January 23, 2001 --- Vol. 7, No. 11January 2001

New study finds oil and gas spending in state tops $2.1 billion annually

A new study on Alaska’s oil and gas industry shows that the industry spends $2.1 billion annually in the state. The Economic Impact of the Oil & Gas Industry on Alaska was commissioned by the Alaska Oil & Gas Association and the Alaska Support Industry Alliance.

The study released Jan. 23 was done by Information Insights of Fairbanks, and The McDowell Group of Juneau, based on 1999 information. It found that the amount the industry spends annually is about equal to the state of Alaska’s general fund spending ($2 billion). Industry directly spends $422 million on payroll and $1.7 billion on goods and services in Alaska.

Overall, this spending generates 33,600 jobs, $1.4 billion in payroll and value added to the Alaska economy of $1.8 billion, for total output of $3.1 billion. Oil and gas accounts for 20 percent of private sector payroll.

Regionally, oil and gas is the largest industry in Anchorage, Fairbanks, Kenai and Valdez.

Oil and gas activity creates more jobs for Mat-Su borough residents than any other industry.

More than one in four — 26 percent — of Kenai employment is oil and gas related.

The industry accounts for 17 percent of Valdez area employment and 28 percent of the area’s payroll.

Researchers evaluated 1999 purchasing and payroll data from 13 oil and gas producers, refiners and transportation companies, and a majority of their contractors and suppliers.

“State and federal agencies routinely request this type of community impact information as they develop best interest findings and environmental impact statements for future oil and gas lease sales,” said Alliance General Manager, Larry Houle in a Jan. 23 statement.

"Defining oil and gas-related revenues to local, state and federal governments is relatively easy, but getting an accurate picture of the oil and gas industry’s grassroots economic impact has been more difficult," he said.

The new research was sparked by a similar study done for the Fairbanks area a year ago. “We knew that oil and gas plays a significant role in local economies across Alaska, but the results of the Fairbanks study were a real surprise,” said AOGA Executive Director Judy Brady.

The new statewide study reports regional impacts to Anchorage, Fairbanks, Kenai, Mat-Su and Valdez, with results that are just as eye-opening, AOGA and The Alliance said.

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