by Bruce Wells | Nov 19, 2023 | Petroleum Companies
In the early 1950s, Alaska Oil & Gas Development Company marketed 300,000 shares of stock for $1 each.
Decades before Alaska became a state, many petroleum exploration companies drilled expensive dry holes in the remote U.S. territory. The Alaska Oil & Gas Development Company was among them.
Although drillers completed the first Alaska Territory commercial oil well in 1902, significant oilfield production did not arrive until 1957, two years before statehood.
Before switching to a rotary rig in 1954, the Alaska Oil & Gas Development Company drilled its Eureka No. 1 using this Walker-Neer Manufacturing Company cable-tool “spudder.” Photo courtesy the Anchorage Museum.
The July 1957 discovery well by Richfield Oil Corporation — later known as ARCO — successfully drilled near the Swanson River on the Kenai Peninsula. The first well, which produced 900 barrels of oil a day from 11,215 feet, revealed a giant oilfield.
Many Alaskans already had been wildcatting for black gold.
Among those searching for petroleum riches, Alaska Oil & Gas Development accepted the financial challenges of exploring unproven territory. William A. O’Neill and a former oilfield roughneck incorporated the company on October 31, 1952.
“Bill O’Neill, a local mining engineer and University of Alaska regent, and partner C.F. ‘Tiny’ Shield, a giant of a man, believed they could find oil in the Copper River Basin,” explained Jack Roderick in his 1997 book, Crude Dreams: A Personal History of Oil & Politics in Alaska.
“Before coming to Alaska in the early 1920s, Shield had been a cable-rig ‘tool pusher’ in Montana, Texas and California,” he added.
Within a year, Alaska Oil & Gas Development began drilling near “mud volcanoes” — sulfuric residues bubbling up from the valley floor — and near mud cliffs embedded with giant marine fossils, Roderick reported.
The Eureka No. 1 well with its Walker-Neer cable-tool rig at its remote site just off Glenn Highway about 125 miles northeast of Anchorage. Photo courtesy the Anchorage Museum.
Far from any oil or natural gas producing well in North America, the well site — known as a rank wildcat — was at Eureka Roadhouse, about 125 miles northeast of Anchorage, just 200 feet off the Glenn Highway (part of Alaska Route 1).
Risky Business
Alaska Oil & Gas Development Company offered 300,000 shares of stock at $1 per share, advertising in newspapers:
The money realized from the sale of this stock is being used to purchase equipment and finance operations for oil exploration in the Eureka-Nelchina location. The location of the first exploratory drill hole has been chosen by our consulting geologist after a geological survey of the area.
The Walker-Neer cable-tool rig reached about 2,500 feet deep before drilling was temporarily suspended at the site. A Texas geologist suggested converting to a rotary rig for greater depth. Photo courtesy the Anchorage Museum.
Drilling at the Eureka Roadhouse site began on September 20, 1953, using cable-tool technology — a Walker-Neer Manufacturing Company rig often called a spudder.
“By early 1954, the Eureka No. 1 well had been drilled down more than half a mile, but the antiquated equipment, making each day’s going tougher, eventually forced O’Neill and Shield to shut down the operation,” noted Roderick.
The limitations of outdated cable-tool technology — and the onset of Alaska’s winter — delayed but did not deter the men. “Shield traveled to Texas, and while looking up some tool pusher buddies, contacted Fort Worth independent James H. Snowden,” Roderick explained.
Snowden sent a geologist to Alaska to investigate the well. “He reported that by converting the cable-tool rug to a rotary, the Eureka well could be deepened to 5,500 feet,” Roderick reported.
By the summer of 1954, having switched the Walker-Neer spudder for a rotary rig, the Eureka No. 1 well reached about a mile in depth — but found no indications of oil.
Alaska Oil & Gas Development Company spudded a well in the Matanuska Valley northeast of Anchorage in June 1953. Map courtesy USGS.
O’Neill and Shield tried again, drilling a second well near Houston, Alaska, on the Alaska Railroad line. It ended as a dry hole as well.
According to Roderick, Alaska Oil & Gas Development plugged and abandoned both wells by 1957. Another company also had tried to find oil in the Matanuska Valley, but failed before it could drill even one well (see Chickaloon Oil Company).
With its funds exhausted, the Alaska Oil & Gas Development Company failed to file a required report and was “involuntarily dissolved” by regulators.
In 1957, Richfield Oil Corporation made the first major discovery two years before Alaska statehood. The company struck the territory’s first commercial oil well at Swanson River on the Kenai Peninsula.
Discovery of the Prudhoe Bay field on Alaska’s North Slope in 1968 made the 49th state a world-class oil and natural gas producer. Prudhoe Bay, the largest oilfield in North America, in turn inspired the U.S. petroleum industry’s 1977 engineering marvel, the Trans-Alaska Pipeline.
The stories of many exploration companies trying to join petroleum booms (and avoid busts) can be found in an updated series of research in Is my Old Oil Stock worth Anything?
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Recommended Reading: Crude Dreams: A Personal History of Oil & Politics in Alaska (1997); Kenai Peninsula Borough, Alaska
(2012); From the Rio Grande to the Arctic: The Story of the Richfield Oil Corporation
(1972). Your Amazon purchases benefit the American Oil & Gas Historical Society; as an Amazon Associate, AOGHS earns a commission from qualifying purchases.
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The American Oil & Gas Historical Society (AOGHS) preserves U.S. petroleum history. Become an AOGHS annual supporting member and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2023 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “ Alaska Oil & Gas Development Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/old-oil-stocks/alaska-oil-gas-development-company. Last Updated: November 22, 2023. Original Published Date: July 14, 2016.
by Bruce Wells | Jun 13, 2023 | Petroleum Transportation
North Slope oil began moving through Alaska’s 800-mile pipeline system in 1977.
The Trans-Alaska Pipeline System, designed and constructed to carry billions of barrels of North Slope oil to the port of Valdez, has been recognized as a landmark of engineering. On June 20, 1977, the 800-mile pipeline began carrying oil from Prudhoe Bay oilfields to the Port of Valdez at Prince William Sound. The oil began arriving 38 days later.
In July 1973, a tie-breaking vote by Vice President Spiro Agnew in the U.S. Senate had passed the Trans-Alaska Pipeline Authorization Act after years of debate about the pipeline’s environmental impact. Concerns included spills, earthquakes, and elk migrations.
With the laying of the first section of pipe on March 27, 1975, construction began on what at the time was the largest private construction project in American history.
The Alaskan Pipeline system’s 420-miles above ground segments are built in a zig-zag configuration to allow for expansion or contraction of the pipe.
The 800-mile Trans-Alaska Pipeline system, including pumping stations, connecting pipelines, and the ice-free Valdez Marine Terminal, ended up costing billions. The last pipeline weld was completed on May 31, 1977.
On June 20, 1977, oil from the North Slope’s Prudhoe Bay field began flowing to the port of Valdez at four miles an hour through the 48-inch-wide pipe. It arrived at the port eight days later.
The completed pipeline system, at a cost of $8 billion, including terminal and pump stations, will transport about 20 percent of U.S. petroleum production. Tax revenues alone earned Alaskans about $50 billion by 2002.
Engineering Milestones
Special engineering was required to protect the environment in difficult construction conditions, according to Alyeska Pipeline Service Company. Details about the pipeline’s history include:
- Oil was first discovered in Prudhoe Bay on the North Slope in 1968.
- Alyeska Pipeline Service Company was established in 1970 to design, construct, operate and maintain the pipeline.
- The state of Alaska entered into a right-of-way agreement on May 3, 1974; the lease was renewed in November of 2002.
- Thickness of the pipeline wall: .462 inches (466 miles) & .562 inches (334 miles).
- The Trans-Alaska Pipeline System cross the ranges of the Central Arctic heard on the North Slope and the Nelchina Herd in the Copper River Basin.
- The Valdez Terminal covers 1,000 acres and has facilities for crude oil metering, storage, transfer and loading.
- The pipeline project involved some 70,000 workers from 1969 through 1977.
- The first pipe of the Trans-Alaska Pipeline System was laid on March 27, 1975. Last weld was completed May 31, 1977.
- The pipeline is often referred to as “TAPS” – an acronym for the Trans Alaska Pipeline System.
- More than 170 bird species have been identified along the pipeline.
- First oil moved through the pipeline on June 20, 1977.
- 71 gate valves can block oil flow in either direction on the pipeline.
- First tanker to carry crude oil from Valdez: ARCO Juneau, August 1, 1977.
- Maximum daily throughput was 2,145,297 on January 14, 1988.
- The pipeline is inspected and regulated by the State Pipeline Coordinator’s Office.
The Alaskan pipeline brings North Slope production to tankers at the port of Valdez. Map courtesy USGS.
At the peak of its construction in the fall of 1975, more than 28,000 people worked on the pipeline. There were 31 construction camps built along the route, each built on gravel to insulate and help prevent pollution to the underlying permafrost.
The above-ground sections of the pipeline (420 miles) were constructed in a zigzag configuration to allow for expansion or contraction of the pipe because of temperature changes.
Specially designed anchor structures, 700 feet to 1,800 feet apart, securely hold the pipe in position. In warm permafrost and other areas where heat might cause undesirable thawing, the supports contain two, two-inch pipes called “heat pipes.”
The Trans-Alaska Pipeline today has been recognized as a landmark engineering feat. It remains essential to Alaska’s economy.
The first tanker carrying North Slope oil from the new pipeline sailed out of the Valdez Marine Terminal on August 1, 1977. By 2010, the pipeline had carried about 16 billion barrels of oil. Alaska’s total oil production in 2013 was nearly 188 million barrels, or about seven percent of total U.S. production.
Oil Production Rise and Fall
The first Alaska oil well with commercial production was completed in 1902 in a region where oil seeps had been known for years. The Alaska Steam Coal & Petroleum Syndicate produced the oil near the remote settlement of Katalla on Alaska’s southern coastline. The oilfield there also led to construction of Alaska Territory’s first refinery.
Atlantic Richfield (ARCO) and Exxon discovered the Prudhoe Bay field in March 1968 about 250 miles north of the Arctic Circle. The oilfield proved to be the largest in North America at more than 213,500 acres (exceeding the East Texas Oilfield, discovered in 1930).
Alaska oil production peaked in 1988 at 738 million barrels of oil, about 25 percent of U.S. oil production, according to the Energy Information Administration (EIA). In 2020, oil production reached the lowest level in more than 40 years.
“Crude oil production in Alaska averaged 448,000 barrels per day (b/d) in 2020, the lowest level of production since 1976,” the agency noted in its April 2021 Today in Energy report. “Last year’s production was over 75 percent less than the state’s peak production of more than 2 million b/d in 1988.”
The decline in the state’s oil production has decreased deliveries in the Trans-Alaska Pipeline System, EIA added. “Lower oil volumes cause oil to move more slowly in the pipeline, and the travel time for oil from the North Shore to Valdez has increased from 4.5 days in 1988 to 18 days in 2020.”
For America’s pipeline history during the World War Two, see Big Inch Pipelines of WW II and PLUTO, Secret Pipelines of WWII.
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Recommended Reading: The Great Alaska Pipeline
(1988); Amazing Pipeline Stories: How Building the Trans-Alaska Pipeline Transformed Life in America’s Last Frontier
(1997); Oil and Gas Pipeline Fundamentals
(1993); Oil: From Prospect to Pipeline
(1971). Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.
_______________________
The American Oil & Gas Historical Society (AOGHS) preserves U.S. petroleum history. Become an AOGHS annual supporting member and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. © 2023 Bruce A. Wells.
Citation Information – Article Title: “Trans-Alaska Pipeline History.” Author: Aoghs.org Editors. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/transportation/trans-alaska-pipeline. Last Updated: June 12, 2023. Original Published Date: June 20, 2015.
by Bruce Wells | May 17, 2017 | Petroleum History Almanac
Chickaloon Oil Company sought to be part of Alaska petroleum history, which includes milestones beginning with the territory’s first oil well in 1902, an important oilfield discovery in July 1957, and completion of the 800-mile Trans-Alaska Pipeline in 2007. Many small, independent exploration companies tried to become part of state’s oil producing history, and many failed, including Chickaloon Oil.
Seeking investors, Chickaloon Oil’s first advertisement appeared in the Fairbanks Daily News-Miner of January 31, 1953. The new company proclaimed it had chosen an area near Chickaloon, about 75 miles northeast of Anchorage, “as one of the most promising drill sites” for petroleum exploration.
“Not only do our studies show a favorable structure in this area, but United States government geologists have marked this area as a probable oil producing land,” added the company, which claimed to have obtained leases for four sections of land, “where we can drill more than 300 wells if oil is found.”
Chickaloon was a coal-mining ghost town in the Alaska Territory. It had mostly perished in the 1920s after the U.S. Navy converted to oil-fired boilers for its ships (see Petroleum and Sea Power). The remains of Chickaloon were on federal property and later became part of Roosevelt’s New Deal community farming experiment, the “Matanuska Valley Colony.”
Around 1930, the U. S. Navy drilled an exploratory oil well in the Matanuska Valley. It was a “dry hole” and capped, but the U.S. Geological Survey cited reports on several other efforts. “A well drilled near Chickaloon in the Matanuska Valley is reported to have struck gas in association with coal,” the USGS noted. In 1929, the Peterson Oil Association had also drilled, but failed to find any oil.
Almost 25 years later, Chickaloon Oil and other exploration companies, returned to the Matanuska-Nelchina area in search of Alaska’s first major oilfield. To find investors for its highly speculative wildcat drilling, Chickaloon Oil advertised as far away as Oregon, offering $250,000 in stock to fund operations. In its ads, the company advised investors that the “veteran oilman from Texas,” Frank Dillard, would supervise the drilling of a 5,000-foot-deep test well in the summer of 1953.
In June 1953, a competitor, Alaska Oil & Gas Development Company, spudded a well just 50 miles down the Matanuska Valley near the Eureka Roadhouse. That well and several later ones would not strike oil.
However, Chickaloon Oil Company could find sufficient funds to actually launch drilling operations. The Alaska Oil and Gas Conservation Commission has no record of the company and it would be another four-years before Richfield Oil Corporation (today’s ARCO) completed its Swanson River Unit No. 1 well, which produced 900 barrels of oil per day and changed Alaska’s future.
Chickaloon Oil Company, Alaska Oil & Gas Development Company, and many other small exploration ventures ultimately became small footnotes in Alaskan petroleum history.
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The stories of exploration and production companies trying to join petroleum booms (and avoid busts) can be found updated in Is my Old Oil Stock worth Anything? The American Oil & Gas Historical Society preserves U.S. petroleum history. Please support this AOGHS.ORG energy education website. For membership information, contact bawells@aoghs.org. © 2018 Bruce A. Wells.
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