In early 1968 the Atlantic-Richfield Company struck the 10-billion-barrel Prudhoe Bay oil field on Alaska’s Arctic coastal plain. In the subsequent oil lease sale in 1969, the 23rd since statehood, oil companies bid more than $900 million. There was hope that Alaska’s economy would stabilize and diversify. The Trans-Alaska Pipeline System (TAPS), a joint venture of Atlantic-Richfield, British Petroleum, and Humble Oil, applied to the U.S. Department of the Interior in June 1969 for a permit to construct a hot-oil pipeline across 1,280 km (800 mi) of public domain from Prudhoe Bay to the coast at Valdez on Prince William Sound.
It soon became apparent that no pipeline would be built without settling the long-standing Native claims. Some sections of the proposed right-of-way crossed lands that Natives claimed. For some time, Natives had filed protests to state land selections; between 1961 and 1968, such filings covered almost 136 million hectares (337 million acres). In 1966 Secretary of the Interior Stewart Udall imposed a land freeze, stopping the transfer of any lands claimed by Natives. The Natives united in 1967 in a representative body, the Alaska Federation of Natives, which started to lobby for a settlement.
The land freeze and the necessity of getting the oil to market forced the state, the oil companies, Natives, conservationists, and developers to work together for a solution. After much work, Congress passed and President Richard M. Nixon signed into law the Alaska Native Claims Settlement Act (ANCSA) on December 18, 1971.
Natives were to receive title to approximately 18 million hectares (44 million acres) of land and compensation of $962.5 million, of which about half was to come from the federal treasury and the rest from mineral revenue sharing. Twelve regional business corporations would administer the settlement. Every Native could hold 100 shares of stock in one of the corporations after registering and proving Native ancestry. In addition, the act created 220 village corporations, which could be either for-profit or nonprofit.
To gain the support of environmentalists, the act authorized the secretary of the interior to withdraw up to 32.37 million hectares (80 million acres) of Alaskan land for study and possible inclusion in national parks or forests, wildlife refuges, wild or scenic river systems, wilderness areas, and national monuments. Congress would decide which areas to include.
With the Native claims settled, the pipeline promoters faced the opposition of environmental groups that sued to halt pipeline construction. In the meantime, the Organization of Petroleum Exporting Countries (OPEC) cut off oil supplies to the United States in 1973. An energy crisis resulted, and Congress passed legislation authorizing the construction of the pipeline. Construction by the Alyeska Pipeline Service Company started in 1974, and the first oil arrived at the Valdez tanker terminal on July 28, 1977. This project, one of the largest privately financed projects ever built, cost approximately $9 billion.
Thousands of construction workers streamed to Alaska to work on the pipeline at an average wage of $1,200 per week, about three or four times what they could make in the “lower 48.” Parts of Alaska near the pipeline boomed, but once it was built, Alyeska laid off most of the workers. By the end of 1985 more than 4 billion barrels of crude oil had been pumped from the Prudhoe Bay field. By early 1986 approximately 6,000 tankers had berthed at Valdez. With the resulting oil wealth, the legislature abolished personal income taxes, and the state became largely dependent on oil revenues for its budgets. For comparison, Texas, Louisiana, and Oklahoma—other states with large oil pumping operations—received 19.6, 29.2, and 15 percent, respectively, of their revenues directly from the oil industry in that year. More than 80 percent of Alaska’s revenues generally come from oil revenues.
In 1976 voters had approved a constitutional amendment creating the Alaska Permanent Fund. It required that at least 25 percent of all mineral lease bonuses, royalties, and rentals be deposited in a fund used only for income-producing investments. Various state leaders, including Republican governor Jay S. Hammond (1974-1982), have worried about the integrity of the fund’s principal. At Hammond’s urging, the legislature enacted into law the innovative concept of permanent fund dividends to distribute part of the earnings directly to Alaska citizens. The purpose was to create a constituency with a vested interest in protecting the fund’s principal. After a court challenge, the legislature implemented the plan in early 1982: any adult who had lived in Alaska at least six months was to receive dividends of $1,000. For future years it promised amounts based on distribution of half the earnings of the permanent fund in any given year. A rise in oil prices during the 2000s, along with increased taxes on oil company profits, brought in record revenue for the state. In 2008 Alaska residents received a $2,000 dividend plus a bonus of $1,200 to help them pay for fuel. "USA" © Emmanuel BUCHOT, Encarta, Wikipedia
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