Providing coverage of Alaska and northern Canada's oil and gas industry
March 2018

Vol. 23, No.9 Week of March 04, 2018

Murkowski questions fall in Alaska hire

Senator asks oil and gas companies to provide local hire data and make suggestions for in-state workforce development and training

Alan Bailey

Petroleum News

U.S. Sen. Lisa Murkowski has sent a letter to the five largest oil and gas companies operating in Alaska, raising concerns that state data indicate a rising percentage of out-of-state workers in the state oil and gas industry. The letter follows the publication by the Alaska Department of Labor and Workforce Development’s 2016 report on nonresidents working in Alaska.

That report indicates that, while there has been a large decrease in the overall number of workers in the Alaska oil and gas industry in response to the industry downturn in recent years, the proportion of non-resident workers increased to 37.1 percent from a level of 28.1 percent in 2009.

Murkowski, in her letter, asked the companies for up-to-date information on the employment of Alaska residents, including employment by contractors and subcontractors. She also noted workforce training programs available in Alaska and asked what more can be done to ensure that the industry hires more Alaskans.

“I have taken full advantage of the opportunity to visit the many career and technical colleges for workforce training programs across the state. I see firsthand the many talented and skilled Alaskans we train each year,” Murkowski wrote. “What more can we do to build a well-qualified Alaska workforce for the oil and gas industry?”

Companies support Alaska hire

Oil producers in Alaska have told Petroleum News that they are committed to high levels of Alaska resident employment.

ConocoPhillips spokeswoman Natalie Lowman said that her company strongly supports Alaska hire and buy and encourages its contractors to hire Alaskans. About 84 percent of the company’s Alaska employees live in the state, she said.

“We actively recruit Alaskans for ConocoPhillips positions and support a number of programs to train Alaskans for oil field related work,” Lowman said. “As part of our commitment to Alaska workforce development, we have a longstanding relationship with the University of Alaska.”

The company supports a number of other organizations that train Alaskans: the Alaska Native Science and Engineering Program, the Alaska Process Industry Career Consortium and Ilisagvik College. In addition, in an effort to support businesses that hire Alaskans, 87 percent of the company’s Alaska spending on goods, services and transportation in 2016 went to Alaska-based companies, Lowman said.

Dawn Patience, spokeswoman for BP Exploration (Alaska), told Petroleum News that BP’s current Alaska hire rate is 76 percent and that the company encourages its contractors to hire Alaskans. The company publishes an annual Alaska hire report - the latest edition, with data for 2016, emphasizes the company’s efforts to support the education and recruitment of Alaskans. According to the report, BP contributes funding to the University of Alaska system, provides internships for students and hires Alaska graduates. The company also partners with the university in industry related programs, while also supporting the Alaska Process Industry Careers Consortium, a program to prepare Alaskans for careers in the process industries.

David Wilkins, senior vice president, Hilcorp Alaska, expressed his company’s strong commitment to local hire.

“Our current Alaska hire is 89 percent,” Wilkins told Petroleum News. “We believe that hiring Alaskans is the best way for us to make a positive contribution to the local economy, strengthen our communities and achieve long-term success in Alaska.”

Job losses impacted Alaskans

The state’s employment report shows employment levels in the oil industry climbing steadily between 2006 and 2015, before dropping sharply in 2016 in the wake of the rapid fall in the price of oil in 2014. The percentage of nonresident workers in the industry hovered around 28 to 30 percent between 2006 and 2009, before beginning a steady climb to 37.1 percent in 2016. The fall in employment levels in 2016 did not appear to impact the rate of increase in nonresident employment. Thus, the job losses in 2016 impacted resident employment more that nonresident employment: Resident job losses accounted for 70 percent of the total employment decline, although just under 63 percent of workers were resident in the state, the report says.

Under the job categories that the state uses, the oil industry in Alaska includes people who work directly in the extraction of oil and gas, and people who work for oilfield service companies. In 2016, 28.3 percent of the oil extraction workers were nonresident, a fall from 29.4 percent in 2015. The percentage of nonresident earnings also fell slightly, from 27.7 percent to 27.5 percent.

On the other hand, the proportion of nonresident employees in the service companies rose from 38 percent to 40 percent between 2015 and 2016. Comparisons of earnings between residents and nonresidents in the service sector are complicated by the fact that, in this sector, resident employees tend to work across more of the year than do nonresidents. So, while in service companies nonresident quarterly earnings in 2016 where higher than those of residents, residents earned more annually, the report says.

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