1. Ties that Bind The Enduring Economic Impact of Alaska on the Puget Sound Region McDowell Group, Inc. Tacoma-Pierce County Chamber August 13, 2015

2. McDowell Group Research and consulting since 1972 16 professional staff Offices in Juneau, Anchorage, Bellingham Areas of expertise: mining, oil & gas, tourism, seafood, transportation, health care, education Services: economic and socioeconomic analysis, surveys, market research, feasibility studies, community planning, program evaluation

3. About Ties That Bind Previous reports: 1985, 1994, 2003 Six counties: King, Kitsap, Pierce, Snohomish, Skagit, Whatcom Sources: government agencies, industry- specific impact reports, McDowell Group data, interviews, business survey IMPLAN for economic impact analysis

4. Sponsors Presenting Sponsor Alaska Airlines Gold Sponsors Lynden Transport, Inc. Port of Seattle Port of Tacoma Shell Oil Company Totem Ocean Trailer Express Silver Sponsors Alaska Oil & Gas Association Banner Bank Foss Maritime Company GCI ConnectMD Jones Stevedoring Co. Bronze Sponsors Alaska Railroad At-sea Processors Association Manson Construction Port of Anchorage Schnitzer The Wilson Agency / Albers & Company, Inc. Transportation Institute U.S. Bank Supporting Sponsors Alaska Salmon Alliance Fifth Third Bank Nexus Northwest Co-Presenters Seattle Metropolitan Chamber of Commerce Alaska Chamber Tacoma-Pierce County Chamber of Commerce

5. Economic Impact Includes direct, indirect, induced impacts Alaska “exports”: 74,000 jobs Puget Sound goods/services provided to Alaska Natural resources: 39,000 jobs Fishing, processing, petroleum, tourism Economic Impacts Alaska-Related Jobs113,000 Alaska-Related Labor Earnings$6.2 billion

6. Impact Trends Labor Earnings Jobs $4.3 billion $6.2 billion 103,500 113,000 (+12%*) (+9%) *Adjusted for inflation. 2003 2013 2003 2013

7. Ties that Bind: Sectors Cargo/freight Seafood Passenger transportation/tourism Petroleum Maritime support Health care Education

8. Freight and Cargo

9. 3.4 million tons moved between Puget Sound and Alaska in 2013 80% northbound, 20% southbound 97% water, 2% truck, 1% air Trade with Alaska accounts for over 80% of domestic containerized shipments at Ports of Seattle and Tacoma (20% of total) Economic Impacts Jobs5,500 Labor Earnings$450 million

11. Seafood Largest Alaska-Puget Sound Sector Three components: Commercial fishing Seafood processing Government & industry orgs. Puget Sound residents own nearly 1,000 vessels participating in Alaska commercial fisheries 36 processors based in Puget Sound account for 82% of first wholesale value in 2013

12. Seafood Impacts Commercial fishing 10,150 jobs $600 million in labor earnings Seafood processing 13,100 jobs $690 million in labor earnings Government/industry orgs 650 jobs $50 million in labor earnings Economic Impacts Jobs24,000 Labor Earnings$1.3 billion

13. $619 $818 $2,462

14. Transportation & Tourism Sea-Tac: 1.1 million Alaska- bound air passengers Port of Seattle: 430,000 Alaska cruise passengers Alaska Marine Highway: 14,000 Alaska ferry passengers Economic Impacts Jobs14,100 Labor Earnings$554 million

16. Petroleum Five refineries in Puget Sound: Ferndale (2), Anacortes (2), Tacoma Alaska is #1 supplier of crude to Puget Sound’s refineries (46% of their volume) 265,000 barrels/day Economic Impacts Jobs12,000 Labor Earnings$780 million

18. Maritime Support Services include ship construction, repair, maintenance, supply of marine-related goods and equipment, & manufacturing Vessels from Washington represent 56 percent of Alaska fleet’s gross tonnage Economic Impacts Jobs5,300 Labor Earnings$390 million

19. Health Care Many services not available in Alaska Shared providers: Providence, Providence/Swedish, PeaceHealth, Universal Shared expertise: 10% of Alaska physicians report WA address; WWAMI program Puget Sound facilities served over 2,000 Alaska residents in 2013 at 33 different facilities (inpatient only) Economic Impacts Jobs1,200 Labor Earnings$100 million

20. Education Washington is #1 state for Alaska students attending out- of-state 600+ Alaska students at Puget Sound institutions 35 different Puget Sound institutions 2005-12 Programs: WUE, WWAMI, Alaska scholarships Economic Impacts Jobs250 Labor Earnings$11 million

21. Outlook DOWNSIDE/FLAT Declining oil production and prices (below $45/barrel) Cargo, population, overall economic activity Alaska population projections modest at 1% annual Seafood: strong US$ presents challenge; stable/slightly lower value for 2015 (pending salmon season); Alaska-based processors growing Limited cruise growth capacity UPSIDE Potential big projects: gas pipeline, OCS oil and gas development Seafood: Long-term upside due to resource size, management, & branding Maritime services: aging Alaska fleet needs replacement Tourism: will grow along with nationwide economy Strong Puget Sound economy and population growth Recent T5 issue pushing AK-WA relations into spotlight

22. More in the Report! Overview of each economy Additional detail on each sector Trends Outlook Tribal ties Additional ties Impacts on Alaska Available at www.seattlechamber.com

23. Ties that Bind The Enduring Economic Impact of Alaska on the Puget Sound Region McDowell Group, Inc. Tacoma-Pierce County Chamber August 13, 2015