Canada has the opportunity to become an energy superpower on the global stage, and it is the city of Calgary in the western province of Alberta that will lead the way. Located in the heart of the resource-rich Western Canada Sedimentary Basin—which includes the oil sands, the second-largest deposit of oil in the world—Calgary is the decision center of a young country’s vast energy industry. It is vibrant and hopeful, a place driven by the western spirit of determination and innovation.
Calgary sits in a rich valley at the intersection of two rivers—a spot where the Canadian prairie meets the foothills and just a bit further, the Rocky Mountains. It is a beautiful region, but historically a difficult one in which to exist. Settlers called it “next-year country,” reflecting the hope that coming times would always be better than those at hand.
Like most centers in Alberta, Calgary’s roots go back to the late 1800s and the fur trade between first nations and two fiercely competitive European firms called the North West Company and the Hudson Bay Company. In 1875, the Royal Canadian Mounted Police established Fort Calgary, naming it after a village on the Scottish Isle of Mull, a Gaelic word that means “garden of the meadow.”
It would not be long before energy development began to dominate the young city.
“Alberta’s energy industry began in the 1880s with coal mining in Lethbridge, south of Calgary, and natural gas production in Medicine Hat, east of Calgary,” according to literature from Calgary Economic Development (CED). “In 1910, the discovery of natural gas and oil in [nearby] Turner Valley triggered a drilling boom in the southern reaches of the province and prompted the overnight startup of hundreds of oil and gas companies in Calgary. The city’s location proved ideal...as the crossroads of Alberta’s exploration, production and finance.”
CED goes on to say that the 1947 discovery of oil in the area by Imperial Oil further transformed the city, and the country, into energy leaders. After drilling 133 dry holes, the company struck oil at Leduc, one of the richest deposits ever found in western Canada. In the decades since, Calgary has been Canada’s undisputed energy capital and today is a major player in the world’s energy economy.
Calgary is home to the largest presence of corporate headquarters in Canada, most engaged in energy development. Much of the city’s now-global presence is related to the oilsands industry. While the oil-sands area is neither at nor near Calgary, virtually all corporate decisions affecting its development happen within the city. With proven extractable reserves at more than 170 billion bbl, the oil sands are a force of growing importance to the world as conventional supplies deplete.
There are three oil-sands deposits in Alberta, located near the centers of Fort McMurray, Cold Lake, and Peace River. The resource in the Fort McMurray region is by far the largest, and the most developed, first made commercial by open-pit mining as a result of investment by the American Sun Oil Company in the 1960s. The Great Canadian Oil Sands plant (now Suncor) started operating in 1967, followed in 1978 by the giant Syncrude consortium (owned partially at the time by government). New mining ventures were quiet until 2003, when Royal Dutch Shell opened the Athabasca Oil Sands Project. In late 2008, Canadian Natural Resources officially joined the sand box with the opening of its own project, called Horizon. These ventures will soon be joined by Imperial Oil’s Kearl project, slated to go on line in 2012.
As the mines progressed, work also continued on unlocking oil-sands deposits too deep to be accessed by trucks and shovels. Imperial Oil commercialized cyclic steam stimulation in the 1980s, while thanks in part to investment by the Alberta government, steam-assisted gravity drainage was proven viable in the 1990s and commercialized by EnCana at Foster Creek in 2001. These technologies are being exported around the world in efforts to access unconventional oil.
Mining and thermal in-situ oil-sands development in Canada together produce slightly more than 1 million B/D today, which is expected to grow to as much as 4.5 million B/D by 2030.
Although Alberta’s oil-sands resources are staggering, vast also is its wealth in conventional oil, as well as both conventional and unconventional natural gas. According to the Alberta government, the province produces approximately 5 Tcf of natural gas per year, much of which—like the oil—is exported to the United States.
Natural-gas development has been significantly reduced as a result of the global recession and the introduction of new supplies unlocked by horizontal-well-fracturing technology in both Canada and the United States, which have resulted in depressed prices and a lower appetite for new drilling. It is a downturn felt hard by the province of Alberta and its communities—including Calgary, now home to more than 1 million people and among the five largest cities in Canada.
But Calgary has been through the ups and downs of the energy industry before. It is a city keenly aware of the sharp, sometimes glorious and sometimes painful volatility of the world of fossil fuels. Other industries, such as tourism, agriculture, and high technology, also contribute to the regional economy, but it is petroleum by far that defines the city. That and its spirit—seen at no time more clearly than during 10 days each July.
Calgary celebrates many festivals of music, theater, and culture, but nothing compares with the “Greatest Outdoor Show on Earth,” the Calgary Stampede. An annual event that attracts more than 1 million visitors, it is among other things the world’s largest outdoor rodeo. Established in 1912 by a performer and promoter named Guy Weadick, the Calgary Stampede virtually brings all official business in the city to a halt in favor of a giant western party.
This party is about much more than the rodeo. It is whatever one wants it to be. There is a giant parade and a slew of free pancake breakfasts, as well as a plethora of corporate events and a general sense of merriment across a city that dresses up as cowboys and cowgirls, who never tire of the phrase “Yee-Haw.” And that’s just outside the grounds. Inside the Stampede, visitors find a seemingly endless array of entertainment, including music, gambling, the carnival atmosphere of the midway, food, novelty, and art. The Stampede grounds are currently undergoing a major expansion.
Despite the economic downturn, a tower under construction in Calgary’s small but influential downtown, when finished in 2011, will be the tallest office tower in western Canada. It will be occupied by Canadian energy giant EnCana, soon to be split into two separate companies—one named Cenovus Energy, to be focused on oil, and the other, which will retain the EnCana name, focused on natural gas.
Calgary is home to giants of the Canadian oil patch, its emerging players, and the subsidiaries of global super majors. Its newest hulk is the merged company of Suncor Energy and former crown corporation Petro-Canada, a combined entity that will compete with the likes of Imperial Oil/ExxonMobil and Royal Dutch Shell.
No matter their size, the energy players in Calgary’s downtown share a view of what everyone in the city can enjoy in just over an hour’s drive—the Rocky Mountains, a winter playground that draws visitors the world over, including the athletes who competed in the 1988 Olympic Winter Games.
Calgary undoubtedly also has its warts, but it is truly defined by a sense of optimism that stems from the commitments of its pioneers, those who founded the city and also those who continue to flock to it in hopes of success.
“Though our history is short, our accomplishments are many. We are proud of what we are today, but with confidence that says we will always strive to be better,” said Calgary mayor Dave Bronconnier in his most recent State of the City address. “Ours is a city of imagination, drive and optimism.”
Calgary Facts
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