The result looks like something out of Willy Wonka's chocolate factory. As a result, Adkin isn’t at all shocked at the federal government’s willingness to compensate for losses in Trans Mountain — and thinks it might only the beginning, setting up the possibility of province eventually taking increasing equity shares in the sector. History of Oil Sands Development. Turner said the Alberta government, then led by premier Ernest Manning, “ushered it in every step of the way.” In 1981, the Government of Ontario bought a 25 per cent stake in Suncor, which it held until 1993. Everything about the oil industry has always been big. U.S. petroleum history provides a context for understanding how to meet America’s future energy needs. The oil is in the sand. There are countless public agencies providing research and development for industry: CanmetENERGY, the University of Alberta’s Institute for Oil Sands Innovation, Emissions Reductions Alberta (the latter of which is funded by carbon levy revenue which Adkin argued should be directed towards actual low-carbon energy sources). But then $40 a barrel happened and the oil sands not only made sense, they made billions for the people digging them. But it wasn’t just about the research: the public also played a significant direct investment role in launching the oilsands. The process now represents almost all future oilsands growth beyond 2025. There's an oil boom going on right now. It's three stories high and costs $5 million. That's what they call the giant trucks and shovels that roam the mines. "We never thought it would happen.". “But it was all built on old public investment.”. Asked if the processed oil is as good as that pumped in Saudi Arabia, Mather says, "Absolutely as good as. People always tell us they love our newsletter. "This is a very, very big resource.". Last Updated: May 11, 2020. Why doesn't oil come out when squeezed? In mid-1995, the National Task Force on Oil Sands Strategies — created by industry lobby group, the Alberta Chamber of Resources — released a 62-page report calling for an aggressive overhaul of tax and royalty regimes for the oilsands. It has to be dug up and processed. "Well, because it's not warm enough. The 1960s is the birth of the company’s future. Become an AOGHS supporting member and help maintain this energy education website and expand historical research. Joyce Hunt’s introduction to petroleum came at an early age in New Brunswick, Canada. The decision by the government to financially back an oilsands project didn’t come from nowhere. People always tell us they love our newsletter. Government support was even more pronounced with Syncrude. The Alberta Energy Company (AEC) was a key creation by the province to take a more active role in energy, forestry and coal, with half of its shares owned by residents. That's second to Saudi Arabia's 260 billion but it's only what companies can get with today's technology. Original Published Date: September 1, 2012. Oil sands deposits are found around the world, including Venezuela, the United States and Russia, but the Athabasca deposit in Alberta is the largest, most developed and uses the most technologically advanced production processes. This oil froth is then sent to an upgrader and eventually to a refinery. That technology, as Turner put it, “remains at the core of every oil sands mining enterprise.”. He holds a journalism degree from Mount Royal University in…. “The infrastructure of research innovation has always been oriented towards massive subsidies for fossil fuel related technologies,” she said. In fact, it even trades as a, at a premium because it's high quality crude oil.". They're digging up dirt — dirt that is saturated with oil. “In order to have an educated opinion about the Oil sands, one must first understand the history that led to the development of this massive resource,” the reviewer added. As the consortium was gearing up to build its project, Atlantic Richfield (ARCO) — which had a 30 per cent stake — pulled out. But up here in Alberta, it's frankly ridiculous. Experimentation continued through the 1960s without significant commercial production. In 2015, the U.S. consumed 19.4 million barrels of oil per day. Canadian author preserves history of Alberta Energy Industry. “If the Oil Sands have been a curiosity to you and you want to fully […] When it comes to oil and gas, Alberta is arguably most famous- or infamous, depending on who you talk to- for its sprawling northern oil sands. Alberta's oil sands’ proven reserves equal about 165.4 billion barrels (bbl). It may look like topsoil but all it grows is money. The Alberta government has also announced a wide range of oilsands investments in recent months: $440 million in December 2017 to help producers cut emissions, $1 billion for partial oil upgrading facilities in February 2018, $70 million for emissions-reducing techs earlier this month. In Alberta, Canada, in a town called Fort McMurray where, in the dead of winter, the temperature sometimes zooms up to zero. “The major issues 100 years ago were not that different from the major issues the big players face today,” Joyce Hunt proclaims. Find out yourself with a weekly dose of our ad‑free, independent journalism, As the feds announce taxpayer dollars to back the Trans Mountain pipeline, here’s a look back at public investment in the Alberta oilsands, Government support was even more pronounced with, . It’s unclear how much money the government would commit, but in late 2017, the company stated that it loses about $75 million in gross earnings for every month of delay. Those highly generous regimes have stubbornly remained to this day, even through multiple royalty reviews. Syncrude has a rich history dating back to the 1950s, but the oil sands of Northern Alberta have a history all their own going back nearly 100 years before Canada even became a country. The Syncrude oil sands plant is seen north of Fort McMurray, Alberta. Another piece of the puzzle was the Alberta Oil Sands Technology and Research Authority, also known as AOSTRA, which Turner described as being “set up by the Lougheed government with the single task of making in-situ bitumen deposits commercially profitable.”. “And it’s now even more in the interest of Albertans that they don’t fail.”, James Wilt is a freelance journalist based in Winnipeg, Manitoba. As Steward put it in her report, “other private corporations involved in the project used the withdrawal to force major concessions from the Alberta, Ontario, and federal governments.”, “It was in danger of the whole thing falling apart,” Steward told The Narwhal. The total estimates could be two trillion or even higher," says Clive Mather, Shell's Canada chief. Hot water separation, the process vital to the commercializing bitumen, was perfected by the now-legendary Karl Clark when he worked as a research scientist for the provincial government. T. Boone Pickens, a legendary Texas oil tycoon, was working Alberta's traditional oil rigs back in the '60s and remembers how he and his colleagues thought mining for oil sands was a joke. "We know there's much, much more there. Where Black Gold And Riches Can Be Found In The Sand. Although conventional drilling methods were used in most of Alberta, she notes, experiments with extraction processes characterized development work in the Athabasca region throughout the 1920s. It's characterized by bigness, from the pumps to the personalities. In 1950, an engineer hired by the Alberta government published a landmark report about economic viability, which Turner described in his book as bringing “an unprecedented sense of purpose to the oil sands project.”, Following that, the province hosted a sizeable conference in Edmonton that attracted oil companies from around the world to hear about the region’s prospects, after which Clark gave guided tours of the hot water processing facility in Bitumount. "You have 14 steps going up, and at my house you have 14 steps to the bedroom. A pond collects soil and water residue from oil-sands mining near Fort McMurray, Alberta. Very big? T. Boone Pickens, a legendary Texas oil tycoon, was working Alberta's traditional oil rigs back in the '60s and remembers how he and his colleagues thought mining for oil sands was a joke. The mine operates the world's biggest truck. For more information, contact bawells@aoghs.org. But Morneau confirmed the government is indeed ready to compensate any company — whether Kinder Morgan or any other company that takes on the project — for any financial losses resulting from delays. In total, 45 of the 57 committee chairs and members were from industry, with the other dozen from the federal and provincial government. Details were scarce. “If the Oil Sands have been a curiosity to you and you want to fully understand and appreciate the events that shaped the development of the oil sands industry in Alberta, this book is a must read,” noted a February 2012 review. It’s a bit strange in the current market environment but it’s not something wildly new to the industry.”. After many years of research and interviews, in 2012 Joyce Hunt of Calgary, Canada, published her 400-page illustrated book Local Push-Global Pull: The Untold Story of the Athabaska Oil Sands, 1900-1930. As the consortium was gearing up to build its project, Atlantic Richfield (ARCO) — which had a 30 per cent stake — pulled out. Now is the time for the federal government to support disruptive innovation in the same spirit as the Alberta Oil Sands Technology and Research Authority (AOSTRA), which was launched in 1974 and made technological breakthroughs that unlocked hundreds of billions of dollars of value from the oil sands in subsequent decades benefitting all Canadians. In fact, there’s an incredibly lengthy history of public investments and supports in the sector — which continues to this day. Both levels of government almost immediately accepted the task force’s recommendations: Alberta established a generic royalty regime that only charged one per cent of revenues until projects had recouped capital costs, while the federal government brought in accelerated capital cost allowances — which let companies write off more costs, earlier. Early Exploration. In fact, Turner described the first two mines as “all but Crown corporations in their early days.”. Wells. The oil sands have been in the ground for millions of years, but for decades, prospectors lost millions of dollars trying to squeeze the oil out of the sand. Rick George, the Colorado-born CEO of Suncor Energy, took 60 Minutes into his strip mine for a tour. But it wasn't just the price of oil that changed the landscape, it was the toys. The oil here doesn't come gushing out of the sand the way it does in the Middle East. The estimate of how many more barrels of oil are buried deeper underground is staggering. That's eight times the amount of reserves in Saudi Arabia. “I don’t think that would have happened without government money,” Steward said. Copyright © 2020 CBS Interactive Inc.All rights reserved. The Narwhal is ad-free, non-profit and supported by readers like you. “While many recognized the potential value of the deposits and pushed to develop them, others struggled with suitable terms to describe them, where as some searched for an explanation of their origin.”.

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