Energy and Rural Alaska Economic Development Steve Colt, University of Alaska Anchorage presented to Utility Wind Interest Group May 23, 2000

Institute of Social and Economic Research, University of Alaska Anchorage2 Statewide Economic Outlook : On the Surface, Positive Signs People Feel Good Future Looks Positive

Institute of Social and Economic Research, University of Alaska Anchorage3 Economic Indicators Jobs Wage Rate Personal Income Per Capita Income Value Added (GSP) Population

Institute of Social and Economic Research, University of Alaska Anchorage4 JOBS: Growth Rate Down

Institute of Social and Economic Research, University of Alaska Anchorage5 BASIC JOBS: 4,000 Lost since 1990

Institute of Social and Economic Research, University of Alaska Anchorage6 AVERAGE REAL WAGE: Down

Institute of Social and Economic Research, University of Alaska Anchorage7 REAL PERSONAL INCOME: Growth Rate Down

Institute of Social and Economic Research, University of Alaska Anchorage8 Total REAL INCOME: Growth Since 1990

Institute of Social and Economic Research, University of Alaska Anchorage9 PER CAPITA PERSONAL INCOME: Now Below U.S. Average

Institute of Social and Economic Research, University of Alaska Anchorage10 NON-OIL Value-Added: Growth Rate Down

Institute of Social and Economic Research, University of Alaska Anchorage11 POPULATION: Cumulative Change in the 1990s

Institute of Social and Economic Research, University of Alaska Anchorage12 The Post-Prudhoe Blues Market Value of Oil and Other Production

Institute of Social and Economic Research, University of Alaska Anchorage13 What About Rural Alaska? Shift from State to Federal Funding Shift from Govt to “Services” employment (nonprofits, tribes) Shift from Municipal to Tribal govt Continuing Rapid Population Growth –(2-3%) Struggle to retain fisheries wealth Cautious embrace of tourism

Institute of Social and Economic Research, University of Alaska Anchorage14 High Wind Communities Class 6 and 7 Coastal Treeless Small -- average population 387 –(excluding Unalaska) Some have Fish Resources

Institute of Social and Economic Research, University of Alaska Anchorage15 Per Capita Personal Income: Alaska vs. High-Wind Communities

Institute of Social and Economic Research, University of Alaska Anchorage16 Fuel Cost per kWh: Anchorage vs. High-Wind Communities

Institute of Social and Economic Research, University of Alaska Anchorage17 Components of Diesel Cost Crude oil = $.35 Refining = $.25 Bulk Barge = $ Inland Transport = $.00 - $1.00 Bulk Storage = $ cents Total = $.80 - $2.10

Institute of Social and Economic Research, University of Alaska Anchorage18 NonFuel Cost per kWh

Institute of Social and Economic Research, University of Alaska Anchorage19 Rural vs.(?) Urban Energy Projects Through 1993, urban projects cost about twice as much as rural projects plus PCE. In any Event, About 75% of rural energy project dollars flow to urban areas. (weatherization)

Institute of Social and Economic Research, University of Alaska Anchorage20 Energy Projects and Jobs The conventional energy system supports significant employment. –Little of the total cost goes out-of- state Hence, Real job creation comes from a lower cost (not price!) of living and doing business, not from one-time construction impacts.

Institute of Social and Economic Research, University of Alaska Anchorage21 Four Types of Feasibility Technical -- Performs according to design, designed for Alaska Economic -- beats avoided cost of diesel Locational -- resilience against normal disruption Human Resource / Administrative

Institute of Social and Economic Research, University of Alaska Anchorage22 Which Comes First? Projects drive Community Development and develop capacity Or, Community Capacity Enables Projects