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Business/Economy

Jobless benefit claims keep rising in Alaska oil and gas sector

  • Author: Alex DeMarban
  • Updated: September 30, 2016
  • Published January 31, 2016

The number of people receiving jobless benefits in Alaska continued to fall in December, except for in the oil and gas sector, where claims doubled from the year before, according to figures released by the state labor department.

In December, 1,020 Alaskans who had been working in the oil and gas industry collected $1.1 million in unemployment benefits. That compares to 518 in December 2014, Lennon Weller, a state Department of Labor economist, said Friday.

Year-on-year increases began occurring in May 2015 after plunging oil prices forced companies to trim projects and thin workforces, creating ripple effects that have also hurt contractors and oil field service firms.

"We could be seeing more claims coming into the system," Weller said.

With its high-paying jobs, the oil industry is being closely watched in a state that has suffered tough times in past periods of low oil prices. Employment in the sector remains historically high, though the numbers are falling. A preliminary estimate shows the industry employed 13,500 workers in December, a level not seen since May 2012.

ASRC Energy Services Response Operations informed the state in mid-November it would cut about 30 positions as it wound down its operations in the U.S. Arctic Ocean. The announcement was triggered by a federal law requiring companies to give notice of large layoff decisions.

The cuts stemmed from Shell's announcement in September that the oil giant would end its exploration effort in the remote region, affecting 400 jobs in Anchorage alone.

ASRC Energy Services Response Operations, a subsidiary of Arctic Slope Regional Corp., the Barrow-based Native corporation, said the "substantial reductions" in its workforce meant the company could not move the affected employees, including vessel operators and field supervisors, to other positions within the company.

The company's general manager, Gary Schliesing, said the situation "is having a devastating impact" on the company's business operations.

Oil prices have fallen steadily since summer 2014, dropping from more than $100 a barrel for North Slope crude oil to $31.72 on Thursday.

The number of former oil and gas workers receiving jobless benefits in December was 125 more than in November, when 895 received the assistance.

The numbers could continue growing. Earlier this month, British oil company BP announced it would cut 13 percent of its Alaska workforce, affecting about 270 employees as part of a global reduction.

As for all industries, the total number of claims was down by almost 100 in December, compared to the year before.

Weller said 15,996 people received jobless benefits amounting to $13.4 million last month. That compares to 16,093 recipients in December 2014.

"It is down just slightly," he said.

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