Senators want to know why more Alaskans aren't on Slope

Lawmakers say too many well-paying jobs are going to people who live out of state. They express dismay over a state Labor Department finding that more than half of the new hires in Alaska oil and gas jobs during the third quarter of 2010 weren't state residents.

State labor statistics show that employment on the North Slope is near an all-time high, said state Sen. Dennis Egan, a Democrat from Juneau and chairman of the Senate Labor and Commerce Committee. Oil and gas employment jobs numbered 12,800 last year, just under the count in 2009.

"Yet many qualified Alaskans are still looking for work in the oil industry," Egan said.

The panel is examining the hiring practices of oil producers and their contractors. Some contractors bring in all their employees from Outside, Egan said. Overall the portion of oil industry workers who aren't Alaskans has been about 28 to 30 percent in recent years, according to a Labor Department analysis.

The senators want to find ways to get more Alaskans hired, Egan said. The committee on Thursday took testimony for about four hours in Anchorage from industry, labor and the public. It earlier held hearings in Fairbanks. A number of state representatives participated as well.

A state law passed at the start of the oil boom in 1972 created a preference for Alaska hires in the oil patch. But a 1978 U.S. Supreme Court decision voided it as unconstitutional.

Representatives of BP, Exxon Mobil and Conoco Phillips all told the legislators that it's in their interest to hire Alaskans, and they work hard to do so. They invest millions of dollars into a variety of training and education programs to develop a local work force. And they push their contractors to hire Alaskans, too.

They also said the best way to boost Alaska hires is to encourage more oil production, which would then create more jobs.

Sen. Joe Paskvan, D-Fairbanks, pressed the industry representatives on why the figures are so skewed if industry is doing so much. On the North Slope, for instance, about 3,000 of the oil workers are non-Alaskans, nearly triple the number from the year 2000, he said.

"We're going in the wrong direction," Paskvan said.

Claire Fitzpatrick, chief financial officer for BP in Alaska, said some jobs are specialized and hard to fill in-state.

For instance, BP contracts with an Outside firm that brings in 200 workers for four to eight weeks for what she called "summer turnaround work." It involves taking big plants such as flow stations out of commission for major maintenance, a BP spokesman said later. While BP has tried to get a local contractor, it's hard to get such a big team of skilled workers for such a brief period during Alaska's busy construction season, Fitzpatrick said. The Outside firm can deploy its workers in various states as needed.

At BP itself, about 80 percent of its 2,000 Alaska workers are Alaskans, Fitzpatrick said. Those based Outside must pay their own way to Anchorage or Fairbanks, and must deal with the aftermath if they can't get to work because of a delayed plane, she said.

The oil giant already is making changes to boost the percentage of Alaskans working for its contractors. For instance, it's breaking down some big contracts into smaller units so that more companies can bid on the work. And it's going to start deciding contracts in part based on an Alaska-hire factor, strengthening an existing provision that encourages contractors to hire Alaskans, Fitzpatrick said.

At Conoco Phillips, Alaska-hire already is factored in when awarding contracts to subcontractors, said Bill Hurley, a senior human resources business partner. Conoco no longer contracts here with companies that don't employ Alaskans, he said. And it has one of the highest rates of Alaska hire, now at about 88 percent, Hurley said.

Still, the hiring of non-Alaskans remains a big problem, said Vince Beltrami, president of the AFL-CIO in Alaska. Some of the work going to non-Alaskans is for "coating" -- isn't that just painting? he asked. Surely Alaskans could do that.

There's even a sleeping facility being constructed at Ted Stevens Anchorage International Airport that will cater to out-of-state workers, he said. They won't have to leave security if they need to sleep for a few hours while passing through Anchorage on the way to or from the Slope, Beltrami said.

Sen. Cathy Giessel, R-Anchorage, said she spoke with the state transportation commissioner and learned the sleeping facility is being built by a contractor and is not targeted at Slope workers. It will be available to anyone stuck at the airport, including families with tired babies, she said.

But Beltrami said the facility is offering discounts specifically to oil field workers.

During the public testimony, the room filled with a mix of suit-wearing business and industry representatives and oil patch workers in construction boots and T-shirts.

A welder who testified, Brodie Jensen, said he's worked on the Slope since 1997 and believes the vast majority of the foremen are from out of state. They make sure jobs go to their friends from back home; they're gunning for the Alaskans, he said.

Egan said his committee will hold further hearings to discuss what the state can do to improve the situation. The group is awaiting a report by the McDowell Group, a consulting firm it hired for $170,000 to examine the resident versus non-resident worker issue in depth.

Reach Lisa Demer at ldemer@adn.com or 257-4390.