Regulatory and fiscal stability herald bright future for investment in Alaska
There is a renaissance underway on the North Slope driven primarily by two huge projects – Santos’ and Eni’s Pikka development and ConocoPhillips’ Willow. Together, these two, new oil fields will increase production to levels not seen in in two decades.
Despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and fluctuating oil prices –Alaska can expect $22 billion in planned oil and gas industry investment between 2025 and 2030, according to a petroleum economics study by Anchorage-based McKinley Research.
“By 2034, more than 60% of North Slope production will come from fields that, today, have yet to put a single drop into the Trans Alaska Pipeline System,” the study found.
We cannot control many of the challenges Arctic operations bring, but we can maintain fair and stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.
Let’s keep Alaska competitive!
What’s at stake
$4B
State & Local Revenue
FY25
70,425
Alaskan Jobs Supported
Direct/Indirect
$0.5B
Grow the Permanent Fund
FY22 Dedicated Revenues to Corpus
$5.8B
Spending with Local Businesses
Annual
Source: McKinley Research for AOGA
Stable tax policy leads to resource renaissance on the North Slope
“The oil and gas industry is generally an area of strength right now,” says Dan Stickel, Chief Economist at the Alaska Department of Revenue. “Prices are not great, but they are sufficient to allow quality projects to proceed.”
Alaska Business takes a look at the state’s economy in 2026, interviewing a variety of economists and business leaders. Here are some of its findings:
Rebecca Logan, CEO of the Alaska Support Industry Alliance, is optimistic about the potential growth for the oil and gas industry, as well as the mining industry. “People feel pretty good about the work they have for 2026,” says Logan. “The big excitement is about what can be solidified in 2026.”
First out of the gate is Pikka, an 80,000-barrel/day shot in the arm for the Trans Alaska Pipeline System, followed in a couple of years by Willow.
While these mega projects anchor the North Slope for now, many economists and researchers say Alaska needs to strike a balance between optimism and realism. “Global economic uncertainty, strong US production, geopolitical events in Russia and Iran, and OPEC policy have led to a decline in oil prices in the last six to twelve months. OPEC has signaled a willingness and ability to put further pressure on US producers in order to reclaim market share,” says Brett Watson, UAA associate professor of Applied and Natural Resource Economics.
Even if activity keeps up its tempo, the industry is changing and fewer Alaskans are likely to draw paychecks from it. “Like many industries, oil and gas has achieved more operational efficiencies over the last decade or so as it was forced to slim down employment in the face of lower prices,” Watson says. “Wells require fewer workers and are drilled in faster than in years past. Horizontal drilling accommodates many wells to a pad. Artificial intelligence [AI] presents new opportunities for this (and every other industry) to do the same.”
There’s more on Alaska’s outlook here: www.akbizmag.com/industry/government/alaskas-economic-forecast-for-2026/
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2026 is shaping up to be a pretty good year in the oil patch.
“Oil and gas employment has grown by 2,300 since the industry hit a low of 6,700 jobs in 2021. Production has remained remarkably stable despite the big COVID-era employment drop and partial rebound since,” the state writes in its latest issue of Alaska Economic Trends.
“An additional 1,000 jobs are expected in 2026 as Pikka moves into production and overall activity rises, pushing jobs back up to pre-pandemic levels. While Willow is under development, the project is primarily generating jobs in construction and transportation, and to a lesser degree in professional and business services, manufacturing and wholesale.”
Anchorage’s oil and gas employment continued to grow last year but remains at about half of its 2015 peak of 3,800 jobs. “Major exploration and production companies developing prospects on the North Slope and in Cook Inlet are headquartered in Anchorage and have been hiring locally. We forecast oil and gas will add another 100 jobs in 2026,” the forecast said.
View the complete forecast: live.laborstats.alaska.gov/trends-magazine/2026/January/jobs-forecast-for-2026
Letter from the co-chairs
Fair and Competitive oil taxes are working
There is a resurgence in oil production and jobs in Alaska that is directly related to our current oil tax policy. SB 21, a fair and competitive tax policy, replaced the antiquated ACES tax structure that drove down petroleum investment for more than a decade. Thanks to SB 21, Alaskans have the greatest opportunity of our generation on the North Slope today.
Some present and former legislators argue that SB 21 was a mistake, but the facts speak for themselves.
The Willow and Pikka projects, years in the making, are in active development, with Pikka now expecting first production any day now. These and other robust investments in Alaska’s future would not have occurred under the previous punitive tax regime. Between the Willow and Pikka projects alone, the oil and gas industry is spending over $10 billion in Alaska, with each project generating thousands of construction jobs and hundreds of operating jobs.
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