Trans Alaska Oil Pipeline

The Trans Alaska Oil Pipeline, or the Pipeline, as they commonly call it in Alaska, is one of the largest systems of oil pipelines, and conveys oil from Prudhoe Bay to Valdez, Alaska. It includes the Trans-Alaska Pipeline, eleven pump stations, several hundred miles of feeder pipelines, and the Valdez Marine Terminal. In all, it is 800 miles (1,300 km) long and as of 2010, has shipped almost 16 billion barrels (2.5×109 m3) of oil.

The Trans Alaska Oil Pipeline was built between 1974 and 1977, as a response to the 1973 Oil Crisis, which caused a sharp rise in oil prices in the U.S. For the first time, exploration of the Prudhoe Bay Oil Field, where oil was discovered in 1968, became economically feasible. Environmental, legal, and political issues barred the excavation of that oil, but after the Oil Crisis, legislation was passed to make it possible.

The first barrel of oil traveled through the Trans Alaska Oil Pipeline in 1977; full-scale production was underway by the end of the year. The Pipeline’s impact on the Alaskan economy is indisputable. Before 1976, Alaska’s personal income tax rate was 14.5 percent, the highest in the U.S. Thirty years after the Pipeline was built, Alaska went from the most heavily taxed state in the country to the most tax-free state. Alaska had no personal income tax, the gross state product was $39 billion, and Alaskans earned $25 billion in personal income. Alaskan citizens even earn annual payments from the interest left over from oil tax revenues.

Both the state’s economy and its government became dependent upon the tax revenues of the companies that used the Trans Alaska Oil Pipeline. Over 85 percent of Alaska revenue now comes directly from the petroleum industry. In 1988, the Trans Alaska Oil Pipeline delivered 25 percent of all oil production in the U.S; today the Pipeline provides less than 17 percent.


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