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Thread: Is the Alaskan economy effected?

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    Member stack's Avatar
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    Default Is the Alaskan economy effected?

    Just wondering if Alaskans are feeling any effects of the slowing economy? I would think Alaska would be more self sufficient than the lower 48 and not as effected as much.

    Thanks for stopping by.

    Matt

  2. #2
    Mark
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    Not yet.

    Our real estate situation won't get as bad as the worse areas of the Lower 48. We did that in the late 80's, and it appears that lending institutions here learned their lesson.

    But when King Ted's last capital appropriations run dry in a couple of years, our construction industry will simply die.

    And the oil industry? It's slowly dying (production has been declining for several years now), and there will be no more.

    That lesson was driven home to me when oil hit it's high this summer and the environmental industry showed no sign of letting up. In fact, it appeared like they were going for the killing blow, trying to kill oil off for good (even though we have nothing to replace it with).

    We're fine now. We'll be hurting real bad in a few years.

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    Member AKDoug's Avatar
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    My business is doing fine now, but I am preparing for far worse.

    I don't totally disagree with Mark. We have totally been hamstrung by the environmentalists and it's not looking to get any better.

    In my town 90% of the money is made locally in 6 months because we have sold our soul to tourism and failed to develop any other industry that will keep people employed year round. A large portion of the people making that money in those six months disapear to the Lower 48 after the first frost and little money stays in town through the winter. This is the story throughout tourist towns in Alaska.

    Overall, though, my numbers are no different this year than they were for the last four years.
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    Member Phish Finder's Avatar
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    I tend to be more optimistic about the outlook. The oil industry isn't going anywhere. The tourism industry is going to be a concern this year. The major construction projects will have a funding shift. If the infrastructure plans are undertaken, we will be fine. If not, a large share of the jobs are still medical and government.

    We'll be just fine.
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    just like to pee a lot." --Capitol Brewery

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    Mark
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    What business are you in, Doug?

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    Feel it?
    Hell, were used of it.

    Were self employed as my wife is an artist, and opportunitys are drying up.

    Stove oil AND Gasoline are 7.85$ a gallon here on Kobuk River, and thats not gonna change untill the next barge in July.
    Every price here follows that.

    So we often discuss "What did our fathers do?" Heat with wood, hunt and fish for food.....gee, thats the economy of the 19th Century.....

  7. #7
    Member AKDoug's Avatar
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    The tourism industry is going to be a concern this year.
    Tourism in this state is going to follow the world economy..down. People don't travel when their retirements are in the toilet. Medical and government are not ways to build a strong economy.

    What business are you in, Doug?
    I own a hardware and building materials store.
    Bunny Boots and Bearcats: Utility Sled Mayhem

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    Moderator Paul H's Avatar
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    One of the reasonss the oil production has been dropping is that due to the pipeline leak a few years back. With all the work it's taken to replace that pipeline and others, there simply haven't been enough beds on the slope to house more workers to install the projects that will increase production in the existing fields. At least $100 million in upgrade projects have been delayed do to the inability to get the projects built and installed. I'd venture to say that current production could have been say 50,000 bbls/day more if those upgrade projects had been completed vs. the pipeline replacements.

    It'll be interesting to see what gets funded in the future years for oil field projects, but I don't see them halting work. Even with high taxes and low oil prices, they still make $.

    Oil and government (which is mostly oil tax $) is a large portion of our states economy. It's certainly going to slow with dropping oil prices, but who knows how fast.

    I recall when oil was $9/bbl, and going on flights to the slope when the planes were 2/3 full. Now you're hard pressed to get a seat on a flight, or a room to sleep in on the slope, and it's been that way for over a year now.

    I'd really like to see the gas pipeline, and I have a feeling it'll happen. Perhaps the current economic conditions are just what are needed, raw material prices have taken a huge drop, which is a good thing when you want to build a big project.

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    Default The governor is not helping

    Progessing projects on the north slope has historically be difficult. With the current administration, it has become even more so.

    There are a lot of hands in the pot. In order to grow production, it takes more than upgrades, you have to developed new fields. When everyone wants a piece of the pie, the incentives to developed new fields get less and less.

    But at the end of the day you are correct. Oil companies will continue on if, "IT MAKES MONEY".

  10. #10
    Mark
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    Quote Originally Posted by AKDoug View Post
    What business are you in, Doug?
    I own a hardware and building materials store.
    That's an excellent business for a community like Talkeetna, and an excellent business during difficult times, when fixing is more economical than replacing.

    And it appears like you're of sound, cautious mind.

    I'll bet you'll be fine.

  11. #11
    Mark
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    Quote Originally Posted by Paul H View Post
    ....I'd really like to see the gas pipeline, and I have a feeling it'll happen......
    I'd really like to see it, too (even if it's just for our own state's consumption), but after decades of talk and environmental extremism, I'm not as optimistic as you are.

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    Doug,

    I hope you do fine. It sounds like you have taken the position of anchor in your community. Hopefully, your stake can maintain a growth period in these trying financial times. When stirred intently, the cream rises to the top!
    ><((((>.`..`.. ><((((>`..`.><((((>

    "People who drink light 'beer' don't like the taste of beer; they
    just like to pee a lot." --Capitol Brewery

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    Member AKDoug's Avatar
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    We are well established and have been careful with our money. I expect a downturn and I think I'm ready for it. It will only last a while. Nowhere in the country has there been a downturn that didn't recover. Look what happened to Texas after their oil bust..they were down for many years but came rocketing back with a different economy. I much prefer a downturn now when I am forty. We should recover from this one well before I'm ready to retire and sell. I'd much prefer to sell on an upturn
    Bunny Boots and Bearcats: Utility Sled Mayhem

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    Member COtoAK's Avatar
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    Good question.

    We are feeling it just a tad.
    I can't speak for my husband quite yet (because his line of work is gradually changing), but I will say that in my line of work, oddly, it's not affected whatsoever. I don't know how it's worked or panned out this way, but for some reason, parents are still pushing their kids towards additional after school activities and tutoring. This is good for me because my line of work has grown in the last year. (This time last year, I was at 6 students. This year, I am almost 6x that amount).

    Where we are feeling it is where my husband is at. Like I said before, I can't speak for him, but what I can say is that blue collar jobs are competitive out there. We are waiting patiently for his dispatch go to back to the Slope for the season. We do this every year. We work hard in the winters to pay for our summers, but if we have to turn that around and do construction over the summer, so be it. We'll take it. He's interested in starting his own company. If that happens and rocks, then the Slope position will dissolve itself and we will just both have our own companies out of our home.

    We are seeing less houses being sold in the area. This summer, there were 586 houses on the market, but that will change because there is another 2,000 soldiers that are being transfered to Ft. Wainwright. We will then have a housing shortage in Fairbanks. They are contimplating doing base housing on Eielson for Ft. Wainwright. Eielson people are not so happy about it over there. They are used to their little quaint area of Air Force folk.
    There are not many businesses that have closed, either, but if the ecomony continues, I definitely think it could change.
    I also have personally experienced many people deciding that the cost of living is too outrageous up here, so they jet back to the lower 48 within months of being here. I am done on my quota of helping people move back to the lower 48.
    Lurker.

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