THE MINERAL INDUSTRY OF ALASKA 
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1,000-ton-per-day prilled urea plant. Natural gas from the Kenai unit was
to be the feed stock for the two plants. Target date for completion of the
complex was November 1968 with full production expected in the first 3 months
of 1969. Company, State, and Federal officials were striving to solve the
disposal problems involved in discharging a treated plant effluent into Cook
Inlet waters. 
 Collier received a temporary permit to discharge certain wastes into the
waters of Cook Inlet in connection with the design and testing of equipment
to meet the State's antipollution requirements for the main plants. The permit,
effective until the summer of 1968, allowed discharge of 820,000 gallons
per day of treated waste waters. Cook Inlet fishermen, however, protested
the granting of the permit as harmful to marine life in the Inlet. After
a series of meetings between the fishing industry and petrochemical industry
interests, the ~State announced a new, more restrictive, permit would be
issued to Collier in order to minimize the threat of pollution in Cook Inlet.

 Pollution of the inlet waters was of major concern in other areas. In addition
to the opposition of commercial fishermen to Collier's plan several incidents
occurred which focused attention on other aspects of pollution. Tankers moving
into the Inlet to load oil at terminal facilities were reported to be pumping
oily ballast prior to loading. When several thousand ducks covered with a
thick heavy oil coating were found dead on the beaches and waters of Cook
Inlet, State officials moved rapidly to eliminate this hazard to wildlife.
Severe penalties were set for any discharges into Alaska waters harmful to
fish or wildlife. In another incident, a loaded tanker at the Drift River
terminal was punctured when thrown by an erratic tide against a loading dock
fender. An appreciable amount of oil was spilled before the oil in the niptured
compartment was transferred to shore storage. Both State and industry officials
were studying means of controlling such loading accidents to reduce the hazards
to Inlet waters. 
 Three competitive oil and g'as lease sales were held during the year by
the State. Proceeds from the sales totaled $20.2 million, including the record
high $18.7 million received from the 20th competitive sale. Offshore tracts
in Cook Inlet ac 
counted for most of the money received. Among the successful bidders in the
20th competitive sale was a newcomer to Alaska, Alaskco U.S.A. Ltd., a Japanese
firm organized in 1966 to explore and develop Alaska oil and gas potential.
Alaskco bid jointly with Gulf Oil Corp. Another newcomer to Alaska was Mesa
Petroleum of Amarillo, Tex., and Calgary, Alberta, Canada. 
 In the competitive lease sale, the State auctioned an offshore parcel of
land below Kalgin Island in Lower Cook Inlet. The Federal Government immediately
brought suit contesting Alaska's title to the land auctioned. The State based
its ownership claims on the historic bay principle while Federal authorities
claimed ownership by virtue of the land lying more than 3 miles offshore.
A Federal court hearing ruled in favor of the State. An appeal by the Federal
Government was expected. 
 A bill to return to the Department of the Interior Naval Petroleum Reserve
No. 4 on the North Slope in far northern Alaska was introduced in Congress.
The legislation was aimed at transferring 23 million acres so that the Department
of the Interior could lease the land competitively to oil and gas interests.
Continued use of gas from the South Barrow fields for government use and
for use by residents of Barrow was provided for. The Defense Department would
continue to administer this phase. The area was thought to hold excellent
chances for discovery of important new reserves. 
 The Secretary of the Interior announced plans to open Federal tracts in
the Gulf of Alaska to oil and gas leasing. Invitations for nomination of
areas for competitive bidding on the outer Continental Shelf were expected
by early 1968 with the first sale held in 1969. Some 60 million acres under
Federal jurisdiction were involved. In a unique suggestion, the Secretary
proposed that the long-standing native land claims be settled by giving the
natives a share in Federal royalties from oil and gas wells drilled in offshore
Gulf waters. The natives had laid claim to about 75 percent of Alaska's 586,400
square miles and were seeking large tracts of land as settlement. 
 Reacting to the Department of the Interior announcement on the Gulf of Alaska
leasing, 18 oil companies operating in or having an interest in Alaska oil
formed a consortium to fund and admin