Today’s Key Takeaways: Oil will lead AK in job growth this year. Oil markets optimistic in New Year. Hilcorp plans gas storage facility in Cook Inlet to address shortages. Contango Ore breaks thru barriers for to build mines faster with smaller footprint. Congressman Begich sworn in today.
NEWS OF THE DAY:
Construction and oil expected to lead job growth in Alaska this year
Yereth Rosen, Alaska Beacon, January 3, 2025
While growth is forecast in other sectors, struggling seafood processors are expected to keep shedding jobs, and demographic shifts cloud the state’s longer-term future.
Alaska is expected to have moderate job growth in 2025, with the construction and oil and gas sectors forecast to be the big winners and seafood processing seen as the biggest loser.
Statewide job growth is forecast to be 1.6%, with 5,300 jobs added, according to the analysis published in Alaska Economic Trends, the monthly magazine of the Alaska Department of Labor and Workforce Development’s research and analysis section.
Alaska’s rate of job growth slightly outpaced that of the rest of the nation starting in 2023, and that is expected to continue this year.
“Alaska is still pretty steady as she goes, as far as how many jobs we’ve been adding back every year, but nationally it’s slowed down,” said Karinne Wiebold, the state labor economist who wrote the article detailing the statewide employment forecast. The rest of the nation emerged from the COVID-19 pandemic a little quicker than Alaska did, she said.
The dominant job-growth sector — construction — will continue to have robust increases this year, thanks in large part to federal funding from the Infrastructure Investment and Jobs Act of 2021, according to the forecast. Another 1,500 jobs, a 7.9% increase, is expected this year in that sector, according to the forecast.
Overall, by the end of the year, Alaska construction employment is expected to have grown by over 25% from 2019 to 2025, the forecast said.
The health care sector, one of the state’s biggest employers, is expected to gain 1,000 jobs, or a 2.9% increase over 2024, the forecast said.
The oil and gas sector is expected to gain 600 jobs in 2025, for an increase of 7.4% from 2024 levels. Total employment in the sector is expected to average 8,700 jobs a month.
Possibly affecting employment now is the mature state of many fields, which may not need as many people to operate as they did in the past, she said.
OIL:
Signs of Optimism in Oil Markets as a New Year Begins
Michael Kern, OilPrice.Com, January 3, 2025
Oil markets have started the year with a renewed sense of optimism, driven by stock draws in the U.S. and China’s attempts to stimulate its economy.
The gradual return of oil market participants from the New Year’s Eve holidays has been marked with tacit optimism as US stock draws tightened product availability just as cold snaps are threatening both Europe and the US. Meanwhile, China’s vows to be more proactive with stimulus measures have lifted the spirits of those who gave up on more robust policy coming from Beijing, even if temporarily, pushing ICE Brent futures closer to $76 per barrel.
GAS:
Hilcorp wants to build a Kenai Peninsula natural gas storage facility as a ‘buffer’ against shortage
Alex DeMarban, Anchorage Daily News, January 2, 2205
A subsidiary of Hilcorp Alaska is asking state regulators to approve a gas storage facility in the Cook Inlet region that could help prevent a gas shortfall in winter in Southcentral Alaska.
A newly formed company, Hilcorp Alaska Gas Storage, filed an application on Monday with the Regulatory Commission of Alaska for permission to own and operate the storage facility at the Kenai Gas Field, south of Kenai.
It would be the second commercial facility of its kind in the region, allowing utilities to store gas in a depleted gas field, similar to Cook Inlet Natural Gas Storage Alaska that’s also on the Kenai Peninsula.
The regulatory commission would regulate gas prices at the proposed facility.
“Hilcorp is happy to be collaborating with the utilities and regulatory agencies to make our gas storage assets available for commercial use,” said Matt Shuckerow, a spokesperson for Hilcorp, the major gas producer in Cook Inlet.
The head of the Alaska House Resources Committee and an official with Chugach Electric Association said the extra storage is needed.
The 91-page filing says a second reservoir is in the public’s best interest.
MINING:
This company helped build an Alaska mine without a tailings dump. Can it build two more?
Max Graham, Northern Journal, January 2, 2025
Touting an unconventional approach, Contango Ore says it can develop mines faster and with a smaller environmental footprint. But some Alaskans fear an influx of ore trucks on state roads.
Rick Van Nieuwenhuyse has little patience left for mines that aren’t getting built.
After 40 years in Alaska’s mining industry, he is tired of permitting delays, lawsuits and the state’s lack of infrastructure.
So a bell chimed in his head four years ago when he read a vague line in a corporate report proposing an unusual kind of gold mine — one that could be ready for construction in just a couple of years, instead of the dozen or more that some projects take.
The idea was simple: dig a typical pit and mine the ore — but send the rocks somewhere else for the heavy industrial process of separating out the gold.
“When I read that, I was like, ‘That actually makes a hell of a lot of sense,’” Van Nieuwenhuyse said in an interview.
A mine could be approved more quickly, and built much faster, Van Nieuwenhuyse figured, if it didn’t need the same processing and waste disposal sites that most large mines do. It also, in theory, would have a smaller environmental footprint, would need less power and would cost less to build.
Thus was born the central strategy of Contango Ore, a Fairbanks-based company that has emerged as a player in Alaska’s mining industry since Van Nieuwenhuyse took over as chief executive in 2020.
The company notched an early success in 2023: Its flagship project, Manh Choh, near the town of Tok in Alaska’s Interior, became the first large mine to open in the state in more than a decade.
POLITICS:
Begich to be sworn in Friday as new term of Congress begins
Iris Samuels, Anchorage Daily News, January 2, 2025
Alaska is expected to formally get a new U.S. House representative Friday when members of the 119th Congress are sworn in.
Republican Nick Begich III bested Democratic U.S. Rep. Mary Peltola in the November election. Peltola was sworn in to the U.S. House in September 2022, after winning a special election to replace longtime Rep. Don Young, who died after 49 years in office.
Begich, who campaigned on carrying out President-elect Donald Trump’s agenda, is one of more than 60 new members joining the U.S. House on Friday.
He is set to join Congress 54 years after his grandfather, Democratic U.S. Rep. Nick Begich Sr., who disappeared in 1972 during a flight from Anchorage to Juneau.
Born in Alaska, Nick Begich III was raised by his maternal grandparents in Florida and returned to Alaska as an adult, bringing with him a conservative brand of politics that set him apart from his uncles — former U.S. Sen. Mark Begich and former state Sen. Tom Begich — who were both elected as Democrats.
This will be Nick Begich III’s first experience in elected office. He previously founded a company focused on offshoring information technology jobs to other countries.
Before the swearing-in ceremony, the U.S. House on Friday is expected to elect its speaker. In a social media post, Begich said he supported current Speaker Mike Johnson, a Louisiana Republican. Begich’s statement came after Trump endorsed Johnson, who had faced criticism from far-right Republicans.