The petroleum industry has had massive social, economical, political, cultural, and demographic influences on the Canadian province of Alberta during the 20th and 21st centuries, especially during the second half of the 20th century. Oil and gas replaced agriculture and ranching as the primary industry, resulting in the province becoming one of the richest in the country. Nationally, the discovery allowed Canada to become self-sufficient within a decade and ultimately a major exporter of oil. Most of its oil production came from its enormous oil sands deposits, whose production has been steadily rising in recent years. It has produced only 5% of its oil sands, and its remaining oil sands reserves represent 98% of Canada's established oil reserves. The issue of the control of oil has been the main conflict between the provincial government and the federal government, with the issue of oil defining the provincial-federal relationship at every level. The petroleum industry in Alberta has been one of the main factors that have contributed to Western alienation, and Alberta separatism, especially during the 1980s when the federal government under the control of Pierre Trudeau crippled the prospering Albertan economy through the National Energy Program.
Background
Oil was known to exist in Alberta for many centuries, with the Native Indians using it to pitch canoes and to act as a medicinal ointment. The first recorded mention of Canada's bitumen deposits goes back to June 12, 1719. According to an entry in the York Factory journal, on that day, Cree Indian Wa-Pa-Sun brought a sample of oil sand to Henry Kelsey of the Hudson's Bay Company. When another fur trader and a founder of the rival North West Company, Peter Pond traveled down the Clearwater River to Athabasca in 1778, he became the first European to see the Athabasca deposits after exploring the Methye Portage, which allowed access to the rich fur resources of the Athabasca River system from the Hudson Bay watershed. He saw the deposits and wrote of "springs of bitumen that flow along the ground." Ten years later in 1788, the explorer and fur trader Alexander Mackenzie, after whom the Mackenzie River was later named, traveled along routes to both the Arctic and Pacific Ocean, writing: "At about from the fork (of the Athabasca and Clearwater Rivers) are some bituminous fountains into which a pole of long may be inserted without the least resistance. The bitumen is in a fluid state and when mixed with gum, the resinous substance collected from the spruce fir, it serves to gum the Indians' canoes." On his travels he saw Chipewyan Indians using oil from the oil sands to caulk their canoes. He was followed in 1799 by mapmaker David Thompson and in 1819 by British Naval officer John Franklin. Despite the fascination of the early explorers, however, the existence of the sands did not excite commercial interests for more than a century. Pioneer settlers to southern Alberta in the late 19th century noticed that an oily film occasionally covered pools of water, and that the air had unusual odours at times.
John Richardson did the first serious scientific assessment of the oil sands in 1848 on his way north to search for Franklin's lost expedition. The first government-sponsored survey of the oil sands was initiated in 1875 by John Macoun of the Geological Survey also noted the presence of the oil sands. Later reports by Robert Bell and D. G. McConnell, also of the Geological Survey, led to drilling some test holes. In 1883, G. C. Hoffman of the Geological Survey of Canada tried separating the bitumen from oil sand with the use of water and reported that it separated readily. In 1893, Parliament voted $7,000 for drilling. This first commercial effort to exploit the oil sands probably hoped to find free oil at the base of the sands, as drillers had in the gum beds of southern Ontario a few decades earlier. Although the Survey's three wells failed to find oil, the second was noteworthy for quite another reason. In 1888, Robert Bell, the director of the Geological Survey of Canada, reported to a Senate Committee that "The evidence ... points to the existence in the Athabasca and Mackenzie valleys of the most extensive petroleum field in America, if not the world."
"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 after encountering a high-pressure gas zone. According to drilling contractor A.W. Fraser, But the well blew wild, Fraser's crew unsuccessfully tried to kill the well by casing it, then abandoned the well for that year. They returned in 1898 to finish the job, but again they failed. In the end, they simply left the well blowing wild. Natural gas flowed from the well at a rate of some 250,000 cubic meters per day until 1918. It was not until 1918 that a crew led by A.W. Dingman succeeded in killing the well." The well flowed uncontrolled in all for 21 years.
Count Alfred von Hammerstein (1870–1941), who arrived in the region in 1897, promoted the Athabasca oil sands for over forty years, taking photos with descriptive titles such as "Tar Sands and Flowing Asphaltum in the Athabasca District," that are now in the National Library and National Archives Canada. Photos of the Athabasca oil sands were also featured in Canadian writer and adventurer, Agnes Deans Cameron's, best-selling book entitled The New North: Being Some Account of a Woman's Journey through Canada to the Arctic which recounted her roundtrip to the Arctic Ocean. Following this journey and the publication of her book, she travelled extensively as lecturer, with magic lantern slides of her Kodak images, promoting immigration to western Canada at Oxford, Cambridge, St. Andrew's University and the Royal Geographical Society. Her photographs were reproduced in 2011–2012 in an exhibit at the Canadian Museum of Civilization in Ottawa, Ontario, Canada. Cameron was particularly enthusiastic about the Athabaska region and the Athabaska oil sands which included photos of Count Alfred Von Hammerstein's oil drill works along the Athabasca River. "While the Count was unsuccessful drilling for "elephant pools of oil," Cameron's book and its images... made her a media celebrity." "In all Canada there is no more interesting stretch of waterway than that upon which we are entering. An earth-movement here has created a line of fault clearly visible for seventy or eighty miles along the river-bank, out of which oil oozes at frequent intervals. ... Tar there is ... in plenty. ... It oozes from every fissure, and into some bituminous tar well we can poke a twenty-foot pole and find no resistance. cited in
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 someday 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 1911, Ontario-born settler William Herron identified the nature of the odours from his time working in oil fields in Pennsylvania. He convinced Calgary businessman Archibald Dingman and Member of Parliament R. B. Bennett to visit the site near Turner Valley. The trio gathered four other investors, formed the Calgary Petroleum Products Company, Ltd. and began developing the region in search of oil. The company drilled three wells beginning in 1913, and on May 14, 1914, the third struck a significant reserve at a depth of . Excitement reached a fevered pitch in Calgary once word of the Turner Valley strike reached town. Over 500 oil exploration companies were formed within days, the majority of which existed only to bilk unwitting citizens by selling shares in companies that owned no land and had no intention of drilling for oil.
In 1926, Karl Clark of the University of Alberta received a patent for a hot water separation process which was the forerunner of today's thermal extraction processes. Several attempts to implement it had varying degrees of success.
A pioneer in the discovery and use of natural gas was Georg Naumann. He used natural gas as early as about 1940.
Turner Valley
"In early 1914, oil fever swept Calgary and other parts of southern Alberta. Investors lined up outside makeshift brokerage houses to get in on exploration activity triggered by the May 14, 1914 discovery of wet gas and oil at Turner Valley, southwest of Calgary." "Reportedly, 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 second major natural gas discovery brought renewed interest when the Royalite No. 4 well blew in with a mammoth fire that burned uncontrolled for nearly a month. This find was made at a depth of . "The Calgary Petroleum Products Company, reorganized as Royalite Oil Company, drilled into Paleozoic limestone. The well blew out at ." "The blowout at Royalite No. 4 was one of the most spectacular in Alberta's history. In 20 minutes, of and of pipe – together weighing 85 tonnes – rose to the top of the derrick. The well blew wild, caught fire, and destroyed the entire rig."