Alaskans can meet challenge

Last year at this time I drove through the downtown and midtown areas of Anchorage and was stunned by the large number of buildings with “For Sale” and “For Rent” signs.

This year, not so much. As an old friend used to say, you could count those signs on the fingers of one foot. The worst economic impact of the ongoing pandemic has yet to hit Southcentral Alaska, but there is good reason to believe the bankruptcies and closings will not be as great as many people fear.

The reason is that Alaska was already in what you might call the post-oil-boom economy, relatively lean and mean.

Throughput in the trans-Alaska pipeline is now a quarter of the two million barrels a day it saw in the early years. And many of those likely to leave the state during lean times have already left. We have had a major shakeout and our economy now consists primarily of the hardier people and businesses.

Last spring’s empty office, retail and commercial buildings represented many lost jobs and failed investments.

They also suggested there were perhaps thousands of families whose lives were disrupted and forced to look to futures in other states and other parts of the world.

A great deal of economic pain and dislocation from the Covid-19 health crisis is almost certainly yet to come. But the people of Alaska today are, for the most part, much like those who were here before Prudhoe Bay.

We always have a fair share of knot-heads; that will never change. But a high percentage of people who live in this state are here because they love the place and will do what it takes to stay here and build their lives.

The losses of recent years have taken their toll. Many were high-profile companies like Nordstrom’s, which closed its doors last September. Nordy’s was Alaska’s only high-end department store and was a shoppers’ favorite for 44 years.

Anchorage’s Nordstrom closure was only partly caused by changes to the Alaska economy. The chain recently announced it was closing another 16 of its remaining 117 full-line stores. That apparently resulted from changes to shoppers’ buying habits, including the widespread switch to online shopping.

Alaska’s oil industry is quite a bit smaller than it was when prices were high and both the North Slope and Cook Inlet oil were booming. Things are changing but there are important good things happening here. Among the more promising are ConocoPhillips operations on the North Slope and Hilcorp’s acquisition of BP’s major interests in Alaska.

BP’s departure from Alaska is bittersweet for me since I worked at ARCO in the years after the Prudhoe Bay discovery and spent a lot of time with BP people. And BP was a client when I had a consulting firm.

But Hilcorp is a worthy successor to BP and BP’s selection of Hilcorp as the buyer of its Alaska interests is an important testament to Hilcorp’s credibility as a capable and committed member of the state’s business community.

The price of Alaska oil was about $33 this week and complicated by a worldwide glut caused by the the planet-wide hunkering down forced by Covid-19. Russia and Saudi Arabia are flooding the market with their huge oil reserves, which is driving prices down.

But both the White House and Congress are concerned about the problem and looking at remedies like placing tariffs on imports from those countries.

These are definitely interesting times but Alaska has a lot going for it, both in its promising hydrocarbon reserves and the strength of its people.

As the saying goes, when the going gets tough the tough get going.

And we are tough.