Economy of Alaska Midterm
When did Alaska become a State?
1959
What does ANILCA stand for and when what it put in place?
1981 Alaska National Interest Lands Conservation Act
In what year did Alaska oil production peak?
1988
Suppose leakage increases. What happens to support income? Does it get larger, get smaller, or stay the same?
As leakage increases the multiplier decreases.
Suppose leakage increases. What happens to the multiplier? Does it get larger, get smaller, or stay the same?
As leakage increases the multiplier decreases.
What Native group is indigenous to the UAA area?
Dena'ina
Where did the money in the Permanent Fund come from?
From saving part of the state's oil revenues, and the growth in the value of the Permanent Fund's investments
While ANCSA and ANILCA theoretically resolved the issues of state and Native land claims, why did it take until the late 1980s before the land ownership pattern in Alaska became known?
It took years for large blocks of land to be selected and conveyed.
What was Alaska oil production in 2012 (approximately), in millions of barrels per day?
Less than 0.6 million barrels per day
Describe Kenai, AK.
Located approximately 65 air miles and 155 highway miles southwest of Anchorage, where a major river flows into Cook Inlet. The center of the Cook Inlet oil and gas industry, providing services and supplies for oil and natural gas drilling and exploration. Tourism—primarily associated with sport fishing--and commercial fishing are also an important industries.
Describe Dillingham, AK.
Located at the extreme northern end of Nushagak Bay in northern Bristol Bay. The economic, transportation, and public service center for western Bristol Bay. Commercial fishing, fish processing, cold storage and support of the fishing industry are the primary activities. The population doubles during the summer Bristol Bay salmon fishing season
What percent of Alaska is owned by Native corporations?
12%
How many Regional Native Corporations own land in Alaska?
12
total income equation
(basic + support) or (basic x multiplier)
gross migration
(in-migration + outmigration)
net migration
(in-migration - outmigration)
multiplier equation
(total / basic) or (1 / leakage)
Alaska selected some land before statehood. After statehood, what was the order of selection?
- ANCSA - ANICLA - State
What are two important ways in which different regions of Alaska differ, which contribute to differences in their economies?
- climate - natural resources
List two kinds of ways in which government may affect the economy which are probably more important than in most other states.
- government spending (more federal and state spending per capita than most other states) - government resource ownership and management (economy highly dependent on natural resources and government owns/manages a lot in AK)
What are the four types of significant economic activities that occur in Alaska?
- private sector production of natural resources for outside markets - private sector production of services for the Alaska market - public sector production of services for the Alaska market - public sector production of services for outside market
Detail ANCSA Section 7i.
- requires Regional Corporations to share 70% of natural resource revenue with its sister corporations. - each shareholder in Alaska should get an equal value - applies only to Regional Corporations - only applies to "timber and subsurface estate" revenue (oil, gas, and minerals) -doesn't apply to business revenue (drilling companies, oil field service, etc.)
Briefly describe Alaska's economy.
- small - open - remote - resource-based
Give three examples of things Alaska can't do because it doesn't have full political and economic sovereignty.
- we can't limit in-migration or out-migration - we can't discriminate between non-residents and residents - we can't discriminate against non-Alaska products W - we can't have our own currency and monetary policy - we can't have our own foreign policy
Use "economic base model" terminology to describe two different ways in which an economy can grow.
1) By increasing basic activity 2) By increasing the multiplier
How was the settlement of indigenous land claims different in Alaska from elsewhere in the U.S.?
1) Corporations, not reservations 2) Corporations were allowed to select their own land, rather than have it forced upon them. 3) Made part of the economic system of Alaska.
What percent of Alaska is owned by the State government?
28%
What is the total land area of Alaska? (in acres)?
365 million acres
What percentage of Alaska's population does Anchorage account for in 2010?
41.1%
What percent of Alaska is owned by the federal government?
59%
If you were a Native Alaskan, alive in 1971, what two types of corporations might you own stock in?
A Village Corporation and its Regional Corporation
What recent change in energy markets has reduced the likelihood that a natural gas pipeline will be built from Alaska's North Slope through Canada to the American Midwest?
A steep decline in US natural gas prices, due to the rapid development of Lower 48 shale gas resources
About what share of Alaska jobs are in trade and service industries?
About 1/2
What was Alaska oil production at its peak, in millions of barrels per day?
About 2 million barrels per day
What statement best characterizes Native corporations' interest in developing their resources?
Alaska Native corporations vary in their priorities for resource development.
For any market that the Alaska private sector wants to sell to, what does it have to achieve to be able to compete with markets outside the state?
Alaska private sectors have to be able to produce and transport the output to that market for a combined cost less than that of a competitor outside Alaska
Why was hitting a record number of oil jobs in 2013 "an amazing feat"?
Alaska was producing only a quarter of the oil that it had produced at peak oil productionAlaska oil jobs hit a record high in 2013.
Describe Ketchikan, AK.
Alaska's southern-most city. Located in the Southeast Alaska "maritime" climate zone. Receives 162 inches (13.5 feet) of precipitation annually. The major port of entry for Southeast Alaska. Cruise ships bring over 650,000 visitors annually. Also a major fishing port. Formerly a major center of the Alaska timber industry, and the location of one of two large southeast Alaska pulp mills which closed in the 1990s. The city's airport is on an island and the airport is reached by a 10-minute ferry ride.
What is the name used for Alaska's regional political subdivisions?
Boroughs
Why is it important for the Alaska economy that large parts of Alaska are set aside for parks and refuges?
Economic development activities such as logging and mining are typically restricted or banned on these lands. However, they offer significant potential for future tourism development.
What two major military installations were built in Anchorage during World War II?
Fort Richardson Elmendorf Air Force Base
What Anchorage industry grew particularly rapidly during the 2000s, generating more than a third of all new jobs in Anchorage?
Healthcare
Which Alaska coastal community is the farthest-west community that you can drive to overland (without taking a ferry) from New York?
Homer
In what two Alaska regions are the two largest Alaska House Election Districts mostly located?
Interior and Arctic
What major Anchorage industry was hit hard by the national and international Great Recession which began in 2008—and still hasn't recovered?
International air cargo
Suppose leakage increases. What happens to basic income? Does it get larger, get smaller, or stay the same?
It stays the same.
What did ANILCA do?
It added nearly 104 million acres to conservation systems, with 56 million acres designated "wilderness"
Suppose the multiplier increases. What happens to support income? Does it get larger, get smaller, or stay the same?
It gets bigger.
Describe Sweard, AK.
Located at the head of Resurrection Bay south of Anchorage. The southern terminus of the Alaska Railroad. Was extensively damaged by tsunamis during the 1964 earthquake. The annual July 4 Independence Day celebration features a running race from the center of town and up and down 3000' Mt. Marathon. Many tourists take day cruises from this community. The economy has diversified in recent years, and is based on summer tourism, commercial fishing and processing, transportation, and government, including a state prison.
Describe Cordova, AK.
Located at the southeastern end of Prince William Sound near a major river delta. An important fishing community with several major fish processing plants.
Describe Valdez, AK.
Located in northeastern Prince William Sound. The community was rebuilt on a new site after it was almost completely destroyed by a tsunami during the 1964 earthquake. The southern terminus of the Trans-Alaska pipeline which brings North Slope oil to tidewater. Oil is transferred to oil tankers which transport the oil to markets on the U.S. west coast. Also an important fish processing center and cruise ship destination. Because of the pipeline and the oil terminal, this community has one of the highest municipal property tax bases in Alaska.
Describe Sitka, AK.
Located in northern Southeast Alaska on the west coast of Baranof Island fronting the Pacific Ocean. Russian traders established a fort and trading post here in 1799, which they named "New Archangel," and which became the capital of Russian America. It remained the capital of Alaska until 1906. A large pulp mill began operated in the community from 1960 until 1993. Today the economy is diversified with fishing, fish processing, tourism, government, transportation, retail, and health care services. Cruise ships bring over 200,000 visitors annually.
Describe Unalaska/Dutch Harbor, AK.
Located in the Aleutian Islands, 800 air miles from Anchorage. An important port since the Russian period of Alaska history. Location of a large Navy based during WWII, which was bombed by the Japanese. The largest U.S. fishing port, and the center of the Bering Sea fishing industry.
Describe Palmer, AK
Located in the Matanuska Valley, 42 miles northeast of Anchorage on the Glenn Highway. Was the center of the Matanuska Valley Colony, an attempt by the federal government during the depression of the 1930s to resettle farming families from the midwest to start a farming industry in Alaska. Location of the Alaska State Fair. Many residents commute to Anchorage to work.
Describe Fairbanks, AK.
Located in the heart of Alaska's Interior on the banks of the Chena River, 358 road miles north of Anchorage. Alaska's second largest city. The regional service and supply center for Interior Alaska, with a diverse economy, including city, borough, state and federal government services, transportation, communication, manufacturing, financial, and regional medical services. Tourism and mining are also important. Two major military bases are located in or near the city. The University of Alaska is also a major employer.
Describe Wasilla, AK.
Located midway between the Matanuska and Susitna Valleys, on the George Parks Highway, 43 miles and about one hour's drive north of Anchorage. The largest town in the rapidly growing MatanuskaSusitna Borough. Approximately 30% of the workforce commutes to Anchorage. The local economy is diverse, and residents are employed in a variety of government, retail, and professional service positions.
Describe Bethel, AK.
Located near the mouth of the Kuskokwim River, 40 miles inland from the Bering Sea. Serves as the regional center for 56 villages in the Yukon-Kuskokwim Delta. The population is 68% Alaska Native. Government accounts for 50% of the jobs. Connected with many other Kuskokwim River communities by an ice road in winter.
Describe Kodiak, AK.
Located on a large island in the northern Gulf of Alaska. Alaska's second-largest fishing port and the center of the Gulf of Alaska fishing industry. Also the location of a large Coast Guard base. The first capital of Russian America during the Russian period in Alaska. During the 1964 earthquake a tsunami caused major damage to the community.
Describe Homer, AK.
Located on the north shore of Kachemak Bay on the southwestern edge of the Kenai Peninsula. Part of the community is located on a 4.5 mile long gravel bar or "spit" which extends into Kachemak Bay. The economy is based on a mix of commercial fishing, tourism (particularly for charter-boat fishing), and increasingly ecotourism.
Describe Nome, AK.
Located on the south side of the Seward Peninsula in western Alaska, on the coast of Norton Sound. The population is 59% Alaska Native. The community got its start as a gold rush community in 1898, when thousands of gold-rush miners came to pan for gold along the beaches. Extensive gold mining activities continued in the first several decades of the twentieth century. The regional center for the Norton Sound region, serving as a supply, service and transportation center for the region. The finish of the annual Iditarod sled dog race
Give four examples of "basic industries" in Alaska.
Oil, seafood, tourism, federal government
Describe Kotzebue, AK.
On a three-mile long spit of land in Northwest Alaska. The population is 77% Alaska Native (mostly Inupiat). The regional service and transportation center for the Northwest Arctic region of Alaska, and the location of the headquarters of the NANA regional corporation. Most income derives directly or indirectly from government employment.
What can the State spend from the Permanent Fund?
Only the realized earnings, not the principle.
What was one of the most important land selections that Alaska made in the early 1960s?
Prudhoe Bay
Briefly, summarize ANCSA Section 7i?
Requires regional Native Corporations to share 70% of their natural resource revenue with other corporations.
Give three examples of "support industries" in Alaska
Retail trade, services, local government
What is Alaska's largest operating gold mine? Where is it located?
The Fort Knox mine, located north of Fairbanks
What are the six major regions of Alaska?
Southeast, Southcentral, Interior, Arctic, Northwest, Southwest
What act of Congress resolved the Native Land Claims. What year was it passed?
The 1971 Alaska Native Claims Settlement Act
What 1989 event helped spur the recovery of the Anchorage economy?
The Exxon Valdez oil spill clean-up
What major new potential mining project in southwestern Alaska is generating a lot of controversy? Why is it controversial?
The Pebble Mine— because of the potential effects on Bristol Bay salmon
What is Alaska's largest mine? What mineral is mined there?
The Red Dog Mine. Zinc.
Describe Juneau, AK.
The capital of Alaska and Alaska's third largest city. Located in southeast Alaska. Government is by far the most important economic activity. Tourism is also a significant contributor to the private sector economy during the summer months
What is the largest Alaska landowner?
The federal government
What led to the establishment of Anchorage?
The federal government selected Anchorage as the site for a constructional headquarters for building the Alaska railroad
Describe Anchorage, AK.
The largest city in Alaska, located in southcentral Alaska at the head of Cook Inlet. Established in 1915 as a midpoint construction headquarters during construction of the Alaska Railroad. Headquarters of the state's major oil and gas companies, finance, real estate, transportation, and communications companies well as many government agencies. Home to two major military bases and one of the busiest cargo airports of the United States.
Describe Utqiagvik (formerly Barrow), AK.
The northernmost community in North America, located on the coast of the Chukchi Sea. The capital of Alaska's North Slope Borough. Because of the high taxes collected by the North Slope borough on the oil industry, residents enjoy higher rates of employment and higher incomes than those of most other rural Alaska regional centers. Residents are 64% are Alaska Native. Subsistence traditions, particularly whaling, remain very important
How has the period of Anchorage's history between the completion of the Alaska railroad and the start of World War II been characterized?
The sleepy railroad town period
Which Alaska community is the farthest west community you can travel to on the Alaska Marine Highway (the state ferry system)?
Unalaska
Eventually Alaskans will probably face a difficult choice regarding the oil industry's impact on Alaskan economy. What is that choice?
When oil revenues decline, either we will have to reduce spending, impose broad-based taxes on Alaskans, use some or all of the Permanent Fund earnings to pay for state expenditures rather than dividends— or spend from the capital of the Permanent Fund (which would require a Constitutional Amendment).
annual change in population
annual natural growth + annual net migration
What is the "Permanent Fund"? a. Money you get every year from the state b. A State savings account created by saving part of Alaska's oil revenues
b. A State savings account created by saving part of Alaska's oil revenues
natural growth
births - deaths
What best characterizes the role of oil revenues in state general fund revenues? a. Oil revenues account for only a small share of state general fund revenues b. Oil revenues account for about half of state general fund revenues c. Oil revenues account for almost all of state general fund revenues.
c. Oil revenues account for almost all of state general fund revenues.
goods
physical products that are made using natural resources and other; examples are canned fish, houses, water color paintings
During the process of statehood, what were Congress' concerns?
concerned that the state wouldn't generate enough money to support itself; because of this, the state was granted an extraordinary amount of land and choose which land it wanted to own
Where does Alaska rank, relative to other states, in terms of average annual gross migration?
first
What kind of tax can boroughs use to gain substantial revenues from resource developments?
property tax
natural resources
raw materials which are extracted from the environment as inputs for making goods; examples are oil, fish, minerals, timber, aesthetic scenery
net migration
in-migration - out-migration
value added industries
industries based on manufacturing products derived from natural resources (such as oil refining or lumber production); they "add value" to the natural resources and what the regional economy produces
regional economy
the economy of a geographic area of an intermediate size within a larger political unit
local economy
the economy of a village, town, or relatively small geographic area
national economy
the economy of an entire nation
leakage
the money spent outside the community
basic sector
the part of an economy which produces goods or services for sale outside of the region
support sector
the part of an economy which produces goods or services for sale to residents of the region or other industries within the region
services
things of value the economy produces that are not natural resources or goods; examples are UAA classes, healthcare, state trooper protection, fire protection, road plowing, military defense
What is the approximate level of the multiplier for a small rural village?
~1-2
What is the approximate level of the multiplier for the State of Alaska?
~2-3