While the name “Prudhoe Bay” may not be a well-known one among Americans, the oil fields located in this bay are a significant part of the American economy and its strategy for energy production. Located along Alaska’s North Slope in the Arctic Ocean, the discovery of the Prudhoe Bay oil fields in 1968 transformed the economic landscape of Alaska and significantly helped the U.S. reduce its dependence on foreign oil, which continues to be a concern for many Americans.
While Prudhoe Bay’s oil production has been in decline for several decades, it still remains one of the major sources of America’s energy and is a vital plank in its economy. This is the history of the Prudhoe Bay oil fields and their significance to Fairbanks, Alaska’s second-largest city.
The Prudhoe Bay Oil Fields and Fairbanks
Alaska became a part of the U.S. in 1867, when Secretary of State William Seward negotiated its purchase from the Russian Empire. At the time, no one could have imagined the wealth of material resources that Alaska contained; many Americans saw the purchase as worthless, with some critics calling the Alaska Purchase “Seward’s Folly.” The discovery of gold in Alaska in the late 1800’s inspired a wave of migration and development in the region, but by the middle of the 20th century, gold mining had lessened in importance. At this time, however, oil production had become paramount due to society’s increasing dependence on it for energy, with surveyors constantly on the lookout for new deposits of petroleum.
As far back as the 1800’s, the North Slope of Alaska had been suspected of holding large oil deposits. The Iñupiat, a tribe that had resided along the North Slope for generations, had long had a practice of gathering oil-saturated peat and burning it for fuel. The Iñupiat called this substance “pitch,” and whalers who traded with them saw them burning it and recognized it as oil. The first formal sightings of oil along the North Slope came in 1836, when Thomas Simpson, an officer of the Hudson’s Bay Company in what is now northern Canada, spotted oil seepages along the coast during an expedition.
In the 1920’s, Presidents Warren Harding and Calvin Coolidge earmarked land in the North Slope for surveys in the hopes of finding oil deposits. During World War I, the U.S. Navy had converted its ships to use oil for fuel instead of coal, and new deposits of petroleum were necessary to keep the military running. The U.S. Geological Survey launched expeditions in the North Slope from 1923 to 1925 to find oil deposits, but their results were poor due to the primitive drilling and sensing technology of the time. Oil exploration in the North Slope resumed during World War II, with the government conducting additional surveys, but a thorough examination of the area was not carried out due to the North Slope’s remoteness and cold climate.
In 1957, the Richfield Oil Corporation (later known as Atlantic Richfield) successfully drilled a large oil well in Kenai, in the southern part of Alaska. The success of this oil field rejuvenated interest in examining oil reserves throughout the state, including the North Slope. In 1967, Atlantic Richfield launched a major survey of the North Slope and eventually found oil in Prudhoe Bay the following year, proving the presence of massive deposits of oil and natural gas in the area.
While oil deposits in Prudhoe Bay had been confirmed to be real, development of the area was hamstrung by logistical difficulties. The North Slope was sparsely inhabited, lacking the necessary infrastructure to ship oil via the sea. Additionally, the presence of massive amounts of sea ice in the Arctic Ocean made it extremely dangerous—as well as costly—to send oil tankers directly to Prudhoe Bay. To get around this hurdle, oil firms eventually decided to construct a pipeline across Alaska that would allow for overland transport of oil to port cities along Alaska’s Pacific coast. This pipeline was dubbed the Trans-Alaska Pipeline System.
The Trans-Alaska Pipeline System was planned in the late 1960’s, but construction did not begin until 1974 due to legal and conservational hurdles. Environmentalists believed that the Pipeline would harm Alaska’s natural beauty and wildlife, while the Native Alaskans who owned land in the Pipeline’s proposed path were unwilling to negotiate with the oil companies.
The Trans-Alaska Pipeline System gradually won approval through negotiations with individual native villages in the northern part of Alaska. The oil crisis of 1973, in which Arab states issued an oil embargo against the U.S. due to its support of Israel in the Yom Kippur War, also helped the Pipeline secure authorization from the U.S. government. Mass anger over gas shortages in the U.S. made Americans realize that they needed to develop their own energy reserves so they would not be held hostage by hostile foreign states.
In 1973, authorization for the Trans-Alaska Pipeline System was signed into law by President Richard Nixon, with construction beginning the following year. Pipeline construction was finished in 1977, allowing for the first barrels of oil to finally be transported from Prudhoe Bay. At the same time, the Dalton Highway was completed, connecting Prudhoe Bay to Fairbanks and allowing truckers and motorists to reach the North Slope via land. Fairbanks was economically revitalized by the oil fields and Pipeline; as the closest major city, it became a service center for Prudhoe Bay and a jumping-off point for those traveling to and from the oil fields.
Oil production in Prudhoe Bay reached its peak in the 1980’s, causing an oil glut that lowered the price of oil worldwide and allowing the U.S. to become less dependent on Middle Eastern oil. Since 1989, oil extraction from Prudhoe Bay has continuously declined, but the region still provides a significant amount of oil and gas each year. Oil exploitation and related construction has made Alaska one of the wealthiest states in the U.S., and Alaska has reaped large tax revenues from the oil industry, allowing taxes for ordinary citizens to be lowered or eliminated entirely.
In 2000, the original location where oil was discovered in Prudhoe Bay became part of the National Register of Historic Places, and is marked by a commemorative monument. In 2006, an oil spill was spotted in the western part of Prudhoe Bay and was attributed to a pipeline leak; it remains the largest oil spill that has ever occurred in the North Slope. An investigation afterwards led to a temporary hiatus in production after large amounts of corrosion were found in the local infrastructure.
Finally, the Prudhoe Bay Oil Field has become a major tourist attraction in Alaska. While the oil field proper is closed to the public, the Trans-Alaska Pipeline System is a popular tourist destination, and many visitors to Alaska make a point to visit the Pipeline on their vacations. The Dalton Highway, which was built to allow truckers access to Prudhoe Bay, has also become a major tourist route, with countless visitors using it to travel to the Arctic Circle on their own or as part of guided tours. Fairbanks’ role in the Prudhoe Bay oil industry has also made it a tourist attraction in its own right; its airport is the primary means by which outsiders visit the area.
While the amount of oil produced at Prudhoe Bay has been declining for the past few years, the area is still a major energy producer and one of the foundations of American oil independence. Prudhoe Bay oil has a significant effect on the American economy, and the North Slope remains one of America’s leading oil fields. Prudhoe Bay’s effect on the Alaskan and U.S. economies cannot be overstated, and its existence has continued to make Alaska one of the most important states in the U.S.