The Great Land: Boom or Doom

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supplies. By 1980, if no new oil is found in the U.S., that dependency may rise to 45%—at a time when assorted wars and political crises may well engulf foreign sources. Avid to seize the initiative, ARCO joined Humble Oil in pushing ahead on the North Slope. In March or 1968, the drillers struck oil near Prudhoe Bay within the Arctic Circle, and Alaska's future lit up like a pinball machine. Now Prudhoe Bay's reserves are estimated at 15 billion bbl., three times those of East Texas, the previous giant of U.S. oil. Estimates of Alaska's potential reserves go as high as 100 billion bbl.

The strike was a triumph over the harsh adversary of climate. In winter, the North Slope is so cold that men work at one-third of their normal efficiency. When one roustabout took off his face mask to shout at a friend, his windpipe froze. Metal equipment snaps like icicles; helicopters are grounded at—30° lest their rotors break. In summer, the ground above the permafrost (frozen subsoil) thaws and turns the Arctic north into a spongy bog that hampers land transportation and defies sewage disposal.

Despite all this, ARCO and seven other companies quickly set out to build the Trans Alaska Pipeline System. A mammoth conduit 4 ft. in diameter, TAPS was to run 773 miles south from Prudhoe to the ice-free port of Valdez, where tankers would load the oil for delivery in the continental U.S. Humble's icebreaking supertanker, Manhattan, also bulled through the Northwest Passage to test the feasibility of shipping North Slope oil across the top of North America to East Coast markets. Last September the potential bonanza spurred 15 major oil companies to pay the state $900 million to lease another 434,000 acres of its North Slope land. The state ecstatically deposited the cash in a savings account (interest: $199,320.52 a day) until the legislature could decide what to do with it. One early suggestion: buy Texas.

What oil could do for Alaska, a pauper state, is almost incalculable. The first $900 million is enough to cover all state government expenses for 4½ years. At a flow of 2,000,000 bbl. a day, the pipeline could net the state as much as $200 million a year in royalties and severance taxes. To those Alaskans who proudly call themselves "boomers" and scorn conservationists, the oil rush promised immense personal gain. Building the pipeline and a 370-mile access road would pump $1.5 billion into the Alaska economy. Boomers predicted that service industries would proliferate like snowshoe rabbits. The state would need more houses, schools, roads, airports and factories. Demand for unskilled as well as skilled workers would soar.

What Went Wrong?

But the confident forecasts have withered: the pipeline has been postponed temporarily. In Fairbanks, the North Slope staging area, heavy construction equipment worth $45 million stands idle. With Alaskan unemployment at a high 13% (and 25% in Fairbanks), the state has put up information booths in U.S. airports to warn job seekers not to come north. Scores of small businesses, from auto agencies to gift shops, swelled their inventories in preparation for the impending boom. With no customers, many cannot repay loans. Banks are not foreclosing—yet.

What went wrong? Boomers blame "hysterical preservationists," who insistently warned that TAPS could ruin the state's