Energy and Rural Alaska Economic Development

1
Energy and Rural Alaska Economic Development

• Steve Colt, University of Alaska Anchorage
• email afsgc_at_uaa.alaska.edu
• presented to
• Utility Wind Interest Group
• May 23, 2000

2
Statewide Economic OutlookOn the Surface,

• Positive Signs
• People Feel Good
• Future Looks Positive

3
Economic Indicators

• Jobs
• Wage Rate
• Personal Income
• Per Capita Income
• Value Added (GSP)
• Population

4
JOBS Growth Rate Down
5
BASIC JOBS
4,000 Lost since 1990
6
AVERAGE REAL WAGE Down
7
REAL PERSONAL INCOME Growth Rate Down
8
Total REAL INCOMEGrowth Since 1990
9
PER CAPITA PERSONAL INCOME
Now Below U.S. Average
10
NON-OIL Value-AddedGrowth Rate Down
11
POPULATIONCumulative Change in the 1990s
12
The Post-Prudhoe BluesMarket Value of Oil and
Other Production
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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

14
High Wind Communities

• Class 6 and 7
• Coastal
• Treeless
• Small -- average population 387
• (excluding Unalaska)
• Some have Fish Resources

15
Per Capita Personal IncomeAlaska vs. High-Wind
Communities
16
Fuel Cost per kWh Anchorage vs. High-Wind
Communities
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Components of Diesel Cost

• Crude oil .35
• Refining .25
• Bulk Barge .10-.30
• Inland Transport .00 - 1.00
• Bulk Storage .10-.20 cents
• Total .80 - 2.10

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NonFuel Cost per kWh
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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)

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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.

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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

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Which Comes First?

• Projects drive Community Development and develop
  capacity
• Or,
• Community Capacity Enables Projects