In 2017, we could celebrate 40 years of success with the Trans-Alaska Pipeline System. RESOURCE REVIEW THIS EDITION SPONSORED BY AT&T AND NORTHRIM BANK TAPS transforms Alaska’s economy continued on page 2 TAPS: “We didnʼt know it couldnʼt be done.” MAY - JUNE 2017 \\ AKRDC.ORG It was a gray, chilly morning at Prudhoe Bay on the eve of the summer solstice 40 years ago when the first oil from North America’s largest oil field flowed into the Trans-Alaska Pipeline System (TAPS) for its 800-mile journey to Valdez, where it would be transported by ocean tanker to West coast refineries. For BP and ARCO, the event on June 20, 1977 at Milepost 0 of the pipeline was the first fruits of a major move into the Arctic that began in 1968 with the discovery of the giant Prudhoe Bay oil field. That discovery has since led to the development of 24 separate North Slope oil fields, established Alaska as a world-class oil and gas province, and transformed Alaska’s small economy. At the time construction began in 1974, TAPS was the largest private construction project in the world with an estimated price tag of $900 million. When completed in 1977, final costs exceeded $8 billion. Approximately 70,000 worked on the pipeline, including a peak workforce of 28,072 in 1975. Alaska’s North Slope has now produced more than 17 billion barrels of oil since TAPS came on line 40 years ago. Through last year, the oil industry has invested more than $55 billion in Alaska and has become the undisputed foundation of the economy. Oil has funded up to 90 percent of the state’s unrestricted General Fund revenues in most years and has generated more than $180 billion in total state revenue. Even at today’s low oil prices, oil revenues account for approximately 67 percent of unrestricted General Fund revenues. Furthermore, the oil industry has generated approximately one-third of Alaska jobs and accounts for about one-half of the overall economy when the spending of state revenues from oil production is factored into the equation. In other words, without oil and TAPS, Alaska’s economy would be half its size or smaller. As the oil industry expanded so did Alaska’s economy and basic infrastructure throughout the state. TAPS and the oil flowing through it also led to the creation of the Permanent Fund. The fund has grown to over $59 billion and has paid out more than $18 billion in dividends to Alaskans. While the economic impact of oil and gas activity and production in Alaska is profound, throughput in TAPS has been in a long-term decline trend since peaking at 2.1 million barrels per day in 1988 when the state accounted for more than 20 percent of domestic production. Yet because of Prudhoe Bay and TAPS, Alaska is poised over the long term to reap a new bounty with an estimated 40 to 50 billion barrels of conventional oil remaining to be developed in onshore and offshore areas of the Arctic. However, the majority of the remaining resource is located in federal TAPS construction near the southern foothills of the Brooks Range in 1976. Oil from the North Slope and the pipeline that carried it brought great wealth to Alaska. (Photos by Carl Portman) Crew insulates a joint on the pipeline north of the Yukon River in the summer of 1976. www.AKRDC.org 39
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