Alaska Economy Bounces Back
After the weak late '80s, oil and mining production and development are rising robustly
THE two converted mobile homes comprising the maiden branch of three-month-old Northrim Bank are proof that Alaska's economic recovery is in full bloom. A leaner, meaner, and smarter Alaska is emerging from the economic dark years of 1986 to 1989, when nine banks and two savings-and-loans collapsed and home foreclosure rates reached over eight times the national average.
It's an ideal environment for a new bank, says Marc Langland, Northrim's president.
``After you've had the shakeout, you're lending to people who survived the shakeout,'' says Mr. Langland, sitting in an office above the construction site that will become the bank's permanent headquarters. ``If they've made it through that, they probably stand a better chance of making it through the next one.''
The oil industry leads the state's recovery. The Persian Gulf crisis and resulting high oil prices sparked enhanced-recovery programs and production in marginal fields on the North Slope. Daily output is near the all-time high of 2 million barrels. Once-dormant exploration programs are active again. A $1.8 billion investment in gas-handling expansion to extend the life of the Prudhoe Bay oil field, a project planned long before the Gulf war, is under way.
Alyeska Pipeline Service Company, operator of the trans-Alaska pipeline, is in the third year of a five-year program to replace corroded sections of the 800-mile line. Estimated to cost $800 million, the repair is the nation's biggest single construction project.
The state's mining industry has grown robust, thanks largely to two new major mines - Cominco Alaska Inc.'s Red Dog Mine near Kotzebue, expected soon to become the world's biggest zinc producer, and the Greens Creek Mine near Juneau, already the nation's top silver producer. Mineral deposits from Fairbanks to the Alaska Peninsula are being explored as possible mine sites.