History of the petroleum industry in Canada
Encyclopedia
The Canadian petroleum industry arose in parallel with that of the United States
. Because of Canada's unique geography
, geology
, resources
and patterns of settlement
, however, it developed in different ways. The evolution of the petroleum
sector has been a key factor in the history of Canada
, and helps illustrate how the country became quite distinct from her neighbour to the south.
Although the conventional oil and gas industry
in western Canada is mature, the country's Arctic
and offshore petroleum resources
are mostly in early stages of exploration and development. Canada became a natural gas
-producing giant in the late 1950s and is second, after Russia
, in exports; the country also is home to the world's largest natural gas liquids extraction facilities. The industry started constructing its vast pipeline
networks in the 1950s, thus beginning to develop domestic and international markets in a big way.
Despite billions of dollars of investment, her bitumen - especially within the Athabasca oil sands
- is still only a partially exploited resource. By 2025 this and other unconventional oil resources - the northern and offshore frontiers and heavy crude oil
resources in the West - could place Canada in the top ranks among the world's oil producing and exporting nations. In a 2004 reassessment of global resources
, the United States' EIA
put Canadian oil reserves
second; only Saudi Arabia
has greater proved reserves
.
Many stories surrounding the petroleum industry
's early development are colourful. The gathering oilpatch involved rugged adventurers, the occasional fraud, important innovations and, in the end, world-class success. Canadian petroleum production
is now a vital part of the national economy
and an essential element of world supply
. Canada has become an energy giant.
for centuries, Charles Nelson Tripp
was the first Canadian to recover the substance for commercial use. The year was 1851; the place, Eniskillen Township, near Sarnia
, in present-day Ontario
(at that time Canada West). It was there that Tripp started dabbling in the mysterious gum beds near Black Creek. This led to incorporation
of the first oil company in Canada
.
Parliament
chartered the International Mining and Manufacturing Company, with C.N. Tripp as president, on December 18, 1854. The charter empowered the company to explore for asphalt
beds and oil and salt springs, and to manufacture oils, naphtha
paints, burning fluids, varnish
es and other such products.
International Mining and Manufacturing was not a financial success, but Tripp’s asphalt received an honourable mention for excellence at the Paris Universal Exhibition
in 1855. Several factors contributed to the downfall of the operation. Lack of roads in the area made the movement of machinery and equipment to the site extremely difficult. And after every heavy rain the area turned into a swamp
and the gum beds made drainage extremely slow. This added to the difficulty of distributing finished products.
When James Miller Williams
became interested and visited the site in 1856, Tripp unloaded his hopes, his dreams and the properties of his company, saving for himself a spot on the payroll as landman
. The former carriage builder formed J.M. Williams & Company in 1857 to develop the Tripp properties. Besides asphalt, he began producing kerosene
.
Stagnant, algae-ridden surface water lay almost everywhere. To secure better drinking water, Williams dug (rather than drilled) a well a few yards down an incline from his plant. At a depth of 20 metres (65.6 ft) the well struck free oil. It became the first oil well
in North America, remembered as the Williams No. 1 well at Oil Springs, Ontario
.
Some historians challenge Canada’s claim to North America’s first oil field
, arguing that Pennsylvania
’s famous Drake well
was the continent’s first. But there is evidence to support Williams, not least of which is that the Drake well did not come into production until August 28, 1859. The controversial point might be that Williams found oil above bedrock while “Colonel” Edwin Drake
’s well located oil within a bedrock reservoir
.
We do not know exactly when Williams abandoned his Oil Springs refinery and transferred his operations to Hamilton. He was certainly operating there by 1860, however. Spectator advertisements offered coal oil
for sale at 16 cents per gallon for quantities from 4000 gallons (15,141.6 l) to 100000 gallons (378,541.2 l).
Williams reincorporated there as The Canadian Oil Company (perhaps provisionally as the Canada Rock Oil Company). His company produced oil, refined it and marketed refined products. That mix of operations qualify Canadian Oil as the world’s first integrated oil company
.
Exploration
in the Lambton county backwoods quickened with the first flowing well in 1860: Previous wells had relied on hand pumps. The first gusher blew in on February 19, 1862, when a down-in-his-luck photographer named John Shaw (sometimes mistakenly identified as Hugh Nixon Shaw, another oil operator of the period) struck oil at 48 metres (157.5 ft). For a week the oil gushed unchecked, eventually coating the distant waters of Lake St. Clair
with a black film.
Dr. A. Winchell, in his Sketches of Creation, refers to this gusher (though not very accurately) in the following passage.
Following Williams' example, practically every significant producer in the infancy of the oil business became his own refiner
. Seven refineries were operating in Petrolia, Ontario
in 1864 and 20 in Oil Springs. Together, they processed about 80 cubic metres of oil per day.
In 1865 oil was selling for $70 per cubic metre ($11.13 per barrel). But the fields of Ontario delivered too much too quickly, and by 1867 the price had dropped to $3.15 per cubic metre ($0.50 per barrel). By 1870, Oil Springs and Bothwell were both dead fields, but other booms followed as drillers tapped deeper formations and new fields.
Although the industry had a promising start in the east, Ontario’s status as an important oil producer did not last long. Canada became a net importer of oil during the 1880s. Dependence on neighbouring Ohio
as a crude oil supplier increased after the automobile
rolled into Canada in 1898.
Petrolia
drillers developed the Canadian pole-tool method of drilling which was especially useful in new fields where rock formations were a matter for conjecture. The Canadian technique was different from the American cable-tool method. Now obsolete, cable-tool drilling uses drilling tools suspended from a cable which the driller paid out as the well deepened.
Canada’s pole-tool rig used rods or poles linked together, with a drilling bit fixed to the end of this primitive drilling “string.” Black-ash rods were the norm in early Petrolia. Iron rods came later. Like the cable tool system, pole-tool drilling used the weight of the drill string pounding into the ground from a wooden derrick to make hole.
The record is not complete enough to show all the locations Canadians helped to drill. However, Petrolia drillers unquestionably helped drill for oil in Java
, Peru
, Turkey
, Egypt
, Russia
, Venezuela
, Persia, Romania
, Austria
and Germany
. One of the best-known Canadian drilling pioneers was William McGarvey
. McGarvey acquired oil properties in Galicia (now part of Poland
) and amassed a large fortune - then saw his properties destroyed when Russian and Austrian armies swept across the land during the First World War
.
Today, Canadian drillers
still move to far away places to practise their widely respected skills.
, amusing themselves by driving sticks into the ground, pulling them out, then lighting the escaping natural gas.
In 1859 an oil explorer found a natural gas seep near Moncton, New Brunswick
. Dr. H.C. Tweedle found both oil and gas in what became the Dover field, but water seepage prevented production of these wells.
An offshoot of the oil drilling boom was the discovery of gas containing poisonous hydrogen sulfide
(“sour” gas) near Port Colborne, Ontario. That 1866 discovery marked the first of many gas fields found later in the southwestern part of the province.
Eugene Coste, a young Paris-educated geologist who became the father of Canada’s natural gas industry, brought in the first producing gas well in Essex County, Ontario, in 1889. Canada first exported natural gas in 1891 from the Bertie-Humberstone field in Welland County to Buffalo, New York. Gas was later exported to Detroit from the Essex field through a 20-centimetre pipeline under the Detroit river. In 1897, the pipeline stretched the Essex gas supply to its limit with the extension of exports to Toledo, Ohio. This prompted the Ontario government to revoke the licence for the pipeline. And in 1907 the province passed a law prohibiting the export of natural gas and electricity.
In 1909, New Brunswick’s first successful gas well came in at Stoney Creek near Moncton. This field still supplies customers in Moncton, although the city now has a propane air plant to augment the limited natural gas supply.
The year 1911 saw a milestone for the natural gas industry when three companies using Ontario’s Tilbury gas field joined to form Union Gas
Company of Canada, Limited. In 1924, Union Gas was the first company to use the new Seabord or Koppers process to remove poisonous hydrogen sulfide
from Tilbury gas. Union became one of the largest corporations in Canada before its acquisition by Duke Energy
, a US firm.
Those were the early days in Canada’s petroleum industry. The cradle was in the east, but the industry only began to come of age with discoveries in western Canada
, notably Alberta
. There, the Western Canadian Sedimentary Basin
is at its most prolific.
Alberta’s first recorded natural gas find came in 1883 from a well at CPR
siding No. 8 at Langevin, near Medicine Hat. This well was one of a series drilled at scattered points along the railway to get water for the Canadian Pacific Railway
’s steam-driven locomotives. The unexpected gas flow caught fire and destroyed the drilling rig.
This find prompted Dr. George M. Dawson of the Geological Survey of Canada to make a notable prediction. Noting that the rock formations penetrated in this well were common in western Canada, he prophesied correctly that the territory would some day produce large volumes of natural gas.
A well
drilled near Medicine Hat in 1890 - this time in search of coal - also flowed natural gas. The find prompted town officials to approach the CPR with a view to drilling deeper wells for gas. The resulting enterprise led to the discovery in 1904 of the Medicine Hat gas sand, which is now recognized as a source of unconventional gas. Later, that field went on production to serve the city, the first in Alberta to have gas service. When Rudyard Kipling
travelled across Canada in 1907, he remarked that Medicine Hat had “all Hell for a basement.”
In northern Alberta, the Dominion Government began a drilling program to help define the region’s resources. Using a rig brought from Toronto, in 1893 contractor A.W. Fraser began drilling for liquid oil at Athabasca
. He abandoned the well in 1894. In 1897 Fraser moved the rig to Pelican Rapids, also in northern Alberta. There it struck gas at 250 metres (820.2 ft). But the well blew wild, flowing uncontrolled for 21 years. It was not until 1918 that a crew led by A.W. Dingman succeeded in killing the well.
Dingman, who played an important role in the industry’s early years, began providing natural gas service in Calgary through the Calgary Natural Gas Company. After receiving the franchise in 1908, he drilled a successful well in east Calgary on the Walker estate (a well which continued producing until 1948). He then laid pipe from the well to the Calgary Brewing and Malting Company, which began using the gas on April 10, 1910.
The earliest efforts to develop western Canadian oil were those of Kootenai Brown. This colourful character - a frontiersman with an Eton and Oxford education - was probably Alberta’s first homesteader. In 1874, Brown filed the following affidavit with Donald Thompson, the resident solicitor at Pincher Creek:
In 1901, John Lineham of Okotoks organized the Rocky Mountain Drilling Company. In 1902 he drilled the first oil exploration well in Alberta
on the site of these seepages (now in Waterton Lakes National Park
). Despite a small recovery of 34° API sweet oil, neither this well nor seven later exploration attempts resulted in production. The site is now a National Historic Site of Canada.
In 1909, exploration activity shifted to Bow Island in south central Alberta, where a natural gas discovery launched Canada’s western gas industry. The same Eugene Coste who had found gas in Ohio and again in southern Ontario drilled the discovery well, Bow Island No. 1 (better known as “Old Glory”). Pipelines soon transported Bow Island gas to Medicine Hat, Lethbridge
and Calgary, which used the fuel for heat and light. Eugene Coste became the founder of the Canadian Western Natural Gas Company when he merged the Calgary Natural Gas Company, Calgary Gas Company and his Prairie Fuel Company in August 1911.
and other parts of southern Alberta. Investors lined up outside makeshift brokerage houses to get in on exploration activity triggered by the 1914 discovery of wet gas and oil at Turner Valley
, southwest of Calgary. So great was the excitement that, in one 24-hour period, investors and promoters formed more than 500 “oil companies.” Incorporated a year earlier, the Calgary Stock Exchange was unable to control some of the unscrupulous practices that relieved many Albertans of their savings.
The discovery well that set off this speculative flurry belonged to the Calgary Petroleum Products Company, an enterprise formed by W.S. Herron, William Elder and A.W. Dingman. Named Dingman No. 1 after the partner in charge of drilling, the well produced natural gas dripping with condensate
, sometimes referred to as naphtha
. Stripped from the gas, this hydrocarbon mixture was pure enough to burn in automobiles without refining; it became known as “skunk” gasoline because of its distinctive odour.
Pioneered in Turner Valley, natural gas liquids extraction eventually became an important Canadian industry in its own right, as the story of its development illustrates.
The Dingman well and its successors were really “wet” natural gas wells rather than true oil wells. The high expectations raised by the initial discovery gave way to disappointment within a few years. Relatively small volumes of liquids flowed from the successful wells. By 1917, the Calgary City Directory listed only 21 “oil mining companies” compared with 226 in 1914.
Drilling continued in Turner Valley, however, and in 1924 came another significant discovery. The Calgary Petroleum Products Company, reorganized as Royalite Oil Company, drilled into Paleozoic
limestone. The well blew out at 1180 metres (3,871.4 ft).
The blowout
at Royalite No. 4 was one of the most spectacular in Alberta’s history. Initially flowing at 200,000 cubic metres per day, the flow rate increased to some 620,000 cubic metres per day when the well was shut in. The shut in pressure continued to rise and, when the gauge read 1,150 psi (7,930 kilopascals), the drillers ran for their lives. In 20 minutes, 939 metres (3,080.7 ft) of 8 inch (20.3-centimetre) and 3,450 feet (1,052 m) of 6 inch (16-centimetre) pipe - together weighing 85 tonnes - rose to the top of the derrick. The well blew wild, caught fire, and destroyed the entire rig. The fire blazed for 21 days. Finally, wild well control experts from Oklahoma
used a dynamite explosion to blow away the flames. They then applied the combined steam flow of seven boilers to keep the torch from lighting again.
Unknown to the explorers of the day, these wells extracted naphtha from the natural gas cap over Turner Valley’s oilfield. After two years of off-and-on drilling, in 1936 the Royalites No. 1 well finally drilled into the principal oil reservoir at more than 2500 metres (8,202.1 ft).
This well, which established Turner Valley as Canada’s first major oil field and the largest in the emerging British Commonwealth
, used innovative financing. Promoters ordinarily sold shares in a company to finance new drilling programs, but in the Depression money for shares was hard to come by. Instead, R.A. Brown, George M. Bell and J.W. Moyer put together an enterprise called Turner Valley Royalties. That company offered a percentage share of production (a "royalty") to those willing to put money into the long-shot venture.
Recoverable oil reserves
from the Turner Valley field were probably about 19 million cubic metres. Although locals boasted at the time that it was "the biggest oil field in the British Empire
," Turner Valley was not a large field by later standards. (By way of comparison, the Pembina field in central Alberta - Canada’s largest - had recoverable reserves of about 100 million cubic metres.) But besides being an important source of oil supply for the then-small market in western Canada, the field had an important long-term impact. It helped develop petroleum expertise in Canada's west, and it established Calgary as Canada’s oil and gas capital.
, so other producers could not sell their gas. But all the producers wanted to cash in on the natural gas liquids for which markets were growing. So the common practice became to pass the gas through separators, then flare it off. This greatly reduced the pressure on the oil reservoir, reducing the amount of recoverable oil. But the size of the problem was not clear until the oil column was later discovered.
The flares were visible in the sky for miles around. Many of these were in a small ravine known to locals as Hell’s Half Acre. Because of the presence of the flares, the grass stayed green year-round and migrating birds wintered in their warmth. A newspaper man from Manchester, England, described the place with these florid words:
While the flaring
continued, the business community seriously discussed ways to market the gas. For example, in early 1929 W.S. Herron, a Turner Valley pioneer, publicly promoted the idea of a pipeline to Winnipeg. At about the same time, an American company made application for a franchise to distribute natural gas to Regina. The Bank of North Dakota offered to buy 1.4 million cubic metres per day.
By early 1930, there was talk of a pipeline from Turner Valley to Toronto. Estimates showed that gas delivery to Toronto would cost $2.48 per thousand cubic metres. A parliamentary committee looked into ways to force waste gas down old wells, set up carbon black plants or export the gas to the United States. Another proposal called for the production of liquefied methane.
Unfortunately, the Depression
had already gripped Canada, which might have been more severely affected by this economic catastrophe than any other country in the world. Capital investment became less and less attractive and drilling at Turner Valley ground to a halt as the economic situation worsened.
The federal government owned the mineral rights
not held by the Canadian Pacific Railway
, the Calgary & Edmonton Corporation and by individual homesteads. The government tried to curb the flaring of gas, but legal difficulties made its efforts of little avail. One federal conservation measure succeeded, however. On August 4, 1930, began operations to store surplus Turner Valley gas in the depleted Bow Island field.
An earlier effort to control waste resulted in an Order in Council made on April 26, 1922, prohibiting offset drilling closer than 70 metres (229.7 ft) from any lease boundary. Keeping wells spaced away from each other, as this regulation did, prevents too rapid depletion of a field.
After a bitter appeal to Britain’s Privy Council
, the federal government transferred ownership of natural resources to the provinces effective October 1, 1930. Soon after, the Alberta government enacted legislation to regulate oil and gas wells. In October 1931, the Legislature passed legislation (based on a report by a provincial advisory committee) to control the Turner Valley situation. While most operators supported this act, one independent operator successfully launched legal proceedings to have the Alberta act declared ultra vires. The provincial government asked the federal government to pass legislation confirming the Alberta law. Ottawa
, however, shrugged off the request saying that natural resources were under provincial jurisdiction
During 1932, the newly created Turner Valley Gas Conservation Board proposed cutting production in half and unitizing the field to reduce waste. But the producers could not reach agreement on this issue, and the idea fell by the wayside. And so legal wrangling tied up any real conservation measures until 1938. In that year, the federal government confirmed the province’s right to enact laws to conserve natural resources
.
With this backing, in July 1938 the province set up the Alberta Petroleum and Natural Gas Conservation Board (today known as the Alberta Energy and Utilities Board). New unitization rules limited well spacing to about 16 hectares per well. The board also reduced oil production from the field. This reduced the flaring of natural gas, but it came only after the waste of an estimated 28 billion cubic metres. The lessons of Turner Valley made an impression around the world as the need for conservation and its impact on ultimate recovery became better understood. Countries framing their first petroleum laws have often used the Alberta legislation as a model.
Besides contributing to conservation, solving Turner Valley’s technical challenges with innovative technology also helped earn the field a place in early oil and gas history. Uncorrected, drilling holes wandered 22 degrees or more off course. As the field’s high-pressure gas expanded, it cooled rapidly freezing production equipment. This complicated the production process. Other problems involved external corrosion, casing failures, sulfide stress corrosion cracking, corrosion inside oil storage tanks, and the cold winters.
Early drilling was done by wooden cable tool drilling rigs which pounded a hole into the ground. These monsters ruled the drilling scene until the mid-1920s. Rotary drilling (which has since replaced cable tool drilling) and diamond coring made their appearance in Turner Valley in 1925. Nitro-shooting came in 1927 to enhance production at McLeod No. 2. Acidizing made its Canadian debut in 1936 at Model No. 3. Scrubbing gas to extract hydrogen sulfide started in 1925. Field repressurization
began in 1944 and water flooding
started in 1948.
Only months after Union Gas completed a scrubbing facility for its Tilbury gas in Ontario, in 1924 Royalite began sweetening gas from the sour Royalite #4 well through a similar plant. This process removed H2S from the gas, but did not extract the sulfur
as a chemical element. This development waited until 1952, when a sulfur recovery plant at Turner Valley began producing raw sulfur.
Turner Valley oil production peaked in 1942, partly because the Oil and Gas Conservation Board increased allowable production as part of the Second World War
war effort. During that period exploration results elsewhere in western Canada were disappointing. The only significant discoveries were small heavy oil fields. Natural gas finds were mostly uneconomic, since Western Canada's few gas pipelines were small and already well supplied.
, generally near rivers, streams and creeks.
At Rolla, British Columbia
, for example, such an observation caught Imperial Oil's attention, and in 1922 the company financed exploration to investigate. A well was drilled and oil and gas found. However, the remoteness of the Peace River Country
from market and the lack of good transport hindered commercial exploitation of the area. Today, however, Northeastern British Columbia is an active exploration and production region within the Western Canada Sedimentary Basin. Commercial development dates from the 1950s.
Many small wells were successfully drilled in Western Canada in the pre-war years, but prior to the Second World War
there were no big oil discoveries outside Turner Valley.
That changed in 1947, when Imperial Oil
discovered light oil just south of Edmonton
. Imperial's success was inspired by their much earlier discovery at Norman Wells in the Northwest Territories
. The link was that there appeared to be Devonian
reef
s in Alberta. At the Norman Wells discovery, Imperial had located just such a reservoir in the 1920s.
During the 1930s and early 1940s, oil companies tried unsuccessfully to find replacement for declining Turner Valley reserves. According to legend, Imperial Oil had drilled 133 dry wells in Alberta and Saskatchewan, although the records show that many of those wells were natural gas discoveries that were uneconomic at the time.
In 1946, the company decided on one last drilling program from east to west in Alberta. The wells would be “wildcats” - exploratory wells drilled in search of new fields. The first drill site was Leduc No. 1
in a field on the farm of Mike Turta, 15 kilometres west of Leduc
and about 50 kilometres south of Edmonton. Located on a weak seismic anomaly, the well was a rank wildcat. No drilling of any kind had taken place within an 80-kilometre radius.
Drilling started on November 20, 1946. It continued through a winter that was “bloody cold,” according to members of the rig crew. At first the crew thought the well was a gas discovery, but there were signs of something more. At 1530 metres (5,019.7 ft), drilling sped up and the first bit samples showed free oil in dolomite, a good reservoir rock. After coring, oil flowed to the surface during a drill stem test
at 1544 metres (5,065.6 ft).
Imperial Oil decided to bring the well in with some fanfare at 10 o’clock in the morning of February 13, 1947. The company invited the mayor of Edmonton and other dignitaries. The night before the ceremony, however, swabbing equipment broke down. The crew laboured to repair it all night. But 10:00 a.m. passed and no oil flowed. Many of the invited guests left.
Finally by 4:00 pm the crew were able to get the well to flow. The chilled onlookers, now numbering only about 100, saw a spectacular column of smoke and fire beside the derrick as the crew flared the first gas and oil. Alberta mines minister N.E. Tanner turned the valve to start the oil flowing (at an initial rate of about 155 cubic metres per day), and the Canadian oil industry moved into the modern era. This well marked the discovery of what became the Leduc/Woodbend field, which has since produced about 50 million cubic metres (more than 300 million barrels) of oil.
Imperial lost no time. On February 12 the company had started drilling Leduc No. 2, about three kilometres southwest of No. 1, trying to extend the producing formation. But nothing showed up at that level and company officials argued over how to proceed. One group proposed abandoning the well, instead drilling a direct offset to No. 1; another group wanted to continue drilling No. 2 into a deep stratigraphic test. But drilling continued. On May 10 at 1657 metres (5,436.4 ft), No. 2 struck the much bigger Devonian reef, which later turned out to be the most prolific geological formation in Alberta, the Leduc Formation
.
Leduc No. 1 stopped producing in 1974 after the production of some 50,300 cubic metres (320,000 barrels) of oil and 9 million cubic metres (320 million cubic feet) of natural gas. On November 1, 1989, Esso Resources (the exploration and production arm of Imperial) began producing the field as a gas reservoir. Thus did Canada’s seminal oil discovery become a gas well on its way to extinction.
The Leduc discoveries put Alberta on the world petroleum map. News of the finds spread quickly, due in large part to a spectacular blowout in the early days of the development of this field. In March 1948, drillers on the Atlantic Leduc #3 well lost mud circulation in the top of the reef, and the well blew out.
In one journalist's words,
Atlantic #3 eventually caught fire, and the crew worked frantically for 59 hours to snuff out the blaze.
It took six months, two relief well
s and the injection of 160,000 cubic metres of river water to bring the well under control, an achievement which the crews celebrated on September 9, 1948. Cleanup efforts recovered almost 180,000 cubic metres of oil in a series of ditches and gathering pools. The size of the blowout and the cleanup operation added to the legend. By the time Atlantic #3 was back under control, the whole world knew from newsreels and photo features of the blowout that the words "oil" and "Alberta" were inseparable.
Exploration
boomed. By 1950, Alberta was one of the world's exploration hot spots, and seismic activity
grew until 1953. After the Leduc strike, it became clear that Devonian reefs could be prolific oil reservoirs, and exploration concentrated on the search for similar structures. A series of major discoveries followed, and the industry began to appreciate the diversity of geological structures in the province that could contain oil. Early reef discoveries included Redwater in 1948, Golden Spike in 1949, Wizard Lake, Fenn Big Valley and Bonnie Glen in 1951 and Westerose in 1952. In 1953, Mobil Oil made a discovery near Drayton Valley, in a sandstone
formation. By 1956, more than 1,500 development wells dotted what became the Pembina oil field
(the largest field in western Canada) with hardly a dry hole among them, and the oil bearing Cardium Formation
was dubbed the Cardium Freeway. The Swan Hills
field, discovered in 1957, exploited a carbonate rock
formation.
Before Leduc, the petroleum industry had long been familiar with the oil sand deposits. A number of companies were already producing heavy oil in Alberta and Saskatchewan
. The Turner Valley petroleum reservoirs near Calgary had been on production for nearly 35 years, and the Devonian reef at Norman Wells in the Northwest Territories
had been discovered a quarter of a century earlier.
In the decade after Leduc, the industry identified many more reservoir types, including those at Daly, Manitoba
in 1951, at Midale, Saskatchewan
in 1953 and at Clarke Lake, B.C. in 1956. And in the years since, the sector has found many more petroleum traps
in the Western Canada Basin, especially within Alberta's borders. The region has great geological diversity.
established Canada as a leader in pipeline construction. A 25-kilometre length of cast-iron pipe moved natural gas to Trois-Rivières
, Quebec
, to light the streets. It was probably the longest pipeline in the world at the time. Canada also boasted the world's first oil pipeline when, in 1862, a line connected the Petrolia oilfield to Sarnia, Ontario
. In 1895, natural gas began flowing to the United States from Ontario's Essex field through a 20-centimetre pipeline laid under the Detroit River.
In Western Canada, Eugene Coste built the first important pipeline in 1912. The 274-kilometre natural gas line connected the Bow Island gas field to consumers in Calgary. Canada's debut in northern pipeline building came during World War II when the short-lived Canol line delivered oil from Norman Wells to Whitehorse
(964 kilometres), with additional supply lines to Fairbanks
and Skagway, Alaska
, USA, and to Watson Lake, Yukon
. Wartime priorities assured the expensive pipeline's completion in 1944 and its abandonment in 1946.
By 1947, only three Canadian oil pipelines moved product to market. One transported oil from Turner Valley to Calgary. A second moved imported crude from coastal Maine to Montreal while the third brought American mid-continent oil into Ontario. But the Leduc strike and subsequent discoveries in Alberta created an opportunity for pipeline building on a grander scale. As reserves increased, producers clamored for markets. With its population density and an extensive refining system that relied on the United States and the Caribbean
for crude oil, Ontario was an excellent prospect. The west coast offered another logical choice - closer still, although separated from the oilfields by the daunting Rocky Mountains. The industry pursued these opportunities vigorously.
system from Alberta to Central Canada began in 1949 with surveys and procurement. Field construction of the Edmonton/Regina/Superior (Wisconsin) leg began early in 1950 and concluded just 150 days later. The line began moving oil from Edmonton to the Great Lakes, a distance of 1,800 kilometres, before the end of the year. In 1953, the company extended the system to Sarnia, Ontario, in 1957 to Toronto. Other additions have extended the pipe to Montreal, Chicago and even Wood River in southern Illinois. The Interprovincial crude oil pipeline (now part of Enbridge Inc.) was the longest oil pipeline in the world when it was first constructed; the longest oil pipeline is now the Druzhba pipeline
from Siberia
. Until the completion of the TransCanada gas pipeline, it was also the longest pipeline in the world.
The IPL line fundamentally changed the pricing of Alberta oil to make it sensitive to international rather than regional factors. The wellhead price reflected the price of oil at Sarnia
, less pipeline tolls for shipping it there. IPL is by far the longest crude oil pipeline in the western hemisphere. Looping, or constructing additional lines beside the original, expanded the Interprovincial system and allowed its extension into the American midwest and to upstate New York. In 1976, it was 3,680 kilometres through an extension to Montreal. Although it helped assure security of supply in the 1970s, the extension became a threat to Canadian oil producers after deregulation in 1985. With Montreal refineries using cheaper imported oil, there was concern within the industry that a proposal to use the line to bring foreign oil into Sarnia might undermine traditional markets for Western Canadian petroleum.
The oil supply situation on the North American continent grew critical during the Korean War and helped promote construction of the Trans-Mountain pipeline from Edmonton to Vancouver and, later, to the Seattle area. Oil first moved through the 1,200-kilometre, $93 million system in 1953. The rugged terrain made the Trans-Mountain line an extraordinary engineering accomplishment. It crossed the Rockies, the mountains of central British Columbia, and 98 streams and rivers. Where it crosses under the Fraser River into Vancouver at Port Mann, 700 metres (2,296.6 ft) of pipe lie buried nearly 5 metres (16.4 ft) below the river bed. At its highest point, the pipeline is 1200 metres (3,937 ft) above sea level.
To support these major pipelines, the industry gradually developed a complex network of feeder lines in the three most westerly provinces. A historic addition to this system was the 866-kilometre Norman Wells pipeline, which was in effect an extension of the Interprovincial line. This pipeline accompanied the expansion and water flooding of the oilfield, and began bringing 600 cubic metres of oil per day to Zama
, in northwestern Alberta, in early 1985. From Zama, Norman Wells oil travels through other crude oil arteries to markets in Canada and the United States. Interprovincial Pipeline was the foundation from which the large Canadian corporation Enbridge
grew.
Canadian attitudes about gas date back to the late 19th century, when Ontario stopped exports. The province began exporting natural gas in 1891 to Buffalo, N.Y. from the Bertie-Humberstone field near Welland, Ontario
. Another pipeline under the Detroit River transported gas from the Essex field to Detroit. And by 1897, a pipeline to Toledo, Ohio
began taxing the Essex gas field to its limits. As a result, the Ontario government revoked the pipeline licenses and passed a law prohibiting the export of both gas and electricity.
The reasons behind Canada's protectionist policies toward natural gas are complex, but closely tied to the value gas has for space heating
in a cold climate. These issues were not finally resolved in favour of continentalism
until the implementation of the North American Free Trade Agreement
in the 1990s.
By the late 1940s, Alberta's Conservation Board had eliminated most of the wasteful production practices associated with the Turner Valley oil and gas field. As new natural gas discoveries greeted drillers in the Leduc-fueled search for oil, the industry agitated for licenses to export natural gas. That was when they discovered that getting permits to export Alberta natural gas was politically more complex than getting permits to export oil. Before giving approval, the provincial government appointed the Dinning Natural Gas Commission to inquire into Alberta's likely reserves and future demand.
In its March 1949 report, the Dinning Commission supported the principle that Albertans should have first call on provincial natural gas supplies, and that Canadians should have priority over foreign users if an exportable surplus developed. Alberta accepted the recommendations of the Dinning Commission, and later declared it would only authorize exports of gas in excess of a 30-year supply.
Shortly thereafter, Alberta's Legislature passed the Gas Resources Conservation Act, which gave Alberta greater control over natural gas at the wellhead, and empowered the Conservation Board to issue export permits. This led to the creation of the Alberta Gas Trunk Line, which gathered gas from wells in the province and to delivered it to exit points.
There were many reasons for the creation of AGTL. One was that the provincial government considered it sensible to have a single gathering system in Alberta to feed export pipelines, rather than a number of separate networks. Another was that pipelines crossing provincial boundaries and those leaving the country fall under federal jurisdiction. By creating a separate entity to carry gas within Alberta, the provincial government stopped Ottawa's authority at the border. Incorporated in 1954, AGTL issued public shares in 1957. The company later restructured as NOVA Corporation, sold its pipeline assets (now primarily operated by TransCanada Corporation), and transformed itself into NOVA Chemicals
.
The federal government's policy objectives at the time reflected concern for national integration and equity among Canadians. In 1949, Ottawa created a framework for regulating interprovincial and international pipelines with its Pipe Lines Act. The federal government, like Alberta, treated natural gas as a resource that was so important for national security that domestic supply needed to be guaranteed into the foreseeable future before exports would be allowed.
Although Americans were interested in Canadian exports, they understandably wanted cheap gas. After all, their natural gas industry was a major player in the American economy, and American policy-makers were not eager to allow foreign competition unless there was clear economic benefit. Consequently, major gas transportation projects were politically and economically uncertain.
. The Westcoast plan, eventually achieved in a slightly modified form, took gas from northwestern Alberta and northeastern B.C. and piped it to Vancouver
and to the American Pacific northwest
, supplying B.C.'s interior along the way. Except for a small export of gas to Montana which began in 1951, Westcoast was the first applicant to receive permission to remove gas from Alberta.
Although turned down in 1951, Westcoast received permission in 1952 to take 50 Gcuft of gas out of the Peace River area of Alberta annually for five years. The company subsequently made gas discoveries across the border in B.C. which further supported the scheme. However, the United States Federal Power Commission (later the Federal Energy Regulatory Commission
) rejected the Westcoast proposal in 1954 after three years of hearings and 28,000 pages of testimony.
Within eighteen months, however, Westcoast returned with a revised proposal, found a new participant in the venture, and received FPC approval. Construction began on Canada's first major gas export pipeline.
The Canadian section of the line cost $198 million to build and at the time was the largest private financial undertaking in the country's history. Built in the summer seasons of 1956 and 1957, the line moved gas from the Fort St. John
and Peace River
areas 1,250 kilometres to Vancouver and the American border.
TransCanada PipeLines Limited
also applied early for permission to remove natural gas from Alberta. Two applicants originally expressed interest in moving gas east: Canadian Delhi Oil Company (now called TCPL) proposed moving gas to the major cities of eastern Canada by an all-Canadian route, while Western Pipelines wanted to stop at Winnipeg with a branch line south to sell into the midwestern United States. In 1954 C.D. Howe forced the two companies into a shotgun marriage, with the all-Canadian route preferred over its more economical but American-routed competitor.
This imposed solution reflected problems encountered with the construction of the Interprovincial oil pipeline. Despite the speed of its construction, the earlier line caused angry debate in Parliament, with the Opposition arguing that Canadian centres deserved consideration before American customers and that "the main pipeline carrying Canadian oil should be laid in Canadian soil". By constructing its natural gas mainline along an entirely Canadian route, TCPL accommodated nationalist sentiments, solving a political problem for the federal government.
The regulatory process for TCPL proved long and arduous. After rejecting proposals twice, Alberta finally granted its permission to export gas from the province in 1953. At first, the province waited for explorers to prove gas reserves sufficient for its thirty-year needs, intending to only allow exports in excess of those needs. After clearing this hurdle, the federal government virtually compelled TCPL into a merger with Western pipelines. When this reorganized TCPL went before the Federal Power Commission
for permission to sell gas into the United States, the Americans greeted it coolly. The FPC proved sceptical of the project's financing and unimpressed with Alberta's reserves.
Engineering problems made the 1,090-kilometre section crossing the Canadian Shield
the most difficult leg of the TransCanada pipeline
. Believing construction costs could make the line uneconomic, private sector sponsors refused to finance this portion of the line. Since the federal government wanted the line laid for nationalistic reasons, the reigning Liberals put a bill before Parliament to create a crown corporation to build and own the Canadian Shield portion of the line, leasing it back to TCPL. The government restricted debate on the bill in order to get construction underway by June, knowing that delays beyond that month would postpone the entire project a year. The use of closure created a furore which spilled out of Parliament and into the press. Known as the Great Pipeline Debate, this parliamentary episode contributed to the Louis St. Laurent
government's defeat at the polls in 1957. But the bill passed and construction of the TransCanada pipeline began.
A stock trading scandal surrounding Northern Ontario Natural Gas
, the contractor for the Northern Ontario leg of the pipeline, also implicated Sudbury mayor Leo Landreville
and Ontario provincial cabinet ministers Philip Kelly, William Griesinger
and Clare Mapledoram between 1955 and 1958.
The completion of this project was a spectacular technological achievement. In the first three years of construction (1956–58), workers installed 3,500 kilometres of pipe, stretching from the Alberta-Saskatchewan border to Toronto and Montreal. Gas service to Regina
and Winnipeg
commenced in 1957 and the line reached the Lakehead
before the end of that year. In late 1957, during a high pressure line test on the section of the line from Winnipeg to Port Arthur
(today called Thunder Bay
), about five and a half kilometres of pipeline blew up near Dryden
. After quick repairs, the line delivered Alberta gas to Port Arthur before the end of the year, making the entire trip on its own wellhead pressure.
Building the Canadian Shield leg required continual blasting. For one 320 metres (1,049.9 ft) stretch, the construction crew drilled 2.4 metres (7.9 ft) holes into the rock, three abreast, at 56-centimetre intervals. Dynamite broke up other stretches, 305 metres (1,000.7 ft) at a time.
On October 10, 1958, a final weld completed the line and on October 27, the first Alberta gas entered Toronto. For more than two decades, the Trans-Canada pipeline was the longest in the world. Only in the early 1980s was its length finally exceeded by a Soviet pipeline from Siberia
to Western Europe.
With these events - the discovery and development of oil and gas reservoirs and of processing and transportation infrastructure - Canada's petroleum industry established its foundations. However, over the decades that followed the industry began to develop other domestic petroleum resources. These included oil sands and heavy oil
deposits, and the northern and offshore frontiers
. Also, the natural gas sector
constructed extensive natural gas liquids extraction facilities
. Taken together, these developments helped Canada create one of the world's largest and most complex petroleum industries. The origins of these industrial sectors are covered in this series on the industry's history.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Because of Canada's unique geography
Geography
Geography is the science that studies the lands, features, inhabitants, and phenomena of Earth. A literal translation would be "to describe or write about the Earth". The first person to use the word "geography" was Eratosthenes...
, geology
Geology
Geology is the science comprising the study of solid Earth, the rocks of which it is composed, and the processes by which it evolves. Geology gives insight into the history of the Earth, as it provides the primary evidence for plate tectonics, the evolutionary history of life, and past climates...
, resources
Natural Resources
Natural Resources is a soul album released by Motown girl group Martha Reeves and the Vandellas in 1970 on the Gordy label. The album is significant for the Vietnam War ballad "I Should Be Proud" and the slow jam, "Love Guess Who"...
and patterns of settlement
Settler
A settler is a person who has migrated to an area and established permanent residence there, often to colonize the area. Settlers are generally people who take up residence on land and cultivate it, as opposed to nomads...
, however, it developed in different ways. The evolution of the petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
sector has been a key factor in the history of Canada
History of Canada
The history of Canada covers the period from the arrival of Paleo-Indians thousands of years ago to the present day. Canada has been inhabited for millennia by distinctive groups of Aboriginal peoples, among whom evolved trade networks, spiritual beliefs, and social hierarchies...
, and helps illustrate how the country became quite distinct from her neighbour to the south.
Although the conventional oil and gas industry
Extraction of petroleum
The extraction of petroleum is the process by which usable petroleum is extracted and removed from the earth.-Locating the oil field:Geologists use seismic surveys to search for geological structures that may form oil reservoirs...
in western Canada is mature, the country's Arctic
Arctic
The Arctic is a region located at the northern-most part of the Earth. The Arctic consists of the Arctic Ocean and parts of Canada, Russia, Greenland, the United States, Norway, Sweden, Finland, and Iceland. The Arctic region consists of a vast, ice-covered ocean, surrounded by treeless permafrost...
and offshore petroleum resources
Offshore drilling
Offshore drilling refers to a mechanical process where a wellbore is drilled through the seabed. It is typically carried out in order to explore for and subsequently produce hydrocarbons which lie in rock formations beneath the seabed...
are mostly in early stages of exploration and development. Canada became a natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
-producing giant in the late 1950s and is second, after Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, in exports; the country also is home to the world's largest natural gas liquids extraction facilities. The industry started constructing its vast pipeline
Pipeline transport
Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
networks in the 1950s, thus beginning to develop domestic and international markets in a big way.
Despite billions of dollars of investment, her bitumen - especially within the Athabasca oil sands
Athabasca Oil Sands
The Athabasca oil sands are large deposits of bitumen, or extremely heavy crude oil, located in northeastern Alberta, Canada - roughly centred on the boomtown of Fort McMurray...
- is still only a partially exploited resource. By 2025 this and other unconventional oil resources - the northern and offshore frontiers and heavy crude oil
Heavy crude oil
Heavy crude oil or extra heavy crude oil is any type of crude oil which does not flow easily. It is referred to as "heavy" because its density or specific gravity is higher than that of light crude oil. Heavy crude oil has been defined as any liquid petroleum with an API gravity less than 20°.Extra...
resources in the West - could place Canada in the top ranks among the world's oil producing and exporting nations. In a 2004 reassessment of global resources
World energy resources and consumption
]World energy consumption in 2010: over 5% growthEnergy markets have combined crisis recovery and strong industry dynamism. Energy consumption in the G20 soared by more than 5% in 2010, after the slight decrease of 2009. This strong increase is the result of two converging trends...
, the United States' EIA
Energy Information Administration
The U.S. Energy Information Administration is the statistical and analytical agency within the U.S. Department of Energy. EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and...
put Canadian oil reserves
Oil reserves
The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...
second; only Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
has greater proved reserves
Oil reserves
The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...
.
Many stories surrounding the petroleum industry
Petroleum industry
The petroleum industry includes the global processes of exploration, extraction, refining, transporting , and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline...
's early development are colourful. The gathering oilpatch involved rugged adventurers, the occasional fraud, important innovations and, in the end, world-class success. Canadian petroleum production
Petroleum production in Canada
Petroleum production in Canada is a major industry which is important to the economy of North America. Canada is the sixth largest oil producing country in the world. In 2008 it produced an average of of crude oil, crude bitumen and natural gas condensate. Of that amount, 45% was conventional...
is now a vital part of the national economy
Economy of Canada
Canada has the tenth largest economy in the world , is one of the world's wealthiest nations, and is a member of the Organization for Economic Co-operation and Development and Group of Eight . As with other developed nations, the Canadian economy is dominated by the service industry, which employs...
and an essential element of world supply
Oil reserves
The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...
. Canada has become an energy giant.
Early origins
The early uses of petroleum go back thousands of years. But while people have known about and used petroleumPetroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
for centuries, Charles Nelson Tripp
Charles Nelson Tripp
Charles Nelson Tripp was a pioneering geologist and bitumen businessman in Ontario....
was the first Canadian to recover the substance for commercial use. The year was 1851; the place, Eniskillen Township, near Sarnia
Sarnia, Ontario
Sarnia is a city in Southern Ontario, Canada . It is the largest city on Lake Huron and is located where the upper Great Lakes empty into the St. Clair River....
, in present-day Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
(at that time Canada West). It was there that Tripp started dabbling in the mysterious gum beds near Black Creek. This led to incorporation
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
of the first oil company in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
.
Parliament
Parliament of Canada
The Parliament of Canada is the federal legislative branch of Canada, seated at Parliament Hill in the national capital, Ottawa. Formally, the body consists of the Canadian monarch—represented by her governor general—the Senate, and the House of Commons, each element having its own officers and...
chartered the International Mining and Manufacturing Company, with C.N. Tripp as president, on December 18, 1854. The charter empowered the company to explore for asphalt
Asphalt
Asphalt or , also known as bitumen, is a sticky, black and highly viscous liquid or semi-solid that is present in most crude petroleums and in some natural deposits, it is a substance classed as a pitch...
beds and oil and salt springs, and to manufacture oils, naphtha
Naphtha
Naphtha normally refers to a number of different flammable liquid mixtures of hydrocarbons, i.e., a component of natural gas condensate or a distillation product from petroleum, coal tar or peat boiling in a certain range and containing certain hydrocarbons. It is a broad term covering among the...
paints, burning fluids, varnish
Varnish
Varnish is a transparent, hard, protective finish or film primarily used in wood finishing but also for other materials. Varnish is traditionally a combination of a drying oil, a resin, and a thinner or solvent. Varnish finishes are usually glossy but may be designed to produce satin or semi-gloss...
es and other such products.
International Mining and Manufacturing was not a financial success, but Tripp’s asphalt received an honourable mention for excellence at the Paris Universal Exhibition
Exposition Universelle (1855)
The Exposition Universelle of 1855 was an International Exhibition held on the Champs-Elysées in Paris from May 15 to November 15, 1855. Its full official title was the Exposition Universelle des produits de l'Agriculture, de l'Industrie et des Beaux-Arts de Paris 1855.The exposition was a major...
in 1855. Several factors contributed to the downfall of the operation. Lack of roads in the area made the movement of machinery and equipment to the site extremely difficult. And after every heavy rain the area turned into a swamp
Swamp
A swamp is a wetland with some flooding of large areas of land by shallow bodies of water. A swamp generally has a large number of hammocks, or dry-land protrusions, covered by aquatic vegetation, or vegetation that tolerates periodical inundation. The two main types of swamp are "true" or swamp...
and the gum beds made drainage extremely slow. This added to the difficulty of distributing finished products.
A North American first
James Miller Williams
James Miller Williams was a businessman and political figure in Ontario, Canada. He represented Hamilton in the Legislative Assembly of Ontario from 1867 to 1879. He is also commonly viewed as the father of the petroleum industry in Canada.He was born in 1818 in Camden, New Jersey, and apprenticed...
became interested and visited the site in 1856, Tripp unloaded his hopes, his dreams and the properties of his company, saving for himself a spot on the payroll as landman
Landman (oil worker)
In the United States and Canada, a Landman or "Petroleum Landman" is an individual who performs various services for oil and gas exploration companies...
. The former carriage builder formed J.M. Williams & Company in 1857 to develop the Tripp properties. Besides asphalt, he began producing kerosene
Kerosene
Kerosene, sometimes spelled kerosine in scientific and industrial usage, also known as paraffin or paraffin oil in the United Kingdom, Hong Kong, Ireland and South Africa, is a combustible hydrocarbon liquid. The name is derived from Greek keros...
.
Stagnant, algae-ridden surface water lay almost everywhere. To secure better drinking water, Williams dug (rather than drilled) a well a few yards down an incline from his plant. At a depth of 20 metres (65.6 ft) the well struck free oil. It became the first oil well
Oil well
An oil well is a general term for any boring through the earth's surface that is designed to find and acquire petroleum oil hydrocarbons. Usually some natural gas is produced along with the oil. A well that is designed to produce mainly or only gas may be termed a gas well.-History:The earliest...
in North America, remembered as the Williams No. 1 well at Oil Springs, Ontario
Oil Springs, Ontario
Oil Springs is a village in Lambton County, Ontario, Canada, located along Former Provincial Highway 21 south of Oil City. The village, an enclave within Enniskillen Township, is home to the Oil Museum of Canada....
.
Some historians challenge Canada’s claim to North America’s first oil field
Oil field
An oil field is a region with an abundance of oil wells extracting petroleum from below ground. Because the oil reservoirs typically extend over a large area, possibly several hundred kilometres across, full exploitation entails multiple wells scattered across the area...
, arguing that Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
’s famous Drake well
Drake Well Museum
The Drake Well Museum is a museum that interprets the birth of the American oil industry in 1859 by "Colonel" Edwin Drake along the banks of Oil Creek in Cherrytree Township, Venango County, Pennsylvania in the United States. The museum collects and preserves related artifacts...
was the continent’s first. But there is evidence to support Williams, not least of which is that the Drake well did not come into production until August 28, 1859. The controversial point might be that Williams found oil above bedrock while “Colonel” Edwin Drake
Edwin Drake
Edwin Laurentine Drake , also known as Colonel Drake, was an American oil driller, popularly credited with being the first to drill for oil in the United States.-Early life:...
’s well located oil within a bedrock reservoir
Oil reservoir
A petroleum reservoir, or oil and gas reservoir, is a subsurface pool of hydrocarbons contained in porous or fractured rock formations. The naturally occurring hydrocarbons, such as crude oil or natural gas, are trapped by overlying rock formations with lower permeability...
.
We do not know exactly when Williams abandoned his Oil Springs refinery and transferred his operations to Hamilton. He was certainly operating there by 1860, however. Spectator advertisements offered coal oil
Coal oil
Coal oil is a term once used for a specific shale oil used for illuminating purposes. Coal oil is obtained from the destructive distillation of cannel coal, mineral wax, and bituminous shale, while kerosene is obtained by the distillation of petroleum...
for sale at 16 cents per gallon for quantities from 4000 gallons (15,141.6 l) to 100000 gallons (378,541.2 l).
Williams reincorporated there as The Canadian Oil Company (perhaps provisionally as the Canada Rock Oil Company). His company produced oil, refined it and marketed refined products. That mix of operations qualify Canadian Oil as the world’s first integrated oil company
Vertical integration
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or service, and the products combine to...
.
Exploration
Oil exploration
Hydrocarbon exploration is the search by petroleum geologists and geophysicists for hydrocarbon deposits beneath the Earth's surface, such as oil and natural gas...
in the Lambton county backwoods quickened with the first flowing well in 1860: Previous wells had relied on hand pumps. The first gusher blew in on February 19, 1862, when a down-in-his-luck photographer named John Shaw (sometimes mistakenly identified as Hugh Nixon Shaw, another oil operator of the period) struck oil at 48 metres (157.5 ft). For a week the oil gushed unchecked, eventually coating the distant waters of Lake St. Clair
Lake Saint Clair (North America)
Lake St. Clair is a fresh-water lake named after Clare of Assisi that lies between the Province of Ontario and the State of Michigan, and its midline also forms the boundary between Canada and the United States of America. Lake St. Clair includes the Anchor Bay along the Metro Detroit coastline...
with a black film.
Dr. A. Winchell, in his Sketches of Creation, refers to this gusher (though not very accurately) in the following passage.
Following Williams' example, practically every significant producer in the infancy of the oil business became his own refiner
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
. Seven refineries were operating in Petrolia, Ontario
Petrolia, Ontario
Petrolia is a town in Ontario, Canada, near Sarnia. The town, an enclave within Enniskillen Township, is billed as "Canada's Victorian Oil Town" and is often credited with starting the Oil industry in North America....
in 1864 and 20 in Oil Springs. Together, they processed about 80 cubic metres of oil per day.
In 1865 oil was selling for $70 per cubic metre ($11.13 per barrel). But the fields of Ontario delivered too much too quickly, and by 1867 the price had dropped to $3.15 per cubic metre ($0.50 per barrel). By 1870, Oil Springs and Bothwell were both dead fields, but other booms followed as drillers tapped deeper formations and new fields.
Although the industry had a promising start in the east, Ontario’s status as an important oil producer did not last long. Canada became a net importer of oil during the 1880s. Dependence on neighbouring Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
as a crude oil supplier increased after the automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
rolled into Canada in 1898.
Canadian drillers
Canadians developed petroleum expertise in those early days. The Canadian “oil man” or driller became valued the world over.Petrolia
Petrolia, Ontario
Petrolia is a town in Ontario, Canada, near Sarnia. The town, an enclave within Enniskillen Township, is billed as "Canada's Victorian Oil Town" and is often credited with starting the Oil industry in North America....
drillers developed the Canadian pole-tool method of drilling which was especially useful in new fields where rock formations were a matter for conjecture. The Canadian technique was different from the American cable-tool method. Now obsolete, cable-tool drilling uses drilling tools suspended from a cable which the driller paid out as the well deepened.
Canada’s pole-tool rig used rods or poles linked together, with a drilling bit fixed to the end of this primitive drilling “string.” Black-ash rods were the norm in early Petrolia. Iron rods came later. Like the cable tool system, pole-tool drilling used the weight of the drill string pounding into the ground from a wooden derrick to make hole.
The record is not complete enough to show all the locations Canadians helped to drill. However, Petrolia drillers unquestionably helped drill for oil in Java
Java
Java is an island of Indonesia. With a population of 135 million , it is the world's most populous island, and one of the most densely populated regions in the world. It is home to 60% of Indonesia's population. The Indonesian capital city, Jakarta, is in west Java...
, Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
, Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
, Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
, Persia, Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
, Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
and Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
. One of the best-known Canadian drilling pioneers was William McGarvey
William McGarvey
William McGarvey was a priest in the Episcopal Church and rector of St. Elizabeth parish in Philadelphia. In 1896 he became the leader of a group known as the 'Companions of the Holy Savior', which was associated with St. Elizabeth parish. McGarvey had been mentored by Henry Percival along with...
. McGarvey acquired oil properties in Galicia (now part of Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
) and amassed a large fortune - then saw his properties destroyed when Russian and Austrian armies swept across the land during the First World War
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
.
Today, Canadian drillers
Driller (oil)
The driller is a team leader in charge during the process of well drilling. The term is commonly used in the context of an oil well drilling rig....
still move to far away places to practise their widely respected skills.
Eastern natural gas
The natural gas industry was also born in eastern Canada. Reports from around 1820 tell of youngsters at Lake Ainslie, Nova ScotiaNova Scotia
Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The name of the province is Latin for "New Scotland," but "Nova Scotia" is the recognized, English-language name of the province. The provincial capital is Halifax. Nova Scotia is the...
, amusing themselves by driving sticks into the ground, pulling them out, then lighting the escaping natural gas.
In 1859 an oil explorer found a natural gas seep near Moncton, New Brunswick
New Brunswick
New Brunswick is one of Canada's three Maritime provinces and is the only province in the federation that is constitutionally bilingual . The provincial capital is Fredericton and Saint John is the most populous city. Greater Moncton is the largest Census Metropolitan Area...
. Dr. H.C. Tweedle found both oil and gas in what became the Dover field, but water seepage prevented production of these wells.
An offshoot of the oil drilling boom was the discovery of gas containing poisonous hydrogen sulfide
Hydrogen sulfide
Hydrogen sulfide is the chemical compound with the formula . It is a colorless, very poisonous, flammable gas with the characteristic foul odor of expired eggs perceptible at concentrations as low as 0.00047 parts per million...
(“sour” gas) near Port Colborne, Ontario. That 1866 discovery marked the first of many gas fields found later in the southwestern part of the province.
Eugene Coste, a young Paris-educated geologist who became the father of Canada’s natural gas industry, brought in the first producing gas well in Essex County, Ontario, in 1889. Canada first exported natural gas in 1891 from the Bertie-Humberstone field in Welland County to Buffalo, New York. Gas was later exported to Detroit from the Essex field through a 20-centimetre pipeline under the Detroit river. In 1897, the pipeline stretched the Essex gas supply to its limit with the extension of exports to Toledo, Ohio. This prompted the Ontario government to revoke the licence for the pipeline. And in 1907 the province passed a law prohibiting the export of natural gas and electricity.
In 1909, New Brunswick’s first successful gas well came in at Stoney Creek near Moncton. This field still supplies customers in Moncton, although the city now has a propane air plant to augment the limited natural gas supply.
The year 1911 saw a milestone for the natural gas industry when three companies using Ontario’s Tilbury gas field joined to form Union Gas
Union Gas
Union Gas Limited is a major Canadian natural gas storage, transmission and distribution company based in Chatham-Kent, Ontario. The distribution business serves 1.3 million residential, commercial and industrial customers in more than 400 communities across northern, southwestern and eastern...
Company of Canada, Limited. In 1924, Union Gas was the first company to use the new Seabord or Koppers process to remove poisonous hydrogen sulfide
Hydrogen sulfide
Hydrogen sulfide is the chemical compound with the formula . It is a colorless, very poisonous, flammable gas with the characteristic foul odor of expired eggs perceptible at concentrations as low as 0.00047 parts per million...
from Tilbury gas. Union became one of the largest corporations in Canada before its acquisition by Duke Energy
Duke Energy
Duke Energy , headquartered in Charlotte, North Carolina, is an energy company with assets in the United States, Canada and Latin America.-Overview:...
, a US firm.
The move west
Western Canada
Western Canada, also referred to as the Western provinces and commonly as the West, is a region of Canada that includes the four provinces west of the province of Ontario.- Provinces :...
, notably Alberta
Alberta
Alberta is a province of Canada. It had an estimated population of 3.7 million in 2010 making it the most populous of Canada's three prairie provinces...
. There, the Western Canadian Sedimentary Basin
Western Canadian Sedimentary Basin
The Western Canadian Sedimentary Basin is a vast sedimentary basin underlying of Western Canada including southwestern Manitoba, southern Saskatchewan, Alberta, northeastern British Columbia and the southwest corner of the Northwest Territories. It consists of a massive wedge of sedimentary rock...
is at its most prolific.
Alberta’s first recorded natural gas find came in 1883 from a well at CPR
Canadian Pacific Railway
The Canadian Pacific Railway , formerly also known as CP Rail between 1968 and 1996, is a historic Canadian Class I railway founded in 1881 and now operated by Canadian Pacific Railway Limited, which began operations as legal owner in a corporate restructuring in 2001...
siding No. 8 at Langevin, near Medicine Hat. This well was one of a series drilled at scattered points along the railway to get water for the Canadian Pacific Railway
Canadian Pacific Railway
The Canadian Pacific Railway , formerly also known as CP Rail between 1968 and 1996, is a historic Canadian Class I railway founded in 1881 and now operated by Canadian Pacific Railway Limited, which began operations as legal owner in a corporate restructuring in 2001...
’s steam-driven locomotives. The unexpected gas flow caught fire and destroyed the drilling rig.
This find prompted Dr. George M. Dawson of the Geological Survey of Canada to make a notable prediction. Noting that the rock formations penetrated in this well were common in western Canada, he prophesied correctly that the territory would some day produce large volumes of natural gas.
A well
Oil well
An oil well is a general term for any boring through the earth's surface that is designed to find and acquire petroleum oil hydrocarbons. Usually some natural gas is produced along with the oil. A well that is designed to produce mainly or only gas may be termed a gas well.-History:The earliest...
drilled near Medicine Hat in 1890 - this time in search of coal - also flowed natural gas. The find prompted town officials to approach the CPR with a view to drilling deeper wells for gas. The resulting enterprise led to the discovery in 1904 of the Medicine Hat gas sand, which is now recognized as a source of unconventional gas. Later, that field went on production to serve the city, the first in Alberta to have gas service. When Rudyard Kipling
Rudyard Kipling
Joseph Rudyard Kipling was an English poet, short-story writer, and novelist chiefly remembered for his celebration of British imperialism, tales and poems of British soldiers in India, and his tales for children. Kipling received the 1907 Nobel Prize for Literature...
travelled across Canada in 1907, he remarked that Medicine Hat had “all Hell for a basement.”
In northern Alberta, the Dominion Government began a drilling program to help define the region’s resources. Using a rig brought from Toronto, in 1893 contractor A.W. Fraser began drilling for liquid oil at Athabasca
Athabasca
Athabasca is an anglicized version of the Cree name for Lake Athabasca in Canada, āthap-āsk-ā-w , meaning “grass or reeds here and there”.Related to the lake are several other geographical and administrative features called Athabasca...
. He abandoned the well in 1894. In 1897 Fraser moved the rig to Pelican Rapids, also in northern Alberta. There it struck gas at 250 metres (820.2 ft). But the well blew wild, flowing uncontrolled for 21 years. It was not until 1918 that a crew led by A.W. Dingman succeeded in killing the well.
Dingman, who played an important role in the industry’s early years, began providing natural gas service in Calgary through the Calgary Natural Gas Company. After receiving the franchise in 1908, he drilled a successful well in east Calgary on the Walker estate (a well which continued producing until 1948). He then laid pipe from the well to the Calgary Brewing and Malting Company, which began using the gas on April 10, 1910.
The earliest efforts to develop western Canadian oil were those of Kootenai Brown. This colourful character - a frontiersman with an Eton and Oxford education - was probably Alberta’s first homesteader. In 1874, Brown filed the following affidavit with Donald Thompson, the resident solicitor at Pincher Creek:
In 1901, John Lineham of Okotoks organized the Rocky Mountain Drilling Company. In 1902 he drilled the first oil exploration well in Alberta
First Oil Well in Western Canada
The First Oil Well in Western Canada National Historic Site of Canada commemorates the 1902 oil strike in what is now Waterton Lakes National Park, Alberta...
on the site of these seepages (now in Waterton Lakes National Park
Waterton Lakes National Park
Waterton Lakes National Park is a national park located in the southwest corner of Alberta, Canada, and borders Glacier National Park in Montana, USA. Waterton was Canada's fourth national park, formed in 1895 and named after Waterton Lake, in turn after the Victorian naturalist and conservationist...
). Despite a small recovery of 34° API sweet oil, neither this well nor seven later exploration attempts resulted in production. The site is now a National Historic Site of Canada.
In 1909, exploration activity shifted to Bow Island in south central Alberta, where a natural gas discovery launched Canada’s western gas industry. The same Eugene Coste who had found gas in Ohio and again in southern Ontario drilled the discovery well, Bow Island No. 1 (better known as “Old Glory”). Pipelines soon transported Bow Island gas to Medicine Hat, Lethbridge
Lethbridge
Lethbridge is a city in the province of Alberta, Canada, and the largest city in southern Alberta. It is Alberta's fourth-largest city by population after Calgary, Edmonton and Red Deer, and the third-largest by area after Calgary and Edmonton. The nearby Canadian Rockies contribute to the city's...
and Calgary, which used the fuel for heat and light. Eugene Coste became the founder of the Canadian Western Natural Gas Company when he merged the Calgary Natural Gas Company, Calgary Gas Company and his Prairie Fuel Company in August 1911.
Turner Valley
In early 1914, oil fever swept CalgaryCalgary
Calgary is a city in the Province of Alberta, Canada. It is located in the south of the province, in an area of foothills and prairie, approximately east of the front ranges of the Canadian Rockies...
and other parts of southern Alberta. Investors lined up outside makeshift brokerage houses to get in on exploration activity triggered by the 1914 discovery of wet gas and oil at Turner Valley
Turner Valley, Alberta
Turner Valley is a town in Alberta, Canada. It is located southwest of Calgary.Situated on Highway 22 , the town was once the centre of an oil and natural gas boom. For 30 years, the Turner Valley Oilfields was a major supplier of oil and gas and the largest producer in the British Empire, but is...
, southwest of Calgary. So great was the excitement that, in one 24-hour period, investors and promoters formed more than 500 “oil companies.” Incorporated a year earlier, the Calgary Stock Exchange was unable to control some of the unscrupulous practices that relieved many Albertans of their savings.
The discovery well that set off this speculative flurry belonged to the Calgary Petroleum Products Company, an enterprise formed by W.S. Herron, William Elder and A.W. Dingman. Named Dingman No. 1 after the partner in charge of drilling, the well produced natural gas dripping with condensate
Natural gas condensate
Natural-gas condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields....
, sometimes referred to as naphtha
Naphtha
Naphtha normally refers to a number of different flammable liquid mixtures of hydrocarbons, i.e., a component of natural gas condensate or a distillation product from petroleum, coal tar or peat boiling in a certain range and containing certain hydrocarbons. It is a broad term covering among the...
. Stripped from the gas, this hydrocarbon mixture was pure enough to burn in automobiles without refining; it became known as “skunk” gasoline because of its distinctive odour.
Pioneered in Turner Valley, natural gas liquids extraction eventually became an important Canadian industry in its own right, as the story of its development illustrates.
The Dingman well and its successors were really “wet” natural gas wells rather than true oil wells. The high expectations raised by the initial discovery gave way to disappointment within a few years. Relatively small volumes of liquids flowed from the successful wells. By 1917, the Calgary City Directory listed only 21 “oil mining companies” compared with 226 in 1914.
Drilling continued in Turner Valley, however, and in 1924 came another significant discovery. The Calgary Petroleum Products Company, reorganized as Royalite Oil Company, drilled into Paleozoic
Paleozoic
The Paleozoic era is the earliest of three geologic eras of the Phanerozoic eon, spanning from roughly...
limestone. The well blew out at 1180 metres (3,871.4 ft).
The blowout
Blowout (well drilling)
A blowout is the uncontrolled release of crude oil and/or natural gas from an oil well or gas well after pressure control systems have failed....
at Royalite No. 4 was one of the most spectacular in Alberta’s history. Initially flowing at 200,000 cubic metres per day, the flow rate increased to some 620,000 cubic metres per day when the well was shut in. The shut in pressure continued to rise and, when the gauge read 1,150 psi (7,930 kilopascals), the drillers ran for their lives. In 20 minutes, 939 metres (3,080.7 ft) of 8 inch (20.3-centimetre) and 3,450 feet (1,052 m) of 6 inch (16-centimetre) pipe - together weighing 85 tonnes - rose to the top of the derrick. The well blew wild, caught fire, and destroyed the entire rig. The fire blazed for 21 days. Finally, wild well control experts from Oklahoma
Oklahoma
Oklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...
used a dynamite explosion to blow away the flames. They then applied the combined steam flow of seven boilers to keep the torch from lighting again.
Unknown to the explorers of the day, these wells extracted naphtha from the natural gas cap over Turner Valley’s oilfield. After two years of off-and-on drilling, in 1936 the Royalites No. 1 well finally drilled into the principal oil reservoir at more than 2500 metres (8,202.1 ft).
This well, which established Turner Valley as Canada’s first major oil field and the largest in the emerging British Commonwealth
Commonwealth of Nations
The Commonwealth of Nations, normally referred to as the Commonwealth and formerly known as the British Commonwealth, is an intergovernmental organisation of fifty-four independent member states...
, used innovative financing. Promoters ordinarily sold shares in a company to finance new drilling programs, but in the Depression money for shares was hard to come by. Instead, R.A. Brown, George M. Bell and J.W. Moyer put together an enterprise called Turner Valley Royalties. That company offered a percentage share of production (a "royalty") to those willing to put money into the long-shot venture.
Recoverable oil reserves
Oil reserves
The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...
from the Turner Valley field were probably about 19 million cubic metres. Although locals boasted at the time that it was "the biggest oil field in the British Empire
British Empire
The British Empire comprised the dominions, colonies, protectorates, mandates and other territories ruled or administered by the United Kingdom. It originated with the overseas colonies and trading posts established by England in the late 16th and early 17th centuries. At its height, it was the...
," Turner Valley was not a large field by later standards. (By way of comparison, the Pembina field in central Alberta - Canada’s largest - had recoverable reserves of about 100 million cubic metres.) But besides being an important source of oil supply for the then-small market in western Canada, the field had an important long-term impact. It helped develop petroleum expertise in Canada's west, and it established Calgary as Canada’s oil and gas capital.
Waste and conservation
Enormous waste of natural gas was a dubious distinction that Turner Valley claimed for many years. Royalite had a monopoly on sales to Canadian Western Natural Gas CompanyATCO
ATCO Ltd. is an Alberta based corporation with more than 7,000 employees operating across three main business divisions: Power Generation; Utilities and Global Enterprises, with companies active in industrial manufacturing, technology, logistics and energy services.ATCO Ltd...
, so other producers could not sell their gas. But all the producers wanted to cash in on the natural gas liquids for which markets were growing. So the common practice became to pass the gas through separators, then flare it off. This greatly reduced the pressure on the oil reservoir, reducing the amount of recoverable oil. But the size of the problem was not clear until the oil column was later discovered.
The flares were visible in the sky for miles around. Many of these were in a small ravine known to locals as Hell’s Half Acre. Because of the presence of the flares, the grass stayed green year-round and migrating birds wintered in their warmth. A newspaper man from Manchester, England, described the place with these florid words:
While the flaring
Gas flare
A gas flare, alternatively known as a flare stack, is an elevated vertical conveyance found accompanying the presence of oil wells, gas wells, rigs, refineries, chemical plants, natural gas plants, and landfills....
continued, the business community seriously discussed ways to market the gas. For example, in early 1929 W.S. Herron, a Turner Valley pioneer, publicly promoted the idea of a pipeline to Winnipeg. At about the same time, an American company made application for a franchise to distribute natural gas to Regina. The Bank of North Dakota offered to buy 1.4 million cubic metres per day.
By early 1930, there was talk of a pipeline from Turner Valley to Toronto. Estimates showed that gas delivery to Toronto would cost $2.48 per thousand cubic metres. A parliamentary committee looked into ways to force waste gas down old wells, set up carbon black plants or export the gas to the United States. Another proposal called for the production of liquefied methane.
Great Depression in Canada
Canada was hit hard by the Great Depression. Between 1929 and 1939, the gross national product dropped 40% . Unemployment reached 27% at the depth of the Depression in 1933...
had already gripped Canada, which might have been more severely affected by this economic catastrophe than any other country in the world. Capital investment became less and less attractive and drilling at Turner Valley ground to a halt as the economic situation worsened.
The federal government owned the mineral rights
Mineral rights
- Mineral estate :Ownership of mineral rights is an estate in real property. Technically it is known as a mineral estate and often referred to as mineral rights...
not held by the Canadian Pacific Railway
Canadian Pacific Railway
The Canadian Pacific Railway , formerly also known as CP Rail between 1968 and 1996, is a historic Canadian Class I railway founded in 1881 and now operated by Canadian Pacific Railway Limited, which began operations as legal owner in a corporate restructuring in 2001...
, the Calgary & Edmonton Corporation and by individual homesteads. The government tried to curb the flaring of gas, but legal difficulties made its efforts of little avail. One federal conservation measure succeeded, however. On August 4, 1930, began operations to store surplus Turner Valley gas in the depleted Bow Island field.
An earlier effort to control waste resulted in an Order in Council made on April 26, 1922, prohibiting offset drilling closer than 70 metres (229.7 ft) from any lease boundary. Keeping wells spaced away from each other, as this regulation did, prevents too rapid depletion of a field.
After a bitter appeal to Britain’s Privy Council
Privy council
A privy council is a body that advises the head of state of a nation, typically, but not always, in the context of a monarchic government. The word "privy" means "private" or "secret"; thus, a privy council was originally a committee of the monarch's closest advisors to give confidential advice on...
, the federal government transferred ownership of natural resources to the provinces effective October 1, 1930. Soon after, the Alberta government enacted legislation to regulate oil and gas wells. In October 1931, the Legislature passed legislation (based on a report by a provincial advisory committee) to control the Turner Valley situation. While most operators supported this act, one independent operator successfully launched legal proceedings to have the Alberta act declared ultra vires. The provincial government asked the federal government to pass legislation confirming the Alberta law. Ottawa
Ottawa
Ottawa is the capital of Canada, the second largest city in the Province of Ontario, and the fourth largest city in the country. The city is located on the south bank of the Ottawa River in the eastern portion of Southern Ontario...
, however, shrugged off the request saying that natural resources were under provincial jurisdiction
During 1932, the newly created Turner Valley Gas Conservation Board proposed cutting production in half and unitizing the field to reduce waste. But the producers could not reach agreement on this issue, and the idea fell by the wayside. And so legal wrangling tied up any real conservation measures until 1938. In that year, the federal government confirmed the province’s right to enact laws to conserve natural resources
Natural Resources
Natural Resources is a soul album released by Motown girl group Martha Reeves and the Vandellas in 1970 on the Gordy label. The album is significant for the Vietnam War ballad "I Should Be Proud" and the slow jam, "Love Guess Who"...
.
With this backing, in July 1938 the province set up the Alberta Petroleum and Natural Gas Conservation Board (today known as the Alberta Energy and Utilities Board). New unitization rules limited well spacing to about 16 hectares per well. The board also reduced oil production from the field. This reduced the flaring of natural gas, but it came only after the waste of an estimated 28 billion cubic metres. The lessons of Turner Valley made an impression around the world as the need for conservation and its impact on ultimate recovery became better understood. Countries framing their first petroleum laws have often used the Alberta legislation as a model.
Besides contributing to conservation, solving Turner Valley’s technical challenges with innovative technology also helped earn the field a place in early oil and gas history. Uncorrected, drilling holes wandered 22 degrees or more off course. As the field’s high-pressure gas expanded, it cooled rapidly freezing production equipment. This complicated the production process. Other problems involved external corrosion, casing failures, sulfide stress corrosion cracking, corrosion inside oil storage tanks, and the cold winters.
Early drilling was done by wooden cable tool drilling rigs which pounded a hole into the ground. These monsters ruled the drilling scene until the mid-1920s. Rotary drilling (which has since replaced cable tool drilling) and diamond coring made their appearance in Turner Valley in 1925. Nitro-shooting came in 1927 to enhance production at McLeod No. 2. Acidizing made its Canadian debut in 1936 at Model No. 3. Scrubbing gas to extract hydrogen sulfide started in 1925. Field repressurization
Repressuring
Repressuring is the method by which the pressure inside a crude oil well is increased so as to increase the output of the well. Pumping crude oil from an reservoir causes its pressure to drop, which further reduces pumpability...
began in 1944 and water flooding
Enhanced oil recovery
Enhanced Oil Recovery is a generic term for techniques for increasing the amount of crude oil that can be extracted from an oil field...
started in 1948.
Only months after Union Gas completed a scrubbing facility for its Tilbury gas in Ontario, in 1924 Royalite began sweetening gas from the sour Royalite #4 well through a similar plant. This process removed H2S from the gas, but did not extract the sulfur
Sulfur
Sulfur or sulphur is the chemical element with atomic number 16. In the periodic table it is represented by the symbol S. It is an abundant, multivalent non-metal. Under normal conditions, sulfur atoms form cyclic octatomic molecules with chemical formula S8. Elemental sulfur is a bright yellow...
as a chemical element. This development waited until 1952, when a sulfur recovery plant at Turner Valley began producing raw sulfur.
Turner Valley oil production peaked in 1942, partly because the Oil and Gas Conservation Board increased allowable production as part of the Second World War
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
war effort. During that period exploration results elsewhere in western Canada were disappointing. The only significant discoveries were small heavy oil fields. Natural gas finds were mostly uneconomic, since Western Canada's few gas pipelines were small and already well supplied.
Small discoveries elsewhere
Natural flows of oil and gas led to the successful early exploration in Alberta's foothills. Those discoveries were not unique, however. Early settlers frequently found oil and gas seeps in Western CanadaWestern Canada
Western Canada, also referred to as the Western provinces and commonly as the West, is a region of Canada that includes the four provinces west of the province of Ontario.- Provinces :...
, generally near rivers, streams and creeks.
At Rolla, British Columbia
Rolla, British Columbia
Rolla is a small historic farming community in the Peace River district of North Eastern British Columbia. It was first founded about 1912 as a way stop and steamer landing on the Peace River. Farms were established as the prairie was open, and the soil was rich...
, for example, such an observation caught Imperial Oil's attention, and in 1922 the company financed exploration to investigate. A well was drilled and oil and gas found. However, the remoteness of the Peace River Country
Peace River Country
The Peace River Country is an aspen parkland region around the Peace River in Canada. It spans from northwestern Alberta to the Rocky Mountains in northeastern British Columbia, where the region is also referred to as the Peace River Block.- Geography :The Peace River Country includes the...
from market and the lack of good transport hindered commercial exploitation of the area. Today, however, Northeastern British Columbia is an active exploration and production region within the Western Canada Sedimentary Basin. Commercial development dates from the 1950s.
Many small wells were successfully drilled in Western Canada in the pre-war years, but prior to the Second World War
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
there were no big oil discoveries outside Turner Valley.
Leduc
Imperial Oil
Imperial Oil Limited is Canada's largest petroleum company. The company is engaged in the exploration, production and sale of crude oil and natural gas. It is controlled by US based ExxonMobil, which owns 69.6% of its stock...
discovered light oil just south of Edmonton
Edmonton
Edmonton is the capital of the Canadian province of Alberta and is the province's second-largest city. Edmonton is located on the North Saskatchewan River and is the centre of the Edmonton Capital Region, which is surrounded by the central region of the province.The city and its census...
. Imperial's success was inspired by their much earlier discovery at Norman Wells in the Northwest Territories
Northwest Territories
The Northwest Territories is a federal territory of Canada.Located in northern Canada, the territory borders Canada's two other territories, Yukon to the west and Nunavut to the east, and three provinces: British Columbia to the southwest, and Alberta and Saskatchewan to the south...
. The link was that there appeared to be Devonian
Devonian
The Devonian is a geologic period and system of the Paleozoic Era spanning from the end of the Silurian Period, about 416.0 ± 2.8 Mya , to the beginning of the Carboniferous Period, about 359.2 ± 2.5 Mya...
reef
Reef
In nautical terminology, a reef is a rock, sandbar, or other feature lying beneath the surface of the water ....
s in Alberta. At the Norman Wells discovery, Imperial had located just such a reservoir in the 1920s.
During the 1930s and early 1940s, oil companies tried unsuccessfully to find replacement for declining Turner Valley reserves. According to legend, Imperial Oil had drilled 133 dry wells in Alberta and Saskatchewan, although the records show that many of those wells were natural gas discoveries that were uneconomic at the time.
In 1946, the company decided on one last drilling program from east to west in Alberta. The wells would be “wildcats” - exploratory wells drilled in search of new fields. The first drill site was Leduc No. 1
Leduc No. 1
Leduc No. 1 was a major crude oil discovery made near Leduc, Alberta, Canada on February 13, 1947. It provided the geological key to Alberta's most prolific conventional oil reserves and resulted in a boom in petroleum exploration and development across Western Canada...
in a field on the farm of Mike Turta, 15 kilometres west of Leduc
Leduc, Alberta
- Demographics :The population of the City of Leduc according to its 2011 municipal census is 24,139, a 3.6% increase over its 2010 municipal census population of 23,293....
and about 50 kilometres south of Edmonton. Located on a weak seismic anomaly, the well was a rank wildcat. No drilling of any kind had taken place within an 80-kilometre radius.
Drilling started on November 20, 1946. It continued through a winter that was “bloody cold,” according to members of the rig crew. At first the crew thought the well was a gas discovery, but there were signs of something more. At 1530 metres (5,019.7 ft), drilling sped up and the first bit samples showed free oil in dolomite, a good reservoir rock. After coring, oil flowed to the surface during a drill stem test
Drill Stem Test
A drill stem test is a procedure for isolating and testing the surrounding geological formation through the drill stem. The test is a measurement of pressure behavior at the drill stem and is a valuable way to obtain important sampling information on the formation fluid and to establish the...
at 1544 metres (5,065.6 ft).
Imperial Oil decided to bring the well in with some fanfare at 10 o’clock in the morning of February 13, 1947. The company invited the mayor of Edmonton and other dignitaries. The night before the ceremony, however, swabbing equipment broke down. The crew laboured to repair it all night. But 10:00 a.m. passed and no oil flowed. Many of the invited guests left.
Finally by 4:00 pm the crew were able to get the well to flow. The chilled onlookers, now numbering only about 100, saw a spectacular column of smoke and fire beside the derrick as the crew flared the first gas and oil. Alberta mines minister N.E. Tanner turned the valve to start the oil flowing (at an initial rate of about 155 cubic metres per day), and the Canadian oil industry moved into the modern era. This well marked the discovery of what became the Leduc/Woodbend field, which has since produced about 50 million cubic metres (more than 300 million barrels) of oil.
Imperial lost no time. On February 12 the company had started drilling Leduc No. 2, about three kilometres southwest of No. 1, trying to extend the producing formation. But nothing showed up at that level and company officials argued over how to proceed. One group proposed abandoning the well, instead drilling a direct offset to No. 1; another group wanted to continue drilling No. 2 into a deep stratigraphic test. But drilling continued. On May 10 at 1657 metres (5,436.4 ft), No. 2 struck the much bigger Devonian reef, which later turned out to be the most prolific geological formation in Alberta, the Leduc Formation
Leduc Formation
Leduc Formation is a stratigraphical unit of Frasnian age in the Western Canadian Sedimentary Basin.It takes the name from the city of Leduc, and was first described in B.A. Pyrz No. 1 well in central Alberta by Imperial Oil Limited in 1950. A complete section was cored in Imperial Oil's Leduc No...
.
Leduc No. 1 stopped producing in 1974 after the production of some 50,300 cubic metres (320,000 barrels) of oil and 9 million cubic metres (320 million cubic feet) of natural gas. On November 1, 1989, Esso Resources (the exploration and production arm of Imperial) began producing the field as a gas reservoir. Thus did Canada’s seminal oil discovery become a gas well on its way to extinction.
Geological diversity
In one journalist's words,
Atlantic #3 eventually caught fire, and the crew worked frantically for 59 hours to snuff out the blaze.
It took six months, two relief well
Relief well
A relief well is a well drilled to intersect an oil or gas well that has experienced a blowout. Specialized liquid, such as heavy drilling mud followed by cement, can then be pumped down the relief well in order to stop the flow from the reservoir in the damaged well.The first use of a relief well...
s and the injection of 160,000 cubic metres of river water to bring the well under control, an achievement which the crews celebrated on September 9, 1948. Cleanup efforts recovered almost 180,000 cubic metres of oil in a series of ditches and gathering pools. The size of the blowout and the cleanup operation added to the legend. By the time Atlantic #3 was back under control, the whole world knew from newsreels and photo features of the blowout that the words "oil" and "Alberta" were inseparable.
Exploration
Oil exploration
Hydrocarbon exploration is the search by petroleum geologists and geophysicists for hydrocarbon deposits beneath the Earth's surface, such as oil and natural gas...
boomed. By 1950, Alberta was one of the world's exploration hot spots, and seismic activity
Reflection seismology
Reflection seismology is a method of exploration geophysics that uses the principles of seismology to estimate the properties of the Earth's subsurface from reflected seismic waves. The method requires a controlled seismic source of energy, such as dynamite/Tovex, a specialized air gun or a...
grew until 1953. After the Leduc strike, it became clear that Devonian reefs could be prolific oil reservoirs, and exploration concentrated on the search for similar structures. A series of major discoveries followed, and the industry began to appreciate the diversity of geological structures in the province that could contain oil. Early reef discoveries included Redwater in 1948, Golden Spike in 1949, Wizard Lake, Fenn Big Valley and Bonnie Glen in 1951 and Westerose in 1952. In 1953, Mobil Oil made a discovery near Drayton Valley, in a sandstone
Sandstone
Sandstone is a sedimentary rock composed mainly of sand-sized minerals or rock grains.Most sandstone is composed of quartz and/or feldspar because these are the most common minerals in the Earth's crust. Like sand, sandstone may be any colour, but the most common colours are tan, brown, yellow,...
formation. By 1956, more than 1,500 development wells dotted what became the Pembina oil field
Pembina oil field
The Pembina oil field is one of the largest and most prolific conventional oil fields in the province of Alberta, Canada.The mature field is centered around Drayton Valley and is named for the Pembina River, which crosses the region from south-west to north-east.It taps in the Cretaceous deposits...
(the largest field in western Canada) with hardly a dry hole among them, and the oil bearing Cardium Formation
Cardium Formation
The Cardium Formation is a stratigraphical unit of Upper Cretaceous age in the Western Canadian Sedimentary Basin.It takes the name from the Cockle shells, and was first described along the Bow River banks by James Hector in 1895.-Lithology:...
was dubbed the Cardium Freeway. The Swan Hills
Swan Hills, Alberta
Swan Hills is a town in northern Alberta, Canada. It is located north of Whitecourt at the junction of Highway 32 and Grizzly Trail. Swan Hills is located in Municipal District of Big Lakes within census Division No...
field, discovered in 1957, exploited a carbonate rock
Carbonate rock
Carbonate rocks are a class of sedimentary rocks composed primarily of carbonate minerals. The two major types are limestone, which is composed of calcite or aragonite and dolostone, which is composed of the mineral dolomite .Calcite can be either dissolved by groundwater or precipitated by...
formation.
Before Leduc, the petroleum industry had long been familiar with the oil sand deposits. A number of companies were already producing heavy oil in Alberta and Saskatchewan
Saskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
. The Turner Valley petroleum reservoirs near Calgary had been on production for nearly 35 years, and the Devonian reef at Norman Wells in the Northwest Territories
Northwest Territories
The Northwest Territories is a federal territory of Canada.Located in northern Canada, the territory borders Canada's two other territories, Yukon to the west and Nunavut to the east, and three provinces: British Columbia to the southwest, and Alberta and Saskatchewan to the south...
had been discovered a quarter of a century earlier.
In the decade after Leduc, the industry identified many more reservoir types, including those at Daly, Manitoba
Manitoba
Manitoba is a Canadian prairie province with an area of . The province has over 110,000 lakes and has a largely continental climate because of its flat topography. Agriculture, mostly concentrated in the fertile southern and western parts of the province, is vital to the province's economy; other...
in 1951, at Midale, Saskatchewan
Midale, Saskatchewan
-Area statistics:*Lat 49° 24' 00" N*Long 103° 24' 00" W*Dominion Land Survey 22-5-11-W2*Time zone UTC-6-Climate:-Location:-See also:* List of weather records* Highway 702...
in 1953 and at Clarke Lake, B.C. in 1956. And in the years since, the sector has found many more petroleum traps
Oil reservoir
A petroleum reservoir, or oil and gas reservoir, is a subsurface pool of hydrocarbons contained in porous or fractured rock formations. The naturally occurring hydrocarbons, such as crude oil or natural gas, are trapped by overlying rock formations with lower permeability...
in the Western Canada Basin, especially within Alberta's borders. The region has great geological diversity.
Pipeline networks
In 1853, a small gas transmission line in QuebecQuebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....
established Canada as a leader in pipeline construction. A 25-kilometre length of cast-iron pipe moved natural gas to Trois-Rivières
Trois-Rivières
Trois-Rivières means three rivers in French and may refer to:in Canada*Trois-Rivières, the largest city in the Mauricie region of Quebec, Canada*Circuit Trois-Rivières, a racetrack in Trois-Rivières, Quebec...
, Quebec
Quebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....
, to light the streets. It was probably the longest pipeline in the world at the time. Canada also boasted the world's first oil pipeline when, in 1862, a line connected the Petrolia oilfield to Sarnia, Ontario
Sarnia, Ontario
Sarnia is a city in Southern Ontario, Canada . It is the largest city on Lake Huron and is located where the upper Great Lakes empty into the St. Clair River....
. In 1895, natural gas began flowing to the United States from Ontario's Essex field through a 20-centimetre pipeline laid under the Detroit River.
In Western Canada, Eugene Coste built the first important pipeline in 1912. The 274-kilometre natural gas line connected the Bow Island gas field to consumers in Calgary. Canada's debut in northern pipeline building came during World War II when the short-lived Canol line delivered oil from Norman Wells to Whitehorse
Whitehorse, Yukon
Whitehorse is Yukon's capital and largest city . It was incorporated in 1950 and is located at kilometre 1476 on the Alaska Highway in southern Yukon. Whitehorse's downtown and Riverdale areas occupy both shores of the Yukon River, which originates in British Columbia and meets the Bering Sea in...
(964 kilometres), with additional supply lines to Fairbanks
Fairbanks, Alaska
Fairbanks is a home rule city in and the borough seat of the Fairbanks North Star Borough in the U.S. state of Alaska.Fairbanks is the largest city in the Interior region of Alaska, and second largest in the state behind Anchorage...
and Skagway, Alaska
Skagway, Alaska
Skagway is a first-class borough in Alaska, on the Alaska Panhandle. It was formerly a city first incorporated in 1900 that was re-incorporated as a borough on June 25, 2007. As of the 2000 census, the population of the city was 862...
, USA, and to Watson Lake, Yukon
Watson Lake, Yukon
Watson Lake is a town at historical mile 635 on the Alaska Highway in the southeastern Yukon close to the British Columbia border. Population in December 2004 was 1,547 ....
. Wartime priorities assured the expensive pipeline's completion in 1944 and its abandonment in 1946.
By 1947, only three Canadian oil pipelines moved product to market. One transported oil from Turner Valley to Calgary. A second moved imported crude from coastal Maine to Montreal while the third brought American mid-continent oil into Ontario. But the Leduc strike and subsequent discoveries in Alberta created an opportunity for pipeline building on a grander scale. As reserves increased, producers clamored for markets. With its population density and an extensive refining system that relied on the United States and the Caribbean
Caribbean
The Caribbean is a crescent-shaped group of islands more than 2,000 miles long separating the Gulf of Mexico and the Caribbean Sea, to the west and south, from the Atlantic Ocean, to the east and north...
for crude oil, Ontario was an excellent prospect. The west coast offered another logical choice - closer still, although separated from the oilfields by the daunting Rocky Mountains. The industry pursued these opportunities vigorously.
Crude oil arteries
Construction of the Interprovincial PipelineEnbridge
Enbridge Inc. is a Calgary, Alberta based company focused on three core businesses: crude oil and liquids pipelines, natural gas transportation and distribution, and green energy. The company has approximately 6,000 employees, mostly in Canada and the United States...
system from Alberta to Central Canada began in 1949 with surveys and procurement. Field construction of the Edmonton/Regina/Superior (Wisconsin) leg began early in 1950 and concluded just 150 days later. The line began moving oil from Edmonton to the Great Lakes, a distance of 1,800 kilometres, before the end of the year. In 1953, the company extended the system to Sarnia, Ontario, in 1957 to Toronto. Other additions have extended the pipe to Montreal, Chicago and even Wood River in southern Illinois. The Interprovincial crude oil pipeline (now part of Enbridge Inc.) was the longest oil pipeline in the world when it was first constructed; the longest oil pipeline is now the Druzhba pipeline
Druzhba pipeline
The Druzhba pipeline is the world's longest oil pipeline and in fact one of the biggest oil pipeline networks in the world. It carries oil some from the eastern part of the European Russia to points in Ukraine, Belarus, Poland, Hungary, Slovakia, Czech Republic, and Germany...
from Siberia
Siberia
Siberia is an extensive region constituting almost all of Northern Asia. Comprising the central and eastern portion of the Russian Federation, it was part of the Soviet Union from its beginning, as its predecessor states, the Tsardom of Russia and the Russian Empire, conquered it during the 16th...
. Until the completion of the TransCanada gas pipeline, it was also the longest pipeline in the world.
The IPL line fundamentally changed the pricing of Alberta oil to make it sensitive to international rather than regional factors. The wellhead price reflected the price of oil at Sarnia
Sarnia, Ontario
Sarnia is a city in Southern Ontario, Canada . It is the largest city on Lake Huron and is located where the upper Great Lakes empty into the St. Clair River....
, less pipeline tolls for shipping it there. IPL is by far the longest crude oil pipeline in the western hemisphere. Looping, or constructing additional lines beside the original, expanded the Interprovincial system and allowed its extension into the American midwest and to upstate New York. In 1976, it was 3,680 kilometres through an extension to Montreal. Although it helped assure security of supply in the 1970s, the extension became a threat to Canadian oil producers after deregulation in 1985. With Montreal refineries using cheaper imported oil, there was concern within the industry that a proposal to use the line to bring foreign oil into Sarnia might undermine traditional markets for Western Canadian petroleum.
The oil supply situation on the North American continent grew critical during the Korean War and helped promote construction of the Trans-Mountain pipeline from Edmonton to Vancouver and, later, to the Seattle area. Oil first moved through the 1,200-kilometre, $93 million system in 1953. The rugged terrain made the Trans-Mountain line an extraordinary engineering accomplishment. It crossed the Rockies, the mountains of central British Columbia, and 98 streams and rivers. Where it crosses under the Fraser River into Vancouver at Port Mann, 700 metres (2,296.6 ft) of pipe lie buried nearly 5 metres (16.4 ft) below the river bed. At its highest point, the pipeline is 1200 metres (3,937 ft) above sea level.
To support these major pipelines, the industry gradually developed a complex network of feeder lines in the three most westerly provinces. A historic addition to this system was the 866-kilometre Norman Wells pipeline, which was in effect an extension of the Interprovincial line. This pipeline accompanied the expansion and water flooding of the oilfield, and began bringing 600 cubic metres of oil per day to Zama
Zama
-Places:*Zama, Numidia, a principal town of the Numidian tribe the Massylii*Zama, Kanagawa, a city of Kanagawa prefecture, Japan*Zama, Mississippi, an unincorporated community in the United States*Zama City, Alberta, a hamlet in Alberta, Canada...
, in northwestern Alberta, in early 1985. From Zama, Norman Wells oil travels through other crude oil arteries to markets in Canada and the United States. Interprovincial Pipeline was the foundation from which the large Canadian corporation Enbridge
Enbridge
Enbridge Inc. is a Calgary, Alberta based company focused on three core businesses: crude oil and liquids pipelines, natural gas transportation and distribution, and green energy. The company has approximately 6,000 employees, mostly in Canada and the United States...
grew.
Gas pipelines and politics
Through much of the 20th century, Canadians viewed natural gas as a patrimony, an essential resource to husband with great care for tomorrow. By contrast, they generally viewed oil as just another commodity. Only in special circumstances was there much public debate about crude oil exports.Canadian attitudes about gas date back to the late 19th century, when Ontario stopped exports. The province began exporting natural gas in 1891 to Buffalo, N.Y. from the Bertie-Humberstone field near Welland, Ontario
Welland, Ontario
Welland is a city in the Regional Municipality of Niagara in Southern Ontario, Canada.The city has been traditionally known as the place where rails and water meet, referring to the railways from Buffalo to Toronto and Southwestern Ontario, and the waterways of Welland Canal and Welland River,...
. Another pipeline under the Detroit River transported gas from the Essex field to Detroit. And by 1897, a pipeline to Toledo, Ohio
Toledo, Ohio
Toledo is the fourth most populous city in the U.S. state of Ohio and is the county seat of Lucas County. Toledo is in northwest Ohio, on the western end of Lake Erie, and borders the State of Michigan...
began taxing the Essex gas field to its limits. As a result, the Ontario government revoked the pipeline licenses and passed a law prohibiting the export of both gas and electricity.
The reasons behind Canada's protectionist policies toward natural gas are complex, but closely tied to the value gas has for space heating
Space heating
A space heater is a self-contained device for heating an enclosed area. Space heating is generally employed to warm a small space, and is usually held in contrast with central heating, which warms many connected spaces at once...
in a cold climate. These issues were not finally resolved in favour of continentalism
Continentalism
Continentalism refers to the agreements or policies that favor the regionalization and/or cooperation between nations within a continent. The term is used more often in the European and North American contexts, but the concept has been applied to other continents including Australia, Africa and...
until the implementation of the North American Free Trade Agreement
North American Free Trade Agreement
The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...
in the 1990s.
By the late 1940s, Alberta's Conservation Board had eliminated most of the wasteful production practices associated with the Turner Valley oil and gas field. As new natural gas discoveries greeted drillers in the Leduc-fueled search for oil, the industry agitated for licenses to export natural gas. That was when they discovered that getting permits to export Alberta natural gas was politically more complex than getting permits to export oil. Before giving approval, the provincial government appointed the Dinning Natural Gas Commission to inquire into Alberta's likely reserves and future demand.
Shortly thereafter, Alberta's Legislature passed the Gas Resources Conservation Act, which gave Alberta greater control over natural gas at the wellhead, and empowered the Conservation Board to issue export permits. This led to the creation of the Alberta Gas Trunk Line, which gathered gas from wells in the province and to delivered it to exit points.
There were many reasons for the creation of AGTL. One was that the provincial government considered it sensible to have a single gathering system in Alberta to feed export pipelines, rather than a number of separate networks. Another was that pipelines crossing provincial boundaries and those leaving the country fall under federal jurisdiction. By creating a separate entity to carry gas within Alberta, the provincial government stopped Ottawa's authority at the border. Incorporated in 1954, AGTL issued public shares in 1957. The company later restructured as NOVA Corporation, sold its pipeline assets (now primarily operated by TransCanada Corporation), and transformed itself into NOVA Chemicals
NOVA Chemicals
NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, with Executive Offices in the Pittsburgh suburb of Moon Township, Pennsylvania and Lambton County, Ontario. It was founded in 1954 as Alberta Gas Trunk Lines and was later renamed to NOVA Corporation...
.
The federal government's policy objectives at the time reflected concern for national integration and equity among Canadians. In 1949, Ottawa created a framework for regulating interprovincial and international pipelines with its Pipe Lines Act. The federal government, like Alberta, treated natural gas as a resource that was so important for national security that domestic supply needed to be guaranteed into the foreseeable future before exports would be allowed.
Although Americans were interested in Canadian exports, they understandably wanted cheap gas. After all, their natural gas industry was a major player in the American economy, and American policy-makers were not eager to allow foreign competition unless there was clear economic benefit. Consequently, major gas transportation projects were politically and economically uncertain.
Construction
Among the first group of applicants hoping to remove natural gas from Alberta was Westcoast Transmission Co. Ltd., backed by British Columbia-born entrepreneur Frank McMahonFrank M. McMahon
Frank Murray Patrick McMahon was a Canadian businessman best known as the founder and first chairman of Westcoast Transmission Co. Ltd...
. The Westcoast plan, eventually achieved in a slightly modified form, took gas from northwestern Alberta and northeastern B.C. and piped it to Vancouver
Vancouver
Vancouver is a coastal seaport city on the mainland of British Columbia, Canada. It is the hub of Greater Vancouver, which, with over 2.3 million residents, is the third most populous metropolitan area in the country,...
and to the American Pacific northwest
Pacific Northwest
The Pacific Northwest is a region in northwestern North America, bounded by the Pacific Ocean to the west and, loosely, by the Rocky Mountains on the east. Definitions of the region vary and there is no commonly agreed upon boundary, even among Pacific Northwesterners. A common concept of the...
, supplying B.C.'s interior along the way. Except for a small export of gas to Montana which began in 1951, Westcoast was the first applicant to receive permission to remove gas from Alberta.
Although turned down in 1951, Westcoast received permission in 1952 to take 50 Gcuft of gas out of the Peace River area of Alberta annually for five years. The company subsequently made gas discoveries across the border in B.C. which further supported the scheme. However, the United States Federal Power Commission (later the Federal Energy Regulatory Commission
Federal Energy Regulatory Commission
The Federal Energy Regulatory Commission is the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates...
) rejected the Westcoast proposal in 1954 after three years of hearings and 28,000 pages of testimony.
Within eighteen months, however, Westcoast returned with a revised proposal, found a new participant in the venture, and received FPC approval. Construction began on Canada's first major gas export pipeline.
The Canadian section of the line cost $198 million to build and at the time was the largest private financial undertaking in the country's history. Built in the summer seasons of 1956 and 1957, the line moved gas from the Fort St. John
Fort St. John, British Columbia
The City of Fort St. John is a city in northeastern British Columbia, Canada. A member municipality of the Peace River Regional District, the city covers an area of about 22 km² with 22,000 residents . Located at Mile 47, it is one of the largest cities along the Alaska Highway. Originally...
and Peace River
Peace River Country
The Peace River Country is an aspen parkland region around the Peace River in Canada. It spans from northwestern Alberta to the Rocky Mountains in northeastern British Columbia, where the region is also referred to as the Peace River Block.- Geography :The Peace River Country includes the...
areas 1,250 kilometres to Vancouver and the American border.
TransCanada PipeLines Limited
TransCanada PipeLines, LP
TC PipeLines, LP is a publicly traded master limited partnership. TransCanada Corporation owns 24.65% of the outstanding units and controls the general partner...
also applied early for permission to remove natural gas from Alberta. Two applicants originally expressed interest in moving gas east: Canadian Delhi Oil Company (now called TCPL) proposed moving gas to the major cities of eastern Canada by an all-Canadian route, while Western Pipelines wanted to stop at Winnipeg with a branch line south to sell into the midwestern United States. In 1954 C.D. Howe forced the two companies into a shotgun marriage, with the all-Canadian route preferred over its more economical but American-routed competitor.
This imposed solution reflected problems encountered with the construction of the Interprovincial oil pipeline. Despite the speed of its construction, the earlier line caused angry debate in Parliament, with the Opposition arguing that Canadian centres deserved consideration before American customers and that "the main pipeline carrying Canadian oil should be laid in Canadian soil". By constructing its natural gas mainline along an entirely Canadian route, TCPL accommodated nationalist sentiments, solving a political problem for the federal government.
The regulatory process for TCPL proved long and arduous. After rejecting proposals twice, Alberta finally granted its permission to export gas from the province in 1953. At first, the province waited for explorers to prove gas reserves sufficient for its thirty-year needs, intending to only allow exports in excess of those needs. After clearing this hurdle, the federal government virtually compelled TCPL into a merger with Western pipelines. When this reorganized TCPL went before the Federal Power Commission
Federal Power Commission
The Federal Power Commission was an independent commission of the United States government, originally organized on June 23, 1930, with five members nominated by the president and confirmed by the Senate...
for permission to sell gas into the United States, the Americans greeted it coolly. The FPC proved sceptical of the project's financing and unimpressed with Alberta's reserves.
Engineering problems made the 1,090-kilometre section crossing the Canadian Shield
Canadian Shield
The Canadian Shield, also called the Laurentian Plateau, or Bouclier Canadien , is a vast geological shield covered by a thin layer of soil that forms the nucleus of the North American or Laurentia craton. It is an area mostly composed of igneous rock which relates to its long volcanic history...
the most difficult leg of the TransCanada pipeline
TransCanada pipeline
The TransCanada pipeline is a system of natural gas pipelines, up to 48 inches in diameter, that carries gas through Alberta, Saskatchewan, Manitoba, Ontario and Quebec. It is maintained by TransCanada PipeLines, LP...
. Believing construction costs could make the line uneconomic, private sector sponsors refused to finance this portion of the line. Since the federal government wanted the line laid for nationalistic reasons, the reigning Liberals put a bill before Parliament to create a crown corporation to build and own the Canadian Shield portion of the line, leasing it back to TCPL. The government restricted debate on the bill in order to get construction underway by June, knowing that delays beyond that month would postpone the entire project a year. The use of closure created a furore which spilled out of Parliament and into the press. Known as the Great Pipeline Debate, this parliamentary episode contributed to the Louis St. Laurent
Louis St. Laurent
Louis Stephen St. Laurent, PC, CC, QC , was the 12th Prime Minister of Canada from 15 November 1948, to 21 June 1957....
government's defeat at the polls in 1957. But the bill passed and construction of the TransCanada pipeline began.
A stock trading scandal surrounding Northern Ontario Natural Gas
Northern Ontario Natural Gas
Northern Ontario Natural Gas was a natural gas company in Canada in the 1950s and 1960s, which was involved in a stock trading scandal that implicated Supreme Court of Ontario judge Leo Landreville and three members of Premier Leslie Frost's cabinet....
, the contractor for the Northern Ontario leg of the pipeline, also implicated Sudbury mayor Leo Landreville
Leo Landreville
Leo Landreville was a Canadian politician and lawyer, who served as mayor of Sudbury, Ontario in 1955 and 1956 before being appointed to the Supreme Court of Ontario as a judge...
and Ontario provincial cabinet ministers Philip Kelly, William Griesinger
William Griesinger
William Griesinger was an Ontario merchant and political figure. He represented Windsor—Sandwich in the Legislative Assembly of Ontario from 1945 to 1959 as a Progressive Conservative member....
and Clare Mapledoram between 1955 and 1958.
The completion of this project was a spectacular technological achievement. In the first three years of construction (1956–58), workers installed 3,500 kilometres of pipe, stretching from the Alberta-Saskatchewan border to Toronto and Montreal. Gas service to Regina
Regina, Saskatchewan
Regina is the capital city of the Canadian province of Saskatchewan. The city is the second-largest in the province and a cultural and commercial centre for southern Saskatchewan. It is governed by Regina City Council. Regina is the cathedral city of the Roman Catholic and Romanian Orthodox...
and Winnipeg
Winnipeg
Winnipeg is the capital and largest city of Manitoba, Canada, and is the primary municipality of the Winnipeg Capital Region, with more than half of Manitoba's population. It is located near the longitudinal centre of North America, at the confluence of the Red and Assiniboine Rivers .The name...
commenced in 1957 and the line reached the Lakehead
Thunder Bay
-In Canada:Thunder Bay is the name of three places in the province of Ontario, Canada along Lake Superior:*Thunder Bay District, Ontario, a district in Northwestern Ontario*Thunder Bay, a city in Thunder Bay District*Thunder Bay, Unorganized, Ontario...
before the end of that year. In late 1957, during a high pressure line test on the section of the line from Winnipeg to Port Arthur
Port Arthur, Ontario
Port Arthur was a city in Northern Ontario which amalgamated with Fort William and the townships of Neebing and McIntyre to form the city of Thunder Bay in January 1970. Port Arthur was the district seat of Thunder Bay District.- History :...
(today called Thunder Bay
Thunder Bay
-In Canada:Thunder Bay is the name of three places in the province of Ontario, Canada along Lake Superior:*Thunder Bay District, Ontario, a district in Northwestern Ontario*Thunder Bay, a city in Thunder Bay District*Thunder Bay, Unorganized, Ontario...
), about five and a half kilometres of pipeline blew up near Dryden
Dryden, Ontario
Dryden is the second-largest city in the Kenora District of Northwestern Ontario, Canada, located on Wabigoon Lake. It is the smallest community in the province of Ontario designated as a city...
. After quick repairs, the line delivered Alberta gas to Port Arthur before the end of the year, making the entire trip on its own wellhead pressure.
Building the Canadian Shield leg required continual blasting. For one 320 metres (1,049.9 ft) stretch, the construction crew drilled 2.4 metres (7.9 ft) holes into the rock, three abreast, at 56-centimetre intervals. Dynamite broke up other stretches, 305 metres (1,000.7 ft) at a time.
On October 10, 1958, a final weld completed the line and on October 27, the first Alberta gas entered Toronto. For more than two decades, the Trans-Canada pipeline was the longest in the world. Only in the early 1980s was its length finally exceeded by a Soviet pipeline from Siberia
Siberia
Siberia is an extensive region constituting almost all of Northern Asia. Comprising the central and eastern portion of the Russian Federation, it was part of the Soviet Union from its beginning, as its predecessor states, the Tsardom of Russia and the Russian Empire, conquered it during the 16th...
to Western Europe.
With these events - the discovery and development of oil and gas reservoirs and of processing and transportation infrastructure - Canada's petroleum industry established its foundations. However, over the decades that followed the industry began to develop other domestic petroleum resources. These included oil sands and heavy oil
History of the petroleum industry in Canada (oil sands and heavy oil)
Canada's oil sands and heavy oil resources are among the world's great petroleum deposits. They include the vast oil sands of northern Alberta, and the heavy oil reservoirs that surround the small city of Lloydminster, which sits on the border between Alberta and Saskatchewan...
deposits, and the northern and offshore frontiers
History of the petroleum industry in Canada (frontier exploration and development)
Canada's early petroleum discoveries took place near population centres or along lines of penetration into the frontier.The first oil play, for example, was in southern Ontario. The first western natural gas discovery occurred on a Canadian Pacific Railway right-of-way...
. Also, the natural gas sector
History of the petroleum industry in Canada (natural gas)
Natural gas has been used almost as long as crude oil in Canada, but its commercial development was not as rapid. This is because of special properties of this energy commodity: it is a gas, and it frequently contains impurities. The technical challenges involved to first process and then pipe it...
constructed extensive natural gas liquids extraction facilities
History of the petroleum industry in Canada (natural gas liquids)
Canada's natural gas liquids industry dates back to the discovery of wet natural gas at Turner Valley, Alberta in 1914. The gas was less important than the natural gasoline - "skunk gas" it was called, because of its distinctive odour - that early producers extracted from it...
. Taken together, these developments helped Canada create one of the world's largest and most complex petroleum industries. The origins of these industrial sectors are covered in this series on the industry's history.
See also
- Technological and industrial history of Canada
- History of CanadaHistory of CanadaThe history of Canada covers the period from the arrival of Paleo-Indians thousands of years ago to the present day. Canada has been inhabited for millennia by distinctive groups of Aboriginal peoples, among whom evolved trade networks, spiritual beliefs, and social hierarchies...
- Energy policy of CanadaEnergy policy of CanadaCanada is the 5th largest producer of energy in the world, producing about 6% of global energy supplies. It is the world's largest producer of natural uranium, producing one-third of global supply, and is also the world's leading producer of hydro-electricity, accounting for 13% of global...
- Natural gas processingNatural gas processingNatural-gas processing is a complex industrial process designed to clean raw natural gas by separating impurities and various non-methane hydrocarbons and fluids to produce what is known as pipeline quality dry natural gas.-Background:...
- Science and technology in CanadaScience and technology in CanadaScience and technology in Canada consists of three distinct but closely related phenomena:* the diffusion of technology in Canada,* scientific research in Canada* innovation, invention and industrial research in Canada...
- History of petroleumHistory of petroleumPetroleum, in one form or another, is not a recent discovery but is now an important part of politics, society, and technology. The invention of the internal combustion engine was the major influence in the rise in the importance of petroleum.-Early history:...
Further reading
- Alan Anderson, Roughnecks and Wildcatters, Macmillan of Canada; 1981
- Robert Bott, Our Petroleum Challenge: Sustainability into the 21st Century, The Canadian Centre for Energy Information, Calgary; seventh edition, 2004
- Earle Gray, Ontario's Petroleum Legacy: The birth, evolution, and challenges of a global industry (Edmonton: Heritage Community Foundation) 2008
- George de Mille, Oil in Canada West, The Early Years, George de Mille Books, printed by Northwest Printing and Lithographing Ltd., Calgary; 1972
- Gary May, Hard Oiler! The Story of Early Canadians' Quest for Oil at Home and Abroad, Dundurn Press, Toronto; 1998
- Peter McKenzie-Brown, Gordon Jaremko, David Finch, The Great Oil Age, Detselig Enterprises Ltd., Calgary; 1993; draft