Alaska's New Strike

This is the law of the Yukon, and

ever she makes it plain: "Send not your foolish and feeble; send me your strong and your sane--Strong for the red rage of battle;

sane, for I harry them sore."

--Robert W. Service, 1907

Modern technology is writing amendments to Service's Law of the Yukon, and strong, sane, shrewd men are putting them into practice. With winter settling harshly over Alaska, an assault is being mounted by air and land on an area north of the U.S. share of the old Yukon. In the air, so many planes are aloft that the Federal Aviation Administration next month will impose the first air-space controls over the barren territory. On the ground, road-building equipment rolled out of Fairbanks to begin the two-month job of scraping a 429-mile-long "winter road" over the frozen tundra, lakes and rivers along which trucks can manage 15 to 20 m.p.h. A boomtown atmosphere pervades some usually sleepy communities, where all the talk now is about how to get a piece of the tundra and get rich quick--and then move to Hawaii.

The cause of all the activity is not the gold of Service's day but another resource that may eventually make Alaska far richer. Under the ice, by expert estimates, are pools of at least 5 billion to 10 billion bbl. of oil. If so, this would be the biggest U.S. oil find since the East Texas strike in 1930, and perhaps even greater than that. Some enthusiasts make blue-sky estimates of 40 billion bbl. That would more than double American reserves (currently 31 billion bbl.) and rank the U.S. alongside Kuwait (70 billion bbl.) as the world's greatest source of oil.

Gently to the Sea. The Yukon law still holds in one sense: the oil, like the gold, is remote and difficult to recover. It lies under the 89,000-sq.-mi. North Slope, an area that drops gently from the Brooks Range to the Arctic Sea. Temperatures there fall to 65DEG below zero and fierce winds howl; consequently, the slope so far has been populated largely by lemming, hare, fox and caribou. Oilmen have had to bring in by air or snow tractor all the gear needed for drilling. Alaska Airlines and Interior Airways, using C-130 Hercules transports, which haul an average 22 tons a load, carry cargoes including food, hardwood logs for pilings and the pile drivers to sink them.

Half a dozen airstrips have been cleared for the "Herky birds," but in a pinch, says one pilot, they can land on "anything flat and a mile long."

Transportation costs and weather conditions--which snap metal wrenches or freeze the drilling equipment--make oil prospecting expensive. To haul in a rig and drill one hole may cost $15 million, compared with about $55,000 in Texas. Thus the slope is a place where only big companies can survive, and even they prefer to work in consortiums.

It was just such a joint venture that touched off the rush to the North Slope this year. Geologists have long been aware that Alaska holds one of the last great known deposits of the world's main energy source. The Navy has controlled a 37,000-sq.-mi. North Slope petroleum reserve since World War II, but found no need to develop what it considered only a strategic reserve. Farther south at Cook Inlet, working wells produce 195,000 bbl. daily and have made Alaska the U.S.'s eighth largest oil-producing state. Three years ago. with U.S. consumption increasing and reserves decreasing, oilmen decided to take advantage of a state auction of North Slope oil leases. Companies like Sinclair, British Petroleum, Union Oil and Atlantic-Richfield spudded about 30 wells and came up with nothing worthwhile. Then, after drilling through the permafrost to 9,500 ft., a consortium of Atlantic-Richfield and Humble Oil last spring brought in a well named Prudhoe Bay State No. 1. When high-grade oil in sufficient flow was located seven miles away at a second well, Sag River State No. 1, oilmen knew that they had struck a major field.

Pipeline or Rail. Now that success seems almost assured, Atlantic and Humble, as well as eight other companies, will sink wells this winter. The season is favorable because the muskeg has frozen hard enough to support the rigs, and the huge swarms of bugs that plague workmen in summer have disappeared. Meanwhile, oilmen and speculators have applied for 5,000 new leases on tracts all over the state. Indians, Aleuts and Eskimos, whose tribes were there before the white men, originally claimed 469,000 sq. mi. (80% of the state) under an old, almost-forgotten law. Now they are asking the Interior Department for a settlement of 62,500 sq. mi. and $500 million. Interior has so far refused, and ultimate settlement will be up to the next Administration.

None of the oil is likely to reach U.S. markets until 1971. The companies and the Alaskan state government are still mulling over ways to move it. The companies prefer a pipeline to a relatively ice-free port like Valdez. The line would have to weather destructive ground heaves caused by summer thaws and winter freezes and could cost $500 million or more. Alaska's Governor Walter J. Hickel is pushing his longtime dream of extending the Alaska Railroad beyond its present Fairbanks terminal all the way to the Arctic Sea. Washington's Department of Transportation, which runs the federally owned, 541-mile road, has balked so far at the estimated $300 million cost of the extension.

Either way, Alaska is bound to benefit. Though the fields are now being worked by outside labor, oil should eventually alleviate chronic unemployment among the state's 270,000 residents, whose two main occupations are fishing and working at the U.S. military bases. The state government will collect a 12.5% royalty in the form of oil, which it will sell to processors for the profitable petrochemical trade that they already conduct with Japan. Eventually, oil will mean far more to the state than gold, of which about $750 million worth has been mined since 1880. Only $760,000 worth will be produced this year, as Alaska continues to run out of the metal that ruined those whom Poet Service called "the crippled and palsied and slain."

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