Those Post-Pipeline Blues

The granddaddy of all garage sales is soon to occur in Alaska. With the completion of the great 800-mile Alyeska oil pipeline at last in sight, the builders are preparing to sell off the vast store of equipment accumulated in 2 1/2 years of construction. Among the items for sale: 18,000 bulldozers, cranes and other pieces of heavy equipment; nearly 2,000 pickup trucks; 125 portable bridges; and from the 29 construction camps strung out along the line, 5,395 modular camp buildings fitted out as dormitories, kitchens, game rooms and offices and fully equipped right down to the telephones and Coke machines. Alyeska's most prized offering: 1,500 elaborately insulated outhouses built, at a cost of $ 10,000 each, to serve in comfort in --70DEG temperatures. TIME Correspondent John Quirt toured the line as its builders, a consortium of eight U.S. and British oil companies, hurried to complete the largest private construction job ever undertaken in the U.S. His report:

All last week, helicopters churned high into the snow-capped Chugach Mountains in southern Alaska as if on a frantic rescue mission--which, in a way, they were. The choppers were carrying crews to finish a critical half-mile link in the pipeline before the long Alaska winter sets in. Working through the rapidly shortening arctic autumn days and, under portable arc lamps, far into the lengthening night, the men slogged through ankle-deep mud to set the last 40-ft. lengths of pipe in place. It was slow, hazardous work, hampered by howling winds, rock slides and blowing snow. Drawled one grizzled pipeliner, "This here Thompson Pass, she's a frozen hell in the sky."

The airborne assault--Alyeska President Bill Darch calls it a "commando raid"--on the pass could be stopped cold by a heavy snowfall. If it was, finishing touches on this last difficult part of the line would have to wait until about 30 ft. of snow melts late next spring.

Almost on Schedule. Elsewhere along the line, other final construction work has already been slowed by blizzards and sporadic work stoppages. As a result, concedes Darch, "we are not going to meet our goal of putting oil into the line next May." But "with a little luck," he insists, the oil will start to flow by the end of June, enabling Alyeska to begin loading tankers at the ice-free port of Valdez almost on schedule.

But Thompson Pass is only one of the obstacles that could still upset the timetable. Another is the need to unearth, test, mend and backfill the last 200 of 3,955 "suspect" welds--about 10% of the total--that earlier this year were discovered to have been inspected sloppily or not at all. Some are buried under ice-covered river crossings, and they will have to be dug up and, if necessary, rewelded before the salmon return next spring. That chore, wryly says one Alyeska technician, promises to be "another wildly interesting experiment in arctic engineering." It could add to the project's cost, which has already soared from an early estimate of $900 million in the late 1960s to $7.7 billion today. Some officials reckon that the hassle over the welds will help push the final bill to $8.4 billion.

West Coast Glut. Meanwhile, another problem looms: What to do with the oil when it finally begins to flow? Incredibly, that question has still not been resolved. About half the crude in Prudhoe Bay is owned by Standard Oil of Ohio, in partnership with British Petroleum. It is scheduled to be shipped by tanker from Valdez to California. But Cleveland-based Sohio has no marketing outlets on the West Coast; it wants to unload its oil at Long Beach, Calif., and move it to its territory in the Midwest through a 200-mile pipeline to be built across southern California and existing natural gas lines running through Texas. But unloading at Long Beach, protests Chairman A. Thomas Quinn of California's powerful air resources board, could daily release more than 50 tons of hydrocarbon vapors into the air and "severely aggravate" pollution in the Los Angeles area.

Quinn says he warned Sohio "as long ago as mid-1975" that it might not be welcome at Long Beach. Sohio claims that when the pipeline was planned, it did not believe there would be any surplus in California that would have to be piped East. The unexpected West Coast glut--about 600,000 bbl. per day--arose, says Sohio, because of increased energy conservation and the lower fuel consumption that resulted from the recession. Yet others insist that the glut problem cannot be a surprise to the company. Says O.K. ("Easy") Gilbreth, director of Alaska's division of oil and gas: "Sohio told me five years ago that they were well aware of the surplus."

Sohio's oil could be shipped to Japan and swapped for Middle East crude that would be diverted across the Atlantic to East Coast ports. Such a swap, in an industry that operates on a global scale, would not be unusual, and California's Quinn says it deserves "serious consideration." But the main reason for building the pipeline, after all, was to reduce initially the nation's reliance on foreign oil by about 7%, or 1.2 million bbl. per day, and for that reason Congress expressly prohibited the foreign sale of any Alaskan crude.

If Sohio and California cannot settle their differences, an alternative could be to build one or more new pipelines--through Canada, from Washington State to the Midwest or across Guatemala, where the oil could be shipped to Texas by tanker and piped north. But none of these options could be ready by the time Prudhoe Bay crude starts to flow. Although it would add to transportation costs, and presumably to consumer fuel bills as well, Sohio can temporarily ship part of the surplus--perhaps 200,000 bbl. daily--on U.S.-owned tankers, through the Panama Canal and on to the Midwest.

Unless an answer can be found, the Alaskan oil spigot may have to be kept partially closed to eliminate the West Coast surplus until a pipeline is built somewhere to handle it. The pinch would be felt by Alaska and the continental U.S. The state stands to collect in taxes about 200 on each dollar of Prudhoe crude, and it is counting on that revenue to cover more than half its projected $900 million budget for 1977-78. A production cutback could deprive Alaska of more than 20% of its oil-tax receipts. State Senate President Chancy Croft favors a "substantial increase" in oil company taxes to strengthen the state's treasury to cope with growing economic and social problems.

Nearly all those problems have been made worse by the pipeline. Since construction began, the state's population (now 400,000) has increased 20%. Prices have climbed higher than Mount Mc-Kinley: a loaf of bread costs $1; a hotel room, $50. Crime is on the rise too. In Anchorage, robberies are up 100% since 1973; in Fairbanks, 200%. Nearly everywhere, prostitutes, con men and gamblers have swarmed in to help pipeline workers spend their weekly paychecks, which average nearly $1,000.

Too Much Civilization. Meanwhile, schools and highways in many locations are overcrowded; so are the state's once pristine parks and other summer recreational facilities. "Alaska is a place where people come in order to have wilderness in their backyards," says Governor Jay Hammond. "They are understandably disappointed to find the front yard filling up with civilization." Republican Hammond opposes lavish spending programs, arguing that Prudhoe Bay's 9 billion-bbl. reserves constitute a "nonrenewable resource for the state."

Hammond may have to loosen the purse strings somewhat. Alaska's economy has slowed as work on the pipeline nears completion. The housing market is softening: new construction in Anchorage is 20% below a year ago. More than half the 20,000 workers who have been building the pipeline are being laid off this fall, and most of the rest will be out of work by next spring.

Those who try to stay will be in for a shock, even if they are lucky enough to find work. Says Pipeline Hand Tony Knebel, 28: "Many days I've sat out on the line doing next to nothing or pretending to look busy and earning more than I was worth. It's going to be a rude jolt for me, for most of us, to come back to a $5-an-hour job." The Alyeska layoffs will increase the normal winter rise in the state's unemployment, lifting the jobless rate from its present level of nearly 8%--already 18th in the nation--to about 13%.

Native Alaskans will also feel the post-pipeline blues. To resolve the issue of land rights along the line, Congress in 1971 awarded 40 million acres and $962.5 million to Alaska's Eskimos, Aleuts and Indians. They have invested much of that money in pipeline-related businesses such as construction-camp catering and security guard services. Now they are being forced to scramble for nonpipeline dollars.

There is some hope in a proposed multibillion-dollar project to build a natural gas line to tap the huge reserves of gas--about 10% of the U.S. total--under the northern Alaska tundra. Governor Hammond is for the project, "if it meets sound environmental standards." But many of his fellow Alaskans, hooked by the flush of prosperity that came with the Alyeska project, already seem addicted to the idea that gas will pick up where oil is about to leave off. Says one pipeline worker: "I was thinking of packing up and going home. But if they could just get that gas line going, the money's so damn good I know I'd stay."

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