Tourism can’t replace oil

 

Replacing the economic benefits of oil production with trail tourism is a nice idea, but the economic reality is staggering (“Trail Blazing,” HCN, 6/26/17). The current Trans-Alaska Pipeline carrying rate is about 500,000 barrels per day. At about $43 per barrel, the value of that resource is $21.5 million. Per day. All year long.

Until the recent oil-price crash, the state took in billions per year in royalties and production taxes. Alaska has no income tax, but the economic benefits of tens of thousands of industry employees, most of them making six-figure salaries, kept the entire economy alive.

Assuming trail users want to travel from Valdez to the North Slope, a length of 800 miles, that could require about 80 huts (for hikers) or 20 huts (for bikers). With bigger huts that could accommodate 10 people, that’s 200 to 800 visitors per night, and at $200 per bed, that’s $40,000 to $160,000 per day. While that sounds like a lot, it looks tiny compared to the dollars the state government, and the state workforce, have enjoyed in the past. Of course, building the huts and associated infrastructure would require millions of dollars.

So a tourist economy is better than nothing, but the scope is limited and often seasonal, and most of the jobs pay little.

Robert Krantz
Durango, Colorado