Article details Anchorage’s centennial

Eric Lidji

For Petroleum News

With the city of Anchorage celebrating its centennial this year, a report from the Alaska Department of Labor and Workforce Development details the events that have shaped the economy of Alaska’s largest city, including the booms and busts of oil development. (See graph)

An article in the December 2014 issue of Alaska Economic Trends chronicles the economic history of Anchorage from its early Native beginnings, to the brief tent camp established in 1915 to prepare for construction of the Alaska Railroad, to an expanded military presence through World War II, the rise of international air transportation and the discovery of oil on the Kenai Peninsula. “When Alaska achieved statehood in 1959, Anchorage’s economy was small but in satisfactory shape, with the military and federal government at the forefront,” state economist Neal Fried wrote. “However, federal primacy faced a challenge with the discovery of oil on the Kenai Peninsula.”

The Anchorage oil industry began in 1954, when Phillips Petroleum established its headquarters in the city. Other oil companies soon followed. The discovery of the Swanson River oil field in 1959 started commercial production in Cook Inlet. By the time Cook Inlet production peaked in 1970, Anchorage had become an administrative hub for companies developing the newly discovered Prudhoe Bay field on the North Slope.

With activities related to the construction of the trans-Alaska oil pipeline, payroll employment in Anchorage doubled to 80,000 jobs between 1970 and 1975, according to Fried. The tripling price of oil in the early 1980s, and rising production in Alaska, gave the Anchorage economy another boost once the pipeline came online, bringing 57,000 people to the city between 1980 and 1985. “By the mid-1980s, both private and public investment in the economy outpaced demand,” Fried wrote. “Then oil prices collapsed, kicking the chair out from under an already softening economy.” The Anchorage economy grew again with the response to the Exxon Valdez oil spill in March 1989.

Over the quarter century since, “no single event or series of events drove Anchorage’s economy,” according to Fried. But low oil prices in the 1990s and high oil prices starting in the mid-2000s both impacted the Anchorage economy. Higher paying resource extractions jobs are likely why per capita income in Anchorage increased from 16 percent above the national average in 2000 to 25 percent above it in 2012, according to Fried.

The complete article is available online at http://labor.state.ak.us/trends/.