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Home  >  Digital Archives  >  Government  >  Making of Alaska
A Forward-Thinking People: Contemporary Alaska
By Jennifer Houdek Page 1 of 2   Next ยป

The state's most recent boom arrived in 1968 with the discovery of a massive oil reservoir at Prudhoe Bay. Construction of the Trans-Alaska Pipeline System (TAPS) would create one of the largest pipeline systems in the world. Before work could begin, environmental concerns and land rights issues had to be addressed. Alaska Native rights that had long been a back-burner topic were suddenly in the fore. Officials were virtually forced to deal with aboriginal land and resource claims that had remained unresolved since statehood.

On December 18, 1971, Congress passed the Alaska Native Claims Settlement Act, legislation that would create 13 regional Native corporations and village corporations all over the state. Every Alaska Indian, Eskimo, and Aleut person of at least one-quarter Native heritage would qualify for membership. In 1971, they numbered about 80,000, including those Alaska Natives who lived outside of Alaska. The corporations shared a sum of $1 billion and were asked to select 44 million acres of land. In exchange, Alaska's Native people would surrender any rights to future claims against the government.

While plans for the pipeline had been in the works for years, construction officially began on January 3, 1974, when the first federal right-of-way grant was issued. On April 29, road builders began work on the North Slope Haul Road (now the Dalton Highway), linking the Yukon River to the North Slope. During peak pipeline construction, 20,000 people were employed on what was called the largest privately financed construction project in history. The total cost came to $8 billion, including building the Valdez terminal, before it was completed in 1977.

The pipeline stretches 800 miles from Prudhoe Bay on Alaska's North Slope, to Valdez, the northernmost ice-free port in North America. Since pipeline startup on June 20, 1977, until 2006, the Alyeska Pipeline Service Company, the operator of TAPS, has successfully transported over 15 billion barrels of oil, and the current flow represents approximately 17 percent of total U. S. oil production.

The "rainy day" account known today as the Alaska Permanent Fund safeguards the state against downturns in oil revenues. It also allows the people of Alaska to share annually in their state's oil wealth through a trickle-down plan that taps the fund's investment earnings. The brainchild of former Gov. Jay Hammond, the plan was approved by voters in 1976 and established in 1980. The language provided that "at least 25 percent of all mineral lease rentals, royalties, royalties sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments."

Once a year every man, woman, and child who has lived in Alaska for at least one year, and plans on staying, receives a Permanent Fund Dividend check, known among Alaskans as the "PFD." To calculate the amount for distribution, the formula takes half of the approximate average of the Fund's realized income for the last five years and divides that among qualified applicants. The Alaska Permanent Fund has become a model studied the world over.

Another milestone in Alaska history took place in 1980, when President James E. Carter signed the Alaska National Interest Lands Conservation Act, placing more than 104 million acres of land in federal protection, creating and adding to national parklands and refuges. Today, less than 1 percent of Alaska's 365 million acres is held in private hands.

In the 21st century, the state has become a melting pot. Its 2005 population of 655,435 people includes new Alaskans from nearly every continent. Alaska's modern economy is driven by several basic sectors: exports including petroleum, mining, seafood and forest products, tourism, international air cargo, as well as the military, and state and federal governments. The travel and tourism industry has quietly and surprisingly become the state's largest private sector employer, accounting for 39,420 direct and indirect jobs, bringing $1.15 billion in labor income along with $1.6 billion in visitor spending. Oil and gas supplies have proven lucrative; since 1965, the state has collected more than $53 billion in unrestricted oil and gas revenues.

The Alaska Department of Community and Economic Development reported that 2005 commercial fishing revenues came to nearly $1.7 billion. Total production value of minerals came to $1,357.4 million, according to the Alaska Division of Geological and Geophysical Survey. Finally, Alaska's location still serves a strategically important mission for the United States military, with both Army and Air Force bases in Fairbanks and Anchorage, and U.S. Coast Guard stations along the coasts.

Alaska continues to prove itself the best purchase that the United States ever made. Far from the first impression of Americans in 1867, Seward's Folly, locked in snow and ice, represents home-sweet-home to its residents and a dream destination for visitors from all over the world.

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Jay Hammond
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Gov. Hickel meeting with Native leaders
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Above-ground pipeline as it leaves a remote control valve installation to go underground

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