History of oil and gas in Red Deer

The crisis in the energy industry is having an impact on our community. For a very long time, oil and gas have been one of the most important components in the economy.

The history of oil and gas in the Red Deer area goes back more than 130 years. In 1885, the Winnipeg and Northwest Petroleum Company (Noxo) dispatched drilling equipment to a site along the Red Deer River where oil seepages had been reported.

Noxo predicted it would be able to strike oil at a mere 100m (300 ft). However, the venture proved a failure. In fact, J.B. Tyrell, the famous scientist with the Geological Survey of Canada, reported that he could find no evidence of the purported petroleum seepage.

Nevertheless, the entrepreneurs chartered the Alberta and Athabasca Railway Company, which received permission to construct a railroad from the C.P.R. line east of Calgary to Edmonton and then on to Athabasca. Moreover, the Company was given authorization to construct telegraph and telephone lines from southern to northern Alberta and to run steamboat lines on the Red Deer, North Saskatchewan and Athabasca Rivers.

For many years, nothing much happened with respect to oil and gas exploration. In 1909, the Red Deer Board of Trade hired Eugene Coste to provide advice on drilling for natural gas. After he told them that such a venture would cost $100,000, with no guarantee of success, the idea was quickly dropped.

In the spring of 1914, a major oil and gas discovery was made at Turner Valley.

The Pioneer Oil Company and Red Deer Investment Company drilled wells on the south side of Red Deer, but both holes ended up dry.

The discovery of an oil and gas field at Leduc in 1947 revived interest in local exploration. Major fields were discovered in the Stettler-Big Valley area in 1949-1950 and around Sylvan and Gull Lakes by 1952.

In the summer of 1953, a very successful well was drilled in the Joffre district, northeast of Red Deer. Within two years, there were 285 wells completed over an extended area.

The City of Red Deer quickly felt the benefits of the dynamic new industry.

At the end of August, 1953, Gulf Oil opened a large central administrative office on the second floor of the new Truant Block on Gaetz Avenue. Shortly thereafter, Imperial Oil also announced the creation of a regional Red Deer office.

In the spring of 1955, drilling began in the Balmoral district on the east side of the City. In 1957, Imperial Oil began drilling deeper wells and soon hit another huge pool of oil at 2100m.

The spike in local employment was not only limited to drilling rig crews.

All kinds of associated businesses, such as trucking and supply companies, sprang up as well. As more and more people flooded into the City to take advantage of the new jobs, there was a major boom in the construction industry as well.

The huge increase in world oil prices in the 1970s resulted in a new round of drilling across Central Alberta and a renewed boom both for the energy service industry and the community as a whole.

The imposition of the National Energy Policy was a huge blow to the oil and gas industry in the early 1980s.

Just as the industry seemed to stabilize by the middle of the decade, O.P.E.C. and particularly Saudi Arabia began to flood the market to maintain market share against the non-OPEC nations who had been ramping up production. The result was a sudden collapse of oil prices, down as low as $10 per barrel in March 1986.

The Gulf Wars in the 1990s cause some short term spikes in the price of oil. However, prices generally remained fairly constant due to a plentiful world-wide supply. After the turn of the millennium, oil and gas finally began a prolonged climb upwards. However, the near total collapse of the world financial markets in 2008 caused yet another sharp downward spike.

Finally, prices seemed to recover bringing prosperity to much of the industry.


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