Morning Headlamp — Recession Hits Alaska, According to Some

State economist Caroline Schultz says Alaska is in a recession, which likely began at the end of 2015. The last big recession Alaska experienced was in the 1980s. Schultz said the state experienced minor job losses in 2009, during the Great Recession that hit other parts of the country hard. Citing Department of Labor data, the more than 2,000 jobs lost in the oil and gas industry largely contributed to the slump. As we approach the next legislative session, Alaska’s lawmakers should pay attention to Schultz’s findings: when the oil and gas industry suffers, we all suffer. We wonder how raising taxes on our state’s most critical industry will help pull us out of this recession?

In a recently released letter, Governor Bill Walker seems to be feuding with producer giant ExxonMobil. “Please do not take steps to thwart Alaska’s ability to monetize our gas,” the governor says in the Oct. 14 letter to Jim Flood, an ExxonMobil vice president. Walker, an advocate of a gas line long before he became governor, has blamed the death of past pipeline projects on the producers’ unwillingness to sell gas they produce with oil, preferring instead to pump it back into the ground. Rex Tillerson, chief executive of ExxonMobil, called Alaska “its own worst enemy.”

ExxonMobil says it has indeed made significant investments to support a gas project. It says it has spent more than $275 million to study the current gas project in Alaska and two earlier ones. It also invested $2.6 billion of the $4.2 billion that companies have paid to develop Point Thomson — a North Slope field with huge gas reserves that could supply a gas line.

 

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First Reads

With employment down, Alaska slumps into recession, economist says
Fairbanks Daily News Miner, December 3, 2016

Economist: Alaska is in a recession
KTUU, December 3, 2016

Governor feuds with ExxonMobil as state moves to take over LNG project
Alaska Dispatch News, Alex DeMarban, December 4, 2016

For first Alaska Native House speaker, a budget fix is personal
Alaska Dispatch News, Nathaniel Herz, December 4, 2016