Top business stories for 2004: from the gasline to tourism to exports, 2004 was a good year for Alaska.

• Author: Martin, Gary L.

It has been a good year for Alaska's business communities. What a difference a year makes.

Twelve months ago, one of the major business stories was Alaska's "budget woes." The media was filled with chatter about slashing budgets, and reintroducing state income or sales taxes. Plus, like bears focused on a bucket of honey, many politicians drooled at the thought of dipping their paws into Alaska's Permanent Fund.

Why is this year different? It all boils down to three little words: higher oil prices.

Another top story for 2004 is the passage of laws by the federal government, with incentives for oil companies to produce a natural gas pipeline through Alaska. Also, state exports are up, there is a bright light for Alaska's salmon fishing industry, new cigarette taxes cause a buzz-and rounding out the top business stories of the year are the election results.

OIL

For the first time in Alaska's history, on Oct. 14, oil prices broke $50 a barrel, and throughout the month prices at the gas pumps, nationwide, averaged $2.07 a gallon, which was up more than 30 cents a gallon over the same time last year. Alaska oil closed that Thursday evening at $50.44 a barrel; it was up $1.30 a barrel from the day before and more than 50 percent higher than the year prior.

Much of the rise in oil costs is due to the world situation, largely speaking of the war in Iraq and an oil-thirsty Asia, China in particular. Some of the blame also can be placed on the slow recovery of production in the Gulf of Mexico. Some 17 million barrels of oil never got produced because of Hurricane Ivan, according to the federal Minerals Management Service. Plus there was nearly a half million barrels held hostage more than a month after Ivan struck its blow for Mother Nature.

And while many Alaskans grit their teeth while pumping their gas, some of their anxiety dissipates at the thought of the state's dissolving budget deficit and the potential for a raise in the Permanent Fund. A little more irk also is tolerable when it is pointed out that our fellow motorists are paying more than $5 a gallon (U.S.) throughout much of Europe.

While the Alaska state budget is having its purse strings loosened, to make room for an expected budget surplus of $840 million, the rise in oil prices is a drag on the country's overall economy.

Many oil-dependent industries, like the trucking companies, construction companies and the airlines, are suffering from the hit-like a punch below the belt. Delta Airlines, which has been knocked to its knees, is requesting many of its employees to accept salary cuts. Delta officials are hoping this will keep the company from having to take the 10-count and file for Chapter 13.

Even Alaska Airlines, the country's ninth largest airline, is suffering. By spring it is expected to cut some 750 rank-and-file jobs, about 150 of them in Alaska. And while it is not known how many management jobs will go in Alaska, airlinewide there have been 206 upper-level positions that have been earmarked for elimination.

When the dust clears, it is estimated that Alaska Airlines will have eliminated about 8 percent of its work force. Although it will save the company between $5 million and $10 million annually in the future, the cost of downsizing could cost the company $55 million.

NATURAL GASLINE

Alaska's Republican A-team (Lisa Murkowski, Ted Stevens and Don Young) in Washington, D.C., spent much of October patting one another on the back for a job well done. Their hard work paid off in getting a bill on the president's desk...