ACCESS NUMBER: 85079 & 39092 

STUDY TITLE: North Slope Economy, 1965 to 2005 

REPORT TITLE: North Slope Economy, 1965 to 2005 

Task Order Numbers: 0102 PO 85079 and 0105 PO 39092 

SPONSORING OCS REGION: Alaska 

APPLICABLE PLANNING AREAS: Beaufort Sea, Chukchi Sea, Hope Basin 

FISCAL YEAR OF PRODUCT FUNDING: FY 2002 and FY 2005 

COMPLETION DATE REPORT: April 2006 

COSTS: FY 2002: $99,345 and FY 2005: $45,910 

CUMULATIVE PROJECT COST: $145,255 

PROJECT MANAGER: Patrick Burden/Leah Cuyno 

AFFILIATION: Northern Economics, Inc. 

ADDRESS: 880 H Street, Suite 210, Anchorage, AK 99507 

PRINCIPAL INVESTIGATORS: Leah Cuyno, Nancy Mundy, Don Schug, Kelly Baxter 

KEY WORDS: North Slope Borough, local government revenues and expenditures, 

economic linkages, household economic impacts, resident employment, income, quality 

of life indicators, Arctic Slope Regional Corporation, native corporations, federal and 

state expenditures in the North Slope, North Slope communities, history of the North 

Slope economy 

BACKGROUND: The Minerals Management Service (MMS) commissioned this study 

to provide a basis for the socio-economic analyses required in environmental impact 

statements (EIS’s) or environmental assessments (EA’s) as stipulated by the Outer 

Continental Shelf Lands Act and National Environmental Policy Act. Information from 

this study is expected to be particularly useful in establishing baseline conditions for the 

required EIS’s and EA’s associated with sales and development as well as production 

plans in the Beaufort Sea, Chukchi Sea, and Hope Basin planning areas. In general, 

this study is intended to provide a long-term, region-wide perspective of the economic 

effects of oil and gas development against which future Outer Continental Shelf (OCS) 

economic effects may be benchmarked. 

OBJECTIVES: The specific objectives of the study include the following: 

1) To characterize the evolution of the NSB economy with respect to six key 

components: 

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ACCESS NUMBER: 85079 & 39092 

 The structure of the North Slope economy in terms of employment and income 

within sectors or industries, and the demographic composition of labor. 

 Revenue and expenditure patterns of the NSB and city governments. 

 The role of ASRC and village for-profit Alaska Native corporations in the economy. 

 The role of non-profit corporations, tribal governments, and federal and state 

governments. 

 Linkages among the various entities described above. 

 The response to change of household economies and the effects of economic 

change on traditional subsistence practices. 

2 ) To provide a historical account of economic activities in the NSB and present trend 

lines, charts, and diagrams that would depict the changes in the economy of the region 

through the years. 

DESCRIPTION: The study documented changes in the North Slope regional economy 

in terms of structure, composition, and linkage of the economic dimensions to key 

historic institutional milestones. The study is a comprehensive account of economic 

activity from 1965 to 2005; characterizing the evolution of the North Slope Borough 

economy with respect to six key components as listed above. Historical data are 

presented using trend lines, charts, and diagrams that depicted the changes in the 

economy of the North Slope through the years. 

SIGNIFICANT CONCLUSIONS: While change has been a constant for the inhabitants 

of the North Slope, several major events occurring during the last few decades 

contributed to key structural changes that created the North Slope economy as it exists 

today; these events include Alaska statehood in 1959, the discovery of oil in Prudhoe 

Bay in 1968, the enactment of the Alaska Native Claims Settlement Act (ANCSA) in 

1971, the establishment of the North Slope Borough (NSB) in 1972, passage of the 

Alaska National Interest Lands Conservation Act in 1980, and opening of the National 

Petroleum Reserve-Alaska for oil and gas development. This study explores the 

structural changes that have had significant economic, institutional, and social impacts 

on the region. The following sections describe some of the major highlights of the 

report. 

Changes in Employment and Economic Activities 

Prior to 1968, employment opportunities on the North Slope were primarily limited to 

federal and state activities, and North Slope villages could only afford limited local 

government. The discovery of oil in Prudhoe Bay in 1968, formation of the regional and 

village Alaska Native corporations after passage of the ANCSA in 1971, and formation 

of the NSB in 1972 dramatically changed the physical and economic infrastructure of 

the region. These events created a more diverse economy with increased activities in 

construction, oil and gas extraction, and support sectors such as transportation, 

communications, and utilities, and other service sectors. While employment and total 

earnings in the region increased significantly, the wealth created (from net earnings) did 

not necessarily create significant effects in the regional economy, as most of these 

dollars were earned by non-residents and were not re-spent in the regional economy. 

The local government sector is the region’s major employer of North Slope residents. 

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ACCESS NUMBER: 85079 & 39092 

The Role of Local Government 

Through its ability to levy taxes on oil and gas properties within the Borough, the NSB 

government has provided employment and services to all North Slope communities and 

has been the largest employer of North Slope Iñupiat. The NSB has financed major 

infrastructure projects primarily with property tax revenues. The NSB has also leveraged 

federal and state funds to provide for public services to all North Slope communities. As 

oil and gas production and pipeline property depreciates, tax revenues to the Borough 

also decline. The declining revenues are causing significant budgetary challenges, 

leading to reductions in the scale of capital projects and increased efforts in efficiently 

managing operating income. 

The Role of For-Profit Alaska Native Corporations 

The Arctic Slope Regional Corporation (ARSC) and eight village corporations that were 

formed under ANCSA have been a significant economic force in the region, providing 

jobs to residents and opportunities to be involved in all sectors of the economy (i.e. 

construction, oilfield activities, retail and service sector, etc.). Since 1973, ASRC has 

increased its revenues at an average rate of 39 percent per year. In 2003, the 

corporation’s gross revenues amounted to about $1 billion. Both ASRC and the village 

corporations have served as vehicles to channel Native assets and capital toward 

productive investments on behalf of their shareholders. While they are required by law 

to make good faith efforts at earning financial returns for their shareholders, they also 

put emphasis on hiring their shareholders, providing for educational needs of their 

shareholders and children, and remaining involved in political and social issues. 

The Role of Federal, State, and Tribal Governments and Non-Profit Organizations and 

Important Economic Linkages in the Region 

Aside from the large, multinational corporations that produce oil on the North Slope, the 

major players in the North Slope economy are the Alaska Native corporations and the 

various government sectors (federal, state, and local governments). Most of these 

entities own and manage lands in the region, provide employment to North Slope 

residents, and provide resources to carry out infrastructure development and community 

operations. The NSB, given its functions and powers, is at the center of the web of 

linkages among these various entities, funneling federal and state dollars as well as 

property tax revenues to manage its physical/natural resources and provide public 

services for its residents. 

Individual and Household Economic Impacts and Responses 

The substantial expansion of public facilities and services that has occurred in North 

Slope communities over the past 25 years has significantly improved the quality of 

village life. Significant improvements have occurred in water and sanitation facilities, 

health and social services, education, housing, public safety, transportation and 

communication. While long-standing income inequalities between Iñupiat and nonIñupiat households continue, income increases among Iñupiat households appear to be 

fairly evenly distributed. To some extent, the income increases experienced by North 

Slope households have been offset by the high cost of living. Surveys indicate that 

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ACCESS NUMBER: 85079 & 39092 

subsistence resources continue to be of economic and cultural importance to residents, 

although the adoption of modern technology has raised the cost of participating in 

subsistence activities. While North Slope residents generally agree that the overall 

quality of life in their communities has improved, they continue to express concern 

about the social effects of rapid economic development in the region. 

STUDY RESULTS: The study results are documented in five sections of the report. 

This includes: 1) The Structure of the North Slope Economy (Section 3); 2) The Role of 

Local Government (Section 4); 3) The Role of For-Profit Alaska Native Corporations 

(Section 5); 4) The Role of Other Government and Non-profit Organizations and the 

Economic Linkages among Entities (Section 6); and 5) Individual and Household 

Economic Impacts and Responses (Section 7). 

STUDY PRODUCTS: Northern Economics, Inc. 2006. North Slope Economy, 1965 to 

2005. Prepared for the U.S. Department of the Interior, Minerals Management Service 

Alaska OCS Region, Anchorage, Alaska. OCS Study MMS 2006-020. 

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