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Unlike most state economies, Alaska's is mainly built on natural resource sales and large amounts of federal cash.
The University of Alaska's Institute of Social and Economic Research or ISER compares the state's economy to a three-legged-stool. Of jobs held by Alaska residents: 35 percent- federal, state, and local governments, 34 percent- other sectors like fishing, mining and timber and 31 percent- oil. Each job, ISER says, is dependent on the other leg.
That third leg, oil, reached its peak in 1989. Currently, one-third of the 1989 amount is flowing down the Trans-Alaska Pipeline System, or TAPS. One of ISER's chief economists predicts Alaska's economy, as residents now know it, will disappear if that declining trend continues, and no new oil is discovered.
It was a scary prediction seemingly backed up by former Gov. Frank Murkowski, R-Alaska, at a November Anchorage Chamber of Commerce luncheon.
"It's estimated about 300,000 barrels a day will no longer be economic by 2018," Murkowski said.
Murkowski used that date because his belief after studying economic models is 2018 is when less than 300,000 barrels a day will be flowing through TAPS if new oil is not discovered. At that level, some industry officials say the oil pipeline will not work.
The prospect of TAPS not having enough oil to keep profitable production is something the former governor's daughter, Sen. Lisa Murkowski, R-Alaska, reminded state lawmakers of during her annual address in February.
"Alaska without oil is like Florida without sunshine. It's unthinkable," Murkowski said. "We all know that TAPS throughput is declining, and there are days when that throughput falls below 500,000 barrels a day, causing significant operational problems when it's cold. We know we've got to get more oil in that line. It's as simple as that."
UAA Economist Scott Goldsmith has already plotted out what he thinks Alaska's economy would look like without oil.
"The red flag is that if we are complacent and think that in the future, economic growth and development is going to come as easily as it has in the past, we're mistaken," Goldsmith says.
The most shocking fact of Goldsmith's assessment seems to be if oil had never existed, every Alaskan would have been paying more than $13,000 every year in taxes to enjoy their current lifestyles.
"If you wanted to keep things just to way they are, the oil industry went away, where would you get the money? Well, from you and me. At a pretty stiff tax rate," Goldsmith says.
That would mean, Goldsmith says, Alaska would look a lot like Maine because of our similar economies. Maine is also heavily dependent on natural resources, federal spending, tourism's seasonal economy and is remotely located.
"If you look at Maine's economic performance over the last 50 years, it's been pretty much at the bottom of the United States," Goldsmith says.
In other words, Goldsmith says, Alaskans have to understand oil's significance. For an average Alaskan family of four, it has meant higher wages, no state taxes, a permanent fund dividend and high public spending. Meaning, thanks to oil, Alaska families have enjoyed a yearly bonus of more than $50,000.
"A significant chunk of this extra spending that benefits extra households is that building up of the Alaskan infrastructure," Goldsmith says.
Which is why Goldsmith says Alaskans have to start planning now to continue enjoying the same lives they have since oil money came into them.
To read the part II of the Alaska without oil series click here.
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