Many oil rigs dotted Katalla's landscape by 1910.
Generations of Alaska Natives made use of thick, black goo oozing out of the hills and beaches in the Last Frontier long before white men "discovered" oil. Sources say Northern Natives burned the tar-like chips, and Southeastern Natives used it for war paint. Oil shale was used in knives and labrets.
The Russians knew of Alaska Peninsula oil seeps as early as 1860, but at this time whale oil was the important fuel. Oil from rocks was ignored. When Russian fur trade declined, the Russian American Company began exploring for minerals while searching for gold only a few miles from what became the Swanson River oil fields on the Kenai Peninsula. The Russians passed on the oil and settled for a coal prospect near Katchemak Bay in Cook Inlet. The black gold of the Kenai was left to be discovered almost 100 years later.
The first discovery of commercially viable oil happened accidentally in 1896. While hunting for bear, Thomas White fell into a seepage pit in the Controller Bay region southeast of Cordova. He later claimed that after he cleaned himself and his gun, he tossed a match into the pit "to see what would happen."
The pool burst into flames and burned for a month.
Thus began the first oil rush to Alaska and grew the community of Katalla, which is in the Katalla is in the Valdez-Cordova Census Area. In September 1902, the Alaska Development Company, also known as the English Company, brought in the first gusher after stumbling upon more oil seepages.
As news of the discovery spread, Katalla experienced a rapid transformation with a frenzy of speculation and investment. By the fall of 1904, there were 15 holes down or drilling, including two at Katalla, two at Strawberry Harbor, and nine between Katalla Slough and the Bering River.
About this time the first oil swindle was reported, pulled off by an enterprising prospector. He staked a claim at Controller Bay and sold it for $1,700 (almost $59,000 in 2024 dollars). When spring breakup came and went, the claim was carried away-the buyer had purchased a non-sedimentary Controller Bay ice floe.
The population of Katalla soared to nearly 5,000. The hillside near the discovery site became dotted with oil derricks, drilling equipment, cabins, and pipelines. In the absence of proper storage facilities, workers resorted to digging deep pits in the bog to hold the crude temporarily.
The town's growth was further propelled by the announcement that the Copper River and Northwestern Railway planned to make Katalla its Pacific Ocean terminus, providing access to the Bering River coal fields. However, violent storms in the fall of 1907 destroyed the jetty under construction. That prompted the railroad to relocate its terminus to nearby Cordova, dealing a blow to Katalla's ambitions.
Despite the setback, Katalla's oil industry persisted, albeit on a smaller scale. In 1911, Alaska's first oil refinery was established on Katalla Slough to process the crude oil, which was primarily sold locally to power the fishing fleet. The Chilcat Oil Company refinery expanded the following year and went into regular operation, producing gasoline and other products. Most of the refinery products were used in Cordova, as Katalla oil could not compete with fuel oil that was produced more cheaply in California.
By 1931, 44 test wells had been drilled in the area-18 were producing oil. However, the town's fortunes took a turn for the worse on Christmas Day 1933 when a fire ravaged the refinery. Deemed economically unfeasible to rebuild, the refinery's closure marked the beginning of Katalla's decline.
Although Katalla's post office closed in 1943 and the town was eventually abandoned, its legacy endures as a significant chapter in Alaska's oil and gas history. The Chilkat Oil Company Refinery site is listed on the National Register of Historic Places and serves as a tangible reminder of Katalla's pioneering role in the state's energy industry.
This column features tidbits found while researching Alaska's colorful past for Aunt Phil's Trunk, a five-book Alaska history series written by Laurel Downing Bill and her late aunt, Phyllis Downing Carlson. The books, including the newest titled "Pioneers From Alaska's Past," are available at bookstores and gift shops throughout Alaska, as well as online at www.auntphilstrunk.com.
