“I believe that in the future,” said Mitchell, “whoever holds Alaska will hold the world. I think it is the most important strategic place in the world.”

Strategic or not, Congress did not act on Mitchell’s advice about Alaska. In 1935, there were millions unemployed in the U.S. Vast swaths of industry were idle. The national economy was in shambles. The world trading system was broken. Congress had other priorities. It took World War II, the Cold War that followed and much in the way of technological advancement to define the position of Alaska on the strategic ladder.

Strategy and Planning — Hope and Possibility

Yes, it took decades for people to begin to appreciate the strategic importance of the roof of the world. But as any good Navy planner can tell you, strategy must follow logistics and not vice versa. Also, strategic planning is what is called “iterative.” That is, planning must evolve over time. Planning always has to take into account how things are changing. “The plan” must adapt to one’s goals and resources. What do you want? How are you going to get it? What do you need along the way?

Strategic planning — certainly as a tool of national policy — is effective only if it can help a leader or commander distinguish quickly between mere hope and real possibility. This is particularly the case when the onset of crisis or the outbreak of conflict crystallizes the circumstances. Then and there, “the plan” meets up with reality. As German Gen. Helmuth von Moltke said long ago, “No plan survives first contact with the enemy.” But as U.S. Gen. Dwight D. Eisenhower said, as if to explain the point, “Plans are nothing; planning is everything.”

The Tyranny of Distance

Today, three generations later, there is no question that Billy Mitchell was a visionary in his view of Alaska. Yes, Alaska is an unsinkable aircraft carrier at the center of gravity of the Northern Hemisphere. Alaska is a large and rugged landmass between two oceans. Alaska sits atop the polar axis of three continents. Using a “great circle” route, you can go places from Alaska. And from Alaska — especially with air power, and particularly today — you can make things happen. Or you can prevent other things from occurring. You can shape events. So Mitchell saw the distant future correctly when he testified to Congress in 1935 about Alaska. But how was his close-up vision?

Well, visionaries are not necessarily clairvoyant. Mitchell’s role as a partisan advocate of air power apparently led to him to overstate the near-term strategic case for Alaska. Was Alaska “strategic” in 1935? Not in the short or medium term. In 1935, effective air power had a combat radius of perhaps 500 miles. Even by 1941, when the U.S. entered World War II, the best U.S. bombers could deliver a payload to a distance of 1,000 miles or so. These distances were meaningful if you were planning operations in Europe or East Asia and using airfields within those ranges. But 500- and 1,000-mile numbers were simply lost in the vastness of Alaska. (They still are, truth be told.) So when he testified to Congress in 1935, Mitchell was offering strategic hope. But the realities of the aircraft industry back then did not match Mitchell’s words with the possibility of effectiveness.

In other words, Alaska is and has always been held captive by the tyranny of distance. From the standpoint of space and time, Alaska is far away and it takes a long time to get there. Contrary to what Mitchell was saying, in the 1930s and early 1940s, Alaska was all but irrelevant as a springboard for air power (and sea power, as well). Even if one considered the possibility of a distance-saving “great circle” route of sailing or flying to the Far East, the Alaska route was relatively insignificant. The climate along the route is horrible most months. The infrastructure is sparse at best and useful only after making a large investment in bases and logistics. And the endpoints of the northern track are the relatively undeveloped areas of Northeast Asia and Japan, or the almost unpopulated and brutally cold Arctic.

It is no surprise to learn that in 1939, Army Chief of Staff Gen. George C. Marshall wrote to President Roosevelt that “Defense of the extreme North Pacific is not a major anxiety of the War Department.” And historian Edward Miller’s monumental book, War Plan Orange: The U.S. Strategy to Defeat Japan, 1897-1945 , concluded that “In both Plan Orange and World War II, mainland Alaska was strategically insignificant.”

Geology and Strategy

But let’s not be too hard on Billy Mitchell. He made a critical point about Alaska over the long term. Alaska was “strategic,” but it was a strategic importance that was far beyond the realm of air power and the capabilities of the day. When Mitchell testified before Congress in 1935, he spoke as a retired military man and active air power advocate. There is little doubt that Mitchell said what he knew and what he certainly believed about the future.

But there was much more to know about Alaska, and even in 1935, there were people who knew it — at least in rough outline. Many people, for example, knew in the 1930s that Alaska held large resources of gold and other minerals, as well as vast stretches of coal and timber. And a good number of serious students had a broad understanding of Alaska’s mountains, volcanism and seismic belts. The U.S. Geological Survey (USGS) had worked in Alaska for many decades, including studying the mysterious and stark Arctic mountain system called the Brooks Range and its adjacent North Slope. (The Brooks Range was named in 1925 by the USGS in honor of Alfred Brooks, chief USGS geologist for Alaska from 1903-1924.) In the middle of Alaska, the breathtaking Mount McKinley and the surrounding spellbinding Denali were also well known. McKinley and Denali were even tourist destinations — albeit only for the well-heeled who could afford to travel to such a distant locale.

But did such a broad understanding come with enough credibility to drive national strategy? Put another way, did Alaska offer mere hope to the strategic planner? Or did Alaska offer real possibility? To the trapper or prospector, the place has always offered hope. But to the strategist and planner, Alaska’s possibilities lacked both definition and development. There was barely a working coal mine in Alaska, and only one single-track railroad from Seward on the southern coast to Fairbanks in the interior. For all intent, there was no road system in Alaska. From the standpoint of geology and buried resources, the explorers and scientists had barely scratched the surface of Alaska.

By contrast, as far back as the 1930s, most regions of the lower 48 states had been mapped with some degree of accuracy. Most of the obvious resource prospects — those of any note — were picked over by prospectors, if not university-level scientists. One old Harvard professor once joked to me that every road cut in New England has been the subject of at least two master’s theses. And in Europe, by comparison, there has not been a new mineral district discovered since the days of the Roman Empire.

But in the 1930s, there were still parts of Alaska that no human being — native or not — had ever seen. So when Mitchell discussed the strategic importance of Alaska in 1935, he spoke in broad, futuristic geographic and geopolitical terms — “great circle” thinking by a forward-looking student of air power. In Mitchell’s vision, aircraft that did not yet exist would fly from Alaskan bases that had not yet been built.

Time, Investment and Discovery

But you take your advocate as you find him, right? Mitchell was an air power man, not a geologist. Thus, Mitchell did not address the point that the energy and mineral resources of Alaska offer strategic significance of their own. And paralleling the development of air power, the development of the resources in Alaska could occur only after much time and significant investments had run their course.

In 1957, 22 years after Mitchell testified to Congress, Richfield Oil Co. discovered large hydrocarbon reserves in Alaska’s Cook Inlet, on the Pacific coastline. A decade after that, in 1967, Arco discovered immense oil and gas resources two miles beneath Prudhoe Bay, on the North Slope and at the edge of the Arctic Ocean. Forty years after the North Slope discovery — and after tens of billions of dollars invested in the search — the energy and mineral resources of Alaska are far better known. Today, these resources of Alaska are a key part of the strategic resource reserve of the U.S. Still, though, there are large areas in Alaska that have barely been touched by modern techniques of mapping and analysis. There is much left to learn about Alaska. There is far more to discover.

One thing is certain today, however. Alaska is strategic. Billy Mitchell had it right.

Until we meet again…
Byron W. King

February 14, 2008

Alaska: “The Most Important Strategic Place in the World,” Part II was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

I wrote some articles about the trip to Alaska for Whiskey & Gunpowder and Outstanding Investments and there are more in progress. But even the first couple of articles prompted some reader mail. So this is a sampling of your letters, as well as some answers.

From John in New York:

“You did not discuss the wildlife of Alaska very much. What has been the impact of oil development on the wildlife of Alaska?”

Byron’s Reply:

I make no claim to be an expert on Alaska’s wildlife. There are many dedicated scientists and other professionals who have made great careers in evaluating and monitoring the wildlife of Alaska, and on all technical matters I properly defer to them.

However, I was up there, and I can tell you what I saw, and what I was told by knowledgeable people such as park rangers and others who have worked in the field.

Anecdotally, our group saw quite a bit of Alaskan wildlife. In the south, during a trip to observe the lava flows and pillow basalts of Resurrection Bay, we saw a variety of sea life, including otters, gray whales, killer whales, seals, and dolphins. The Sitka spruce covered the hillsides, growing in the soils right down to the waterline. The bird life was rich and varied, and in places I was reminded of scenes from the Discovery Channel.

Inland, we saw quite a bit of Alaskan wildlife, as well. This ranged from Dall Sheep and mountain goats to red and arctic foxes, gray wolves, moose, caribou, arctic hares, and many other smaller rodents. Again, bird life was rich (as were the bugs, in many places with calm winds). Of interest, we saw three arctic foxes, still in white coats, in and around the oil workings at Prudhoe Bay, and there were geese and ducks paddling and nesting literally right next to the gravel pads of the oil wells.

I mentioned in one article the Haul Road, which is a 20-foot-wide gravel road about 494 miles in length from Fairbanks to Deadhorse. It was upon this road that the equipment and materials were hauled in the 1970s to construct the Alaska Pipeline. Of interest, many forms of wildlife actually use the Alaska Pipeline and adjacent Haul Road as an assistance to living. Generally, the gravel beds under the Pipeline and Haul Road are built up to just a few feet above the nearby elevations. So moose and caribou walk on the elevated tracks to catch some breezes and keep the bugs away. Also, the open nature of the road, with almost no trees or ground cover, means that birds hunt for small game nearby. And dust from the Haul Road blows over nearby snow, which causes that snow to melt first in the spring. The availability of open water near the Haul Road tends to attract waterfowl, so the Haul Road has created something of a bird breeding corridor.

One interesting way of viewing the condition of wildlife in Alaska is to compare what is happening near the industrial development of the North Slope with an absolutely protected and essentially pristine area such as Denali National Park. Denali covers about 6.2 million acres, which makes the place larger than, for example, the Commonwealth of Massachusetts. (Of those 6.2 million acres, about 1 million acres are covered with glaciers or permanent snow pack.) Yet Denali has all of 15 miles of paved road and about 40 miles of gravel road, of which half are off limits to all but official traffic. So imagine what it would be like to try to “see” Massachusetts if the place had only about 35 miles of paved and gravel roads for ingress.

Yet for all of its vastness and isolation, according to one park guide, Denali is home to fewer than 40 wolves. This is simply a function of the large territory that a wolf requires for its feeding and breeding ground, and the harsh climate for most of the year. There are far more wolves in the zoos of Massachusetts than there are in Denali, which is a larger and utterly undeveloped area. This says something about the general state of nature in Alaska, and the fragility of the Arctic environment, as well.

From Richard in Illinois:

“You seem to view the industrial development of Alaska as a good thing, and further development as a foregone conclusion. Do we have to develop everything? Can’t we just leave some places alone?”

Byron’s Reply:

Actually, Richard, I try to play these issues down the middle. ARCO and its geologists discovered the Prudhoe Bay oil field in 1967, when I was in middle school. The development consortium, acting under legislation passed by the U.S. Congress, built the Alaska Pipeline in the 1970s, when I was in college. I had nothing to do with it. And now, as the so-called “Peak Oil correspondent” for Agora Financial, I am merely describing where we are and forecasting where the ominous trends seem to be taking us. As Bill Bonner once mentioned to me, “I wouldn’t send somebody to cover a baseball game who does not understand the game of baseball.” And if during the past 30 years or so you have driven a car, or flown in an airplane, or heated your house, or eaten food grown on and transported from a farm, you have benefited directly or indirectly from the oil of Prudhoe Bay and the Pipeline. After 15 billion barrels of oil production, it’s a little late in the game to be complaining about industrial development in Alaska. So spare me the preaching and scolding, OK?

But you raise a good point, Richard. “Do we have to develop everything?” Yes, damn good question. Do we? That oil and gas of the North Slope has been there for millions of years of geologic time, and it will stay there for millions more years if it is left alone. (Now, if it were in China, I am inclined to think that the drilling rigs would be turning and burning. It’s a cultural thing.) What are you prepared to give up if, say, “we” decide not to build a Northern Pipeline to transport natural gas from the Arctic through Canada and to the Lower 48? You, for example, live in Illinois. And I read somewhere that it gets cold in Illinois in the winter. What’s your plan?

I mentioned in one article that the Alaska Pipeline and Haul Road are rather difficult to spot from the air. At the end of the trip to Prudhoe Bay, we flew down to Fairbanks in Caribou aircraft, and I was sitting in the co-pilot seat with a God’s-eye view of the Brooks Range. I knew what I was looking for, and I knew exactly where to look, and from 9,000 feet I could barely spot the Pipeline and Haul Road. So that aspect of development is visually insignificant in the grand scheme. As for the roads and drilling pads of Prudhoe Bay, they are all just a few feet of gravel. When the oil is pumped out, sometime in the far distant future, I suspect that people will just plug the wells and dig out the gravel and give the land back to Mother Nature and her permafrost. It is not as if anybody is building housing developments up on the North Slope. Really, do you want to live up there? It’s just plain cold and harsh, plus dark for months of the year.

I also mentioned in an article how clean the Haul Road was, and I am still astonished at that fact. It got to where we were all looking for litter, and just not finding it. OK, there might be a piece of plastic, or an aluminum can somewhere along the 420-mile stretch, but I sure did not see it. Today, the Haul Road is an industrial service road for access to the Pipeline, and for goods going to and from the oil fields of Prudhoe Bay. But why is it so clean? And I mean country club clean, dear readers. Actually, there was more litter at Oakmont during the U.S. Open than there was on the Haul Road in Alaska.

On reflection, the Haul Road is used by just a few hundred truck drivers at most, and everybody seems to know everybody else. There is something of an honor code among the drivers to keep the stretch clean. The Haul Road is, to be specific, a public highway, but you really have to have a good reason to trek up north. It is just not a road for a Sunday drive, by any means. According to one knowledgeable individual, no more than 4,000 tourists per year visit Deadhorse, and about half of those are with one particular cruise-ship line that arranges overnight tours to the area. The other 2,000 or so tend to be scientific or “adventure” explorers, such as our group of 22 geologists.

Really, most people do not have the slightest clue about how far away, how vast, how isolated, how harsh, how just plain alone is the territory of the Brooks Range and North Slope. It is an area far larger than the size of California, with a total population less than that of a typical American shopping mall on a busy Saturday afternoon.

In terms of numbers, the North Slope of Alaska is home to about 10,000 or so industrial workers who commute up there for a few weeks at a time. They live in temporary housing constructed on gravel pads. The oil wells and pipelines all sit on gravel pads. And it is all connected to the south by a 20-foot-wide gravel Haul Road. The place appears to be very clean, and the end result is currently 775,000 barrels of oil per day to keep the U.S. economy running. Looked at in this light, I think that we have quite a remarkable trade-off going here. People are, of course, free to differ in that assessment.

Until we meet again…
Byron W. King

June 28. 2007

Letters to the Editor: Alaska was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Fairbanks

While traveling, I spent some time in Fairbanks, a lovely old town along the meandering Chena River. Fairbanks got its start in 1903, serving the gold miners who headed into the Alaska interior in search of fate, and sometimes even fortune. In more recent years, Fairbanks has developed and diversified its economic base, serving both the industrial needs of central Alaska and the tourist trade. One of our Outstanding Investments recommendations, Kinross Gold, operates the famous Fort Knox mine near Fairbanks, producing about 1,000 ounces of the yellow metal per day from disseminated ore.

Tourists

I will be writing about the industrial aspects of Alaska in other articles, but I also want to mention how many tourists are now visiting the state. The public information is that several million tourists visit Alaska every year, arriving by ship, plane, and road, hailing from all over the world. This large figure does not surprise me given the many tour buses that are moving around near both the ship terminals and along some of the interior roadways. Alaska is a destination in its own right, filled with spectacular natural wonders of almost indescribable beauty. Denali National Park alone, home to Mount McKinley, which is the tallest feature in North America, receives over 400,000 visitors per year. This number strikes me as remarkable, given the remoteness of the place. (But a visit to Denali is well worth the effort, I must add.)

For Sale

Anchorage, Fairbanks, Denali, and many other tourist spots have the typical array of shops that sell souvenirs and mementos. For example, at the high end, there are some gorgeous pieces of carved stone and other artwork for sale in some shops, usually depicting the wildlife of Alaska (carved bears, birds, and fish, and the like). And some of the prices for this artwork are rather steep, as well, a steepness that is reminiscent of the north face of Mount McKinley, if you get my drift.

Much of what is for sale in the gift shops also includes the usual honky-tonk, with T-shirts, ball caps, and other clothing items bearing Alaska-themed logos and artwork. Some of this is advertised as “native craftwork,” but I think that many of these so-called “natives” probably speak Chinese as their first tongue — again, if you get my drift.

While in Fairbanks, I strolled down Second Avenue, which is the main drag in the old downtown section. For some strange reason, I just happened to find myself in front of a place called the Alaska Rare Coin Shop. Although relatively small, the shop has a nice array of gold and silver coins, and many other types of rare and collectible items of numismatic value. The store also has a large amount of shelf space devoted to old books related to Alaska. The store is a browser’s dream. It is, in all sincerity, a delightful place and worth a visit if ever you journey north and pass through Fairbanks. Afterward, you can walk next door and dine at Soapy Smith’s Restaurant, where they served me the best piece of salmon that I have ever tasted.

What to Buy?

I had been looking for some souvenirs of my trip to Alaska, but was sort of conflicted by most of the stores and the wares for sale. I do not need any $4,000 carved stone bears, nice as they are, and besides, I do not want to have to lug them home. And there are only so many T-shirts and ball caps that I, or my wife and kids and family and friends, can or will ever wear. But at the Alaska Rare Coin Shop, I was able to find some real right out-of-the-ground unaltered gold nuggets, direct from the placer deposits near Fairbanks. Now, that is my kind of souvenir.

The Gold That Caught My Eye

I made a deal with the shop owner for one particular gold nugget that caught my eye. You can see some of the crystallization within the gold, and the piece still has a small bit of quartz embedded in it. I am sure that this nugget made some miner’s day when he pulled it out of the sluice bucket. Interestingly, the storeowner told me that most people do not want to buy raw, unfinished nuggets from the placers, but are more interested in just purchasing the gold and silver coins. Well, I like high-purity coins, too. But too bad for everybody else. A gold nugget is a gold nugget. As the saying goes, “It worked for me.”

So I traded some U.S. dollars for a wonderful nugget of Alaska gold. Long term, I would rather have a nugget of gold in my safe than a carved stone bear on my mantelpiece, let alone a few more T-shirts in my chest of drawers.

Buy Gold

Is there a moral to this tale? Well, if you insist, here it is. “The dollar is doomed,” to quote the Mogambo Guru. “Buy gold.”

But if you have no plans to travel to Fairbanks and buy gold nuggets from the Alaska Rare Coin Shop, you can try another way of doing things. You can save the time and airfare it takes to travel to Anchorage and the drive to Fairbanks and just buy an insured gold-backed certificate of deposit from our friends at EverBank. Click here to discover how easy it is to protect your financial integrity by tying yourself and your savings to gold, albeit without the feel of owning a nugget of gold from the placer deposits of Alaska. For that kind of heft in your pocket, you have to travel to Fairbanks and make your own deal.

Best wishes to all, and until we meet again…

Byron W. King

June 20, 2007

A Gold Nugget from Alaska was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Thrilling and Humbling

On a personal level, I am both thrilled and humbled by my trek across Alaska. In many respects, I am awestruck. And I am privileged, if not blessed, to have been part of the endeavor. I was in the company of a group of astonishingly smart and gifted geologists, supplemented by a number of subscribers to Whiskey & Gunpowder who answered the call of a note that I put out in March. The Whiskey readers were outstanding participants and overall super troopers, as one would expect of such a hardy breed. And the geologists on the transect included the famous Gil Mull, one of the original Richfield Oil (later, ARCO) team that discovered the 15-billion-barrel Prudhoe Bay oil field in 1967. As you can imagine, the discussions of geology and, in particular, the oil and gas potential of Alaska were… well, they were pretty deep. (OK, sorry for the pun.) We “went there,” if you know what I mean. And once you go there, perhaps, I think that you can never really come all the way back. There is just so much to say, dear readers. Where to begin?

Mountains and Pipelines

Let me begin at the beginning and go back to Aug. 21, 1778, when the redoubtable British sea Capt. James Cook was sailing north through what would later be named the Chukchi Sea. Cook had, in fact, sailed farther north than even the most daring Russian navigators of that era or previous times. He went into a region inhabited by the relatively nomadic, but also relatively friendly and industrious Native Alaskan people who eked a living from the sparse fruits of a cold sea. Cook gazed at one distant body of land and wrote in the ship’s log about a place that “appeared to be pretty high land, even down to the sea.” Cook also noted, of interest, that it was “destitute of wood.” Cook called the place Cape Lisburne, after a British earl of that same name. Cape Lisburne is the westernmost extremity of what is now called the Brooks Range.

And what a range of mountains is that Brooks Range! It is a rugged, jagged, foaming ocean of snowcapped mountains, 150 miles wide and 750 miles long, extending from the northwest coastline of Alaska far to the east and deep into the Canadian Yukon. The Brooks Range is larger in many respects than the Appalachians, yet in my experience, few have even heard of this massive geological feature. The Brooks Range, so named in the 1920s after a brilliant and bold geologist who pioneered the exploration of the mountain system, boasts peaks of 10,000 feet in elevation, and lies entirely above the Arctic Circle. Much of it lies within the protective jurisdiction of the Gates of the Arctic National Park and the Arctic National Wildlife Refuge (ANWR). The Brooks Range is the northernmost range of mountains in the world, geographically isolating a very flat coastal plain the size of California that is called the North Slope of Alaska.

Earlier in the 20th century, many geologists thought that the Brooks Range was an extension of the U.S. Rocky Mountains and their northerly companion, the Canadian Rockies. But now, in an era when plate tectonics is the operative geological paradigm, it appears that the Brooks Range is its own Arctic mountain system, sui generis, and filled with thrust-faulted masses of sedimentary rocks that are, in turn, closely related in time, space, and tectonic force to the opening of the Arctic Ocean Basin due to sea-floor spreading. And because of this interesting scientific tidbit, the Brooks Range and North Slope offers an entirely different sort of petroleum and natural gas system than one might initially expect when using “lower 48” forms of geological thinking. Hold that thought, dear readers.

I will discuss more geology in this and, of course, future articles. But I also want to get you thinking about the fact that the Trans-Alaska Pipeline System (TAPS) — in particular, the famous Alaska Pipeline — has to cross the mighty Brooks Range as part of the first leg of its route south from Prudhoe Bay, about 500 miles east of Cape Lisburne. Thus, in the first push for the petroleum of the North Slope, immense pumps the size of several railroad locomotives connected together in a series drive the oil from sea level to up and over the aforementioned Brooks Range, along a “utility corridor” established by federal law for just that purpose. Currently, the oil pushed through and making the ride amounts to about 800,000 barrels per day, although in earlier years the North Slope was producing, and the Alaska Pipeline was transporting in excess of 2.2 million barrels per day. (The decline is due to reservoir depletion.) Think of just the energy required in overcoming the force of gravity, in order to lift that much oil high enough to cross a broad, high mountain range. Hold that thought, too.

TAPS crosses the Brooks Range at Atigun Pass, a narrow crack in one particular mountain composed of mostly solid quartzite conglomerate. Atigun Pass is about 170 miles south of Prudhoe Bay and sea level, offering one of the only clear shots to the south, albeit over a glacially carved valley and at an elevation more than 4,800 feet above sea level. Atigun Pass is, they say, utterly treacherous in wintertime, which is most of the time up here. And the Brooks Range is just one of three immense mountain ranges, and nearly 1,000 rivers and streams, that the Alaska Pipeline crosses in its long 800-mile path to Valdez on the southern coastline of Alaska. Hold that thought as well.

Putting Thoughts Together

OK, dear readers, I asked you to hold some thoughts and now it is time to put some of these thoughts together from the perspective of Outstanding Investments.

Hydrocarbon-Bearing Formations

One of the oil-bearing and -producing formations at Prudhoe Bay is called the “Lisburne limestone.” Does that name sound familiar? It should, because it is related in time and origins to the rocks that form Capt. Cook’s so-named Cape Lisburne, many hundreds of miles to the east. And there are many other hydrocarbon-bearing rock formations that the good Capt. Cook never saw or suspected, currently productive or otherwise prospective, north of the Brooks Range. These rock formations are deeply buried under the North Slope, and extend from under the Chukchi Sea, along the northern coastline of Alaska and offshore, following the line of the Arctic Ocean all the way over into northern Canada. Also of exploration interest, somewhere in northern Canada, according to some geologists, lies the “other half” of the Arctic Basin rift system, where there may be rock units similar to what we find beneath the North Slope. So there is immense hydrocarbon potential along the North Slope, and perhaps elsewhere in the northern region of North America.

Isolated, Vast, Cold

Yet despite the rich prospective hydrocarbon potential of this vast Arctic area, it is immensely difficult to accomplish even the most basic of tasks. The place is almost entirely uninhabited and there are simply no roads or other infrastructure. Ingress and egress is by dog sled in winter, airlift most other times (except when the winds are blowing 150 miles per hour), or barge during the few ice-free months of summer. Most everything else currently arrives in Deadhorse, Alaska, after a 420-mile trip up the 20-foot-wide gravel “Haul Road” (now named the Dalton Highway) that parallels the Alaska Pipeline from Fairbanks to Prudhoe Bay. My group of touring geologists rode up that rough road in a set of tough vans, viewing (and feeling) every hard mile of Haul Road, and observing the Pipeline in all its industrial glory, which is significant.

Climate is, as one would expect so far north of the Arctic Circle, constantly extreme and from an environmental standpoint extremely fragile. As Capt. Cook noted, the area is “destitute of wood.” Yes, indeed, and it is destitute of almost everything else under God’s sun. In fact, for many months of the year, it is destitute of even the sun. And it is cold, too. It is very cold, my friends. When I stood at the edge of the Arctic Sea the other day, a sunny day in June, with my boots just touching the ice-clogged waters, the temperature was nominally in the low 30s Fahrenheit. But I think that somebody was lying. It had to be colder than that, or perhaps it was the 40-knot gusts of wind that cut through and penetrated a U.S. Navy-issue Gore-Tex Arctic outer liner, plus numerous other layers of protective clothing. There is something about the Arctic wind that just wants to kill you, and for a deeper understanding of that, I recommend any of a number of poems by the great Robert Service. But the point is: Wow, was it ever cold!

When you find something in that frozen north (and if you look hard, dear readers, you probably will), what do you do with it? How much is there? What are the numbers on any given prospect? What are the economics? What is the environmental impact? How do you plan for large-scale industrial development in such a remote and harsh environment? What are the logistic challenges, the hurdles, the utter barriers (such as crossing Gates of the Arctic National Park lands or ANWR) to accomplishing what you want to do? How do you arrange for long-term extraction operations, and transport your treasure to the eager markets of the world? These are just the first of many hard and exceedingly expensive questions you have to ask.

One of the World’s Great Oil Finds

I mentioned earlier that geologist Gil Mull, who was part of the original exploration team that found the Prudhoe Bay field in 1967, was on the trip to the north. Gil described the early days of exploring around Prudhoe Bay in the mid-1960s, when the oil workers would take off in a transport aircraft from Fairbanks and fly north to an utterly isolated drill site on the edge of the frozen Arctic Ocean. This was, of course, before the Haul Road, the Pipeline or anything else even remotely resembling the current state of development after 40 years. There was no global positioning system (GPS) in those days, and not even any of the radio navigation aids that were then around and available farther south but not working so far north. All they had to steer by was dead reckoning, aiming the nose of the airplane eventually at the glowing light on top of the drilling rig. Little rig, big Arctic. And once they saw the light, they would land the airplane, in the dark, on an ice runway carved out of frozen tundra. Any volunteers?

To give away the happy ending of the story of the first well in the Prudhoe Bay area, the “discovery well” of one of the world’s great oil finds, they drilled into a 300-foot gas cap at the top of a deeply buried structure, underlain by dozens of feet of oil-soaked sandstones and conglomerate. Many months later, when they drilled the confirmation well about seven miles away on the flank of the structure, they found over 400 feet of oil column in the rocks. Gil discussed how, during one coring operation, they started to pull the core out of the drilling tube and “it simply flowed out, just sand and rock and oil, 180 degrees or so hot, flowing and steaming all over the drilling deck.” At one point, the geologists conducted what is called a “drill stem test,” in which they allowed the fluids from the well simply to flow into the drill pipe. “We rapidly had a supercritical pressure buildup,” said Gil. “And then we closed off the drill stem mechanism and it took over 12 hours simply to blow down the pressure. We were flaring natural gas for 12 hours just to get the high pressure down.”

Yes, Gil was fortunate enough to have been part of a group that found the largest oil field ever discovered in the U.S. or Canada, 10 billion barrels, or so they thought at the time (now we know that it is much larger, near 15 billion barrels). But the Prudhoe Bay field got developed only because it was so large. Anything much smaller might not have paid off, because there was no other infrastructure. The next step was to build the Haul Road and adjacent Alaska Pipeline, which ultimately took an act of Congress and a total of $11 billion in 1970s-era dollars.

Could we do something similar today? And we have to ask, would it be worth it to do so? Because, dear readers, whatever happens is going to cost, and cost really big, and I mean that in many respects. This is spectacular territory, but it is spectacularly fragile and treacherous as well. As Barry Lopez wrote in his book Arctic Dreams, “No summer is long enough to take away the winter. The winter always comes.” To my observation, winter never really leaves.

Think of this in terms of current and future exploration to the far west of Prudhoe Bay, in what is quaintly labeled on the pretty maps as the “National Petroleum Reserve-Alaska.” Yeah, right. “Petroleum Reserve.” Piece of cake, huh? Who is going to develop that “petroleum reserve”? Who will pay to drill it up, and to build the next part of the Arctic energy complex? Who will take the risks, and make a series of large hydrocarbon discoveries, and then build an accompanying “Northern Pipeline” across 500 miles of North Slope and Arctic Ocean coastline? Will anyone venture to build something else down to the south (and if so, to where?) across that all-but-impenetrable Brooks Range of mountains? Think about it. Who is going to do that? Will someone find another Prudhoe Bay and mark out another Atigun Pass, maybe? There is nothing easy about this, nothing at all, not even breathing that cold Arctic air.

Things Are Going to Happen

I will close by saying that I believe strongly that many great and vast and difficult things are going to happen in northern Alaska, and I am going to watch it all like a hawk. But I know, and I am absolutely certain, that whatever happens will have to occur in a harsh and utterly unforgiving Arctic world that is very much different from the world in which our civilization developed its resources in the past. People are, in all likelihood, going to do what has to be done, and spend the funds to accomplish the tasks. But what challenges! And what expenses! And what risks! Fools dare not rush in, and we want to screen those fools out of our Outstanding Investments portfolio. That is why I am discussing so much in this update to you.

Looking at things more broadly, I do not think that, at any time over its entire history, mankind has ever done anything remotely similar in scope to what is going to occur up in the frozen north over the next few generations. As I stated near the beginning of this article, I am simply humbled at the measure of the task. I am awestruck.

Please keep reading this newsletter, dear readers. There is much more to say. But for now, I bid you all adieu.

Until we meet again…
Byron W. King

June 19, 2007

“Pretty High Land” was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

I’m looking at one critical component of the nation’s energy resource base, as well as the utterly spectacular wilderness of this vast and complex land.

There are few more complex geologic terrains anywhere on Earth.

Western North America in general, and Alaska in particular, is a complex mosaic of many different ages and types of rocks, called "terranes," all formed at different periods of geologic time…

The Anchorage area, and Kenai Peninsula alone, is comprised of at least eight different types of rock terranes, all formed over the past half billion years or so…

Then, you have granite plutons, formed at depth within the Earth, almost right next to active volcanoes erupting the melted sediments that were subducted, millions of years ago, beneath the Aleutian Trench…

I could go on and on, but my point is not to overwhelm you with geological concepts or jargon. My point is to introduce the notion that Alaska holds a treasure trove of resources, but the exploration and production process is difficult.

Take the difficult-to-decipher geology, and then couple that with the remoteness of Alaska and the need to transport equipment and supplies literally thousands of miles over the North Pacific Ocean and through the adjacent seas. Then, you have to land your goods and transport them, often as not to some site in the mountainous interior. Add in the utterly hellacious weather that strikes this land for much of the year. And if you find something, now you have to extract it and haul it out. So Alaska holds great wealth, but only for the hardy, the patient and often for the lucky, if not the good.

To Build? Or, Not to Build?

When I arrived here in Anchorage, the lead business story in the Anchorage Daily News concerned the proposed "Arctic Gas Line" that people have desired for decades to build from the North Slope, down through Canada’s Mackenzie Valley and into the U.S. The headline in the newspaper states, "Exxon Frets Over Arctic Gas Line Cost."

You have surely heard of the vast oil resources of the North Slope. To date, more than 13 billion barrels of oil have been pumped from beneath the frozen tundra of Prudhoe Bay and environs, with more to come.

But there is also an immense resource of natural gas in the rocks below. In fact, moving west from Prudhoe Bay, the reservoir rocks dip downward and are buried deeper and deeper. Many exploration geologists believe that any hydrocarbons that will be found are probably in the form of natural gas, not oil. So the next big play in the northern Alaska region will likely be natural gas drilling. But as with much else that occurs in Alaska, progress is measured in glacial increments.

The newspaper story described the concern of ExxonMobil over the spiraling costs to build the proposed line. At the annual Exxon shareholders’ meeting, Exxon CEO Rex Tillerson described how the cost estimates for just the Alaskan portion of the gas line had more than doubled in recent years, to $15 billion. He may recall the original Trans-Alaska Pipeline, and the initial cost estimate of $800 million that ballooned in the mid-1970s to near $8 billion. And cost estimates for the entire Arctic Gas Line, if it is ever built to a proposed terminus in the U.S., range up to $30 billion, making it the largest single private capital project in history.

"At that cost, it is not viable to build the pipeline," said Tillerson. "It involves lots of steel, lots of compressors, lots of valves," said the Exxon CEO, referring to the skyrocketing prices of most basic industrial products and commodities. In addition, the cost of labor is rising, and there is a critical scarcity of personnel who have the necessary technical skills to manage such immense capital projects.

That is, any gas pipeline in the Arctic is competing for labor, steel and equipment with shipbuilders in Korea and skyscraper constructors in China, as well as with comparable oil and gas projects ranging from the Gulf of Mexico to offshore Brazil and the Middle East. We live in a world of vast marketplaces…

"Shed Our Shackles to Exxon"

The day after the Anchorage Daily News article, in an editorial piece published in the same newspaper, longtime Alaska oilman Jack Roderick, author of Crude Dreams: A Personal History of Oil in Alaska , stated that it was "time to shed our shackles to Exxon." Roderick came up to Alaska in 1954 and has been involved with Alaskan resource development since before the place was even a state. He is a former mayor of Anchorage, a former member of the state natural resource commission and currently a member of the federal Arctic Research Commission.

I took the occasion to look up Mr. Roderick, and we had a very cordial and informative discussion. In Roderick’s view, the massive 1968 oil strike at Prudhoe Bay drew essentially all attention and exploration emphasis on oil toward the North Slope, where major oil companies were looking for giant oil fields.

Hydrocarbon exploration languished elsewhere in Alaska, particularly near the Cook Inlet area, where the first major oil strike in Alaska had occurred in 1957. This 1957 oil strike, at the Swanson River on the Kenai Peninsula, was actually quite instrumental in propelling Alaska to statehood, because it demonstrated that Alaska would have the economic means to support itself, and not become a net drain on the federal Treasury. But about 10 years later, the North Slope bonanza drew the focus of the oil world away from the many other prospective basins of Alaska.

According to Roderick, "For 30 years, we have contentedly collected our oil taxes and royalties from the North Slope. Exxon, BP and ConocoPhillips are responsible for keeping this largesse flowing to Juneau, and we should thank them for it. However, these same three giants now want to control our natural gas."

Roderick points out that Exxon and BP are not making any major effort to explore for gas, while ConocoPhillips is, to its credit, investing in such an effort. Roderick asks, "Does it make sense to put the two companies that will not be exploring for natural gas on the North Slope in charge of the pipeline that is to carry that gas to market?"

Roderick believes that the North Slope of Alaska and the regions to the west in the National Petroleum Reserve will be exploration and production plays "for the next 50 years." He told me that he anticipates development activities in the far north "comparable to what you see today in the Gulf of Mexico after 50 years of development down there."

According to Roderick, the north of Alaska should be, and currently is, opening up to more exploration by more companies. If Exxon does not want to invest in Alaska, then "the best solution is for Exxon to leave Alaska."

Well, we all know that Exxon will probably not leave Alaska. But sometimes an editorial writer simply overstates a point to be sure that the point gets made.

For us investors, the idea to keep in mind is that there are immense opportunities within the U.S., and particularly in Alaska, for the companies that understand what they are doing in this complex, distant, rugged and often harsh locale.

Until we meet again…
Byron W. King

June 12, 2007

There’s Money to Be Made in Alaska’s Resources was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Russian Odyssey, Russian America

In an article published two years ago in Whiskey & Gunpowder entitled “Odyssey to Tsushima,” I discussed Russian expansion across Asia and Siberia in the 1600s and 1700s. To make a long story short, by about 1740, the Russians had sent explorers into North America. These explorers established a land called “Russian America” (it would not be commonly called the Aleut name of “Alyeska” until the 1860s), with trading posts down the West Coast of North America to as far as what is now San Francisco. We now return to that theme.

Trade and Oil Seeps

From the mid-1700s when they first arrived to well past the mid-1800s when jurisdiction changed hands, Russia had a significant presence on the West Coast of North America. The Russians physically controlled the coastline of Russian America, as much as any nation could control such wild and rugged territory. And by virtue of sovereignty, the Russians controlled key trade routes, sources, and goods, to include whale products, furs, timber, other fish and food products, and some primitive manufactured items. Fur products from Russian America were of particular value in China, where they were easily and profitably exchanged by Russian merchants for Chinese tea, spices, and silver.

For 100 years, Russians traded extensively with the native populations in Russian America and western North America, and tightly controlled the movement of commerce from what would become Canada, meaning that Russia placed particular controls over British commerce. Despite the political constraints, however, at the level of the trading desk, the Russians gladly exchanged goods with British merchants, as well as with the merchants of Mexico and Spain to the south, and with the few Americans who ventured so far to the west in the early part of the 19th century. As to those Americans who had reached the western side of their great continent, in the early and mid-1800s, their nation was a new and struggling place with enough to think about simply taming the lands of the Ohio River Valley and Midwest. The young United States, that place that Alexis de Tocqueville described in his monumental work Democracy in America, were expanding slowly to the west from the original domain on the East Coast of North America. Few informed observers believed that America could or would expand to the West Coast for at least another 100 years.

Of interest, as early as the 1790s, Russian traders noticed and recorded oil seeps along the coastline of Russian America, in the area of the Kenai Peninsula. But this was long before anyone knew what to do with an oil seep. For that particular insight, and the technical and cultural development it conferred, mankind would have to await the events that occurred in Titusville, Pa., in 1859 and thereafter. And by then, other things had taken on a life of their own. But this gets ahead of the story.

Edouard de Stoeckl

In 1841, an elegant young Russian man was posted by his government to a diplomatic assignment in Washington, D.C. His name was Edouard de Stoeckl (1804-1892). He intended on pursuing a career in the Russian diplomatic service, and his American assignment was to the secretariat of Russian Legation. He would remain posted to the United States for the next 27 years, and at the end of his posting would alter the trajectory of history.

Stoeckl was urbane and sophisticated. He spoke flawless French and excellent English, with just an engaging hint of Russian accent. In the 1840s, he stood out in Washington, which was then a coarse and often violent place, where even members of Congress walked about armed. Quickly, Stoeckl became a frequent guest at the most selective of social gatherings and a confidant of many of the leading politicians and public intellectuals of the day.

But the American embrace of Stoeckl was not grounded purely on social desires. In the first half of the 19th century, the U.S. relationship with Russia was mutually cultivated, because both nations had an interest in competing with and constraining the British. The Russians saw Britain as a rival great power in Europe, and the U.S. saw Britain as a danger, past and present, lurking to the north in its Canadian possessions. Both Russia and the U.S. saw Britain as a rival in maritime trade and naval power. So it was not unnatural that both Russia and the U.S. would seek common ways to restrain Britain.

In the late 1840s and early 1850s, Stoeckl was witness to an astonishing and all but instantaneous surge of U.S. power and territorial expansion. In 1847 and 1848, he saw the U.S. whip itself into wartime frenzy toward Mexico, and seize and annex Texas and much of the land to the west. And between 1848-1850, the U.S. presence utterly overwhelmed California, in the months after gold was discovered at Sutter’s Mill. This display of almost breakneck U.S. expansionism, coupled with a close reading of the U.S. concept of its own “Manifest Destiny” to expand westward, convinced Stoeckl that it would not be long before the U.S. also moved north into Canada and eventually up the western coastline to Russian America. This message and warning is what Stoeckl repeatedly sent back to the Russian Foreign Ministry in St. Petersburg.

The Crimean War and American Support of Russia

In the early 1850s, tensions flared in Europe between Russia, France, Britain, and Ottoman Turkey. By 1854, Russia was involved in full-scale war with Britain, France, and the Turks, with most of the fighting taking place in the Crimea and the Black Sea. Popular opinion in the U.S. concluded that Britain, France, and the Turks were in the wrong, and were unjustifiably waging war against Russia. U.S. policy took a decided tilt in favor of Russia.

During the course of Crimean War hostilities, 1854-1856, U.S. ships assisted Russian ships in distress. The U.S. government of President Franklin Pierce allowed U.S. merchants to sell arms to the Russians, and even oversaw the delivery of fine DuPont gunpowder to Russia. One unit of 300 Kentucky sharpshooters presented itself to go to Crimea and fight for Russia, while U.S. surgeons provided medical care to wounded Russian soldiers in field hospitals. The U.S. minister to London, an up-and-coming political star named James Buchanan (1791-1868), passed intelligence on British policy to the U.S. secretary of state, who in turn relayed the information to the Russian Legation in Washington. In 1856, while still posted in London, Buchanan would be nominated as a candidate, and in due course elected to the office of U.S. president.

One beneficiary of this outpouring of U.S. support for Russia in the Crimean War was the Russian diplomat posted to Washington, Edouard de Stoeckl. His contacts in Washington, cultivated during the previous decade, facilitated many of the U.S. policies that benefited Russia. In 1856, Stoeckl was appointed as first minister to the U.S., and soon thereafter came to be a close correspondent with the new U.S. President Buchanan.

Buchanan’s presidency, however, coincided with the descent of the U.S. toward its Civil War, a topic far too broad for this article to discuss in detail. Suffice to say that Buchanan had to deal with the judicial and political fallout of the Dred Scott holding, issued by the Supreme Court in 1857; the economic fallout of the Panic of 1857; and the social fallout of events such as “Bleeding Kansas” of the late 1850s, and the more easterly John Brown raid on Harpers Ferry in the fall of 1859. The expansive U.S. nation was tearing itself apart politically, and under the presidency of Buchanan headed for war. The election of Abraham Lincoln (1809-1865) cast the final die, and on April 12, 1861, Confederate shots were fired at Fort Sumter, S.C.

The Civil War interrupted the “Manifest Destiny” expansion of the U.S. to the west, while the various states of the Union and Confederacy were involved in other matters. Still, Stoeckl watched with trepidation and, taking a long view, did not cease to anticipate a time when the U.S. would seize Russian America as part of its effort to consolidate the territory of North America under one flag. The solution, thought Stoeckl, would be for Russia to “sell” its Russian America territory to the U.S. Again and again, Stoeckl raised the issue with his home office in St Petersburg.

In St. Petersburg, the idea of selling any part of Russian territory was out of the question. Where the Russian flag was raised, it would never come down. Indeed, 100 years of Russian colonization in Russian America had planted the seeds of the orthodox religion among both settlers and natives. Selling the territory would be the equivalent of abandoning these souls to some unknown, and probably cruel, fate.

The Civil War and Russian Support for the U.S.

As the U.S. Civil War raged, Russia again found herself, in mid-1863, facing the possibility of another war with Britain over the fate of Poland. But this time, it did not seem likely that the now-divided U.S. would be able to assist Russia, as had occurred during the Crimean War, either diplomatically or militarily, or with materiel of any sort. So the Russians decided to alter the diplomatic climate to their own benefit, and secretly dispatched numerous elements of their navy to U.S. ports. In September 1863, coincidentally just two months after the Battle of Gettysburg (July 1-3, 1863), Russian warships sailed into and anchored in the harbors of New York on the East Coast and San Francisco on the West Coast.

The specific Russian military purpose was to protect these otherwise vulnerable ships from any attack by superior British naval forces. But to the American perception, the docking of the vessels made a statement by Russia that Britain should not intervene in the American war on the side of the Confederacy. The public within the Northern states went wild with acclaim for the Russian warships. News reports all but sang paeans to the Russian ships, and lionized the Russian officers and crew. “Thank God for the Russians,” wrote Secretary of War Gideon Welles in his diary. The Russian ships remained in U.S. ports for seven months, and received courtesy calls by numerous politicians and prominent journalists and individuals of wealth and power. Even Mary Todd Lincoln, wife of the U.S. president, paid a call upon the Russian flagship in New York. This Russian naval maneuver effectively brought an end to the possibility that any European nation would provide aid or assistance to the Southern states, and thus doomed the Confederacy to suffer under a Northern war of attrition.

The Civil War and Russian America

Although the Civil War ended with a Northern victory over the South, the U.S. was a shambles. Total U.S. casualties were of biblical proportions. The U.S. government had incurred great debt to fight the war, and wartime inflation was raging. The South was rapidly becoming lawless, and its economy was destroyed by war and plunder. The economy of the North was badly distorted by the effects of wartime industrial production. The assassination of President Lincoln, in April 1865, only added to the national discord, in that an ostensible Southerner, Andrew Johnson, became president and was distrusted by many Northerners and Southerners alike.

On the same night that Lincoln was murdered, his Secretary of State William Seward (1801-1872) was also severely wounded in a failed attempt to take his life. Seward had made a political career as an ardent expansionist and proponent of U.S. Manifest Destiny, and in the course of his career had become a close acquaintance of Russian Minister Stoeckl. On many occasions, Seward and Stoeckl had discussed issues concerning Russian trade with California out of “Alyeska,” and in the process, the two had discussed the future of Russian America, and which nation would eventually control those lands. It was Seward’s belief in the need to look out for the long-term interests of the U.S., and particularly its continuing territorial expansion, that caused him to decide to stay on with the new Johnson administration, and for that act, he forfeited most of his political support.

On the one hand, in 1865, Russian America was not for sale by the Russian government. In Russia, the belief was that the postwar U.S., with its economy so distorted and dislocated, would need to trade in order to obtain many kinds of essential goods. The products and resources being exported from Russian America could provide many of those goods to the markets of Oregon and California. In addition, in the Russian perception, the weakened U.S. was no longer in a position to exert a threat to Canada, and by extension to Britain. So the U.S. could not be counted on to work in concert to protect Russian interest against Britain. There was nothing to gain by selling out.

But on the other hand, from his post in Washington, Russian Minister Stoeckl persisted in making a case to sell the Russian territory to the U.S. He continually advocated to the Russian government the sale of Russian America (by now being called “Alyeska” so as to minimize its Russian character) to the U.S., arguing that this would allow the Russian government to concentrate its resources on Eastern Siberia, particularly the problematic Amur River border area with China. Also, insisted Stoeckl, by selling the North American possession to the U.S., Russia would avoid any future conflict with America due to what he believed would be inevitable, eventual territorial expansion.

At one point, the Russian government recalled Stoeckl to St. Petersburg, in order to give him a promotion that would remove him from Washington and stop further discussion of selling the North American colony. But in a twist of fate, Stoeckl used his return to Russia as another forum from which to advocate selling “Alyeska.” Finally, at a secret meeting in the Winter Palace held in December 1866, Russian policymakers conceded to Stoeckl the authority to sell the North American holdings, but “not for less than $5,000,000.00.”

By March 1867, Stoeckl was back in Washington, negotiating with Seward for the sale of Russian America to the U.S. Eventually, Stoeckl got Seward up to $7,200,000.00, which was little enough. Indeed, the Russian navy cost twice that much to operate every year. $7,200,000.00 was a relative pittance. The Russians may as well have just given the place away.

“Unfit for Civilized Men”

Seward quickly took the agreement to the U.S. Senate, where he immediately encountered stiff resistance. Much of the resistance was because the sale was perceived as Seward’s idea, and Seward’s stock was low. But through much suasion and not a few promises of future benefit of one sort or another, the Senate finally voted to approve the purchase, 27-to-12, only one vote more than the two-thirds vote required to ratify a treaty.

Now Seward was faced with the prospect of obtaining funding from the U.S. House. The opposition to paying any money to Russia was furious, even $7,200,000.00 for all of Alaska. At root, it was all about animosity toward Seward and the president he served, Andrew Johnson. But from the rhetoric, it was also clear that the warm feelings toward Russia from the days of the Crimean War were gone. And it was as if Russian ships had not sailed into New York Harbor at a critical time of the Civil War. As far as many members of the U.S. House were concerned, Seward’s deal with the Russians was just a golden payback for a notorious publicity stunt. The entire landmass of “Alyeska” was characterized as nothing but “Seward’s Icebox” and the deal was “Seward’s Folly.” The House Foreign Affairs Committee issued a scathing report in which it categorized as worthless the timber, the fish, the minerals, and the furs of Alaska. These resources were all “unfit for civilized men,” stated the report. This stigma, certainly untrue and entirely unfair, would attach to Alaska and persist for many decades.

But in July 1868, the U.S. House finally voted in favor of funding the purchase of Alaska from Russia. According to a note left in the papers of President Johnson, Seward had arranged for many of the House members to receive substantial bribes to vote in favor of the purchase and funding. In other words, it almost did not happen.

Stoeckl returned to Russia under a cloud of suspicion. He was accused of sedition, denied another diplomatic post, and quietly pensioned off to live out his life in Paris. He is barely remembered in Russian history, and if mentioned, it is usually in the context of selling out Russian interests to the U.S.

Seward served out his term under President Johnson, and retired when Ulysses Grant was inaugurated as the 18th U.S. president, in March 1869. Seward returned to his home in Auburn, N,Y., where he died on Oct. 10, 1872. Seward’s last words were to his children: “Love one another.” Seward was buried near his home, and his headstone says not a word about Alaska, but simply reads, “He was faithful.”

Until we meet again…
Byron W. King

June 4, 2007

$7,200,000.00 was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.