2011 Fairbanks North Star Borough
The oil and gas industry in the Fairbanks North Star Borough (FNSB) includes refinery operations, TAPS operations, and oil industry support services-related activity. The borough is also home to a number of North Slope workers.
Key Findings
- A total of 313 Primary Company employees reside in the FNSB, accounting for $44 million in annual payroll.
- An estimated total of 747 Oil and Gas Support Services company employees reside in the FNSB, with annual payroll of $43 million.
- Including all direct, indirect, and induced effects, the oil and gas industry accounted for an annual average 3,000 jobs in the FNSB and total annual payroll of $168 million in 2010.
- The oil and gas industry paid $9.2 million in property taxes to the FNSB in 2010, 10 percent of total Borough revenues. The industry also paid $163,000 in property taxes to the City of Fairbanks.
- Oil and gas industry firms are among the largest property tax payers in the FNSB. Alyeska Pipeline Service Company is the single largest contributor of property tax revenues. The Flint Hills refinery is the fourth largest.
Direct Employment and Payroll
Primary Company employment (by place of work) in the FNSB averaged 266 in 2010, with total annual payroll of $29 million. Slightly more Primary Company jobs were held by residents of the borough: 313, for which payroll equaled $44 million. The majority of borough residents who work for Primary Companies at work sites outside of the borough commute to jobs on the North Slope.
Indirect and Total Oil and Gas Industry Related Employment
Primary Company activity generates three categories of indirect and induced employment and payroll. The first is the group of companies categorized in government statistics as oil and gas support services. A total of 747 FNSB residents worked in these companies and received annual payroll of $43 million.
There were another 400 jobs in Fairbanks and $30 million in annual payroll in firms that directly provided goods and services to the Primary Companies but were categorized in sectors other than oil and gas support services (e.g., transportation, construction, and professional and business services).
Finally, as support services companies purchase goods and services in support of their operations, and as local employees of oil and gas industry firms spend their payroll dollars in FNSB, additional jobs and income are created. These subsequent cycles of spending created about 1,540 indirect and induced jobs in FNSB, and $51 million in payroll. Combining the direct, indirect, and induced effects, the oil and gas industry generated 3,000 jobs and $168 million in payroll.
The oil and gas industry’s impact on the FNSB economy was equal to 11 percent of private sector earnings and 8 percent of private sector employment. In terms of all jobs (private and public sector), the oil and gas industry’s impact was equal to 5 percent of employment and 6 percent of resident earnings.
Oil and Gas Jobs in FNSB by Place of Work and Place of Residence
The following graph and table illustrate two different aspects of the oil and gas industry’s employment impact on FNSB: employment by place of work and employment by place of residence. This study defines the direct economic impact of the industry as the FNSB resident employment and payroll in Primary Companies – because those payroll dollars are the ones most likely to circulate through the local economy in spending on housing, goods and services, taxes, etc. There is also economic relevance to the number of industry jobs located in the borough, irrespective of where the job holders live.
Data by place of work and place of residence was available for Primary Companies and for companies designated in government statistics as oil and gas support services. Combined employment for the two categories by place of work averaged 988 in 2010, about 70 fewer than the job count for Fairbanks residents working in the industry (either in Fairbanks or somewhere else in the state). The payroll difference is similar with slightly more payroll going to FNSB residents who work in the industry than for industry jobs that are located within FNSB by place of work.
