In a report compiled by the Alaskan Government, the real GDP of Alaska was $51.1 billion in 2011, $52.9 billion in 2012 and $51.5 billion in 2013. The drop-off that occurred between 2012 and 2013 has been attributed to the decline in the mining sector, specifically the oil and gas sectors, a consequence of declined production. The state's economy has been described by

University of Alaska Anchorage The University of Alaska Anchorage (UAA) is a public university in Anchorage, Alaska. UAA also administers four community campuses spread across Southcentral Alaska: Kenai Peninsula College, Kodiak College, Matanuska–Susitna College, and Prin ...

economist Scott Goldsmith as a "three-legged stool" - with one leg being the petroleum and gas industry, the second leg being the federal government and the third leg being all other industries and services. Between 2004 and 2006, the federal government was responsible for 135,000 Alaska jobs, the petroleum sector provided 110,000 jobs and all other industries and services combined for 122,000 jobs.UA Research Summary No. 13: What Drives The Alaska Economy?
Scott Goldsmith,

Alaska Alaska ( ; russian: Аляска, Alyaska; ale, Alax̂sxax̂; ; ems, Alas'kaaq; Yup'ik: ''Alaskaq''; tli, Anáaski) is a state located in the Western United States on the northwest extremity of North America. A semi-exclave of the U.S., ...

's main export product after oil and natural gas is seafood, primarily salmon, cod, pollock, and crab. In the 2013 fishing season, Alaskan fishers were able to accumulate a total of 5.8 billion pounds of seafood, which equates to an evaluation of $1.9 billion, a small, but noticeable increase in comparison to 2012, which had a total of 5.3 billion and $1.7 billion respectively. Agriculture represents only a very small fraction of the Alaskan economy. Agricultural production is primarily for consumption within the state and includes nursery stock, dairy products, vegetables, and livestock. Manufacturing is limited, with most food and general goods imported from elsewhere. Employment is primarily in government and industries such as natural resource extraction, shipping, and transportation. Military bases are a significant component of the economy in both Fairbanks and Anchorage. Federal subsidies are also an important part of the economy, allowing the state to keep taxes low. Its industrial outputs are crude petroleum, natural gas, coal, gold, precious metals, zinc and other mining, seafood processing, timber and wood products. There is also a growing service and tourism sector. Tourists have contributed to the economy by supporting local lodging.

History

Alaska's first cannery opened in 1878 to facilitate the selling of salmon.

Economic sectors

Energy

Alaska crude oil production in 1970 through 2020 (51140868890)

Alaska has vast energy resources. Major oil and gas reserves are found in the Alaska North Slope (ANS) and Cook Inlet basins. According to the

Energy Information Administration The U.S. Energy Information Administration (EIA) is a principal agency of the U.S. Federal Statistical System responsible for collecting, analyzing, and disseminating energy information to promote sound policymaking, efficient markets, and publ ...

, Alaska ranks fourth in the nation in crude oil production. Prudhoe Bay on Alaska's North Slope is the highest yielding oil field in the United States and on North America, typically producing about . The

Trans-Alaska Pipeline The Trans-Alaska Pipeline System (TAPS) is an oil transportation system spanning Alaska, including the trans-Alaska crude-oil pipeline, 11 pump stations, several hundred miles of feeder pipelines, and the Valdez Marine Terminal. TAPS is one of ...

can pump up to of crude oil per day, more than any other crude oil pipeline in the United States. Additionally, substantial coal deposits are found in Alaska's bituminous, sub-bituminous, and lignite coal basins. The United States Geological Survey estimates that there are of undiscovered, technically recoverable gas from natural gas hydrates on the Alaskan North Slope. Alaska also offers some of the highest hydroelectric power potential in the country from its numerous rivers. Large swaths of the Alaskan coastline offer wind and geothermal energy potential as well. Alaska's economy depends heavily on increasingly expensive diesel fuel for heating, transportation, electric power and light. Though wind and hydroelectric power are abundant and underdeveloped, proposals for statewide energy systems (e.g. with special low-cost electric interties) were judged uneconomical (at the time of the report, 2001) due to low (<$0.50/Gal) fuel prices, long distances and low population. The cost of a US gallon of gasoline in urban Alaska today is usually $0.30–$0.60 higher than the national average; prices in rural areas are generally significantly higher but vary widely depending on transportation costs, seasonal usage peaks, nearby petroleum development infrastructure and many other factors. In 2012, Alaska accounted for 8.1% of American crude oil production, ranking behind Texas (30.6%), North Dakota (10.2%), and California (8.3%).

Other resource extraction

See:

Gold mining in Alaska Gold mining in Alaska, a state of the United States, has been a major industry and impetus for exploration and settlement since a few years after the United States acquired the territory in 1867 from the Russian Empire. Russian explorers discovere ...

Tourism

Tourism in Alaska is the second-largest private sector employer, accounting for one in eight Alaskan jobs, nearly 2 million visitors, and $2.42 billion in direct visitor spending including labor income. Nearly half the visitors arrive to Alaska through the cruise industry including

Carnival Cruise Line Carnival Cruise Line is an international cruise line with headquarters in Doral, Florida. The company is a subsidiary of Carnival Corporation & plc. Its logo is a funnel (ship), funnel shaped like a whale's tail, with a red, white, and blue colo ...

Celebrity Cruises Celebrity Cruises is a cruise line headquartered in Miami, Florida and a wholly owned subsidiary of Royal Caribbean Group. Celebrity Cruises was founded in 1988 by the Greece-based Chandris Group, and merged with Royal Caribbean Cruise Line in 19 ...

Crystal Cruises } Crystal Cruises is a cruise line now headquartered in Downers Grove, Illinois, USA. It was founded in 1988 by Japanese shipping company Nippon Yusen Kaisha, and sold to Hong Kong-headquartered conglomerate Genting Hong Kong in 2015. Following in ...

Disney Cruise Line Disney Cruise Line is a cruise line operation that is a subsidiary of The Walt Disney Company. The company was incorporated in 1996 as Magical Cruise Company Limited, through the first vessel, ''Disney Magic'' and is domiciled in London, England ...

Holland America Line Holland America Line is an American-owned cruise line, a subsidiary of Carnival Corporation & plc headquartered in Seattle, Washington, United States. Holland America Line was founded in Rotterdam, Netherlands, and from 1873 to 1989, it operated ...

Norwegian Cruise Line Norwegian Cruise Line (NCL), also known in short as Norwegian, is an American cruise line founded in 1966, incorporated in Bermuda and headquartered in Miami. It is the fourth-largest cruise line in the world by passengers, controlling about 8.6 ...

, Oceania Alaskan Cruises,

Princess Cruises Princess Cruises is an American cruise line owned by Carnival Corporation & plc. The company is incorporated in Bermuda and its headquarters are in Santa Clarita, California, Santa Clarita, California. As of 2021, it is the List of cruise lines# ...

Regent Seven Seas Cruises Regent Seven Seas Cruises (RSSC), formerly known as Radisson Seven Seas Cruises, is a luxury cruise line headquartered in Miami, Florida. Since September 2014, Regent Seven Seas Cruises has been a wholly owned subsidiary owned of Norwegian Cruise ...

Royal Caribbean Cruises Ltd. Royal Caribbean Group, formerly known as Royal Caribbean Cruises Ltd., is a global cruise holding company incorporated in Liberia and based in Miami, Florida, United States. It is the world's second-largest cruise line operator, after Carnival C ...

Silversea Cruises Silversea Cruises is a luxury cruise line headquartered in Monaco. Founded in 1994 by the Vlasov Group of Monaco and the Lefebvre family of Rome, it pioneered all-inclusive cruising with its first ship, Silver Cloud (ship), ''Silver Cloud''. Si ...

Seattle Alaskan Cruises Seattle ( ) is a seaport city on the West Coast of the United States The West Coast of the United States, also known as the Pacific Coast, Pacific states, and the western seaboard, is the coastline along which the Western United States m ...

, and

Vancouver Alaskan Cruises Vancouver ( ) is a major city in western Canada, located in the Lower Mainland region of British Columbia. As the most populous city in the province, the 2021 Canadian census recorded 662,248 people in the city, up from 631,486 in 2016. Th ...

. Other visitors arrive via the

Ted Stevens Anchorage International Airport Ted Stevens Anchorage International Airport is a major airport in the U.S. state of Alaska, located southwest of downtown Anchorage. The airport is named for Ted Stevens, a U.S. senator from Alaska in office from 1968 to 2009. It is included ...

, driving along the main road access to the state, the

Alaska Highway "Alaska Grown" is used as an agricultural slogan. Alaska has an abundance of seafood, with the primary fisheries in the Bering Sea and the North Pacific, and seafood is one of the few food items that is often cheaper within the state than outside it. Many Alaskans fish the rivers during salmon season to gather significant quantities of their household diet while fishing for subsistence, sport, or both. Hunting for subsistence, primarily

caribou Reindeer (in North American English, known as caribou if wild and ''reindeer'' if domesticated) are deer in the genus ''Rangifer''. For the last few decades, reindeer were assigned to one species, ''Rangifer tarandus'', with about 10 subspe ...

moose The moose (in North America) or elk (in Eurasia) (''Alces alces'') is a member of the New World deer subfamily and is the only species in the genus ''Alces''. It is the largest and heaviest extant species in the deer family. Most adult mal ...

, and Dall sheep is still common in the state, particularly in remote

Bush Bush commonly refers to: * Shrub, a small or medium woody plant Bush, Bushes, or the bush may also refer to: People * Bush (surname), including any of several people with that name **Bush family, a prominent American family that includes: *** ...

communities. An example of a traditional native food is

Akutaq Alaskan ice cream (also known as Alaskan Indian ice cream, Inuit ice cream, Indian ice cream or Native ice cream, and Inuit-Yupik varieties of which are known as ''akutaq'' or ''akutuq'') is a dessert made by Alaskan Athabaskans and other Alaska N ...

, the Eskimo ice cream, which can consist of reindeer fat, seal oil, dried fish meat and local berries. Alaska's reindeer herding is concentrated on the

Seward Peninsula The Seward Peninsula is a large peninsula on the western coast of the U.S. state of Alaska whose westernmost point is Cape Prince of Wales. The peninsula projects about into the Bering Sea between Norton Sound, the Bering Strait, the Chukchi S ...

where wild caribou can be prevented from mingling and migrating with the domesticated reindeer. Most food in Alaska is transported into the state from "Outside", and shipping costs make food in the cities relatively expensive. In rural areas, subsistence hunting and gathering is an essential activity because imported food is prohibitively expensive. The cost of importing food to villages begins at 7¢ per pound (15¢/kg) and rises rapidly to 50¢ per pound ($1.10/kg) or more. The cost of delivering a of milk is about $3.50 in many villages where per capita income can be $20,000 or less. Fuel cost can exceed $8.00 per gallon.

Permanent Fund

The

Alaska Permanent Fund The Alaska Permanent Fund (APF) is a constitutionally established permanent fund managed by a state-owned corporation, the Alaska Permanent Fund Corporation (APFC). It was established in Alaska in 1976 by Article 9, Section 15 of the Alaska State ...

is a legislatively controlled appropriation established in 1976 to manage a surplus in state petroleum revenues from the recently constructed

Trans-Alaska Pipeline System The Trans-Alaska Pipeline System (TAPS) is an oil transportation system spanning Alaska, including the trans-Alaska crude-oil pipeline, 11 pump stations, several hundred miles of feeder pipelines, and the Valdez Marine Terminal. TAPS is one of ...

. From its initial principal of $734,000, the fund has grown to $40 billion as a result of oil royalties and capital investment programs. Starting in 1982, dividends from the fund's annual growth have been paid out each year to eligible Alaskans, ranging from $331.29 in 1984 to $3,269.00 in 2008 (which included a one-time $1200 "Resource Rebate"). Every year, the state legislature takes out 8 percent from the earnings, puts 3 percent back into the principal for inflation proofing, and the remaining 5 percent is distributed to all qualifying Alaskans. To qualify for the Alaska State Permanent Fund one must have lived in the state for a minimum of 12 months, and maintain constant residency.

Cost of living

The cost of goods in Alaska has long been higher than in the contiguous 48 states. This has changed for the most part in Anchorage and to a lesser extent in Fairbanks, where the cost of living has dropped somewhat in the past five years. Federal government employees, particularly

United States Postal Service The United States Postal Service (USPS), also known as the Post Office, U.S. Mail, or Postal Service, is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the U ...

(USPS) workers and active-duty military members, receive a Cost of Living Allowance usually set at 25% of base pay because, while the cost of living has gone down, it is still one of the highest in the country. The introduction of

big-box store A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The t ...

s in Anchorage, Fairbanks (Wal-Mart in March 2004), and Juneau also did much to lower prices. However, rural Alaska suffers from extremely high prices for food and consumer goods, compared to the rest of the country due to the relatively limited transportation infrastructure. Many rural residents come into these cities and purchase food and goods in bulk from warehouse clubs like

Costco Costco Wholesale Corporation (doing business as Costco Wholesale and also known simply as Costco) is an American multinational corporation which operates a chain of membership-only big-box retail stores (warehouse club). As of 2022, Costco i ...

and

Sam's Club Sam's West, Inc. (doing business as Sam's Club) is an American chain of membership-only retail warehouse clubs owned and operated by Walmart Inc., founded in 1983 and named after Walmart founder Sam Walton as Sam’s Wholesale Club. , Sam's Cl ...

. Some have embraced the free shipping offers of some online retailers to purchase items much more cheaply than they could in their own communities, if they are available at all.

Largest employers

According to the

Alaska Department of Labor and Workforce Development The Alaska Department of Labor and Workforce Development (DOLWD) is a department within the government of Alaska which handles most of the state's labor and workforce issues, primarily at the administrative level. Structure Within the Department ...

, the following were the state's largest

private sector The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The ...

employers in 2010:Alaska's 100 Largest Private Sector Employers in 2010 (July 2011 Alaska Economic Trends)." Alaska Department of Labor and Workforce Development (2007).

References

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