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40 Years at Prudhoe Bay: Pipeline startup brings oil to market Producers wade through sea of challenges to build trans-Alaska oil transportation system Petroleum News
The year 1973 brought the Arab Oil Embargo and saw the creation of the term “oil crisis” in the minds of Americans and the nationalization of oil holdings by several Third World countries, including ARCO’s holdings in Libya.
ARCO President Thornton F. Bradshaw told a Congressional committee on March 27, 1973, that “each day’s delay in bringing Alaska oil to U.S. markets results in a balance of payments loss to the United States of about $5 million.”
By the 1980s, he said, this loss would amount to $10 million per day. He also told the Senate Interior Committee that the first decade of operation of the pipeline would have a cumulative benefit of between $20 billion to $25 billion on U.S. balance of trade payments.
Addressing the environmental issues surrounding the proposed pipeline, Bradshaw said, “We have spent tens of millions of dollars in design to meet the stringent challenges of the Alaskan wilderness. The trans-Alaska pipeline will be easily the safest and best-engineered pipeline in the world.”
Pipeline right-of-way becomes law President Richard M. Nixon signed the measure into law on Nov. 16, 1973, and on Jan. 23, 1974, the U.S. Secretary of the Interior signed the primary federal right-of-way permit for construction of the $9 billion, 800-mile, trans-Alaska oil pipeline. Called the most massive construction project ever undertaken by private industry, the trans-Alaska pipeline system was designed to pump up to 1.5 million barrels per day of crude across three mountain ranges and some 600 rivers and streams.
Alaska residents, particularly in Fairbanks, were cautious in their enthusiasm when Nixon signed the pipeline legislation because many of their businesses had barely survived the expected boom of 1969, which collapsed when plans to build the pipeline were put on hold by the federal government.
World-class construction begins Prior to actual pipeline construction, a service road was built from Livengood to the North Slope, a distance of some 360 miles, or about 581 kilometers. It took more than 31 million cubic yards of gravel to build the road.
First pipe laid for line The first pipe for the trans-Alaska oil pipeline was installed at the Tonsina River on March 27, 1975. There were 29 temporary camps from Pump Station 1 to the marine terminal in Valdez. Each camp was self-sufficient and housed between a few and several thousand workers. The entire pipeline work force peaked at 28,000 in October 1975. Minority hire ranged between 14 percent and 19 percent and anywhere from one in 20 to one in 11 workers were women.
Average pay for working 12 hour days, seven days a week, was $1,000 per week. Skilled laborers such as welders earned considerably more. Even with the high wages of the time, the turnover rate was about 20 percent.
In Fairbanks at the main transportation hub for the project, telephone lines were constantly jammed; grocery stores struggled to keep shelves stocked; and a cab-over camper in a pickup truck rented out for $500 a month.
To a lesser extent, Anchorage and Valdez felt similar effects.
The Valdez terminal was a massive project. It covers more than 1,000 acres and was designed with four tanker-loading berths and tankage to hold a total of 9 million barrels of crude oil. The facility also processes oil ballast water taken out of tanker ships as they are loaded with North Slope crude oil. Hydrocarbon vapors are vented from the storage tanks as the level of crude oil fluctuates. The cost of the terminal was about $1.4 billion.
Oil flows into TAPS Officials hoped to have oil flowing through the pipeline by July 1, 1977. Ten days ahead of schedule, the first oil flowed into the trans-Alaska oil pipeline on June 20, 1977, at 10:05 a.m. The oil moved at about 5 miles per hour through 10 pump stations, taking six days to reach Valdez. At that point, it was stored in 510,000-barrel tanks and then was taken by oil tankers to refineries in the Lower 48.
To date, the trans-Alaska pipeline system has safely transported nearly 13 billion barrels of crude from the North Slope to Valdez, oil that has accounted for 20 percent of U.S. oil production at Prudhoe Bay’s peak of output and a substantial portion of domestic output for most of the past 31 years.
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