This Day in Presidential History (Nixon Signs Alaska Pipeline Bill)

November 16, 1973—Over a month after an international oil cartel imposed an embargo on America in retaliation for American support for Israel in the Yom Kippur War, Richard M. Nixon signed the Alaska Pipeline Authorization Act. The bill—part of a larger “Project Independence” that, the President claimed, would wean Americans from dependence on foreign oil in seven years--did little or nothing to curb demand. It did, though, inaugurate an era in which Alaska stagnated, in the worlds of New Republic writer Charles Homans, "in the hands of a single ruling party bolstered by a monolithic extraction economy."

New Yorkers were inclined in the recently concluded Presidential election to laugh off the idea of the governor of Alaska even contemplating being a heartbeat away from the President. The leader of such a state had never handled the kind of complicated problems that the mayor of New York City—“the 51^st state,” in Norman Mailer’s famous phrase—did on a regular basis.

Sarah Palin’s lack of experience was as much a disqualifying factor for me as for other voters. But New Yorkers ought not to think they are so much more special than Alaskans. In fact, Gotham might be seen as merely the mirror image of “The Last Frontier.”

True, one electoral entity is blue, the other red; but both are overwhelmingly single-party entities, with their fortunes tied to a fate of a single industry: financial services for New York, oil for Alaska.

The conditions created by the embargo by the Organization of Petroleum Exporting Countries (OPEC)—notably including quadrupled oil prices and longer lines at the gas pump—gave the upper hand to those who wanted to extract oil from beneath the ground in Alaska, even if it meant putting at risk environmentally sensitive land. Their eyes alit on the largest oil field ever found in North America: Prudhoe Bay.

Eventually, the oil industry decided that an overland pipeline, crossing 34 major rivers, 800 smaller streams and three mountain ranges, represented the most realistic possibility of getting the gas to market. With the Nixon Administration’s backing, the Trans-Alaska Pipeline, an enormous engineering project, was constructed, despite environmentalists’ concerns about damaging the wilderness.

Nixon’s optimism about meeting America’s energy needs was misplaced. Six years later, Jimmy Carter would tell the nation, "Beginning this moment, this Nation will never use more foreign oil than we did in 1977–never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation." We know what happened to that. (You were staying awake as the two principal Presidential candidates went at each other rhetorically on energy independence this year, right?)

While Americans’ dependence on foreign oil remained virtually unabated, Alaskans became increasingly enamoured with the money they could make from the project. Oil taxes and revenues funded more than 80 percent of its government, and residents don't have to pay a state income tax.

You would think that governments would more aggressively try to diversify their economies, the way that financial managers have long advised clients to diversify their holdings lest they be exposed to huge risk. It's going to be a nightmare when the gravy train ends for New Yorkers and Alaskans.