The Role of Oil and Gas
in Alaska's Economy
The oil and gas industry has far-reaching effects on the economy of Alaska. The industry continues to outspend all other non-governmental industries, contributing the majority of funds to the state general fund through taxes and royalties, donating millions to local charitable organizations, and creating thousands of high wage jobs.
This report takes a second look at how the industry affects Alaska’s economy as follow-up to an initial study conducted in 2000. At that time, the Alaska Oil and Gas Association and the Alaska Support Industry Alliance commissioned a study to quantify the important role the oil and gas industry plays in the Alaska economy. Published in January 2001, the report looked at industry activity in calendar year 1999. Prior to that effort the scope of the industry’s economic influence had been widely speculated upon and was commonly understood to be significant but had never been objectively assessed.
Divining information about the reach of the industry is not an easy task. Although both state and federal governments report on the industry, the picture painted is somewhat blurry. Oil production is often included as part of the “mining” sector; oil refining may be folded into “manufacturing” statistics without delineation; and pipeline operations are rolled into the broad category of “transportation, communications, and utilities.”
In the first study for AOGA, the Information Insights and McDowell Group team analyzed regional impacts on the Municipality of Anchorage, Fairbanks North Star Borough, Kenai Peninsula Borough, Matanuska-Susitna Borough, and the City of Valdez, examining direct, indirect and induced economic effects of the industry in these regions and communities.
Eight years later, much has changed. We find that industry spending is up, with increases in both payroll and purchasing; the oil and gas industry remains a driving force in the state economy and a primary economic driver at the regional level. Improvements in methodology and the software used to analyze data give us a new perspective on industry impacts in Alaska. Due to the broadened regional scope of the report and modifications in the analytical software (IMPLAN input/output economic modeling), direct comparison with the 2001 report is not advised.
The 2008 report quantifies the economic role of the oil and gas industry on Alaska and on specific regions within the state in calendar year 2007: the Municipality of Anchorage, FNSB, KPB, Matanuska-Susitna Borough, North Slope Borough, Valdez region and other Alaska.