12:15 p.m. EST. A few minutes ago the Keystone XL approval bill passed the U.S. House of Representatives. It should be interesting to see what the outgoing Senate leader does with that bill. See relevant story below. -dh
CBC alerted us that the U.S. House of Representatives is scheduled to vote on the Keystone XL Pipeline today. (Note: Watch Senator-elect Dan Sullivan's interview with Greta Van Susteren (NGP Photo) last night and, in particular, his remarks about Keystone and other energy issues. -dh)
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Katie Bender, publisher of Alaskanomics.com, reports today that, "…(Labor and Workforce Development) Department Commissioner Dianne Blumer (NGP Photo) highlights that Alaska is expected to gain more than 36,000 jobs by 2022. This will increase the state’s total job count to more than 370,000. In the projections, health care and mining jobs will have the largest increase with 25 percent and 24.8 percent, respectively.
(Insert our commentary: "Can Alaska Avoid A Perfect Economic Storm?" These pleasant job projections are based on history.
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More comment. Alaska is in the midst of exhaustive vote counting exercises to determine the winner of the November 4 vote for governor. We would alert NGP readers that Governor Parnell has played key roles nationally in, among other groups, the Interstate Oil & Gas Compact Commission (i.e. IOGCC) and the OCS Governors Coalition. The IOGCC work, in particular, has placed him in close contact with Canadian provincial premiers whose interests sometimes coincide with Alaska's. If a new governor should begin representing Alaska in a dramatically different way, national — and even international — energy policies will be affected. We hope that if a close vote finally confirms that Alaska has a new governor, that person will be mindful of not only the big statewide responsibility, but the broader impact of his words and actions as well. -dh |
Over the past year and a half, the state's largest investors — who directly and indirectly propel the majority of non-federal employment — have based investment decisions on the passage of SB 21 oil tax reform and state support for gas pipeline efforts.
We have it on good authority that before the election, companies were committed to billions of dollars of new investments in Alaska due to improved state policies.
With a new administration, critical of both SB 21 and the manner in which the Parnell administration has pursued monetization of Alaska North Slope gas, there is significant risk that investment flows could reverse along with the optimistic job projections Commissioner Blumer has released.
We also note that Alaska is already using depleting savings accounts to balance a state budget deficit that is based on the assumption of Alaska oil production priced at above $100/barrel. In recent months, the price of oil has been dropping to new lows — over 25% lower than the budget requires. This is due to the prolific new streams of shale oil and gas production, to Middle Eastern oil production policies and to the more efficient use of energy around the world.
Cutting state spending can reverse positive job projections very quickly. Oil company spending reductions could combine with state cuts to produce a 'perfect economic storm' for Alaska along with many winters of discontent and out-migration rivaling what we experienced in the late 1980s.
A new Administration had better approach these issues with a great deal more respect as it governs, than when it was engaged in political campaigning. -dh)
The projected gain of just over 36,000 jobs by 2022 is a 10.8 percent growth rate for Alaska. This follows the projected population growth of 10 percent during the same period. The health care industry will see the largest increase of jobs due to the increasing age of Alaska residents. Between 2012 and 2022, the number of Alaskans who are 65 or older will increase 79 percent.
The mining industry, minus oil and gas, will be right behind health care in job growth. The expected increase of 24.8 percent will be due to higher-than-average mineral commodity prices and the expansion of existing mines. Many existing mines are expected to grow and there are multiple projects in various stages of permitting and planning. Because of the volatile nature of the mining industry, experts are not able to predict which projects will move forward and there could be significant changes to the forecast depending on mineral prices.
Not only are jobs expected to grow by 36,000 before 2022, there will also be 95,000 jobs that will need to be filled due to employees retiring or changing jobs. As noted earlier, the number of people over 65 will increase significantly in the next 8 years. In comparison, the number of people under 65 will only see a 3.6 percent increase. This will put high demand on healthcare jobs and related services as the population ages.
Alaska Economic Trends gives specifics in a variety of industries and occupations and expands on the forecast through 2022. The full issue can be viewed at http://labor.alaska.gov/trends/oct14.pdf
Commentary: Note that in the Senator-Elect Sullivan interview below the question arises as to whether the Keystone XL project will adversely affect marketing of ANS crude carried by the Trans Alaska Oil Pipeline. In our opinion, the answer is, "no", for a number of reasons. Crude oil, unlike natural gas/LNG, is a much more fungible, world commodity. It's like asking, "If I poured a million barrels per day of water in the ocean at Key West, wouldn't that adversely affect coastal structures in Northwest Alaska?" Also, Alaska's oil has its traditional markets which rely on the particular quality of Alaska crude, which is different than oil sands product from Alberta. Lastly, if the Alberta oil is not marketed through the gulf coast, it will still find its way into world markets, by rail or pipeline, to Canada's East or West coast. -dh
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