The Anchorage Times headline said it all: “After 8 Years, 4 Months, 10 Days, FIRST SLOPE OIL FLOWS. World’s Biggest Pipeline Starts Service to Nation.”
It was a historic moment for Alaska, and indeed the nation as the initial flow of 180,000 barrels of oil per day eventually rose to 1.5 million barrels per day, and stayed at that level for more than a decade.”Prudhoe Bay created wealth so great that it would convert the State of Alaska from, perhaps, the nation’s poorest state in income, into a state not only rich but filthy rich,” wrote Bob Atwood, the Anchorage Times’ legendary publisher.
“No single event in Alaska’s history has had an impact on the region of intensity comparable to that…of the gigantic…Prudhoe Bay …” wrote Alaska historians Claus-M. Naske and Herman Slotnick in “Alaska, a history of the 49th state.”
The road to Prudhoe Bay began in the 1920s when hearty explorers traveled by dog team, foot and boat in search of oil. They made some small discoveries and left convinced that the North Slope was an area of huge potential with geological structures similar to those in the Middle East.
Geologic surveys followed in the late 1950s and early 1960s and in 1968, after nearly a dozen unsuccessful wells, ARCO and its partner, Humble Oil (now ExxonMobil) struck it big.
“On Dec. 26, 1967, a loud vibrating sound drew a crowd of about 40 men to the well. They were wrapped in heavy clothes – it was 30 degrees below zero – and they had to struggle to hold their places in the 30-knot wind. The noise grew louder and louder – the roar of natural gas. To one geologist it sounded like four jumbo jets flying directly overhead. A natural gas flare from a pipe shot defiantly 30 feet straight up in the strong wind. They had stuck oil. …A true elephant,” wrote Pulitzer Prize winning author Daniel Yergin in “The Prize.”
Sohio (now BP) drilled the confirmation well three months later.
The sheer size of the price tag ($25 billion) to develop the field and the transportation system to deliver the oil to market, combined with the years of delay before first oil, put enormous strain on both the State of Alaska and the three leading oil companies.
“There were basically no budgets because we had to design everything from scratch,” recalled Landon Kelly, the field’s first manager for ARCO.
“It was a place unlike any other from which oil had yet been recovered,” wrote Yergin. “The technology did not exist for production in such an environment... Normal steel piling would crumble like soda straws when driving into the permafrost.”
Then there were the years of delay, first to resolve Native land claims and then environmental lawsuits. Congress finally intervened in 1973 when Vice President Spiro Agnew broke a 49-9 tie on an amendment to limit further court delays.
The long delay sent many businesses into bankruptcy and brought the state’s economy to a halt. But all that changed on July 28, 1977 when first oil reached Valdez and the partnership between Alaska and the oil industry began to pay off.
Today, after 30 years of production, Prudhoe Bay remains the largest oil field in North America and ranks among the 20 largest fields ever discovered worldwide. The field has produced nearly 11 billion barrels and its operators expect to produce another 2 billion with current technology. It led to development of 24 separate oil fields on the North Slope – five of which are among the nation’s 10 largest producing fields. The North Slope produces about 800,000 barrels per day and makes a significant contribution to America’s energy needs.
Prudhoe Bay and the fields that followed have contributed more than $100 billion in state revenues (adjusted to today’s dollar), billions of dollars more from investments that support hundreds of Alaska businesses and creates thousands of jobs for Alaskans. It led to creation of the Permanent Fund which pays every Alaskan a dividend each year.
It’s funded the basic necessities of life in the Last Frontier – and many of its luxuries.
As former Gov. Bill Sheffield puts it, “The oil and gas industry has benefited everyone in the state.”