Alaska's Oil and Gas Industry: Key Figures

In 2022, Alaska’s oil and gas industry supported 16% of the state's jobs and contributed 47% to state revenue, with major companies employing over 4,000 workers. The industry plans to invest $14 billion in development through 2028, potentially creating thousands of new jobs and significantly boosting wages.

Overview of Alaska's Oil and Gas Industry

Oil and gas companies play a significant role in Alaska's economy, supporting many jobs and contributing heavily to state revenue:

• In 2022, the oil and gas industry supported 16% of the state's jobs.
• For each direct job in the industry, 15 other jobs are created.
• A total of 4,105 workers were employed by these companies in 2022, with 83% being Alaska residents.
• The industry paid $4.5 billion in tax and royalty payments in 2022, constituting 47% of the state's revenue.

These companies fuel not only the state's economy but also its contribution to the national energy market:

• The industry plans to invest $14 billion in new fields and existing fields through 2028.
• This investment could lead to 1,600 jobs and $1 billion in wages during the construction phase.
• During the production phase, an estimated 300 jobs and $65 million in wages could be generated by 2028.

Despite some variations in employment levels from year to year, the oil and gas industry's role in Alaska's economy remains considerably vast:

• As of 2018, the industry supported about a quarter of all wage and salary jobs in the state.
• The same year, the industry generated $4.6 billion in total labor income.

With a noteworthy economic impact and significant contributions to state revenue, the oil and gas industry is an essential part of Alaska's economic stability.

Major Players in Alaska's Oil and Gas Sector

The oil and gas industry plays a huge economic role in Alaska. A study conducted by the McKinley Research Group found that 16% of jobs in the state were supported by this industry in 2022.

• The industry supported 15 jobs for each direct job, a significant economic multiplier.
• An oil and gas company's single-dollar in wages can support $4 of other Alaskan wages.
• The industry is deeply connected to Alaska: an employee's everyday expenses, like dental check-ups or childcare, drive local economic activity.

In 2022, the 15 major oil and gas companies in Alaska employed 4,105 workers. Of these, 83% were Alaska residents.

• These companies paid $1.1 billion in wages.
• They spent $4.6 billion on goods and services in the state.
• They made a total of $4.5 billion in tax and royalty payments. 91% of this ($4.1 billion) went to the state government.
• This $4.1 billion made up 47% of state revenue for the fiscal year ending June 2022.

Through all the indirect and direct impacts, the industry was responsible for 69,250 jobs and $5.9 billion in wages in 2022.

• Oil and gas companies plan to spend $14 billion on new fields and investment in existing fields through 2028.
• Direct employment during the production phase of these new projects is predicted to amount to 300 jobs and $65 million in wages by 2028.
• When considering all factors, it's expected that by 2028, these new developments will create roughly 2,700 new jobs and $215 million in wages.

A separate study by PricewaterhouseCoopers (PwC) and the American Petroleum Institute (API) highlighted the industry's role in the post-pandemic recovery of Alaska's economy.

• The study suggested Alaska's oil and gas industry supported 47,300 total jobs across the entire economy of the state in 2019.
• The industry contributed $19.4 billion toward the state's gross domestic product, inclusive of $4.6 billion added to total labor income.
• The economic outlook for Alaska is brighter because of the world leadership in energy production.

Future Trends and Challenges in Alaska's Oil and Gas Industry

The oil and gas industry enjoys a significant economic presence in Alaska. An industry study divulges that it supports 16% of the state's jobs and contributes a substantial amount to the state’s revenue. Every oil and gas employment indirectly yields 15 other jobs, forming a strong network of economic support.

• The industry has a significant economic multiplier effect. The spending by oil and gas workers on services like dentistry, childcare, and consumer goods supports the local economy.
• Primary oil and gas companies employed over 4,000 workers in 2022, paying $1.1 billion in wages. These companies contributed $4.5 billion in total tax and royalty payments with $4.1 billion going directly to the state government.
• These payments amounted to almost half of the state’s revenue in the fiscal year ending June 2022.
• In 2022, accounting for all economic multipliers, this industry supported 69,250 jobs and brought in $5.9 billion in wages.

Looking to the future, the oil and gas sector in Alaska continues to show promise. Companies are expected to invest $14 billion in new fields and existing investments through 2028.

• Direct construction and drilling employment from this future investment is anticipated to total 1,600 jobs and $1 billion in wages.
• Factoring in the economic multiplier effect, this investment could potentially support 2,500-2,900 workers annually during the construction phase.
• The production phase of the new projects anticipates creating 300 jobs and $65 million in wages by 2028. With the multiplier factors, this could translate to around 2,700 new jobs and $215 million in wages by 2028.

Environmental concerns, regulatory changes, and technological advancements pose challenges for this future growth, calling for responsible management to balance both economic prospects and environmental responsibility.

Sources Used:

• Alaska Public Media: Oil and Gas Companies Have Outsized Economic Impact on Alaska
• American Petroleum Institute: Alaska PwC
• Alaska Oil and Gas Association: 2020 Economic Impact Report by McKinley Research Group

FAQ

How many jobs did the oil and gas industry support in Alaska in 2022?

In 2022, the oil and gas industry supported 16% of the jobs in Alaska, which translates to about 69,250 jobs, including both direct and indirect employment.

What percentage of Alaska's state revenue in 2022 came from the oil and gas industry?

In 2022, the oil and gas industry contributed 47% of Alaska's state revenue through tax and royalty payments, amounting to $4.5 billion.

What are the projected investments and job creation figures for Alaska's oil and gas industry through 2028?

The industry plans to invest $14 billion in new and existing fields through 2028, expected to create 1,600 jobs during the construction phase and 300 jobs during the production phase, with significant additional indirect job creation.

How does the oil and gas industry impact local economies in Alaska?

The industry not only supports a large number of jobs but also boosts local economies through employee spending in sectors like healthcare, childcare, and consumer goods. Additionally, oil and gas companies spent $4.6 billion on goods and services in the state in 2022.

What challenges does Alaska's oil and gas industry face?

The industry faces challenges such as environmental concerns, regulatory changes, and the need for technological advancements to ensure sustainable and responsible growth.

How does the oil and gas industry support post-pandemic recovery in Alaska?

According to a study by PricewaterhouseCoopers and the American Petroleum Institute, the oil and gas industry supported 47,300 total jobs in 2019 and contributed $19.4 billion to the state's GDP, playing a crucial role in Alaska's economic recovery post-pandemic.