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Business/Economy

Number of nonresidents working in Alaska oil industry again up slightly

  • Author: Alex DeMarban
  • Updated: December 2, 2017
  • Published February 7, 2017

The percentage of out-of-state residents working in Alaska's oil and gas industry inched up for the sixth straight year in 2015, reaching 36.4 percent, according to newly released figures from the Alaska Department of Labor and Workforce Development.

"In 2015, the oil industry employed a record number of nonresidents," says the report, written by state economist Neal Fried.

The number reflects a steady annual increase since 2009, when the nonresident hire rate was 28.1 percent, according to the February edition of Alaska Economic Trends issued by the agency.

The data is included in a review of the oil and gas industry's ups and downs over the decades as oil prices have risen and dropped. Fried does not explore the reasons for the rising nonresident hire rates in the article.

Nonresidents in the state's oil and gas industry earned $708 million in 2015, 34 percent of its total wages. Oil and gas companies, including oil-field service firms, are the top wage-payers in Alaska, averaging $139,704 in 2015, more than 2 1/2 times higher than the statewide average of $54,192, the report said. 

The industry reached record monthly employment in 2015, averaging 14,100 jobs, after experiencing strong growth between 2005 and 2015.

But companies began cutting positions in May 2015 as the oil-price collapse took hold. Oil and gas employment was down 3,164 jobs in June 2016 from a year earlier.

Fried said on Tuesday that the 2015 figures for nonresident hire in the industry are the most current. The numbers are tied to Permanent Fund dividend eligibility.

Out-of-state hire is also high in other sectors of the economy, including seafood processing, with about three of four workers from places other than Alaska, and construction, with about one in five workers from Outside.

One in five Alaska jobs and $2.6 billion in wages went to nonresidents in 2014, according to figures released early last year. The statewide nonresident hire rate rose annually between 2009 and 2014, with construction and other sectors contributing to the increase.

Companies in the oil industry have said they strive to employ and retain Alaskans.

Factors often cited for the industry's high nonresident rates include difficulty finding workers for the highly skilled jobs, and the North Slope's unique work schedules — usually two weeks on, two weeks off — that enable workers to commute from out of state.

Kara Moriarty, president of the Alaska Oil and Gas Association, said some companies have rates of Alaska employment that are high by any standard, such as Hilcorp Alaska at 90 percent and Alyeska Pipeline Service Co. at 95 percent.

"The oil industry strongly prefers to hire Alaskans but sometimes demand for experienced workers exceeds what is available in Alaska — another reality of pulling from a small labor pool," she said.

Another obstacle is "the 30 percent failure rate of pre-employment drug screens seen by most major employers," she said, an effort the state is working to address.

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