The Socio-economic character of Alaska

Prior to the March 27 1964 Earthquake-Tsunami

European interest in Alaska began in 1741 with the inclusion of the State within the new Russian territories. The primary activity within the region related to fur trading and hunting. From 1800 to 1867, numerous settlements were established all of which dealt with trading or ship building activities. Alaska was sold to the Americans in 1867 and from then on the principal activities related to fur trading, fishing and then gold mining. World War II saw a change in economic activity that was dominated by military operations. From the end of the Second World War until 1964, development mainly occurred within the interior and north of Alaska in association with mineral and oil exploration.

By 1964, the total population of Alaska was just 250,000. The largest settlement was Anchorage with a population of 100,000. The population of coastal southern Alaska was sparse, the communities were small and most settlements were located on the north shores of embayments and fjords to provide protection from storms and tsunamis. By far, the most significant economic activity related to fishing and seafood processing. Additionally, Homer, Seaward, Valdez and Whittier were all year round ice free harbours and as such, provided important transport network points with connections to the railroad and highway transportation systems. In 1964, the Gross State Product (GSP) was just over US$1 billion. Approximately 30% of the GSP was deprived from the fishing and seafood processing industries and nearly 35% of the population was employed in this sector.

The 1964 Earthquake-Tsunami Event

At 5:36pm (Alaska standard time) on March 27th 1964 (or 03:36:11.9 to 12.4 GMT on the 28 March 1964) an earthquake with a body magnitude of Mw9.5 (or Richter magnitude of 8.3 to 8.75) occurred with its epicentre located beneath Prince William Sound 80 miles east southeast of Anchorage. The exact coordinates for the epicentre of this event are recorded as 61o 4’N, 147o 73’W. The earthquake originated at a depth between 20 and 50 km and is the largest to have struck the North American continent in history. The earthquake occurred as a result of a northward thrust of the Pacific Ocean sea floor beneath the continental landmass of Alaska. Duration of strong ground motion (earthquake shaking) was on average 3 to 4 minutes and may have been as great as 7 minutes. Vertical changes in the Earth’s surface elevation that accompanied the Alaska earthquake are the largest in recorded history. 48,000 square miles of land and sea floor dropped up to seven feet and more than 60,000 square miles of the land surface were uplifted. In some places, uplift of the land surface and sea floor exceeded 50 feet (seriously affecting maritime activity). The whole of the contiguous continental mass of North America rose and fell several inches as the earthquake waves traveled out from the epicentre. The energy release was equivalent to 12,000 Hiroshima-type atomic bombs or 240 million tons of TNT.

The enormous deformation and uplift of the seafloor caused the generation of a large tsunami within the Gulf of Alaska which propagated out across the Pacific Ocean as a teletsunami. This tsunami also impacted the southern coast of Alaska. This tsunami caused the deaths of many people and inflicted massive damage on many locations far from its point of origin (e.g., California and Washington States and in Hawaii). Whilst significant interruption of the social fabric of these places as well as major economic losses were incurred, they lie outside the study area of this report and as such are not dealt with. It is noteworthy however, that in Crescent City, California, damage was estimated at more than US$84 million and in places, the tsunami inundated more than 800 metres from the coastline with wave run-ups of more than 10 feet.

In addition to the major teletsunami, more than 20 local tsunamis were generated. These local tsunamis were initiated by a combination of submarine and subaerial landslides at the heads of river deltas and in fjords all along the coast and were triggered by the large earthquake. All of the locally generated tsunamis arrived at the coastline within 2 to 5 minutes of the onset of the earthquake and were responsible for the majority of the damage and deaths reported in the various communities affected in Alaska.

Impacts and Effects of the 1964 Earthquake-Tsunami

The earthquake-tsunami of March 27 1964, caused very significant damage to infrastructure and facilities across a wide coastal area of southern Alaska. Table 2 provides a summary of the estimated damages associated with this event.

Table 2
Summary of estimated damages, as of August 12, 1964

Est. Damage
Public Property (US$ 1964 prices)

Federal:
Military 35,610,000
Nonmilitary 35,641,000
Non-Federal:
State and local 107,373,000
Highways 55,568,000
Private Property:
Real 77,000,000
Personal No estimate
Total Damages* 311,192,000

*Excluding personal property and loss of income.

In 1964, the city of Anchorage had a population of 100,000. The major damage to Anchorage was centered in parts of the downtown business district and a residential area called Turnagain Heights. While areas of Anchorage were badly affected by subsidence associated with the earthquake of March 27 1964, there was no significant tsunami in the Anchorage area.

The town of Cordova had a of population 1,100 when the earthquake-tsunami occurred. The main economic activity of the town was related to fishing and seafood processing. The area of Cordova was uplifted by the earthquake by on average, 6 feet. The first tsunami arrived within about 5 minutes of the onset of the earthquake and maximum wave run-up was probably 29 feet above normal tidal conditions. The tsunami caused enormous destruction to boats, the harbour and dock, cannery and storage facilities. Total damages exceeded $1,645,000.

The small town of Homer had a population of 1,200 and was important because it has a deep water ice free port. The principal economic activity for the town also related to fishing and seafood processing. The earthquake caused realtively minor damage to the town. The first tsunami arrived within 3 minutes of the onset of the earthquake and maximum tsunami wave run-up was to 6 feet above normal tidal levels. The port, docks, canneries and storage facilities were all destroyed on the harbour front. Total damages exceeded $1,750,000.

The city of Kodiak on Kodiak Island had a population of 2,658. The fishing and the crab fishing industry in particular, were extremely important to the local economy. The earthquake caused very minor damage to the town of Kodiak and the very important Kodiak Navel Station. 10 tsunami waves were observed at Kodiak and the highest run-up was recorded at 25 feet above normal tide levels. The city canneries, boats, docks and storage facilities were all destroyed. The main electrical power unit was knocked out, the water pipe system was destroyed, the dock pier, generators, roads, houses, runways, warehouses and other facilities were also damaged or totally destroyed. Radioactive nuclides were scattered in the basement of the Electronics Building of the Naval Base needing specialist clear-up operations. $35 million worth of damage was caused by the tsunami, 80% of the industrial base of the city was destroyed and 600 people were made homeless out of a population of 2,658. Table 3 shows the property and income losses for Kodiak.

Table 3
Losses of property and income on Kodiak

The town of Seaward with a population of 1,730 was also important because of its ice free harbour and its connection as a terminus of the Alaska Railroad and the Anchorage-Seaward Highway. Seawards economy was dependent on the transport industry and included extensive railroad yards and freight staging areas. Fish processing plants and petroleum storage facilities were also very important to the economy and were all located in the vulnerable water front area. There were two important petroleum products handling facilities at Seaward: the Standard Oil Company dock and the Texaco dock. The town of Seaward was built on a delta at the head of Resurrection Bay. The town was very isolated with only a single road connecting it via a raised causeway that ran along the edge of the bay to the outside area. The earthquake caused an enormous underwater sediment slump of the delta front and this generated a series of tsunamis. The combined slump and tsunami caused the collapse of the dock fronts and the sinking of some boats within the harbour. Fire spread when the oil facilities ruptured. The first tsunami arrived within 1 to 2 minutes of the onset of the earthquake and the tsunamis inundated at least 800 metres in to the town. Tsunami run-up was up to 30 feet at the north end of Second St. The railroad yards were heavily damaged as were freight units in the marshalling yards. Warehouse storage units were also totally destroyed. With the tsunami loss of the fish canneries and processing units, 95% of Seawards industrial base was lost. 15% of the town’s residential properties were either totally destroyed or very heavily damaged. Total damage to public and private facilities was estimated at $22,363,349

Valdez is the most northern ice free port in Alaska and had a population of 1,200 in 1964. The principal economic activity related to shipping supplies in to the interior via the Richardson Highway. Other industries included fishing and seafood processing, tourism and highway maintenance. The town was built on the head of an outwash delta. Within 20 seconds of onset of earthquake shaking, 98 million cubic yards of delta material slumped down in to the bay. Tsunami wave run-up was as high as 170 feet above normal tidal levels. Half of the downtown business district was totally destroyed, massive damage was caused to the waterfront, storage, warehousing and railroad facilities. The towns entire fishing fleet was destroyed. Total damage at Valdez was estimated at more than $3,585,000

The small town of Whittier with its population of 70 was an ice free port and terminus of the Alaska Railroad built by the army during World War II as a transportation hub to Anchorage. A series of at least eight tsunami waves struck the town starting no more than 1 minute after earthquake shaking began. Maximum wave run-up is reported at 104 feet above normal tidal levels. Huge damage was done to the commercial petroleum industry facilities, railroad yards, storage and handling facilities in the dock area.

Disaster Recovery Timeframe

One of the most important factors to consider when examining the economic consequences of the 1964 earthquake-tsunami event in Alaska is the period of time that it took for various industrial sectors to recover following the disaster. Indeed, the recovery timeframe was significantly different for different sectors depending on a range of factors such as the level of State aid, insurance reimbursement and new planning controls and regulations.

The key phases following the disaster can be divided in to three: the emergency, the restoration and the reconstruction phases. In reality, the emergency phase lasted approximately four weeks from March 27 1964; the restoration phase lasted from the 4th to the 40th week and the reconstruction phase was not fully completed for more than 600 weeks (or approximately 12 years) following the disaster. Various milestones characterised each of these phases. For example, within the four weeks of the emergency phase, 90% of the gas generation, storage and transmission system was restored, 75% of the water system was restored and the power and electricity generation and distribution network systems were restored. During the 40 weeks that defined the restoration phase, 25% of all public restoration projects were completed and the temporary provision of most utilities was ended. The 600 weeks that defined the reconstruction phase were characterised by the completion of repairs to all local facilities, the completion of post-disaster construction projects (public and private) and, most importantly, the restoration of commercial and industrial activities to pre-disaster levels.

It is the period of time that elapsed for the completion of the reconstruction that has the most important consequences for the insurance industry. That is, insurance claims would arise in relation to a number of areas. For example, claims could be made in respect of business interruption. Claims could also be made for business recovery that in some circumstances could be quite prolonged. A good example of this relates to the downtime of economic activity that crab fishermen experienced in the Prince William Sound area following the earthquake-tsunami and which completely destroyed the crab breeding grounds. It actually took 12 years for the breeding grounds to reestablish to levels that sustained year-on-year harvest catches. As such, the fishermen were able to make insurance claims for business recovery for up to 12 years. For other industrial activities, the period of business recovery will be dependent on a variety of upstream and downstream factors such as the ability of a company’s suppliers to deliver component units, the market needs of a company following the disaster and how quickly the infrastructure and distribution networks recover which a particular company is dependent upon.

Long-term economic consequences

The March 27 1964 earthquake-tsunami event had a number of significant long-term economic consequences for individual settlements of the coast of the Gulf of Alaska. Prior to the tsunami disaster, large petroleum terminals servicing the needs of Alaska existed at the ports of Seaward and Whittier. These industries were significant to the local economy of these towns. Following the tsunami, a decision was made to move these terminals to a larger central facility in Anchorage. Whilst this was economically important for Anchorage, it was a major economic blow to these smaller settlements. Additionally, it was decided that the port at Valdez should be developed and now handles the entire daily production and distribution of Alaskan oil to the rest of the continental United States and this has been of enormous economic importance to Valdez.