North Slope oil industry employment: McDowell Group releases employment study.

• Author: White, Rindi
• Position: Special section: OIL & GAS

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North Slope employment is on the rise, with more people working in the northern Alaska oil and gas fields in 2011 than ever before. The rise in employment comes despite a decline in production--fewer and fewer barrels of oil are being produced each year.

According to Juneau-based research firm McDowell Group, at the peak of production in 1994, more than 200,000 barrels of oil were produced per employee each year. In 2010, about 28,000 barrels were produced per employee, McDowell reported.

MORE JOBS, LESS OIL

One reason for more employees despite fewer barrels of oil: more attention being paid to maintaining and improving aging infrastructure. McDowell reported that ConocoPhillips listed its annual maintenance spending as $800 million more per year than the company spent five years ago, while development spending remained level. Efforts to increase oil recovery from mature fields and new development activity also play a part in the recent employment growth, McDowell reported.

The Alaska Senate Finance Committee hired McDowell Group in September 2011 to take a closer look at conflicting reports of change in the oil industry. Despite indications there were fewer jobs on the Slope following a change in the oil tax structure in 2008, Alaska Department of Labor reports in 2010 reflected a growing pool of employees. Also, the number of nonresident employees seemed to be on the rise, leaving some in the Senate wondering if Alaska could do more to encourage local hire.

While debating Gov. Sean Parnell's oil tax reduction proposal, House Bill 110, last fall, the committee requested the study to gather more information about Slope employment. The committee paid McDowell $175,000 to conduct the study.

FLUCTUATING EMPLOYMENT

Jim Calvin, managing principal at McDowell, spoke before the Senate Finance Committee in late January, when the study came out. Calvin said there was reason for the conflicting employment reports.

"The last four or five years have been a very interesting few years," Calvin said. "We've gone through a couple of roller-coaster rides."

Calvin said McDowell's data showed 2009-2010 was a shaky time for Slope employers. Employment peaked in 2008 and, over the next several months, the industry lost about 1,700 jobs, or about 14 percent of the work force.

Calvin said the job losses appeared to be directly linked to the global recession and a drop in the market price of North Slope crude oil. But at about the same pace...