Oil and gas jobs shatter record in 2013, the last year of old ACES tax

JUNEAU -- Alaska oil and gas jobs hit a new record in 2013, as the sector has done repeatedly since the passage in 2007 of the ACES oil tax.

The claim that ACES resulted in job losses had been a centerpiece of the campaign against the tax that passed when Sarah Palin was governor, with strong support by legislative Democrats.

That campaign succeeded last year with the passage of Senate Bill 21, rolling back oil tax rates, and 2013 was the last year in which ACES was in effect.

There were 14,100 people directly employed in the oil and gas extraction and production industries in 2013, a new post-pipeline construction record. The year ACES passed, 2007, there were 11,500 oil and gas jobs in Alaska.

'Trending upward'

"It's definitely trending upward pretty consistently," said Caroline Schultz, economist with the Department of Labor and Workforce Development's Research and Analysis Section.

The trend appears to be continuing this January, with preliminary numbers showing 14,200 oil and gas jobs, and the North Slope Borough sporting an unemployment rate of 4.3 percent, lowest in the state.

The debate over the impact of oil taxes on jobs began soon after the passage of ACES, and was a hallmark of campaigns to roll back the increase.

A television ad campaign called "Faces of ACES," claimed to portray personal stories of Alaskans who had lost jobs because of ACES. Several news organizations at the time revealed that those profiled in the ads had either been hired after ACES was adopted or were company managers who had not lost their jobs at all.

Representatives of the oil companies said they were continuing to increase hiring.

All-time-high for oil field jobs

Last year, when Senate Bill 21 passed, those claims were made again once again.

"Our companies have been fleeing to North Dakota," said Sen. Anna Fairclough, R-Anchorage.

But Sen. Bill Wielechowski, D-Anchorage, welcomed the news of the new jobs numbers on Friday. "The simple undeniable fact is under ACES we continually shattered the all-time high record for oil field jobs," he said. "Those who continue to deny that put their credibility into question regarding every other fact they put forward regarding oil taxes."

The department's oil and gas numbers understate the impact of the petroleum industry on Alaska's economy, he added.

"When we talk about oil and gas numbers, we are talking about oil and gas extraction, which are typically almost entirely the big players, the big companies who are doing the extraction and the oil support services, which are the subcontractors doing work for the big extraction companies," Schultz said.

Other parts of the industry include the trans-Alaska pipeline and oil refineries, neither of which are included in the state's oil and gas job numbers. Some construction companies and other firms doing work for the big producers are counted elsewhere as well.

'Thousands' of new jobs under SB 21

Further, oil and gas jobs pay well above average wages in Alaska, magnifying their impact on the economy.

The state does not calculate multiplier effects for oil and gas jobs, but Schultz said economists with the University of Alaska's Institute for Social and Economic Research and the McDowell Group have found oil and gas jobs have much more impact as employees and suppliers spend money throughout the economy.

The battle over jobs has been shifting. Those who have been claiming the state's tax regime was driving jobs away now claim that Senate Bill 21 is bringing hordes of jobs to the state.

Their arguments are similar to those made by the ACES supporters earlier.

Senate Bill 21 supporter Sen. Peter Micciche, R-Soldotna, said last month that critics fail to recognize the "thousands" of new jobs since the passage of Senate Bill 21.

"Anyone that will deny the increase in actively simply has installed a set of blinders and is not paying attention to what's going on on the North Slope," he said.

Economist Schultz said the state is predicting an increase of 500 oil and gas jobs in 2014, with an expected level of 14,700 for the year.

"Our model showed a continued trend ... of growth, which made sense considering what we believe to be the driver of growth in oil and gas. I mean, there is some new development, new projects, but a lot of the job growth is probably driven by increased maintenance and operations work," she said.

That maintenance work may have been the reason for job growth during recent years as well.

"Aging facilities just need more work to function," she said.

Contact Pat Forgey at pat(at)alaskadispatch.com