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How Sun Oil and Imperial Oil built an oilsands energy powerhouse

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by Peter Kenter

The development of the Alberta oilsands is more than the story of a single individual, company or government agency. Interest in the province's unconventional oil deposits dates back a century. Since then, many have tried to unlock its energy riches. Some failed, but even their failure created the building blocks for future success.
How Sun Oil and Imperial Oil built an oilsands energy powerhouse

Two projects in particular, Imperial Oil's Cold Lake development and Sun Oil's Great Canadian Oil Sands (GCOS) project, were milestones.

Imperial Oil had been evaluating the Cold Lake region for oilsands potential since 1962, drilling 10 evaluation wells in the area.

With little fanfare in 1964 it established a four-well project at Ethel Lake, 20 kilometres northwest of Cold Lake to examine the effectiveness of cyclic steam stimulation (CSS), a process that employs alternating cycles of steam injection, soaking and pumping.

Encouraged by its success, the company slowly expanded its presence in the region, incrementally building what became the largest in situ oilsands plant constructed in Alberta during the 1980s.

Using CSS, Imperial was producing an average of 90,000 barrels of oil per day by 1991.

The Great Canadian Oil Sands (GCOS), on the other hand, began with deliberate fanfare.

Montreal businessman Lloyd Champion helped form the GCOS consortium, a Toronto-based investment group, in the 1950s.

"The promoters of the project chose to add 'Great" to the name to generate excitement for eastern investors," says Peter McKenzie-Brown, historian and author of Bitumen: The people, performance and passions behind Alberta's Oil Sands. "However, the group had neither the capital nor the expertise required to develop the oilsands."

The project was ultimately financed by Philadelphia-based Sun Oil, which already owned extensive leases in the area. Sun Oil president, J. Howard Pew was the driving force of the consortium. His interest in the oilsands dated back to 1944 and dovetailed with his commitment to North American energy security.

Alberta Premier Ernest Manning supported the project, even promising Pew that he would limit the production of the province's conventional oil to help create a market for the unconventional oil to be produced at GCOS.

In 1960, the consortium applied to the Oil and Gas Conservation Board for approval to construct GCOS, which was designed to produce 45,000 barrels of synthetic oil per day.

Sun Oil also agreed to purchase 10,125 barrels per day of the oil produced at the new facility for processing at its refinery in Toledo, Ohio.

The board offered approval to construct the world's first large-scale commercial oilsands plant, to be located north of Fort McMurray, in April 1964. The original construction cost estimate: $190 million.

Bechtel of Canada was the contractor for the project and Robert McClements, Jr. was the Sun Oil engineer overseeing the project.

"McClements recalled that Pew would visit the site and ask very specific questions about construction," says McKenzie-Brown.

"For example, he supplied information on the amount of food construction workers needed to eat each day while on the project—six to eight lbs. per person at a cost of $2 a day, was the answer."

The project combined challenging construction conditions in a remote area with the cutting-edge process engineering required to mine bitumen and extract oil from it.

Traveling to Germany, an engineering assessment team purchased two large, crawler-mounted bucket-wheel excavators, each 10 storeys tall. These would cut into the tar sand face and could mine more than 100,000 tons of sand per day.

Excavators would transfer oilsands ore onto conveyor belts entering the separation plant. Inside the plant, bitumen was separated from sand and process water.

The bitumen would then be further refined and pumped to Edmonton through a 266-mile pipeline.

The plant required 65,000 barrels of bitumen to produce 45,000 barrels of synthetic oil, the first of its kind produced in Fort McMurray.

The Petroleum History Society's oilsands oral history project interviewed operations specialist George Skulsky in 2012. He recalls visiting the plant for the first time in December 1966:

"I went to Fort McMurray, and the GCOS plant was in the final stages of construction. The camp at that facility at that time had 2,500 men. And it was a real experience to drive from Edmonton to Fort McMurray and then 18 miles north of Fort McMurray into this huge camp facility and to report there for employment.

"Little did I realize, after being there for a few days that the entire camp of Bechtel personnel and contractors, but mostly Bechtel tradespeople and engineers, had all come from a hydro project in Quebec. So very few people realized that the first GCOS plant built here in Fort McMurray was actually built mostly by French people from Quebec. This project when we went there in 1967, it was so massive in those days it would take your breath away."

He notes that some of the winter construction was completed under large fabric bubbles, supported by compressed air.

Skulsky recalls construction being completed in phases. The powerhouse was completed first. "So, we really accepted piece by piece of equipment, as it was turned over to us, on behalf of GCOS," he says.

"And slowly, slowly we started to operate the plant. The plant was the most modern plant ever designed for the oilsands."

The project was completed on Sept. 30, 1967, five days ahead of schedule at a total cost of $240 million.

At the time, it represented the largest, single private investment in the country to date.

"The name Great Canadian Oil Sands was dropped in 1979," says McKenzie Brown.

"However, the plant remains a landmark in oilsands development, pioneering technology for bitumen extraction and upgrading. The people who developed Alberta's oilsands turned Alberta into an economic powerhouse."

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