By: Blythe Campbell
The U.S. Energy Information Administration (EIA) has released some new estimates for 2015 energy consumption, prices and spending. Final data will be released in June 2017. Jet fuel estimates were updated in October 2016 for 2015.
According to the Alaska Department of Natural Resources, in their December 2015 Alaska In-State Refining Study “jet fuel accounts for nearly half the demand for petroleum products in the State, making Alaska the largest consumer of jet fuel per-capita in the U.S.” Our small population makes that an interesting statistic, but Alaska accounts for just 3% of jet fuel consumption in the U.S., according to the EIA.
Alaska’s jet fuel consumption increased 7% in 2015, after the sharp decline that began in 2007. The more than 40% decline over the past decade was due to a decrease in the number of flights into and out of Alaska, as well as increased fuel efficiency of modern airplanes. This impacts Alaska in two ways – airplanes that stop in Alaska use less fuel, and some routes can now be flown without a stopover in Alaska. In Alaska’s favor, though, is that cargo is more valuable than fuel, so a stopover in Alaska to refuel allows carriers to save weight for cargo. In an article published in early 2015, airport officials estimated that carriers could transport 100,000 more pounds of cargo by refueling in Anchorage.
Cargo landings grew 6% in FY2015, according to the Alaska Department of Transportation’s activity reports for the Anchorage and Fairbanks airports, which would account for the growth in jet fuel consumption. FAA Data shows that landed weights of cargo in Anchorage grew by 8% in 2015. The Ted Stevens Anchorage International Airport was the second-busiest cargo hub, behind Memphis, in the U.S. At 17 trillion pounds of freight, Anchorage is not far behind Memphis’ 23 trillion pounds, and Memphis lost freight volume last year (these figures are for all-cargo aircraft; local and regional freight is also carried on passenger airlines in Alaska.)
Industry organizations had been cautiously optimistic about the continued growth of air cargo , but the recent U.S. Presidential election has cast some doubt on the potential impacts that more protectionist policies – not only in the U.S. but across the world – may have on global trade.
The air cargo industry is a positive economic driver in Alaska and may be more so in the current low oil price environment because lower fuel prices should not only increase profits for carriers, but lead to increased demand for cargo services. Alaskans have a stake in U.S. policies that could impact this important industry.