John Weissenberger: How Canadian ingenuity turned Alberta's tar pits into a cash cow

Somewhere across this great land, someone or something great is just getting started. This country is built on game-changing people, ideas and initiatives: Wayne Gretzky redefined a game; oilsands innovations helped us prosper; Frederick Banting transformed millions of lives; Loblaws changed how we live. Today, we launch a new National Post series that celebrates Canadian greatness, in whatever form we find it.

Of the collective psychoses plaguing Canada, a particularly irksome one has to do with our natural resources. This appears to reflect our distaste for the specific tasks of “hewing and drawing,” at least when it comes to wood and water respectively. The reference comes from Canada’s “first great political economist,” Harold Innes, who asserted that Canada’s abundant natural resources would “relegate” us to simply producing staple products — first cod and beaver pelts, then lumber, wheat, minerals. Or hydrocarbons.

Innes had a point, at least in terms of resource economies’ vulnerability to international markets, and he spurred interminable Canadian hand-wringing about the “resource curse,” “Dutch disease” and perpetual economic diversification efforts, to the tune of countless tax dollars. Think battery plants.

It’s somehow just too easy, says the argument, pulling things out of the ground, harvesting whatnot and selling it. And it wrecks the planet. Our resource endowment is consequently a burden to be abandoned as we emulate the Na’vis in Avatar. Besides, brain work is superior, in fact nobler than the hand-dirtying labour that supports it.

What’s forgotten between the pumpkin spice lattes and yoga classes is the endless toil and ingenuity required to create modern society in the first place, and how technically difficult maintaining our lifestyle is, providing basic materials and energy. Spoiler alert: AI alone now consumes 1.5 per cent of global electricity and over 225,000 kilograms of rock must be to produce one Tesla battery.

A case in point is our own oilsands, the estimated 160-billion barrels of oil just sitting there since the Cretaceous period — the world’s fourth-largest proven oil resource. Far from simply “digging it up,” realizing its value required a century of persistent innovation by our best and brightest. Blind optimism and gritty persistence overcame countless technical and financial setbacks, ultimately contributing immense value to Canada.

As recounted in Earle Gray’s narrative, “The Great Canadian Oil Patch” (2005), recorded knowledge of the Alberta oilsands stretches back to the earliest periods of European exploration and Indigenous contact. Gray notes that in 1719, “Wa-pa-su, a Cree Indian working for the (Hudson’s Bay) company” met trader Henry Kelsey at Fort York. He brought with him “a lump of the oil-saturated sand described as ‘that gum or pitch that flows out of the banks of (the Athabasca) River.’”

As fascinating as the soft, bitumen-saturated McMurray Formation is to sandstone fanciers and petroleum geochemists, getting the molecules out is the issue. It’s something like extracting clean broth from a half-frozen can of dog food, leaving behind any meat and nasty bits.

When, in 1870, Canada acquired the vast Rupert’s Land wilderness, the Geological Survey of Canada (GSC) mapped the region’s resources. Geologist Robert Bell, judged that the immensity of the oilsands deposits warranted access to foreign markets via a pipeline to Hudson Bay and “further shipment ‘by steamers.’ ” Only 150 years later, the Carney government announced that an energy corridor to Churchill, Man., “could be truly transformative for this country,” but requires “further development.”

Bell shipped some of his samples to the GSC’s chemist, Georg Christian Hoffmann, who judged it suitable for road paving and roofing. He postulated that oil could be separated from the sand simply by “boiling or macerating the material with hot water” — the oil floating while the sand dropped to the bottom of the solution. Hoffmann’s method, essentially similar to that used today, failed to remove the finest particles — a problem solved only decades later.

Unsurprisingly, federal and provincial researchers locked horns over how best to develop the resource. The fed’s Sidney Ells pioneered using oilsands for paving, with tons railed out as early as 1916 for roads in Edmonton. Alberta’s Karl Adolf Clark tackled the separation problem. Meanwhile, Prince Edward Island-born R.C. Fitzsimmons’ International Bitumen Company, developed its own hot water flotation process. The product was still not sufficiently sediment-free to be refined, but was marketable as a roofing product.

Provincial investment during the Second World War furthered Clark’s separation process as more private investors joined in. These included Colorado engineer Max Ball, whose plant was, by 1940, processing 400 tons of bitumen per day into gasoline, diesel oil, etc.

Major player J. Howard Pew of Sun Oil Ltd. bought into a 1,600-hectare lease in 1953, and Sun Oil had mining rights with an option to build a synthetic crude plant. In 1963, as other players got cold feet, Pew convinced his board to commit up to $280 million (almost $3 billion in 2025) into mostly untried technology. They did and, 60 years later, Suncor produces over 800,000 barrels per day from the oilsands.

Only seven per cent of the oilsands is shallow enough to be mined. The technological battle with the deeper resource was also daunting because the oil had to be extracted by heating the sand in the formation — “in situ” — from 100 to 600 metres down. The first in situ production occurred in 1918(!) near Ft. McMurray, from a well stimulated with dynamite and injected with hot steam. The first commercial in situ project, Imperial Oil’s “huff and puff” steam injection venture at Cold Lake, came on stream in the early 1980s. Similarly, “fire flooding” was attempted in 1920, by lighting a stream of natural gas in a wellbore, but proved unproductive. Such production wasn’t achieved until 1968.

Consensus thinking now has it that all these efforts were misguided, due to the oilsands’ environmental impact. Campaigns to “Keep it in the Ground” persist, supported by millions of dollars flowing from U.S. foundations. Neil Young called Ft. McMurray “Hiroshima.”

In reality, the cost-benefit equation is simple. The oilsands contribute 0.1 per cent of global greenhouse gas emissions — China produces 31 per cent — and the mineable area represents 0.2 per cent of Canada’s boreal forest. In return, this activity creates, conservatively, 166,000 Canadian jobs and the oilsands alone accounts for about half of the $34 billion that provinces collect annually in royalties, plus the lion’s share of the billions industry pays in tax. The Energy Institute of America projects global oil consumption to increase well into the latter part of this century, and our resource endowment allows Canada to benefit from that.

So, thank you to Messrs. Bell, Ells, Clark, et al. Their skill and ingenuity still supports millions of Canadians, including the naysayers.

National Post

John Weissenberger is a Calgary petroleum geologist and executive. He has conducted and sponsored studies on the immense bitumen resource below the oilsands, the estimated 406-billion barrels of the Devonian Grosmont Formation.