Administration Ofthe Bituminous Oil Sands Of Alberta

Abstract

The exposed bituminous oil sands at Athabasca appear to have first received the attention of white settlers in 1719 when Henry Kelsey, one of Hudson's Bay Company's early Governors, observed a sample of bituminous sand brought to him at Fort York(1)). One of his Cree employees had travelled to the Athabasca valley and brought back a sample of "gum or pitch" taken from the river bank. Although the bituminous sands sample did not impress Kelsey in 1719, the resource was recognized as having enormous potential by others who followed close behind him. Extensive efforts have been made since then, by provincial, federal and industry interests to improve the understanding of the resource, establish its economic potential and ensure that it is developed in the best interests of Alberta and Canada. Early Disposition of Rights The first disposition of rights to develop the oil sands was made in 1901 by the Privy Council of Canada(2). Seven tracts comprising 12,725 acres along the Athabasca River at and north of Fort McMurray were patented for surface, asphalt and petroleum and natural gas. Regulations for the "Disposal of Tarsands, the property of the Crown", in that portion of Alberta lying north of Township 80 between the 4th and 5th Meridians were approved by Order of the Governor in Council in 1910. Tar sands were interpreted in the regulations as: " ...the sands and other material impregnated with tar, bitumen, petroleum, oil and other like substances found in deposits in the northerly portion of the Province of Alberta". Soon after this in 1912 the regulations were suspended and each application was considered on its own merits. In total some 21 leases were issued by the federal government. However, only four were in existence at the time of the transfer of the administration of the resources to the province in 1930. It appearsonly the leases held by Mr. Draper resulted in the construction of a plant and other significant operations prior to the transfer. However, in the late 1920s International Bitumen Company had commenced work at Bitumount leading to the major pilot extraction operations there in the 1930 to 1950 period. The first regulations issued by Alberta for the disposal of bituminous sands deposits, the property of the Crown in the Province of Alberta, were issued by order in 1930. Between 1930 and 1951 provincial agreements for development of the sands were entered into with companies and individuals including: Max Waite Ball, International Bitumen Company Limited, Abasand Oils Limited, and Lloyd Rogers Champion. Of this group of dispositions only that of Max Waite Ball of Denver, who also formed Abasand Oil, was continued. His work led later to the Great Canadian Oil Sands (now Suncor) development. A major bituminous sands conference was arranged by the Alberta government in September 1951 to study factors affecting bituminous sands development. In conjunction with the conference, Honourable N.E. Tanner, then Minister of Mines and Minerals, gave a: policy statement regarding prospecting permits and leases.