Oil prices spark Alaska's economy
Associated Press
ANCHORAGE, Alaska — Wanted: Workers who know their way around an oil field. Salaries in the high five digits. Report to eager employers in Alaska, and don't forget to bring a heavy coat.
Associated Press
While chilly economic winds are blowing through the Lower 48, Alaska is enjoying bright economic weather, created in large part by strong oil prices — currently around $25 per barrel — that translate into higher state revenue, higher employment and overall higher hopes.
Jason Robins works on a gas processing module in Anchorage for BP Exploration. The module will be barged to the North Slope oil field as Alaskaâs economy booms.
"My gut feeling is that we're on the front end of a boom that's going to last four, five, six years," said Chris Johansen, engineering manager at Flowline Alaska, a Fairbanks-based company that makes and insulates pipelines.
"We are more optimistic than we've been in a long time," agreed Neal Fried, a state labor economist. "We have high oil prices, the oil industry is in good shape."
Each year Alaska's economy is less dependent on oil, but when the industry is cruising, as it is now, the state also gets a nice ride. Oil taxes and royalties accounted for more than 75 percent of the state government's $2 billion operating budget in the latest fiscal year. Upswings also are felt strongly in real estate, retail and construction.
Times are so good that some Alaska companies are beginning to worry about their ability to attract enough skilled employees to keep up with an increasingly ambitious work load in the North Slope oil region.
The oil patch is bustling around the country, so Alaska is competing with the Lower 48 states and elsewhere for engineers, pipefitters, drilling workers and more to find and develop new oil reservoirs.
"Our business is cyclical — always has been," said Clyde Treybig, quality and marketing manager for Doyon Drilling Inc., based in Fairbanks. "In one of these ramping-up modes like we're in now, it's hard to find competent people with experience."
"Right now, if I needed to hire three more welders, I could call the (union) hall and they wouldn't have them," Johansen said.
Things aren't quite that tight, union officials say.
"For the most part we have enough people," said Jim Laiti, business agent for Plumbers and Pipefitters Local 375 in Fairbanks. "We haven't had any trouble supplying people, but we're at the break-even point."
The state pegged oil industry employment in January at 9,300, up 23 percent from a year earlier.
At Flowline Alaska, the job ranks have expanded to nearly 100 workers, Johansen said. A few years ago, when oil prices were in the tank, there were fewer than 10.
Steve Harrison, a marketing manager for Schlumberger Oilfield Services in Anchorage, says his firm has about 400 people working, up 25 percent from December 1999.
Doyon Drilling, owned by an Alaska Native corporation, was down to about 80 workers when oil prices fell below $9 a barrel a couple years ago. Now the count is running close to 800, Treybig said.
Alaska's economy has greatly diversified since the early 1990s. A major gold mine opened near Fairbanks, and the world's largest zinc mine began producing on the state's remote northwestern coast. Big-box retailers like Wal-Mart, Costco and The Home Depot opened dozens of new stores in a market that had been largely ignored, and tourism has boomed.
The current optimism among development-minded Alaskans is also fed by projects still in the talking stages.
There's hope that a pipeline will be built soon to carry North Slope natural gas to market, and that the Arctic National Wildlife Refuge will be opened to oil drilling, as President George W. Bush has proposed. Alaska is also a leading candidate for basing a missile defense system under consideration in Washington.
