A Different Perspective
By Paul Wiltse
It’s hard for Alaskans not to feel like we’re “under siege”.
existing hospitality facilities should have many good upcomEvery day, there’s more news about low oil prices in Alaska,
ing years to house the influx of 5,000 new folks. In addition,
which is adversely affecting the State budget, oilfield-related
the military bases in Fairbanks are adding Apache Helicopjobs, and the ripple effect of state contracts not awarded.
ters, which requires additional employment. Drone technoloMany of us wonder if Alaska’s opportunities will be limgy is also being brought here over the next three years.
ited in the future – will a high percentage of us need to leave
Should the Donlin Creek gold mine proceed with its
the State to find jobs?
plans, it would build a gas pipeline to its mine and construct
The Venture North Group is an Anchorage-based compa- a power generation facility. This would create more incentive
ny that seeks to place companies with new buyers and to find
to explore for gas in Cook Inlet and along this corridor. The
capital on behalf of project sponsors. In the course of perproject would employ thousands during its planning and conforming our jobs, we see a good cross-section of companies
struction phases, in addition to employment at the mine.
for sale and new projects on the horizon. We also have the
Longer-term projects are in the works, as the Northwest
opportunity to see industry trends in
Passage begins to open up. Northwest
What we’ve learned is that
many of Alaska’s business sectors, and
areas in Alaska are likely to expand
most
of
Alaska’s
industries
are
have access to the reasons that owners
Ports, Coast Guard facilities, ice-breakare divesting their firms, why buyers
er infrastructure and private investfaring well, if not booming.
are buying, and why project sponsors
ment to service this developing market.
are trying to find capital now, versus later.
According to the June Alaska Trends, published by
What we’ve learned is that most of Alaska’s industries are
Alaska’s Department of Labor, Alaska’s overall employment is
faring well, if not booming. Tourism in Alaska is at or near
down by 1.3 percent versus this time last year. This is unforturecord levels, which has benefitted other support industries
nate, but is a far cry from fears of a much larger market downindirectly. Alaska’s telecommunication industry has benefitside here in the state. Some of this reduction in employment is
ted from large infrastructure projects such as the Quintillion
due to large exploration projects coming to completion, giving
project, aiming to connect Europe and Asia. Other substantial way to increased production.
infrastructure projects are also underway as telecoms upgrade
According to Alaska Trends, crude oil production in
their facilities and seek new markets. Alaska has increased by 16.2 percent since this time last year.
Railbelt electric utilities have, or
Also, the world’s price of a barrel of oil has recovered substanare in the process of replacing aging
tially from its recent lows. Prices today are lower than we’d
power generation facilities and are
like to see, but are representative of the historical prices we
investing millions in addressing the
experienced through 2005.
best strategies to upgrade 50-yearIn regard to the State’s fiscal uncertainty, as opposed to
old transmission lines. These power
many states, Alaska has substantial wealth and future prosplants are generally seeking to utilize pects for continued wealth. The general consensus is that
Cook Inlet gas as a fuel, which
Alaska’s state government needs to diversify its revenue base
Paul Wiltse
encourages continued investment in across more revenue-producing sources. Relying upon oil
keeping gas production robust in
as its primary source of income is risky and lends itself to
Alaska to support local needs. Local companies are investing
moments like what we’re experiencing. We look forward to
millions in exploration to find more gas to help Fairbanks
our government leaders resolving this diversification problem,
lower its costs of power. In addition, local companies tasked
which would reduce the volatility we’re experiencing in state
with constructing and upgrading these facilities are having
funding. This might be more of a legislative challenge than a
their best years.
wealth challenge.
Fairbanks, with the receipt of two squadrons of F-35s
In short, Alaska’s business community is holding up
beginning in the fall, is likely to add 2,300 or so military and
well – in fact, many business sectors are having record years.
related civilian workers to support this new deployment of
Employment is down, but only slightly. Many large projects
assets. To construct the new infrastructure required to house
are planned for the near and long term, none of which depend
this capability, as many as 2,700 construction workers will be
upon state funding.
needed for a good five years. New housing will be needed and
I think the “doomsayers” were wrong.
STRIVE
3 July 2016