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Alaska's Families Running on Dry as Oil Boom Goes Bust

09-26-2016
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Alaska Oil Industry
Alaska Oil Industry

TALKEETNA, Alaska -- The state of Alaska runs on oil. That industry makes up 90 percent of the state's budget and its jobs pay two-and-a-half times higher than any other.

Now, thanks to almost a year of low oil prices, Alaska's money-making industry appears to be drying up.

"Our members started seeing, in 2015, that we were going to come to a point of very low oil prices and so they started restructuring a little bit and looking for efficiencies in their businesses and started doing reductions in services," Rebecca Logan, with the Alaska Support Industry Alliance, explained. "Then they looked at reductions in benefits and wages and then they hit the point probably about six months ago of layoffs, significant layoffs."

Economists in Alaska predict the loss of more than 2,000 good-paying jobs by the end of the year.

"When you've laid off that many people in the highest paying jobs in the state, the average salary is $135,000 a year, there aren't opportunities here yet. They will come back but they're just not available right now," Logan said.

Layoffs Hit Families Hard

As a well service technician on the North Slope, Bronn Salmon made a good living.

"All I had to do was show up at work, do my job for two weeks and then come home. No phone calls, no email, undivided attention, provided me time to go out on field trips with the kids, volunteer at the school," Salmon said.

He's been out of work since February. 

Salmon's wife, Jodi, works at Talkeetna Elementary School and summer break meant no paychecks. Fortunately now, students are back in school and so is the family's sole source of income.

"I mean we're making it. We're paying the bills and the kids are eating. We have a local food bank that helps out families and they've helped us out which is great. We volunteer when we can to go help them," Salmon said.

He saw the warning signs when his company didn't hire the usual number of workers for the winter season, but he was assured that his job was safe.

"In December BP came out and made an announcement that all the work on the books was still supposed to go as scheduled, that there would be no more reason to lay anybody off. Everything was going to be fine come the first of the year. And then of course the first of the year came and they announced that they were cutting back most of the programs, they were laying down rigs," Salmon explained. "And then in late February that's when I got laid off with about 180-200 people total."

After working the slopes for the last eight years, Salmon knows the volatility of the oil industry--changing jobs three times because of various slow downs.

Starting Over at Age 50

Now Salmon may have to start over as job prospects look worse than he's ever seen.

"There's such a large number of applicants to every job, I mean I've applied consistently, but I'm going to be 50 this year, and I know that plays -- even though its not supposed to -- I know that plays into HR when they look into someone that's going to be doing work on the slope, its physically demanding so it's tough," Salmon said.

Experts like Rebecca Logan say oil jobs are slowly coming back, but haven't reached Alaska yet.

"It's always challenging here because we have such a challenging environment to work in and so for companies to invest here they need to have a higher price of oil than they would in other areas," Logan said.

"For me, I'm at the point where we have to consider, is this really something that we want to try and stick with, and do it again? Or do I do something different," Salmon said.

He fills his time with projects around the house.

"It keeps your mind off the reality of what's going on or what's not happening in that part of your life. I just try to focus on what am I doing today, but when I'm paying bills, that's the hard part," Salmon said.

Salmon is worried that oil companies will continue to lay off seasoned and experienced workers, hiring younger workers at lower pay, drastically increasing the accident rate.

"I wouldn't recommend anyone to do it, honestly, at this point. If they said they had other options, I would say go with the other options," Salmon said.

It's a decision forced on him and thousands of other workers.

 

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