Study outlines oil industry's enormous

contribution to Alaska's economy

The oil and gas industry has far-reaching effects on Alaska’s economy, far beyond its enormous contribution to state revenue coffers, according to a recent study commissioned by the Alaska Oil and Gas Association and released at an Anchorage Chamber of Commerce luncheon June 30.

While royalties and taxes on oil production have accounted for nearly 90 percent of Alaska’s annual unrestricted general fund revenues, the report revealed industry activities supported 9.4 percent of all employment in the state and 11.2 percent of all wages, at $2.4 billion. The industry generated 12 percent of the private sector jobs in Alaska last year and 21 percent of private sector payroll. In 2007, 41,744 people were employed directly and indirectly in Alaska as a result of industry activity.

The study, conducted by Information Insights and the McDowell Group, noted the oil and gas industry has the highest average wage in Alaska. The average company in the industry paid a monthly wage of $12,737, 3.5 times higher than the statewide average of $3,627.

With regard to revenues, the industry accounted for 88 percent of Alaska’s unrestricted general fund sources in 2007. Producers paid the State $5.14 billion in taxes and royalties in fiscal year 2007. The amount is expected to double as the 2008 fiscal year closed on June 30. If current oil prices are maintained in the new fiscal year, revenues could exceed $14 billion.

The industry also paid local property taxes totaling $236 million on $15.6 billion in oil and gas production property.

The industry made $28 million in charitable contributions last year. Alaska based charitable foundations reported total giving of $21.6 million in 2004, the most recent year for which data is available.

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