Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
Peter Tertzakian is chief energy economist and managing director with Arc Financial Corp. in Calgary and provides analysis on technology and energy-related businesses to fund managers and portfolio companies.
A large part of the oil and gas renaissance is a consequence of reviving old fields with new technology.
Pennsylvania, where the industry had its genesis in the mid-1800s, and mostly forgotten in favor of more prolific finds a century ago, is now repositioning itself to be a dominant supplier of natural gas. Light oil fields throughout Texas, Oklahoma and Alberta — thought to have peaked in the 1970s — are making such a vigorous comeback that North American energy independence is the new phrase du jour. And who would have said a few years ago that North Dakota, a small and stable producer up until 2007, would be the next energy superpower?
So, it’s with interest that we watch big dollars being attracted to one of the oldest North American oil fields, the Sahtu Region of Canada’s Northwest Territories.
Drilling 160 kilometers below the Arctic Circle, near Fort Norman, N.W.T., Theodore Link, a geologist for Imperial Oil, is credited for drilling the first commercial oil well in the region. Records suggest that when the bit hit pressurized oil at 122 meters deep, on Aug. 23, 1920, the column shot 21 meters high into the air. Inspired by the success, other wells were drilled and development of the high quality oil ensued, including a small regional refinery to make fuel for bush planes and equipment.
Earnest development of the known oil fields around Norman Wells came as a result of increasing angst about oil supplies during the Second World War, especially after the attack on Pearl Harbor in 1941. The pursuit of oil for national security kicked off the “Canol” project, an abbreviation for Canadian Oil. Further wildcat drilling in the Sahtu region was coupled with the construction of a pipeline to carry the oil to a refinery in Whitehorse. Petroleum products were then to be piped further south to ports like Skagway, Alaska, for consumption in the Pacific war theatre.
Harsh weather made Canol a gruelling endeavour that never reached its full potential before the war ended. Sadly, procurement waste and cost overruns rendered the noble project, “the white elephant of Whitehorse,” according to Newsweek. Nevertheless, the exercise served to prove the oil potential of the Northwest Territories.
And that’s why the Canol oil shale in the Northwest Territories is attracting big dollars these days. In the last 18 months, work commitments of nearly $630-million on 13 parcels of land have been made in the central Mackenzie Valley. The companies with the winning bids were Husky Energy, Shell Canada, Imperial Oil, ConocoPhillips and MGM Energy.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/n-americas-energy-renaissance-more-like-a-revival/article5466109/