The Petroleum Industry

The one promising economic prospect for the new state was the discovery of oil and gas fields. Before statehood, petroleum was a minor part of Alaska's economy. While oil was found at some locations around the state, the amounts were insufficient to justify commercial operations. Alaska's first commercial oil well was not started until 1957, when a large oil field was found on the Kenai Peninsula near the Swanson River. 

The discovery of the Swanson River oil field led to more interest from oil companies. Other companies quickly began drilling and made discoveries of other major oil and natural gas fields in the region. At its peak in 1970, the Upper Cook Inlet produced 225,000 barrels of oil daily.

The petroleum discoveries proved lucky for the new state. By 1966, the oil industry had gone from virtually non-existent 10 years earlier to becoming Alaska's most important economic activity. This new industry provided the basis for the state to meet its growing revenue needs during the first decade of statehood. From 1948 to 1957, the territorial government received less than $1 million from the oil industry. Between 1958 and 1967, the new state government received over $100 million in oil taxation and leases. 

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