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State sees some 10-year growth for O&G
Jobs for 2018-28 projected to rise 5.5% overall, 3.2% for oil, gas extraction jobs, 9% for support activities, 35.8% for drilling Kristen Nelson
The Alaska Department of Labor and Workforce Development’s Research and Analysis Division pushed 2018-28 employment projects for the state in the October issue of Alaska Economic Trends.
While pointing out the difficulties of long-term projection in light of COVID-19, overall Alaska employment is projected to grow 5.5% from 2018 to 2018, economist Paul Martz said in the publication’s lead article.
Past performance is used in long-term projections, he said, and those projections “don’t capture business cycles, structural changes, or unforeseen events.”
With uncertainties in mind, the state is projected to add some 18,000 jobs from 2018 to 2018, total growth of 5.5% over the period.
Oil and gas Martz listed oil and gas as among industries less likely to be affected by the COVID-19 pandemic but said while the future of oil and gas is “particularly uncertain … long-term growth remains likely.”
Employment in the industry was “up slightly in 2019 as the state recession ended and oil prices stabilized,” he said, with oil and gas service, support and drilling services seeing the most gain in jobs, “in line with new exploration the industry had announced over the previous few years.”
Some of that progress will be slowed by the pandemic, but Martz said the industry is expected to “rebound in the long run,” with 9% growth projected for oil and gas support activities, 515 jobs, by 2028, and 35.8% growth for drilling (234 jobs).
He said the projection is that regular oil and gas extraction probably won’t grow much, just adding 113 jobs, 3.2%, and said employment is expected to “take time to level out after BP withdrew from Alaska and sold its assets to Hilcorp.”
Extraction employment hasn’t fluctuated much with price or production changes, with the exception of the high-price periods in 2014 and 2015, Martz said, “but this jump was short-lived, and employment quickly settled back at its 30-year average.”
He said significant price changes could be a significant factor, noting that the industry lost more than 5,000 jobs between 2015 and 2018 “as prices slid from the $90 range to the low $40s before settling around $60 a barrel.”
There is further uncertainty due to the pandemic, “especially on the demand side,” Martz said.
“If demand resumes and global production stabilizes around current levels, which is what history suggests will happen, then prices will land in the $40 to $70 range,” he said. “That price environment appears sufficient to maintain interest in expanding North Slope projects.”
Job numbers There are professional, scientific and technical jobs tied to oil and gas, mining and construction, and expected growth in those industries will also boost related companies, Martz said.
Engineering and drafting services are expected to grow over the decade by 17.3%, 587 jobs; geophysical surveying and mapping services by 35%, 137 jobs; testing labs by 19.5%, 107 jobs, and environmental and other scientific and technical consulting services by 42.8%, 401 jobs.
Overall, mining, oil and gas jobs are projected to grow by 1,690 from 2018 to 2028, 13%.
There were 3,511 jobs classified as oil and gas extraction in 2018, with a projected 3,624 in 2028, a 3.2% growth, 113 jobs. The number of mining jobs, by contrast, is projected to grow by 28%, 784 jobs, from 2,803 in 2018 to 3,587 in 2028. Construction jobs, at 15,075 in 2018, are projected to grow by 10.7%, 1,618 jobs, to 16,693 in 2028. Professional, scientific and technical services, at 13,212 in 2018, are projected to grow by 15.5%, 2,047 jobs, to 15,259 in 2028.
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