The Alaska Oil & Gas Association (AOGA) hosted its annual luncheon on Thursday. Jim Calvin from the McDowell Group presented findings from their updated report “The Role of the Oil and Gas Industry in Alaska’s Economy”. The McDowell group was contracted by AOGA to assess the role of the oil and gas industry in Alaska’s private and public sector economy. The economic impact was based on detailed expenditure and payroll data provided by 16 primary companies in Alaska’s oil and gas industry. The study also measured direct, indirect and induced jobs and wages from the industry. An addition to the 2014 report was the tracking of tax and royalty payments made by the industry.

Key findings in the study showed that during 2013, the 16 primary companies employed 5,335 workers; 4,700 individuals, or 88%, were Alaska residents. The employees earned $780 million in wages in 2013. Adding indirect and induced employment numbers, spending by the industry accounted for 51,000 jobs and a total of $3.45 billion in wages for Alaska’s private sector. This does not include non-resident oil and gas industry workers or their wages. Government spending of oil revenue accounted for an additional 60,000 jobs and $3 billion in wages. The total for direct, indirect and induced jobs within the primary companies, as well as the private and public sector is over 111,000 jobs and $6.45 billion in wages. For every primary company job, there are 20 more jobs generated in the Alaska economy. A multiplier of 20 is difficult, if not impossible, to find within other industries or areas of the country.

The report also broke out private sector spending within six geographic areas; the Municipality of Anchorage, Fairbanks North Star Borough, Kenai Peninsula Borough, Mat-Su Borough, North Slope Borough, and Valdez.

Alaskans understand the importance of a healthy oil and gas industry and its impact on state taxes and royalties. Alaska is the only state in the US that does not have a state sales tax or personal income tax. This is because of the revenue received from the oil and gas industry. During FY2013, the oil and gas industry paid $7.4 billion in taxes and royalties to the state government. This was 47 percent of the total of all state revenue. $6.4 billion was unrestricted general fund revenue (UGF), which was 92 percent of the total.

Statewide government programs benefit greatly from the oil and gas industry. Approximately $8 of every $9 UGF spending on support of K-12 education comes from the industry. On average, each student received approximately $9,100 in state aid and $8,170 was oil-funded revenue. Alaska’s Medicaid program is also heavily reliant on the industry. Approximately $9 of every $10 of Alaska’s state match is related to oil revenue. This relates to $4 of every $10 spent on Medicaid in Alaska ($557 million out of $1.4 billion).

Without question, the oil and gas industry has a significant impact on the Alaska economy. Speaker Jack Gerard, President and CEO of the American Petroleum Institute, noted that no other state in the union comes close to what the Alaska oil and gas industry can do for its residents. The report’s summary illustrates the magnitude of the economic impact of the oil and gas industry for all Alaskans.



The full report can be read at: http://www.aoga.org/sites/default/files/news/aoga_final_report_5_28_14_0.pdf