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5.1.7.wavWith the discovery of vast oil fields under the North Slope, the state moved to develop these. In 1969, Alaska held an oil lease sale. 450,000 acres around Prudhoe Bay was divided into 179 tracts of land, each of which could be bid on. The highest bidder would win the rights to produce oil on the tract.
On September 10, 1969, the state held the auction for the tracts. Thousands of international oil executives, financial investors, geologists, drilling experts, and accountants descended on Anchorage for the sale. Every hotel room in the city was booked. Media crews from around the world covered the event, making it front-page news.
When the final auction was over that afternoon, the State of Alaska had received $900 million for the Prudhoe Bay leases. The entire state budget that year was $112 million.
The sudden windfall in one day, which was nearly equal to the entire state's expenditures since statehood, led to a lot of questions. Should some or all of the money be saved, or should it be spent on projects to improve Alaskan's lives? The legislature, in association with the Brookings Institute, held a series of conferences in late 1969 to discuss Alaska's future. In the end, the windfall was largely spent on needed infrastructure for the largely undeveloped state, such as roads, rural schools, airports, and water and sewer improvements.
The lease sale revenue was also used to fund social programs such as the Alaska Student Loan program and the Alaska Longevity Bonus. The student loan program would forgive much of the loan if college and vocational students remained in Alaska after graduation. The Longevity Bonus program provided all Alaska residents over the age of 64 a monthly payment.
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