costs and benefits of marine protection, Jane Lubchenco
stated "One of the things that became strikingly obvious during Deepwater Horizon was just how dependent the
economies of the Gulf were on the health of the Gulf itself, which was at risk," Lubchenco said. "I think that is
one of the lessons. We can talk about numbers until we are blue in the face, but here is a striking example of how
interconnected the coasts are and how the economy is connected to a healthy ocean and coastal area."
Scientific Value
Leeworthy et al, (2005) state that marine reserves provide science benefits: "We cannot quantify these benefits,
but they are extremely important."
• Provides long-term monitoring sites
• Provides focus for study
• Provides continuity of knowledge in undisturbed site
• Provides opportunity to restore or maintain natural behaviors
• Reduces risks to long-term experiments
• Provides controlled natural areas for assessing anthropogenic impacts, including fishing and other
impacts
Alternative A offers unique scientific benefits as there is no other potential site in the region and possibly along
the US Pacific Coast. When the previous NAS study panel sought a site to demonstrate a healthy Olympia
oyster bed, the closest reference site was on the west coast of Vancouver Island. In Alternative D, DBOC
proposes to conduct research which would benefit from being in Drakes Estero, but since the purpose of this
research is to benefit the industry, the research can be done at many other West Coast locations.
11
Conclusions
None of these reports - the DEIS, Dr. Wilen's review, NAS (2009), or the Environ report - considers all relevant
socioeconomic factors and none of them proves overall moderate or major adverse socioeconomic impact
resulting from Alternative A. Alternative A may well lead on some important socioeconomic dimensions and
lag on other socioeconomic dimensions compared to Alternatives B, C and D.
"The demand for oyster products far exceeds the state’s production level" (CDFG, 2008). No proof has been
offered that the loss of DBOC production will effect California market prices; this market absorbed a similar loss
with no reported ill effects in 2000-2004 when JOC cut back Drakes Bay production. Lipton et al, 2006,
document how US prices were unaffected by long term changes in US oyster production. The authors concluded
that higher oyster prices were not sustainable in the marketplace.
Retail sales of shellfish can occur elsewhere locally and regionally.
In evaluating non-market valuations, the uniqueness of the opportunity favors weighting the benefits of
Alternative A highest for the only designated Federal Marine Wilderness on the US Pacific Coast south of
Canada. Whereas Alternatives B, C, and D offer shellfish production and research that can be done elsewhere on
the US Pacific Coast. Furthermore, the population surveys described in Leeworthy et al, 2005 seem to
consistently show a 4 or 5 to 1 ratio favoring protection over consumptive use for a small portion of our ocean
resources.
It is extremely difficult to imagine another comparable coastal bay in California for protection as a marine
reserve.
References (In addition to DEIS References in DEIS Chapter 5, Atkins Review, and Environ Comment letter)
Barbier, Edward B., Sally D. Hacker, Chris Kennedy, Evamaria W. Koch, Adrian C. Stier, and Brian R. Silliman.
2011. The value of estuarine and coastal ecosystem services. Ecological Monographs 81:169–193.
California Department of Fish and Game (CDFG). 2001-2008. "Status of the Fisheries Report."
(http://www.dfg.ca.gov/marine/status/)
21 Culture of Oysters (2008)
http://nrm.dfg.ca.gov/FileHandler.ashx?DocumentID=34440&inline=true
California Department of Fish and Game (CDFG). 2011. Comments on Draft Environmental Impact
Statement for Drakes Bay Oyster Company, December 20, 2011, Charlton Bonham, Director.
Drakes Bay Oyster Company (DBOC). 2012. Letter from Drakes Bay Oyster Company to Superintendent, Point
Reyes National Seashore on June 5, 2012. "DBOC requests that all financial information remain confidential.",
page 1.
http://www.nps.gov/pore/parkmgmt/upload/planning_dboc_sup_background_letter_dboc_to_nps_120605.pdf
Hanemann, Michael. 2010. Non-market Valuation. PDF created 7/29/2010 of a presentation
http://emf.stanford.edu/files/docs/259/Hanemann.pdf
12
Leeworthy, Vernon R., P. C. Wiley, and E. A. Stone. 2005. Socioeconomic Impact Analysis of Marine
Reserves for the Channel Islands National Marine Sanctuary. U.S. Department of Commerce,
National Oceanic and Atmospheric Administration, National Ocean Service, Special Projects.
Silver Spring, Maryland. May 2005.
http://coastalsocioeconomics.noaa.gov/core/reserves/analysis/2005_analysis.pdf
Lipton, D.W., J. Kirkley, and T. Murray. 2006. A Background Economic Analysis for the
Programmatic Environmental Impact Statement Regarding the Restoration of the
Chesapeake Bay Oyster Fishery Using the Non-Native Oyster, Crassostrea ariakensis. Final Report to the
Maryland Department of Natural Resources, January 2006. 54pp.
http://www.dnr.maryland.gov/fisheries/oysters/mtgs/111907/AriakensisFinalReport.pdf
Lubchenco, J. et al. (2003) Plugging a hole in the oceans: the emerging science of marine reserves. Ecol. Appl.
13 (Suppl.), 3–7
Wasson, Kerstin. Adjunct Associate Professor, University of California, Santa Cruz
http://bio.research.ucsc.edu/people/wasson/People/Kerstin/wasson_current.htm
13
Attachment A. Fresh oyster costs and usage in local diets
How much does it cost to supply protein for a family?
Food source
Milk
Eggs
Chicken breast
Hamburger
Organic Tofu
Organic milk
Organic eggs
Organic chicken
breast
Organic
hamburger
Oysters
price per gallon
price per dozen
price per pound
price per pound
price per 14 oz
package
price per gallon
price per dozen
Prices
$3.00
$2.79
$3.69
$1.99
grams
per unit
244 g/cup
60 g/ egg
454 gm/lb
454 gm/lb
total grams
weight
3904
720
454
454
protein
grams
117.12
72.00
108.96
108.96
Cost
per gm
protein
$0.03
$0.04
$0.03
$0.02
397
3904
720
40.20
117.12
72.00
$0.03
$0.06
$0.06
$1.29
$7.00
$4.50
397 gm/pack
244 g/cup
60 g/ egg
price per pound
$5.00
454 gm/lb
454
108.96
$0.05
price per pound
Price per dozen
medium in shell
$4.00
454 gm/lb
454
108.96
$0.04
$14.00
85 g/oyster
1020
96.90
$0.14
Oysters are not an affordable source of food and protein to feed a family.
If the DBOC supply of food and protein was removed from the SF bay area the effect would be small
DBOC Oysters consumed in SF Bay area
DBOC production
shucked weight lbs
Bay area population
DBOC Pounds per
Assumes none shipped
capita per year
out of Bay area
450000
7200000
0.06
Pounds per capita consumption estimates for SF Bay Area
All Foods lbs. per capita
From
Est. Consumer Dietary
Protein
weight
survey
percent
Total all foods
1423
794
DBOC
production
0.06
0.06
10%
% contribution
0.004%
0.008%
Protein lbs per capita
Est. Consumer
weight
416.00
Dietary
survey
87.00
0.006
0.001%
0.006
0.007%
A range is shown because estimates of consumer weight purchased exceed estimates from dietary
surveys. Both estimates are shown above from Food Consumption in San Francisco and the Bay Area,
Chapter 3 of the San Francisco Foodshed Report, at farmland.org
http://www.farmland.org/programs/states/ca/Feature%20Stories/documents/Chapter_3_foodshed.pdf
14
Attachment B The investment value for the Drakes Estero Federal Marine Wilderness and its
supporting watershed
The value should include not just the acreage of the estero, but the open space nearby, the protected
streams and watershed, restoration costs, and the siting with Federal protection services. A replacement
site would have comparable features to Drakes Estero such as:
•
•
•
An estero with limited amounts human structures on adjacent land. Drakes Estero is in a 19,840 acre
watershed within a 172 square mile National Seashore, protected by the National Park Service.
Ocean inlet open year round, near a major headland in the California current, connected to a recently
created nine square mile State Marine Reserve, and additional offshore State Marine Conservation Area
A salmonid stream with federally protected Steelhead and a potential for Coho. At Drakes Estero, East
Schooner Creek is a such a protected stream, and its road crossings were recently improved by the
National Park Service.
It would be a formidable task to acquire, gain approvals, and restore a replacement site because
estuaries have attracted humans for water front property, docks, mariculture, motor boats, fishing and
hunting, and establishing near-by communities among other uses. “Estuaries are considered the most
human-altered ecosystems on earth, because human population growth, industries, and harbors are
often focused on these productive, sheltered land-sea interfaces.” Kerstin Wasson, UC Santa Cruz. For
example, Tomales Bay illustrates the mixed use common to most estuaries on the Pacific Coast.
Table 1 provides a capital cost estimate and a structure for the analysis. Although cost is probably the
least of the issues in acquiring a replacement site, the price estimate is significant at $534 million, due
to the costs of coastal property along the central California Coast and the costs of restoration,
regulatory approvals, and property management. Table 2 provides some comparable costs for
conservation acquisitions in the region.
15
Table 1: Estimated cost to acquire and restore a replacement for Drakes Estero and its
watershed.
Area Assumptions:
Acres
Area of Drakes Estero
Shoreline span
2.55 Sq Miles
6 miles
Shoreline property: A natural
buffer of 1500 feet along the
shoreline span with removal of
human structure, revegetation
and a small access location
Salmonid stream
Ranch land
Open space reserve
Total water and watershed area
1.6 sq miles
3 miles
An estero and wetlands
Shoreline property
Salmonid stream
Ranching conservation
easements
Open space reserve
Total cost ($ millions)
1024
360
7250
8936
19840
31 sq miles
Acquisition and site
conversion/restoration costs Acres
Cost per acre
2270
1024
360
7250
8936
2270
18000
200000
100000
4000
25000
Total cost ($ million)
Buy rights, remove
human structure,
41 restore
Buy title, remove
human structure,
205 restore vegetation
Buy title, remove
human structure and
bottlenecks, restore
36 vegetation
Conservation
easement with NPS
quality protection
29 services
Buy title, remove
human structure,
restore vegetation
with NPS quality
223 protection services
534
16
Table 2: Examples of acquisition costs and restoration costs
Wetlands
Giacomini wetlands restoration
Acres
Cost $ millions)
Cost/acre
acquisition
563
4.50
7993
restoration
563
6.00
10657
Giacomini wetlands restoration
total
Drakes Estero Coastal Watershed
Restoration Project
replaced existing roadcrossing facilities on East
Schooner Creek, a
freshwater stream used by
steelhead trout
wetland habitat and agricultural land
at the heart of the Watsonville
Sloughs
purchase
18650
2.44
95
3.10
32632
Ranchland conservation
easements
Panfiglio Ranch
purchased the
development rights
810
1.16
1432
Poncia Ranch
prevent any
nonagricultural
development
750
2.00
2667
Tomales Farm and Dairy
purchased the
development rights
243
1.00
4115
Crayne Ranch
purchased the
development rights
291
1.00
3436
imminent purchase
agreement
966
value of prior sale in 1998
966
16.00
16563
purchase
74
0.25
3378
purchase
118
0.40
3390
purchase price
952
3.00
3151
appraised value
952
7.00
7353
Open space acquisition
Rancho San Vicente
unknown
two properties in Santa Clara county
near open space properties
Toto Ranch
difference is donation
Site on Skyline Ridge connecting
two open space areas
purchase
32
0.65
20313
Ocean front bluff near Pillar Point
purchase
17
1.85
108824
Jenner Headlands
purchase
5630
36.00
6394
17