An anniversary noteworthy for Alaskans passed unremarked last week: the discovery of the first American oil well that produced significant investment, in Titusville, Pennsylvania, on August 27, 1859. It's noteworthy for Alaskans because without oil Alaska would be a much different place than it is, and we would have very different public policy choices than we do.
Oil wasn't new in 1859; it had been used mostly as brine for salt production, and in fact, other shallow wells had been drilled in America's Appalachian region to extract oil for that purpose. That was the intention of the Titusville well, drilled by Col. Edwin Drake, a former railroad conductor. The significance of his well was its quantity -- 60 barrels a day at 70 feet using mechanical pumps, sufficient to sustain a burgeoning industry. It was only a few years earlier that Samuel Martin Kier had developed, also in Pennsylvania, a method for refining crude oil into kerosene, a technology also developed by a Polish pharmacist, Ignacy Lukasiewicz. Kerosene, used for lamps and heaters, would be the stimulus to the new industry for 40 years, until the development of the automobile. Since then, the oil and auto industries have been inseparable from each other, and from the American economy.
The first spectacular oil discovery in the U.S. was "Spindletop," at Beaumont, Texas; it initially produced 100,000 barrels a day at a depth of just over 11,000 feet; at the time it was the largest proven oil deposit in the world. As developers produced more oil, and automobile drivers consumed more gasoline, investors proved willing to fund exploration projects far and wide, including in Alaska. Though the first significant investment here was on the Iniskin Peninsula (west shore of Cook Inlet), in the late 1890s, the first commercially producing wells were at Katalla, south of the Copper River delta, where, in 1911, a Guggenheim-funded project yielded a modest flow. The Corporation refined it on site and marketed it in Cordova. Production ceased after a fire in 1933 destroyed the refinery.
Most U.S. lands with oil potential were closed to exploration by an executive order from President Theodore Roosevelt in 1906, reflecting anxiety that private exploitation of the resource might threaten national security, a concern Congress addressed with the Mineral Leasing Act of 1920. The same apprehension led President Warren Harding to establish a naval petroleum reserve on Alaska's north slope in 1923. But even though the Interior Department issued more than 400 exploration permits in 1921, and many subsequently, no one found any significant oil, not even during World War II when the Navy undertook a drilling program in the petroleum reserve. In 1946, though, the Navy found enough natural gas to fuel a limited heating system for the community of Barrow, but nothing more.
Not until the discovery of the Swanson River deposit near Kenai did significant exploration pick up again in Alaska. That find generated considerable interest in the territory and may have contributed to winning statehood. It's likely that Texas oil developers preferred working with an Alaska state administration to dealing with the federal government.
The great Prudhoe Bay discovery in 1968 solved a challenge that had vexed Alaska both before and after statehood: adequate revenues to fund a state government and to support modern life. Sustaining non-Native settlement here, and providing services in Native Alaska, requires embrace of virtually any prospect for economic development that may arise, for the capital to provide sufficient quantity and quality of jobs to underwrite the level of material capacity most Alaskans demand does not reside within the state, and never has. For Alaska, oil has been the "mother" of economic development, our material salvation. Taxation of Prudhoe production, responsible for almost all state revenue, together with other oil industry investment, comprises a third of Alaska's economic base.
But because oil is so big here, it represents a vital dependency, for as our somewhat desperate hope for a gas pipeline demonstrates, our influence on how that industry proceeds in Alaska is meager.
In Titusville they well recognize their historic relationship to oil; all last week was given over to the celebration of "Titusville 150." Here, despite our broad dependence, nary a word was spoken.
Steve Haycox is a professor of history at the University of Alaska Anchorage.
Steve Haycox
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