American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc.

This paper was prepared for the Southwest Alaska Section Regional Meeting of the Society of Petroleum Engineers of AIME, to be held in Anchorage, Alaska, May 5–7, 1971. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal, provided agreement to give proper credit is made.

Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines.

It is a great pleasure to be invited to Anchorage to address the first Alaska Regional Meeting, The Alaska Oil scene, of the Society of Petroleum Engineers of AIME. My last visit to this city was almost 10 years ago. At that time I tried to keep my mouth shut. But I could not help believing - even in the Cook Inlet perspective of those days - that this state was a very exciting oil province. Today we recognize it as probably the greatest in the history of the U. S.

Since that early visit the demand problems in the oil industry have certainly been multiplying. I have some slides showing the scale of demand growth and the part that we now expect Alaska to play in meeting it.

There was a time when the industry's professional pessimists used the Prudhoe Bay professional pessimists used the Prudhoe Bay discoveries as proof that the industry was in for new troubles. The theory was that at least 15 billion bbl of recoverable oil in the Prudhoe Bay area would give rise to a new source Of about 2 million B/D of production by 1980. This would pour into the West Coast market, more than doubling its present supply. Together with some increase in production from other parts of Alaska and with California continuing parts of Alaska and with California continuing to produce about 1 million B/D, local needs would be unable to absorb the new supply. With Canadian imports remaining economically attractive, and with no obvious way of transporting crude oil to the big markets of the Midwest and the East Coast, it was argued that nearly 1-1/2 million B/D would be hunting desperately for buyers on the West Coast. As a result, the price structure would crumble. Production in price structure would crumble. Production in the Southwest would have to be cut back … or so said the pessimists.

This was a gloomy outlook for the oil companies. And we broadly agree with the basic statistics that I just mentioned. But we do not agree about Alaska's impact on the industry. In fact, the oil shortages that appeared last summer made it clear how greatly the pessimists had misjudged the outlook.

Today, we are much more conscious than we used to be of the obstacles to North Slope development. Ever since Seward's $7 million "folly" in 1867, many people have had mixed feelings about what Alaskans call outside "spoilators". The gold discoveries on Bonanza Creek in the Klondike in 1896, the Kennecott discovery in the Copper River basin in 1900, and the excesses of the fish trappers in the first half of this century, all gave a very solid basis to fears like those expressed by Thomas E. Kelly of the Dept. of Mineral Resources of Alaska. At a meeting of the Society of Petroleum Engineers not much over a year ago, he talked about the after-math of exploitation as a "tragic scene on the Alaskan landscape."

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