The State of Alaska most likely earned more than $10 billion this fiscal year from oil and gas operations, according to a new look at the role of the industry in the state economy.
The revenue figure is part of a larger report on how oil and gas operations figure into job creation, wages and charitable giving in Alaska, conducted by Information Insights and the McDowell Group for the Alaska Oil and Gas Association.
The industry group presented highlights of the report before the Anchorage Chamber of Commerce on June 30, the last day of the state fiscal year.
The $10.2 billion revenue figure, which will be either validated or revised when the state releases year-end financial information, represents the reality of ever-rising world oil prices and the first fruits of a revised production tax enacted last fall, but retroactive to the beginning of the fiscal year.
Still, the number is surprising compared to recent revenues and forecasts.
The state made “only” $5.1 billion from oil revenues in fiscal year 2007. And as recently as the spring forecast released this past March, state economists predicted that revenue from the oil industry would total just under $9 billion this fiscal year.
According to the report, the state has collected more than $75 billion in revenues from the oil industry since 1959, with nearly one third of that coming in the last 10 years.
Industry employs 13,000The new report updates and expands a similar study AOGA commissioned in 2000, back when the delivered price of Alaska North Slope crude oil averaged $23.27 per barrel, nearly one fourth of the average price for the fiscal year just ended.
The new report found that the oil industry was the largest private sector employer in the state, responsible for 41,744 jobs in 2007. However, nearly 70 percent of those jobs were “induced” by the industry, meaning jobs throughout Alaska made possible by the spending of those in the oil industry.
The 4,497 Alaskans directly employed by the industry through extraction, refineries and operations on the trans-Alaska oil pipeline received $643.8 million in payroll with an average monthly wage of $12,737. That makes the oil industry the highest paying of any industry in the state, more than 3.5 times the statewide average.
The industry also indirectly employs 8,410 people through the support industry, not part of the induced jobs total. Those support positions earned $769.2 million in wages last year.
Collects data in one placeInformation Insights and the McDowell Group conducted the study using the purchasing and payroll records for 12 major producers, transporters and refiners of oil in the state, as well as 300 vendors that billed more than $500,000 in 2007.
The new report classifies oil industry jobs under one heading, simplifying the measure of jobs usually categorized under four other existing headings: mining, transportation, construction and manufacturing.
As well as taking a statewide look, the report also breaks out the economic impact of the industry in six municipalities along the road system: Anchorage, the Fairbanks North Star Borough, the Kenai Peninsula Borough, the Matanuska-Susitna Borough, the North Slope Borough and Valdez.
The full report is available at www.aoga.org.