Rush for Riches on the Great Pipeline
"Economically, right now Alaska is the most exciting place to be in the world." --Neil Bergt, president of Alaska International Industries
"I can't imageine a worseplace in the world to be than Fairbanks this summer." --Lewis J. Gibson, Fairbanks police captain
"Is business good? Wow, fantastic! Just great!" --Gari Andreani, Anchorage stockbroker
"I came to get away from California. I just hope California living doesn't chase me up here." --Jeff Graham, Alaskan trapper and fisherman
Every day the outlanders come streaming in: lean, ambling riggers from Texas and California, husky bulldozer operators, stubble-bearded, pinch-eyed welders from Chicago and Bartlesville, Okla., geologists from "back East," college students out for adventure, and a smattering of whores, highrollers and assorted hangers-on from all over. They come by jets screaming in from Houston and New Orleans, or in mud-covered Winnebago trailers swaying up the Alaska Highway. They come in ancient station wagons, the kids frisking in back, the husband hunched over the wheel and the exhausted wife dozing fitfully in the front seat. They are the latest breed to head for Alaska with the burning desire to strike it rich. Their aim is to work on--or feed off--Alaska's vast oilfields and its great new pipeline. Many will never get jobs, but some who do will make $6,000 or more a month.
Win and Lose. After years of delays, work is finally surging ahead this month on the 798-mile steel boa that will stretch from the wells at Prudhoe Bay to the deep-water port of Valdez (pronounced Val-deez), where block-long tankers will be loaded for the trip to West Coast refineries. Already, 12,000 men and women are on the job building, excavating and servicing, and by midsummer the number will swell to 20,000 as the pipeline contractors drive to make their target date of mid-1977. The spongy, oil-soaked strata nearly two miles beneath the tundra at Prudhoe Bay contains an estimated 9.6 billion barrels of oil, by far the largest deposit in the U.S. Initially, the pipeline will carry 1.2 million bbl. per day, an amount equal to one-fifth of the nation's current oil imports. If other fields in the inhospitable area can be brought into production as expected, the capacity will eventually rise to 2 million bbl. daily.
For Alaska, which has more than twice as much land as Texas but fewer residents (340,000) than Toledo, the pipeline will change practically everything. By 1980 oil royalties and taxes are expected to hit $1 billion a year or twice as much as the state's current budget. Most important, the pipeline will give Alaska a chance, at long last, to escape from its status as an underdeveloped, impecunious ward of the Federal Government. The state's optimists predict that employment will double in five years.
While the oil surge is an economic bonanza, many Alaskans argue that it is also an environmental and social disaster. Says Republican Governor Jay S. Hammond, a former bush guide: "We can't preserve Alaska as we know it, we're going to have to lose some freedoms and qualities of life here." The boom is bringing to the last frontier urban blight, soaring prices, traffic jams, housing shortages and short tempers.
"You can't live here and ignore the pipeline," says Tom Gibboney, managing editor of the Anchorage News. "It touches everybody at all levels. It leaves no one alone."
Dangers and Comforts. The project that is opening up the last frontier is the kind of technological challenge on an Olympian scale that Americans love to tackle. It is the latest in a long line of engineering marvels that include the building of the transcontinental railroad and rocketing man to the moon. The oil companies estimate the pipeline's cost at $6 billion, making it the most expensive project ever undertaken by private industry. It is also one of the most ambitious and dangerous.
From sea level at Prudhoe Bay, the pipeline will climb 4,800 ft., crossing the Brooks Range, then go on to span 34 major rivers and streams and finally pass through the Alaska Range at 3,500 ft. before descending to Valdez.
Workers must struggle in the summer against swarms of blood-sucking flies and voracious mosquitoes and most of the rest of the year against ice, bitter cold and the danger of "white-outs"--disorienting, blinding swirls of wind-whipped snow. Even in April, when the photographs in TIME'S accompanying color pages were taken, workers had to bundle up in face masks and thermal underwear. In midwinter, temperatures can plunge to --70DEGF.; tires flatten and stick to the ground, and engines must be kept running 24 hours a day to avoid freezing up. Exposed to the wind, a man's face can turn white with frostbite in a matter of seconds.
A careless rigger who touches a pipe with his bare hand loses a patch of skin.
The cold increases all the dangers of life on the oil rigs or the pipeline. Broken arms and legs are commonplace. At one well, Bo Grittman from Riverton, Wyo., holds up his left hand. The tops of the third and fourth fingers have been severed at the first joint. Although his injury did not occur at Prudhoe Bay, Grittman says, "Lots of that around." Altogether, at least 44 persons have died so far in pipeline-related accidents. The oilmen tell of the bulldozer driver who ran out of fuel and tried to walk back to camp. He was found frozen to death the next morning, 100 yds. short of his goal.
Because the pipeline project was too big and tough for any single firm, eight oil companies* formed a consortium to tackle the job. Taking its name from the Aleutian word for Alaska, which means "the great land," the Alyeska Pipeline Service Co. is building segments of the pipeline simultaneously all along the route. Strung out like frontier forts in the wilderness are 19 work camps, each housing 200 to 1,600 persons.
To ease the job's strains, the facilities have all the comforts of home and then some. The poshest by far is the $21 million pleasure dome that British Petroleum built on the barren wastes at Prudhoe Bay, where the nearest town is Barrow, 150 miles away. Known to workers as the "BP Hilton," it houses about 140 people who share two-man (or two-woman) suites, each of which has its own bath. The complex is an interior decorator's marvel of muted shades of green, blue and gray, wall-to-wall carpeting, Eames chairs and leather and chrome couches. Workers can listen to music or news on a built-in radio system in their rooms, watch television or movies in the lounge, work out in the well-equipped gym, swim in a heated pool--or eat.
Not all of the camps are so luxurious, but in all the food is inexhaustible and the kitchens are open 24 hours a day. Steak is served three or four times a week, and there are always two choices of meat for dinner and lunch. At one camp workers can snack on as many as seven kinds of pie, unlimited quantities of ice cream and toppings, and cream puffs only slightly smaller than catcher's mitts. Many workers consume 5,000 calories a day or more. There is an epidemic of potbellies in the camps.
Money Lure. Drugs and guns are strictly banned in the camps, but a similar prohibition on liquor is winked at. "If you don't think there's drinking, forget it," says Don Butler, the manager of one camp. "But if a man becomes a problem or makes an ass of himself, he'll be run off. I've never had to run a man off yet for drinking."
In this man's world, the scattering of women workers has caused surprisingly few problems, although their bedrooms are sometimes side by side with the men's. Most of the women quickly become attached to one man or none at all. "The women aren't permissive up here," says George Thompson, 38, an electrician at the BP construction camp.
"They're treated just like everyone else. I walk down the halls in my shorts. If they don't like it, too bad. Most of us are family men. If one guy starts giving a woman a hard time, there are twelve others ready to knock him down. We sort of watch out for them."
To avoid stirring up problems, Alyeska almost never shows an X-rated film. But earlier this year word went out from the Chandalar Camp, north of the Yukon, that the evening's program was Deep Throat. Men flocked in from 45 miles around--and were treated to Walt Disney's Bambi. Of course, it was April Fool's Day.
For all the inherent tensions of group living, often in desolate isolation, life in the camps is relatively calm. The workers are usually too tired to cause much trouble after putting in ten, eleven and twelve hours a day, seven days a week, for up to nine weeks at a stretch, often in bitter weather.
Like Marines coming out of combat, the pipeline and oilfield workers are allowed two weeks of "rest and recreation" following a long stretch. Employees usually try to get as far away as they can. The bachelors often fly off on special excursions to Hawaii, but the married men head south to their families.
Says a bargirl in Fairbanks: "They may stop for a few drinks while they're waiting for their plane, but then, bam! They're gone. They do the Texas shuffle'--home to Mama."
Usually they come back, lured by the big money. By agreeing not to strike, the powerful Teamsters and other unions won fat contracts that allow workers to put in as many as 84 hours a week, with everything over 40 hours counted as time-and-a-half or double-time. Some of the startling paychecks being earned on the project:
gross for Job hourly an 84-hour
rate week
Camp Handyman $8.87 $940
Oil Rig Laborer 9.40 996
Rig Mechanic 11.00 1,166
Journeyman Welder 14.20 1,505 With money like this to be earned, a wide variety of Americans are leaving home to work on the pipeline. A sampling:
> Beverly Bonomo, 43, grosses about $1,000 a week by painting serial numbers on pipe sections at Prudhoe Bay. Her husband and four children are back in Anchorage, 930 miles away. "My friends said I was crazy, coming up here with all these men," she says. "I must admit my husband was somewhat apprehensive about that too. He told me, 'You know what people are going to say, don't you? That we are having trouble with our marriage.' " Mrs. Bonomo is willing to put up with the talk and the separation because she is there to earn enough to put her children through college.
> Lewis Paske, 38, a powerfully built Montanan, drives a rig loaded with 96,000 pounds of supplies twice a week from Fairbanks to Prudhoe Bay--501 miles away. Known as the "Kamikaze Trail," the gravel road winds through the mountains, skirting precipices and diving down into valleys. Says Paske: "It'll knock your guts out. A man would have to be a damn fool to ride that road if he didn't have to." Paske drives the road to earn money for his wife and two sons back in Missoula. Now that he is grossing about $1,500 a week, he says, "maybe I'll bring the family and stay here. It looks like pretty good country."
> Gus Frank, 19, left New Jersey at the instigation of his father George, 47, a specialized electrician at Prudhoe Bay who grosses $1,700 for a 70-hr. week. Gus's job title is "materials handler," but an older worker confides, "What he really is, is a 'go-fer'--you know, gofer coffee, gofer this, gofer that." For go-ferring, Gus Frank grosses $900 a week. "What's it like up here?" asks Frank. "The only thing to like is the money."
The pipeline that these workers are building gives Alaska a new chance to escape its heritage of boom or bust --mostly bust. With its vast area, harsh climate and rugged terrain, Alaska has defied systematic development ever since Secretary of State William Seward shrewdly bought it in 1867 from Russia for $7.2 million or about 2-c- an acre. Outsiders came to the territory like raiders, first to hunt seals, then to pan for gold, then to fish for salmon--and when those ventures petered out, they cut and ran. Historically, the only reliable employer has been the Government, which has a huge military establishment. This year the Government will spend an estimated $1.03 billion in Alaska. Government and military families account for 33% of Alaska's payroll and 25% of its population.
With no solid economic base, the state often has an unemployment rate double that of the rest of the nation. Because it has to import 90% of its food and nearly all of its manufactured goods, prices are sky high. With little to tax, it has not been able to raise the sums to take care of its own social problems.
Golden Goose. But when Alaska gained statehood in 1959, it was given a special present: the right to select 103 million acres from the 275 million owned by the Government. As part of its choice, the new state picked 2 million acres on the North Slope that descend to the Beaufort Sea from the Brooks Range. For decades the Eskimos had been using oil seepages in the region for fuel to boil down blubber. Atlantic Richfield and British Petroleum had bought some leases from Alaska for as low as $6 an acre and began to search for oil in 1963. By 1968, BP had spent more than $30 million on dry wells and had decided to quit. Atlantic Richfield had spent $125 million, then decided to try one more time. On Feb. 18, 1968, the company's crew stood shivering on the rig in temperatures of --45DEG F.--and made the big strike. The oil rush was on. The state then sold oil and gas leases for 451,000 acres on the North Slope to 19 companies for over $900 million.
Unexpectedly, some environmental groups got the courts to block construction of the pipeline for five years, arguing that the project would forever disrupt the ecology of Alaska. In late 1973 Congress passed a bill authorizing construction, which began in April 1974. Inflation and changes made in the system to protect the environment grossly raised the cost from the original estimate of $900 million.
Under a complex formula, the more the pipeline costs the less the state will get in royalties and taxes. If the price stays at the currently projected $6 billion, Alaska could earn its $500 million in the first year of operation. The annual take could rise to $1 billion two years later and then gradually decrease until 30 years from now, when the Prudhoe Bay field is expected to be sucked dry. All of these projections would be somewhat reduced if construction costs soar still higher, and Alyeska is now running about 10% over its budget.
Alaska needs every cent it can get from the pipeline and the sooner the better. The original $900 million windfall received from the oil leases, plus $268 million in interest, is now down to $520 million; the rest was swallowed up by rising costs of education, transportation and the salaries of a rapidly swelling state bureaucracy. As they struggle with social problems that have been made much worse by the pipeline, Alaska officials fear that the state will be in the red next March, at least 16 months before the project can start paying off. Since Alaska's constitution requires the state to finish each fiscal year in the black, Governor Hammond is considering selling more oil leases around Prudhoe Bay to raise $200 million.
With their economy so dependent upon the pipeline, many Alaskans are wondering if the raw, sparsely populated state has the leadership to deal with the oil companies. The industry now clearly outclasses the state government in manpower, money and talent. A number of former top state officials have signed on with the companies, including Former Attorney General Norman Gorsuch, now an Alyeska lobbyist. The consortium always seems to get its own way in the legislature and with state agencies. Says Democratic State Senate President Chancy Croft: "There's still the underlying fear that if we assert ourselves too much, we'll kill the goose that lays the golden egg."
Environmental Guards. Under pressure from the environmentalists, however, Alyeska modified the design of the pipeline to decrease ecological threats. One problem is that the oil, which comes out of the ground at temperatures of up to 180DEG F., will flow through the pipe at about 140DEG F. The heat could damage the tundra vegetation and disrupt the underlying permafrost, the frozen ground that covers much of Alaska. Where conditions warrant it, the pipeline will be well insulated and buried 3 ft. to 12 ft. below the ground, out of sight and harm's way. But for 382 miles, the pipeline will be elevated 4 ft. or more above the surface to keep the heat away from unstable permafrost.
To avoid disrupting the migration of caribou every spring, the pipeline will be buried for about seven miles where it crosses the route of one herd of 450,000 in the Copper River valley. To make sure that the permafrost stays frozen in this particularly sensitive area, the pipeline will be refrigerated by surrounding conduits filled with brine.
The abiding fear of the environmentalists--and Alyeska--is that a section of the pipeline may rupture, spraying a hot, brown fog of oil across the landscape. To make the danger more acute, the line crosses three major earthquake zones. In these areas, the pipe will run aboveground on special mounts that will allow the 80-ft. lengths of welded steel to whip 20 ft. from side to side and 5 ft. up and down without breaking. Alyeska believes that the gear will allow the pipeline to ride out earthquakes that register up to 8.5 on the Richter scale. The most severe tremor ever recorded in Alaska, in 1964, was officially measured between 8.3 and 8.6.
If the pressure in the pipeline drops by 1% or more--a warning sign of a rupture--electronic sensors will detect the change, and technicians in Valdez can close down the affected segment of the line in seven minutes. Alyeska believes that it can confine any major leak to about a maximum of 50,000 bbl., and has emergency plans to dam, bury and soak up the spillage.
Some scientists fear that the pipeline will damage fish life in the rivers and streams it crosses by changing the flow of the water and thus causing silt-age and erosion. Environmentalists also are afraid that the Alyeska-built service road that runs north from Fairbanks to Prudhoe Bay will eventually become a means of opening the fragile Alaskan wilderness to man--and his garbage, his sewage and his guns. Though only Alyeska vehicles can now use the haul road, it is scheduled to be taken over eventually by the state. Several bus companies have already applied to drive tourists to the North Slope, and the U.S. Bureau of Land Management has plans to turn five of the construction camps into vacation centers.
Boom or Boomerang. More basically, the environmentalists are deeply concerned that the pipeline is leading to uncontrolled development of the state. "We are witnessing a genuine historical tragedy in the making here," says Charles Konigsberg, a member of the Federal-State Land-Use Planning Commission for Alaska. For every Alaskan who is happy about the oil development, there seem to be ten--or a hundred --who agree with Konigsberg. So many workers have flooded into the state that despite the new jobs, the raw unemployment figure is 11.5%, and Alyeska and the unions are urging workers to stay away unless they are highly skilled or have a job waiting for them. Lately the state has begun strictly enforcing a regulation that prospective pipeline workers must have lived at least one year in Alaska.
Con men and parasites are following the big money north. Valdez and Fairbanks are packed with every manner of hustler, card shark, pusher and pimp who can pull a pair of galoshes over patent-leather shoes. In cafes in downtown Fairbanks, pimps in broad-brimmed leather hats lounge around the bandstand and keep close watch on their girls, up from Seattle and San Francisco, who turn tricks for $100. Last March a police raid broke up a gambling group in town that was so professional the casino had regulation tables and dealers. "This is no boom," says Sylvia Ring-stadt, a former mayor of Fairbanks. "This is a boomerang."
Alaska's major crime rate (murder, rape, robbery) has jumped 12% in the first quarter of this year alone. A major problem is a lack of law-enforcement officers--and again the pipeline is to blame. Fairbanks patrolmen earn $1,620 a month; many have left to become $1,000-a-week guards for Wackenhut Corp., which provides security at many oil-company installations.
Though authorized to have 17 state troopers, Fairbanks now has only two.
All over the state, people are abandoning their jobs to join the pipeline and drilling crews. Carpenters, clerks, reporters, bus drivers are letting their communities flounder. In the first six months of 1974, the Alaska National Bank lost 104 of its staff of 180 to the oil rush.
As outsiders jam into Alaska, the communities on the pipeline are simply being overwhelmed. In 17 months Valdez's population has trebled, to 3,600; it is expected to bulge to 10,000 by autumn. Prices in the Valdez Market, the one grocery, are one-third higher than those in Anchorage--if there is anything on the shelves to buy. Housing has become so tight in Valdez that the monthly rent for one two-bedroom apartment recently jumped from $286 to $1,600. The sewage system is overloaded, children are attending school in makeshift classrooms, and traffic snarls the muddy streets.
Things are no better in Fairbanks, where a tent manufacturer has delightedly watched sales leap from $45,000 in 1972 to $240,000 last year. At the Fairbanks Rescue Mission, Supervisor Bud Retynski carefully steps over three dozing men as he goes about his work. Says he: "We regularly have 15 or 20 sleeping on the floor."
Divorce is skyrocketing in Fairbanks. The Rev. Donald Hart, 37, pastor of St. Matthew's Episcopal Church, figures that the pipeline has caused tremendous family tensions. "The men are gone for nine weeks and then come home exhausted physically and emotionally. They have a lot of money and nothing to do. They don't have the energy to hold up their end of the family and help raise the kids." And, Hart adds, "child abuse is epidemic." Recently the town's "crisis line" got a call from a ten-year-old who said that he and his younger brother and sister had run out of food and were hungry. Asked where his parents were, the sobbing child said that they had both left for pipeline jobs more than a week before.
Is the pipeline worth all the trouble? Defenders of the project point to signs that it is already bringing benefits. Employment is rising, and the flow of money is freshening. Deposits in the National Bank of Alaska jumped 42.5% in 1974. Says Vice President Robert R. Richards: "From this day on, Alaska's economy will never again resemble what it has in the past. We're running precisely counter to the Lower 48.
They are nosediving economically. Alaska is accelerating."
With an expanding tax base, plus the oil taxes and royalties, Alaska will finally have an opportunity to develop further its enormous natural resources. The state's challenge will be to find much more orderly ways of tapping its large reserves of fluoride and tungsten, rich deposits of copper, iron ore and zinc, plus at least 1 trillion tons of coal--enough to supply the U.S. for about 1,800 years at current consumption rates.
All together, Alaska's proven oil reserves constitute about a third of the entire known U.S. supply. As the U.S. tries to decrease its dependence upon foreign sources for its energy, the pressure will surely increase to tap more of Alaska's lode of black gold in areas like the Cook Inlet and offshore in the Bering Strait. By 1985, the state could be furnishing 25% of the nation's oil. Alaska also has an estimated 420 trillion cu. ft. of natural gas, a supply worth approximately $420 billion and large enough to handle all U.S. needs for 18 years. Inevitably, more pipelines will be built to carry these huge quantities of oil and gas.
This spring, as the oil pipeline that started it all cuts its way through the northern wilderness, a defiant Alaskan bumper sticker proclaims: "We don't give a damn how they do it on the outside"--"the outside" meaning the rest of the U.S. For better and for worse, the changes already under way in the 49th state make it all too likely that as time goes on, Alaskans will be doing things more and more the way "they" do them in the Lower 48. This time, the future and all of its problems have come to Alaska to stay.
* Amerada Hess, Atlantic Richfield, British Petroleum, Exxon, Mobil, Phillips, Sohio and Union.
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