The oil industry's hiring practices on the North Slope have caught the attention of the Senate Finance Committee which on Sunday approved spending $200,000 to figure out why industry employment is up, yet Alaska companies report there are no jobs for their workers.
The review is part of the contentious debate over whether the Legislature should cut taxes on the oil industry in order to spur more investment and thus create more jobs. Oil industry representatives testified before a number of legislative committees that Alaska was losing jobs to booming oil prospects Outside, particularly North Dakota. They argued that North Slope employment in particular was falling and that the Legislature needed to act now to save jobs, a claim that has become the centerpiece of TV spots and media campaigns pushing passage of the tax cuts.
The House passed House Bill 110, proposed by Gov. Sean Parnell and it went to the Senate where it landed before the Labor and Commerce Committee. At the first hearing, Commissioner Click Bishop of the Department of Labor and Workforce Development testified that jobs in the oil industry actually have seen "an uptick" in recent years and are at near record high levels.
The feeling that there are fewer jobs for Alaskans, according to Bishop and state labor economist Neal Fried, may be because nearly half the people being hired by the oil industry are non-residents. The data shows about 30 percent of those hired in the last few years were non-residents but the number climbed to 47 percent in the past year, they said.
The labor department figures show oil and gas industry jobs in Alaska have grown from 8,800 in 2000 to 10,100 in 2006, just before the controversial current tax structure was put in place. Last year, there were 12,800 oil field jobs. The figures suggest the tax system has not discouraged work in the oil fields and lawmakers want to know why the numbers contradict the claims of the industry and Parnell.
Some of the upswing in North Slope jobs is associated with maintenance and repair work, industry officials have said.
But lawmakers were caught off guard by Parnell's own labor department staff telling them that companies getting work on the Slope appear to be hiring from Outside to fill many of the jobs.
Sen. Dennis Egan, who chairs the labor committee, asked for more information but didn't receive an answer from the administration. So he is holding HB 110 in his committee over the interim and said he might hold hearings in an effort to find out what is going on before the Legislature resumes in January.
On Sunday, the Senate Finance Committee voted to spend $200,000 of the committee's own budget on a study of oil and gas employment on the North Slope, including job classifications, wages, hiring practices and the use of non-residents vs. residents, co-chair Sen. Bert Stedman said.
The House, at the urging of Parnell, has moved quickly this session to reduce taxes on the oil industry, a restructuring estimated to cost the state about $2 billion a year.
The Senate has consistently said it needs more information before it can go along with a revenue loss of that magnitude and has raised concerns that the oil industry may not invest that tax savings in Alaska.
Contact Patti Epler at patti(at)alaskadispatch.com.