Seafood, energy, minerals key to Alaska's export market

PHOTO/Courtesy John Immel
Wolf.jpg Most Alaskans know that seafood is the state’s largest export commodity. In 2000, exports of seafood from Alaska exceeded $1 billion, accounting for 42 percent of the state’s total overseas exports. Less-known perhaps, but very important, are energy and mineral exports, the state’s second and third-largest export categories respectively.

Taken together, seafood, energy and minerals make up more than 75 percent of the state’s total exports and constitute the three main pillars of Alaska’s export economy. Forest products and fertilizers are two other important export sectors.

Energy exports

Since the lifting of the oil export ban in 1996, North Slope oil producers have exported a portion of their production to overseas customers. In 1999, the dollar value of these exports reached $500 million. During the past year, however, BP announced its intention to ship its entire production to refineries in the Lower 48.

Traditionally, BP had been the largest exporter of crude oil. This shift, while not having any appreciable impact on employment and revenue for the state, is having an impact on the bottom line of the state’s international trade statistics.

In 2000, crude oil exports fell to $287 million and in the current year it is anticipated that this number will drop to zero. As a result, for the first eight months of 2001, energy sector exports of oil, gas and coal are down 57 percent from the same period last year.

Liquid natural gas exports rose slightly in 2000 to $145 million. Utility companies in Japan purchase 100 percent of Alaska’s LNG exports. It is interesting to note that the first LNG imported by Japan was from Alaska. Beginning in 1969, shipments from the Phillips-Marathon Nikiski plant on the Kenai Peninsula have continued without interruption.

Refined fuel product exports totaled $122 million in 2000. Williams Alaska Petroleum Inc., for example, shipped 85 million gallons of naphtha to customers in Japan and Taiwan. In addition, it sold 13 million gallons of products to buyers in Canada from its North Pole refinery outside Fairbanks.

Tesoro Alaska is another exporter of refined petroleum products. The State of Alaska has recognized both companies for their successful export activities. In 1995, Tesoro received the Governor’s Exporter of the Year Award and last year Williams won first runner-up honors for the same award.

Usibelli Coal Mine is the sole exporter of Alaska coal. The company ships coal to Korea Electric Power Co. under a long-term contract. In 2000, Usibelli shipped 708,000 tons to Korea with a total dollar value of $16 million, an 8 percent increase from 1999.

Mineral exports

For the full year 2000, mineral exports totaled $293 million. This represented an 18 percent decline from the previous year, mainly because of a drop in zinc prices and reduced output at Red Dog Mine while it underwent infrastructure improvements.

The primary markets were Belgium, Canada and Japan. As in previous years, zinc and lead concentrates accounted for the lion’s share of the state’s exports. Quantities of silver, gold and other metals are also exported from Alaska.

During the first eight months of 2001, mineral exports are up by some $2 million, or about 1.5 percent, over the same period of the previous year.

Red Dog, near Kotzebue in Northwest Alaska, is the world’s largest zinc mine. Teck Cominco, a Canadian firm, owns the mining operation. To date, the company has invested more than $600 million in facilities at the mine and in 1998 the company was the recipient of the Governor’s Exporter of the Year Award.

Last year, the company exported 585,000 tons of zinc and some 91,000 tons of lead. Upon completion of the mine infrastructure improvements, output is expected to increase by nearly 10 percent.

Another exporter of zinc and lead is the Greens Creek Mine near Juneau. In 2000, the company exported 84,000 tons of zinc and 31,000 tons of lead. The mine is majority owned by Rio Tinto, a British company.

It is not only foreign investment and overseas markets that are important to Alaska’s mineral industry. Foreign companies, mainly Canadian, have spent considerable sums on minerals exploration in the state. Records show that of the $780 million spent on exploration since 1981, about $470 million, or 60 percent, s was carried out by non-U.S. companies.

Looking forward, energy and mineral exports, along with seafood, will continue to be the mainstays of the state’s export economy. These industries provide thousands of jobs and contribute significant revenues to the state as well as to the local communities in which they operate.

Greg Wolf is director of the Alaska Division of International Trade & Market Development. He can be reached at 907-269-8110.

12/02/2001 - 8:00pm