Oil Discovery And Development In Alaska

Alaska History Essay #5

The Russians were the first non-natives to notice oil seepages in Alaska. But they were more focused on furs and other natural resources and made no attempt to develop the potential that Alaska had to produce oil.  America didn’t pay attention to the oil in Alaska for years after they acquired the land.

The first claims on oil were in 1890. They were unsuccessful because the wells couldn’t pump enough oil and the oil was mixed with seawater. The first productive oil operation was in 1900. The wells were drilled at Katalla on the Gulf of Alaska. They were able to get oil but the investors who were financing the wells pulled out and forced the operation to shut down. In 1911 in the same area new wells were drilled, they produced a steady amount of oil but the transportation cost was very high. So the owners built an oil refinery on sight and they shipped the refined oil to Cordova. This successful operation lasted until 1933 when a fire destroyed the refinery.

These early operations provide a good example of the problems that producing oil in Alaska present. The most important obstacle being the cost of transporting the oil to market.

In 1921 a lot of new oil operations were started. But they didn’t last to long because oil discoveries in Texas made oil too cheap to be worth getting from Alaska. So Alaskan oil took a back seat to the more readily available oil in Texas.

Oil became more important in Alaska in the 1950’s and in 1957 the first major commercial well was drilled by Richfield Oil Company which was based out of California. The site produced 900 barrels of oil a day and was very successful.

In 1967, ten years later, the ARCO (a merger of Richfield Oil, Humble Oil, and Atlantic Oil) discovered oil at Prudhoe Bay. It turned out to be the biggest oil field in North America. The North Slope as it is know now produces 850,000 barrels of oil per day. In 1974 the trans-Alaska oil pipeline was constructed to cut the cost of transporting oil.

Ever since the discover of oil on the North Slope, it has been a very important part of Alaska’s economy.  Oil is the most profitable industry in Alaska today.

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