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Economic and Demographic Systems Analysis, North Slope Borough
Will Nebesky and Gunnar Knapp
This report describes current and projected economic conditions in the North Slope Borough and discusses possible impacts of OCS development upon the Borough's revenues and expenditures as well as on Inupiat employment. We use a simulation model of the North Slope Borough's economy to examine these impacts. The North Slope Borough receives substantial revenues from its taxes on oil and gas property. Following our examination of the factors affecting borough revenues, we conclude that OCS development will not substantially increase borough revenues due to state-imposed property tax revenue limits. Other factors, however, can be expected to cause the borough to begin to curtail its construction program and, thereby, reduce local employment opportunities. Our review of Inupiat employment patterns and projected borough employment opportunities suggests that reduced Inupiat employment, rather than increased Inupiat involvement in petroleum activities, may best characterize the coming decade unless there are spec if i c efforts to reduce constraints to Inupiat employment associated with petroleum development. These constraints include job rotation schedules, work crew composition, hiring location, and training opportunities.
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Economic, Subsistence, and Sociocultural Projections in the Bristol Bay Region Vol. I (Analysis and Projections) and Vol. II (Village Descriptions)
Will Nebesky, Steve Langdon, and Teresa Hull
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Alaska OCS Social and Economic Studies Program.
John S. Petterson, Bruce M. Harris, Lawrence A. Palinkas, and Steve Langdon
This report describes current and projected economic and social conditions on the North Slope, establishes an analytical framework for assessing changes in these conditions due to OCS devleopment, and describes research methods specifically developed to examine the issues of future North Slope Borough revenues and expenditures and Inupiat perceptions of the potential effects of petroleum development. The primary source of social and economic change on the North Slope between 1973 and 1983 has been the North Slope Borough. We expect this situation to continue as long as the borough continues to receive substantial property taxes from the petroleum industry and significant environmental effects can be avoided. Following our examination· of the factors affecting borough revenues, we conclude that OCS development will not substantially increase borough revenues. Other factors, however, can be expected to cause the borough to begin to curtail its construction program and thereby reduce local employment opportunities. Our review of Inupiat employment patterns and projected borough employment opportunities suggests that reduced Inupiat employment, rather than increased Inupiat involvement in petroleum activities, may best characterize the coming decade unless there are specific efforts to reduce constraints to Inupiat employment associated with petroleum development. These· constraints include job rotation schedules, work crew composition, hiring location, and training opportunities. To date, conflicts between onshore petroleum development and Inupiat land use and land-use values appear to have been isolated. The major potential conflict associated with onshore petroleum development is posed by the regulatory restriction of subsistence activities in development areas. Oil spill 11 s related to offshore development ·could reduce the subsistence resources available to Inupiat, as could noise. Rudimentary available data on oil spill risks, biological responses to environmental disturbances, and Inupiat hunting and fishing patterns suggest that development activities in coastal areas near Inupiat settlements and/or areas with significant concentrations of wildlife could adversely affect the North Slope subsistence economy. We analyzed ten years of Inupiat testimony on proposed developments and conclude that Inupiat fears that offshore development will inevitably harm subsistence resources are both intense and widespread and themselves constitute an impact of development. The report describes Inupiat perceptions through direct quotations and specific references 'to past Inupiat experiences with their environment or development activities. Inupiat institutions have actively attempted to place controls on development activities. Barring unforeseen successes, however, we do not expect that North Slope institutions will be particularly effective in influencing offshore activities, an outcome which may generate significant social stress on the North Slope.
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ARCO and Its Critics: The North Slope Crude-Oil Transfer-Price Controversy
Arlon Tussing, Connie C. Barlow, and Samuel A. Van Vactor
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The Place of Support-Sector Growth, Import-Substitution, and Structural Change in Alaska's Economic Development
Arlon Tussing, Lee Huskey, and Thomas Singer
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The Economic and Fiscal Impacts of Declining Petroleum Revenues
Oliver Scott Goldsmith
The Prospect of declining petroleum revenues means that in future years, significantly less money will be available to fund government programs than we currently have. Because state spending has in recent years become the main driving force behind the growth of the economy, a decline in state spending will have economic effects beyond the reduction of certain government services. Tables 1 and 2 provide a rough estimate of the importance of state spending for the economy. For example, at least one job in six (33,000 employees working directly for state government or working for local government but funded through state transfers) in the Alaskan economy is directly funded by petroleum revenues. The Recently passed spending limit law will not prevent the revenue decline from translating into a significant spending decline. If spending occurs from translating into a significant spending decline. If spending occurs up to the limit when revenues are available and spending equals revenues when revenue growth is slower that the limit ceiling, the future pattern of spending would be as illustrated in Figure 1. Liquidation of the general and permanent funds closes the revenue gap for only a short time. Reestablishment of the income tax (dashed line) also has only a marginal impact. Alternative resource development cannot produce a tax base to replace the depleting petroleum base. Indicators for 1979 (tables 3 and 4) show that no other resource or manufacturing activity is significant in the Alaskan economy in comparison to petroleum. If adoption of the spending limit means significant reductions in state spending in future years, a logical alternative spending strategy would be one where the level of spending never fell. A sustainable spending level is based upon sustainable revenues from recurring plus nonrecurring revenues. For nonrecurring revenues, the equivalent recurring value is calculated as the annual real earning of the total value of the nonrecurring revenue viewed as an asset. In table 5 the sustainable revenue flow is estimated at $1.4 Billion (1982 $) based on $800 Million of sustainable revenues and $600 million of investment earnings. The latter is the 2 percent return annually received on state asset holdings of $30 billion (the state share of oil in the ground). Adoption of such a spending program would require very significant set-asides of current revenues into an investment program generating real positive monetary returns to the state treasury. Figure 2 shows the proportion of revenues annually invested to produce a level of investment earnings sufficient to sustain $1.4 billion of spending (including a two-year phase-in period). The level of spending under this strategy is contrasted with the spending limit strategy in Figure 3. Any variant between the two is possible, indicated by the hashed lines. The figure clearly shows the present-future trade. If in any year more than $1.4 billion of spending (including a two-year phase-in period). The level of spending under this strategy is contrasted with the spending limit strategy in Figure 3. Any variant between the two is possible, indicated by the hashed lines. The figure clearly shows the present-future trade. If in any year more than $1.4 billion is spent, there must be a year when correspondingly less than $1.4 billion is spent.
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The Relationship Between the Alaska Natural Gas Pipeline and State and Local Government Expenditures
Oliver Scott Goldsmith and Margaret Mogford
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Electricity Demand Forecast For the Bristol Bay Regional Power Plan
Oliver Scott Goldsmith, Will Nebesky, Jim Kerr, Judy Zimicki, and Elsa Aegerter
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