He bought vast mineral riches for pennies on the dollar. If only every U.S. politician were so foolish.

Lured by the prospect of wealth from the demand for sea otter fur (which was worth nearly its weight in gold), Russians migrated into the coastal regions of the Aleutian Islands and southern and southeastern Alaska in the 1700s. This invasion resulted in the Russian American Company, which as a for-profit company governed the new territory until the sea otter was completely depleted by the mid-1800s. With no other obvious natural resources to exploit, the Russian government sold its territory to the U.S.

Had the Russians migrated up the Yukon River or along the northern part of the Bering Sea, they would have easily discovered these regions’ large gold placers. They did not, because no sea otters existed along any of Alaska’s rivers or along the colder Bering Sea coast. The otters were confined to the southern Pacific Coast, which had experienced extensive glacial advances during the Pleistocene era (10,000 to 2.7 million years ago). Such advances destroyed most of the large surface gold nugget deposits that would have accumulated near the numerous subsurface gold bodies. In contrast, most of Alaska’s interior was never glaciated. There was one major Russian expedition to the Copper River Valley, to search for copper and other metals because the coastal Indians used copper tools. That expedition never returned.

So in 1867, Russia sold Alaska to the U.S. for a bit more than $7 million – less than $0.02 per acre. William H. Seward, the U.S. Secretary of State who was responsible for pushing this sale, was considered by some to be foolish. Even though the purchase had public support, it was branded as “Seward’s Folly.” Unfortunately, even to this day, most Americans lack any understanding of the 49th state’s history and its amazing geologic wealth.

By the start of the twentieth century, the gold placer deposits were nearly depleted and it was a major strain for the Territory of Alaska to maintain its gold-mining capital of Juneau. Then the Guggenheims came to the rescue, building the Copper River Railroad to their “world class” Kennecott Copper Mine in the Copper Valley. By 1910, the coastal town of Cordova at the railroad’s southern end had become the largest town in Alaska. Once ore reached Cordova, it was shipped to a smelter in Washington’s Puget Sound. This required a regular shipping schedule, resulting in the Alaska Steamship Company, the territory’s first scheduled transportation system. This shipping line, transporting people, ore, and supplies, operated until 1954. The fact that the Guggenheims could successfully build major transportation systems in the state led the U.S. government to build the Alaska Railroad to interior Alaska in 1912. Even though most of the copper wealth had left Alaska, the resulting development activities were important for building needed infrastructure. With World War II, the U. S. government had to accelerate infrastructure development, but once the war was over, that slowed.

However, the discovery of new mineral wealth in 1957 led to more development. The catalyst was the discovery of oil in the Swanson River field in south-central Alaska’s Cook Inlet Basin. In fact, after that it was argued that perhaps this territory could maintain itself. Statehood followed in 1959. It took several years for Alaska to take ownership of what would become known as the Prudhoe Bay oil field on the central North Slope. Ownership was decided by only several votes in the state legislature, and only after extensive lobbing by resource specialists such as Thomas Marshall, who was director of the state’s Division of Mining and Geology. The Prudhoe Bay oil field was discovered in 1967, and in 1969, the nearby Kuparuk field was discovered, the largest and second-largest oil fields in North America. Along with some smaller nearby fields, they have collectively produced over 15 billion barrels of crude. The production is now declining and the central North Slope has reached maturity as an oil and gas province.

The rest of the North Slope as well as the shelves of the Beaufort and Chukchi Seas have barely been explored. What resources actually exist in these regions will not be known until additional exploratory drilling has been completed. A 200 million barrel North Star reservoir has already been proven in the Beaufort Sea and is presently being produced. The Hammerhead and Kuvlum reservoirs, also in the Beaufort Sea, have also been proven, each containing at least 100 million barrels of crude oil. Such fields are farther from the Arctic coast and not presently in production. It is strongly suspected that at least another dozen such small but significant fields exist in the Beaufort Sea, and that another dozen similar fields could exist east of the Prudhoe Bay, up through the 1002 Area of the Arctic National Wildlife Refuge.

Recent discoveries were recorded to the west of the Prudhoe Bay and Kuparuk fields, such as the 1996 Alpine field and the more recent Fiord satellite field, which probably hold less than 100 million barrels. Additional recent discoveries by ConocoPhillips, with their Spark, Rendezvous, and Lookout discovery wells, look similar to the nearby Alpine field discovery. Further to the west, the rest of the National Petroleum Reserve A is truly a frontier, with only limited exploratory efforts mainly by the U. S. Navy and the U. S. Geological Survey. Based on previous exploratory efforts, the reserve contains possibly another two dozen fields of an Alpine nature. Only drilling will tell the complete story.

The Chukchi Sea has the possibilities of oil reservoirs larger than even Prudhoe Bay. The huge geologic structures there correlate with the hydrocarbon-rich geology of northern Alaska and contain all of the necessary ingredients for a world-class oil/gas province. This speculative conclusion has been made not only by government specialists but by industry specialists as well. In 2008, the U. S. Minerals Management Service lease sale of the Chukchi Sea brought in over $3.1 billion, principally from Shell, ConocoPhillips, Eni, and Repsol. Obviously, the major oil companies are serious about the potential development of the Chukchi shelf despite the logistical and environmental challenges.

Over the long term, Alaska’s vast coal resources will also gain attention. Alaska has well over 5 trillion tons, principally on the North Slope but also throughout most of the state. Such a resource represents over half of the total known U.S. coal reserves. These reserves could produce coal-bed methane in the near future. Large reserves of gas hydrates also likely exist under northern Alaska’s permafrost. Such gas resources, while not as attractive as oil, must be considered. The coal itself will someday probably be Alaska’s most valuable asset, next to its natural beauty.

So, was Seward foolish? The state of Alaska is unique and one of the most beautiful in the U.S. But it can also help supply badly needed resources that could keep the U.S. going until the development of new, more environmentally friendly technologies for energy generation and metal recycling. But Seward was, in fact, foolish. He was foolish for not trying to buy the Russian far east as well!

We in Alaska honor Secretary Seward every year. Perhaps the rest of the U.S. should honor him too.