10 years ago this week

Jan. 10, 1994

Economy strong, but plunge in oil sends a shudder

[an error occurred while processing this directive] Analysis by Tim Bradner

Alaska Journal of Commerce

Alaskans held their breath as oil prices plunged below $10 per barrel in December. It was a major jolt to business confidence.

There was other bad news: two significant oil discoveries announced earlier in the year by Arco Alaska Inc. - which had done much to bolster confidence in 1993 - turned out to be disappointing when more wells were drilled.

Now there's a wariness about the future, compounded by the state's looming billion-dollar fiscal gap and the Legislature's seeming political paralysis in doing anything about it.

In spite of all this, Alaska's economy seems in better shape than it has ever been. Economics and business people - homebuilders, for example - predict 1994 will be almost as good as 1993. The intangible factor is if confidence falters, they worry.

A lot of what helped propel 1993 was simple faith that good times were back and were going to stay a while. The $10 oil prices severely jolted that.

But despite that, there's a lot of good news:

More Alaskans are now working than ever before. A record 253,000 Alaskans were employed in wage and salary jobs through 1993, the state Department of Labor said. That's about 20,000 more than were working at the peak of the mid-1980s boom.

Surprisingly, even oil employment turned up later in the year. By October, the loss of jobs within the oil producing companies had slowed, and employment among oil service companies picked up smartly.

Jan. 10, 1994

Mill closure, slowdowns dramatize year in Southeast

Analysis by Rollo Pool

For the Journal of Commerce

Despite continuing low pulp prices and federal timber shortages in Southeast Alaska, markets held strong for Alaska logs and sawmill products throughout the year. Industry officials feel 1994 prices for Alaska's forest products will be as good or better than 1993.

During the year, other news came from Seward where its sawmill reopened, and from Sitka where residents were shocked by the indefinite closure of the town's largest employer, Alaska Pulp Corp., and the loss of 400 jobs.

Ketchikan Pulp Co., Alaska's largest manufacturer, extended pulp shutdown by 60 days in 1993 because of wood shortages from the Tongass National Forest. Dissolving pulp prices, which have not been as depressed as Kraft and paper pulp prices, are expected to rise in 1994.

There are several new horizons for the Alaska timber industry, mostly on state lands, said Troy Reinhart, Alaska Forest Association executive director.

"The resource is there," said Reinhart. "Alaska's potential to grow is in the Kenai Peninsula and the Interior. Some stands, like those on the Kenai Peninsula, need to be harvested or they will be lost."

Beginning in 1994, the state will offer about 55 million board feet of timber per year, according to State Forester Tom Boutin. That's up from about 31 million board feet offered in 1993. Much of the increase comes from the Kenai Peninsula in an attempt to harvest beetle-plagued timber stands while they have some commercial value.

- Compiled by Ed Bennett.