Among Alaska's vast resources, gold and oil were the rich twins that put the territory on the map near the turn of the last century. Gold discoveries had been made in the Interior and at Nome when, in September 1902, the Alaska Development Co., known as the English Co., made the first commercial oil discovery at Katalla, 47 miles southeast of Cordova.
The oil was found near the mouth of the Bering River, about 15 miles from actively producing coal fields. It seeped and bubbled at the surface, an inviting picture for oil producers and investors whose hopes were egged on by hyperbolic talk and activity. The news was reported by as distant a source as the New York Times, which suggested, wrongly, that the English Co. had hit a gusher that spouted 200 feet in the air. "Oil stands in pools and small lakes all over the surface of the lowlands lying east of Copper River . . . In places there are lakes of oil covering acres," the paper reported.
Soon the hillside near the discovery site was peppered with oil derricks, drilling equipment, cabins, and pipelines. Until oil tanks could be installed for storage, workers dug deep pits in the bog, where the crude oil was stored temporarily. Within six years of discovery, the population of Katalla had risen to nearly 5,000. Several oil companies, however, were prospecting using unscientific methods and guesswork, choosing drilling sites almost randomly in the hope that the oil field was large enough to reward them. Dry holes were common and by 1907, several companies had pulled out.
With the arrival that year of newspaperman J.F.A. Strong, who later would be appointed territorial governor, the region received a powerful dose of "boosterism." On August 10, 1907, Strong used the first issue of his newspaper, the Katalla Herald, to minimize the reports of dry holes and drilling problems, and to announce new development work.
Meanwhile, that same year, geologist George Martin was reporting in U.S.G.S. Bulletin No. 10, "The known facts of the local geology are unfavorable to the presence of productive bodies of oil."
Still, one of the remaining oilmen, Clark Davis, returned from a trip to Seattle with overly optimistic reports of outside interest, reporting to Strong, who in turn published Davis's words in the Herald: " . . . I expect to see, next year, a dozen big outfits actively at work developing the oil fields surrounding the city. I gave it out that the Alaska Petroleum and Coal Company stood ready to give every encouragement to oil men to come here, and we are ready to let oil developers have from 40 to 80 acres each to begin work upon, on the most liberal terms."
No one would become rich on Katalla oil in the early 20th century; however, investments in nearby coal-producing fields and the railroad kept some operations in business, and the oil did flow in minor quantities. In 1911, a refinery was established near Katalla to process the crude, which was sold locally, mainly to power the fishing fleet.
In the early 1920s, Alaskan Barrett Willoughby, who gained nationwide fame for her novels and nonfiction, photographed the ongoing work at the oil and coal mines near Katalla. Her photo collection includes images of Tom White, whom she named "the Sourdough driller," the man who drilled the first oil well in Alaska. Like newspaperman J.F.A. Strong, she waxed romantic about the region, juxtaposing a gritty oilfield scene set among magnificent natural beauty: "Gas seepages and oil seepages abound in this vicinity. Seven glaciers can be seen from this location, in the mountains behind, and the Slough itself is reported to be fifty feet deep, and a hundred and fifty feet wide. It forms a perfect mirror for the surrounding country in calm weather and its banks are the nesting grounds of millions of ducks and geese."
By 1931, some 44 test wells had been drilled, 28 of which were within the Katalla field. Of those, 18 produced oil, which was refined and sold locally. A fire destroyed the Chilkat Oil Company's refinery on Christmas Day 1933, and rebuilding was not reasonable, given the economic realities. By then, a mere 154,000 barrels had been produced. Katalla's post office closed in 1943 and the place became a ghost town. In 1974, the Chilkat Oil Company refinery site was named to the National Register of Historic Places.