2011 Kenai Peninsula Borough
The Kenai Peninsula Borough (KPB) has a substantial oil and gas industry presence. Oil and gas production in Cook Inlet creates jobs and income for borough residents, as does operation of Tesoro’s refinery. The KPB also enjoys substantial economic benefit from the payroll dollars spent in the local economy by North Slope workers who reside in the borough.
Key Findings
- A total of 837 Primary Company employees reside in the KPB, accounting for $92 million in annual payroll.
- A larger number (1,911) of Oil and Gas Support Services company employees reside in the KPB, with annual payroll of $147 million.
- Including all direct, indirect, and induced effects, the oil and gas industry accounted for an annual average 4,700 jobs in the KPB and total annual payroll of $320 million in 2010.
- Oil and gas industry-related payroll was equal to approximately 24 percent of all KPB resident earnings. The industry’s impact in terms of jobs was equal to 15 percent of all jobs and 19 percent of all private sector jobs.
- The oil and gas industry paid $6.8 million in property taxes to the KPB in 2010, 12 percent of total property tax revenues for the Borough. The industry also paid $81,000 in property taxes to the City of Kenai (3.4 percent of the City total).
Direct Employment and Payroll
Primary Company employment (by place of work) in the KPB averaged 501 in 2010, with total annual payroll of $56 million. The numbers are higher for Primary Company jobs held by Kenai residents because some Anchorage oil industry jobs are held by KPB residents, and because some KPB residents commute to jobs on the North Slope. Borough residents held a total of 837 Primary Company jobs and received $92 million in payroll in 2010.
Indirect and Total Oil and Gas Industry Related Employment
Primary Company activity generates three categories of indirect and induced employment and payroll. First is the group of companies categorized in government statistics as oil and gas support services.
There were another 400 jobs in KPB and $28 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 (transportation, construction, and professional and business services, among others). 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 KPB, additional jobs and income are created. These subsequent cycles of spending created about 1,550 indirect and induced jobs in Anchorage, and $53 million in payroll. Combining the direct, indirect, and induced effects, the oil and gas industry generated 4,700 jobs and $320 million in payroll.
Oil and Gas Jobs in KPB 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 KPB: employment by place of work and employment by place of residence. This study defines the direct economic impact of the industry as the KPB 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 in 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 1,287 in 2010, less than half the number of KPB residents in those same two categories. The primary reason for the difference is a significant number of North Slope workers commute to their remote work sites from KPB residences.
Payroll differences are in the same range, with $119 million paid to people who work in KPB and a much larger $239 million paid to residents of the borough, irrespective of where their actual oil industry jobs are located.
KPB’s Largest Employers
Two Primary Companies, Tesoro and Chevron, are among KPB’s top employers, based on 3rd quarter 2010 ADOLWD data. ASRC Energy Services and Peak Oilfield Services are also among the largest. Due to ADOLWD confidentiality restrictions, specific employment data is not available for individual companies. However, firms listed in the following table are ranked according to number of employees during the July through August period of 2010.
