THE RICHEST AUCTION IN HISTORY

Already Alaska beckons on the north, and pointing to her wealth of natural resources asks the nation on what new terms the new age will deal with her. --The Frontier in American History, 1920, Frederick Jackson Turner

Americans have long paid little heed to their frontier of the north, idealizing instead the memory of a Western frontier that is forever gone. Now Alaska increasingly presents what Historian Turner called the "stubborn American environment" with its "imperious summons to accept its conditions." The 49th state's environment is as raw and untouched as the Great Plains and Rockies were 150 years ago, offering anew a spaciousness unknown to urban Americans and an awesome treasure of untapped wealth.

Last week part of that treasure produced a scene reminiscent of the land-rush days of the old West. At stake was not land or gold, but oil--an estimated 5 billion to 10 billion barrels --that lies below the tundra of Alaska's North Slope. Gathered in a concrete auditorium in Anchorage, executives of 50 oil companies bid for the right to explore for oil along a 140-mile coastal stretch of state-owned land. When the bidding ended, Alaska was richer by $862,297,961.05--more than has been mined in yellow gold in the past 80 years, almost 120 times the $7.2 million that Secretary of State William Seward paid for the territory in 1867, and the equivalent of $3,000 for every one of the state's 285,000 men, women and children.

Steam Screen. The great Alaska oil rush has been building momentum ever since January 1968, when an Atlantic Richfield Co. drilling crew struck pay dirt 8,700 feet below the tundra at Prudhoe Bay, on the Arctic Coast. Since then, 22 drilling rigs have been brought in, and their crews have sought to duplicate that feat, often working in minus 65DEG weather and braving 100-m.p.h. winds. The land that they explored was open range until last week's sale of leases, and maintaining secrecy was as important as keeping warm. Companies hired helicopters to spy on competitors' drilling rigs, and the crews in turn switched on hot-water hoses to throw up screens of steam. The drilling results were reported to head offices by courier or by coded radio message.

As pressure mounted during the countdown to last week's sale of leases, Anchorage (pop. 113,000) became a haven for industrial spies and counterspies, almost suggestive of Lisbon in the 1940s. The state had put on the auction block 179 tracts of land, totaling 450,858 acres, some of it reaching out under the Arctic Ocean. The rules demanded sealed bids for each tract, to be submitted no later than the morning of the sale.

To keep competitors from learning the size of their bids, the oilmen in the Anchorage Westward Hotel reserved rooms on either side of their own and the rooms above and below. A favorite joke around town went: "Are you in oil?" "No, I'm incognito." One company wrapped its bid in aluminum foil in case a competitor had an exotic camera capable of taking pictures through a manila envelope. Another consortium, headed up by Continental Oil, hired a private train at $12,500 a day to ply back and forth between Calgary and Edmonton for four days while executives prepared their bids in total secrecy; at the last minute, they flew to Anchorage in a corporate JetStar.

Captive Audience. On the morning of what Alaska's Governor Keith Miller called "a rendezvous with our dreams," Alaskans began lining up outside the auditorium at 3 a.m. to witness the spectacle. Between the time that oilmen presented their bids before 8 a.m. and the first results were announced at 10:28 a.m., Miller had a captive audience that any politician might envy. The Governor made the most of his opportunity, leading the oil executives through the Alaska Flag Song, introducing fellow Alaska politicians and screening a color film on the state. The audience was then treated by self-styled Bard of the Arctic Larry Beck to a recital of all 30 dreary stanzas of Black Gold. A sample couplet: "They made their way to Prudhoe Bay/To mine the black gold oil."

Then the results were announced. For the first six tracts, a combine of Gulf Oil, British Petroleum and its Alaskan subsidiary bid $97 million. Another tract, just southwest of Prudhoe Bay, brought the highest single bid of the day, submitted jointly by Amerada Hess and Getty Oil: $72,277,133. A rival consortium of Phillips, Mobil and Standard Oil of California had bid a scant $164,133 less. Having underestimated on one tract, the same group decidedly overestimated on another, making a bid of $18,130,000. The next highest bid was a nominal $1.

By the end of the day, Alaska held a down payment of $180 million; the rest is due in ten days. To cash the checks through ordinary bank channels would have required four days, and cost the state $180,000 in lost interest. But this was no ordinary transaction. The Bank of America chartered a jet (for $23,000) to carry the checks east to be cashed in time to be invested in Treasury bills the next morning.

Capitol by a Glacier. Besides the windfall from the leases, Alaska will collect a 12 1/2% royalty and a 4% "severance tax" on every barrel of oil taken out. Inventing ways to spend the wealth, in fact, has become a favored pastime. Alaskans have variously suggested building a bridge to Siberia, distributing the cash equally among the citizenry, and building a much-discussed new state capitol beside the Mendenhall Glacier near Juneau. More soberly, the Legislative Council has commissioned The Brookings Institution to recommend how best to invest the interest that the money will earn, and Governor Miller has asked the Stanford Research Institute to undertake a similar study. Beyond that, Alaska has another 800,000 acres to put up for bids whenever it wishes, and will collect 90% of the royalties from any oil produced on federal land within the state.

More important for the long run, the winning companies are now committed to develop their tracts, at costs running up to $4,000,000 per well. This will constitute a radical infusion of money into Alaska's economy, which up to now has been largely dependent on federal aid. A $900 million pipeline is planned to bring the oil to the port of Valdez for shipment by tanker to West Coast markets in the 1970s, just when Texas, Louisiana and California fields are expected to go into decline.

Searching for a cheaper means of serving the East Coast, the 115,000-ton tanker Manhattan last week pushed its way through the Arctic ice pack. Officers from the Manhattan reported optimistically that shipping through the Northwest Passage was a commercially practical proposition--though that was before the vessel got stuck in the ice in the McClure Strait. The Manhattan broke loose 24 hours later and headed toward the Beaufort Sea. Should the Manhattan's voyage be successful, the way will then be clear to bring Alaska's wealth of iron, zinc, copper and sulphur readily to market as well.

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