Oil and gas is Alaska’s largest nongovernmental industry.
The industry generates 12 percent of the private sector jobs in Alaska and 21 percent of private sector payroll.
Oil and gas activity creates 41,744 jobs, 9.4 percent of all employment in the state and 11.2 percent of all wages, at $2.4 billion.
• Employment and payroll include direct impacts of 4,497 jobs and $643.8 million in payroll for the primary companies.
• Indirect and induced effects include: $5 billion industry spending in Alaska on goods, services and capital, generating 8,410 support industry jobs and $769.2 million in payroll. [1]
• An additional 28,837 jobs, with $987 million in payroll, are created throughout the rest of the Alaska economy by support industry spending on payroll and purchasing, and by primary company employee spending.
The oil and gas industry has the highest average wage in Alaska.
• The average primary company pays a monthly wage of $12,737 – 3.5 times higher than the statewide average of $3,627.[2]
• Oil and gas revenues represent 88 percent of Alaska’s unrestricted general fund sources. Oil tax revenue has a significant effect on the state’s ability to provide services to Alaskans.
• The industry pays local property taxes totaling $236 million (FY2007) on $15.6 billion in oil and gas production property.
The industry gave more than $28 million in charitable contributions in 2007.
• Beneficiaries of industry charitable spending included community foundations, the University of Alaska – all campuses and statewide – social service agencies, the United Way, and arts and cultural organizations throughout the state.
• By comparison, Alaska-based foundations reported total giving of $21.6 million in 2004, the most recent year for which data is available.[3] Because foundation giving in Alaska continues to increase, this figure provides a relative gauge but does not present current totals.
Direct employment and payroll for The oil and gas industry PLAYS A significant economic ROLE in each of the study areas. Oil and gas is the largest industry in most of the regions included in this study.
• Oil and gas generates more payroll than any other nongovernmental industry in Anchorage, FNSB, KPB, NSB and Valdez. Oil and gas is second only to the service industry in the Matanuska-Susitna Borough.
• Municipality of Anchorage (Anchorage) – the industry directly employed 1,649 area residents in oil and gas extraction, refinery and pipeline sectors, with combined wages of $294.6 million.
• Fairbanks North Star Borough (FNSB) – the industry directly employed 353 borough residents, with an associated payroll of $39.4 million.
• Kenai Peninsula Borough (KPB) – the industry directly employed 939 borough residents with associated wages of $99.1 million.
• Matanuska-Susitna Borough (Mat-Su) – The industry directly employed 830 Mat-Su residents with $98.2 million in wages; none of these jobs are located within the borough.
• North Slope Borough (NSB) – The primary work of the industry occurs in the NSB and significant tax revenues flow to the borough, but employment and spending impacts generally occur elsewhere in the state.
• Valdez-Cordova Census Area – the industry directly employed 284 people with associated wages of $35.5 million.
The tables on the following pages provide additional regional breakouts of the study findings.
Table 1 tells where oil and gas industry jobs are located and how much payroll is generated by those jobs. However, it is inaccurate to assume payroll impacts from these industry jobs are felt primarily in the communities in which the work occurs. Oil industry workers live in all parts of Alaska as well as outside the state.
Table 1: Total Primary Company Employment and Payroll by Location of Work
Employment by Place of Work |
Payroll by Place of Work ($ millions) |
|
Anchorage |
1,618 |
$313.8 |
Fairbanks |
312 |
$34.8 |
Kenai |
427 |
$47.1 |
Mat-Su |
0 |
$0.0 |
North Slope |
1,741 |
$198.7 |
Valdez |
284 |
$35.5 |
Unattributed (Other Alaska) |
115 |
$13.9 |
Total Alaska |
4,497 |
$643.8 |
| Note: The sources for all figures and tables are Study Team estimates based on IMPLAN analysis of the oil and gas industry in Alaska, using data gathered in 2008 by the Study Team, unless otherwise noted. | ||
Table 2 uses W-2 data received directly from the primary companies to show the amount of payroll by residence of the employee. Significant differences can be seen between employment and payroll numbers by place of work and the same numbers by place of residence. The Matanuska-Susitna Borough, with no place-of-work employment and the North Slope Borough with small place-of-residence employment, are the extreme cases.
The Municipality of Anchorage is the exception; although more people live and work in Anchorage than in any other location in Alaska, the total primary company payroll for Anchorage residents comes in lower than the total primary company payroll by place of work due to the number of Anchorage-based employees who reside elsewhere – namely Mat-Su.
Table 2: Total Primary Company Employment and Payroll by Place of Residence
Employment by Place of Residence |
Payroll by Place of Residence ($ millions) |
|
Anchorage |
1,649 |
$294.6 |
Fairbanks |
353 |
$39.4 |
Kenai |
939 |
$99.1 |
Mat-Su |
830 |
$98.2 |
North Slope |
4 |
$0.4 |
Valdez |
284 |
$35.5 |
Unattributed (Other Alaska) |
438 |
$76.6 |
Total Alaska |
4,497 |
$643.8 |
Table 3 shows total impact of the oil and gas industry by region. Industry generated jobs include direct employment with primary companies, employment with a support activity business and the effects of payroll spending of primary company employees in the communities in which they live. The data includes local support activity business spending on purchasing and payroll. The project team used IMPLAN to model how industry-generated dollars rippled through each regional economy.
Table 3: Total Petroleum Industry Economic Impact by Region
Region |
Employment by Place of Residence |
Payroll by Place of Residence ($ millions) |
Total Regional Payroll ($ millions) |
Total Regional Payroll (percent) |
Anchorage |
23,944 |
$1,435.9 |
$8,658.0 |
16.6% |
Fairbanks |
3,250 |
$176.0 |
$2,983.9 |
5.9% |
Kenai |
4,603 |
$262.3 |
$1,110.7 |
23.6% |
Mat-Su |
3,031 |
$231.4 |
$1,920.6 |
12.1% |
North Slope |
984 |
$40.4 |
$270.0 |
15.0% |
Valdez |
684 |
$53.5 |
$155.0 |
34.5% |
Unattributed (Other Alaska) |
5,248 |
$211.0 |
||
Total Alaska |
41,744 |
$2,410.5 |
Economic effects of the industry are significant in each of the study areas, with the largest employment impacts in the Anchorage, Fairbanks, Kenai, and Mat-Su regions.
Municipality of Anchorage
In the Municipality of Anchorage the industry directly employed 1,649 area residents in oil and gas extraction, refinery and pipeline sectors with combined wages of $294.6 million. Support activity positions filled by Anchorage residents totaled 3,543 with $349.3 million in wages in 2007. Indirect and induced employment in Anchorage totals 22,295 jobs with an associated $1.1 billion in payroll (this number includes support activity employment and wages). [4]
The impact of the industry is expanded by the large number of Anchorage residents who work in oil industry jobs outside the Municipality but spend most of their paychecks within its boundaries. An estimated 2,404 Anchorage residents are employed by primary companies or support services at worksites outside the municipality. These residents earn wages of $194 million, money that goes to support households and stimulate the economy in Anchorage.
The industry’s total impact is 23,944 jobs with $1.4 billion in wages, representing 12.0 percent of total employment and 16.6 percent of total regional payroll.
Table 4: Oil and Gas Industry-related Employment and Payroll by Place of Residence, Anchorage
| 2007 | |
| Direct Employment | 1,649 |
| Direct Payroll ($ millions) | $294.6 |
| Indirect and Induced Employment | 22,295 |
| Indirect and Induced Payroll ($ millions) | $1,141.3 |
| Total Oil & Gas Industry-related Employment | 23,944 |
| Total Oil & Gas Industry-related Payroll ($ millions) | $1,435.9 |
| Total Anchorage Employment (2006)[5] | 199,829 |
| Percent Oil & Gas Industry Related | 12.0% |
| Total Anchorage Payroll (2006, $ millions) | $8,658.0 |
| Percent Oil & Gas Industry Related | 16.6% |
Fairbanks North Star Borough
In the Fairbanks North Star Borough the industry directly employs 353 borough residents with an associated payroll of $39.4 million. Support activity positions offer employment to another 709 residents with payroll of $59.5 million. All but roughly 100 of the primary company and support activity jobs held by FNSB residents are located within the borough.
An additional 2,188 jobs are created by the indirect and induced effects of industry spending and spending by employees of the primary companies and support services for total indirect and induced employment of 2,897[6]. Indirect and induced jobs account for $136.6 million in wages. The total industry impact in the borough is 3,250 jobs, paying wages of $176.0 million. This represents 5.5 percent of total employment and 5.9 percent of the total regional payroll.
Table 5: Oil and Gas Industry-related Employment and Payroll by Place of Residence, Fairbanks
| 2007 | |
| Direct Employment | 353 |
| Direct Payroll ($ millions) | $39.4 |
| Indirect and Induced Employment | 2,897 |
| Indirect and Induced Payroll ($ millions) | $136.6 |
| Total Oil & Gas Industry-related Employment | 3,250 |
| Total Oil & Gas Industry-related Payroll ($ millions) | $176.0 |
| Total FNSB Employment (2006) | 59,080 |
| Percent Oil & Gas Industry Related | 5.5% |
| Total FNSB Payroll (2006, $ millions) | $2,983.9 |
| Percent Oil & Gas Industry Related | 5.9% |
Kenai Peninsula Borough
In the Kenai Peninsula Borough the industry directly employs 939 borough residents with associated wages of $99.1 million. Support activity jobs provide employment to another 1,274 residents with payroll of $101.3 million. Within the KPB nearly one of every two residents working in the oil industry must leave the borough to do so.
Indirect and induced employment in the borough accounts for a total of 3,664 jobs with and $163.2 million in wages created by industry spending and spending by employees of the primary companies and support services.[7] The total industry impact in the KPB is 4,603 jobs paying wages of $262.3 million, representing 14.9 percent of total employment and 23.6 percent of total regional payroll.
Table 6 : Oil and Gas Industry-related Employment and Payroll by Place of Residence, KPB
| 2007 | |
| Direct Employment | 939 |
| Direct Payroll ($ millions) | $99.1 |
| Indirect and Induced Employment | 3,664 |
| Indirect and Induced Payroll ($ millions) | $163.2 |
| Total Oil & Gas Industry-related Employment | 4,603 |
| Total Oil & Gas Industry-related Payroll ($ millions) | $262.3 |
| Total KPB Employment (2006) | 30,855 |
| Percent Oil & Gas Industry Related | 14.9% |
| Total KPB Payroll (2006, $ millions) | $1,110.7 |
| Percent Oil & Gas Industry Related | 23.6% |
Matanuska-Susitna Borough
The Matanuska-Susitna Borough is impacted by the oil and gas industry in a less direct manner. With more than a third of its workforce employed in Anchorage the Mat-Su is impacted by industry spending in Anchorage and industry employment around the state. The industry directly employs 830 Mat-Su residents with $98.2 million in wages; none of these jobs are located within the borough.
Indirect and induced employment for the borough is estimated at 2,201 positions with wages of $133.2 million [8]. Total industry impact in the Mat-Su Borough is 3,031 jobs and $231.4 million in wages to local residents, representing 10 percent of total employment and 12.1 percent of total regional payroll.
Table 7: Oil and Gas Industry-related Employment and Payroll by Place of Residence, Mat-Su Borough
| 2007 | |
| Direct Employment | 830 |
| Direct Payroll ($ millions) | $98.2 |
| Indirect and Induced Employment | 2,201 |
| Indirect and Induced Payroll ($ millions) | $133.2 |
| Total Oil & Gas Industry-related Employment | 3,031 |
| Total Oil & Gas Industry-related Payroll ($ millions) | $231.4 |
| Total Mat-Su Employment (2006) | 30,441 |
| Percent Oil & Gas Industry Related | 10% |
| Total Mat-Su Payroll (2006, $ millions) | $1,920.6 |
| Percent Oil & Gas Industry Related | 12.1% |
North Slope Borough
In the North Slope Borough industry impacts are felt differently than the rest of the state. The majority of industry extraction and exploration activity occurs on the North Slope, but the vast majority of industry workers on the North Slope live elsewhere. Wages paid to non-local workers are not spent in the North Slope Borough so the effect of employment spending is lessened.
On the flip side, while most North Slope workers live elsewhere, the revenue from industry tax enjoyed by the borough has a significant impact on local jobs and wages. An estimated 980 jobs are created in the borough as a result of oil and gas industry local tax revenue – this number alone represents nearly nine percent of total borough employment. There are more than 7,500 oil and gas jobs located within the North Slope Borough. Primary companies employ 1,741 people on the North Slope but only four are borough residents - earning $0.4 million in wages in 2007.
Table 8: Oil and Gas Industry-related Employment and Payroll by Place of Residence, North Slope Borough
| 2007 | |
| Direct Employment | 4 |
| Direct Payroll ($ millions) | $0.4 |
| Indirect and Induced Employment [9] | 980 |
| Indirect and Induced Payroll ($ millions) | $40.0 |
| Total Oil & Gas Industry-related Employment | 984 |
| Total Oil & Gas Industry-related Payroll ($ millions) | $40.4 |
| Total NSB Employment (2006) | 11,004 |
| Percent Oil & Gas Industry Related | 8.9% |
| Total NSB Payroll (2006, $ millions) | $270.0 |
| Percent Oil & Gas Industry Related | 15.0% |
Valdez Region
In the Valdez-Cordova census area the industry directly employs 284 people and pays wages of $35.5 million.[10] Support activities employ another 30 people with wages of $2.1 million. An additional 400 indirect and induced jobs are created by industry spending and spending by employees of the primary companies and support services.[11] Total industry impact in the Valdez-Cordova census area is 684 jobs paying wages of $53.5 million. This represents 24 percent of total employment and 35 percent of total regional payroll.
Table 9: Oil and Gas Industry-related Employment and Payroll by Place of Residence, Valdez Region
| 2007 | |
| Direct Employment | 284 |
| Direct Payroll ($ millions) | $35.5 |
| Indirect and Induced Employment | 400 |
| Indirect and Induced Payroll ($ millions) | $18.0 |
| Total Oil & Gas Industry-related Employment | 684 |
| Total Oil & Gas Industry-related Payroll ($ millions) | $53.5 |
| Total Valdez Employment (2006 est.) | 2,800 |
| Percent Oil & Gas Industry Related | 24% |
| Total Valdez Payroll (2006 est.) | $155.0 |
| Percent Oil & Gas Industry Related | 35% |
[1] Total jobs in each region include “direct” jobs (employees of primary companies), “indirect” jobs (created by companies providing goods and services to the primary companies), and “induced” jobs (created when direct and indirect employees spend their personal income locally).
[2] DOLWD Quarterly Census of Employment & Wages 2007
[3] The Foraker Group Report on the Alaska Nonprofit Economy, by Scott Goldsmith, University of Alaska Institute for Social and Economic Research, December 2006
[4] Total jobs in each region include “direct” jobs (employees of primary companies), “indirect” jobs (created by companies providing goods and services to the primary companies), and “induced” jobs (created when direct and indirect employees spend their personal income locally).
[5] 2006 Employment and Payroll data is from DOLWD.
[6] Total jobs in each region include “direct” jobs (employees of primary companies), “indirect” jobs (created by companies providing goods and services to the primary companies), and “induced” jobs (created when direct and indirect employees spend their personal income locally).
[7] Total jobs in each region include “direct” jobs (employees of primary companies), “indirect” jobs (created by companies providing goods and services to the primary companies), and “induced” jobs (created when direct and indirect employees spend their personal income locally).
[8] Total jobs in each region include “direct” jobs (employees of primary companies), “indirect” jobs (created by companies providing goods and services to the primary companies), and “induced” jobs (created when direct and indirect employees spend their personal income locally).
[9] Total jobs in each region include “direct” jobs (employees of primary companies), “indirect” jobs (created by companies providing goods and services to the primary companies), and “induced” jobs (created when direct and indirect employees spend their personal income locally).
[10] The U.S. Census combines Valdez and Cordova into a single region.
[11] Total jobs in each region include “direct” jobs (employees of primary companies), “indirect” jobs (created by companies providing goods and services to the primary companies), and “induced” jobs (created when direct and indirect employees spend their personal income locally).