2019 in the rear view:

It has been an interesting year and an interesting and challenging decade for Alaska

Both come to a close Tuesday, Dec. 31 with the promise of a fresh start for 2020.

The state’s economy seemed to steady itself in 2019 after a three-year recession that began in late 2015 when oil prices collapsed, dropping from over $100 per barrel to the $40-per-barrel range, at sometimes even lower.

Oil production supports a third of Alaska’s economy and, until recently, paid for the bulk of the state budget. State oil tax and royalty income plummeted from over $5 billion a year to just over $1 billion between 2015 and 2016, creating an emergency for former Gov. Bill Walker and the Legislature. Fortunately, there was a hefty $18 billion in savings accounts to cushion the blow as public spending was ratcheted down.

The contraction of prices and revenues were similar to the oil-price crash in the mid-1980s, but the state’s 2016-2018 recession was milder than that of 1986-1988. There were no savings available then to Bill Sheffield, who was governor then.

Spending had to be cut, and fast, the result being the sharp late-1980s recession that saw sharp drops in employment and housing values in Interior and Southcentral Alaska and a string of bank closures.

This time there has been a softer landing. Home values did not crash, and job losses were concentrated in oil, construction and state government but other employment was even, for the most part. In 2019 employment stabilized and is now even growing, although very slowly.

Oil activity is up

Oil activity is up again, although modestly, after oil companies found ways to reduce costs and still explore for and develop new oil. Surprisingly, oil producers were able to stabilize North Slope production at about half a million barrels a day from 2016 through 2018, which meant they found enough new oil to fill in for the underlying natural decline of the larger oil fields.

The decline returned in 2019, however, after the companies worked through their bag of tricks to keep production propped up. Most of what was in the bag were several smaller new oil projects producers developed after 2013, the year the Legislature passed a major tax reform. Production decline is now expected to continue at least through 2024.

In other parts of the economy things were stable, sometimes even good. Stable conditions were reflected in steady earnings of commercial banks in the state, low unemployment, low bankruptcy filings and real estate markets.

Record-breaking tourist seasons

Alaska has had a string of record-breaking visitor seasons and the industry’s growth