Regional Analysis
The regional analyses that follow examine the impacts of the Alaska oil and gas industry upon different areas of the state. The study addressed the following regions:
• Municipality of Anchorage
• Fairbanks North Star Borough
• Kenai Peninsula Borough
• Matanuska-Susitna Borough
• North Slope Borough
• Valdez region (Valdez-Cordova census area)
• Other Alaska
The study found a strong economic relationship between the oil and gas industry and regional support industries. Support industries in the state expand the economic impact of industry employment and earnings. An increase in state spending by primary companies could suggest that support activity businesses in Alaska have matured and are able to meet much of the demand for goods and services required by industry. This is good news for Alaska; as with any major industry, the effects of oil and gas spending ripple through all sectors of the economy – the more primary companies purchase goods and services from local vendors, the larger that ripple effect will be.
Table 18: Summary of Petroleum Industry Economic Impacts by Place of Residence
|
Indirect & Induced Employment |
Total Industry Generated Employment |
Total Industry Generated Payroll |
Anchorage |
22,295 |
23,944 |
$1,435.9 |
Fairbanks |
2,897 |
3,250 |
$176.0 |
Kenai |
3,664 |
4,603 |
$262.3 |
Mat-Su |
2,201 |
3,031 |
$231.4 |
North Slope |
980 |
984 |
$40.4 |
Valdez |
400 |
684 |
$53.5 |
Other Alaska |
4,810 |
5,248 |
$210.5 |
Total Alaska |
37,247 |
41,744 |
$2,410.5 |
The individual regional reports describe the relationship between local economies and the oil and gas industry and its supporting businesses using data obtained directly from primary companies and a sample of support activity businesses. The induced and indirect effects are estimated using IMPLAN.
Figure 4: Oil and Gas Industry Jobs and Payroll by Residence of Employee
Figure 4 illustrates the distribution of oil and gas industry employment and payroll by place of residence between the study regions.
Summary of Impacts
The oil and gas industry created a total of 23,944 jobs in the Anchorage area, with wages to Anchorage residents of more than $1.4 billion – 12 percent of total employment in the Municipality of Anchorage and 16.6 percent of total payroll.
• Oil and gas industry direct employment of Anchorage residents by the primary companies totaled 1,649 in 2007 with payroll of $294.6 million.
• The industry reported contracts of at least $500,000 with 230 Anchorage businesses. These businesses created 1,170 support activity jobs with an associated $136.1 million in payroll within the Municipality.
• 3,543 Anchorage residents worked in oil and gas industry support activity jobs in 2007 with wages of $349.3 million. These are jobs held by Anchorage residents who work both in and outside the Municipality.
• The industry generated 22,295 indirect and induced jobs in the Anchorage region in 2007.[15] Indirect jobs generated $1.1 billion in payroll, including all support activity jobs held by Anchorage residents.
The Municipality of Anchorage is home to an estimated population of just over 283,000, which was more than 40 percent of Alaskans in 2007. The economy of Alaska’s largest city is more diverse than other parts of the state but it continues to rely heavily on several key industries. Industries that contribute significantly to the Anchorage economy include air transportation and freight, health care, oil and gas, and government – local, state and federal.
According to the Anchorage Economic Development Corporation, average annual wages for an individual Anchorage resident in 2007 were $46,305 with a median household income of $63,656. The average annual wage for an Alaska resident working in the oil and gas extraction industry was more than $150,000[16] – about 2.4 times the overall Anchorage average.
Anchorage is home to more than 8,000 businesses, nearly 4,000 of which have five or more employees. These businesses provide approximately 140,000 jobs in the private sector. Many jobs continue to be found in the public sector, with federal, state and local governments employing 22,337 people in 2007. With 47 percent of total state employment in 2007, Anchorage remains the core of Alaska’s economy.
Role of the Oil and Gas Industry in the Municipality of Anchorage
Anchorage acts as the corporate headquarters for all of the major oil and gas exploration, extraction and distribution companies as well as many of the industry support companies operating around the state. The petroleum industry further impacts the Anchorage economy through oilfield workers who live in Anchorage but work elsewhere. The oil and gas industry is responsible, through both direct and indirect employment, for 16.6 percent of total payroll in Anchorage.
Table 19 shows that the ten top private employers in the state are located in Anchorage. Of these employers, four are in the oil and gas industry or support businesses.
Table 19: Top Ten Private Employers, Municipality of Anchorage
Firm |
Employees |
Providence Health System |
3,991 |
Carrs/Safeway |
3,117 |
Fred Meyer |
2,776 |
Wal-Mart/Sam’s Club |
2,608 |
Alaska Petroleum Contractors Inc.[17] |
1,749 |
Alaska Airlines |
1,585 |
CH2MHill[18] |
1,553 |
BP Exploration Alaska |
1,508 |
NANA Management Services |
1,497 |
Alaska Native Tribal Health Consortium |
1,332 |
Source: DOLWD
Table 20 describes direct employment with oil and gas primary companies and support activity by place of work. These are jobs with sites located within the Municipality of Anchorage. Please note in the table below that not all payroll numbers are displayed; this protects the confidentiality of oil and gas industry companies and their employees.
Table 20: Direct Primary and Support Activity Employment and Payroll by Place of Work, Anchorage
Anchorage Direct Impacts |
Oil & Gas Extraction |
Refinery |
Pipeline |
Total Direct Employment |
Support Activities |
Total |
Employment |
1,269 |
17 |
332 |
1,618 |
1,170 |
2,788 |
Payroll ($ millions) |
$269.7 |
* |
* |
$313.8 |
$136.1 |
$449.9 |
Source: DOLWD data and Study Team estimates
In addition to the support activity jobs described above, the oil and gas industry indirectly creates thousands of additional jobs in other sectors of the Anchorage economy. Total indirect and induced employment linked to the oil and gas industry is estimated at 22,295 jobs. This number includes support activity jobs located in Anchorage plus those held by Anchorage residents working primarily on the North Slope. These 22,295 indirect and induced jobs in Anchorage accounted for $1.1 billion in payroll in 2007.
Table 21 shows the number of indirect jobs, gross payroll and value added that the oil and gas industry generates in the Anchorage economy.
Table 21: Oil and Gas Industry Indirect Employment, Payroll, Value Added and Output
Indirect Jobs |
Gross Pay |
Value Added |
Output |
22,295 |
$1,141.3 |
$2,437.0 |
$3,387.9 |
The pie charts in Figure 5 show the distribution of these jobs and payroll within the economy. The oil and gas industry has such a significant indirect impact on the Anchorage economy in part because the city is the primary place of residence for many North Slope workers. While the oil and gas industry and its support activities directly account for 2,788 jobs in Anchorage, an estimated 5,200 workers in these sectors actually reside in Anchorage, and spend their payroll dollars in the city’s service and supply sectors.
Figure 5: Distribution of Indirect Jobs and Payroll, Anchorage
Table 22 illustrates the difference in positions and payroll by place of work versus place of residence. More than 2,370 residents leave the municipality to work but keep their home in Anchorage. Many of these workers travel in rotating shifts to oilfields in remote locations, primarily on the North Slope. The wages these workers earn are spent in the communities in which they live.
Table 22: Direct Oil & Gas Primary and Support Activity Employment and Payroll
by Place of Work and Place of Residence, Anchorage
Municipality of Anchorage |
By Place |
By Place of Residence |
Direct Employment |
1,618 |
1,649 |
Direct Payroll ($ millions) |
$313.8 |
$294.6 |
Support Activity Employment |
1,170 |
3,543 |
Support Activity Payroll ($ millions) |
$136.0 |
$349.3 |
Total Employment |
2,788 |
5,192 |
Total Payroll ($ millions) |
$449.9 |
$643.9 |
Source: DOLWD data and Study Team estimates.
Table 23 describes the total impact of the oil and gas industry on the Anchorage economy. The industry generated 23,944 jobs in the Anchorage economy and for Anchorage residents in 2007, with over $1.4 billion in payroll. With this level of employment and payroll, the oil and gas industry directly or indirectly accounted for approximately 12 percent of employment in Anchorage and 16.6 percent of total payroll in 2007.
Table 23: Total Oil and Gas Industry-related Employment and Payroll by Place of Residence, Anchorage
Municipality of Anchorage |
By Place of Residence |
Direct Employment |
1,649 |
Direct Payroll ($ millions) |
$294.6 |
Indirect and Induced Employment |
22,295 |
Indirect and Induced Payroll ($ millions) |
$1,141.3 |
Total Employment |
23,944 |
Total Payroll ($ millions) |
$1,435.9 |
Total Anchorage Employment (2006) |
199,829 |
Percent Oil & Gas Industry Related |
12.0% |
Total Anchorage Payroll (2006, $ millions)* |
$8,658.0 |
Percent Oil & Gas Industry Related |
16.6% |
*Includes wage and salary disbursements and proprietor’s income.
Source: Anchorage employment and payroll data from BEA
Summary of Impacts
Altogether the oil and gas industry is responsible for the creation of 3,250 jobs for the Fairbanks area with wages to Fairbanks residents of $176 million – 5.5 percent of total employment in the borough and 5.9 percent of total payroll.
• Total oil and gas industry direct employment of FNSB residents by the primary companies was 353 in 2007 with payroll of $39.4 million.
• The industry reported contracts of at least $500,000 with each of 35 local Fairbanks businesses – this number does not include businesses operating in Fairbanks but with primary headquarters in other Alaska locations. This primary company spending in Fairbanks created 653 support activity jobs located in the borough with an associated $54.5 million payroll.
• The total number of Fairbanks residents working in oil and gas industry support activity jobs is 709 in 2007 with wages of $59.5 million. These are jobs held by Fairbanks residents who work both in and outside the borough.
• The industry generated 2,897 indirect and induced jobs in the Fairbanks region in 2007.[19] Indirect jobs generate $136.6 million in payroll, including all support activity jobs held by Fairbanks residents.
The Fairbanks North Star Borough is the second most populated region in the state and the City of Fairbanks is the second largest city. The borough population has grown slowly but steadily to reach an estimated 96,888 in 2007. The average annual wage for an individual working in Fairbanks was $40,375 in 2006.
The largest employers in the Fairbanks area are in the public and healthcare sectors. The largest private employer is Banner Health System operating Fairbanks Memorial Hospital with 1,302 employees in 2007. Fairbanks serves as a hub to interior communities for healthcare services. In the public sector the FNSB School District and the University of Alaska Fairbanks are the largest employers.
Table 24: Ten Largest Employers, FNSB
Firm |
Employees |
State Government (including UAF) |
5,044 |
Federal Government |
3,492 |
Fairbanks North Star School District |
1,539 |
Banner Health System |
1,302 |
Fred Meyer Stores Inc. |
654 |
Wal-Mart Associates Inc. |
507 |
Fairbanks North Star Borough |
497 |
Fairbanks Gold Mining Inc. |
392 |
Chugach Management Services Inc. |
313 |
Tanana Chiefs Conference Inc. |
284 |
Source: DOLWD
Role of the Oil and Gas Industry in the Fairbanks North Star Borough
The oil and gas industry shaped modern Fairbanks during construction of the Trans-Alaska Pipeline System (TAPS) and the industry has played an important role in the area since. Alyeska Pipeline Service Company, while headquartered in Anchorage, has regional offices in Fairbanks and Valdez with 144 Fairbanks residents working in pipeline service at the Fairbanks location in 2007.
Table 25 describes direct employment with oil and gas industry primary companies and support activity by place of work. These are jobs with sites located within FNSB. Fairbanks area employment includes TAPS employees, the Flint Hills refinery in North Pole, and a large number of support activities jobs. Direct and support activity employment averaged 1,062 jobs in 2007, with $98.9 million in total payroll. Please note that the table does not display all employment payroll numbers, this is to protect the confidentiality of the companies and their employees.
Table 25: Direct Oil & Gas Primary and Support Activity Employment and Payroll by Place of Work, Fairbanks North Star Borough
Fairbanks North Star |
Oil & Gas Extraction |
Refinery |
Pipeline |
Total Direct Employment |
Support Activities |
Total |
Employment |
1 |
167 |
144 |
312 |
653 |
965 |
Payroll ($ millions) |
* |
* |
* |
$34.7 |
$54.5 |
$89.2 |
Source: DOLWD data and Study Team estimates.
To draw a comparison, consider that the University of Alaska Fairbanks had an average of 3,417 employees in 2006 – nearly ten times as many as oil and gas industry direct employment - yet UAF total payroll only outpaced oil and gas industry payroll by 3.7 times. What this means is that on average oil and gas industry wages are substantially higher than university wages. The importance of high wage jobs for the economy in Fairbanks is that every dollar spent on household goods and service stimulates the economy, creating additional employment opportunities. Each oil and gas industry job does more to create employment and economic activity than a job in a sector of the economy with lower wages.
The indirect and induced impact of the oil and gas industry in the Fairbanks area is estimated at 2,897 jobs with $136.6 million in annual payroll – these numbers include support activity jobs, including those held by Fairbanks residents working elsewhere. These jobs are created by businesses and organizations that provide goods and services to the oil industry and the households of its employees. Indirect and induced business produced a total economic output of approximately $514 million, with value-added of $371 million.
Table 26 shows the number of indirect jobs, gross payroll and value added that the oil and gas industry generated in the Fairbanks region in 2007.
Table 26: Oil & Gas Industry Indirect Employment, Payroll, Value Added and Output, Fairbanks 2007
Indirect Jobs |
Gross Pay |
Value Added |
Output |
2,841 |
$131.6 |
$371.4 |
$513.7 |
The pie charts in Figure 6 show the distribution of these jobs and payroll within the economy.
Figure 6: Distribution of Indirect Jobs and Payroll, Fairbanks
Table 27 illustrates the difference between employment numbers and payroll by place of work and by place of employee residence. The estimated 97 employees who work outside the borough but live within its boundaries stimulate the local economy through their spending.
Table 27 : Direct Oil & Gas Primary and Support Activity Employment and Payroll
by Place of Work and Place of Residence, Fairbanks
Fairbanks North Star Borough |
By Place |
By Place of Residence |
Direct Employment |
312 |
353 |
Direct Payroll ($ millions) |
$34.8 |
$39.4 |
Support Employment |
653 |
709 |
Support Payroll ($ millions) |
$54.5 |
$59.5 |
Total Employment |
965 |
1,062 |
Total Payroll ($ millions) |
$89.2 |
$98.9 |
Source: DOLWD data and Study Team estimates.
Based on the best available data, the number of oil and gas industry workers employed in Fairbanks is very close to the number of local residents who earn income from the industry. An estimated 1,062 FNSB residents earned income through employment with primary companies or support activity, whether employed locally or elsewhere in Alaska. Their total payroll in 2007 was approximately $99 million.
Table 28 describes the total impact of the oil and gas industry on the FNSB economy. In total, the industry generated an estimated 3,250 jobs in the FNSB economy and for FNSB residents, with $176 million in payroll. With this level of employment, the oil and gas industry directly or indirectly accounted for approximately 5.5 percent of total FNSB employment and 5.9 percent of total payroll in 2007.
Table 28: Total Oil & Gas Industry-related Employment and Payroll by Place of Residence, Fairbanks
Fairbanks North Star Borough Impacts |
By Place of Residence |
Direct Employment |
353 |
Direct Payroll ($ 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% |
*Includes wage and salary disbursements and proprietor’s income.
Source: FNSB employment and payroll data is from BEA.
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
Firm |
Employees |
State Government |
1,171 |
Kenai Peninsula Borough School District |
775 |
Central Peninsula General Hospital |
580 |
Federal Government |
483 |
Kenai Peninsula Borough (local government) |
390 |
Alaska Petroleum Contractors Inc. [21] |
319 |
Frontier Community Services Inc. |
301 |
Icicle Seafoods Inc. |
289 |
South Peninsula Hospital Inc. |
274 |
Fred Meyer Stores Inc. |
268 |
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 $101 million in payroll. Four oil and gas industry firms are counted among the top 15 employers in the KPB.
Table 30 describes direct employment with an oil and gas primary company and support activity by place of work. These are jobs with sites located within the Borough. Please note in the table below that not all payroll numbers are displayed, this is to protect the confidentiality of oil and gas industry companies and their employees.
Table 30: Direct Primary & Support Activity Employment and Payroll by Place of Work, Kenai Peninsula Borough
|
Oil & Gas Extraction |
Refinery |
Regional Pipeline |
Total Direct Employment |
Support Activities |
Total |
Employment |
228 |
185 |
14 |
427 |
743 |
1,170 |
Payroll ($ millions) |
$27.4 |
* |
* |
$47.1 |
$53.6 |
$100.7 |
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
Indirect Jobs |
Gross Pay |
Value Added |
Output |
3,133 |
$115.5 |
$326.4 |
$478.2 |
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, $200 million in payroll in 2007.
Table 32 : Direct Oil & Gas Primary and Support Activity Employment and Payroll by Place of Work and Place of Residence, Kenai
Kenai Peninsula Borough |
By Place |
By Place of Residence |
Direct Employment |
427 |
939 |
Direct Payroll ($ millions) |
$47.1 |
$99.1 |
Support Employment |
743 |
1,274 |
Support Payroll ($ millions) |
$53.6 |
$101.3 |
Total Employment |
1,170 |
2,213 |
Total Payroll ($ millions) |
$100.7 |
$200.5 |
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
Kenai Peninsula Borough |
By Place of Residence |
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% |
*Includes wage and salary disbursements and proprietor’s income.
Source: KPB employment and payroll data is from BEA
Summary of Impacts
Altogether the oil and gas industry is responsible for the creation of 3,031 jobs for the Mat-Su with wages to residents of $231.4 million – almost 10 percent of total employment in the region and 12 percent of total payroll.
• Total oil and gas industry direct employment of Mat-Su residents by the primary companies was 830 in 2007 with payroll of $98.2 million.
• The total number of Mat-Su residents working in oil and gas industry support activity jobs was 401 in 2007 with wages of $36.1 million. These are jobs held by Mat-Su residents who work outside the borough.
• There were 2,201 indirect and induced jobs generated by the oil and gas industry for the Mat-Su.[22] Indirect and induced jobs generate $133.2 million in payroll. Due to the unique relationship and proximity between the Anchorage and Mat-Su economies, the total indirect and induced jobs and payroll in Mat-Su does not include support activity employment as it does in other regions.
The average annual wage in 2006 was $32,542, substantially lower than the statewide average of $41,326 and nearly five times lower than the annual average income for an oil and gas worker in 2007. Many high paying jobs are located in Anchorage while lower paying service industry jobs are located in Mat-Su; wages for residents are a mix of the two. The Mat-Su has been the fastest growing part of the state for the last 20 years. Most of this growth has been attributed to its proximity to Anchorage and the availability of affordable housing.
According to Alaska Economic Trends, June 2007, more than 44 percent of the borough’s workforce finds employment outside its borders with 33 percent heading to Anchorage on their daily commute. The 44 percent of workers who commute outside the borough – either to Anchorage, the North Slope or elsewhere – bring home 58 percent of total wages. Because of the nature of the relationship between the economies of the Municipality of Anchorage and the Matanuska-Susitna Borough, assumptions about workforce and impact must be made. For example, the impact reported by the BEA for Anchorage only takes into consideration the place of work – in reality an estimated six to seven percent of those jobs are held by Mat-Su residents who do much of their spending outside of Anchorage.
The three largest sectors in terms of numbers of employees within the borough are: Government (including public education) 19 percent, Retail Trade 17 percent and Healthcare and Social Assistance with 13 percent.
Table 34: Ten Largest Employers, Mat-Su 2007
Firm |
Employees |
Mat-Su Borough School District |
1,061 |
State Government |
1,014 |
Palmer-Wasilla Health System LLC |
664 |
Safeway Inc. |
478 |
Wal-Mart Associates Inc. |
459 |
Fred Meyer Stores Inc. |
393 |
Matanuska-Susitna Borough |
353 |
Alaska Hotel Properties LLC |
295 |
Federal Government |
198 |
CIRI Alaska Tourism Corporation |
176 |
Source: DOLWD
Role of Oil Industry in Matanuska-Susitna Borough
The economic impact of the oil and gas industry in Mat-Su is unusual in that the effect is limited to indirect and induced effects. There is no direct oil and gas industry employment in the borough; however a significant number of industry employees reside in the borough, some who work on the North Slope, and many more who commute to Anchorage.
Table 35: Direct Oil & Gas Primary Company and Support Activity Employment and Payroll, Mat-Su Borough 2007
Mat-Su Borough |
By Place |
By Place of Residence |
Direct Employment |
0 |
830 |
Direct Payroll ($ millions) |
0 |
$98.2 |
Support Employment |
2 |
401 |
Support Payroll ($ millions) |
$0.2 |
$36.1 |
Total Employment |
2 |
1,231 |
Total Payroll ($ millions) |
$0.2 |
$134.3 |
Source: DOLWD data and Study Team estimates.
Although the oil and gas industry does not operate directly in the Mat-Su borough it is an important part of the local economy. The industry provides high-income direct employment to 830 borough residents who in turn create employment opportunities within the borough through their spending. The estimated number of indirect and induced jobs for the Mat-Su borough is 2,201 – this number includes all Mat-Su residents employed in support activity positions located outside the borough - with payroll of $133.2 million.
Table 36: Total Oil & Gas Industry-related Employment and Payroll
Mat-Su Borough Direct and Indirect Impacts |
2007 |
Direct Employment |
830 |
Direct Payroll ($ 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% |
*Net earnings by place of residents
Source: BEA
Because the Mat-Su and Anchorage economies are so closely intertwined, it is difficult to determine with any precision what role the oil and gas industry plays in the borough economy. For example, the total employment numbers reported by BEA are for jobs located in the borough but we know that an estimated one third of all Mat-Su residents work in Anchorage. Additionally, jobs located in Anchorage pay higher wages than those located in the Mat-Su – deflating the total payroll number reported for the area.
Summary of Impacts
There are a lot of jobs on the North Slope - 1,741 primary company direct jobs with wages of $198.7 million and another 5,799 jobs in support activity with wages of $521.2 million.
• The vast majority of the 1,741 primary company direct jobs on the North Slope are occupied by employees that do not reside on the slope – non-resident in this case means living in other parts of Alaska. Primary company direct payroll to borough residents was less than half a million dollars in 2007.
• Reliable data is not available to count the number of residents employed in oil and gas support activities.
• There are 980 indirect and induced jobs[23] generated by the oil industry for the North Slope Borough. Payroll for these jobs totals $40 million.
• All together the oil and gas industry is responsible for the creation of 984 jobs in the NSB with payroll of $40.4 million – 9 percent of total employment and 15 percent of total payroll.
Average annual wages on the North Slope in 2006 were $73,614 - much higher than the statewide average of $41,326. Individuals working in oil and gas extraction in Alaska had average annual wages of more than $150,000, just two times higher than overall average annual wage, indicating that the majority of work on the North Slope is a part of the oil and gas industry.
Nine of the top 10 largest employers in the borough are oil industry companies or oilfield service companies.
Table 37: Ten Largest Employers, North Slope Borough
Firm |
Employees |
Alaska Petroleum Contractors Inc. [24] |
1,869 |
CMH2Hill |
1,379 |
BP Exploration Inc. |
1,241 |
North Slope Borough |
810 |
Doyon/Universal Ogden J/V |
691 |
Conoco Phillips Company |
504 |
Nabors Alaska Drilling Inc. |
461 |
Udelhoven Oilfield System Services |
416 |
Schlumberger Technology Corporation |
415 |
Doyon Drilling |
322 |
Source: DOLWD
The Oil Industry’s Role in the North Slope Borough
Alaska’s North Slope is the heart of Alaska’s oil industry. In 2007 more than 7,500 jobs were based there with $720 million in annual payroll. This includes 1,741 jobs with the primary companies and 5,799 jobs with businesses engaged in oil and gas industry support activities. The 7,540 oil and gas industry jobs reported for the NSB represent 62 percent of 12,066 total jobs reported by DOLWD for the borough in 2007.
Table 38: Direct Oil & Gas Primary Company and Support Activity Employment and Payroll by Place of Employment, NSB 2007
North Slope Borough |
Oil & Gas Extraction & Pipeline |
Support Activities |
Total |
Employment |
1,741 |
5,799 |
7,540 |
Payroll ($ millions) |
$198.7 |
$521.2 |
$719.9 |
Source: DOLWD data and Study Team estimates
The number of jobs on the North Slope is not, however, a good indicator of the number of borough residents employed in the oil and gas industry. Few NSB residents hold oil and gas industry jobs on the North Slope. Data is not available on the number of support activity jobs held by North Slope residents. The economic benefit of the oil and gas industry to the resident of the NSB is primarily related to taxes on oil industry operations. More than 98 percent of 2007 property tax revenues to the borough came from the oil and gas industry in 2007. These tax revenues are outlined in the tax and royalties section of this report.
The economic impact of the oil and gas industry on the NSB includes the substantial interests of the Arctic Slope Regional Corporation (ASRC). ASRC’s interests include land ownership, oilfield services, and ownership interest in Petro Star, among other connections to the oil and gas industry. However, assessing the economic impact of ASRC’s role in the oil and gas industry is beyond the scope of this analysis. Given that, the analysis of the economic impact of the oil and gas industry, by place of residence, presented in the following table, under-represents the role of the industry in the region’s economy.
Table 39: Total Oil & Gas Industry-related Employment and Payroll by Place of Work,
NSB 2007
North Slope Borough |
By Place |
Direct Employment |
1,741 |
Direct Payroll ($ millions) |
$198.70 |
Indirect and Induced Employment |
6,779 |
Indirect and Induced Payroll |
$561.20 |
Total Oil and Gas Related Employment |
8,520 |
Total Oil and Gas Related Payroll ($ millions) |
$759.90 |
Total Area Employment (2006) |
11,004 |
Percent Oil & Gas Industry Related |
77% |
Total Area Payroll (2006)* |
$973.60 |
Percent Oil & Gas Industry Related |
78% |
*By place of work payroll is total payroll for all employees, whether resident or non-resident. By place of residence payroll is net earnings for Borough resident only.
Source: BEA
Table 40: Total Oil & Gas Industry-related Employment and Payroll by Place of Residence, NSB 2007
North Slope Borough |
By Place of Residence |
Direct Employment |
4 |
Direct Payroll ($ millions) |
$0.40 |
Indirect and Induced Employment |
980 |
Indirect and Induced Payroll ($ 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% |
Summary of Impacts
Direct industry jobs averaged 284 in 2007 with associated wages of $36.7 million. Data supplied to the project team reported these 284 jobs held by residents of the Valdez-Cordova census area. Information was requested by zip-code of the home address listed on employee W-2 forms. For the purposes of this analysis the project team assumes that the data submitted is correct.
• Altogether the oil and gas industry is responsible for the creation of 684 jobs for the Valdez area with payroll of $53.5 million – 24 percent of total employment in the region and 35 percent of total payroll.
• Total oil and gas industry direct employment of Valdez residents by the primary companies was 284 in 2007 with payroll of $35.5 million.
• The industry reported contracts of at least $500,000 with each of four local Valdez businesses – this number does not include businesses operating in the borough but with primary headquarters in another Alaska location.
• There are 400 indirect and induced jobs generated by the oil and gas industry for the Valdez area.[25] Indirect and induced jobs generate $18 million in payroll - all support activity jobs held by Valdez residents are included in this number.
Average annual wage in Valdez in 2006 was $42,529, slightly higher than the statewide average but still three times lower than the average oil and gas industry worker in the state. Valdez is the terminal of the Trans-Alaska Pipeline and as such the oil and gas industry have played an important part in the local economy since TAPS construction in the ‘70’s. Transportation of crude oil is the dominant industry in Valdez.
Table 41: Ten Largest Employers, Valdez-Cordova Census Area, 2007
Firm |
Employees |
Peter Pan Seafoods Inc. |
330 |
State Government |
302 |
Alyeska Pipeline Services Inc. |
254 |
Crowley Marine Services Inc. |
247 |
Great Pacific Seafoods Inc. |
209 |
Bear and Wolf LLC |
199 |
Federal Government |
192 |
City of Valdez |
152 |
Trident Seafoods Corporation |
121 |
Copper River Seafoods Inc. |
120 |
Source: DOLWD
Tourism is a growing sector of the economy in Valdez with well over 100,000 visitors in the summer and enough snow to draw ski and snowboarding tourists from outside and other parts of the state. Commercial fishing is not a huge part of the Valdez economy, three of the four large fish processing facilities listed below are in located outside the city of Valdez but within the census area.
Role of Oil in the Valdez Economy
Oil is the most important industry in Valdez. The community’s largest year round private employer is Alyeska Pipeline Service Company. Revenue from oil related sources funds approximately 70 percent of the Valdez City budget. The City has been able to save a portion of this tax revenue and has a Valdez permanent fund of approximately $140 million.
Other significant oil-related employment sources include the Ship Escort and Response Vessel System (SERVS). SERVS focuses on oil spill prevention and response. Crowley Marine and TCC LLC are under contract to perform most response and prevention efforts.
Most SERVS personnel are employed either by Crowley Marine (tug escort services) or by TCC, LLC, a subsidiary of Chugach Alaska. According to DOLWD, Crowley Marine had annual average employment of 224 people in 2007; and TCC, LLC had average employment of 102. The majority of Crowley Marine Service employees, approximately 190, work eight-week shifts and live aboard vessels while in Valdez. There are currently 10 employees that live in Valdez year-round.
The Petro Star refinery is another significant oil industry employer in Valdez. In 2007 Petro Star employed an annual average of 31 workers in refinery operations in Valdez. Please note in the table below that not all payroll numbers are displayed, this is to protect the confidentiality of oil and gas industry companies and their employees.
Table 42: Direct Oil & Gas Primary Company and Support Activity Employment and Payroll by Place of Work, Valdez 2007
Valdez Direct Impacts |
Refinery |
Pipeline |
Total Direct Employment |
Support Activities |
Total |
Employment |
31 |
253 |
284 |
30 |
315 |
Payroll ($ millions) |
* |
* |
* |
* |
$37.6 |
Source: DOLWD data and Study Team estimates.
While it is not clear how many oil and industry workers employed in Valdez are full-time residents of the community, it is nevertheless clear that the oil industry is the single most important source of employment and income in the community. The industry directly or indirectly accounts for one quarter of all employment and over one-third of all payroll in the community.
Table 43: Total Oil & Gas Industry-related Employment and Payroll, Valdez 2007
Valdez Direct and Indirect Impacts |
2007 |
Direct Employment |
284 |
Direct Payroll ($ 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.)[26] |
2,800 |
Percent Oil & Gas Industry Related |
24% |
Total Valdez Payroll (2006 est.) |
$155.0 |
Percent Oil & Gas Industry Related |
35% |
Source: Study Team estimates