Larry Wood\Valley Voices
Editor's note: This is the first of two columns about the state of Alaska's economy.
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Throughout Alaska's history, Alaska's natural resource development has always been a case of rape and run. From the days of the Russian fur traders to the Trans-Alaska Pipeline, most of our natural. resources have yet to be processed here, and are sent outside of Alaska for value-added processing.
This is simply colonial economics. The raw material goes out, and the manufactured goods come back.
Prior to oil, Alaska's year-round jobs existed only in the government sector, the retail/wholesale sector and mining. When the termination dust hit, construction stopped until May of the following year.
The major resource development activities in Alaska were commercial fishing, commercial big-game hunting, and mining. Alaska's mining operations were producing everything from cassiterite (tin), coal and copper, to gold, silver and platinum.
Very little was done during this period in the way of timber development until Gov. Walter Hickel (1966-1969) managed to make a deal with the Japanese for timber. Alaska's timber started to go to Japan in the round. Along with peas.
Construction was seasonal and waxed and waned with government projects. It was not until the start of the Trans Alaska Pipeline project in the early '70s that the residential housing market really boomed, induced by the population influx to provide labor and support for the project. Alaska's population exceeded 300,000 by 1972.
Two coal mines produced coal for steam plants generating power for Southcentral Alaska. Usibelli Coal Company at Suntrana supplied coal for the Healy power plant. Once a week, the coal train came through Palmer to and from the Evan Jones Coal Company mine tipple at Sutton.
In 1965, loss of the power plant coal contract for Elmendorf/Ft. Richardson to Hickel's natural gas from Cook Inlet closed the mine at Jonesville. My father worked at Evan Jones from 1961 through 1965. Usibelli continues to provide coal for the power plant at Healy, and remains the only active coal mine in Alaska..
The small Eklutna hydroelectric plant was then the only non-hydrocarbon electric power plant in Alaska. Both my father and grandfather worked on the construction of that plant. My grandfather retired as a plant operator in the '60s.
In the late '50s, early '60s, oil and natural gas exploration and development began in earnest on the Kenai Peninsula. The focus of the petroleum industry then shifted to the North Slope, where the federal government had several Naval Petroleum Reserves. The presence of oil on the North Slope was known for generations by the Inuit, and by New Bedford whalers.
In 1961, the dairies of the Matanuska Valley and the Tanana Valley supplied milk to the military and to local markets. In those days, during the Cold War, Alaska's farmers were paid to produce a certain volume of milk, even if the excess capacity had to be dumped. A common sight for me when I would walk up the hill on Smith Road from the Old Glenn Highway to my parents' house would be a long ribbon of white going over the bank near the Palmer Airport into the Matanuska River.
In the late 60s, Matanuska Maid, the local dairy co-op, moved its dairy to Anchorage, changing Palmer forever. Shortly thereafter, Lyden Farms won the military contract and Mat-Maid has not been the same since.
Since then, Alaska's producing farms have diminished in number, and those surviving have only begun to demonstrate an economic impact due to literally heroic efforts of those farmers who learned to get out from under the government's hand-out programs and to develop their own markets for their produce.
In 1961, Independence Mine at Hatcher Pass shut down. Independence was the last major gold lode mine in Southcentral Alaska to close.
Around 1968, things started going crazy on the North Slope. The oil industry in Alaska had come of age. With the North Slope oil lease sales and the subsequent production royalties came big state government, and spending to match.
After 47 years of statehood and 60 years of oil development in Alaska:
€ The state has become dependent upon oil for revenues;
€ Where family mining operations were the mainstay of Alaska's mining, now Canadian firms with state subsidies and big projects have the state's blessing;
€ Commercial fishing is in decline;
€ Agriculture is still in its infancy;
€ Timber is still an export with finished wood products imported;
€ After 20 billion barrels of oil sent south through the pipeline, all Alaska has to show are two small refineries and an ammonium nitrate plant that is reducing its output.
The next column will address the NG pipeline choices.
Larry Wood lives in Palmer.
Comments
1 comment(s)Michael McLaughlin wrote on Oct 13, 2007 9:48 AM: