Eye on the prize: petroleum.

• Author: Goldsmith, Scott
• Position: OIL & GAS

The Alaska economy has always been dependent on its abundant natural resources of wildlife, fish, timber and minerals, but none has transformed Alaska like petroleum since we became a state. Research done at the University of Alaska's Institute of Social and Economic Research funded by Northrim Bank has estimated that two-thirds of the job growth since 1960 is attributable to petroleum and that half of today's jobs and income can be traced back to petroleum.

But the path forward is not clear. Although by standard measures the economy is strong, the decline in petroleum production represented in the "Prudhoe Curve" looks like a dark cloud on the horizon. Fortunately petroleum has the potential to continue to sustain the economy for decades to come, but only if Alaska can rise to the challenge.

Today's Economy

The economy is not only bigger today because of petroleum; it bears little resemblance to the Alaska of 1960. Alaskans today take home paychecks that are above the national average, enjoy a low tax burden, and collect a Permanent Fund dividend check each year. Job opportunities are readily available for young Alaskans.

The cost of living in urban areas mirrors that of the rest of the U.S. The expanded availability of consumer goods and services eliminates the need for trips Outside for shopping and health care.

Generous government spending has resulted in high quality public services like education and health care delivery across the state and new roads, harbors and other infrastructure to support the Alaska life style and economic development.

The economy is more diversified and less dependent on federal spending or the seasonal fishing and tourist industries.

There is no better indicator of the quality of the economy than the fact that young Alaskans and senior citizens are both voting with their feet to stay in Alaska. In fact, the senior population is growing at a faster rate than any other state, both because retirees are choosing to stay and new seniors are moving in.

Unfortunately many Alaskans underestimate the role that petroleum has played. Unlike tourism or commercial fishing, most petroleum exploration, development and production takes place in the remote northern part of the state, far from the population centers, so we just do not see it. This is particularly the case in the rural parts of Alaska where no one can point to a neighbor who works in the oil patch or can see the headquarters building of an oil company.

But a...