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Oil Discovery
In 1898 the first Alaska wells were drilled west of Homer by russians. They struck small amounts of oil. However there was not enough to support the production of it, so the oil was abandoned. -
Failed Attempts
At the same time oil was discovered in Homer, a group funded drilling at Dry Bay and as well as Puale Bay, these attempts were unproductive, due to them not finding oil. -
Katalla Oil Field
Alaska's first productive oil drilling operation was at Katalla (in the Gulf of Alaska). In 1901 a group of investors asked a English petroleum expert to see if the area could have oil. He looked and was sure there would be, soon afterward, drilling began. Some wells found oil, however it was in cold blizzard like conditions and the investors decided it was not worth it for the amount of oil found. -
Theodore Roosevelt Withdraw
Around 1900 large mining and oil companies began filing "blanket claims" to areas of potential oil fields. In 1906 President Theodore Roosevelt was concerned about the nation's need for fuel, so he withdrew all coal and most oil lands in the country from developing until Congress could come up with a way to control coal and oil claims. Roosevelt used authority given to him by Congress in the 1906 Antiquities Act to make the withdrawal. -
Katalla Oil Continued
In 1911 new wells in the area began to produce more oil. The amount was still not enough for the cost of transportation, so most of the oil was processed at a refinery at Katalla. The oil was then shipped by a tanker-barge to Cordova. This continued for nearly 20 years. The original investors sold their claims in 1916, those buyers then sold to other investors in 1920. Katalla was still working until a fire destroyed the refinery in 1933. After the fire, the wells were then abandoned. -
Mineral Leasing Act
Congress did not provide a resolution for Roosevelt's Withdraw until 1920 when it adopted the Mineral Leasing Act, it established a leasing plan for coal, oil and natural gas. Most states soon followed with leasing acts of their own. At the same time Congress created several national oil reserves. The largest, Petroleum Reserve, was on Alaska's Arctic coast. Most lands with oil potential in the country were re-opened for entry, including Alaska. Nearly 400 permits were issued for Alaska in 1921. -
8 Year Exploration
In 1946 the U.S. Geological Survey and the Navy began an eight-year exploration program. They explored near barrow. Teams drilled 36 test wells but found only two minor oil deposits. Gas from the Barrow field would be pumped to the village of Barrow for limited distribution, but otherwise none of the oil was used. -
Swanson Oil Field
The discovery of the large Swanson River oil field on the Kenai Peninsula in 1957 caused even more interest from potential oil investors. Richfield Oil Company of California was the first to drill, they struck oil their first well. The find tested at 900 barrels a day, it was the first major, commercial discovery in Alaska. Other companies began drilling programs in the area, and in 1959, Unocal Corporation discovered a major natural gas field, near the Swanson River Oil Field. -
Community Impact
The impact of community development on the west shore of cook inlet, and Anchorage has been significant. Kenai, the city nearest the development, was home to about 500 people in 1957. The boom in economic development and population growth after the discovery of oil was immediate and continues to the day. Most of the current workforce and many new settlers went to work for the oil companies. Commercial development followed with shopping malls in Kenai and Soldotna in the 1970s. -
Prudhoe Bay
By 1967 Richfield Oil drilled a number of dry holes on its North Slope leases, and began to leave the Slope. Their last effort were in bad condition. The day after Christmas, the crew opened a rig to see the results. Natural gas burst into the air. It flared 50 feet in 30 mph wind. Richfield's 2nd well begun instantly to see if there was more gas and oil in the area. March 1968 the other well produced. The early estimate for the field was 9.6 billion barrels. Today's estimate is 13 billion. -
Pipeline Issue
Oil business men knew immediately that an oil pipeline across Alaska to a port on the Gulf of Alaska would be necessary to get the oil to markets. But obstacles were in the way of construction of the pipeline. The first issue was Alaska Native claims to their land, land they had lived for as long as we know. Passage of the Alaska Native Claims Settlement Act 1971 took care of that problem. The Act was at the time the largest land claims settlement in United States history. -
Pipeline Issue 2
A second obstacle was with environmental protests to the idea of the pipeline. Environmental groups tried to stop the project before it started, claiming the industry plans did not meet the requirements of the National Environmental Policy Act. A federal judge gave a injunction to stop construction. As oil industries came up with a plan, national leaders debated whether or not there even should be a pipeline. Environmental concern was, the last stretch of land in the country should be preserved. -
Pipeline Outcome
National leaders recognized that Congress would have to make the final decision about Alaska land. In 1973, in a dramatic vote in the Senate, the vote was 49-49. Vice president Spiro Agnew made the deciding vote to approve the Alaska Pipeline Authorization Act on July 17, 1973. Construction of the Alaska Pipeline began in 1973 and was completed by 1977. Over 28,000 people worked on the project, which cost $7.7 billion, which was well beyond the industry's $900,000 estimate in 1970. -
Economic Change
A separate company created by the leaseholders to build and operate the pipeline (the Alyeska Pipeline Service Company) had to pay high wages, provide food, housing, and other amenities to keep the labor. The high wages created a major boom, in Fairbanks and Anchorage. Unemployment dropped to near zero in both cities as Alaskans left their routines to take advantage of the high wages. Off duty workers spent generously in Fairbanks and Anchorage, where crime rates increased dramatically. -
Aftermath
Taxation on oil on the North Slope has made $2 billion a year on average. For over 20 years about 80% of Alaska's revenue has come from oil tax. Oil prices crashed in 1985-86. From $40 in 1981 to $15 in 1986. In 1999 the amount of oil fell to about 850,000 barrels a day, the Pipeline should maintain that level for 30-40 more years. The state recovered from that downturn, it is a reminder today of The important role oil plays in Alaska's economy and the lives of all Alaskans. -
Economic Change And Pipeline Issue Revise
Economic change lead to an increase in crime because there was more people had money get to their head resulting in bad decisions. There was over 28,000 people at the time the pipeline was completed. The Alaska Native Claims Settlement Act 1971 benefit the state and oil companies because that gave them the space to build the pipeline, before there wasn't a space were they could build it without going through natives land.
