AOGA

Kenai Impacts

Kenai Peninsula Borough

Summary of Impacts

Altogether, oil and gas industry related employment is 4,603 jobs for the KPB with wages to residents of $262.3 million – 14.9 percent of total employment in the region and 23.6 percent of total payroll.

• Oil and gas industry direct employment of Kenai Peninsula Borough residents by the primary companies was 939 in 2007 with payroll of $99.1 million.
• The industry reported contracts of at least $500,000 with each of 30 local Kenai Peninsula Borough businesses – this number does not include businesses operating in the borough but with primary headquarters in other Alaska locations. This primary company spending in the KPB created 743 support activity jobs located in the borough with $53.6 million in payroll.
• 1,274 KPB residents worked in oil and gas industry support activity jobs in 2007 with wages of $101.3 million. These are jobs held by KPB residents who work both in and out of the borough.
• The industry generated 3,664 indirect and induced jobs in KPB in 2007.[20] Indirect jobs generated $163.2 million in payroll, including all support activity jobs held by KPB residents.

The KPB had an estimated population of 51,350 in 2006. The peninsula is rich in natural resources and has an economy that is unusually well diversified for Alaska – boasting industry in tourism, fishing, seafood processing, mining, and oil and gas extraction and exploration, and refining. Average annual wages in the borough in 2006 were $35,971. An individual working in the oil and gas extraction industry in the Alaska made an average annual wage of more than $150,000 – more than four times the overall average annual wage in the area.

The largest employers in the KPB are public sector in the form of government and education. Healthcare also plays an important role with two of the top ten employers in the region being hospitals.

Table 29: Ten Largest Employers, Kenai/Soldotna

Source: DOLWD

The sixth largest employer on the Peninsula is Alaska Petroleum Contractors Inc. with 319 employees in 2007. Three other private sector oil and gas companies make the top 15 list – providing significant employment opportunities on the peninsula, they are: Tesoro Alaska, Peak Oilfield Services, Inc. and Chevron.
The Role of the Oil Industry in the Kenai Peninsula Borough

The KPB economy is affected by the oil and gas industry in several ways. Oil and gas production and related support activities in Cook Inlet create local jobs and income, as does the local refinery. In addition, significant numbers of North Slope workers reside in the borough. The oil and gas industry directly generated 1,170 jobs in the KPB in 2007 with an associated $101 million in payroll. Four oil and gas industry firms are counted among the top 15 employers in the KPB.

Table 30 describes direct employment with an oil and gas primary company and support activity by place of work. These are jobs with sites located within the Borough. Please note in the table below that not all payroll numbers are displayed, this is to protect the confidentiality of oil and gas industry companies and their employees.

Table 30: Direct Primary & Support Activity Employment and Payroll by Place of Work, Kenai Peninsula Borough

Source: DOLWD data and Study Team estimates.

The indirect and induced impact of the oil and gas industry in the KPB area is estimated to total just over 3,664 jobs and $163.2 million in annual payroll. The businesses and organizations that provide goods and services to the oil industry and the households of its employees produced a total economic output of approximately $478 million, with value-added of $326 million.

Table 31 shows the number of indirect jobs, gross payroll and value added that the oil and gas industry generated in 2007 in the KPB economy.

Table 31: Oil & Gas Industry Indirect Employment, Payroll, Value Added and Output, Kenai

Source: DOLWD data and Study Team estimates

The pie charts in Figure 7 show the distribution of these jobs and payroll within the economy.

Figure 7 : Distribution of Indirect Jobs and Payroll, Kenai Peninsula Borough

Table 32 illustrates the difference in positions and payroll by place of work versus place of residence. The number of KPB residents that earn income from the oil and gas industry is significantly larger than the number of residents that work in the industry on the peninsula. While oil and gas industry jobs located in the KPB accounted for $101 million in annual payroll, jobs located in the borough and elsewhere in the state (the North Slope) held by residents accounted for nearly twice that number, $200 million in payroll in 2007.

Table 32 : Direct Oil & Gas Primary and Support Activity Employment and Payroll by Place
of Work and Place of Residence, Kenai

Source: DOLWD data and Study Team estimates

Indirect and induced employment and payroll totals 3,664 jobs and more than $163 million in payroll – this number includes peninsula residents employed in an industry support activity working elsewhere in the state. Total oil and gas related employment accounts for 14.9 percent of total regional employment and 23.6 percent of total regional payroll.

Table 33: Total Oil & Gas Industry-related Employment and Payroll by Place of Residence

*Includes wage and salary disbursements and proprietor’s income.

Source: KPB employment and payroll data is from BEA

[20] These jobs were created by companies in support industries providing goods and services to the primary companies and by employees of both primary and support industry companies spending their personal income locally on consumer goods, other property, services and taxes.

[21] Alaska Petroleum Contractors Inc. is a subsidiary of ASRC Energy Services