19 Feb 2020

A Look Back at 1985

It’s the 1980’s. Big hair, Back to the Future, Sony Discman and Super Mario Brothers – these are just some of the phenomenon’s raging in 1985 that were inherent in the cultural fabric of the day. Dubbed the “Greed Decade,” the 1980’s saw an emergence of decadence and discovery, prosperity and power, and opened up the technology boom that is undeniably prominent today.

As Oil Sands Conference & Trade Show celebrates 35 years of showcasing the people, the projects and the technologies in the industry, we’ve decided to explore the past, and discover how government, regulatory and technology played a part in the way the oil sands sector and Albertans’ live and work today.

Oil Sands in the 1980’s

AOSTRA (Alberta Oil Sands Technology and Research Authority) was a government-funded agency, and one of the largest research and development programs ever launched in Canada. AOSTRA played a critical role in developing steam-assisted gravity drainage (SAGD) and in situ extraction technologies, which are the future of oil sands extraction.

Hon. Peter Lougheed was Premier of Alberta then, and when he took office in 1971, work on the deeply buried oil sands reservoirs, which represented about 90% of the resource, had stalled in Cold Lake, Peace River, Wabasca (now Athabasca). There were no available technological advancements to unlock the reserves.

With over $100 million in funding from Alberta Government, AOSTRA set about stimulating in situ demonstration projects, which evolved into Steam-Assisted Gravity Drainage (SAGD) – one of the many AOSTRA initiatives that have helped develop scientific, engineering and entrepreneurial expertise for the oil sands. Roger Butler, working for Imperial Oil in the 1970’s, is credited as being a pioneer and the ‘father’ of SAGD. “Roger’s invention of the SAGD concept stands with Karl Clark’s invention of the hot water process as the critical technical innovations that have allowed the [oilsands] of Alberta to emerge as a key energy source for the world, on the scale of Saudi Arabia,” writes Doug Lillico, manager of heavy oil and oilsands, for the Alberta Research Council. “Without SAGD, much of the explosive growth currently being experienced in Alberta’s energy sector would not be occurring.”

AOSTRA constructed the Underground Test Facility at the Dover Ridge Project operated by Northstar Energy Limited. The UTF was used to test horizontal wells and Steam Assisted Gravity Drainage technologies for recovery of the bitumen of oil sands. The rest, they say, is history.

Like the technology it researched, AOSTRA itself evolved over the years. Its activities became part of the mandate of the Alberta Department of Energy in 1994, although AOSTRA continued to operate as a semi-independent agency. In August 2000, AOSTRA was dissolved and its role was transferred to the newly-created Alberta Energy Research Institute (AERI). In 2010 AERI was renamed Alberta Innovates—Energy and Environment Solutions.

During the 1980’s, however, Alberta was held to the National Energy Program – developed by the then-Liberal government led by Pierre Trudeau. Although designed to promote Canada’s oil self-sufficiency, maintain oil supply, and shield it from rising oil prices, the program was to redistribute revenue from the [oil] industry and “lessen the cost of oil for Eastern Canada.” In 1981, Brian Scarfe, an Edmonton economist, wrote, “by keeping domestic oil prices below world market prices, the NEP was essentially mandating provincial generosity and subsidizing all Canadian consumers of fuel, thanks to Alberta and the other oil producing provinces (such as Newfoundland, which as a result of the NEP received funding for the Hibernia project).”

For the period 1980 through 1985, bankruptcies per 1,000 businesses in Canada peaked at 50% above the 1980 rate.

During that same time, the bankruptcy rate in Alberta’s economy rose by 150%.

It wasn’t until the mid-1990s, with oil prices at depressed levels, that the Liberal government of Jean Chrétien provided tax relief breaks to ‘rescue’ the industry, according to The Globe and Mail.  Seems like Alberta in 2020 could use some good news.

What does the current state of affairs in oil and gas in Alberta look like in the foreseeable future?  The politics, the people and the projects will be discussed at the 35th annual Oil Sands Conference & Trade Show on Sept. 16 & 17, 2020 in Fort McMurray – bringing together government leaders, industry and the supply chain.