Seismic shifts from regulations: Spatial trade-offs in marine mammals and the value of information from hydrocarbon seismic surveying

Seismic surveys can increase hydrocarbon deposit information, lowering subsequent expected costs of hydrocarbon exploration. Survey noise, however, can interfere with marine mammals and fishes, reducing fitness. Ice-covered Arctic waters temporally constrain both surveying and marine mammal species; damage mitigation requires temporal and spatial planning. The survey noise externality is stronger than that for drilling (Erbe, 2012); there is additional cost to marine species’ habitat versus drilling alone. We develop a spatially explicit bio-economic and Value-of-Information (VOI) model examining these tradeoffs and illustrate it for oil exploration decisions off the Western Greenlandic coast. We use cost-effectiveness to identify implicit thresholds for sound habitat quality conservation as a function of regulatory choices that have different impacts under different assumptions about the relative spatial values of marine mammal habitat maintenance.