History of the petroleum industry in Canada (oil sands and heavy oil)

According to an entry in the York Factory journal, on that day a Cree man, Wa-Pa-Sun, brought a sample of oil sand to Henry Kelsey of the Hudson's Bay Company.

When fur trader Peter Pond travelled down the Clearwater River to Athabasca in 1778, he saw the deposits and wrote of "springs of bitumen that flow along the ground.

He said he encountered Fort McMurray area bitumen deposits en route to the Klondike, and decided to stay and turn his interest from gold to the oil sands.

[3] His syndicate received the first (and only) clear title to oil sands lands in 1910, and he was elected to the Canadian Petroleum Hall of Fame one hundred years later.

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.

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.

These plants were part of a successful project (led by the Research Council's Dr. Karl A. Clark) to develop a hot water process to separate the oil from the sands.

The plant conducted successful tests using the Clark hot water process in 1948/49 then closed, partly because the recent Leduc discoveries had lessened interest in the oil sands.

In 1962, Great Canadian Oil Sands Limited (GCOS) received approval from the Alberta government to build and operate a 10,000 cubic metre per day plant near Fort McMurray.

Financial difficulties delayed construction of the GCOS plant until a new investor - Sun Oil Company's Canadian subsidiary, today known as Suncor - was found.

During the opening ceremonies for the plant, Sun Oil Company chairman J. Howard Pew (a legendary industrialist, then 85 years old) made remarks which still ring true: No nation can long be secure in this atomic age unless it be amply supplied with petroleum ...

It therefore decided not to bring too many oil sands plants on stream at once, and rejected the Cities Service proposal in favor of the GCOS project.

The reason for the long gap between approval and completion was an alarming escalation of costs that beset all major North American projects in the 1970s.

In December 1974, Atlantic Richfield (whose American parent needed cash to develop its Prudhoe Bay interests) withdrew its 30 per cent participation in the project.

Beginning in 1973, the members of the Organization of Petroleum Exporting Countries had taken advantage of tight world oil supplies to rapidly and regularly increase prices.

Policy-makers in the oil consuming countries therefore considered it a matter of national urgency to develop stable, secure energy supplies.

When it found that the consortium's cost estimates were not out of line, the governments of Canada, Alberta and Ontario participated in a historic meeting in Winnipeg in February, 1975.

Known as the Athabasca Oil Sands Project, the entire complex consists of Muskeg River, Shell's Scotford Upgrader located near Fort Saskatchewan, Alberta, and supporting facilities.

The first in situ experiment in Alberta took place in 1910, when a Pittsburgh-based outfit, the Barber Asphalt Paving Company, drilled a bore hole into the bitumen and pumped in steam to liquefy the oil.

Project Oilsand received federal approval in Canada, and the United States Atomic Energy Commission agreed to provide the device.

The results were excellent, and the petroleum industry soon began producing bitumen through SAGD well pairs drilled and operated from the surface.

Husky Oil was born during the Depression through the efforts of Glenn Nielson, an Alberta farmer driven to bankruptcy when the bank called a loan on his farm.

Steel was scarce, so Husky dismantled a small Wyoming refinery constructed during the war to provide bunker fuel to the American Navy.

Small improvements in technology applied to such a huge resource could mean enormous additions to Canada's recoverable crude oil reserves.

Few Canadian refineries can process more than small amounts of heavy oil, so production has traditionally gone to United States asphalt plants.

Like the plants at Syncrude, Suncor and Shell's Scotford facility near Edmonton, these refinery-like operations turn heavy oil and bitumen into lighter and lower-sulfur, more desirable crude.

The federal government saw the project as an opportunity to move the nation one small step towards the stated goal of crude oil self-sufficiency.

In exchange, it became a 50 per cent partner in the combined operation with Consumers' Co-op, which committed its existing refinery (valued at $500 million) to the project.

A wrinkle in this arrangement occurred as the project neared completion, however, when Saskatchewan's newly installed NDP government refused to pay its share of $190 million in cost overruns.

The plant upgrades Lloydminster-area heavy oil and Cold Lake bitumen, making still more of those resources available for central Canadian and American markets.