Editor’s note: This story has been changed to correct the name of Bobbi O’Neill, originally referred to by her maiden name of Burns.
Three generations of drillers, truckers, operators and other oil workers connected to the Kenai Peninsula’s first oilfield gathered for an anniversary at Kenai’s Cannery Lodge on Wednesday.
The July 19, 1957 discovery of oil north of Sterling at Swanson River provided, according to Alaska’s first governor William Egan, “the economic justification for statehood for Alaska.” Many have agreed with his statement, including present Governor Bill Walker, who spoke at the lunch honoring the Swanson River field’s 60th anniversary, organized by its present operator Hilcorp.
“If people think the oil industry in Alaska started up in the Bay (Prudhoe Bay) —absolutely not,” Walker said.
In 1955 the southern California-based Richfield Oil (which in 1966 merged with east coast Atlantic Refining to become Atlantic Richfield Company, or ARCO) sent geologists Bill Bishop and Ray Arnett to explore for oil on the 50,000 acres it had leased on, what was then the Kenai National Moose Range, now the Kenai National Wildlife Refuge. At that point, oil companies had drilled 165 consecutive unsuccessful oil wells in the state.
On July 19, 1957, Bishop and Arnett drilled a successful oil well at Swanson River, in the northwest Kenai Peninsula. Their announcement of the well on July 23 set off a flurry of economic activity that some compared to the gold rush.
The present-day shape of the Kenai Peninsula is the product of this economic activity.
In the late 1950s, the port of Seward was the peninsula’s urban center, such as it was, with a 1950 population of 2,114. Seldovia, the second-largest town, held 436, according to U.S Census counts. On the west side, beyond the Moose Range, the military airfield and cannery outpost of Kenai had about 300 inhabitants. Soldotna, just reaching its first decade of existence, had only about a hundred.
The oil industry’s arrival in Cook Inlet after Swanson River flipped the peninsula’s population balance from east to west. Kenai’s population boomed to 3,500 by the end of the 1960s as workers packed into subdivisions built by Marathon and Unocal. Oil money made it possible for the new population to have the lifestyle of mid-20th century American wage-earners, bringing developments that the peninsula has today.
Gathered at the Cannery Lodge on Wednesday were workers from every company to operate the Swanson River field since, as well as former contractors, their families, and descendants. As one attendee, Alaska Senator and ConocoPhillips LNG Facility superintendent Peter Miccichie, put it, “every logo that’s been in the Inlet is represented today.”
Waiting in the buffet line, attendees clustered into groups of old acquaintances. Some grew up at Swanson River where, during its peak, supervisors lived in on-site housing with their families. A bus once traveled Swanson River road twice a day, taking their children to and from school. Some in the buffet line recalled fishing in the uncrowded Swanson River or picking blueberries in the undeveloped lease land.
Dave Hutchings credits the Swanson River oilfield for rooting his family in Kenai — after coming to Alaska in 1952, he said his father moved around the state to work various jobs. It wasn’t until oil investment created steady employment on the peninsula that the family built a house in Kenai, remaining here ever since.
Don Silva, who in 1958 began coordinating work at Swanson River as it was developed from a new discovery to a producing field — and who at Wednesday’s event was the attendee with the oldest association with the field — said hiring local homesteaders was a deliberate move. Previous oil speculation had created a readily employable population.
“We drew from the local area, all of the workforce,” Silva said. “All of the people who came up here in the early 50s probably came up here for homesteading, and happened to be maybe trained in the oil industry back in the Oklahoma area, the Texas area, the California area. Those were earlier developments in the industry… It was our aim to get most of the hiring locally done.”
As an adult, Hutchings worked for driller Glen Rex ‘Red’ McCollum, and later for Homer Freight Lines, contracted to transport rigs between Anchorage and Swanson River “for about four or five years — a lot of good employment for everybody,” he said. Hutchings estimated he’d been up and down Swanson River road hundreds of times.
“We could basically pick up a drilling rig in Anchorage, bring it down here piece by piece, and then just like an erector set put it all together at Swanson River before we’d raise the derrick and turn it over to the drillers,” Hutchings said.
Red McCollum’s daughter Pat Falkenburg was also present Wednesday. She recounted her father’s early career drilling in Wyoming, Montana, and Colorado, before Mountain State Drilling offered him a job in Alaska. With the traveling, Falkenburg said she’d gone to 33 schools by the time she graduated high school in Kenai. Falkenburg and her childhood friend Bobbi O’Neill — whose father worked with McCollum for Mountain State Drilling — also emphasized the field’s economic importance for statehood.
“This was instrumental,” said O’Neill, who now works at the Soldotna Historical Society Musuem. “Before (the Swanson River discovery) we had the military in the 1940s, and then we had fishing and mining, but that still wasn’t working out as an economy base.”
1970 was Cook Inlet’s peak year of oil production, when companies extracted about 230,000 barrels per day. Swanson River hit its own peak the year before, at 40,000 barrels per day. By the end of the 1960s the tide of oil investment was flowing north to the Slope, where, according to the ALaska Department of Natural Resources Divsion of Oil and Gas, companies in 2016 produced 189 million barrels of oil versus Cook Inlet’s 5.64 million.
Chevron operated Swanson River in 2008, when geologist Kevin Eastham began working there. He said its oil production was declining not because of a shrinking pool of oil but a shrinking pool of capital that a company like Chevron, with global priorities and a different organizational goal, was willing to put into new development.
“Swanson River wasn’t a big focus for Chevron — they were really more interested in gas in Ninilchik and the Kenai gas field and other places,” Eastham said.
Natural gas’s traditional role at Swanson River was to be injected into oil formations to drive up well pressure. A former operator there, Unocal, had begun injecting gas in emptied wells for storage in 2001 after getting a supply contract with ENSTAR. At the time, Swanson River produced about 49 million cubic feet of gas, though Eastham said it was “not a big gas field per se. It’s a big oilfield. I thought if we got to drilling more oil wells we’d really have more success.”
In 2012 Chevron sold all its Cook Inlet assets to Hilcorp, a Houston, Texas-based company known for work in mature oilfields such as Cook Inlet.
“(Chevron) had bigger fish to fry,” Eastham said. “Angola, Brazil, the Gulf of Mexico, and other places. But something like Swanson River is a really big deal to Hilcorp. We finally got the capital to spend to go do the projects we wanted to do.”
Eastham chose to work for Hilcorp so he could stay at Swanson River and put his drilling plans into action. A single new well drilled during his first year under Hilcorp doubled the field’s production, Eastham said, to over 2,000 barrels a day. It was the most productive well drilled at Swanson River in 36 years, he said.
Today Swanson River is producing about 2,700 barrels of oil per day, though much of its present production is natural gas, for which it is still being developed. Hilcorp is presently working on a new gas well at the site.
Though Eastham’s career has since followed the majority of Alaska’s oil production up to the North Slope, he said drilling new wells at Swanson River is the work he’s most proud of. He recalls the field history being present in its people — his Swanson River foreman, Greg Merle, was a second-generation oilworker who grew up there in the 1960s, familiar with with infrastructure and pipelines laid during his childhood.
Eastham and Merle were among the former co-workers to meet at Wednesday’s anniversary lunch. Another in their circle was Phil Ayer, a reservoir engineer who helped design gas storage at Swanson River in the early 2000s, and who compared the event to a reunion.
“It’s neat,” Ayer said. “Maybe it just comes with age, but if you get a bunch of people together who’ve experienced something in common, and you take the time to celebrate it — this could have been a high school celebrating 60 years of football teams. You see people from all over, and you bond. You hear stories from the past… Young people are told this, but at the end of the day it’s the people who count. Whether you’re poor or rich or whatever, it’s the people. It becomes more important as you get older, and you realize it. You’re tied together in this common effort.”
Reach Ben Boettger at ben.boettger@peninsulaclarion.com
