They say life begins at 40. The trans-Alaska pipeline turns 40 this June, and the pipeline may indeed be entering a new phase in its existence. It's a good time to take stock – and to remember how we got where we are.
Oil first flowed south to Valdez on June 20, 1977. Forty years later, it is still the superpower among economic drivers for Alaska. But looking at the pipeline's role today, it's as though the coin has turned. Cause and effect have changed places.
In the 1970's, it was the oil in the ground that drove the building of the pipeline, one of the largest and most challenging construction projects in history. But today, in its turn, it's the pipeline itself that's becoming the driver. It's the fact that the pipeline is in place, with all its associated infrastructure, that makes economic conditions favorable for new exploration and discovery on the North Slope.
Even amid the pricing and supply chaos of today's oil industry, the harsh and expensive Slope is still a good bet for exploration – because Alaska's delivery infrastructure is there.
Repsol, the Spanish oil operator, said as much in March when it announced what may be the largest onshore oil discovery in three decades. In its statement, Repsol said its discovery in what was previously viewed as a mature basin is very much connected to the reality that "Alaska has significant infrastructure which allows new resources to be developed more efficiently."
That's the alchemy of the pipeline and the capital investment it represents. It's not just a kind of ATM to get money out of the ground. It's also an enabler of new investment and expanding wealth. If new discoveries play out because TAPS is in place, then a new life for the pipeline may indeed be starting at 40.
There's another big aspect of the pipeline's alchemy. In a state that is by nature friendly to new ideas, the pipeline has enabled innovation on a grand scale. In particular, the Permanent Fund and its dividend payments to Alaskans – now totaling $24.3 billion – were unique steps.
Alaska had learned the hard way how fast a lot of money can disappear ($900 million from the lease sale in 1969 was gone in a few years). With the Permanent Fund, the state stepped up to a disciplined savings plan with innovative citizen profit-sharing through dividends.
How unusual is the Permanent Fund's dividend plan? Actually, policy-makers today are considering the pros and cons of a universal basic income for all Americans. And as they consider that idea, it turns out there is only one place in the world where they can look for empirical evidence from a similar approach: the 49th state and its Permanent Fund dividends.
Maybe universal income is a good idea, maybe it isn't. But Alaska is both the place where that kind of groundbreaking innovation has taken place and where further innovation is possible. In the years to come, the pipeline could finance still other new approaches to in-state investment and infrastructure-building, broadening and deepening Alaska's economy.
Forty years out, it's important to remember how the pipeline came into existence. Alaskans are "can-do" people. But the actual building of the pipeline was by no means inevitable.
Legitimate issues of Native land claims as well as environmental impacts had to be faced. And then, even after those issues had been confronted, there was politics. In Washington, "can-do" met "can't-do" in dramatic fashion.
Legitimate delays ultimately turned into delays for their own sake and for the sake of ideology. More and more study was being proposed, no longer based on good-faith calculations of risk and benefit, but based on viewpoints that fundamentally opposed the risks associated with all economic growth on the scale of the pipeline.
It was Mike Gravel, Alaska's Democratic U.S. senator from 1969 to 1981, who broke through Washington's "can't-do" wall. With an amendment to a bill that would have required yet further study, Sen. Gravel instead called on Congress to step up and make the decision.
His amendment said, in effect: "Enough study has been performed. Build the pipeline." In a dramatic vote on July 13, 1973, his amendment was passed, 50-49, with a tie-breaking vote cast by the vice president. Construction could begin.
Gravel's amendment was based on a judgment call. He believed that delay would continue indefinitely until Congress itself made the decision. So he forced the issue.
Many others thought that economic considerations would eventually make construction inevitable and that Gravel's confrontational style wasn't necessary. Of course, that's possible – there's really no way to be sure. But the constraints we've seen Washington impose since that time, not to mention the failure over these 40 years to build a gas pipeline, suggest that Gravel's judgment was on point. The issue had to be brought to a head in the one place where a final decision could be made.
Today, as we celebrate the pipeline's 40th, so many people deserve credit – from the geologists responsible for the discoveries, to the engineers and workers who built the pipeline, to the state leaders who created the Permanent Fund. We should even credit those good-faith environmentalists who insisted on the highest safety standards.
But as we remember, can we also recognize Gravel's particular role? When all the legitimate problems had been worked through, it was Washington that loomed as the ultimate bottleneck. And it was Gravel who pulled the cork. The amendment he insisted on was passed, the pipeline was set free and the oil flowed.
Forty years later, it may look like ancient history and it may seem like the pipeline was inevitable. But in truth it could have turned out differently. Alaska and the scope of opportunity it has come to take for granted could have been radically constrained.
Campbell Gardett served as Sen. Mike Gravel's press secretary. William Hoffman was Gravel's legislative director. Jim Palmer was his office and staff manager. Former State Sen. Mike Szymanski previously served as Sen. Gravel's Fairbanks representative.
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