**REPORT TITLE:** Alyeska-Fairbanks Case Study.

**STUDY TITLE:** Alyeska-Fairbanks Case Study (TR-14).

CONTRACT NUMBER(S): BLM: CT6-61; MMS: 14-12-0001-29002

SPONSORING OCS REGION: Alaska.

APPLICABLE PLANNING AREA(S): Gulf of Alaska; Kodiak; Cook Inlet;
Shumagin; Aleutian Arc; North Aleutian Basin; St. George Basin; St.
Matthew Hall; Bowers Basin; Aleutian Basin; Navarin Basin; Norton Basin;
Hope Basin; Chukchi Sea; Beaufort Sea.

FISCAL YEAR(S) OF PROJECT FUNDING: 1976.

COMPLETION DATE OF REPORT: May 1978.

COST(S): FY 1976: \$27,191; CUMULATIVE PROJECT COST: \$27,191.

PROJECT MANAGER(S): S. Indicello.

AFFILIATION: Wordsmiths.

ADDRESS: 1221 Coppett, Fairbanks, Alaska 99701.

PRINCIPAL INVESTIGATOR(S)\*: S. Indicello.

KEY WORDS: Gulf of Alaska; Kodiak; Cook Inlet; Shumagin; Aleutian Arc;
North Aleutian Basin; St. George Basin; St. Matthew Hall; Bowers Basin;
Aleutian Basin; Navarin Basin; Norton Basin; Hope Basin; Chukchi Sea;
Beaufort Sea; Alaska; socioeconomics; historical review; literature
review; human population; pipeline; impacts; planning; synthesis;
Fairbanks; Alaska Region.

ACCESS NUMBER: 29002

**BACKGROUND:** Fairbanks was the only urban Alaskan community located
within the construction corridor of the Trans-Alaska Pipeline System
(TAPS). Community planners and decisionmakers, attempting to prepare for
pipeline-associated impacts, were faced with a paucity of applicable
information. The problems anticipated for Fairbanks included accelerated
population growth, stress on the infrastructure, social problems, and
the continuation of the economic cycle of \"boom and bust\". These
factors were examined through three major impact research efforts
completed during and just after pipeline construction. The present study
effort, conducted under the auspices of the Alaska Outer Continental
Shelf (OCS) Socioeconomic Studies Program, was implemented to synthesize
the results of the three prior impact-related research efforts. The
information synthesis details what the community of Fairbanks learned
from pipeline construction and its associated impacts, summarized the
attitudes of residents toward future growth and development, and
determined how government officials may apply the lessons of oil
pipeline impact to planning and decision making for the future of the
community.

**OBJECTIVES:** (1) To synthesize the findings of three previous
research efforts dealing with the effects of pipeline construction on
Fairbanks and how the city has incorporated that experience in
preparation for future potential impacts associated with petrochemical
development.

**DESCRIPTION:** A significant number of articles and documents have
been prepared and several studies have been completed which projected
the impacts and long term effects of TAPS, the 800-mile trans‑Alaska
pipeline, upon the city of Fairbanks. Three major works selected for the
present synthesis included: (1) What happened to Fairbanks? (Dixon,
1978); (2) the compiled reports of Ms. Sue Fison from the Fairbanks
North Star Borough Impact Information Center (1977); and (3) the
research findings of a community survey conducted by Jack Kruse of the
University of Alaska, Institute of Social and Economic Research (1976).

This four part synthesis report discusses: (1) the history of the city
of Fairbanks, including an analysis of the preparations made by the city
prior to pipeline construction; (2) the actual impacts attributed to
pipeline construction upon the Fairbanks community; (3) the community\'s
resultant perceptions regarding responsibilities of the Alyeska Pipeline
Service Company and the State government; and (4) the post-construction
status of Fairbanks and the lessons learned from the TAPS experience.

**SIGNIFICANT CONCLUSIONS:** The public attitudes which have
characterized Fairbanks throughout its history did not change during the
period of pipeline construction. These individualist ethics continue to
this day, and a lack of community values is listed as one of the prime
reasons for the absence of preparation for the oil pipeline and the
future proposed gas pipeline. City officials were reluctant to raise
taxes and voters were reluctant to approve bond issues during the period
of pipeline construction when public services were in greater demand and
the tax base was at its highest point. The general attitude was that
major changes within and to the community as a result of the pipeline
were negative. Residents felt that they had benefitted as individuals,
but that Fairbanks overall was a worse place to live. The Northwest
Alaska Pipeline Company has indicated that it will locate its
headquarters within Fairbanks, and has expressed a willingness to work
together with communities that will be impacted by gas line construction
in finding joint solutions to problems before they arise. Under these
circumstances, the city was presented with an opportunity to act on the
basis of its past experience regarding the construction of the planned
gas pipeline.

**STUDY RESULTS:** Fairbanks is the only urban center in Alaska\'s
interior and is the State\'s second largest city. At the time of the
discovery of North Slope oil, the economy of Fairbanks was lagging
following a decade of unemployment and slowed construction activity. The
city was primary occupied with attempts to recover from the disastrous
flood of 1967. The economic history of Fairbanks had exhibited a \"boom
and bust\" cycle. As a result, the North Slope oil discovery was viewed
and accepted as the next big project.

The people who initially settled Fairbanks came for adventure, the
pursuit of money, and to be left alone. They came as individuals and not
as members of a community endeavor. More recent immigrants brought many
of the same attitudes and expectations as the first pioneer settlers. It
was not until the late 1950s that the frontier attitudes of Fairbanks
residents were moderated in three ways: (1) as a result of homesteaders
bringing families; (2) the Alaska Statehood Act which created a
government within the State; and (3) the additions to the population of
people who had been educated at the University of Alaska. The discovery
of North Slope oil created a chance for Fairbanks to serve as a service
and supply center for pipeline construction. In such a capacity,
residents developed expectations of jobs, income, and the sale of goods
and services to the largest private construction project in history.
Residents and community leaders emphasized these positive economic
opportunities. Planning was geared towards how the city could capitalize
on the construction activities rather than what could be done to prepare
the municipal infrastructure to accommodate pending change. Pre-planning
was viewed as a premature and inappropriate expenditure of energy and
resources as a result of controversial speculation on the granting of
pipeline construction permits. Negative expectations about the pipeline
stemmed from problems associated with a massive influx of transients,
creating a drastic increase in pressures upon existing public services,
along with a lack of accompanying government revenues. The result was
perceived to be an unacceptable increase in tax burden upon permanent
residents.

The city\'s planning for its role as a pipeline staging area consisted
of two steps. Initially, the City Center Plan was formulated in 1972 and
addressed the comprehensive needs of Fairbanks over the next 20 years.
Secondly, the city proposed a restructuring of the rates for the
Municipal Utilities System. The school board was also planning for
projected growth. City planning proved to be inadequate; for example,
city planners failed to address gaps in those community resources which
would be tapped as a result of negative impacts, including crowding,
traffic, and increased crime and poverty. The effects upon segments of
the population who were unable to benefit from the pipeline (e.g., the
very young and the elderly, unskilled persons, those with language or
cultural barriers, and those with emotional problems) were also not
addressed. During the period of pipeline construction (1973-1976), the
Fairbanks North Star Borough estimated the population increased 57%
while its tax base increased 63%. However, the requirements of new
residents (e.g., housing, electricity, water, roads, police protection,
schools, consumer goods, health care, recreation facilities) were not
noticeably improved by the Borough, the city, or private enterprise
until the boom was well underway. A drastic housing shortage accompanied
the population growth and the only solutions attempted were mobile home
parks and house \"sharing\". Consumer prices increased significantly and
residents believed that the cost of living was the worst attribute of
the community. Subsequently, higher salaries were demanded in order to
offset the elevation in living costs. Employee turnover at businesses
within Fairbanks was one of the greatest unexpected impacts associated
with pipeline construction, permeating both low paying and professional
jobs. As a result, the local attitudes about money, property, and family
changed. Local residents were feeling pressures from the outside with
more people entering the community and tapping its utilities, goods, and
services. Pressure from the inside was also noted, with residents trying
to keep up with the rising cost of living, long hours, and disrupted
life styles. Shortages in goods and services were also common and a
marked increase in crime was felt within the local community. It was
generally felt throughout the community that the government\'s
expenditure of impact funds and the timing of solutions to alleviate the
stress of pipeline impacts was too little, too late. Residents of the
community did not place much reliance on the Alyeska Pipeline Service
Company in solving the social problems of Fairbanks.

Plans for the future include the establishment of a permanent
petrochemical industry in Fairbanks, along with the construction of the
proposed trans-Alaska gas pipeline, in an attempt to reduce the boom and
bust cycles characteristic of the city. What happens to Fairbanks in the
future is dependent upon whether the attitudes of community leaders has
changed as a result of the TAPS construction activity and its associated
impacts. Based on this previous experience, the policies established by
community leaders will also determine how quickly and favorably
Fairbanks responds to future development. The expectations of the
residents of Fairbanks and their opinions regarding the community have
changed significantly.

**STUDY PRODUCT(S):** Wordsmiths. 1978. Alyeska-Fairbanks Case Study. A
final report for the U.S. Department of the Interior, Bureau of Land
Management Alaska OCS Office, Anchorage, AK. NTIS No. PB‑284570/AS.
Social and Economic Studies Program Technical Report No. 14. Contract
No. 14-12-0001-29002. viii + 121 pp.

\*P.I.\'s affiliation may be different than that listed for Project
Manager(s).