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November 20, 2018

Azim Lakhoo Breaks Down Canada’s Rich History of Oil Production

Canada’s oil industry makes a large contribution to the country’s economy. With rich natural sources of crude oil and natural gas, Canada is the sixth largest energy producer in the world, the eighth largest consumer, and the fifth largest net exporter of all sources of energy combined. The Canadian oil industry grew and developed alongside the United States oil industry. Azim Lakhoo, the owner of Canadian Coastal Resources, presents a brief history of the Canadian oil industry and examines its place in the world today.


The first Canadian to commercially exploit its oil reserves was Charles Nelson Tripp. In 1851, Tripp found oil in the form of gum beds in Enniskillen Township, near the present-day town of Sarnia, Ontario. The International Mining and Manufacturing Company produced asphalt, oils, and burning fluids. Tripp’s venture was not financially successful for a variety of reasons. Moving equipment and workers in and out of the area were very difficult due to the lack of roads and the swampy conditions.

Tripp later sold his company to James Miller Williams. In 1857, Williams hand-dug a 14 foot (4.26 meters) deep well, hoping for cleaner drinking water at his refinery site. The well filled with crude oil instead. This became the first commercial oil well in Canada.

From these small beginnings, the Canadian oil industry quickly took off. Beginning in Ontario, the industry gradually spread westward. Over the first few years of the oil industry in Ontario, 20 refineries were built in Oil Springs and another seven in Petrolia. The commercial oil industry was soon able to supply local needs as well as exporting oil to the United States.

Unfortunately, the early Canadian oil industry began to outproduce itself by 1867. The price dropped to 50 cents per barrel and the oil fields quickly shut down. The original oil fields at Petrolia and Oil Springs were left behind as the oil mining towns emptied. By 1880, Canada became a net importer of American oil, especially from Ohio.

Westward Expansion

Across the western provinces, oil and gas wells were dug by enterprising explorers. While the growth of natural gas outpaced that of oil, both types of petroleum were important parts of the Canadian economy. Westward expansion of the oil and gas industry produced huge economic returns for the country. Oil and gas reserves come from the Western Canadian Sedimentary Basin, a vast region that spans between northeastern British Columbia and southwestern Manitoba.

In 1914, oil and wet gas were discovered at Turner Valley in Alberta, causing oil fever. Speculation ran rampant around the hundreds of new “oil companies” that were founded, and many people lost their savings in unscrupulous deals. After some difficulties and false starts, the Royalite Oil Company Well no. 1 finally reached the principal oil reservoir at more than 8,200 feet underground.

This find underlined Calgary’s significance to the industry and paved the way for future oil discoveries in Western Canada. At the time, Turner Valley was the world’s largest oil field, but it would soon be outpaced by larger fields.

In 1947, Imperial Oil drilled in the Edmonton area. The company discovered a wealth of light oil, ushering in the modern Canadian oil industry. Oil wells in the area produced 320,000 barrels of oil between 1947 and 1974.

Other areas that were drilled and found to contain significant oil reserves were Drayton Valley, the Pembina oil field, and the Cardium Formation. These areas continue to produce oil today, adding to the economic impact of the fuel across Canada.

Current Trends

Oil is still being drilled in Canada, though the significance of the natural gas industry has outpaced oil for several decades. The energy industry forms 11% of the Canadian Gross Domestic Product (GDP). The sector employs over 276,000 people. Azim Lakhoo predicts that oil and gas will continue to be vital parts of the Canadian economy in the years to come.

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