Strong Ties Bind Puget Sound, Alaska Economies Relationship Spawns 90,000 Jobs, More Than $1.5 Billion In Earnings

Ever since the Klondike Gold Rush of 1898, the economic fortunes of Alaska and Washington’s Puget Sound have been intertwined, and that relationship is getting stronger even though Alaska oil production is declining.

The economic bonds that link the two areas encompass transportation, petroleum, trade, services, construction, a fishing fleet and a large seafood processing industry, according to a study released last week.

The study, called “Jobs Today Jobs Tomorrow: The Puget Sound-Alaska Partnership,” was commissioned by the Tacoma-Pierce County Chamber of Commerce and the Greater Seattle Chamber of Commerce, with the direct involvement of the ports of Seattle and Tacoma and a host of private businesses in the region. It was written by Robert A. Chase of Chase Economics in Tacoma, and Glenn Pascall of the University of Washington’s Institute for Public Policy and Management.

“Every sector within the regional economy is affected by trade with Alaska,” said Chase.

The relationship generates more than 90,000 jobs and $1.6 billion in labor earnings, making it only slightly smaller than the world’s largest aircraft manufacturer, The Boeing Co., in terms of employment in the region. That employment figure has increased 58 percent since 1985.

The value of goods sent to Alaska from the Puget Sound was nearly $2.4 billion in 1994, according to the study, up 46 percent from $1.6 billion in 1988. Trade in services showed the biggest growth over that period - 180 percent in current dollars. That reflected increased purchases by Alaska of specialized legal, accounting, financial, management, educational and medical services.

While the dramatic resource-related events that have marked Alaska’s history - gold, war and oil - have been the most visible part of the state’s economy, “steady population growth has generated a ‘quiet connection’ that may be the most important part of Alaska’s link to the Puget Sound economy,” the study said.

This is indicated by real growth ranging between 12 percent and 28 percent since 1985 in basic sectors such as transportation, trade, finance, insurance and real estate, it added. Excluding aerospace products, Alaska ranks as the Puget Sound’s third-highest export destination.

Waterborne shipments to Alaska were nearly 2.8 million tons in 1994, highest since the boom years of the early 1980s, when oil exploration, development and construction was occurring at Prudhoe Bay. Alaska’s waterborne shipments to Puget Sound totaled 600,000 tons the same year, the second highest in history, reflecting a record seafood harvest in the North Pacific.

Two Puget Sound industries, petroleum and fishing, rely on Alaska resources.

Alaska oil comprises 87 percent of the supply for Puget Sound refineries. Those refineries converted $2.8 billion of Alaska crude in 1994 into $4.8 billion of market product.

The study does not talk about the impact of exploring and developing the Alaska National Wildlife Refuge or the end of the ban on exporting Alaska oil. Developing the refuge would be a definite economic plus for the Puget Sound, because it is traditionally the major staging area and source of supply for Alaska oil exploration and development projects.

Chase commented that even with the export ban lifted, Alaska oil will continue to flow to Puget Sound refineries, at least for the short term. In addition, it’s a resource replaceable by other suppliers.

Alaska provides 85 percent of the seafood supplied in Puget Sound’s fishing and seafood processing industries. But those fisheries “are unique and irreplaceable” for those companies, the study said.