George and Billy Pratt and Sam McCord found gold when they went “north to Alaska” “in the year of ’92.” As Johnny Horton reminded America in 1960, “They crossed the Yukon River and found the Bonanza gold” in the land of the Midnight Sun.
Gold mining continues to be a significant source of income in Alaska, especially now that gold is selling at an all-time high – over $3,000 per ounce, up 35% since January 2024, thanks in part to a surge in central bank purchases of gold as a hedge against inflation. The value of gold produced in Alaska has jumped by over 60% in the past 14 months.
But there’s another kind of gold in Seward’s Folly – “black gold, Texas tea,” the stuff that made Jed Clampett a Beverly Hillbilly. The first Alaskan oil well with commercial production was completed in 1902 – during the heyday of the gold rush – and that small oilfield led to construction of the first oil refinery in the Alaska Territory.
But it was the 1957 discovery of oil at Swanson River that was, as Alaska Governor William Egan said, “the economic justification for statehood for Alaska.” When two Atlantic Richfield geologists announced completion of the company’s first Alaska well, it set off a flurry of economic activity that some compared to the 1890s gold rush.
Two years later, the same year Alaska achieved statehood, Unocal (Union Oil Company of California) discovered a major gas field near the Swanson River oilfield. Then in 1968, Atlantic Richfield and Humble Oil discovered the North Slope’s Prudhoe Bay field, which contained so much oil the industry built the Trans-Alaska Pipeline. Twenty years later, though, Alaska’s oil production began a dramatic decline, from over 500 million to under 200 million barrels a year.
As of 2021, however, Alaska’s proven oil reserves amounted to 3.13 billion barrels, not including the 2018 U.S. Geological Survey estimate of 10.4 billion barrels of “undiscovered, technically recoverable oil resources in ANWR.” Still, two related issues have held back oil and gas exploration and production in Alaska – political opposition and industry response to political opposition.
During Donald Trump’s first term, Public Law No: 115-97 authorized leasing on about 8% of the 19-million-acre Arctic National Wildlife Refuge. The USGS upped its estimated reserves total to 16 billion barrels – plus untold amounts of often associated natural gas.
After a 3-year court battle, the first lease sale was allowed to proceed in January 2021. The change in political climate left the first of two required lease sales generating less than $15 million in high bids, mostly by the Alaska Industrial Development and Export Authority (AIDEA).
A week after AIDEA signed its leases, President Joe Biden ordered a temporary moratorium on implementation of the Coastal Plain oil and gas leasing program and demanded a new environmental impact statement. Interior Secretary Deb Haaland canceled them in 2023, citing flawed environmental analysis.
To nearly everyone’s surprise, however, the Biden Bureau of Land Management authorized ConocoPhillips to drill up to 199 wells at three sites in the 24-million-acre Alaska National Petroleum Reserve, which lies west of ANWR on Alaska’s North Slope. Nine months later, ConocoPhillips’ construction had begun, with first production expected by 2029.
Then came the November 2024 election. The victorious President Trump had promised to revitalize the Alaskan oil and gas industry, and just days after the election Alaska Governor Mike Dunleavy asked for a state-specific executive order to set in motion “critical agency actions that would restore opportunity in Alaska.”
To no one’s surprise, President Trump’s first-day executive order, “Unleashing Alaska’s Extraordinary Resource Potential,” restored his first-term policies for Alaska. The order reopened ANWR and NPR-Alaska, and charged Interior Secretary Doug Burgum to “initiate additional leasing” and issue all permits and easements necessary for oil and gas exploration and development in lease areas.
The Biden administration had canceled the required end of 2024 lease after postponing it to January 10, 2025, citing a lack of interest. No wonder, said Trump, they were not offering any acreage anyone wanted. Alaska’s take, expressed in a new lawsuit, was that the terms of sale were too restrictive.
On March 20, Secretary Burgum announced steps to open about 20 million acres (82%) of the NPR-Alaska to leasing and development and to reopen the 1.56-million-acre ANWR coastal plain. He also lifted restrictions on land along the Trans-Alaska Pipeline Corridor and Dalton Highway and conveyed the land to the State of Alaska, paving the way for construction of the proposed Ambler Road and the Alaska Liquefied Natural Gas Pipeline project.
The move pleased both Governor Dunleavy and Kaktovik Inupiat Corporation President Charles Lampe, who said his indigenous community had “fought for years for our right to self-determination and local economic development.”
Five days later, a federal judge reversed the Biden administration’s cancellation of the 2021 ANWR oil and gas leases, giving at least a symbolic victory to AIDEA, which had purchased the leases at least in part to protect the state’s interest in resource development “when the private sector has been blocked or discouraged from participation.”
AIDEA had a list of objections, but the one that mattered to the court was that Haaland ignored a statutory requirement of the Naval Petroleum Reserves Production Act of 1976 to obtain a court order to cancel the leases.
While Senator Dan Sullivan (R, AK) said of Trump’s executive order, “It is morning again in Alaska,” some U.S. oil and gas executives were less sanguine. American Petroleum Institute spokesperson Dustin Meyers said, “There is always the risk that these areas could be reclosed after the next election cycle.”
Perhaps because drilling in Alaska’s North Slope is a high-risk endeavor that involves time and money, one oil company executive said many companies are unlikely to pursue exploration and development, even if they do seek leases, without an act of Congress to codify the Trump executive order into a law that could not be as easily reversed.
Many may wait to see the public’s reaction to the administration’s efforts to thwart the California electric vehicle (zero emissions) mandate, which has also been adopted by several other states.
But global demand for oil and gas has been exploding.
A 2023 report cited a resurgence in Latin America driven by regulatory reforms, vast untapped reserves, and technological advancements. That report also noted east Africa, the eastern Mediterranean, east Asia, and the Arctic Circle in Russia, Canada, and Alaska as hot spots for investment with the right political climate.
On January 3, Oilfield Workers took a broad look at the status of the industry and concluded that,
for the workforce, a renewed focus on energy security is translating into heightened activity across the entire oil and gas value chain from upstream exploration to downstream logistics and storage. The interplay “of new projects, technological advancements, and geopolitical shifts will create both challenges and opportunities,” they concluded.
Up in Alaska, the champagne has already flowed, but rebuilding the state’s vital oil and gas industry is going to take time – and money – but mostly political stability in Washington.
Will the spiritual descendants of George and Billy Pratt and Sam McCord show up to claim their shares of “black gold across the Yukon?” Or have politicians and naysayers turned that black gold into pyrite?