Are You Prepared: Coronavirus and the Alaska Economy

According to the Center for Disease Control, the Coronavirus or COVID-19 has spread to 48...
According to the Center for Disease Control, the Coronavirus or COVID-19 has spread to 48 countries and seven states in the U.S. <br />There have been no reports in our area, but Jackson County, Ohio is prepping.(WSAZ)
Published: Mar. 6, 2020 at 4:42 PM AKST
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Alaska's major economic sectors are trying to find the best way to monitor and respond to the impact of the global spread of COVID-19, the novel coronavirus first documented in Wuhan, China, in December.

While China is a significant trade partner with Alaska, regardless of whether the virus shows up in Alaska, it could disrupt the state's most significant financial drivers. With billions of dollars at stake, Alaska's fishing, tourism, and oil and gas industries are in an awkward position between knowns and unknowns as they prep for how the virus will impact their businesses.

The Ted Stevens Anchorage International Airport is staying ready with round-the-clock mopping, wiping, and scrubbing.

"Our materials and our methods that we use here are designed to stop the spread of communicable disease in the airport. Whether it's coronavirus or influenza or rotavirus or norovirus -- all of those -- we are always trying to keep the airport clean and safe," airport manager Jim Szczesniak told KTUU.

The cleaning work is an investment in keeping goods and people moving through the airport, a global hub. Eighty percent of all air cargo from Asia to North America stops at the airport, and just under six million people pass through its terminals each year, many over the summer.

Vacationers bring about $4.5 billion into Alaska each year.

Among them: 1.4 million cruise ship passengers.

The Alaska Cruise Ship Industry Association told KTUU it's already expecting more ships and sailings for the summer, with cruise lines looking to Alaska as a solution to the changing and uncertain port restrictions in Asia.

Most visitors to Alaska come from within the United States. With that in mind, the state's tourism industry is closely watching traveler behavior, hoping people with booked trips don't cancel. It's also looking for ways to entice foreign-bound travelers with interrupted plans to choose Alaska as an alternative destination.

"You could just as easily envision a scenario where people who have a pent up demand to travel and are unable to make it overseas and don't have the ability to make it overseas this summer could possibly look to Alaska as the place they take their trip," Jack Bonney, Visit Anchorage's director of community engagement, told KTUU.

Airport manager Jim Szczesniak told KTUU he's been in conversations with major domestic carriers to expand service. "We've been telling them that the Alaska market is something that they need to take a look at for the summer to be able to bring more Americans up here because again there are people that are not wanting to travel internationally, but they still want to travel, and we'll take them up here," Szczesniak said.

Alaska's commercial fishing and oil and gas sectors also face challenges related to the emergence and spread of the virus, and the fishing industry has already felt the pinch from China's coronavirus slump in commerce.

In Southeast Alaska, divers who make a living off of giant-size clams known as geoducks have been struck.

"Right now, we have divers in Southern Southeast Alaska who are harvesting geoducks that are completely shut down because there is no market right now in China. That is their primary market, and so they are actually not fishing right now due to the virus," Frances Leach, Executive Director of United Fisherman of Alaska, told KTUU.

Geoducks are a $4.5 million fishery and are just a fraction of the nearly 6 billion pounds of seafood harvested in Alaska each year, with China by far the largest export market, where the coronavirus-driven slump in commerce has slowed seafood processing.

"If they don't have the workers over there to process the products, then we're going to have a problem, and we're really going to start seeing that come summer if it hasn't calmed down," Leach said.

"It's brought certain elements of our industry to a complete standstill," Norman Van Vactor, CEO of Bristol Bay Economic Development Corporation, told KTUU.

The corporation has ownership in five commercial fishing businesses.

Another concern, according to Van Vactor, is that the hiring of labor for the busy summer salmon season starts now, including foreign workers, who could be affected if borders close. There's also the matter of keeping workers at job sites healthy and safe.

"We're for the most part dealing with scenarios where we have large bunkhouses, people are living together, eating together in cafeterias, and if you truly had a contagious disease situation developing, it would be so easy to see it spread quickly," Van Vactor said.

In the oil and gas industry, investor nervousness over the COVID-19 global health emergency caused oil prices to drop. Alaska North Slope Crude fell to $50 per barrel.

"We are incredibly sensitive to what goes on in the oil industry. A fall in oil prices because of a supply shock because of the coronavirus could potentially be very bad for Alaska," Kevin Berry, an Assistant Professor of Economics at UAA, told KTUU.

Oil and gas revenues make up the lion's share -- nearly 90 percent -- of the state's budget.

"Petroleum is a big deal in Alaska. We're one of the big suppliers. And when people aren't moving, and the economy slows down, that reduces our demand for product," Berry said.

Workers, shipping, the ability to get parts and find buyers, value that fluctuates with domestic and global supply and demand -- Alaska's economic drivers are susceptible to shifts in any of these.

Many people KTUU spoke with said it's too early to know what will happen. So at the moment, the strategy is to prepare as best as they can, then ride it out.

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