Oil's role in Alaska economy explored
Published Sunday, July 6, 2008
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Stumble It!ANCHORAGE -- The State of Alaska most likely earned more than $10 billion this fiscal year from oil and gas operations, according to a new look at the role of the industry in the state economy.
The revenue figure is part of a larger report on how oil and gas operations figure into job creation, wages and charitable giving in Alaska, conducted by Information Insights and the McDowell Group for the Alaska Oil and Gas Association.
The industry group presented highlights of the report before the Anchorage Chamber of Commerce on June 30, the last day of the state fiscal year.
The $10.2 billion revenue figure, which will be either validated or revised when the state releases year-end financial information, represents the reality of ever-rising world oil prices and the first fruits of a revised production tax enacted last fall, but retroactive to the beginning of the fiscal year.
Still, the number is surprising compared to recent revenues and forecasts.
The state made "only" $5.1 billion from oil revenues in fiscal year 2007. And as recently as the spring forecast released this past March, state economists predicted that revenue from the oil industry would total just under $9 billion this fiscal year.
According to the report, the state has collected more than $75 billion in revenues from the oil industry since 1959, with nearly one third of that coming in the last 10 years.
The new report updates and expands a similar study AOGA commissioned in 2000, back when the delivered price of Alaska North Slope crude oil averaged $23.27 per barrel, nearly one fourth of the average price for the fiscal year just ended.
The new report found that the oil industry was the largest private sector employer in the state, responsible for 41,744 jobs in 2007. However, nearly 70 percent of those jobs were "induced" by the industry, meaning jobs throughout Alaska made possible by the spending of those in the oil industry.
The 4,497 Alaskans directly employed by the industry through extraction, refineries and operations on the trans-Alaska oil pipeline received $643.8 million in payroll with an average monthly wage of $12,737. That makes the oil industry the highest paying of any industry in the state, more than 3.5 times the statewide average.
The industry also indirectly employs 8,410 people through the support industry, not part of the induced jobs total. Those support positions earned $769.2 million in wages last year.
Information Insights and the McDowell Group conducted the study using the purchasing and payroll records for 12 major producers, transporters and refiners of oil in the state, as well as 300 vendors that billed more than $500,000 in 2007.
The new report classifies oil industry jobs under one heading, simplifying the measure of jobs usually categorized under four other existing headings: mining, transportation, construction and manufacturing.
As well as taking a statewide look, the report also breaks out the economic impact of the industry in six municipalities along the road system: Anchorage, the Fairbanks North Star Borough, the Kenai Peninsula Borough, the Matanuska-Susitna Borough, the North Slope Borough and Valdez.
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On the Net:
www.aoga.org
Community Discussion
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Very interesting reading. News Miner, the click on site did not work, did a google search to find it. recommend anyone interested in this topic read the report.
The link's been fixed. Thanks for the heads-up, Free.
The pipeline is currently running at about half capacity. ANWR could double that. We currently provide more than 20% of domestic oil consumption. We could double that. If not now, when?
Forget the gasline for now. Palins ACES has trumped the producers hand. We ought to jack another 5 points in increased taxes on them till they actually start to leave like they threatend when ACES was passed. Anybody see any producers leave yet?
Thanx AOGA for the handy maps...
I see there's proposed exploratory drilling in the same area I charted for the 4"LPG line to AtigunPass..
arrgh, that means if this little noodle pipe gets popular enough to get going then I'll have to double the size of my lunch menu, and add another 400lbs of fresh CostaRica coffee beans.
Dang, always a party wherever I go....
www.fairbanksgas.com
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How much did the oil industry get in the years since 1959?
Everyone focuses on what the state got but what about the oil industry?
State brings in quite a bit more then the Oil Company's right now. I think the State takes in around 85% of the income after lifting and transportation costs.
I'll try and get the exact percent this week.
STate brings in what? State gets 85% after lifting and transportation costs? WHat about all their itemized expenses they deduct that have nada to do with either of those. State should jack it up to 90% anyway. Oil co's got schooled by Palin. She called their bluff and they all stayed. Rememeber how they threatened to leave if ACES passed? And how about all those crooked legislators that big oil bribed to sink ACES. Imagine how big our permanent fund would be if we didn't have all those crooked bastards representing us (past and present) for the past 30-40 years.
Almost all Alaskan oil production is on state-owned land, so the state receives revenue from four different sources: production tax, property tax, royalties and corporate tax. The revenues go directly into a general fund to be used for roads, health care facilities, schools and other social services. However, at least 25 percent of all mineral royalties is deposited into the Alaska Permanent Fund. Former governor Jay Hammond, oversaw the fund's establishment, wanted to make sure the state didn't commit the same errors it had when it received money from land leases to the oil companies.
1) Why would anyone want to curtail mining in Alaska?
Jay Hammond said that Alaskans had 900 million reasons to vote for creating the Permanent Fund: he meant the $900 million the state had received from its first big oil lease sale in 1969. Within a few years it was all gone, and Alaskans did not want that to happen again."
Let's make sure Alaska government is held accountable for the proper and legal distribution of these funds.
I remeber very well the bluff from BP, Exon, and Conoco during the ACES hearings. ACES was going to destroy their small profit margin in Alaska and prevent future exploration. Also how Natural Gas was not economical to send south, and how much it was needed to keep the oil flowing. Now look who's running PR campaigns to stop the Alaska Gasline Inducement Act. Keep a close eye on the distribution of the surplus. It is being turned over to companies a little at a time, but a few million here and there, adds up quickly.
In good times Government has a tendancy to grow beyond a sustainable capacity. We deserve a no frills budget for the next five years. Let this oil price boom settle down before we decide to double the state anual budget. Now that we have the money, we can afford to wait for good estimates and write in penalties when capital projects go over budget.
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