100 years of Alberta oil: How an industry was born

100 years of Alberta oil: How an industry was born

Yadullah Hussain | May 9, 2014 9:12 AM ET
100 YEARS OF MEMORIES

Do you have old photos of your family members working on Canadian oil developments languishing in the basement? Dust them off, scan and email them to fpenergy@nationalpost.com with detailed captions. We will publish the best online to commemorate 100 years of oil development in Alberta

When Canadians from Eastern Canada move to Western Canada these days to seek better prospects they are merely following in the footsteps of William Stewart Herron, who packed up his bags in Ontario’s Haliburton county and ended up in Okotoks south of Calgary.

Except that Herron’s migration spawned an industry that transformed Alberta’s fortunes.

Herron has been credited for discovering and laying the ground for the development of Alberta’s first well that gushed oil nearly a 100 years ago on May 14, 1914.

Herron didn’t accomplish his feat alone, of course. There were other major actors including a future prime minister, a senator and one Archibald Dingman.

Born in Peterborough, Ont., Herron began modestly as a cook’s helper, but soon honed his entrepreneurial skills building a logging and road-building business in Northern Ontario. As work waned in the region, he caught the oil bug after visiting an oilfield in Pennsylvania while on holiday, and in the hope of deploying his equipment in the south.

“While Herron did not find work south of the border, the trip did establish what would become a consuming interest in petroleum geology,” wrote R.C. Macleod in his 1984 book ‘William Stewart Herron, Father of the Petroleum Industry in Alberta.’

Herron’s operations continued to deteriorate in Ontario and the restless entrepreneur finally sold his business and house in Halliburton and headed West with his second wife and three daughters in 1905.

He bought a 960-acre farm in Okotoks near Calgary where he sought to expand his farming business by “breaking” horses and securing a deal to transport coal to an electric plant in the area around 1911.

“When he was out west of Okotoks with his two horses and wagon getting coal, he stopped at a spot where natural gas was bubbling up from the ground,” according to oil historian David Finch.

Trapping the gas in jars he sent the samples for tests to U.S. universities, which confirmed what he suspected: he had stumbled on petroleum.

By September of that year he had bought 720-acres of the gas-seeping land in Turner Valley for the princely sum of $18,000 and spent a further $15,000 for surface and mineral rights, according to Macleod. “With this purposeful investment the story of the Turner Valley oil field and the history of the petroleum industry in Alberta can be said to have truly begun.”

Establishing the Calgary Petroleum Products Co. Ltd., Herron solicited the help up of some of Calgary’s most influential businessmen to fund and promote his enterprise.

Two of his key investors included Richard Bedford Bennett, who went on to become Canada’s Prime Minister from 1930 to 1935; and Sir James Lougheed, an influential senator and grandfather of Peter Lougheed, one of Alberta’s foremost premiers.

But the well that started Alberta’s first oil boom was not named after either of these distinguished gentlemen, nor Herron himself, but a relatively unknown Ontarian, Archibald Dingman, who had experience running successful natural gas businesses in Edmonton and southern Alberta. Given his experience in hiring drillers and building rigs, Dingman took on the dual role of investor as well as general manager.

“Herron was the dreamer, the visionary,” said Mr. Finch. “Dingman was a different guy altogether — twio a promoter and manager. Neither were professional oilmen. They did not go to university, were not geologists or specialists in the field.”

But Herron and Dingman more than made up for it with their entrepreneurial spirit. As the company began drilling its first well from January 2013, it caught the media’s imagination.

Calgary’s three newspapers and two weeklies dubbed the well after Dingman, as the promoter and “face of the media,” as they wrote periodic reports on the project’s progress. “The papers at the time reported that the well had showings of oil and gas at 300 feet, 600 feet and so on, but finally at 2,718 feet on May 14, 1914, there were actually gushers of oil coming out of the ground,” Mr. Finch said. “That day they decided it was finally a success.”

Technically it was unrefined condensate, a light blend that could be poured straight from the well into a car or tractor.

Canadian Mineral Statistics record shows 387 barrels of oil were produced in Alberta that year, 0.18% of Canadian production at the time (the rest from Ontario). By 1940, however, Alberta would make up 90% of the country’s output.

The oil fever spread quickly and more than 500 Calgary oil firms were launched in the following weeks, but most of them were “used to drill money out of people’s pockets,” according to Mr. Finch.

However, the euphoria was short-lived as the Great War of 1914 was looming and capital soon dried up.

It would take the might of Standard Oil (forerunner to the Exxon Mobil Corp.) and its subsidiary Imperial Oil to revive exploration and production in Alberta, incidentally with the help of Herron 10 years later.