'Marshall's Folly' Changes Course of Alaska History

Discovery of Prudhoe Bay

It wasn't easy, that's for sure.

But AAPG member Tom Marshall - a geologist who moved to Alaska in his early 30s, enamored by the idea of homesteading in the Matanuska-Susitna Valley - managed to change the future of the entire state with a suggestion that sounded as promising as a dry hole.

Marshall's homesteading, which he funded by random consulting jobs for investors in minerals and petroleum, led him down a path that culminated in a series of discussions with the Alaska governor and ultimately opened the door to the Prudhoe Bay discovery.

It all took place in the late 1950s and early '60s, against a backdrop of tremendous controversy. The public at large, the oil and gas industry and the newly formed state government put Marshall's theory about a large oil field on the North Slope farther left than left field.

Voicing a common belief at the time that oil could not be produced from icy ground, the late Gov. William Egan once asked, "Don't you know the North Slope is frozen?"

So Wrong, So Right

Hired on the spot as an assistant land selection officer in 1960, Marshall's experience in geology piqued the interest of the director of the newly created Division of Lands in the Department of Natural Resources after Alaska became a state in 1959. Marshall was tasked with making recommendations for the selection of state lands that the federal government would deed to Alaska under the 1958 Statehood Act.

The Division of Lands was permitted to select 102 million acres over a 25-year period of time, and it focused on multi-purpose acreage that would bring the state revenue via the timber industry, parks and recreation, agriculture, and oil and gas activity - particularly in Cook Inlet.

Marshall's idea to select 1.59 million coastal acres on the North Slope - believing that oil might lay beneath the Barrow Arch - drew laughs and even disdain, as little was known about North Slope geology at the time.

On Marshall's application to the Bureau of Land Management requesting acreage that included Prudhoe Bay, a colleague had written "Marshall's Folly," and it was buried at the bottom of the stack.

"I wish I had pulled that sheet out and kept it as a souvenir," said Marshall, now 89 and living in Anchorage. "No one wanted to believe it could be a huge oil field. Maybe it was too good to be true. I don't know."

But Marshall stuck to his guns.

If he was wrong, Alaska would own useless land that yielded no revenue. The state would have spent roughly $40,000 in federal filing fees for naught and significantly reduced its federal funding for infrastructure and fire protection, explained Herb Lang, a retired lands officer for the Division of Lands.

However, if Marshall was right ...

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It wasn't easy, that's for sure.

But AAPG member Tom Marshall - a geologist who moved to Alaska in his early 30s, enamored by the idea of homesteading in the Matanuska-Susitna Valley - managed to change the future of the entire state with a suggestion that sounded as promising as a dry hole.

Marshall's homesteading, which he funded by random consulting jobs for investors in minerals and petroleum, led him down a path that culminated in a series of discussions with the Alaska governor and ultimately opened the door to the Prudhoe Bay discovery.

It all took place in the late 1950s and early '60s, against a backdrop of tremendous controversy. The public at large, the oil and gas industry and the newly formed state government put Marshall's theory about a large oil field on the North Slope farther left than left field.

Voicing a common belief at the time that oil could not be produced from icy ground, the late Gov. William Egan once asked, "Don't you know the North Slope is frozen?"

So Wrong, So Right

Hired on the spot as an assistant land selection officer in 1960, Marshall's experience in geology piqued the interest of the director of the newly created Division of Lands in the Department of Natural Resources after Alaska became a state in 1959. Marshall was tasked with making recommendations for the selection of state lands that the federal government would deed to Alaska under the 1958 Statehood Act.

The Division of Lands was permitted to select 102 million acres over a 25-year period of time, and it focused on multi-purpose acreage that would bring the state revenue via the timber industry, parks and recreation, agriculture, and oil and gas activity - particularly in Cook Inlet.

Marshall's idea to select 1.59 million coastal acres on the North Slope - believing that oil might lay beneath the Barrow Arch - drew laughs and even disdain, as little was known about North Slope geology at the time.

On Marshall's application to the Bureau of Land Management requesting acreage that included Prudhoe Bay, a colleague had written "Marshall's Folly," and it was buried at the bottom of the stack.

"I wish I had pulled that sheet out and kept it as a souvenir," said Marshall, now 89 and living in Anchorage. "No one wanted to believe it could be a huge oil field. Maybe it was too good to be true. I don't know."

But Marshall stuck to his guns.

If he was wrong, Alaska would own useless land that yielded no revenue. The state would have spent roughly $40,000 in federal filing fees for naught and significantly reduced its federal funding for infrastructure and fire protection, explained Herb Lang, a retired lands officer for the Division of Lands.

However, if Marshall was right ...

Discovery of the Century

In 1968, the Prudhoe Bay State No. 1 well, drilled by Atlantic Richfield Company (Arco) and Humble Oil (now ExxonMobil), tapped into the largest oil field in North America. The well was located on state lands officially selected by Marshall and leased to Richfield Oil and Humble in a 1965 auction.

A confidential report confirming oil at Prudhoe Bay slid across Marshall's desk before the news hit the public. Working as the state geologist for Alaska's Division of Mines and Minerals at the time, Marshall read the report before walking outside to his next appointment.

"I'll never forget that day," he said. "I was walking toward the Westward Hotel in Anchorage. It was a seven-story building, and I thought, 'Holy Moses! That pay section is as thick as this hotel is tall.'"

The discovery made headlines around the world. Its success drew countless explorers to the North Slope in the late 1960s and '70s - all paying millions to lease state lands in search of another Prudhoe Bay.

Initially estimated to contain 25 billion barrels of oil in place, Prudhoe Bay has produced an excess of 13 billion barrels to date and brought billions of dollars in revenue to Alaska - transforming it from a poor mining state into an oil and gas Mecca of sorts. The state's Permanent Fund, established by its constitution and worth $52 billion today, pays yearly dividends to all Alaska residents.

"It has long seemed to me that every time an Alaskan resident cashes or deposits a Permanent Fund dividend check, he or she should stop for just a moment and say a short word of thanks to Tom Marshall," said Gil Mull, an AAPG member who mapped extensively on the North Slope for Richfield and Humble and served as a wellsite geologist when the Prudhoe Bay State No. 1 well struck oil.

"Of course, the Permanent Fund is just a fraction of the other state services that have been paid for over the years by revenue the state has received as a result of Tom's foresight," added Mull, who also worked for the Alaska Division of Geological and Geophysical Surveys, Division of Oil and Gas, and the U.S. Geological Survey.

"The problem has been that only a few have ever heard his name."

Common Name, Uncommon Man

"Tom Marshall" may be a common name, but the Tom Marshall who was born in Nebraska, went to college in Colorado, accepted his first geology job in Wyoming and then headed to the 49th state is no common man.

While working in Casper, Wyo., Marshall crossed paths with AAPG member John Wold, a well-known geologist and businessman (and AAPG Pioneer Award winner) who opened up coal exploration in the Powder River Basin in the 1950s. Wold hired a young Marshall to evaluate properties he owned in the Lower 48 for uranium potential.

Marshall often talked of a mysterious Alaska. He shared stories about the U.S. territory told by his grandfather, who worked as a mounted policeman in Canada and often crossed the border to take in Alaska's majestic landscape. Marshall wanted to see the land for himself, and Wold hired him on a retainer to scope properties with investment potential.

Aware of the U.S. Navy's efforts to find oil reserves on the North Slope with assistance from the USGS, Marshall studied "the dickens" out of the USGS's reports, accumulating a library of papers and maps.

Running out of money as a homesteader, Marshall applied for a job at the state's Department of Natural Resources and was hired by the director, Roscoe Bell, to help select lands that might enable the nascent state to support itself.

Arctic Wasteland

While other land selection officers worked to identify tracts suitable for agriculture, the timber trade and other means of revenue, Marshall put his petroleum geology background to use. He was the first to suggest land for single-use purposes, and the first to suggest land on what many had dubbed the "Arctic Wasteland."

The state polled the oil and gas industry, and the six operators exploring in Alaska at the time all expressed interest in leasing land much farther south of the North Slope - on the same latitudinal line as the small, non-commercial discoveries made by the Navy near Umiat in the National Petroleum Reserve No. 4 (NPR-4).

Although the conservative way to explore was near known accumulations, Marshall insisted that to bring oil to market, a huge field would be needed to pay for a very long pipeline to tidewater.

The "little wrinkles" in Cretaceous rocks in NPR-4 would not cut it. The large structural high Marshall studied near Prudhoe Bay had much better potential - and oil seeps near Cape Simpson added interest to his claim.

"I was very appreciative of the fact that the North Slope would be a place to commit financial suicide if you tried to develop small fields like Umiat," Marshall recalled. "Size meant everything."

While many may have regarded Marshall as a pariah - or perhaps a tad insane - his opinions caught the attention of the late Phil Holdsworth, a fellow homesteader and the first commissioner of the Department of Natural Resources.

Holdsworth was aware that Marshall was the first to use aerial photographs to piece together a map to evaluate mining properties in Alaska - particularly in the Cashe Creek area.

"I could show the difference in the gradients of that stream and where the gradient changed rapidly. That's where you could expect to find gold to accumulate," Marshall explained.

His map made many rounds through the geological community and eventually landed in front of Holdsworth.

Whistling a Different Tune

Intrigued by Marshall's map and geological savvy, Holdsworth conferred with Bell of the Division of Lands and took a closer look at Marshall's recommendations for state land selection. Soon after, several meetings were held with the governor to sell Marshall's controversial idea.

"We did not have enough money in our budget to do what Tom recommended," Lang recalled, explaining that the new state had little means to pay for the federal filing fees for a land selection that large. "The governor was very cautious. It was a whole new game for us."

Using a plethora of maps and reports, Holdsworth and Bell translated Marshall's technical analysis into words that resonated with the governor, who then dug deep into the state's pockets to fund the selection - keeping his fingers crossed.

"We took chances in the early days," Lang said, "and sometimes we even won."

After the discovery at Prudhoe Bay, operators were bidding in the millions - hitting a record $900 million in 1969 - for state leases on the North Slope.

"It was a shock to people that this oil and gas was really worth something," Marshall recalled. "Oil and gas just didn't have the stature that it has now. Alaska was a mining state."

Lost in the Wrinkles of Time

As with many political successes, the governor received credit for the billions of dollars that flowed alongside the oil at Prudhoe Bay. Marshall has been honored from time to time for his insights, but he mostly remained out of the limelight for the remainder of his career - becoming state petroleum supervisor in 1965 before retiring in 1978.

After all this time, however, Marshall's contributions have again reached radar level.

In May, he will receive an honorary doctor of science degree from the University of Alaska Fairbanks, said Marmian Grimes, a spokeswoman for the university. He will be joined by his son, Charlie, at the commencement ceremony.

As rich in modesty as Prudhoe Bay is in oil, Marshall credits his success to simply being "in the right place at the right time with the right knowledge."

Others see him quite differently.

"Many people in public service in Alaska have made important contributions that make Alaska what it is today," Mull said. "But in my estimation, the decision that Tom Marshall made as an Alaska state employee stands at the top of the list as the single most important decision ever made by anyone in service to the state of Alaska."

"It all started with Tom," Lang added. "He is the man who came up with the idea."

For Marshall, he's simply glad that some people are willing to entertain seemingly outlandish ideas.

"If they aren't going to be tested, then people are going to continue believing that these are just crazy, crazy, crazy ideas," Marshall said.

Discovering Prudhoe Bay "blew everyone's mind," he added. "Including mine."

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