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A refinery in Kenai, southwest of Anchorage, produces most of the state's motor gasoline as well as some distillate fuel oil. Two other refineries, located in Valdez and near Fairbanks, also produce diesel and heating fuels.
Alaska still has plenty of oil in the ground. But output has been falling due to a lack of sufficient investment to offset natural production declines. Investors have been shifting their focus to what they perceive to be more profitable alternatives, especially shale and tight-oil basins in the Lower 48.
Oil producers extracted around 164 million barrels of crude oil from Alaska in 2021.
In order to drill a well for oil, gas, or geothermal resources in Alaska, a person must obtain a Permit to Drill from the Alaska Oil and Gas Conservation Commission (AOGCC).
The Alaska Oil and Gas Conservation Act (1955) created the Alaska Oil and Gas Conservation Commission (AOGCC or Commission). The Commission was composed of the Governor of the Territory of Alaska, the Territorial Commissioner of Mines, and the Territorial Highway Engineer.
In addition to thousands of well-paying jobs and billions in state revenue for the PFD and essential services, the industry contributes significantly to social and educational programs throughout the state each year.