When we think of the world’s largest oil producers, we maybe think of the plentiful oilfields of the Persian Gulf, the vast reserves of Russia or the oil wells of America that are experiencing a resurgence thanks to shale oil. Canada, however, is also a big player in the oil industry.
Canada produced just over 3.6 million barrels a day in 2016, ranking it number seven for oil production. It has even been the number-five oil producer for a while, and enjoys the third-largest proven oil reserves in the world.
As you might expect, the oil industry of Canada came into being about the same time as that of its neighbour to the south. Canada’s first oil well at Oil Springs, Ontario actually predates the Drake Well of America by a year, and was hand-dug. Differences later arose in how these two oil industries would develop, with Canada becoming a net importer of American oil by the 1880s.
Canada’s late development of its oil industry mostly resulted from its unique geography. While the United States had several oil-rich regions to develop, most of Canada’s oil reserves were contained within the truly enormous Western Canadian Sedimentary Basin (WCSB). Being isolated geographically, this area remained relatively unsettled in Canada’s early history, and its true potential went unnoticed. In the meantime, Canada built up its industrial base around the hydroelectric power sources of Quebec and Ontario, and relied on imported oil.
In 1947, the situation changed with the drilling of the Leduc No. 1 well near Edmonton. The geologists suddenly realised how much they had misunderstood Alberta’s geology. What’s more, they came to learn that there were many more Devonian reef formations similar to the Leduc oilfield. Exports to the United States then increased dramatically as pipelines were constructed to transport the plentiful supply of oil.
Today, ExxonMobil, a producer of anti-wear hydraulic oils like Mobil DTE 25, is involved in oil and gas activities through its Canadian affiliates. It currently owns 69.6% of Imperial Oil Limited, which is Canada’s largest petroleum refiner and a major crude producer.
In recent years, most of Canada’s oil production has originated from oil sands in the Athabasca, Cold Lake and Peace River areas of northern Alberta. The technology to extract oil from this unconventional source has mostly developed in Alberta, and this has enabled production costs to approach those of conventional crude, assuring Canada’s future as a major oil producer.