STATE FOCUS | ALASKA
Aerial view of the Alyeska Pipeline near Willow Creek, Alaska, during the winter.
area is not to another,” says Katie Berry, president and lead economist at McKinley Research Group. “In Saint Paul Island, for example, the oil and gas industry is not as immediate or as important to the economy as in other areas.” The state’s economy can be described
as a three-legged stool. The three legs are oil, government spending and the rest – everything from mining and fishing to tourism and air cargo from Asia – and each leg represents around one- third of the GDP.
Investing in the future of energy Along with the big projects listed above, the $8bn Willow Project is a huge oil-drilling venture by ConocoPhillips on Alaska’s North Slope that aims to extract roughly 576 million barrels of oil over 30 years, peaking at 180,000 barrels per day, though it faces fierce opposition from environmental groups over greenhouse gas emissions. Already it has been scaled back from five to three approved drill sites, all slated for initial oil production around 2029. The Alaska LNG Project, developed by Glenfarne Alaska LNG alongside the state-owned Alaska Gasline Development Corporation, is a $44–50bn infrastructure multi-generational plan that involves building an 800+ mile pipeline to bring North Slope natural gas to local markets and international export terminals. The renewed impetus behind this decades-long project is a sign that the energy industry is still a top priority. “The oil industry represents the largest source
of private sector economic activity in the state, though the public sector has a larger footprint overall,” says Brett Watson, associate professor of applied and natural resource economics, UAA Institute of Social and Economic Research. “Those oil and gas projects are less reliant on oil price than projects in the Permian basin, for example, as the operators here are working on much longer-term projects, though oil prices do impact the state budget. Capital deployment is different here compared to the Lower 48.” “The oil and gas industry funded the state government for a long time and brought disparate regions together,” says Berry. “It still plays an important role in determining the amount of money the legislature has to spend, and it is important to the Permanent Fund that the state has, so it is still part of the bedrock of the state economy.” The Alaska Permanent Fund is a state-owned
sovereign wealth fund created in 1976 and funded by oil and mineral revenues. Valued at more than $91.3bn as of 30 June 2026, it saves a portion of state oil and mineral revenues to invest for future generations and fund annual resident dividends. The majority of oil produced in Alaska comes from state-owned lands and assets, so provides a strong royalty revenue stream. In the past, federal spending has been key to propping the state’s economy.
“Public spending dragged us out of the last recession largely through spending on
healthcare,” says Watson. “The state spent on job creation and helped us move out of recession and then Covid brought another downturn, and we are still climbing out of that.” For the crane and hoist industry, the energy
sector clearly presents a major opportunity, but so does the state’s intention to diversify away from oil and gas. Efforts so far have not all been successful, but diversification remains a key strategic goal for the state. “There is absolutely an intent to diversify, and that has been a decades-long conversation,” says Berry. “We have seen in our history some successes, though some things that were tried have gone into the boondoggle category and were not economically viable. There is an effort to look at the supply chain. We produce some commoditised products, so what if we extend down into those supply chains. That could be smelting, oil refining and processing of seafood, and there have been some pockets of success there, but it is limited by the fact that there are only so many people here who can be consumers for those products.”
Changing the economic landscape For now, diversification is still on the agenda, which will open up opportunities for the crane and hoist companies, but the pressure to do so eases when the energy sector is performing robustly. “In the last few years, the oil and gas industry has been in investment mode,” Berry observes. “Our construction forecast looks at what is going to be spent on construction in 11 sectors, and at the split between public and private, which can vary. Generally, it is evenly divided between public and private in dollar terms, but funding priorities can change when a new administration comes in.” The dawn of the second Trump administration in January 2025 saw a significant proportion of infrastructure funding cancelled or paused. Nevertheless, the situation has changed over time, having evolved into targeted, ongoing cancellations and pauses heavily focused on policy alignment. In Alaska, mineral extraction remains a growth area. “We are seeing mining exploration on the upswing in Alaska, spurred by strong commodity prices,” Berry says. “We have world class resources, and there is also investment in access roads and in larger mining developments. We have a lot of excellent gold deposits here, and that has been part of our DNA since the gold rush in the late 1800s. Antimony is another important mineral, and the federal government is keen on developing domestic deposits.” Data centres face a promising future in
the state. This could prove crucial for the hoist industry, as extensive lifting equipment is required during both the initial construction and the ongoing maintenance life cycle. Portable hoists and gantries are particularly important for technicians to manoeuvre heavy components
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