alberta history

100 Years of Energy

Calgary goes ‘oil crazy’ after Dingman discovery.

Oil strike at Turner Valley first of many booms and busts in province…

In its first three decades, Calgary had been devastated by fire and rebuilt. It thrilled royalty with its first cowboy extravaganza, the Stampede, and hosted a world title fight that ended with one dead boxer.
Yet, nothing prepared Calgarians for the frenzied scenes in the spring of 1914.
“Calgary is oil crazy,” declared the front page of the Calgary Herald.
The newspaper probably understated things.
Police were needed to control volatile crowds of investors. Money poured in so fast it was collected in wastepaper baskets. Stock values quadrupled in hours. In offices, streetcars and shops, one word was on everybody’s lips: oil.
“Everybody . . . is talking and thinking of nothing else,” the Herald reported.
Specifically, the Dingman No. 1 well was the talk of the town.
It spurted to life on the evening of May 14, 1914, and flowed with a gasoline-like liquid that the newspaper declared “the most remarkable discovery in the history of the world.”
Not quite, but the discovery of Western Canada’s first commercial oilfield at Turner Valley ignited a fervour that would burn for decades and change the prospects of an entire province.
It was the beginning of Alberta’s first real oil boom. It set up Calgary to become the headquarters of the Canadian oil industry.
It’s also the opening chapter in the history of the Alberta oilpatch, a century-old story that’s punctuated by tenacity, courage, success and controversy.
“This really is a tipping point in Alberta,” says historian David Finch, an authority on the Turner Valley discovery. “Turner Valley is the great granddad to all . . . other oil industry in the West.”
Over the last 10 decades, Alberta has seen oil fortunes rise and fall. Booms have come and gone — and then returned.
In the first half of the 19th century, petroleum was widely accepted as a medicinal agent, used as an ointment for things like arthritis, or as a lubricant on machinery.
But the discovery of how to turn crude oil into kerosene for lamps in 1852 transformed a marginal business into a roaring industry.
Oil exploration in Canada dates to 1858 in southwestern Ontario, with the first commercial well at Oil Springs. The first oil rush in the United States took off in Pennsylvania in 1859.

Just as the electric light bulb threatened oil’s dominance in the late 1800s, along came the automobile — sparking a new surge in exploration.
The Spindletop gusher launched the Texas oil industry in 1901 and the same year, in southwestern Alberta, John Lineham’s Rocky Mountain Development Company struck oil near Waterton and produced a short-lived boom.
In 1909, Eugene Coste discovered the Bow Island gas field and, four years later, a 275-kilometre pipeline was built to ship it to bustling Calgary, allowing the ambitious city to declare itself “gasified.”
(Canadian Pacific Railway first discovered natural gas in Alberta while drilling for water near Medicine Hat in 1883.)
By now, Calgary had a population of 50,000 people and big plans for the future. The city had become a thriving regional hub where entrepreneurs came to get rich, often through land speculation.
Calgary was surrounded by farmers and ranchers, with the some of the prettiest land located south of the city. Despite the natural beauty, however, there were some spots that didn’t always smell good — a rotten eggs odour often percolated up from the ground.
It made one farmer curious.
Stewart Herron was an Ontario native who spent time in the Pennsylvania oilfields before he settled on a farm near Okotoks in 1905.
Herron had “a consuming interest in petroleum geology,” says author David Breen in his book, William Stewart Herron: Father of the Petroleum Industry in Alberta.
One day, in 1911, Herron was hauling coal near Black Diamond when he stopped along Sheep Creek. He decided to check out seepages thought to be swamp gas.
Herron returned with an overturned tub, siphoned the gas into bottles and shipped them to labs in the United States. They confirmed Herron’s suspicions and he began quietly acquiring land and mineral rights in the region.
He then convinced some of Calgary’s most prominent citizens — Sen. James Lougheed, rancher A.E. Cross, and future prime minister R.B. Bennett — to gamble on his venture. Thus, the Calgary Petroleum Products Company began drilling early in 1913.
Archibald Dingman, a partner in the company, was named general manager and became the face of the operation. Marty Hovis was the chief driller.
It was hard, dirty, dangerous work. They used cable-tool drilling, which involved plunging a heavy, chisel-like steel bit down a hole — over and over. A rig might only drill a few feet per day.
After months of drilling, public skepticism about the now well-known venture began to grow.
Then, in the spring of 1914, the drillers found vindication.
On Thursday, May 14, the Calgary Petroleum Products’ crew was back at it again, the mighty drill pounding on the rock below. It was unseasonably warm; the temperature topped 25C in Calgary.
Around noon, the driller got a whiff of gas and something more — the smell of oil.
“I knew from the character in the change of the sand that we were likely to encounter a horizon of oil,” Dingman later told reporters.
Around 5:30 p.m., there was a heavy flow of natural gas saturated with a straw-coloured fluid observers described as “pure white gasoline.” Eighteen tanks, holding about 150 litres each, were rushed to the well site to collect the liquid. Turner Valley had its first “gusher.”
“Every few minutes a great body of oil is shot fifty or sixty feet into the air, and then the flow dies down, only to spout forth again when sufficient gas has collected to send it up,” company director Oscar Devenish told the Herald.
They had uncovered the Turner Valley field. It was close to a religious experience for Herron.
“I am not a sanctimonious man but …,” Herron told the Herald, “The Lord has willed it to be so … coming at this critical time in the history of this great western country, I feel that it is given to us for the benefit of His people and the development of the west.”
But if the discovery was a blessed event in Turner Valley, it was something else entirely in Calgary.
“This oil … is the most remarkable discovery in the history of the world,” the Herald reported on its front page the next day on May 15.
And with that, Calgary went berserk.
At the Bank of Montreal on 8th Avenue and 1st Street S.W., a block-long line of men and women waited eagerly to withdraw their savings.
“In oil offices the money came in so fast they had no time to sort it,” former Herald writer Torchy Anderson recounted 50 years later in a retrospective.
“In one place they were cramming bills into wastebaskets and issuing grocery store receipts.”
Within hours, “a lively but fairly sane cow town became a madhouse,” Anderson wrote.
The lineups at the banks were rivalled only by the lineups at the bars and saloons.
Hundreds of Calgarians made their way to Turner Valley to see the rig. Spectators got a demonstration of the new petroleum they called “crude gasoline” and it was soon selling for $9 a barrel — more than $180 in today’s dollars.
“Some of the crude oil taken from the well was put in the tank of the car … which Mr. Dingman’s chauffeur drove to the well,” the Herald’s Chester Bloom wrote. “The machine went up the hills like a shot.”
Within days of the discovery, thousands of Calgarians had withdrawn almost $500,000 in savings to sink into nearly 500 oil companies, most of them brand new. Investors reached out from England, as well as New York and California.
Not everyone was so enthusiastic. When a group of salesmen hawking oil stock showed up in a village outside Calgary, the local constabulary decided to protect citizens by locking the men up in the pound.
The Dingman well also became a tourist attraction. People from Edmonton, Vancouver and Winnipeg arrived daily.
Even the Duke and Duchess of Connaught and their daughter, Princess Patricia, visited. To the delight of the royal guests, the Herald reported, the crew opened a valve on the well and let the oil spout like an “inexhaustible gasoline fountain forty feet high.”
“Isn’t it pretty?” remarked the 28-year-old princess.
But like the geyser, the oil boom soon came back to earth.
For months, tension had been building in Europe and by summer 1914 it was ready to go off.
The happy news of July’s royal visit was overshadowed by Austria-Hungary declaring war on Serbia. Within days, the First World War began.
“At first there still seemed reason to believe that the wartime need for oil would lead to accelerated development,” wrote Breen. “But even with the region’s endorsement by the British Admiralty, by the spring of 1915, the flow of outside investment capital had almost ceased.”
With the downturn, many of the nearly 500 oil companies that had arrived so suddenly now disappeared, leaving many Calgarians holding useless stock certificates.
Even the company Herron helped launch — Calgary Petroleum Products — didn’t survive. After a costly fire in 1920, the owners sold to Imperial Oil (part of the Standard Oil empire) and took a minority share in the new company called Royalite.
As North America emerged from the First World War, economic prospects improved. Further mechanization of industry and farming secured oil’s place as a vital resource.
Imperial sank more of its money into drilling in the Turner Valley area and it paid off on Oct. 14, 1924, at Royalite No. 4.
Royalite’s gas well was called the “wonder well” by some and it earned notoriety due to an epic blowout days later. The fire at the well ran wild for weeks and its glow was visible for hundreds of kilometres at night.
After the blowout, the “sour” gas — containing toxic hydrogen sulphide — was piped to a nearby coulee and flared. The area became famously known as “Hell’s Half Acre.”
(Royalite No. 4 ultimately produced more than a million barrels of naphtha, Finch notes. By the 1930s, it produced nearly three million cubic feet of gas daily, sending much of it to Calgary by pipeline.)
With the renewed excitement of 1924, Calgary’s mood improved drastically — and not just because the province’s eight-year prohibition on alcohol had ended.
A second oil boom began.
After the success of the ‘wonder well,’ petroleum firms and drilling companies set up their headquarters in Calgary. Turner Valley and Black Diamond were also humming. People could even catch an airplane shuttle from Calgary to the oilfields.
“The kind of attention Fort McMurray gets today, that’s what Turner Valley got during those booms,” Finch says. “It was an exciting place to go. People would go there as tourists. People would go there looking for work.”
For a while, it looked like the boom would never end.
Even the federal government, under Liberal Prime Minister Mackenzie King, delivered good news. After years of lobbying, Ottawa transferred mineral rights to Alberta in 1930, giving the province control over the development of its natural resources.
“This really spread that potential for economic development across the whole country,” says industry consultant George Eynon, who teaches at the University of Calgary’s Haskayne School of Business.
But, in a pattern that repeated itself throughout Alberta’s history, the boom came to a painful halt.
The Great Depression began with a U.S. stock market crash that rattled the world in October 1929.
In Alberta, it hit at the same time wheat prices were tumbling — and didn’t hit bottom until 1932. At the lowest point of the Depression, one-fifth of Calgary’s 75,000 residents were on welfare.
Turner Valley and Black Diamond initially continued growing after the Wall Street collapse. Royalite, the biggest player, had a healthy 26 rigs working in Turner Valley in 1930. The impressive Black Diamond Hotel opened the same year — and quickly became known as a place where even the women fought.
But fortunes changed quickly and, in April 1931, disaster struck.
A fire in the village’s business district burned a hole in the heart of Turner Valley, razing nearly two blocks. People lost everything.
“Behind the gaudy veneer of the exaggerated storefronts and excited activity, oilfield life was less than glamorous. What the fire revealed was a village of shacks,” Finch chronicled in his book on the Turner Valley field, Hell’s Half Acre. “In the background, wooden rigs — once testimony to a booming town — sat idle and abandoned.”
Black Diamond and Turner Valley both declared bankruptcy.
The outlook for Alberta and its nascent oil business looked bleak in the early 1930s.
Then an unlikely person stepped in to save the day — the head of Calgary’s transit system.
Robert Brown was an electrical engineer from Quebec hired in 1911 to head Calgary’s electric light department. Later, he became boss of the city’s streetcar system.
By the 1930s, many people believed the Turner Valley field held no oil, just wet gas and salt water.
But Brown had a “crazy” theory. He believed Turner Valley had oil, but it was between the gas cap and the water. To prove it, he only needed to drill deeper (and spend more money) than anyone had so far in the Alberta oilpatch.
Partnering with newspaper publisher George Bell, he formed Turner Valley Royalties in 1934. With many Calgarians struggling financially, it’s difficult to imagine a worse investment climate. So Brown and Bell offered to pay a royalty to investors on any production.
Eventually, they raised enough cash to start drilling on April 16, 1934. Development of rotary drill technology allowed for drilling to record depths, but it was expensive. Brown borrowed thousands of dollars and equipment; he mortgaged his house and sold his car.
In March of 1936, Bell died, never knowing if the well would be a success. Three months later — at a cost of more than $1.5 million in today’s dollars — Turner Valley Royalties No. 1 made the oil strike that established the field once and for all.
“It is the first time in Canada’s history that anything approaching a crude oil gusher has been struck. It was a great time for Brown to be right,” Finch says.
The discovery of crude spurred more drilling and, three years after Royalties’ strike, Home-Millarville No. 2 became the most prolific oil well in the British Empire.
The province’s newly elected Social Credit government watched the new exuberance with a wary eye.
During the 1920s and 1930s, vast quantities of gas at Turner Valley were burned off, most famously at Hell’s Half Acre. Imperial and the province were both concerned about maintaining the pressure in the reservoir. Alberta had to act.
Though the federal government had ruled the province’s two previous attempts to address the conservation issue as unconstitutional, Alberta tried again. In 1938, with some carefully constructed legislation, the provincial government created the Alberta Petroleum and Natural Gas Conservation Board.
Some people hated the idea.
Many oilmen preferred the old “law of capture” — or the finders-keepers system — that had companies fighting to get rich quickest by drilling first and producing discoveries fastest.
The Social Credit government, including its young industry minister Ernest Manning, bristled at the notion of unfettered development at Albertans’ expense.
“Alberta and my father were quite familiar with what had been done and what hadn’t been done in the United States,” says Preston Manning, founder of the Reform party and president of the Manning Centre for Building Democracy.
“Not just the sort of absence of orderly regulation but the corruption of the regulatory bodies … and they didn’t want to repeat those mistakes. They were also conscious that Alberta’s fields were not as prolific as those, say, in Texas and if you allowed everybody to drill a hole you would de-pressure our reservoirs far faster than some of those in the United States.”
But just as Alberta put rules in place to take the steam off development at Turner Valley, the oilfield was called on to produce like never before.
Canada was limping out from under the Depression when trouble again erupted overseas.
With Adolf Hitler as its leader, Germany drew the world into chaos. Canada entered the Second World War on Sept. 10, 1939.
While the Great War in 1914 effectively snuffed out Alberta’s first oil boom, the new conflict would push the industry’s limits.
As the war began, the economy in Alberta changed dramatically. Oil and gas exploration took off as the federal government created Wartime Oils, a crown corporation that provided companies with money to drill outside the proven zone.
If the company didn’t find anything, it didn’t pay back the cash.
“You go from conservation … to all-out production,” Finch explains.
Alberta oil was used to construct the Alaska Highway, part of the strategic initiative to connect the Lower 48 American states to Alaska. The natural gas condensates produced at Turner Valley were used to make aviation fuel for aircrews training in Alberta. An ammonia plant, which used Turner Valley gas, was built in south Calgary to support war munitions programs.
At its peak, the Turner Valley field produced nearly 30,000 barrels a day, about 95 per cent of Canada’s total oil output.
But it came at a cost.
“They produced it too fast,” Finch says. “It’s not good engineering principles.”
Annual production at Turner Valley peaked in 1942 at 10 million barrels but was down close to three million by 1945. Companies began looking for oil elsewhere. When Imperial Oil made its big discovery at Leduc in 1947, the Turner Valley oil boom was nearing its end.
Royalite, with roots all the way back to Dingman No. 1, drilled its last Turner Valley well in 1950. The gas plant, however, operated until 1985 and is now a designated historic site.
The area is no longer a hotbed for exploration but companies still work in the field in the hope Turner Valley will deliver for them.
“This isn’t a dead oilfield,” Finch explains. “This is a living story.”Turner Valley oilfield and flare
Today, the field produces more than it did a half-century ago — at its 50th anniversary — due to modern horizontal drilling practices, Finch says.
In Turner Valley and Black Diamond, reminders of the area’s oilpatch heritage are easy to find.
In the centre of Turner Valley, a replica wooden rig stands guard over the community, not far from a church with its own decorative iron derrick.
The historic gas plant will soon be a tourist attraction. They still sling pints of beer at the venerable Black Diamond Hotel.
But the legacy of Dingman No. 1 — and the decades of work that followed the discovery — stretches well beyond southern Alberta.
“There really was Before Oil and After Oil,” Finch explains. “Oil allowed us to do a lot of things in Alberta that we wouldn’t have been able to do if we hadn’t found it.”
It spawned companies that went on to find bigger fields in Alberta and made Calgary their headquarters.
It was a proving ground for equipment and workers who taught the next generation of workers at Leduc, Pembina and Golden Spike.
It also helped develop new and better methods of drilling for and producing oil. Petroleum engineers who cut their teeth in Turner Valley found success in Alberta and around the world.
It also established a determination and resolve in the industry that no challenge was insurmountable, whether it was in the Arctic, the oilsands or on a giant offshore rig.
“The whole industry had a philosophy and it came from Turner Valley,” says Daniel Claypool, historian at the Leduc #1 Energy Discovery Center.
“The tough jobs we’ll do right now. The impossible takes 10 minutes.”

David Finch discusses the early days of the oil industry in Alberta.


By Tony Seskus, Calgary Herald May 9, 2014 6:03 AM