Alaska’s oil and gas expected to be huge economic driver over next 5 years

Alaska's oil and gas expected to be huge economic driver over next 5 years
Published: Aug. 30, 2023 at 9:20 PM AKDT|Updated: Aug. 30, 2023 at 10:21 PM AKDT
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ANCHORAGE, Alaska (KTUU) - Wednesday kicked off the seventh annual Alaska Oil and Gas Association conference at the Dena’ina Center, centered on a theme of ‘bringing it home.’ The industry event includes a lineup of speakers and vendors all interested in the future of the energy economy.

Katie Berry, director of economics and research at the firm McKinley Research, presented a new report to those in attendance giving insight on the investments, jobs and industry growth in 2022 — as well as the expected growth within the next five years.

The job report release includes research from a study on 15 of the companies operating in the oil and gas industry.

Currently, the state’s oil and gas industry contributes to nearly 70,000 jobs in Alaska and could grow as the industry expects to invest $14 billion in projects in the next five years.

“Alaska’s oil and gas industry is a significant source of jobs in the state, the industry supports 69,200 jobs and $5.9 billion in wages — that’s 16% of all the jobs in our state,” Berry said.

With the world consuming 100 million barrels of oil a day, the Alaska Oil and Gas Association President and CEO Kara Moriarty maintains the daily need for the oil and gas industry is not going away. She says it’s important to continue producing the energy in Alaska.

“We need to continue to focus on producing that energy at home, we need energy independence not only now but into the future for our country,” Moriarty said. “That all ties into our theme, our theme is bringing jobs, energy and innovation back here to Alaska to continue to grow our economy.”

According to the report, one direct oil and gas job supports 15 additional jobs in Alaska — and every $1 in direct oil and gas wages supports $4 in additional wages in Alaska.

The McKinley report highlighted that despite volatility in oil prices over the last decade, the production has remained steady and constant even though the research report does not include production from new projects. The $14 billion that will be invested in the next five years will allow for the creation of thousands of more jobs and an increase in production.

These new projects are expected to directly impact oil and gas industry employment, wages, and other jobs in Alaska. Throughout the construction phase from 2023 through 2028, it is estimated the projects will directly employ an annual average of 1,600 workers. Those workers will earn a cumulative total of $1 billion in wages.

“The oil and gas industry still has the largest multiplier effect of any other industry in the state, so every time we add one new job, 15 new jobs are created throughout the economy,” Moriarty said. “So when we’re talking about these new projects, new construction, it absolutely has a ripple-down effect through the state’s economy, unlike any other industry in Alaska.”

Due to the multiplier impacts, those projects are shown to additionally support between 2,600 and 2,900 additional workers each year.

The production phase impacts will also create direct employment of hundreds of other workers, totaling millions of dollars of more wages by 2028.

“Alaska’s oil and gas industry continues to be a part of the state’s economic future,” Berry said.

“There’s a future in oil and gas and the importance of fiscal stability and regulatory certainly, you know our industry is not without challenge or constant threat, but the opportunity is bright where we can have more jobs, energy and innovation right here at home,” Moriarty said.

The AOGA conference will continue on Thursday with Gov. Mike Dunleavy and former governor and Secretary of Energy Rick Perry planning to speak at 11 a.m. Later, Rep. Mary Peltota will speak at noon and Sen. Dan Sullivan will speak at 3:30 p.m.