It was hard to know when to begin this section because the story of the trans-Alaska oil pipeline really started more than a decade earlier on the North Slope with the exploration taking place there, followed by the discovery of the giant Prudhoe Bay field. So, we began this story there, adding photos not already included in the Prudhoe Bay section of this edition of Petroleum News’ Explorers magazine. Happy reading.
–Kay Cashman
Exploration, discovery years
1950-55
• Iran and other Middle Eastern countries nationalize oil and gas industry.
• Oil companies look for new prospective areas, including Alaska.
1953
• First exploration phase in NPR-A ends (started 1943); between 1923-1953 U.S. Navy drilled 37 wells, only two of nine discoveries considered sizable - Umiat and Gubik.
1958
• President Dwight D. Eisenhower signs Alaska statehood bill, July 7, 1958.
• Department of Interior, Bureau of Land Management, opens North Slope lands for competitive bidding - 16,000 acres offered in area of Gubik gas field.
• BLM opens 4 million acres south, southeast of NPR-A (then named NPR-4) for simultaneous filing and subsequent drawing.
1959
• Alaska becomes nation’s 49th state, its constitution takes effect.
• William Egan (D) sworn in as state’s first governor (1959-1966).
• Alaska conducts first oil and gas lease sale, Cook Inlet basin.
• First oil and gas revenues in Alaska generate $3 million.
• Richfield Oil and other oil companies send first surface geological mapping parties to North Slope.
1960
• British Petroleum and Sinclair conduct North Slope geological survey.
1961
• In January, Gov. Egan says Alaska will face $15 million budget deficit by 1963.
• In December, Cook Inlet lease sale brings in $14 million rather than $1-$7 million expected.
1962
• State petroleum revenues double in two years, from $10 million in 1960 to $26 million in 1961, due to Cook Inlet basin activity.
1963
• Richfield geologists find oil-saturated sandstone outcrops near Sagavanirktok River, some in ANWR’s 1002 area.
Little activity followed Richfield’s initial 1959 North Slope exploration until 1963 when Harry Jamison, Richfield’s exploration director out of Los Angeles, dispatched Gil Mull, Gar Pessel and two additional geologists from California to Umiat, to the northern foothills of the Brooks Range, asking them to do some mapping and “to get a feel for what the geology was,” Mull told Petroleum News in 2007.
“I guess you could say that he had sort of an intuition that it looked like a good prospective petroleum basin.”
The team covered an area from Umiat eastward into the Arctic National Wildlife Refuge, in a three-month field season.
“We had seen an oil sand over in ANWR - a really good oil sand,” Mull said. “We had also seen oil sand in the river bank … at Sagwon.”
On Aug. 2, 1963, Pessel, co-party chief of the field team, summarized the party’s conclusions: “We have a good section with excellent reservoir possibilities and positive proof of the petroliferous nature of these sands. If one cannot get an oil field out of these conditions, I give up!”
The party recommended a seismic survey to investigate geological structures north of Sagwon where the surface rocks disappeared beneath the North Slope coastal plain.
Jamison presented the findings to Richfield management in California and quickly received the go-ahead to mobilize a seismic crew for that same winter.
Jamison’s drive, followed by promising seismic, led to the first Prudhoe Bay lease sale in 1964.
“The seismic crew started shooting long, north-south reconnaissance lines,” Mull said. They shot three lines, he said.
“The second line … ran over a pretty good looking anticline, called Susie.” Susie, north of Sagwon on the Sagavanirktok River, was the site of the first Richfield exploration well on the North Slope.
1964
• State selects land on North Slope under Alaska Statehood Act.
• Richfield and Humble join forces as partners to explore North Slope.
In the summer of 1964, Richfield geologists extended North Slope field mapping west to Cape Lisburne and more seismic followed that winter.
Sinclair Oil, British Petroleum and Atlantic Refining obtained lease positions on the North Slope.
Richfield entered a 50 percent joint agreement on its North Slope interests with Humble, which became a full participating partner, with its geologists and geophysicists joining field studies.
“Humble bought a half interest in everything that Richfield had gotten,” geologist Gil Mull said, “a half interest in the surface work, half interest in the seismic work and in the federal leases that Richfield had acquired in the foothills, for what had to be the all-time best deal ever - $5 million.”
• First oil industry cat train hauls seismic equipment overland from Fairbanks to North Slope.
In February 1964, John C. “Tennessee” Miller wanted to prove the feasibility of using a “cat train” of bulldozers for overland transport of the oil industry to the Arctic. A veteran catskinner - a virtuoso of heavy equipment - and a salesman; he found an oil man, Charlie Selman, then division geophysicist for Richfield, to back the experiment.
Selman wanted to add a second geophysical crew on the North Slope. The crew would need a cook shack, bunkhouse and three D-7 Caterpillar tractors to plow snow and haul supplies on logging sleds. Selman agreed to use Miller’s tractors, and in the bargain Miller would use them to haul the camp and supplies from Fairbanks to Sagwon on the North Slope.
It was 70 degrees below zero in Fairbanks when Miller staged the equipment and scouted the trail, with the weather staying brutally cold for the entire 40-day expedition.
Mechanical delays, a Yukon River crossing on creaking ice, and some close calls kept the going interesting at speeds averaging 3 miles per hour - on a good day. The open cabs of the tractors were only partially screened, leaving the upper bodies of the operators exposed to cold blinding winds and snow.
The cat train made Sagwon in mid-April, proving both the difficulty and the possibility of overland transport to the North Slope.
• First exploration wells in Brooks Range foothills by British Petroleum and Sinclair, dry holes.
• State hold first North Slope lease sale.
1965
• Sinclair quits on partner too soon.
Before the discovery at Prudhoe Bay, British Petroleum and its partner Sinclair drilled a dry hole at their Colville River leases. Because of the failure, Sinclair dropped out of the bidding on the next North Slope lease sale. British Petroleum ended up bidding at Prudhoe Bay alone. Sinclair went away.
“They got faint of heart,” said Gil Mull. “Sinclair bailed at exactly the wrong time.”
Later, Atlantic Richfield ended up swallowing Sinclair, a company that could have been a very large part of things at Prudhoe Bay, he said.
“A couple of people at Sinclair were disappointed that management let them down,” Mull said. “They were sick about it.”
• Prudhoe Bay beckons
Harry Jamison, who was directing exploration from Richfield’s Los Angeles office, was the first Alaska district manager for the company. In the winter of 1964-65, the Richfield Oil and Humble seismic crew worked north toward the coast of the Arctic Ocean and found the Prudhoe Bay structure.
When the Prudhoe Bay area was offered in a July 1965 state lease sale, Richfield and Humble bid aggressively, especially on the crest of the structure, which turned out later to have more gas than oil. A bid of $94 per acre bested British Petroleum, Atlantic Refining, Mobil and Phillips for the coastal tracts.
Short of dollars and a partner, BP decided it could not compete with American companies for expensive leases in the center of the structure. Instead, it gambled on the striking similarity of the Prudhoe Bay structure to the company’s discovery in Iran - where the oil-bearing rocks had proved to be thicker and more prolific around the edges, the flanks.
In some instances, BP did bid on what were considered prime tracts at the crest of the Prudhoe structure, but was outbid by Richfield.
When the bidding closed, BP had acquired 90,000 acres at an average price of just over $16 an acre - compared with the $93 an acre Richfield paid for leases in the central, crest area.
BP acquired more acreage along the flanks in 1967, ending up with more than half of the oil in Prudhoe Bay. Atlantic Refining picked up leases on the southern flank of the structure.
Later in 1965, Atlantic Refining purchased Richfield and in 1966 the companies became Atlantic Richfield, eventually ARCO.
The stage was set for one of the most remarkable oil finds in North America history.
But first - and later - oil companies would spend huge amounts of money on exploration drilling. Without modern day technology this translated into lots of dry holes.
According to a 2006 IHS Energy report on Alaska’s Arctic, there were 10 dry holes drilled on the North Slope between 1964 and 1968 when Prudhoe Bay was discovered, and 53 dry holes compared to four discovery wells (including Kuparuk and Milne Point) between 1969 and 1971.
1966
• Atlantic Richfield gets approval for civilian use of C-130 cargo aircraft.
In January 1966 Atlantic Richfield obtained U.S. Department of Defense approval to use a Lockheed C-130 Hercules cargo aircraft for civilian purposes: to fly in the drill rig, camp and supplies for the Susie No. 1 well in the Brooks Range foothills.
It was the first time an aircraft had ever been used to mobilize a drill rig in a remote location.
The rig move required more than 80 flights from Fairbanks to the well site over three weeks using the C-130 and another cargo plane.
Before the airlift could proceed, an airstrip was needed at the Susie well site. Construction equipment was landed on a river bar gravel airstrip at Sagwon for overland transport to the Susie location where crews constructed a winter strip out of snow and ice.
The Herc, as the big birds are affectionately called in the oil patch, is a workhorse that can carry 48,000 pounds of outsized cargo.
• Susie No. 1 spud by ARCO and Humble in February 1966 and plugged as dry hole in late December.
Atlantic Richfield and Humble decided to try one more well, this time in Prudhoe Bay. “If the Prudhoe well had been dry, we were going home,” ARCO Chairman Bob Anderson told Jack Roderick in “Crude Dreams.” “It was our last shot.”
• Walter Hickel (R) elected governor (1966-1969)
• Interior Secretary Stewart Udall imposes
Construction of TAPS begins
1974
• Jay Hammond (R) elected governor (1974-1978).
1975
• State of Alaska’s annual budget exceeds $500 million.
• 534 rivers and streams crossed.
• Trans-Alaska pipeline workforce peaks at 28,072 in October.
1976
• Constitutional amendment passed by Alaskans establishing Alaska Permanent Fund to receive “at least 25%” of petroleum royalties.
• Alaska receives nearly $400 million in petroleum taxes and royalties.
• Federal Land Policy and Management Act adopted.
1977
• Trans-Alaska oil pipeline completed on May 31.
• First oil into Pump Station 1 on June 20, reached Valdez July 28; time delay due to fire and explosion on Pump Station 8 on July 8.
• Prudhoe Bay production begins.
• First tanker load of North Slope crude oil departs Valdez Aug. 1.
• State of Alaska’s annual budget exceeds $700 million.
• Alaska Permanent Fund receives first deposit of dedicated oil revenues: $734,000
A man-made wonder
“A silken thread, half hidden across the palace carpet,” former University of Alaska President William R. Wood wrote about the 800 mile trans-Alaska oil pipeline.
Constructed by its operator, Alyeska Pipeline Service Co., in a three year period beginning in April 1974 and ending with the final weld in May 1977, the trans-Alaska pipeline system was built to transport petroleum from the North Slope oil fields to the marine terminal in Valdez where it is loaded aboard tankers for the journey to U.S refineries. At the time it was the largest construction project ever undertaken by private industry.
The cost to build this manmade wonder? $8 billion, Alyeska said (although its original price estimate was $900,000). And that doesn’t include interest on capital investment or capital construction after 1977.
Five hundred and fifteen federal and 832 state permits were required to build the pipeline. Two thousand contractors and subcontractors worked on it.
During the peak of construction in October 1975, approximately 28,072 people were employed by Alyeska and its contractors to build the pipeline.
Twenty-nine temporary camps were set up, used and dismantled in the three-year construction period. The largest was at the marine terminal. It had 3,480 beds.
Seven airports were constructed - two airports, Prospect and Galbraith Lake, continue to be used for pipeline purposes.
The total weight of the materials shipped to Alaska for the construction of the trans-Alaska pipeline system was approximately 3 million tons, the largest being a floating tanker berth at 3,250 tons.
Forty-two thousand, double joint welds and 66,000 field girth welds were made along the line.
Finally, and something that is seldom mentioned, 31 lives were lost in construction-related incidents during the three-year period.
