This election, Alaskans are considering a proposed tax increase on oil production through Ballot Measure 1. Proponents argue that the measure can provide a needed source of revenue as the state faces large deficits and empty bank accounts. Opponents argue that Alaska’s oil industry is under enough pressure from rising costs, low prices, and soft global demand.
Read More
Would you like more information about Ballot Measure 1? If so, are not alone. The “Fair Share Act”, the initiative to change the State of Alaska’s oil production (severance) tax, has many Alaskans puzzled about how oil taxes work now, how the initiative would change how they work, and what issues to think about before voting.
The Anchorage Association for Energy Economists (AAEE) and the University of Alaska Anchorage Institute of Social and Economic Research (ISER), invite you to participate in a live Zoom forum on the ballot measure from 12:00 noon – 1:30 pm, Monday October 12.
Read More
UAA Professors Mouhcine Guettabi and Alex James have just published a paper in the journal Resource and Energy Economics entitled “Who benefits from an Oil Boom? Evidence from a Unique Alaska Data Set.” The paper applies a statistical approach called the “Synthetic Control Method” to examine the impact of the oil boom that began in 2006 on employment and income for residents and non-residents of the North Slope Borough. The study uses data from 2000 to 2016.
Read More
Scott Goldsmith, Professor Emeritus of Economics at ISER, spoke with Abbey Collins of Alaska Public Radio Network last week about increased construction spending in Alaska, particularly increases in petroleum and national defense spending. These increases, along with spending as a result of the 7.1 magnitude earthquake in November, are contributing to what Goldsmith estimates to be about a 10% increase in construction spending over 2018. Goldsmith's estimates of spending by sector are available in the 16th annual construction forecast, prepared for the Associated General Contractors of Alaska.
Read More
ISER's Mouhcine Guettabi told attendees at the Alaska State Chamber of Commerce's Fall Forum in Fairbanks, "The future of Alaska economic development will rest on the success of the traditional basic sectors and the pursuit of new opportunities.
Read More
How did we get here? The Alaska economy is heavily dependent on the oil sector both in terms of private sector jobs and government funding. Since the rapid decline in oil prices, it has experienced a prolonged recession with declines in employment across most sectors. Before the end of 2014, oil prices were elevated for a long period of time when the price exceeded 100 dollars for multiple months. However, starting June 2014, oil prices experienced a deep drop averaging only $54.26 in the 4 years since. This is much lower than the $84.47 they averaged between 2006 and July 2014. While oil prices started declining in June of 2014, the first month of negative employment growth did not occur until October 2015. The state has essentially lost jobs in every month since that initial decline. This has also resulted in a precipitous drop in government revenues, which has forced the state to use savings to fill the fiscal gap. To gain perspective on the depth and severity of the Alaska experience, we attempt to compare the recessions across states and understand the features of the states which fared best and worst.
Read More
In 2017, job losses in Alaska's ongoing recession spread from the sectors first affected—primarily oil and gas and state government—to the sectors that depend on household spending, including retail trade, accommodation and food services, and leisure and hospitality. Alaska will continue losing jobs in 2018, but at a slower pace— likely in the range of 0.7%. That slower pace isn't a sign of recovery, but rather an indication that the initial shock of low oil prices has made its way through the economy.
These are among the findings of a new overview of Alaska's economic and fiscal conditions, by Mouhcine Guettabi, assistant professor of economics at ISER. He also estimates that the the fiscal uncertainty caused by the state's current lack of a plan for dealing with its huge budget deficit may be reducing capital investment in Alaska by something on the order of $200 million to $600 million a year. The overview also considers the effects of different rates of withdrawal from the Permanent Fund earnings reserve, should the legislature decide to use some of those earnings to pay for government operations.
Download the report, What Do We Know to Date about the Alaska Recession and the Fiscal Crunch? By Mouhcine Guettabi, with support from Northrim Bank. If you have questions, get in touch with the author at mguettabi@alaska.edu or 907-786-5496.
Read More
Alaska lost nearly 2,300 jobs—about 1% of all wages and salary jobs— from March 2014 through March 2016. But not all areas of the state and sectors of the economy lost jobs. In a new paper, Mouhcine Guettabi, assistant professor of economics at ISER, examines jobs losses statewide and by area and economic sector. This is the first in a series of short papers that will examine various economic and fiscal issues important to Alaska.
Download the paper (PDF, 752KB). If you have questions, call the author at 907-786-5496 or email him at mguettabi@alaska.edu.
Read More
Siri Veland, an assistant professor of environmental studies at Brown University in Rhode Island, will talk about her work on a new project examining diverse cultural perspectives on risks and benefits of offshore oil and gas developments in Alaska, Greenland, and Northern Norway. Dr. Veland previously studied environmental change and risk in Northern Australia, and she'll discuss possible overlaps with key issues in the Arctic.
When: June 17, from 12 p.m. to 1 p.m.
Where: 1901 Bragaw Street, Third Floor, Suite 301
Please join us, but remember that ISER has moved to 1901 Bragaw Street, Third Floor, Suite 301. The new location is between Northern Lights Blvd. and DeBarr Road. Enter through Reka Drive, and drive all the way south to the front parking area. If you need more directions, call 907-786-7710. Parking is still free. Download the full announcement (PDF, 204KB).
Note: Those who can’t attend in person can join us remotely over the web or call (907) 786-6755, Conference ID: 475905.
By request, a recording was not made of this presentation.
Read More
Gunnar Knapp, ISER's director, was the opening speaker at Governor Walker's conference, "Building a Sustainable Future: Conversation with Alaskans," held June 5 to 7 at the University of Alaska Fairbanks. Two former ISER directors, Vic Fischer and Scott Goldsmith, also took part in the conference, which brought together Alaskans from around the state to discuss Alaska's fiscal future. The conference was held at a time when a sudden drop in oil prices has slashed state oil revenues and left the budget for the coming year several billion dollars in the red.
Oil revenues have largely funded state government for more than 30 years. Dr. Knapp's presentation to the conference, An Introduction to Alaska Fiscal Facts and Choices, summarizes the fundamental fiscal problem the state government faces over time: "Alaska oil production is falling and our population is rising. It is hard for falling oil production to support most of state government for a growing population."
The presentation goes on to describe the fiscal choices for Alaskans, unless oil prices rise dramatically and unexpectedly: adjust our spending or how we pay for it. The state government has several practical options—cut spending more, raise new revenues, or use earnings of the Permanent Fund. As Dr. Knapp points out, "None of these options are easy or popular."
Download the update presentation (PDF, 2.1MB) or watch a video recording. If you have questions, get in touch with Gunnar Knapp at Gunnar.Knapp@uaa.alaska.edu. ISER publications are solely the work of individual authors and should be attributed to them, not to ISER, the University of Alaska Anchorage, or the research sponsors.