LIQUID GOLD

Today the once struggling Canadian oil industry is achieving mightily in the Far Places of the earth

A. RAYMOND MULLENS May 15 1931

LIQUID GOLD

Today the once struggling Canadian oil industry is achieving mightily in the Far Places of the earth

A. RAYMOND MULLENS May 15 1931

LIQUID GOLD

A. RAYMOND MULLENS

Today the once struggling Canadian oil industry is achieving mightily in the Far Places of the earth

CONCLUSION

A BOUT 1900 a use was found for what up to that time had been more or less a waste product of the Ontario petroleum field, the bulk of it being used for cleaning out the oil wells. This was known as 74-76 gravity gasoline and it was marketed as a stove cleanser under the ear-pleasing name of Deodorized Stove Gasoline.

Three years later the internal-combustion engine made its appearance in Canada, a few hundred automobiles being registered at that time. The interesting point is that the fuel for these odd vehicles was practically the same spirit as had been used for the stove cleanser. It became known as “70 Gravity Stove Standard.”

The rapidity with which the automobile became popular is known to everyone. What would have happened to the oil industry if the oil refiners had not been on to their job can scarcely be imagined. Enormous quantities of gas oils, lubricating oils and other petroleum products were at once demanded. The refiners soon solved the problem of how to supply this demand by “cracking,” that is, by subjecting heavier oil fractions not greatly in demand to high pressures and temperatures, which resulted in the rearrangement of the hydrocarbon make-up and the production of what is now known as “cracked gasoline.”

Just why gasoline became the chosen fuel for the automobile Is a question that seems to be shrouded in mystery. Probably the inventor of the internal-combustion engine was tearing his hair in a vain attempt to discover a satisfactory fuel for his contraption, while the petroleum refiners were performing the same tonsorial operation in an endeavor to find a wider market for their pesky gasoline. Anyhow, the two got together and the petroleum industry went ahead by leaps and bounds. As did its problems. From a primitive “one lunger” the automobile became a vehicle of from two to sixteen cylinders, and with each development a new refinement in gasoline was demanded.

Oil Drilling in Peru

THEN, some time in 1916, an extraordinary thing happened. The now automobile-educated world was solemnly warned that there was every possibility of the world's

supply of petroleum quickly being exhausted. There was a hint that an embargo on the exportation of crude oil from the United States would be put on. We now know that such a fear was groundless. Discoveries in Oklahoma and Texas have resulted in an overproduction.

Just why the geologists were not privy to the existence of a huge supply of petroleum is not clear. Any geologist to whom I have spoken has shrugged his shoulders and told me that the industry didn’t look to geologists for a source of crude oil supply, but left that job to the drillers and “smellers”—men who walked around a property with a divining rod and professed to detect the presence of oil by certain twitchings in a hazel rod which they held. These men were, of course, the logical successors of the old “water finders,” who used precisely the same methods in locating the site down which a water well should be drilled.

In extenuation of what appears to be one of the few cases where science has been found napping, it may be stated that such modern methods of oil prospecting as aviation and electrical detection had never been tried.

This rumor of an impending oil famine, baseless as it was, prompted the Imperial Oil Company to a momentous decision. Canada should no longer be dependent on the United States for its supply of crude oil. Other sources of supply must be found, and that quickly.

What this decision involved may be realized if it is explained that it involved the development of oil fields in Peru, the drilling of a test well at Fort Norman amid

the Arctic wastes, an investigation of the oil possibilities of the Turner Valley in Alberta, and the conquering of the Colombian jungle.

Let us briefly review, in chronological sequence, these efforts to meet Canada’s demand for petroleum products. First, Peru.

That oil was to be found in Peru was no secret. I

have mentioned in my preceding article that Pizarro was engaged in the petroleum business as far back as 1552. In modern times, oil had been produced in Peru since 1869. Imperial Oil’s subsidiary, International Petroleum, bought out the interests of two British companies and embarked on a policy of whirlwind development. Producing headquarters were established at Talara and a refining plant at Negritos six miles away.

Although the field had been worked steadily from 1889 to 1913, the International Petroleum men went into a barren desert on the west coast of South America. And Canadians, somehow or other, don’t fancy life in a desert. Accordingly, the company went about the business of making Talara and Negritos towns which for comfortable living equalled the average up-and-coming Canadian town. Talara soon became a place of over 10,000 inhabitants, and Negritos not much smaller. The job of administering two such municipalities was no light one. Railways had to be built, as did highways, pipe lines, docks, tankage, houses for employees, hospitals, churches, water systems, clubs, golf courses—in fact, all the paraphernalia of modern Canadian life.

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One of the executives of International Petroleum had been in the employ of the British company. He told me that on one occasion, finding himself tortured by an ulcerated tooth, he had the molar removed by a blacksmith. A few years later International Petroleum established a complete medical service, including a dental parlor.

As a matter of fact, both in Peru and Colombia, the real pioneer has been the doctor. With International Petroleum, health is the first step in development.

Some idea of the development work done by the company may be gathered from the statement that, whereas in 1913 the oil production was 1,405,786 barrels, the production for 1929 reached nearly 11,000,000 barrels.

While the field in the Peruvian desert was being Canadianized the quest for petroleum was being carried on in Canada, both in the Turner Valley and at Fort Norman. As I want to say something about the Turner Valley boom a little farther on, let me say a little—a very little, alas—about the Fort Norman expedition first.

The Turner Valley Boom

TN 1919, a party of drillers went down -*■ the Mackenzie River and proceeded to prove that they could cheerfully withstand the rigors of Arctic exploration by wintering at Fort Norman. They went by rail to Peace River Landing and by boat to Fort Smith, from which place they began a sixteen-mile portage. Late in August the portage was completed, and the drilling equipment was loaded on boats for the last weary leg of the journey.

At Fort Norman a test well was sunk. The oil was there all right, but it was much too far away from a possible market. One of these days, no doubt, there will be sufficient demand for crude oil to make the Arctic a field humming with all the business of oil production. By that time it is safe to assume that transportation facilities will be available.

So much has been written about the Turner Valley that only the sketchiest outline of its importance in the world of petroleum would seem to be necessary. Just to clear away a few impressions that many people seem to have received, let it be said that Turner Valley has proved

to be a naphtha field rather than a crude oil field. A seepage of oil on the banks of Sheep Creek first suggested the existence of petroleum deposits. The first well was drilled by the Calgary Petroleum Products Company, organized in 1912. Gas was found at several depths between 884 feet and 3,960 feet; oil at 1,557; 2,718 and 3,839 feet.

This strike started the Turner Valley boom, and no modest, retiring boom it was. A wild scramble after stock followed, and Calgary soon saw the formation of not less than 500 companies. Every square inch of Calgary’s available business district was hired by the selling end of new companies. The whole downtown district was swathed in great streamers bearing the names and the prices of new issues of stock. For five or six days after the announcement of the Turner Valley strike legitimate business activities in Calgary were paralyzed. The city had given itself over to delirium. All day long, men and women jostled and shoved at one another in a frantic effort to get to the counter of some oil-broker’s office where shares might be purchased. Price fluctuations! These shares sold all the way from ten cents to a dollar and a quarter each; real values, of course, having nothing whatever to do with the price of the shares.

Even the ticket offices of the railway companies were brokers’ headquarters. A railway inspector from Winnipeg arrived in Calgary when the stock-buying epidemic was most furiously raging. He found the station so jammed that he couldn’t get in by hook or by crook. Finally he discovered a side door opening on a lane. What he saw once he got inside staggered him. Such a prosaic matter as the mere selling of transportation was sidetracked entirely. Wastepaper baskets stood about the floor of the ticket office literally jammed with cheques and paper money. The entire staff was engaged in the stock selling business.

The august inspector himself caught the fever. He confesses that he witnessed some extraordinary sights. For instance, one old lady succeeded in getting near the ticket window and frenziedly demanded “some oil stock.” She had a hundred dollars, and the inspector didn’t feel like taking this small hoard, seeing that he hadn’t the faintest notion of the value of the stock he was selling. The old lady reassured him. “Oh, that doesn’t matter,” she said. “Anything will do so long as I get some stock.” In due time— 1916 to be exact—the boom collapsed, only four additional producing wells having been brought in.

With the formation of the Royalite Company—an Imperial Oil subsidiary, however—the Valley became a real producer. On October 14, 1924, the drill at the well Royalite number four went into the limestone at a depth of 3,470 feet. After penetrating the lime for nearly 300 feet more, a pressure of natural gas was uncorked that lifted the casing in the hole and drove it up to the crown block in the derrick. Some pressure! For four years afterward Royalite four continued to be the biggest producer in the field and then it went the way of all “gushers.” Today it only simpers to the tune of a few barrels a day.

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Before this story leaves Canada for the exotic sphere of Colombia it may be of interest to note that drilling has been carried on in the West from British Columbia to as far east as Rush Lake in Saskatchewan; from the Red Coulee field, right on the Montana border, north to McMurray on the Athabaska Riyer and to Pouce Coulee in Peace River. Recently drilling has been undertaken near Truro, Nova Scotia, so far without success.

Another Tropical Field

"DUT, oh, Colombia, happy land! In search of crude oil, drillers, doctors, geologists, chemists and all those who go to make up the entourage of an oil development, enterprise had fought a stirring bout with a desert in Peru and cheerfully braved the hardships of wintering in the Arctic. But when the Imperial Oil men got to Barranca Bermega in Colombia, anything they had before experienced appeared trivial.

In the first place, to get oil development equipment to this picturesquely named spot was considerably more difficult than driving to a picnic. Men and equipment landed at Cartagena, took the railroad 110 kilometres to Calamar on the Magdalena River, then loaded themselves on a stern paddle-wheel steamboat and crept cautiously up to their point of objective. The Magdalena is not a river which a navigator would welcome with open arms. In fact, it is dotted every few hundred yards with dangerous shallows, and has more than its due complement of rapids and whirlpools.

Miraculously arrived at their destination, the Imperial Oil men found themselves confronted by a steaming jungle. Any road which led to a promising well location had to be conquered by machete and fire, and the location to be prospected extended some seventy miles along the river and had an average width of thirty miles. A nice job!

Nor was the Magdalena Valley particularly healthy. In accordance with its policy of “doctors first,” the Imperial Oil Company had sent on ahead a wellequipped and intrepid medical staff. This staff of stethoscopians had caused oil to be poured on the stagnant waters and had done much to stamp out the plagues of disease with which the tropics of South America are so often ravaged.

Canadian labor being extremely scarce, the natives had to be trained in every branch of the work connected with drilling for and refining oil. And very good pupils they turned out to be.

Desertions were of almost daily occurrence. The reason for these deflections from the path of stern, if well-paid, duty were twofold. First, the Magdalena Valley is uncomfortably close to the equator, with the result that, after a few minutes burst of flaming sunset, impenetrable darkness sets in by six o’clock. In the earlier days of the Colombian experiment recreation was necessarily scant, and, human nature being what it is, many of the workers smuggled themselves aboard an old paddle-wheel steamer and silently departed to places where a man could have a little fun after his day’s work was done. And small blame to him.

Now, of course, things are different. El Centro, the headquarters, boasts a sporty nine-hole golf course, and incipient Babe Ruths bat out home runs to their own delight and that of hundreds of fans.

A brief glance at the history of this oil field is far from lacking in interest. It was discovered by a Frenchman, Roberto de Mares, who was in search of rubber. He found oil, and in 1905 the Colombian Government gave him the enormous concession which is now being w’orked by the

Imperial Oil Company, or, since accuracy is so necessary in a record of this kind, the Tropical Oil Company, a subsidiary.

When De Mares looked about for capital to work his tremendous terrain he found the visibility poor. Finally he came in contact with J. C. Trees and M. L. Benedum. These gentlemen, together with George W. Crawford, J. S. Weller and John W. Leonard, organized the Tropical Oil Company in 1916. The new company soon realized that it had a job of work on its hands. It had purchased three drilling rigs—sad relics of one of those “lost causes, impossible beliefs” with which history abounds—and after dismantling them transported them piece by piece in cayucas or dug-out canoes to the spot where De Mares had discovered an oil seepage.

Fortunately the first three wells were productive. The Tropical Oil Company interested the International Petroleum Company in the venture, and so Imperial Oil promptly assumed control of the operations. This was in 1920. Just what this control amounted to can be best expressed by the following figures:

Year Barrels 1921 . 66,750 1922 . 322,786 1923 . 424,875 1924 . 444,744 1925 . 1,006,708 1926 .. 6,443,587 1927 . 15,014,474 1928 . 19,896,797 1929 . 20,384,547

Meanwhile the field had been extended and the territories of Infantas and La Ciralong produced nearly ten million barrels of oil during the first half of 1929. As shale and sand are the predominant features of the two last named fields, no deep drilling has been necessary.

It really does seem that, so far as petroleum is concerned, Canada will not face a famine in the near future.

Marvellous Expansion

A FEW facts will serve to show the growth of the petroleum industry in Canada. In 1862, the first oil refinery received about 100 barrels of crude oil per week, from which there was distilled from twenty to twenty-five per cent of lamp oil. The rest was just plain waste. Today the Imperial Oil refineries receive about 75,500 barrels of crude oil each day, delivered by railway tank cars and by tank ships. Ninety-eight per cent of this crude oil is refined into gasoline, oils, waxes and greases.

Let us see what this expansion has meant to the automobile. Gasoline is the spirit which drives the motor, asphalt provides the road surface on which it rides, and greases derived from petroleum are the lubricants which enable it to run smoothly.

From petroleum are distilled products varying in character from volatile naphtha, which is so delicate as to be almost an explosive, to grease heavy enough to be used on the slip from which a huge liner is launched. Last of all, when all other products have been removed, there remains petroleum coke, a fuel which is coming more and more into use.

In 1899, the Imperial Oil fleet consisted of three barges which were towed up and down the lakes and through the canals by chartered tugs. Now this fleet is the largest privately-owned under Canadian registry, and comprises fifteen large oceangoing ships, nine of them motor-driven and six steam-propelled. This fleet carries 23,000,000 barrels of oil each year. The C. O. Stillman, incidentally the largest tankship in the world, alone carries 164,135 barrels.

And all this because one J. H. Williams, a Canadian, decided to perform some culinary operations with the gum beds of Enniskillen Township, Lambton County, Ontario; because a poor photographer deserted his daguerrotypes for oil; because the perseverance of Petrolia oil men revealed to an avid world the possibilities of a liquid, the existence of which had been known to the sons of men from the beginnings of recorded time.

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President C. O. Stillman

VWTIAT manner of men guide the YV destinies of this great industry? The Imperial Company being by far the largest corporation engaged in the petroleum industry, a glimpse at one or two of its executives may supply the answer.

They are oil men—a breed as distinctive and as easily recognizable as, say, sailors. In fact there is something of a family likeness between the traditional mariner and the man who is concerned in the manufacture and distribution of the earth’s most potent liquid.

Witness C. 0. Stillman, president of The Imperial Oil Company. Let me record a few outstanding impressions. A deep bass voice, as effortlessly sonorous and resonant as that of Forbes Robertson; a face “stained with the ruddy tan God’s air doth give a man;” an air of genial command; that kindly hint of quiet amusement at the foolish questions of the uninformed which is so striking a characteristic of sea captains. In short, a man who, if he had not decided to become a big figure in the oil industry, might have been the skipper of one of the vessels which his company operates.

As a matter of fact, C. 0. Stillman has always been fond of the water. In his early days he was a champion sculler. Today he is Vice-Commodore of the Royal Canadian Yacht Club and owner of the yacht Thatassa.

But to begin somewhere near the beginning. Young Stillman had whiled away some of his vacations from school by acting as office boy in an oil-refining plant of which his father was superintendent. Iiis studies finished, he informed his parents that he thought the oil game was his meat.

“All right,” his father told him, “but don’t forget this. If you are going to amount to anything as an oil man you’re in for a lot of work.”

“He was right,” Mr. Stillman chuckled as he told me the story. “I was started on my career firing a still. And if that isn’t hard work I don’t want to run into any. Well, I threw fuel into a furnace for about one and a half years. Then I was given charge of the still. A little later I tried my hand at the many processes which go to make up the treating and purifying of oil by chemicals.

“When I was twenty-five I was sent to Buffalo as assistant superintendent of a refinery there. In 1896 I came to Petrolia and I’ve stayed in Canada ever since.”

The next year Stillman moved on a few miles farther, to Sarnia, and superintended the erection of a refinery there. That he made a good job of it I have indicated already. He did something else; he showed that he possessed the rare and valuable faculty of appraising men at their true worth. Two examples. The undertaking at Sarnia demanded a particularly able lawyer, and Stillman chose a struggling Sarnia barrister to do his corporation’s work. His name was W. J. Hanna. He rose to be president of Imperial Oil for the years 1918-1919, and left a definite impress on the Canadian public before he died in 1919.

Other Executives

' j VHE same day that Mr. Hanna was A hired a young machinist applied to Mr. Stillman for work. His qualification for a job was, he stated, his interest in self-propelled vehicles. The superintendent was impressed by the young man. Young Montgomery turned out to be a good mechanic, and not long after he was engaged his boss said to him: “I believe you’ve got a chance to go right ahead if

you want to. Why don’t you take a correspondence course in mechanical drawing and engineering?”

Tom Montgomery took the advice and he is today the head of Imperial’s engineering department. He has passed on a little good advice himself, for many members of his department hold important positions with the Company—Clayton Dean, technical adviser to the Board of Directors; Charles Leaver, superintendent of the Sarnia refinery; F. C. Mechin, superintendent of the Montreal refinery; and R. L. Dunsmore, formerly superintendent of the International Petroleum Company’s refinery at Talara, Peru, and now superintendent of the refinery at Dartmouth, N.S.

The assistant general manager of Imperial Oil refineries, L. C. McClosky, is another man whose career would provide first-ráte material for a new Horatio Alger series. Mr. McClosky started by nailing lids on the tops of candle cases, candles being an important product of an oil refinery at that time. Four months of this inspiring work and the executiveto-be became an office boy. But being an embryo oil man, and a good one too, he soon was back at manual labor, this time in the cooperage shops. Then he was shuttled back again to the office, later becoming a timekeeper. This change took place just when the Sarnia refinery was in process of conversion into a big and, for those days, ultra-modern plant, so it is not surprising that so versatile a young man forged right ahead. He has a big job now.

I have said these few words about three of Imperial Oil’s executives because they are typical of the men who have done their bit in making Canada’s petroleum industry the gigantic affair it is. Turn into almost any private office at the company’s headquarters in Toronto, and you can hear stories of men who have roughed it, have worked like steers, and have not yet reached the stage where their job is an excuse for unlimited recreation. These men are workers. And fine men they are, too.

Altogether, Canada has had a man’ssize finger in the pie of the petroleum industry. The step from the few pints of liquid which Williams extracted from the gum beds of Enniskillen Township to the scope of the Imperial Oil Company has been an enormous one.

Today the activities of the company touch the Dominion at every point. It has nearly 2,000 distributing stations and over 600 gasoline service stations. Its products are distributed from bulk storage plants dotted all over the Dominion from Charlottetown, P.E.I., to British Columbia. It gives employment to over 19,000 people. In Canada its payroll contains the names of over 10,000, while in Colombia and Peru it enlists the services of 8,616 men and women, native and foreign.

It has a fleet of ocean-going and lake vessels that would make the navy of many a small nation look insignificant by comparison.

The 381 products it manufactures are processed in six refineries, one of them at Sarnia, Ontario, extending for two miles along the St. Clair River and being fed by a pipe line 1,096 miles long. Today the company’s issued shares are valued at something around $275,000,000.

Editor’s note: This is the second and concluding article by Mr. Mullens on Canada’s oil industry.

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