78 
MINERALS YEARBOOK, 1967 
 
cent in 1966. Heavy media separation was the treatment process used; only
minor quantities were cleaned by jigging. 
 After a 5-year controversy, it appeared that natural gas producers had won
the struggle to fuel the Elmendorf Air Force Base and the Fort Richardson
Army Base near Anchorage. In October the two military bases announced conversion
of their respective power plants to natural gas. The Congress had authorized
$1.98 million for the conversion costs. Anticipated annual savings were put
at $2.43 million by the Department of Defense. Congressional authorities,
acknowledging the adverse impact of the decision on the economy of the coal-oriented
Matanuska Valley, noted that coal costs had risen steadily over the years
while Congress had been delaying a decision. 
 Late in the year, a group of Cordova businessmen, organized under the name
of Cortella Coal Corp., disclosed plans to activate the Bering River coal
fields north of Controller Bay. Mineral leases were acquired from Jewell
Ridge Coal Co. of Tazewell, Virginia. Cortella hoped to open the deposits
for annual shipment of 1 million tons or more of coking coal to Japan. Jewell
Ridge had examined the Bering River coals in the late 1950's and thereafter
had made laboratory tests and other studies in connection with possible shipments
to the Orient. Coking characteristics of the coals were thought to be suitable
for the Japanese markets, but the highly faulted and tilted structure of
the deposit and the transportation of the coal to ocean loading facilities
were seen as formidable obstacles to economic exploitation. Under consideration
in the Cortella investigation was use of a pipeline to move the coal from
the mine to the port of Cordova. 
 Golden Valley Electric Association, Inc., completed construction on its
mine-mouth steam-generating plant at Healy in the northern fields. The 138,000-volt
transmission line to Fairbanks also was completed. The 22,000-kilowatt system,
at a capital cost of $18 million, was expected to produce power at the busbar
for approximately 8 mills per kilowatt hour. Studies made while construction
was underway showed increased power demand, in excess of capacity being built,
was probable in the near future. As a result of these studies, tentative
plans were drawn to install an 
additional unit at Healy which would triple present capacity. 
 The Bureau of Mines made no coal field investigations in the State in 1967.

 
 Petroleum and Natural Gas.—Development wells in offshore Cook Inlet
were responsible for outstanding gains in both physical volume of production
and value of output. Volume and value of oil from the established Kenai Peninsula
field increased by 10 percent as repressurizing activities continued in the
Swanson River and Soldotna Creek units. The spectacular increase in total
value of oil $91.2 million compared with $44.0 million resulted in large
part from new production from the offshore Cook Inlet fields. 
 At yearend, 11 permanent offshore drilling and production platforms were
operating in Cook Inlet. Nine of the eleven were producing oil. Total combined
production from four offshore fields—Middle Ground Shoal, Granite Point,
McArthur River, and Trading Bay—was greater than that of the Swanson
River field. During December average daily production of offshore oil reached
92,900 barrels versus 35,500 barrels from Swanson River—Soldotna Creek.

 Natural gas production totaled (65.8 billion cubic feet) of which 42.7 billion
was dry gas and 23.1 billion associated gas. Of the total 51.4 billion cubic
feet including 11.4 billion injected for reservior repressurization at Swanson
River, was used, lost, blown, or flared. Marketed production of gas was 14.4
billion cubic feet and was valued at $3.61 million. Gas sold for injection,
all of it from the Kenai unit for injection into Swanson River, was 30.6
million Mc.f. valued at $2.6 million. The 1966 gas production was 11.3 billion
Mc.f. valued at $2.79 million. 
 Total footage drilled in 1967 was 904,- 
368 an increase of 66 percent over the 1966 
figure which in turn more than doubled 
the 1965 footage. Exploratory drilling was 
289,941 feet (369,872 feet in 1966), development drilling showed 614,427
feet (178, 
127 feet in 1966). 
 Exploratory drilling was centered in the Cook Inlet Basin with the trend
being to offshore waters and adjacent onshore lands on the west side of the
Inlet. The only new field discovered in Alaska in 1967 was on the upper .Kenai
Peninsula where Marathon Oil Co. completed Beaver Creek No. 1—A for
a new gas discovery. A prior hole,