Oil prices are through the roof. Here’s why job numbers in the Alaska oil patch are not.

Oil prices in Alaska have surged to their highest levels in a decade.

But job numbers in the oil and gas industry have barely budged upward after they crashed during the COVID-19 pandemic, even as other sectors of the economy enjoy a solid rebound.

Industry observers in Alaska give several reasons for the tepid job growth in the oil patch.

They say it mirrors a trend in the industry nationally, a slow recovery that breaks from past practice. Companies, increasingly flush with cash, aren’t investing in oil field activity like they once did when the good times rolled.

Companies are now more likely to question big, long-term projects, observers say, as investors raise concerns about the industry’s past performance and new regulations that could result from climate change policies.

Sara Teel, an economist with the Alaska Department of Labor and Workforce Development, said in a June report that companies face shareholder pressure to cut capital expenditures while some lenders and investors are shying away from funding projects in environmentally sensitive areas such as the Arctic.

It’s usually “drill, baby, drill” for oil and gas companies when prices rise, Teel said in a phone interview.


“But when prices spiked this time, they restricted spending,” she said. “They are investing some, but not like before.”

In Alaska, the COVID-19 pandemic gutted the oil and gas workforce. Jobs plunged by about 40% as demand for crude oil, and the gasoline it makes, collapsed.

Alaska North Slope crude oil hit a record low of $16.55 a barrel in April 2020, Teel noted in the report. Two years later, the price rose to $109.41 per barrel, a “whopping” 561% jump, she wrote.

Meanwhile, jobs in Alaska’s oil patch have grown by only 18%, to 7,200, after bottoming out in November 2020 at 6,100 jobs, the latest state records show.

The workforce is a fraction of what it was in December 2014, when it hit a record 15,300 positions. Oil prices and job numbers at the time began a multi-year slide. But just before the pandemic, the industry was rebuilding, reaching 10,000 positions.

Teel wrote that the current slow job growth and “muted” activity is being caused by several factors, including automation in the oil patch that continues to reduce the need for workers.

The industry’s tolerance for risk also has changed, she wrote. Alaska projects can also require huge up-front costs, and years of planning.

Investment could grow if prices remain high for a long period, she said.

The risk of an economic downturn is making the industry more cautious, said Roger Marks, a former petroleum economist for the state.

“I think (the slow recovery) has to do with inflation and supply bottlenecks going on throughout rest of economy,” Marks said. “And the recession I think has people skittish about investing too much.”

Sean Clifton, a policy and program specialist at the Alaska Division of Oil and Gas, echoed those concerns.

[A ‘carbon bomb’ or much-needed energy? A village on Alaska’s North Slope holds key to Biden’s climate policy.]

“The likelihood of companies being willing to pull the trigger on projects goes up when the price of oil goes up,” he said. “But there are complications from the supply chain, and access to basic materials like steel.”

“So it’s not as easy as flipping a switch and getting back to work,” he said. “Unfortunately, the market is still complicated.”

A lean workforce

Industry observers say an additional important factor behind the slow job growth is that Hilcorp Alaska took over operation and partial ownership of Alaska’s largest oil field, Prudhoe Bay, in 2020. Hilcorp is known for operating with a lean workforce, compared to the much larger BP, the previous operator, they said.

“That’s going to be a permanent change in the industry’s employment profile,” said Brad Keithley, a retired Alaska oil and gas attorney who tracks economic issues in Alaska.

Other factors include concerns about future climate change regulations that could impact the industry and increased production of renewable energy that could affect demand for oil and gas, he said.


“There’s a fundamental change going on in the oil industry raising questions about its future, and as a consequence people aren’t putting a lot of additional cash into generating additional projects,” Keithley said.

Hilcorp has been increasing its workforce in Alaska, said Luke Miller, a spokesman for the company.

The company hired about 70 new people last year. It is on pace to more than double that number this year, he said.

Hilcorp also produces oil and gas in Cook Inlet in Southcentral Alaska, and employed more than 1,500 people in Alaska last year.

Job increases in the Alaska oil industry are generally tied to new projects, said Teel, the Alaska economist. The lack of new fields in Alaska explains some of the slow growth, she said.

[Oil refineries are making a windfall. Why do they keep closing?]

Kara Moriarty, head of the Alaska Oil and Gas Association, the industry trade group in the state, said oil companies are largely focused on drilling within existing fields, rather than launching big new projects.

“If you want more jobs, you have to have more activity,” she said.


Projects on hold

In Alaska, drilling activity plunged after the pandemic was declared and remains slow compared to pre-pandemic years, according to data from the Alaska Oil and Gas Conservation Commission.

The industry completed 291 wells in the two years before March 11, 2020.

It completed 138 the next two years, the data shows.

Two major projects in Alaska that could sharply boost jobs are on hold or uncertain, industry observers say.

ConocoPhillips’ Willow prospect is undergoing a new round of federal review after a federal judge ruled in favor of conservation groups that had sued to stop it.

Also, Oil Search’s Pikka prospect faces major financing questions as banks withhold financing for Arctic projects following pressure from climate activists. And Oil Search’s merger last year with Santos, a larger Australian oil company, has raised uncertainty about Pikka’s future.

Santos, now the parent of Oil Search, said in a prepared statement that it employs about 150 people in Alaska, primarily located in Anchorage.

“At Santos, we are focused on controlling costs and not the fluctuation in oil prices,” the statement said.

The company will maintain that low-cost model as it works toward making a final investment decision on Pikka, the statement said.

Tara Stevens, a spokeswoman for ConocoPhillips, said in an email that the recent increase in oil prices is a promising indicator of future industry growth. But high oil prices don’t immediately result in growth, she said.

She said ConocoPhillips in Alaska is focused on expanding drilling and production in existing fields, which includes projects in the Alpine field, Greater Mooses Tooth-2 and Fiord West, where new oil production started in recent months.

ConocoPhillips’ workforce of 960 has held steady the past two years while capital spending in Alaska has remained stable, she said.


Willow is an $8 billion project that could create more than 2,000 construction jobs and 300 permanent jobs, she said.

With the supplemental environmental review underway, ConocoPhillips has not made a final decision to invest in the project.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or