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Social Indicators for Arctic Mining

Sharman Haley, Nick Szymoniak, Matthew Klick, Andrew Crow, and Tobias Schwoerer

This paper reviews and assesses the state of the data to describe and monitor mining trends in the pan-Arctic. It constructs a mining index and discusses its value as a social impact indicator and discusses drivers of change in Arctic mining. The widely available measures of mineral production and value are poor proxies for economic effects on Arctic communities. Trends in mining activity can be characterized as stasis or decline in mature regions of the Arctic, with strong growth in the frontier regions. World prices and the availability of large, undiscovered and untapped resources with favorable access and low political risk are the biggest drivers for Arctic mining, while climate change is a minor and locally variable factor. Historical data on mineral production and value is unavailable in electronic format for much of the Arctic, specifically Scandinavia and Russia; completing the historical record back to 1980 will require work with paper archives. The most critically needed improvement in data collection and reporting is to develop comparable measures of employment: the eight Arctic countries each use different definitions of employment, and different methodologies to collect the data. Furthermore, many countries do not report employment by county and industry, so the Arctic share of mining employment cannot be identified. More work needs to be done to develop indicator measures for ecosystem service flows. More work also needs to be done developing conceptual models of effects of mining activities on fate control, cultural continuity and ties to nature for local Arctic communities.
Kids Count Alaska 2009-2010

Virgene Hanna, Irma Schreiner, Patricia DeRoche, Irena Ikatova, and Erin Trimble

For information on children across America, visit the Kids Count Data Center (www.datacenter.kidscount.org). Developed by the national KIDS COUNT program, the site provides data on children and teenagers for every state and hundreds of cities and counties. For Alaska, you can select indicators for each of the state’s seven regions and create your own maps, trend lines, and charts. There are also maps and graphs you can put on your website or blog. You can go directly to that national site or link from our website (kidscount.alaska.edu). This book and all previous data books are available on our website, with each book divided into sections for faster downloading. Also on our site is a link to the most recent national KIDS COUNT data book, as well as other publications and reports.
Digital Diversity: Broadband and Indigenous Populations in Alaska

Heather E. Hudson

Alaska Natives comprise several cultural and linguistic groups including Inupiat, Yupik, Athabascan, Aleut, Tlingit and Haida, organized into some 226 tribes. Approximately two-thirds of the indigenous population live in more than 200 rural villages, most of which are remote settlements with fewer than 200 people and no road access. Since the late 1970’s, all communities with at least 25 permanent residents have had telephone service, but broadband connectivity remains limited. The major mechanism for extending Internet access to rural Alaska has been federal universal service funds, specifically the E-rate program that subsidizes Internet access for schools and libraries, and the Rural Health program that subsidizes connectivity for rural health clinics and hospitals. Under the federal Stimulus program, Alaska has also recently received funding for infrastructure to extend broadband in southwest Alaska, for improved connectivity for rural libraries, and for training and support for rural public computer centers. These initiatives primarily support improvements in Internet and broadband availability for rural Alaska. However, this paper proposes a more rigorous framework including not only availability, but more broadly access, and also adoption, and examines how these concepts apply to Alaska natives. The paper also examines other elements of digital diversity, including innovation in applications and content, ICT entrepreneurship, and participation in telecommunications policy-making.
Risk Management in the Arctic Offshore: Wicked Problems Require New Paradigms

Mandy Kaempf and Sharman Haley

Recent project-management literature and high-profile disasters—the financial crisis, the BP Deepwater Horizon oil spill, and the Fukushima nuclear accident—illustrate the flaws of traditional risk models for complex projects. This research examines how various groups with interests in the Arctic offshore define risks. The findings link the wicked problem framework and the emerging paradigm of Project Management of the Second Order (PM-2). Wicked problems are problems that are unstructured, complex, irregular, interactive, adaptive, and novel. The authors synthesize literature on the topic to offer strategies for navigating wicked problems, provide new variables to deconstruct traditional risk models, and integrate objective and subjective schools of risk analysis.
Local Permit Ownership in Alaska Salmon Fisheries

Gunnar Knapp

Changes in ownership of limited entry permits by “local” residents of the region where a fishery occurs may have significant economic and social implications for fishery-dependent regions. This paper examines changes in local permit ownership in Alaska salmon fisheries, for which a long-term decline in rural local permit ownership is an important policy concern. Theoretically, permit markets allocate permits over time to the individuals who are willing to pay the most for them. Any factors that differentially affect what local and non-local residents are willing to pay for permits may affect the equilibrium share of permits held by local residents. For remote rural fisheries in particular, these may include differences between local and non-local residents with respect to access to and costs of financing permits and boats, costs of travel to the fishery, opportunity costs of participation in the fishery, and many other factors. As a fishery increases in profitability, differences between local and non-local residents in access to financing matter more while differences in costs of travel and opportunity costs matter less in the relative ranking of what local and non-local residents are willing to pay for permits. This tends to increase the share of non-local residents among buyers willing to pay the market price for permits, reducing the equilibrium share of permits held by local residents. This leads to a conflict between two important policy goals: increasing fishery profitability and maintaining rural local permit ownership. Consistent with predictions of this theory, the local share of permit ownership in Alaska salmon fisheries is negatively related to permit prices (an indicator of fishery profitability).
Developing an Arctic Subsistence Observation System

Jack Kruse

The goal of the Arctic Observing Network Social Indicators Project subsistence component is to assess the adequacy of existing subsistence harvest data to advance our understanding of arctic change and to serve as the basis for recommending steps that can improve the observation network. The assessment is based on a database developed to include 1521 place/year records for Alaska and northern Canada. Of these records, 641 include estimates of harvest of all resources. Separate harvest reports are available for 131 species. Annual harvests are expressed as kilograms of edible harvest per capita for years ranging from 1965 to 2007. One or more measures per decade of comprehensive harvest in the 1990s and 2000s exist for 50 of the 411 arctic North American communities. Based on these results, in most, but not all regions, available data on subsistence harvests in Arctic North America cannot support analysis of changes in harvest over time. The Alaska Department of Fish and Game Community Subsistence Information System continues to provide harvest data for communities and has developed several regional sets of community harvest data in response to actual and potential environmental changes. The past harvest surveys conducted in the Nunavik, Inuvialuit, and Nunavut regions offer valuable experience as well as baseline data. The Arctic Borderlands Ecological Cooperative is a model of community–researcher collaboration. These past and current initiatives provide a foundation for the design of an expanded arctic subsistence observation network. The paper concludes with a discussion of challenges and recommendations.
Arctic Observing Network Social Indicators Project: Overview

Jack Kruse, Marie Lowe, Sharman Haley, Ginny Fay, Larry Hamilton, and Matthew Berman

The Arctic Observing Network Social Indicators Project (NSF OPP0638408) is intended to contribute to the development of the Arctic Observation Network and to the science goals of SEARCH in two ways: (1) develop and make available to the science community relevant datasets and (2) identify gaps in the existing observation system and recommend appropriate actions to fill those gaps. The SEARCH Implementation Plan identified the following arenas of human activity likely to involve climate–human interactions: (1) subsistence hunting; (2) tourism; (3) resource development and marine transportation; and (4) commercial fishing. This project seeks to develop and assess datasets in these four areas. Again drawing from the SEARCH Implementation Plan priorities, the project also seeks to develop and assess datasets measuring social outcomes. This special issue of Polar Geography contains articles on each of the four arenas of human activity likely to involve climate–human interactions, an article on demographic indicators of social outcomes, an overview article, and a synthesis of recommendations for researchers and statistical agencies. The articles also introduce datasets now available to the research community.
Arctic Observing Network Social Indicators and Northern Commercial Fisheries

Marie Lowe

This article presents issues and challenges associated with collecting social indicator data in the context of northern commercial fisheries. The Arctic Observing Network Social Indicators Project (AON-SIP) fisheries domain database consists of geo-coded social indicator datasets from Alaska, Iceland, Norway, and Chukotka, of place/year catch, landings, employment, and permit data from 1980-present for commercially important species above 60°N and in the Bering Sea. Comparability of indicator data across regions will be important for the future monitoring and modeling of the effects of changes in the arctic environment such as those influenced by diminishing sea ice cover and increasing ocean acidification which will impact fisheries production and distribution. Equally important, the collection and analysis of time-series social indicator data could aid in understanding how arctic residents experience the processes of globalization as they participate in industries such as fisheries that are increasingly dominated by non-local corporations. Because of this extrinsic control of resources, social indicator data reflecting local ownership in fisheries rights and revenues could be functional in understanding how changes in fisheries impact arctic livelihoods. It is also necessary to understand how changes in fisheries fit within a broader resource use and arctic development context, for example, in conjunction with the oil and gas industry. Finally, planning for arctic fisheries of the future will be dependent upon data collection and analysis activities that can inform management plans and governance structures accommodating international boundary conflicts, rights-based management regimes, indigenous access, and organization/oversight of arctic marine science initiatives.
Greenhouse Gas Emissions: Inventory From Transportation UAA

Alejandra Villalobos Meléndez, Sarah Christine Gerd, and Ginny Fay
The Economic Contributions of the Kenai Peninsula Borough School District

Kim Pitney and Alexandra Hill

The purpose of this study was to evaluate the economic significance of the Kenai Peninsula Borough School District within the Kenai Peninsula Borough. We use an Alaska-specific Input-Output (I-O) model created by Dr. Scott Goldsmith of ISER, which is custom designed for the Alaska economy to “relate changes in spending in a particular industry to total changes in jobs and income in the Alaska economy.1” In the 2009/2010 school year, the school district directly created 1468.4 jobs, and about $109 million dollars was spent in south central Alaska. Based on the results of the model, this created 628.6 jobs, mostly in the borough, but with some located in Anchorage. These figures highlight the school district's role in the private as well as the public sector of the Kenai Peninsula Borough economy.
The Economic Significance of the Kenai Peninsula Borough School District in the Kenai Peninsula Borough

Kim Pitney and Alexandra Hill

The Kenai Peninsula Borough School District is the largest single employer in the borough, providing over 1,200 jobs in the 2009-2010 school year. In addition to employment, school district purchases of goods and services directly supported an additional 250 jobs (Direct employment in Table 1). Those 1450 jobs supported over 600 more jobs (indirect and inducedimpact in Table 1) when employed households spent their income locally. The total payroll from district, direct, indirect and induced employment is almost $100 million. This paper (and the numbers in Table 1) report on the economic significance of the KPBSD. Economic significance analysis models how money is spent and re-spent within the economy, and how much leaks out of the economy (e.g., money spent while on vacation in Hawaii). Based on this modeling, the analysis calculates how much economic activity in the borough can be traced to the school district, as the district and the borough economy currently exist.
Alaska Fuel Price Projections 2011-2030

Tobias Schwoerer, Ben Saylor, and Ginny Fay

This report and supporting spreadsheet outline Low, Medium, and High case fuel price projections for the years 2011-2030 for natural gas in Southcentral Alaska delivered to a utility-scale customer, diesel delivered to a PCE community utility tank, diesel delivered to a home in a PCE community, home heating oil purchased in Anchorage, Fairbanks, Juneau, Kenai, Ketchikan, Palmer, and Wasilla. The report provides documentation of the assumptions and methods that are used, while a companion Excel workbook contains the detailed projections.
Alaska Native Claims Settlement Act: Selected Bibliography

Suzanne Sharp, Irene Rowan, Jo Antonson, Paul Ongtooguk, Gordon Puller, and Willie Templeton

ISER prepared this list of books, reports, and other resources on the Alaska Native Claims Settlement Act for the ANCSA @ 40 Committee. It is the most comprehensive such list we are aware of, but there are likely additional resources yet to be identified. Some of these resources are now out of print and may be available at used bookstores or at libraries. More recent publications can be obtained from the publishers or at bookstores. You can also find resources on websites, as noted in the citations.
Treatment of Petroleum Refining and Other Energy-Intensive and Trade-Sensitive Industries in Pending National Climate Legislation

Matthew Berman

One of the major issues confronting Congress as it deliberates about legislation to limit carbon dioxide and other greenhouse-gas (GHG) emissions is the effect on international trade. If the U.S. implements a cap and trade program, the cost of emissions rights becomes a new business cost for domestic establishments that foreign establishments do not face. This puts domestic industry at a competitive disadvantage in export markets as well as against imported goods. Over time, investments in U.S. industries decline, taking jobs oversees and undermining progress in reducing greenhouse gas emissions. The concern, often called “carbon leakage,” is most acutely felt in trade-sensitive, energy-intensive manufacturing industries. The main climate bills that Congress is currently considering include H.R. 2454 and S. 1733, commonly termed the Waxman-Markey and Kerry-Boxer bills, respectively, in reference to their original sponsors. H.R. 2454 passed the House on June 26, 2009 with a recorded vote of 219-212. The companion Senate bill was filed on September 30, 2009, and is at this writing (11/06/09) under markup in the Senate Committee on Environment and Public Works. S.1733 incorporates many sections of HR 2454 verbatim, but differs in some respects in the way it treats energy-intensive and tradesensitive industries. This policy brief analyzes the way that both bills approach the issue of carbon leakage, with particular attention to the petroleum processing industry. The next section outlines the general treatment of energy-intensive and trade-sensitive industries that is common to both bills. Then, the brief discusses the specific treatment of refined petroleum products. Following that comes an analysis of the limitations and deficiencies in the approach that Congress is taking. The brief concludes with a discussion of potential modifications -- an outline of proposed amendments -- that could address the deficiencies consistent with the overall approach of H.R. 2454 and S. 1733.
Socioeconomic Impacts of Potential Wishbone Hill Coal Mining Activity

Steve Colt and Tobias Schwörer

The purpose of this study is to assess some of the significant socioeconomic effects of potential coal mining activity at Wishbone Hill. The analysis scenario assumes a 16-year period of startup and mine production using two known deposits that are currently permitted by the State of Alaska for mineral exploration. “Mine Area 1” would be mined during years 2-7 and “Mine Area 2” would be mined during years 8-16. Mining would only take place at one of these areas during any given time. We considered four kinds of effects: Jobs and income, fiscal impacts, property values, and traffic.
Benefits of the Southcentral Rail Extension to the Municipality of Anchorage

Steve Colt and Nick Szymoniak

The proposed Southcentral rail extension to Port MacKenzie is likely to generate significant economic benefits for the residents of Anchorage. These benefits are due to a combination of reduced transport costs, the ability to ship bulk commodities over shorter distances, and economical access to industrial land. We considered and analyzed these benefits under a set of assumptions about job creation, transportation costs, land use considerations and future mineral development. Our major findings include the following: Jobs • Port MacKenzie. The rail extension will generate new jobs for Anchorage workers by stimulating industrial development and jobs at Port MacKenzie. Under a base case scenario with a rail extension and ferry service, Anchorage residents would gain 730 average annual jobs and $50 million of annual income during the period of 2013 -2017 from industrial development at Port MacKenzie. Hundreds more jobs would be gained after 2017. The rail extension will play an important role in this process. For example, it will allow coal exports through the port as early as 2013, generating more than 100 jobs. • New Mines. Major new mines shipping concentrate via the rail extension would generate thousands of new jobs, and a significant fraction of these jobs would be held by Anchorage residents. Our detailed analysis of the potential employment from five specific mining projects indicates that more than 2,000 average annual jobs would be created in Anchorage or held by Anchorage residents once the mines are fully developed. Most of these jobs would be in mining and in professional sectors that pay good wages. Also, during initial mine development, many of the jobs would be in construction and fabrication. • Rail Construction. The construction of the rail extension would generate up to 3,000 total jobs, and ongoing operations would generate up to 150 total jobs. It is likely that many of these jobs would be held by Anchorage residents. • State Revenues. State mining taxes generated from new mines will boost the Anchorage economy. Estimated tax revenues and royalties would grow steadily, reaching $267 million per year by 2040. A large share of these potential tax revenues, roughly proportional to Anchorage’s share of state population, would likely flow into the Anchorage economy, sustaining hundreds of direct jobs and reducing property tax burdens that would otherwise stifle private sector job creation. Regional Competitiveness • New Economic Opportunities. Port MacKenzie and the rail extension, operating together, are a significant new strategic asset for the entire regional economy. This infrastructure will create expanded opportunities for mineral, timber, and energy resource development, and the export of bulk commodities by rail through Port MacKenzie constitutes a new economic sector for the Southcentral regional economy. As the region’s commercial and financial hub, Anchorage will gain jobs and income from all of this activity. • More Efficient Land Use. The rail extension allows for higher-valued use of land in Anchorage. The rail extension will allow for railroad-dependent industrial development to take place at Port MacKenzie. This development would allow limited existing industrialzoned land throughout Anchorage to be used for other, higher-value uses such as commercial development, while still meeting the regional economy’s need for industrial land. Fiscal Benefits • New State Revenues. As noted above, revenues to the State of Alaska from new resource development would grow steadily, reaching $267 million per year by 2040. These revenues will reduce the need for other taxes, stimulating capital formation and job creation by the private sector. • Higher Local Tax Base. Local governments will also see higher tax revenues from a higher-valued property tax base. The stimulated new development will increase the tax base and reduce the need to raise taxes on homeowners or existing businesses. Other Benefits • Port of Anchorage. The industrial and mineral development stimulated by the rail extension to Port MacKenzie will likely increase both the volume and the value of cargo going through the Port of Anchorage. For example, if large mines are developed, the goods and equipment used by the mines for development and operations will flow through Anchorage. • Rail Shipping Costs. The unit cost of shipping on the Alaska Railroad is likely to fall as fixed costs of roadbed maintenance and administration are spread over a higher volume of shipments.
Data Survey and Sampling Procedures to Quantify Recreation Use of National Forests in Alaska

Ginny Fay, Steve Colt, and Eric White

Estimating visitor numbers and collecting information on visitor attitudes in Alaska national forests is especially challenging because of the dispersed access to the forests by a relatively small number of visitors. The Tongass and Chugach National Forests are each millions of acres with miles of saltwater coastline and numerous lakes that allow almost infinite boat and float plane access points. This study identified a number of methods used by land managers in Alaska and other states to address dispersed recreational access as well as other ongoing data collection processes in Alaska, such as sport fish angler surveys, traveler surveys, and other systematic efforts that generate visitor data. These data may be useful for USDA Forest Service efforts to improve their visitor use monitoring processes.
Wind-Diesel Systems in Alaska: A Preliminary Analysis

Ginny Fay, Katherine Keith, and Tobias Schwörer

Most remote rural communities in Alaska use diesel to generate electricity. But the recent rapid development of a worldwide commercial wind industry, along with the rise in diesel fuel prices, has increased interest in wind power in rural Alaska—both to reduce energy costs and to provide local, renewable, sustainable energy. Wind is abundant in Alaska, and a growing number of rural communities are building winddiesel systems, integrating wind into isolated diesel power plants. These systems have moved from the initial demonstration phase a decade ago toward a technology available for many communities. Even in places that have not yet added wind, some rural utilities are planning for the possibility. For example, Alaska Village Electric Cooperative (AVEC) has committed to making new diesel power plants “wind ready” by designing its electrical systems so that wind turbines can be incorporated in the future without major reconfiguration. But it is not clear under what rural Alaska conditions wind-diesel systems are more economical than conventional diesel plant operations. The Alaska Energy Authority asked the Institute of Social and Economic Research (ISER) and the Alaska Center for Energy and Power (ACEP) to assess the performance of existing rural wind-diesel systems. We analyzed data available for existing wind-diesel systems as of spring 2010. Keep in mind that our analysis is preliminary; most rural wind-diesel systems are very new, and more time is needed to evaluate them fairly. Only three wind systems (Kotzebue, Wales, and Saint Paul Island) have been operating for more than a few years. Initial funding for the Kotzebue and Wales projects came from the U.S. Department of Energy, which funds research but does not subsidize utility operations. These early projects, built in the late 1990s, faced problems but demonstrated there is hardware that can operate in arctic environments. The Saint Paul village corporation funded the system on the island; it provides power for an industrial complex and airport the corporation owns. It is a high-performing system, and the most successful of the early demonstration systems, as measured by its capacity factor. However, it should be noted that both the Kotzebue and Wales systems have provided valuable experiences and lessons learned while integrating wind on a community-scale grid. Beginning in 2004, the Denali Commission funded projects in five communities (Selawik, Hooper Bay, Kasigluk, Savoonga, and Toksook Bay). In 2008, the Alaska Legislature created the Renewable Energy Fund, a competitive program intended to invest in renewable energy. That fund, which is administered by the Alaska Energy Authority, paid for construction of six projects listed as completed in spring 2010.
Alaska Fuel Price Projections 2010-2030

Ginny Fay and Ben Saylor

We generated Low, Medium, and High case fuel price projections for the years 2010-2030 for the following fuels: Incremental natural gas in Southcentral Alaska delivered to a utility-scale customer Incremental diesel delivered to a PCE community utility tank Incremental diesel delivered to a home in a PCE community Incremental home heating oil purchased in Anchorage, Fairbanks, Juneau, Kenai, Ketchikan, Palmer, and Wasilla This memorandum provides documentation of the assumptions and methods that we used. A companion Excel workbook contains the detailed projections
Alaska Fuel Price Projections 2009-2030

Ginny Fay, Ben Saylor, and Nick Szymoniak
Alaska Isolated Wind-Diesel Systems Performance and Economic Analysis

Ginny Fay, Tobias Schwoerer, and Katherine Keith

Most remote rural communities in Alaska use diesel to generate electricity, but the high price of diesel is causing an increasing number to add a local power source that’s also renewable—wind. Our analysis is preliminary; most existing systems are new. Adding wind to diesel systems makes economic sense to customers if wind energy costs less than the equivalent energy cost of diesel. Our review of project histories did reveal some potential ways of improving the economics and performance of rural wind-diesel systems. Those include geographically and technologically aggregating projects to take advantage of economies of scale; employing skilled project developers who use technological innovations to increase wind-energy generation; having clear power-purchase agreements; having skilled and motivated local operators; establishing remote monitoring to alert project managers about problems and record maintenance and performance data; and hiring people with expertise in Alaska’s harsh climate.
Response to Questions: Potential Effects on Alaska of Proposed Health-Care Reform Legislation

Mark A. Foster and Rosyland Frazier

Mark Foster of Mark A. Foster and Associates (MAFA) is a consultant to ISER, and Rosyland Frazier is an ISER research associate. Both the authors have broad experience studying health-care issues in Alaska, and they have recently been looking at the problems Alaska’s Medicare patients face in getting primary-care doctors to see them. They prepared this note to respond quickly to questions from and discussions with the Office of the Governor in Washington, D.C. and Alaska’s Congressional delegation. Those questions and discussions were about the possible implications for Alaska’s Medicare patients of provisions in health-care reform legislation the U.S. Congress is considering, as well as about the broader potential effects on Alaska of the proposed legislation. This is by no means a full analysis of the many complex issues associated with health-care reform. A working paper by the same authors—examining the Medicare-access problem and related health-policy issues in more detail—will be available soon. The findings and conclusions of this note are those of the authors. If you have questions, get in touch will Rosyland Frazier at: anrrf@uaa.alaska.edu
Improving Health Care Access for Older Alaskans: What Are the Options?

Rosyland Frazier and Mark A. Foster

This report focuses on the problem older Alaskans who rely on Medicare face getting access to primary care, and discusses some of the options policymakers are considering to resolve the problem. But older Americans across the country also report difficulty getting the primary care they need. The discussion here sheds light on the problem and potential solutions nationwide. Most Americans 65 and older use Medicare as their primary health insurance. Medicare is federal health insurance for people 65 and older, people under 65 with certain disabilities, and people of any age with end-stage renal disease—but this report looks only at access issues for Medicare beneficiaries 65 and older. Doctors don’t have to participate in the Medicare program. But those who do participate have to accept, as full payment, what Medicare pays for specific services. Many primary-care doctors say Medicare doesn’t pay them enough to cover their costs—so growing numbers are declining to see new Medicare patients. Among primary-care doctors nationwide, 61% accept new Medicare patients.1 National surveys sponsored by the Medicare Payment Advisory Commission have found that 17% of Medicare patients in the U.S. had “a big problem” finding family doctors in 2007—up from 13% in 2005.2 In Alaska, a 2008 survey by the Institute of Social and Economic Research (ISER) found that just over half of Alaska’s primary-care doctors were willing to treat new Medicare patients.3 The situation was worse in Anchorage, where 40% of all older Alaskans live. Only 17% of primary-care doctors in Anchorage were willing to treat new Medicare patients as of 2008 (Figure 1).4
Phase 1 Report: Community Health Needs Assessment

Rosyland Frazier and Virgene Hanna
Structural Analysis of the Alaska Economy: What are the Drivers?

Oliver Scott Goldsmith

Because of public ownership of much of the natural resource base, state government has a unique role to play in Alaska fostering economic development. A clear understanding of the structure of the economy is a necessary prerequisite for formulating a successful development strategy. This paper describes and quantifies the 14 BASIC sectors (Economic Drivers) upon which all economic activity in the state depends. Without them, the Alaska economy would not exist. Each of these 14 BASIC sectors draws money into the state, which directly generates revenues for businesses, wages and jobs for Alaskans, and other income. As Alaska businesses and households spend this new money within the state, additional revenues, wages, and jobs are created in other businesses (NON-BASIC sectors) through a process known as the economic multiplier. The size and growth of the economy depends largely upon these BASIC sectors because, without the money they bring into the state, the NON-BASIC sectors would not exist.1 We begin this paper with an estimate of the contribution of each of the 14 BASIC sectors to total employment and resident income. We do this using a simple model to calculate how much new money each driver brings into the economy and then estimating how that new money works its way through the economy generating business revenue, wages, jobs, and other sources of income.2 The results of the analysis are summarized in Table I.1. in which total employment (resident and non resident) and personal income of Alaskan households averaged over the period 2004-2007 are parceled out among the 14 BASIC drivers—aggregated into 5 major categories. We find that the various activities of the federal government, both national defense and non-defense spending, account for the largest share of total economic activity. This economic activity is not only the personal income directly flowing to households as payrolls and transfer payments and federal government jobs. It also includes a measure of personal income and jobs generated throughout the economy as the federal dollars circulate through the NON-BASIC sectors in industries like retail trade, business and personal services, transportation, and construction. The total of $9.93 billion in personal income and 131 thousand jobs can be interpreted as the loss to the state if Alaska were to receive no federal dollars over the period 2004- 2007. Petroleum was the largest private economic driver, contributing $7.44 billion to Alaska personal income and 117.6 thousand jobs. The contribution of petroleum comes from production-related activities, current petroleum revenues, and spending from the accumulated savings from revenues collected in prior years and deposited in the Alaska permanent fund and the constitutional budget reserve. The other three driver categories—traditional natural resources, new resources, and personal assets--together accounted for personal income of $7.61 billion and employment of 121.9 thousand. Traditional natural resources are those private sectors that were most important to the economy at the time of statehood. New resources are activities that have developed more recently. The category of personal assets represents the purchasing power of households that is independent of current employment such as retirement income.