One in three oil workers from Outside

Annual report shows continuing increase in nonresident hiring, support industry on steep rise, oil still below other industries

Eric Lidji

Petroleum News

If you have a job in the oil patch, take a look to the left and to the right. Most likely one of the people working on either side of you isn’t an Alaskan. Either that or you aren’t.

Nearly one in three workers in the Alaska oil and gas industry doesn’t live in the state, the highest percentage for the industry in at least a decade, according to a report from the state Department of Labor and Workforce Development.

The annual look at non-resident hiring practices crunches employment figures through 2006, the most recent information available.

According to the report, 30.8 percent of the nearly 14,600 people employed by oil and gas companies and oilfield service companies in Alaska in 2006 did not live here. The percentage is a bit higher among the oilfield service companies and a bit lower among the oil and gas exploration and production companies.

“The increase is a continuation of the oil industry’s employment turnaround that started in 2003 due to higher oil prices,” the report said.

With the delivered price of Alaska North Slope crude oil between $15 and $30 per barrel between 2000 and 2002, the percentage of non-residents employed by the oil companies dropped 6 percent.

But over the past five years the non-resident hiring rate has been steadily climbing along with the price of oil, which hit a record $110.18 per barrel in mid-March.

For the purposes of the annual report, the state determines residency by matching wage records against the database of the Alaska Permanent Fund Dividend. As a result, first year workers are considered “non-residents.” The report also does not cover the self-employed, including most fishermen, or federal employees.

The state releases the yearly look at hiring practices each January to the Legislature.

Oil more local than other industries

However, the oilfield service industry showed the highest single year percentage increase in non-resident hire, jumping 37.1 percent between 2005 and 2006.

The impact can be huge. Oil companies and the support industry paid $327.6 million in wages to non-residents in 2006, or 29 percent of the $1.14 billion paid in industry wages that year.

The oil industry continues to offer among the highest wages in the state, with an average quarterly wage of $34,705.

While Alaskans might not be willing or able to take jobs currently filled by non-residents, the report suggests, “that a significant number of unemployed Alaskans could be employed if given an opportunity, additional training or better information.”

That’s a sentiment shared by Kent Burkland, head of the Department of Applied Technology at the Alaska Vocational Technical Center, or AVTEC, in Seward.

“They’ll take just about every graduate we can muster, if they’re competent,” Burkland said of the oil industry.

The state-run training center has been around since 1969, but faces problems getting its message to those students who would need years of training and work experience to get jobs on a natural gas pipeline or other major project, according to Fred Esposito, director of AVTEC and training development appointee under the Alaska Gasline Inducement Act.

“We need to be focused on high school and middle school age students,” Esposito said.

Esposito and Burkland said their research shows that students who trained in Alaska also stayed in the state on a long-term career path.

Jobs and taxes in 2007?

The oil and gas industry added 800 new jobs in 2007, about 35 percent of all the new jobs added in the state last year.

Over the past three years, the Northern region of the state added 3,200 jobs, mostly related to oil and gas extraction, while in Anchorage and the Mat-Su region, oil and gas, along with state jobs and retail work, accounted for 1,100 new jobs last year.