Alberta's Oil Sands in the 1980's
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.
It was a heady time for technological advancements, and investment in projects continued to flow. As well, Alberta government initiated detailed studies and scientific investigations to better determine oil sands policy.
It was in 1985 that Oil Sands Conference & Trade Show launched, with exhibits in the parking lot of MacDonald Island’s C.A. Knight Centre (now known as Suncor Community Leisure Centre), and in the curling rink. Although the event started small, service companies were able to connect with customers and potential opportunities that were being made available through the various projects.
The Oil Sands Discovery Centre also opened its doors in Fort McMurray in 1985, providing a comprehensive and detailed hands-on interpretive visual history of the resource.
1986 – Deregulation, then Collapse
In 1985, Canada’s federal government deregulated oil prices, allowing oil producers to sell at market value. The price of oil and natural gas was to move in concert with the world prices and more exports were allowed. But by 1986 oil prices had collapsed. Energy investments were cancelled across the country and the western economy was clobbered.
According to the BOE Report, by the time the Brian Mulroney-led Progressive Conservatives cancelled the National Energy Program in 1986, the federal government collected more than $100-billion in today’s dollars from Alberta. Many billions more in potential investment fled the province that up until that point, reveled in an economic boom. The damage caused was immense: construction and energy projects were nixed overnight.
Technology and Affect on Daily Life
It wasn’t just the oil sands sector that benefited from rapid technological advances – the way we we lived and played started to advance speedily also. Take a trip back in time with some of the ‘new’ technologies available in 1985.
Technology in 1985
BACK TO THE FUTURE
This timeless classic was the biggest-grossing movie of 1985, and was responsible for 'futuristic' inventions such as Facetime, Mobile Pay, Video Glasses and Hoverboards.
Imagine carrying this cell phone around today! This 12 pounds of Nokia Mobira Talkman was also known as the 'brick' and available for $3,000 CDN.
HIV Blood Testing
The FDA approves the first blood test for AIDS, used since then to screen all blood donations. A scientific milestone in the fight against AIDS, at the time people thought you could 'catch' HIV by touching someone's hand.