Alaskan Oil Pipeline Opens Summary

  • Last updated on November 10, 2022

The Trans-Alaska Pipeline System between Prudhoe Bay and the port of Valdez, long delayed by environmental considerations, opened nearly ten years after discovery of a major oil field at Prudhoe Bay.

Summary of Event

The opening of the Trans-Alaska Pipeline System on July 28, 1977, represented a victory of energy considerations over environmental concerns and of technology over a bewildering array of problems. Tremendous problems had to be overcome in order to produce oil in the frozen wilderness of Alaska’s North Slope and then transport it across nearly one thousand miles to an open port without disturbing, to any significant extent, the area’s fragile physical and biological landscape. Trans-Alaska Pipeline System[Transalaska Pipeline System] Oil industry;Trans-Alaska Pipeline System[Transalaska Pipeline System] [kw]Alaskan Oil Pipeline Opens (July 28, 1977) [kw]Oil Pipeline Opens, Alaskan (July 28, 1977) [kw]Pipeline Opens, Alaskan Oil (July 28, 1977) Trans-Alaska Pipeline System[Transalaska Pipeline System] Oil industry;Trans-Alaska Pipeline System[Transalaska Pipeline System] [g]North America;July 28, 1977: Alaskan Oil Pipeline Opens[02880] [g]United States;July 28, 1977: Alaskan Oil Pipeline Opens[02880] [c]Energy;July 28, 1977: Alaskan Oil Pipeline Opens[02880] [c]Natural resources;July 28, 1977: Alaskan Oil Pipeline Opens[02880] Anderson, Robert Orville Stevens, Ted Udall, Morris K.

The story of Alaska’s oil begins with the creation of the Naval Petroleum Reserve on the territory’s North Slope in 1923. The history unfolds essentially in three stages from that moment to the opening of the pipeline more than a half century later. During the first of these stages, which lasted until the 1960’s, exploratory drilling in Alaska occurred intermittently, usually at times of projected oil shortages in the continental United States and usually more as a hedge against future shortages than as the first step in a massive commercial development of Alaska’s oil wealth. Even if the technological difficulties in producing and transporting Alaskan oil could be solved, the costs involved would have made the product prohibitively expensive. The discovery of cheap oil in Kuwait and exploration of other rich oil fields in the Middle East during the late 1940’s and early 1950’s further dampened interest in Alaska. Exploratory drilling there slowed.

Changes in the world oil market during the late 1950’s and early 1960’s inaugurated the second period, one of growing interest in Alaskan oil that lasted until the “eleventh hour” discovery of oil in Prudhoe Bay in 1967. As the oil companies of the Western world began to lose the control they had exercised over the world petroleum market for half a century, particularly after the birth of the Organization of Petroleum Exporting Countries Organization of Petroleum Exporting Countries (OPEC) in 1960, interest was rekindled in finding sources of oil that were closer to home. Meanwhile, steady increases in the posted price of oil during the 1960’s closed the gap between the cost of producing Alaska’s oil and the price that it could fetch on the world market.

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During the mid-1960’s, world oil prices increased. At the same time, world politics and the economic power of OPEC made the supply of cheap oil from abroad less secure. These conditions combined to lure an expanding number of American firms into exploratory ventures abroad and at home, chiefly along the Outer Continental Shelf. Among these adventurers was the Atlantic Richfield Company, Atlantic Richfield Company later known as ARCO. Under the direction of Robert Orville Anderson, one of the last great American oil wildcatters, Atlantic Richfield obtained the majority of the governmental leases then being granted for exploratory and developmental activity in Alaska. The company then began its search. Even after its initial well on Alaska’s North Slope proved to be dry in 1966, Anderson pressed on with exploratory efforts. On December 26, 1967, in temperatures thirty degrees below zero, Atlantic Richfield struck a pool of oil that would eventually be estimated to contain ten billion barrels. This was the largest oil field ever discovered in North America.

Then came the third period, the most frenzied of all, in which Atlantic Richfield struggled for permission to build the pipeline necessary to ship oil from the often-frozen tundra of the North Slope to southern markets. While Atlantic Richfield was confirming the size of its find and evaluating its potential, environmental groups began to mobilize in opposition to the construction of any pipeline running south across Alaska’s frozen landscape. Their hand was strengthened enormously by the offshore oil spill near Santa Barbara, California, in 1969 and the National Environmental Policy Act National Environmental Policy Act (1969) (NEPA) passed in its wake, at approximately the same time that oil companies were requesting a federal right-of-way to build the Trans-Alaska Pipeline. NEPA required the U.S. Department of the Interior to prepare a justifying environmental impact statement before granting permission to begin any project likely to have substantial effects on the environment.

On March 20, 1970, the Department of the Interior sought to comply with the letter of the law by issuing an eight-page impact assessment that substantially downplayed the risk of environmental damage being caused by a pipeline from Prudhoe Bay to Valdez. Within a week, a group of respected environmental organizations jointly sued the Department of the Interior for violating the provisions of NEPA. Three weeks later, a court injunction halted construction on the pipeline until such time as a definitive court ruling on compliance with NEPA could be obtained.

The last portion of the Alaska Pipeline is installed.

(Library of Congress)

The trucks and the half million tons of pipeline previously rushed to Alaska so that work could begin on the pipeline ultimately remained in storage for nearly four years. Two of those years were spent in judicial wrangling. On March 20, 1972, the Department of the Interior produced a nine-volume environmental impact statement to justify its approval of the pipeline’s construction, but the injunction remained in effect until August 15 of that year, when the case was appealed to the Supreme Court.

Then came the October, 1973, Arab-Israeli war and resultant Arab oil embargo on Western countries that assisted Israel in that war. Energy crisis (1973) OPEC emerged as a cartel that was effective in controlling the price and production of oil. Almost overnight, the price of oil from OPEC countries quadrupled to nearly $12 per barrel. Opposition in Congress to the construction of the Trans-Alaska Pipeline collapsed. A measure to approve the Interior Department’s last environmental impact statement, relieve the department from further obligations under NEPA, and approve the construction of the Trans-Alaska Pipeline System from Prudhoe Bay to Valdez was passed on November 16, 1973, less than a month following the announcement of the Arab oil embargo Arab oil embargo (1973-1974) on shipment of petroleum to the United States. By April, 1974, the monumental task of constructing an environmentally friendly pipeline was at last under way.

Significance

Almost every aspect of the production and transportation of oil in Alaska represented a technological and environmental challenge to the petroleum industry. Environmentalist groups that sought to block the development of Alaska’s oil reserves were not entirely wrong when they claimed that the industry, when oil was first discovered at Prudhoe Bay, had lacked the technology to exploit the field without significant damage to the environment.

The environment of icebound Prudhoe Bay was unique in the oil industry’s experience. Temperatures could drop to and remain at sixty-five degrees below zero for long periods in winter. The tundra would freeze solid. The layer of permafrost below the tundra could be as thick as one thousand feet. Steel pilings then in use for rig construction were useless.

Laying an eight-hundred-mile pipeline across the terrain posed equally taxing problems. Once thawed, the tundra took on a spongelike property and was thus unable to provide the stability needed for a pipeline. Except in winter, the ground could be extremely delicate, so delicate that even light trucks could easily disfigure it. On the other hand, laying the pipeline below the tundra posed serious threats to the permafrost itself. Unless precautions were taken, oil being pumped from wells would enter the pipeline at temperatures above 150 degrees. Oil rushing through the pipeline at that temperature could melt the permafrost.

Meanwhile, all along the stretch from Prudhoe Bay to Valdez, construction of the pipeline and the pipeline itself posed threats to the landscape as well as to the migratory paths of caribou and other animals. Environmentalists feared the damage that would be caused by construction crews as they worked and also questioned how animals would respond to the pipeline once it was in place. On this score, the anticipated negative effects did not materialize. The elevated pipeline did not inhibit migration, and the caribou population has since expanded. Subsequent shipment of Alaskan oil to California by means of tankers traveling from Valdez through Prince William Sound carried yet another set of environmental risks, as the 1989 wreck of the Exxon Valdez would underscore.

So formidable were the technological and environmental challenges confronting ARCO that its executives considered another pipeline route—one running across Alaska and then Canada to consumers in the American Midwest—as well as other options including shipment of oil from Prudhoe Bay by icebreaker-tankers. The Valdez route was the shorter and generally less expensive option. In addition, because it did not cross national borders, it was the option most in keeping with concerns about the security of the oil supply. Furthermore, it did not require negotiating tricky right-of-passage agreements with a foreign country, as would have been the case with the trans-Canada route. In addition, the Canadian route was not without environmental risks of its own.

At a cost of $7.7 billion, the pipeline was completed in 1977. Within a year, it was carrying a million barrels of oil per day from the North Slope to the port facilities in Valdez. Within another year, as a result of another international oil crisis and another doubling of the price of OPEC oil to more than $36 per barrel, investors in the pipeline were earning handsome profits. The principal remaining problems associated with the Trans-Alaska Pipeline System revolved around the problems of abundance.

By the early 1980’s, the amount of oil being transported had doubled, stemming the U.S. appetite for imported oil but also overwhelming California’s ability to absorb the oil available for shipment from Alaska. Finding other outlets for Alaskan oil thus became an unforeseen inconvenience of the pipeline’s success, but it was only an inconvenience. The brake placed on the growing flow of imported oil into the United States more than offset such unforeseen consequences of the shipment of Alaskan oil. Moreover, although the flow of oil from Alaska came too late to prevent a second oil crisis from occurring in 1979, it played an important part in contributing to the general decline in Western demand for OPEC oil. That decline in demand exerted such pressure on the cohesiveness of the OPEC organization that OPEC substantially lost control over the production rates of its member states and was powerless to prevent the virtual collapse in the posted price for a barrel of OPEC oil in the mid-1980’s. Trans-Alaska Pipeline System[Transalaska Pipeline System] Oil industry;Trans-Alaska Pipeline System[Transalaska Pipeline System]

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Anderson, Robert O. Fundamentals of the Petroleum Industry. Norman: University of Oklahoma Press, 1984. Illustrated, readable, and informative, this work offers just what the title suggests: a guide to and history of U.S. and foreign oil industries, their on- and offshore operations, and the relationship between the worlds of oil and government. For beginners and general audiences.
  • citation-type="booksimple"

    xlink:type="simple">Berry, Mary Clay. The Alaska Pipeline: The Politics of Oil and Native Land Claims. Bloomington: Indiana University Press, 1975. An insightful account of the impact of the Alaska pipeline on the development of the “two Alaskas,” one of natives and one of oil.
  • citation-type="booksimple"

    xlink:type="simple">Bradley, Robert L. Oil, Gas, and Government: The U.S. Experience. Lanham, Md.: Rowman & Littlefield, 1996. An invaluable study of the political motivations and economic conseqences of regulation.
  • citation-type="booksimple"

    xlink:type="simple">Chasan, Daniel Jack. Klondike ’70: The Alaska Oil Boom. New York: Praeger, 1971. Another good account of the impact of oil on Alaska, this time in the form of a very readable narrative covering the first days of the oil rush that followed Atlantic Richfield’s discovery of oil.
  • citation-type="booksimple"

    xlink:type="simple">Coates, Peter A. The Trans-Alaska Pipeline Controversy: Technology, Conservation, and the Frontier. Bethlehem, Pa.: Lehigh University Press, 1991. A good study of the confrontation between environmentalists and energy developers seeking to build the Trans-Alaska Pipeline, examined in the context of a century of confrontations between environmentalists and developers over Alaskan resources.
  • citation-type="booksimple"

    xlink:type="simple">Cole, Dermot. Amazing Pipeline Stories: How Building the Trans-Alaska Pipeline Transformed Life in America’s Last Frontier. Kenmore, Wash.: Epicenter Press, 1997. A well-written narrative of the massive project and its effects on Alaskan life.
  • citation-type="booksimple"

    xlink:type="simple">Davidson, Art. In the Wake of the Exxon Valdez. San Francisco: Sierra Club Books, 1990. An in-depth, often technical analysis of the spill of approximately ten million gallons of petroleum in Prince William Sound in 1989.
  • citation-type="booksimple"

    xlink:type="simple">Dixon, Mim. What Happened to Fairbanks? The Effects of the Trans-Alaska Oil Pipeline on the Community of Fairbanks, Alaska. Boulder, Colo.: Westview Press, 1978. Two years of fieldwork produced a volume of considerable insight and a few surprises pertaining to the unintended effects of the pipeline’s construction on life in Fairbanks.
  • citation-type="booksimple"

    xlink:type="simple">Jorgensen, Joseph G. Oil Age Eskimos. Berkeley: University of California Press, 1990. A solid interpretation of the effect of energy development on one of the poorest groups of native Americans. Compensation for the oil on their Alaskan homelands later relieved poverty.
  • citation-type="booksimple"

    xlink:type="simple">Yergin, Daniel. The Prize: The Epic Quest for Oil, Money, and Power. New York: Simon & Schuster, 1991. A massive study of the development of the international oil industry, with as much attention to the personalities and politics involved as to the historical events that marked the evolution of the petroleum industry in the modern world.

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Exxon Valdez Oil Spill

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