Alaska’s industry experts clustered in the Kenai Chamber of Commerce and Visitor Center on Thursday for the 2022 Industry Outlook Forum, an annual event hosted and facilitated by the Kenai Peninsula Economic Development District.
The day was jam-packed with more than seven hours of TED Talk-style presentations from leaders across Alaska. The schedule gave room to at least eight different industries, including real estate, tourism, medical services, Cook Inlet fishing regulations, manufacturing, mariculture, land management and oil and gas.
There were also talks on specific projects, such as a proposed Kenai Peninsula solar farm, which would be the largest in Alaska, and marine research at the Alutiiq Pride Marine Institute. Attendees also heard from representatives of the Central Peninsula Young Professionals and were shown how to take advantage of KPEDD resources.
The entire forum is available on YouTube and can be accessed by visiting KPEDD’s Facebook page.
Fishing
The biggest change on the horizon for the fishing industry this year is the looming closure of Cook Inlet’s federal waters to commercial salmon fishing. That policy, which will take effect for the summer fishing season, affects waters known as the exclusive economic zone, or EEZ, from Kalgin Island to roughly Anchor Point and that are a key fishing ground for much of Cook Inlet’s drift net fleet.
Jim Butler of the Alaska Salmon Alliance said during a presentation Thursday that a reduction in access will limit the processing capability in Kenai, Homer and Seward, emphasizing that all of the ports are codependent. It is not yet known how the closure will impact the long-term health of salmon, how the closure will impact the local economy and to what extent chronic overescapement will reduce future yield.
The closure currently faces legal challenges, both from individual fishermen and from the United Cook Inlet Drift Association, or UCIDA. The UCIDA case calls the decision to close the waters “arbitrary, capricious, and contrary” to multiple laws, including the Magnuson-Stevens Act, and cites the “immediate and disastrous consequences” the closure would have on commercial fish processors, their families and the local economy.
Oil and gas
Maintaining the cost of doing business in Alaska is a key focus for the oil and gas industry in 2022, according to Alaska Oil and Gas Association CEO Kara Moriarty.
Moriarty gave an overview of where the industry is currently and where it’s headed in the near future.
Despite a growing interest worldwide in renewable energy sources, Moriarty said data from the U.S. Energy Information Administration show that demand for petroleum is expected to grow over the next 30 years, and new investment will be needed to keep up. The transition from traditional energy sources, such as oil and gas, to renewable energy, she said, will be long.
“It’s not a light switch,” Moriarty said.
Moving ahead, Moriarty said she’s keeping an eye on federal efforts to slow domestic oil and gas production, such as investor commitments to not fund drilling projects in the Arctic and President Joe Biden’s “30×30” commitment, through which he hopes to conserve 30% of U.S. lands and freshwater by 2030.
Maintaining investment in Alaska’s portfolio of oil and gas projects, Moriarty said, will be important. The industry has been slower to recover from the impacts of the COVID-19 pandemic and anything that drives the cost of business in Alaska higher up than it is already is the oil and gas industry’s biggest short-term risk.
Tourism
A forecast for the state’s upcoming travel season was given by Sarah Leonard, CEO of the Alaska Travel Industry Association. That association serves to promote tourism in Alaska and is responsible for putting together the “Travel Alaska” program.
Leonard said that efforts to promote tourism in Alaska have been difficult during the COVID-19 pandemic and that the association has focused on marketing to Alaskans and building partnerships with other state groups, such as the Alaska Department of Health and Social Services to help disburse current COVID-19 travel information.
ATIA also established a cultural enrichment committee to incorporate and enhance Alaska Native experiences into the state’s tourism model and collaborated with Alaska’s congressional delegation to push for the return of cruise ships and the inclusion of tourism language in the American Rescue Plan Act.
Looking ahead, Leonard said the association worked with market researcher Destination Analysts to gauge what Alaska should expect this year. A report produced in December showed that traveler sentiment declined over 2021 due to concerns over COVID-19 variants, but that over a third more Americans plan to take leisure trips this year than in 2021, Leonard said.
“Travelers are really looking at this year, getting out of these challenges, and really taking vacations and having fun,” Leonard said. “I think Alaska is well-positioned to be able to provide those experiences for travelers.”
Health care
Health care in Alaska is a nearly $4 billion dollar per year industry, but continues to face threats from workforce shortages. That’s according to Jared Kosin, the CEO and President of the Alaska State Hospital and Nursing Home Association, who emphasized the importance of an adequate workforce to the success of the industry Thursday.
Alaska’s health care sector collects more wages than any other industry in the state — health care alone accounts for about 42,900 jobs and $2.7 billion in annual income, Kosin said. However, job demand exceeds labor supply. Though the sector is expected to add 5,000 jobs over the next 10 years, which is more than any other sector, Kosin said more emphasis needs to be put on making sure workers are available to fill those jobs.
And it’s not enough to just source labor from out of state. A 2019 survey of Southeast Alaska health care institutions found that it cost 64% more on average to engage a traveling health care worker than it would to hire a permanent employee. Alaska most recently dealt with this challenge in 2021, when roughly 470 health care workers were brought to Alaska from the Lower 48 to help hospitals struggling with burnout and overcapacity.
The cost to bring those workers up was around $87 million and was reimbursable by the Federal Emergency Management Agency, or FEMA. Kosin said the solution lies in better investing in Alaska’s burgeoning workforce.
“If we invest in our talent pipeline to get people into these jobs, we’re going to have more Alaskans at work, we’re going to have people staying at home (and) not leaving the state (and) it’s going to be a lot cheaper to bring down the cost of care,” Kosin said.
“Everybody wins in that situation.”
More information about KPEDD can be found at kpedd.org. Thursday’s full industry forum can be found on KPEDD’s Facebook page.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
