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ALASKA’S ECONOMIC FUTURE:
WHAT ROLE FOR A NORTH SLOPE
   NATURAL GAS PIPELINE?

                      Scott Goldsmith
                  Professor of Economics
       Institute of Social and Economic Research
              University of Alaska Anchorage


                     May 10, 2011
    Public Forum on the Alaska Natural Gas Pipeline
         Sponsored by the Federal Coordinator
                  Anchorage, Alaska
PETROLEUM DRIVES THE ECONOMY
PETROLEUM            TOURISM


            •Jobs


       •Complexity
HOW TO GET $5 BILLION IN STATE
REVENUE FROM OTHER SOURCES



            $6,667 / OZ.
               GOLD



                 $33 / SALMON

                                 $3,333 /
                                TOURIST
OUR ECONOMIC FORTUNES ARE
 TIED TO PETROLEUM (MMBPD)
COULD THE FUTURE ALASKA
ECONOMY LOOK LIKE THIS?
THE NON-PETROLEUM STRATEGIES
       FOR THE FUTURE
  • Natural Resource Development
  • Value Added Processing
  • Economic Diversification
  • Infrastructure Investments in Power
  and Transportation
  • Footloose Industry
  • Renewable Energy
DOES PETROLEUM HAVE A
  FUTURE IN ALASKA?
                                Oil (Billion    Gas
                                 Barrels)      (TCF)
PRODUCTION TO DATE                  16           -
KNOWN STATE: Colville-Canning       4.5        37.5
TECHNICALLY RECOVERABLE            33.6        148.8
 ANWR 1002                         10.3         3.8
 OCS Beaufort                       6.9        32.1
 OCS Chukchi                       15.5        60.1
 NPRA                                .9        52.8
OTHER                                ?          ?
PIPELINE CONSTRUCTION
 JOBS: BOOM AND BUST
EMPLOYMENT IN THE OIL PATCH

   TOTAL
               Barrels per Worker
EMPLOYMENT IMPACT:
    BEYOND CONSTRUCTION

• KNOWN GAS

• NEW EXPLORATION
• OIL PRODUCTION AND
DISCOVERIES
• COST OF OPERATING IN OIL
PATCH
• OUTSIDE THE OIL PATCH
GAS PRICE PROJECTION




Source: IEA, AEO 2011.
GAS REVENUE PROJECTION (Billion)
GAS VS OIL REVENUES (Million)

$10,000



 $8,000



 $6,000



 $4,000



 $2,000



    $0
          2001 / 2021   2003 / 2023   2005 / 2025       2007 / 2027   2009 / 2029

                         GAS (2021-2030)            OIL (2001-2010)
REVENUE FROM OTHER OIL


   •ANWR

   •OCS

   •NPRA

   •Unconventional Oil
STATE GF REVENUE PROJECTION
STATE GF: USE OF SAVINGS
STATE GF WITH GAS REVENUE
STATE GF: BALANCED SOLUTION
PERMANENT FUND
ALASKA’S ECONOMIC FUTURE:
WHAT ROLE FOR A NORTH SLOPE
   NATURAL GAS PIPELINE?

                      Scott Goldsmith
                  Professor of Economics
       Institute of Social and Economic Research
              University of Alaska Anchorage


                     May 10, 2011
    Public Forum on the Alaska Natural Gas Pipeline
         Sponsored by the Federal Coordinator
                  Anchorage, Alaska

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Scott Goldsmith - Alaska's economic future; what role for a North Slope Natural gas pipeline

  • 1. ALASKA’S ECONOMIC FUTURE: WHAT ROLE FOR A NORTH SLOPE NATURAL GAS PIPELINE? Scott Goldsmith Professor of Economics Institute of Social and Economic Research University of Alaska Anchorage May 10, 2011 Public Forum on the Alaska Natural Gas Pipeline Sponsored by the Federal Coordinator Anchorage, Alaska
  • 3. PETROLEUM TOURISM •Jobs •Complexity
  • 4. HOW TO GET $5 BILLION IN STATE REVENUE FROM OTHER SOURCES $6,667 / OZ. GOLD $33 / SALMON $3,333 / TOURIST
  • 5. OUR ECONOMIC FORTUNES ARE TIED TO PETROLEUM (MMBPD)
  • 6. COULD THE FUTURE ALASKA ECONOMY LOOK LIKE THIS?
  • 7. THE NON-PETROLEUM STRATEGIES FOR THE FUTURE • Natural Resource Development • Value Added Processing • Economic Diversification • Infrastructure Investments in Power and Transportation • Footloose Industry • Renewable Energy
  • 8. DOES PETROLEUM HAVE A FUTURE IN ALASKA? Oil (Billion Gas Barrels) (TCF) PRODUCTION TO DATE 16 - KNOWN STATE: Colville-Canning 4.5 37.5 TECHNICALLY RECOVERABLE 33.6 148.8 ANWR 1002 10.3 3.8 OCS Beaufort 6.9 32.1 OCS Chukchi 15.5 60.1 NPRA .9 52.8 OTHER ? ?
  • 10. EMPLOYMENT IN THE OIL PATCH TOTAL Barrels per Worker
  • 11. EMPLOYMENT IMPACT: BEYOND CONSTRUCTION • KNOWN GAS • NEW EXPLORATION • OIL PRODUCTION AND DISCOVERIES • COST OF OPERATING IN OIL PATCH • OUTSIDE THE OIL PATCH
  • 14. GAS VS OIL REVENUES (Million) $10,000 $8,000 $6,000 $4,000 $2,000 $0 2001 / 2021 2003 / 2023 2005 / 2025 2007 / 2027 2009 / 2029 GAS (2021-2030) OIL (2001-2010)
  • 15. REVENUE FROM OTHER OIL •ANWR •OCS •NPRA •Unconventional Oil
  • 16. STATE GF REVENUE PROJECTION
  • 17. STATE GF: USE OF SAVINGS
  • 18. STATE GF WITH GAS REVENUE
  • 19. STATE GF: BALANCED SOLUTION
  • 21. ALASKA’S ECONOMIC FUTURE: WHAT ROLE FOR A NORTH SLOPE NATURAL GAS PIPELINE? Scott Goldsmith Professor of Economics Institute of Social and Economic Research University of Alaska Anchorage May 10, 2011 Public Forum on the Alaska Natural Gas Pipeline Sponsored by the Federal Coordinator Anchorage, Alaska