Alaska thrives in 2005 as state enjoys another prosperous year.

• Author: Martin, Gary L.
• Position: Year-End Business Review

Alaskan-owned companies are about to close their books on calendar year '05. As you read this review, the year's final tallies, with the exception of retail, should already be sealed in the great book of commerce.

Besides the state's high oil prices, there were other business topics in the news. They include ANWR, the natural gas pipeline, a positive employment record, construction, mining, the effects of the Department of Defense Base Realignment and Closure Commission, Alaska's two major bridge projects, tourism and a property tax break for Anchorage residents and small-business owners.

Another impact on Alaska's economy was the effects of hurricanes Katrina and Rita.

HURRICANES

The snow and cold weather are here, but fortunately Alaska is able to supply much of its own fuel oil needs. While the cost of fuel in Alaska has gone up, it is much worse in other states.

Spiking of the prices for construction materials will be another byproduct from the hurricanes. There will be a shortage, throughout the country, of building materials needed for reconstruction efforts in the Gulf of Mexico, including New Orleans and Florida. Alaska also is fortunate because by next spring, when Alaska builders move back into action, some of the shortages will have dissipated.

THE REPRIEVE

While not affecting the state as a whole, a new life for Agrium Inc. was a big relief to many people. This was a good summer for residents of the Cook Inlet. Agrium Inc. got a year's reprieve from having to permanently close its doors to resolve its long-term gas supply problems at its nitrogen fertilizer facility.

VILLAGE WOES

While it was a good year for most Alaskans, it was a different story for some of the Native villages. Many of the rural communities are experiencing difficulties in paying insurance and fuel bills.

About 10 communities in Western Alaska, including Emmonak, Chevak and Akiak, are in danger of losing some of their energy this winter. One village's bulk fuel costs went up to $198,000 this year from $124,000 in 2004.

Blamed for this dilemma is the rising cost of diesel fuel and its transportation to the outback. Gov. Frank Murkowski's decision in 2003 to cut revenue sharing to the Native communities also is being criticized for the problem.

Becky Hultberg, the governor's spokesperson, says Murkowski is working on a plan. He wants to raise rural-energy subsidies over the next decade by $17.5 million and to pad the Power Cost Equalization endowment by $50 million. Even if it is passed by the Legislature next year, Native leaders agree it is too little, too late.

EMPLOYMENT

According to statistics published in October by the Alaska State Department of Labor, 2005 will be another year of continued growth. Neal Fried, a Labor Department economist, said, "It is truly remarkable. Alaska is going to extend its streak of employment growth to 18 years. That is two years longer than the next longest stretch (1961-1976) in Alaska's economic history."

According to State Department of Labor figures, employment for the first seven months was up 1.6 percent or nearly 4,800 jobs over the same period last year.

OIL

In October 2004, there was a lot of excitement when Alaska crude broke...