This is the second of three columns dedicated to making the case that Alaska, like the rest of the world, can move beyond oil and into the clean energy economy. As noted in my previous column, if we get the funding reliance switched from oil revenues to the earnings of the Permanent Fund, then we can start thinking beyond oil. Building on the premise that the fiscal gap is solvable, let’s look at how far we’ve come since the pipeline boom days and ask is this enough to build on?
For starters, the Alaska seafood industry has undergone major changes. At the time of the pipeline boom days there were no quota programs for halibut, pollock or crab. Once Alaska fisheries switched over from a race-for-fish structure to a quota program that allowed for months of fishing instead of days, stability and new opportunities abounded. Just look at the price of halibut now. Alaska produces half of the nation’s seafood and all major fisheries are certified as sustainable. Through the CDQ program and regional marketing efforts, the seafood industry reaches far and wide throughout Alaska. Also, since the time of peak oil, the salmon industry weathered the market disruption of farmed salmon and has come through stronger with improved quality and more value-added products. I agree with Sen. Dan Sullivan, who describes Alaska as the superpower of Sustainable Seafood.
The next economic sector that has blossomed in this same time period is tourism. According to a 1997 report, “Alaska Economy and Population, 1959-2020” by the Institute of Social and Economic Research (ISER), “Tourism has been one of the fastest growing basic industries, increasing at estimated 5 to 7 percent annually.” Pre-pipeline, tourism was just a nascent industry. Last year, more than 2 million visitors came to Alaska.
With the opening of the Red Dog Mine, the Greens Creek, the Donlin Mine and Kensington, mining remains a significant contributor to Alaska’s economy. The other core industry since the pipeline days is construction. According to a 2016 report by ISER, “The construction trade is Alaska’s third largest industry, paying the second highest wages, employing nearly 18,000 workers with a payroll over $1 billion.” While construction spending related to oil and gas and the state’s capital budget is expected to decline, overall the trade is expected to remain strong, especially if deferred maintenance and infrastructure become government priorities.
Now to the industries we have now that we didn’t have at the time of the pipeline. At the top are health care and air cargo. According the Alaska Department of Labor and Workforce Development, “Alaska’s health care industry has grown steadily during the past 20 years and that trend is expected to continue as Alaska senior population increases.” In 2010, the industry provided 31,800 jobs and had a payroll of $1.53 billion. While flying into Anchorage, it’s easy to notice the expansive air cargo facilities, but did you know that the Ted Stevens Anchorage International Airport ranks fourth in the world for cargo? With the expansion in online commerce, air cargo will likely remain an economic force.
Add to this list a state-of-the-art telecommunications network that serves the entire state, the maturation of village and regional native corporations, the growth of the university system and an expanding arts and entertainment industry and you see that Alaska has significantly diversified since big oil first came into our lives.
I am not alone in this assessment. ISER economist Mouhcine Guettabi, in October 2017, spoke about “Alaska’s Economy: Then and Now,” concluding that Alaska’s economy is no longer characterized by the boom-and-bust cycle. Instead, “Alaska’s economy is [now] characterized by relatively slow and steady growth in population and employment driven by growth across many sectors such as the federal government, mining, tourism, air cargo, health care, and retail trade, and with significant regional variation. Alaska has considerably changed along almost all dimensions.”
The Alaska I know and love has more than one economic driver. Yes, we may have been funded by oil. But we were founded on fish, and now with wired wilderness, a thriving health care industry, a global cargo center and millions of visitors every year we are so much more.
Kate Troll is a former Juneau Assembly member with 22 years experience in climate and energy, fisheries and coastal management policy. She is the author of “The Great Unconformity: Reflections on Hope in an Imperiled World.”