Oil and gas employment in Alaska drops 9 percent in 2003

Petroleum News

Oil and gas industry employment in Alaska dropped 9 percent in 2003, a loss of 800 jobs — the second year of substantial declines, the Alaska Department of Labor and Workforce Development reported in the May issue of Alaska Economic Trends.

In an employment outlook review, Dan Robinson, an economist in the department’s Research and Analysis Section, said the decline was “mostly due to completion of the construction of the large Alpine and Northstar fields.” Those North Slope fields began production in 2000 and 2001.

Robinson said a “slight additional decline” in oil and gas employment is forecast in 2004, and a “small increase” in 2005.

He noted that high oil prices in recent years have had “little short-term impact on exploration and development activity.

“On the positive side, the dominant share of U.S. reserves that Alaska possesses will support an oil industry in the state for the foreseeable future.”

But the source of investment is likely to change, with major oil companies investing “elsewhere in the world, looking for the next Prudhoe Bay.”

The shortage in Alaska exploration investment from the majors is being made up, he said, by independents, companies which “may be able to move more quickly to develop smaller prospects.”

And while there is no immediate job impact from negotiations between the state and the producers and pipeline companies for fiscal certainty for a natural gas pipeline from the North Slope to market, Robinson said that “if the project moves forward it will energize the industry.” Exploration would then begin in areas believed to hold additional gas reserves, “and development projects might become more urgent since pipeline construction will consume much of the available workforce once it commences.”