|
State predicts oil industry jobs gain Economists see industry adding jobs as oil prices rise and drilling expands, but warn about the impact of declining production Eric Lidji For Petroleum News
It’s an increasingly familiar story: Alaska’s economic dependence on oil production is causing smiles in the short-term and worry over the long-term for state economists.
While Alaska can expect to see “stronger than average” economic growth this year, compared to other states, production declines could hurt the economy in the coming decade, according to the Alaska Department of Labor and Workforce Development.
The surge in oil prices in recent years continues to give Alaska budget surpluses, allowing the state to replenish its rainy-day funds and maintain public-sector employment as other states across the country cut budgets, programs and positions. “Recently, Alaska’s dependence on oil revenue has been a boon,” a team of four state economics wrote in the January issue of Trends, their monthly publication of workforce statistics. “When most states were coping with budget shortfalls stemming from reduced state income and state sales tax collections, Alaska’s oil revenue reached an all-time high in 2008 and has remained well above historical averages for the last three years.”
The recent global recession ended Alaska’s 21-year growth streak for employment in 2009, but the past two years have seen gains. However, the 1.2 percent growth rate anticipated for this year is down slightly from the 1.6 percent gain the state saw in 2011.
The economists expect oil and gas industry employment in Alaska to do better than that, though, by averaging 13,500 this year, or a 2.3 percent increase from 2011.
Declines worrisome The party won’t last forever, though. “Though not likely to have a major effect on 2012 job numbers, one of Alaska’s challenges over the next decade will be the ongoing decline in oil production,” the economists noted. “Rising prices have compensated for the decline so far, a fortunate development that may have simply delayed an important reckoning.”
Those increases are also expected in Anchorage, home of the industry. “During the past four years, oil industry employment in Anchorage has been relatively stable and is likely to stay that way,” economist Neal Fried wrote. “An increase in exploration led by independents and newcomers will help sustain the current levels of activity in the North Slope and Cook Inlet. Shell Oil may also be able to start major offshore exploration in 2012 after years of litigation and other regulatory hurdles. If these efforts come to fruition, they could add another new and important dimension to Alaska’s oil patch.”
|
