Legislature(2011 - 2012)BUTROVICH 205
04/11/2011 06:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB110 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 110 | TELECONFERENCED | |
HB 110-PRODUCTION TAX ON OIL AND GAS
CHAIR EGAN announced HB 110 to be up for consideration [CSHB
110(FIN) was before the committee]. He said they would continue
Friday's meeting with Commissioner Bishop and Mr. Fried and
would start on page 2 of the Labor and Workforce Development
handout.
6:08:55 PM
CLICK BISHOP, Commissioner, Department of Labor and Workforce
Development (DOLWD), introduced Mr. Fried an economist for the
department.
6:09:31 PM
NEIL FRIED, Economist, Department of Labor and Workforce
Development (DOLWD), said Table 2 represents the unemployment
claimants whose most recent earnings came from the oil industry
from 2000 to 2010. He said the categories are total claims for
oil industry intra-state claims (people who are living in Alaska
are receiving) and inter-state claims (people who are outside
whose last earnings were in Alaska working in the oil industry
who are receiving their benefits outside of the state).
Further down, oil and gas extraction and support activities for
drilling and oil and gas wells is just dividing the oil industry
up into separate categories. The oil and gas extraction
basically covers the producers; the support activities, the
largest group, covers everybody else (oil field service
industry).
6:10:44 PM
MR. FRIED explained that the total numbers moved along at about
1,000 per year and then increased a little in 2008 to almost
1,400. There was a significant jump in 2009 to 2,700. Then it
sort of leveled off and actually dropped off slightly in 2010 at
2,500. That is the experience over the past four years of people
whose last major earnings were in the oil industry who became
unemployment claimants.
SENATOR PASKVAN said many people are struggling with the first
slide that shows statewide in 2009 an all-time high employment
in the oil industry and in 2010 it's within 100 employees. What
explains, potentially, increases in unemployment when the
average employment is at an all-time high?
MR. FRIED replied that Alaska has an employment increase and an
unemployment benefits increase, as well. It does look strange
and contradictory. A couple of explanations are when looking at
the annual industry data that went from 12,800 in 2008 to 12,900
in 2009 is that they are looking at averages; they don't see the
monthly changes. The monthly change in the first quarter of 2009
almost reached a peak as high as 13,500 for oil industry
employment. By November 2009, employment had dropped by 1,500.
So, 2009 started out really strong and then dropped off, and he
assumed much of the increase in the number of claimants occurred
during the latter part of the year; and that contributed to a
big increase in the number of unemployment insurance claims that
were tied previously to the oil industry.
One other big thing happened in 2009 that might help explain it,
the big macro picture, and that was the first year in Alaska's
economy in 21 years where overall employment actually fell and
unemployment increased significantly. The job market changed a
lot in the broad sense. Alaska went from a job market where it
was difficult for employers to find enough workers to now
workers having a very difficult time finding work. If you had
lost your job (with transferable skills to the construction
industry) in the oil industry at any time during 2009 it
probably was more difficult to be rehired somewhere, but if the
labor market in general got significantly worse, those
alternatives had also declined.
In the first quarter of 2010, oil industry employment recovered
nicely and stayed relatively strong through the next two to
three quarters; the number of claimants in the oil industry
actually declined slightly. But all other industry claimants
continued to increase.
6:16:00 PM
SENATOR PASKVAN said America has had two major economic
downturns and asked if there is any correlation in his numbers
that fit into those patterns.
MR. FRIED replied yes; but Alaska didn't go into recession in
those periods while the rest of the country did. Employment
managed to grow in 2001 to 2003. What happens each time that
occurs is that fewer Alaskans leave the state because the
pastures do not look very green elsewhere in the country and
more people probably head north looking for opportunities. That
effectively pushes up the number of people who are looking for
work and then our unemployment rate increased. "That happens all
the time."
SENATOR PASKVAN asked if it's an accurate understanding that
Alaska appears to be at or near all-time employment.
MR. FRIED answered yes.
SENATOR GIESSEL asked how long a person can be on unemployment.
COMMISSIONER BISHOP replied up to a maximum of 99 weeks.
SENATOR GIESSEL asked if the 2,780 people that were on
unemployment in 2009 were also reflected in the 2010 numbers.
MR. FRIED replied that it could be a combination; certainly
there were claimants who were new as well as others from 2009.
SENATOR PASKVAN asked if there has been a base wage growth in
the oil and gas industry parallel with the all-time high rate of
employment.
MR. FRIED replied in 2007 the total payroll was about $1.3
billion; by 2009 it was close to $1.6 billion. So, yes, there
was a commensurate increase in payroll as in employment.
6:20:36 PM
COMMISSIONER BISHOP said he wanted to take members' questions
now and started by saying that he wanted to put a face on
unemployment numbers. A week ago he talked to some of the same
people who talked to Senator Paskvan's office from Flowline
Alaska, with whom he had a working relationship in his former
career. They are probably the only pipe coating facility in the
state that does fusion bonded epoxy coating, steel jacketed
coating and insulated pipe coating for the North Slope of
Alaska. His figures are from construction season 2008 to 2010.
He reminded them that the normal construction season on the
North Slope is December through April. In 2008, Flowline had 71
full-time employees and in 2010 they had 31 full-time employees.
Since they have a niche market, they work closely with the
industry and get long lead time on projects so they can order
materials and plan their work around the industry's work, but he
has been told that the next three or four years looks very grim
for them.
Another North Slope contractor he talked to has the specialty of
doing well tie-ins. After the well is drilled, they will come in
and tie it in to an existing pipeline to get the oil into the
TransAlaska Pipeline System (TAPS). They reported employment
down by 50 percent; their engineering division is down 60
percent and they are selling off some of their assets. Another
pipeline contractor Commissioner Bishop said he talked to last
week is down 50 percent on their pipeline work and forecasting
going down another 50 percent. Their Alaska hire rate is 95
percent.
6:26:01 PM
SENATOR PASKVAN said when they are hearing that the employment
numbers are at all-time highs, it's hard to rectify that. The
January 2011 Trends report specifically says that "the number of
non-resident workers employed in Alaska provides an excellent
indicator of labor shortage in the state." But according to the
commissioner, Alaska doesn't have a labor shortage. How do you
explain this? Who is hiring these people if those people aren't?
6:27:00 PM
COMMISSIONER BISHOP replied that he recognizes the fact that
some Alaskan employers have non-resident hire rates of 25 to 54
percent. He has made numerous visits with industry leaders and
oil company executives to see how the state can work better them
to get more Alaskans into those jobs.
SENATOR PASKVAN responded that everyone wants to make sure that
Alaska has a trained workforce, but the troubling thing right
now is how to account for the fact that these seasoned highly
qualified employees aren't working when Alaska is at all time
high numbers of total employment.
COMMISSIONER BISHOP replied this group of North Slope pipeline
and pipe coating contractors are "out there on the front end"
right after the exploration wells have been drilled. They might
not have the skill set the other jobs would require and need
more training; and he has written letters asking what the state
can do better to train more Alaskans to get them into these
jobs.
SENATOR PASKVAN said, then, it seems that the question is what
are the jobs of now and in the near future that Alaskans need
training in, so that they can be employed when the oil industry
as a total is at all-time high employment.
COMMISSIONER BISHOP responded by referring them to a copy of a
letter in their packets that he wrote.
6:31:22 PM
SENATOR PASKVAN asked if he has historical employment trends for
these private companies. Did they experience employment declines
in past economic downturns?
MR. FRIED replied yes; the department has employment data going
back for almost all employers, but the data for individual
companies is confidential.
SENATOR GIESSEL said one of the things she became aware of
working with the Department of Labor and Workforce Development
(DOLWD) and the Department of Health and Social Services (DHSS)
statistics is that a lot of times the identifier numbers for
different professions aren't real specific. When she looks at
the various economic trends, the categories are very broad in
oil and gas; it doesn't say whether these jobs are on a drill
rig or whatever. Is it possible to drill down to those kinds of
specifics or are they just broad-brush numbers?
MR. FRIED replied the definition of the oil and gas industry is
fairly narrow. For example, Alyeska Pipeline Service Company;
it's usually thought to be an integral part of the oil industry
and it is, but it's defined as a transportation company. Or a
catering company or security company or even a lot of
construction companies will be defined under those various
industries. The biggest breakdown they have is between
producers, the Exxons and ConocoPhillips of the world, and the
oil field service companies like the Doyon Drillings and the
CH2MHills. That breakout is actually in Table 2.
SENATOR GIESSEL asked if the companies that the commissioner was
just citing are considered oil and gas or support industries
that wouldn't necessarily be reflected in these categories.
MR. FRIED replied that some of them are in the oil field
services, but he wasn't sure if they all are.
SENATOR PASKVAN asked if the commissioner knows whether Repcon
works up North.
COMMISSIONER BISHOP replied yes, it does.
SENATOR PASKVAN said the January 2011 Trends publication on page
5 says that Repcon reports 100 percent non-resident hire. Is
that accurate?
MR. FRIED replied, "It's in the book; I guess it's accurate."
SENATOR PASKVAN said it seems like they are under the
construction industry, but it appears they are working in the
oil industry. Is that accurate?
COMMISSIONER BISHOP replied yes; they are on the North Slope,
but they are categorized in the construction industry. That's
just the way they are counted by the Bureau of Labor Statistics.
SENATOR PASKVAN asked if another contractor like Matrix Service,
Inc. is working at Prudhoe. That's another company that reports
100 percent non-resident hire. Is that accurate?
MR. FRIED replied yes to both questions.
SENATOR PASKVAN asked what type of construction work within the
oil industry does Matrix and Repcon do at Prudhoe?
COMMISSIONER BISHOP replied to his knowledge they do tank repair
and clean on vessels.
6:37:51 PM
SENATOR PASKVAN went to page 11 of April 2011 Trends that has a
new hires by industry chart that breaks out the oil and gas
industry. Third quarter 2009 saw 636 new hires and third quarter
2010 saw 1,420, for an increase in the oil and gas industry in
Alaska of 123.3 percent. "It seems pretty amazing if we got a
lot of Alaskans that aren't working."
COMMISSIONER BISHOP pointed out that 47 percent of residents are
working.
SENATOR PASKVAN said he understands that to say 47.7 percent of
the new hires are residents, but that infers to him that more
than 50 percent were non-Alaskans.
COMMISSIONER BISHOP remarked, "That's what it says."
SENATOR PASKVAN said that is troubling to him when he knows his
folks at home aren't working. Is that a hiring choice?
COMMISSIONER BISHOP replied yes; it's a hiring choice. The state
has "been around the Horn" for 35 years trying to maximize
Alaskan hire, he said, and at his confirmation hearing for
commissioner he was asked what he would do about Alaska hire. He
had replied that issue had faced every other commissioner before
him since statehood and he obviously isn't doing a very good job
either.
SENATOR PASKVAN asked if he believed there are competent,
experienced qualified Alaskans who could do the work that went
to non-residents.
COMMISSIONER BISHOP replied if he knew what skill sets they were
hired in he could say, but at this point he wanted to read his
letter to the industry into the record so the people watching on
TV could hear it.
Dear Sir:
Thank you for choosing to do business in Alaska and
for hiring Alaska workers. While I recognize that you
hire resident workers, I would like to work with you
to identify additional qualified Alaskans to fill your
hiring needs. The mission of the Alaska Department of
Labor and Workforce Development is to provide a safe
and legal working environment and advance
opportunities for employing our residents. More than
$1.8 billion leaves this state annually each year in
non-resident wages. As critical, those jobs are sorely
needed in our communities where unemployment reaches
hirer than 50 percent.
When you hire trained and experienced workers locally,
you can reduce the high cost of importing and
retaining your labor workforce. Hiring locally also
means you can more readily access state and federal
training and employment resources and services
designed to benefit your company directly.
I look forward to meeting with you so that we can
understand your specific workforce needs first hand
and how to best customize our services to meet those
needs. Please do not hesitate to call. Along with my
senior training team, I'll meet with you at your shop
or mine.
Sincerely,
Click Bishop
6:40:49 PM
CHAIR EGAN said he appreciated that letter and asked him to
discuss any replies he had received from any of the firms he
sent the letter to.
COMMISSIONER BISHOP responded that he got two verbal replies and
one written reply. Two of the majors have called on the phone;
he has met with one already and is meeting with another major
producer this week. He got one Email reply from another service
contractor on the North Slope.
SENATOR PASKVAN said it's a great letter and that it needed to
be sent because it's calling on the line some people who need to
answer.
COMMISSIONER BISHOP said the Supreme Court has said requiring
Alaska hire is unconstitutional and the department "works it as
hard as we can work it with the tools that we have." He said
they spend a lot of effort advancing apprenticeship in this
state by industry and occupation. When you commit to instilling
a registered apprenticeship program in your business, you're
drawing your workforce from Alaskan schools and the University.
Two years ago as a result of looking forward at the gaps in the
gas line training plan, they know the state will need X number
of truck drivers, X number of heavy duty mechanics to keep those
trucks running, and the department started developing and
building a curriculum and setting it up. It took funding, but
they started a truck apprenticeship program through AVTEC.
6:44:51 PM
Carlisle Trucking Company has signed on for a registered
apprenticeship heavy duty mechanic truck program. Carlisle is
also becoming a 100 percent Alaska-hire employer and requiring
that employees become Alaska residents. Commissioner Bishop
said, "I know I don't have the force of law. All's I have is one
on one, face to face, one industry and one employer at a time
building a relationship and there is an example."
He also cited Lynden Transport as another example of a company
he got to commit to an apprenticeship for the heavy duty
mechanic program and they are also the first trucking company to
launch an over the road line haul driver apprenticeship program
- taking apprentices - Alaska kids - to Prudhoe. He said, "We're
building our workforce in our gaps right now."
CHAIR EGAN said they would like to hear about them.
COMMISSIONER BISHOP said he couldn't do it all by himself. He
needs help "from every one of you." If they are all saying it
and he is saying it, it is resonating. In the last two years, he
has instituted 52 new apprenticeship programs in the state. The
last one is directly tied to corrosion repair, non-destructive
testing (NDT), on the North Slope.
6:48:43 PM
He added that one pipeline company he worked for on TAPS that
did Section 3 from the Yukon River down past Salcha, for the
first time in 37 years doesn't have a project booked in the
state.
SENATOR PASKVAN asked if the apparent trend to hire non-
residents appears to be increasing in recent years.
COMMISSIONER BISHOP replied that Alaska is "trending the needle
in the right direction" down by five-tenths of a percent.
SENATOR PASKVAN asked if he said $1.8 billion is lost in
earnings to non-residents.
COMMISSIONER BISHOP replied that figure is across all
industries.
SENATOR PASKVAN said he was looking on page 20 and asked what
percentage of that $1.8 billion is lost to non-residents in the
oil and gas industry.
MR. FRIED responded that it was about $420 million in 2009.
SENATOR PASKVAN said the next column has a non-resident earnings
figure and then "direct effect" followed by $914,490,000
million; it talks about a 1.87 multiplier. Is the "direct
effect" of the $420 million likely also at that 1.87 multiplier?
6:51:54 PM
MR. FRIED replied yes.
SENATOR PASKVAN remarked, "It's a lot of money."
SENATOR GIESSEL said she wanted to segue way back to the amount
of work on the Slope regardless of who is doing it. She asked if
the non-destructive testing is considered oil and gas jobs or
oil field support jobs.
MR. FRIED replied that it depends on the employer, because some
employers might be doing non-destructive testing along with
other things. If they were just doing NDT he didn't think they
would be counted in the oil industry.
SENATOR GIESSEL said this is a job category that has a lot of
Alaskans working in it, but it might not be showing up in our
oil and gas employment numbers.
She said on Friday the commissioner gave them an Email that had
the number of pipe net pounds being transported north by Alaska
Railroad and it dropped in half between 2009 and 2010. Clearly a
lot of different work is going on on the North Slope other than
putting down pipe casings. Is that accurate? What does this
decrease in pipe headed north mean?
COMMISSIONER BISHOP replied it means less drilling. One of his
points last Friday was that in 2009, 109 million pounds went
north, but in 2010 it was 42 million. They all agree that there
is only one exploratory well being drilled there this year by
Brooks Range, and that is one conclusion he has about why there
is less in-field drilling being done. He wants to get more
exploratory work to develop new fields to get more pipelines so
flow lines can get back up to 71 FTEs.
6:55:52 PM
SENATOR GIESSEL said she appreciated the examples of the
companies he had talked to, because in her area she actually
knocks on doors of folks that have lost their jobs in the oil
field, but they are in the oil field support industries. And
they hear about Anchorage companies laying off 50 percent of
their employees, also. So, if they could get drilling up on the
North Slope, then resident employment would rise also. What are
these new employees actually doing on the Slope if they aren't
drilling more wells?
COMMISSIONER BISHOP agreed and said they could find that out,
but it would take time. He doesn't have that expertise in the
department now, but that doesn't mean you can't find those
people. They already have identified 113 occupations directly
related to building a gas line. This type of debate has never
come before the department. He said just from their discussion
tonight it can be seen that there is work that goes on on the
Slope that falls outside of one of the three categories that
comes in under construction. "We can data mine 'til the cows
come home," he said, but there is no denying the uptick in
numbers.
6:58:39 PM
COMMISSIONER BISHOP said he goes back to the 2006 oil spill and
the fact that the increase in these numbers could be directly
tied to maintenance and repair on the corroded pipelines.
SENATOR PASKVAN asked if well casing is needed to do well work-
overs.
COMMISSIONER BISHOP replied that is not his area of expertise,
but it depends on what they are doing to the well. Cleaning and
scaling wouldn't need a work-over rig.
SENATOR PASKVAN said they had a presentation in another
committee that showed the number of well work-overs is very
substantial in Alaska. Also, the presentation by AOGCC explained
it as part of a normal cyclical pattern in Alaska looking back
through a number of decades. Does that sound realistic?
COMMISSIONER BISHOP said he wasn't the best guy to ask.
SENATOR PASKVAN said the September 2008 issue of Alaska Economic
Trends indicates:
Dramatic improvements in technology in the last decade
have had a powerful effect on employment levels. An
example of those include the wide-spread use of
horizontal drilling, alter-extended reach drilling, 3-
D and 4-D seismic surveys, drill bit sensors and other
advancements that reduce the number of wells that need
to be drilled.
In other words, they say the oil industry has been able to
perform more work using fewer workers. Does that technology have
an effect in Alaska where they need to drill fewer wells, but
they're finding out the information from other sources.
MR. FRIED replied that those were his words and it was related
to a report that the Federal Reserve of Dallas wrote in the 90s
that the oil and gas industry had the greatest productivity
gains of all industries. It slowed down somewhat in the 2000s,
although predictably they continued to increase. If they were
looking at it from sort of an accounting point of view, if they
would do the very same work today you probably would need fewer
workers; although, in the long run, an increase in productivity
should lead ultimately to an increase in employment.
7:03:21 PM
SENATOR PASKVAN followed up from the same September 2008 article
that compares Alaska to other oil producing states that
indicates Prudhoe Bay "doesn't need a huge workforce to produce
oil." They then compared that to Texas, Oklahoma and Wyoming and
talked about 400,000 stripper wells, because those are the type
of wells that one would have in small fields like Texas has
where oil is found all across the state; different than Alaska
where it is concentrated in one region. Is it accurate to say
that Prudhoe Bay doesn't need a large workforce whereas other
states need a lot of well drilling to access their oil?
MR. FRIED replied that was said in context sort of comparing
Alaska to the rest of the country, and while he didn't know if
it was a benefit, but Alaska's oil fields on average are much
larger than the oil fields found elsewhere in the country.
Fourteen of the largest oil fields in the country are here in
Alaska. For economic reasons, Alaska tends to choose to only
develop those larger fields. So, Alaska has the economies of
scale when it comes to developing its oil fields.
He said there are a couple of other reasons for that; one is the
structure of our oil and gas industry. Many of the companies
that operate in other states' headquarters are in those states,
so they have additional staff; whereas most of Alaska's
employment is tied very specifically to producing the oil in
both the Kenai Peninsula and the North Slope. The last point in
looking at that is you have to remember these are oil and gas
numbers, which in Alaska means basically oil industry numbers.
But comparing those numbers to elsewhere in the country is
comparing them with oil and gas; but in some those states, gas
is a bigger employer than oil. In that sense, we're mixing a
little bit of apples and oranges, especially nowadays with the
boom in gas exploration and production.
SENATOR MENARD said they were trying to grapple with just how
much is going on with the increase on the North Slope. She
thinks the increase is not from oil production and research and
exploratory development, but a lot of these jobs are for
refurbishment of pipeline and repairs in the infrastructure. Is
that a true statement?
7:06:12 PM
COMMISSIONER BISHOP replied yes; that is what his comments have
been "framing."
SENATOR PASKVAN said the AOGCC presentation last Friday shows
development, service wells and well bores being drilled on the
central North Slope only for the years 1996 to 2010 where in
2010 the number of wells that reflected are at a high going back
to 2005. That seems to contradict the well casing numbers from
the Railroad.
COMMISSIONER BISHOP responded that he didn't have that slide in
front of him.
SENATOR GIESSEL said the DNR might be able to answer it.
CHAIR EGAN said he had invited the DOLWD commissioner and Mr.
Fried here today and he hesitated to ask someone else to come up
and present anything. They would get an answer, though.
SENATOR PASKVAN said one of the concerns that many people have
is that there is a claim that 2,000 jobs have been lost in
Alaska. When one looks at the average annual employment, it
seems like it is at or near an all-time high. What is the truth?
MR. FRIED replied that he didn't know the source of that data,
so he really didn't know.
SENATOR PASKVAN asked if he found that in the data that he
reviews as part of his activities as an economist.
MR. FRIED replied no.
COMMISSIONER BISHOP said he does know a lot of the same things
and gets the same reports that many of those in the legislature
have received.
SENATOR GIESSEL said she was looking at the January 2011 Trends
employment forecast for 2011 and page 6 has a chart that
provides 2009 and 2010 monthly average employment figures. The
category is oil and gas and the change from 2009 to 2010 is
negative by 1,000, a drop of 7.8 percent. The department is
forecasting an average monthly decrease of 100 more jobs from
2010 to 2011. There are a lot of different data points counting
different things. How would you explain the difference?
MR. FRIED replied this series, in theory, represents the same
series as the other numbers they discussed. The 2010 numbers
were a preliminary estimate for 2010. He explained that the
department goes through a four-stage process in estimating
employment each year; they produce a preliminary estimate, a
revised estimate (based on a sample that they receive from
employers), and then when they get the actual data from
employers on their ESC reports. The actual administrative data
gets overlaid on top of their sample based estimates. When they
revised the numbers for 2010, in fact, they did not experience
the decline that the sample-based estimates said were happening.
Those numbers actually became the 12,800 - in exhibit 1.
SENATOR GIESSEL said in column one the 12,800 is 2009 and then
it drops down to 11,800 in 2010. A thousand jobs were actually
lost. Is that what you're saying?
MR. FRIED said no; he is saying that when the numbers are
revised and the actual numbers were overlaid, that number became
12,800. Their numbers were revised in March of this year.
SENATOR GIESSEL said the data is confusing. On page 10 of the
January 2011 Trends, chart 13 shows Anchorage wage and salary
employment forecasts. There's oil and gas, which is "dandy," but
then she turns to her hometown, Fairbanks, on page 14, and oil
and gas isn't even listed. Yet, she knows there are oil and gas
jobs there. Why did it get left off of that chart?
MR. FRIEID agreed that the data is confusing; oil and gas is
part of mining and logging like it is in the other tables, but
they are a subcategory of mining and logging. The size of that
workforce is relatively small and because of its size, it is
very difficult to estimate.
SENATOR PASKVAN recapped that slide 1 indicates that the 12,800
employed in the Alaska oil industry is a figure that was
released as of April 8, 2011.
MR. FRIED agreed and said that the revised figure is now 12,900.
SENATOR PASKVAN asked if that was released last week.
MR. FRIED said correct. He added that the revisions in the
previous years are usually very small, because when that 2009
number was produced, they had three quarters of actual data and
only had one quarter of "estimated" data; whereas all the months
in 2010 were based on sample estimates.
SENATOR PASKVAN referred to the April 2011 Trends that indicates
that more workers are being hired in Alaska from the state's
unemployment insurance numbers. Then it says the oil industry,
in particular, has shown a strong uptick in hiring. Is that
accurate?
MR. FRIED replied it is accurate. However, what is interesting
about the new-hire data is it's not always representative of
growth in the industry; it represents the churning that goes on
in the labor market. Looking at the first three quarters of new
hire data for 2007 when employment was smaller than it was in
2010 by a thousand or so, there were still more new hires in
2007 than there were in 2010. It's another labor market
indicator, in this case, of hiring, because at the same time
this is going on, you could have people being laid off as well.
For example, if a contractor finished a job, those numbers
wouldn't show up in the new-hire data, and if someone else took
over that very same contract and hired people - and not the
people who were laid off - then they would show up as new hires.
7:18:09 PM
SENATOR PASKVAN said again the April 2011 Trend indicates in the
oil and gas section that "the biggest jumps in new hires and
continuous workers were in the oil and gas related industries
both of which reached a four-year peak in 2010." Then it says,
"The region new hires increased the most on the North Slope
primarily due to the spike in the oil and gas industry." This
seems to indicate that things were "pretty darn good" in the oil
and gas industry based on numbers.
MR. FRIED replied that they had looked at those numbers and 2009
and 2010 are record high.
SENATOR GIESSEL said that same paragraph goes on to say,
"However, because it is not possible to differentiate between
workers hired to maintain the current fields and those in new
exploration, it's unclear if the jump in employment will
continue." So, interpreting these statistics is not always "cut
and dried." Nevertheless, she said she appreciates the work that
goes into it.
CHAIR EGAN asked if he tracks availability of housing and
vacancy rates on the North Slope.
MR. FRIED answered no, but it would be interesting.
COMMISSIONER BISHOP added that he knows of several camps that
are at capacity.
SENATOR PASKVAN said it is troubling that camps are full and
employment is at an all-time high, but at the same time
experienced workers are asking why they are not working and it
appears that someone from outside Alaska is working. Following
in that line, he understands that residency of the North Slope
workers is based upon who has applied for PFDs, but on page 2 of
the January 2011 Trends seems to indicate that 14.5 percent of
the people that apply for their PFD were at one point non-
residents. What does that mean?
MR. FRIED answered that it means they have looked at the data
and at the people that were categorized as non-residents in
2008, and then they looked at the same group of people in 2009
and found that 14.5 percent of those that were counted as non-
residents in 2008 became residents in 2009.
SENATOR PASKVAN asked if that rate were to continue, would that
be an ever-growing population of non-residents working on the
North Slope.
MR. FRIED replied he didn't think; it depends on other factors.
That number is pretty consistent year in and year out.
CHAIR EGAN asked if he was willing to discuss the legal issues
of local hire and possible solutions to adding more resident
employment opportunities.
COMMISSIONER BISHOP replied that is why he has been working so
hard to get employers engaged with getting Alaska kids into
apprenticeships. "Those are Alaska kids coming out of our high
schools, coming out of our universities. It takes the non-
resident piece out of the equation when you are using our kids."
He added "it took no law to get there." That is why he has
challenged everybody in this room and has said it every year,
"Help me."
CHAIR EGAN said he appreciated that, but he was wondering if
there were any other possibilities.
COMMISSIONER BISHOP said he went through the book he had on
Friday and found some good stuff, but when he asked DNR and DOL
about it, it was all unconstitutional.
SENATOR PASKVAN asked if he had seen the capital budget with
respect to the pipeline training center and if he could talk
about what it is designed to do.
COMMISSIONER BISHOP replied that Pump Station One had a small
spill this winter. Over 19 individuals fixing that leak went to
that Pipeline Training Center. The training center is in
Fairbanks, but the students come from statewide. Over 27 percent
come from rural Alaska. That's how fast the state can respond.
7:28:26 PM
CHAIR EGAN asked if those people were called out or permanent
full-time employees.
COMMISSIONER BISHOP replied that they were called out and about
550 people were associated with that whole event.
SENATOR PASKVAN said probably a lot of Alaskans are asking who
makes the decisions to hire the non-residents.
COMMISSIONER BISHOP answered that it's up to the individual
service companies.
CHAIR EGAN said even if Alaskans are getting trained, there are
no guarantees that these companies will hire them.
COMMISSIONER BISHOP responded that there would be some
guarantees that some of the companies would hire them. One of
the things he does with his job is look forward five years down
the road. He wants the tech jobs at the facilities to be Alaskan
jobs. He went to Pt. Thomson and Prudhoe and brought ExxonMobil
back to the University Tech Training Program, because it is co-
located at the Pipeline Training Center that is integrated from
top to bottom. Other contractors that support it know its value
and that it's in their vested interested to hire as many of
those people as they can. However, some people don't fit with
what that training center does and that is some of the reason he
wrote the letters to these companies the way he did saying,
"What more can we do working together?"
7:32:58 PM
CHAIR EGAN thanked the commissioner and Mr. Fried for making
themselves available to the committee to answer questions and
adjourned the meeting at 7:32 p.m.
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