AD Main Menu

Alaska oil jobs hit record high, despite governor's warnings

Pat Forgey
State Department of Labor employment data released Friday show direct oil and gas industry jobs in Alaska reached reached 13,600 last year, a new record high since the construction of the trans-Alaska pipeline in 1976. David Steed graphic

JUNEAU -- Oil industry jobs in Alaska hit a new record high in 2012, dealing another blow to what had once been a main focus of the assault by Gov. Parnell and the industry on the state's ACES oil tax.

"If you look at the history of the governor's attempts to attack ACES, this was one of the first main arguments they made, that jobs are going away," said Sen. Bill Wielechowski, D-Anchorage.

Parnell's tax cut bill is now under consideration in the House of Representatives, following passage by the Senate last week.

State Department of Labor employment data released Friday show direct oil and gas industry jobs in Alaska reached reached 13,600 last year, a new record high since the construction of the trans-Alaska pipeline in 1976.

The accusations that ACES is causing job losses on the North Slope has long been a key part of oil industry attempts to roll back their tax rates, beginning soon after ACES was passed in 2007.

One of those effort was a advertising campaign on television and newspapers by the Alaska Support Industry Alliance called "Faces of ACES." In that campaign, people who claimed job losses blamed ACES and sought its repeal.

Members of the the House of Representatives repeated such claims during floor debate as they voted to pass House Bill 110. Those statements appeared to be based not on evidence but on the industry's lobbying effort and anecdotal examples from people they knew or had heard about who had lost jobs.

When the bill moved to the Senate's Labor and Commerce Committee, Chairman Dennis Egan, D-Juneau, called in experts from the state Department of Labor, who reported employment in the oil sand gas industry was up, and was hitting record levels.

A McDowell Group study commissioned by the Senate Finance Committee found similar results, and House Bill 110 never left Egan's committee.

And the people in the "Faces of ACES" campaign were revealed to be have been entirely workers who had been hired after the passage of ACES, or company managers who had not lost their jobs at all.

Some industry advocates claimed that rising employment level was due to a spike in additional maintenance jobs due to corrosion repair, but the numbers have continued to rise in the months and years since.

Consultants have told the Legislature that that job growth is to be expected, as an aging oil field and older equipment take more manpower to operate and repair.

But those advocating Parnell's new tax cut bill, Senate Bill 21, are continuing to claim ACES is costing the state jobs, these days focusing on the claim it is losing those jobs to North Dakota. There, expensive-to-produce oil has been made economically viable by higher oil prices, at the same time when new hydraulic fracturing and horizontal drilling techniques have been developed.

A Legislative Research Services report said the growth in oil production in North Dakota is due to "the confluence of technological advances and historically high oil prices."

But Senate President Charlie Huggins made the linkage again to explain his vote to roll back Alaska's taxes. While visiting North Dakota, he said, he met two young men from Soldotna's Skyview High School who linked ACES to a lack of jobs in Alaska.

"Mr. Huggins, fix Alaska so we can come back and get a job," Huggins said they told him.

Parnell has been continuing to claim Alaska is losing jobs to North Dakota, most recently Thursday at the Juneau Chamber of Commerce in which he repeated Huggins story and linked it to ACES. He said the two young men had asked him to "fix the tax structure" so they could return to Alaska and find work.

"That's when tax change becomes personal and real," he said. "It's not about the government's coffers, its about creating opportunity for Alaskans," he said.

Cruz Construction's Dave Cruz is one of those who blames ACES for their being more jobs in North Dakota than Alaska, and expanded his operations down south to participate in the boom.

"I took a lot of Alaskans with me to North Dakota," he said.

One of Cruz' employees was featured in the "Faces of ACES" campaign. That employee first got a job on the North Slope after the passage of ACES, but when he lost that job he blamed it on the tax.

Democrats who have defended ACES point to the record employment numbers, and question whether the oil industry is hiring non-residents instead of Alaskans.

Despite the official employment numbers from the state, tax cut supporters such as Huggins aren't convinced. "That may or may not be true," he said this year of the Department of Labor's statistics.

But ConocoPhillips, one of the state's largest employers, said that's what they're seeing on the North Slope. "The camps are full," said Scott Jepsen, Conoco's vice president for governmental affairs, told the Senate Finance Committee recently. The lack of space to put workers has sometimes limited the amount of work that could be done, he said.

The Department of Labor's numbers show strong oil and gas employment continuing, with preliminary jobs numbers at 13,900 for February.

Contact Pat Forgey at pat(at)alaskadispatch.com