A Juneau research and consulting firm has been given the job of analyzing North Slope oil field hiring practices in an effort to figure out whether it's true that the coveted jobs are not going to Alaskans and why.
On Friday, the Senate Finance Committee awarded the contract to McDowell Group, which proposed a cost of about $180,000. The final report is expected in December and is a backdrop to the political debate expected to rage again during the next legislative session over whether the state's oil tax structure should be revamped.
Gov. Sean Parnell and House Republican leaders support cutting taxes on the industry in an effort to stimulate investment and more jobs. But opponents, including a bipartisan senate leadership group and Democrats, are reluctant to give companies what was estimated to be a $2 billion a year tax break without promises of new investment and new jobs.
Late in the legislative session earlier this year, lawmakers were stunned to learn from the state Department of Labor that nearly half of new hires on the North Slope are Outside residents. The Senate Finance Committee decided to pay for a study of what's going on and Sen. Dennis Egan, chairman of the Senate Labor and Commerce Committee, plans to hold hearings next month on the issue.
"This is not anti-oil industry," Egan said Tuesday. "What we're trying to find out is why more Alaskans are not being employed."
Egan and other lawmakers said the major oil companies have a good local hire record, but some of the sub contractors do not. One company, Egan said, employs a couple hundred people and not one is an Alaska residents.
"I don't buy that," he said. "They're making a hell of a lot of money off Alaska but they're hopping the jet back and forth."
Egan was involved in choosing the McDowell Group for the study and says he has a lot of faith in their ability. The company employs former state labor analysts and has done numerous studies for the state and private groups that are used in legislative deliberations.
The McDowell Group proposal describes a comprehensive project to document employment trends in the Alaska oil industry including recruiting practices of the primary producers and support service companies. Among other things, the study is expected to drill down on resident hiring, those who come from Outside but become Alaskans, those Alaskans who move Outside but continue to work on the Slope, age of oil field workers and how that's changed over time, and patterns of unemployment insurance claims and if those checks are being mailed Outside.
The study also will look at whether companies are leaving Alaska -- as supporters of the tax break have contended -- and if that is affecting resident hiring trends. The study also hopes to identify opportunities to improve resident hire, including whether more training is needed for specialized jobs.
Although the consultants will be combing through reams of publicly available data such as state and federal labor records, they also hope to be able to use confidential information the state keeps.
They also say they need to obtain information from the oil industry that the companies would need to provide voluntarily, an effort that the proposal describes as a "challenge."
Egan said he doesn't expect the major oil companies to block the kind of information the study seeks because much of it is already required to be reported to the state.
BP Alaska spokesman Steve Rinehart said his company would need to look more carefully at the study proposal before commenting.
The hearings Egan is holding in Fairbanks and Anchorage next month will also be aimed at getting oil industry officials and workers to shed light on the existing situation and how it can be improved. Otherwise, it makes no sense for the state to give away state money when it is getting no new jobs in return, he said.
"Why are we giving them more tax breaks when we are already giving them billion in tax breaks when they're not employing Alaskans," he said. "It doesn't make sense."
Sen. Bill Wielechowski chairs the Senate State Affairs Committee and held a hearing this year on the effect of the state oil tax structure on investment and jobs as well as profits and revenues.
"People in Alaska obviously care about jobs on the North Slope and as policy makers we want to see whether those jobs are going to Alaskans," he said, "and if not, what sorts of levers can we pull to get those jobs to go to Alaskans."
Contact Patti Epler at patti(at)alaskadispatch.com
Note: This story has been corrected to reflect that Sen. Bill Wielechowski chairs the Senate State Affairs Committee, not Judiciary. Sen. Hollis French is the chair of that committee.