Marlynn Jolliffe, Charles O. Fairbank, Jr. and Brian Arnott
By the middle of the nineteenth century, an accelerating wave of industrialization in Western Europe and North America was creating an unprecedented demand for machine lubricants and lighting fuels. The commodity which met these two great needs was petroleum The basic structure for all future developments in the world's oil industry can be traced to pre-Confederation Canada.
Prior to 1858, a number of men had taken an interest in the gum beds of Enniskillen Township, about thirty kilometres southeast of the present city of Sarnia, but it was James Miller Williams (1818-1890) who set out to refine the tarry substance found there and to sell the manufactured product as illuminating oil. By August of 1858, this former carriage manufacturer from Hamilton had developed the world's first commercial oil well, successfully refined the raw material, marketed the product and thereby founded one of the modern world's greatest resource industries.
Explorers and Surveyors
When Europeans opened North America to settlement and commerce, they noted the presence of oil in a number of areas. South of Lake Erie, a French missionary had recorded the use of oil by the Amerindians as early as 1726. In the 1790s explorer Alexander MacKenzie reported that the Cree of northern Alberta were using bitumen from the Athabasca tar sands to caulk their canoes. On a trip along the northern shore of Lake Erie in 1793, Colonel John Graves Simcoe noted an oil slick on the Thames River and his wife commented on its unpleasant smell.
As part of a soil survey of Canada West in the 1840s the provincial geologist, Sir William Logan, directed his staff chemist, Thomas Sterry Hunt, to collect soil samples from various areas for analysis. Hunt described the material he found in the Enniskillen swamp as having a consistency "somewhat like the variety known under the name of mineral rubber. The use of this material in England and the continent to build roads, to pave (seal) the bottom of ships, to manufacture gas for lighting, for which it is eminently suited, is sufficient to attach considerable importance to the deposits there are in this country..." Hunt's report prompted Logan to send his assistant, Alexander Murray, for a closer look. He reported: "The upper portion of the clay was observed to be more or less penetrated with Petroleum and small black globules of the same were scattered through the mass for a depth of four or five feet... Bituminous oil was observed to rise to the surface of the water on Black Creek..."
Most contemporary observers regarded the scientists' findings with little interest. The "oil springs "which Hunt and Murray found in southeastern Ontario were part of a landscape totally unsuitable for human habitation. Enniskillen Township covered 34,800 hectares and the entire area was a thick forest of oak, walnut, elm, and black ash. Through it ran two streams, Bear Creek and Black Creek. Beneath the soil lay an impervious layer of blue clay which drained poorly and caused the area to be known as the "Black Swamp".In spring and summer, the swamp was a mammoth breeding ground for mosquitoes which spread "swamp fever" among the handful of settlers who lived there. The worst parts of this swamp were two gum beds, several hectares in size, where a tarry substance covered the ground in depths varying from a few centimetres to more than a metre. One road through this area was described as "a twelve mile mud hole in which horses threatened to disappear." Men who ventured into this land had to have very special reasons for doing so. One such individual was Charles Tripp.
Production of Asphalt
Tripp may have learned about the Enniskillen swamp from Alexander Murray since both lived in nearby Woodstock. About 1850, Tripp conceived the idea of producing asphalt from the Enniskillen gum beds and two years later, together with his brother Henry and other investors, Tripp applied for a charter from the Legislative Council of Upper Canada to form the world's first petroleum company. In 1854, a charter was finally granted to the International Mining and Manufacturing Company for "the exploration of asphalt beds, oil and salt springs and to manufacture these for the various uses to which they can be converted and made available." The company did produce some lamp oil from the bituminous matter which was dug out of the ground but its principal interest was the asphalt which merited an honourable mention at the Paris Universal Exhibition in 1855.
Despite initial success, the International Mining and Manufacturing Company was a failure. Transportation problems proved insolvable as the terrain was virtually impassable and there were no rail lines to potential markets in the more populous Toronto-Hamilton region. The firm may also have lacked sufficient capital to permit the purchase of distillation equipment. The distillation of the tarry bitumen into usable oil would have diversified production and extended the market possibilities.
Production of Oil
Tripp's pioneering efforts were continued by James Miller Williams, an investor in the original company. Williams' takeover from Tripp heralded a better organized and more integrated approach to turning the raw, tarry material into marketable products. Williams' business sense was acute, but time and increasing opportunities were also on his side. The railroad reached southwestern Ontario in 1855 when the need for a new source of lamp oil was becoming particularly obvious as the supply of whale oil diminished. Williams saw the potential of petroleum and brought to his newly acquired enterprise a mixture of practicality and expertise. Whereas Tripp had merely boiled the bitumen to produce asphalt, Williams distilled it to obtain lamp oil. Tripp had recovered surface bitumen with shovel and axe, but Williams dug into the ground where the material existed in larger quantities and in a more readily refined, liquid state. A contemporary account describes Williams' first well; "Williams and Company's well is 49 feet (14.7 metres) deep, 7 by 9 feet (2 by 2.27 metres) square, cribbed with small logs and does not extend to the rock; the oil rises within 10 feet (3 metres) of the well which contains 13,724 gallons (51,930 litres) or 343 barrels of oil, and has been in operation for two years. The largest amount taken from the well up to the present time was 1,500 gallons (5,675 litres) or 37 barrels (with hand pump) in 10 hours which reduced the depth of the well three feet."
By 1859, Williams had also drilled through bedrock to open a producing well, and in September of that year his refined illuminating oil was well established on the market. The firm opened a second refinery at Hamilton in 1860. In just five years Williams had created the oil industry's first complete manufacturing operation drilling, pumping, refining and marketing and he had an absolute monopoly. Williams' achievement was, however, realized only with the assistance of earlier technological developments. For his refining techniques, he drew upon the coal oil industry and his drilling method was borrowed from the water drilling business. Williams was especially indebted to a Nova Scotia medical doctor named Abraham Gesner (1797-1864) who had developed a process for refining coal into illuminating oil and lubricants. In 1848 Gesner demonstrated that by heating bituminous material from Albert County, New Brunswick to a high temperature in a closed retort, he could produce a satisfactory burning oil. He was thus the first person to distil a hydrocarbon into lamp oil or, as he termed it, kerosene.
The extent to which Gesner was directly involved in Williams' success is not certain. Gesner was aware of Enniskillen oil for he refers to its peculiar qualities in his Practical Treatise on Coal and Petroleum and Other Distilled Oils of 1860. Considering his business acumen, Williams might well have consulted an expert such as Gesner and it appears that the latter may have had a hand in setting up the world's first refinery on the banks of Black Creek in 1857. Although the coal oil industry which Gesner helped to found was soon superseded by petroleum, his technological innovation permitted Williams to avoid the course towards asphalt and bankruptcy of his predecessor, Tripp.
Williams was equally fortunate in being able to borrow drilling methods from the salt water drillers. Prior to canning and effective domestic refrigeration, salt was the major food preservative and, as demand rose, salt was supplied increasingly from brine wells. One well in the southern United States in the 1820s failed to yield brine, but it did produce in excess of 1,000 barrels of oil per day. Another brine well failed when a pocket of natural gas blew the drilling tools out of the hole. In Canada, by 1855 a mineral water well at St. Catharines had successfully been sunk below 150 metres. Drilling technology was thus well developed and already related to petroleum by the time Williams arrived on the scene at Enniskillen. Over the next twenty years, drilling technology was developed to meet the special demands of the search for crude oil.
While Tripp and Williams were at work in Enniskillen, a similar sequence of events was taking place in Pennsylvania where "Colonel" Edwin L. Drake opened the first oil well in the United States in August, 1859. Unlike Williams' well, Drake's discovery started a boom reminiscent of the California gold rush. This boom saw countless wells drilled and seventy-four producing wells developed in the space of fifteen months. Within a year, the United States' oil industry was outproducing its Canadian counterpart and its lead steadily increased.
Expansion of Drilling at Oil Springs
In 1862, James Miller Williams was awarded two medals at the International Exhibition in London, England, one for being the first to produce crude oil and the other for being the first to refine it. The recognition accorded Williams was, however, dramatically overshadowed by the events which were taking place at home in Enniskillen, now a growing settlement called Oil Springs with a population of more than 1,600.
Among other things, the number of wells was increasing dramatically. The conventional method of sinking a well at this time was to dig and crib to a depth of about fifteen metres, a point at which some wells began to produce oil. If oil was not found at this level, drilling through the rock was the only alternative to abandoning the well. A drilling method used at this time was the spring pole, a flexible beam bent over a fulcrum and moved up and down by the weight of the drillers.
Of all the events which transformed the Enniskillen swamp into a working oil field, none was quite so striking as the well which Hugh Nixon Shaw (1811-1864) drilled in 1862. Shaw had begun his well in the summer of 1861 with fifty dollars capital and the lease on a one acre (0.5 hectare) site. Working alone, he dug through fifteen metres of clay and then drilled through another seventy-one metres of rock. Discouraged and overextended on his credit, the undaunted, fifty-year-old Shaw persisted into the new year. Finally, on January 16, 1862, Shaw's well erupted in a spectacular fountain of crude oil. The age of the great flowing wells had arrived in Enniskillen as Shaw's uncontrolled gusher spilled 2,000 barrels per day. By drilling into the rock and going deeper than anyone else he had struck a porous, gravelly formation saturated with oil and gas under pressure. The pressure was so strong as to project the stream of oil up to the tree tops.
Previously wells at Oil Springs had tapped only the oil which was oozing slowly to the surface. Shaw's presented the unforeseen problem of a flow of oil which could not be stopped. Using a technique devised by the water drillers, Shaw attempted to control the flow of oil from his well with a seed bag packer , a leather sleeve about a half metre long filled with flax seed and tied tightly around a pipe at the top and bottom. When the packer was inserted into the well, the liquid oil caused the flax to expand and seal off the passage, forcing the oil to flow through the pipe. Shaw controlled the well by wrapping his bag of flax around a large pipe which he then forced down the 76 millimetre bore of the well. Another bag was made and wrapped around a smaller pipe which was, in turn, stuffed down the large pipe. By this time, Shaw's well was still flowing at the rate of 500 barrels per day or approximately one barrel (132.5 litres) every three minutes. The gusher was now under control but great quantities of oil had been lost. A reporter for the London Free Press wrote three weeks later: "In all about 100,000 barrels of oil were lost before the well was brought under subjection. I measured the depth of oil in the creek and found it to average from three to four inches." Shaw's gusher was a harbinger of things to come more flowing wells and more waste. More than thirty flowing wells were discovered within the next year in Oil Springs, all in an area about 1.5 kilometres square straddling Black Creek. In the same period the number of wells of all types rose from about 300 to more than 1,000. At the height of this boom, teamsters hauled 500 loads of oil per day nineteen kilometres through the Enniskillen swamp to the rail line at Wyoming. The village's population skyrocketed to 3,000 and business boomed. Hotel rooms rented by the hour to exhausted oilmen. The main street of Oil Springs was paved for 2.5 kilometres with white oak planks and brilliantly illuminated with oil lamps. Coaches ran four times a day over a thirty-two-kilometre planked road to Sarnia. Land prices soared, one lot selling for as much as $80,000. In such an atmosphere, fortunes were made and lost in a day.
By the end of 1862, the wells at Oil Springs were yielding 12,000 barrels per day. Spillage from uncontrolled wells at times flooded the Black Creek basin to a depth of a metre. At this time, each oil producer generally operated his own refinery in the field and it was a struggle to keep up with production from the wells. In wet weather transportation to the rail line became impossible and barrels were invariably in short supply. The boom continued for a full year. Then, in January 1863, it passed on as suddenly and mysteriously as it had arrived. One after another the great flowing wells dried up. At the same time, the market began to feel the effects of a year of uncontrolled production. A glut of oil caused prices to topple from ten dollars to ten cents a barrel. Oil Springs staggered under the shock.
By 1865, however, the price of oil was back up to eleven dollars a barrel and the village population was a healthy 4,000. Oil production had also begun at Bothwell, about thirty-two kilometres southeast, and at Petrolia, about eleven kilometres north. Hope for a new boom at Oil Springs persisted but these aspirations were crushed forever by a unique combination of events in 1866. As the Civil War in the United States came to an end, the Pennsylvania fields were reactivated and satisfied requirements of the United States' market. Fenian raids and the threat of war between Britain and the United States sent the latter's oil men south of Lake Erie. Finally, a number of very good wells were discovered at Petrolia and drillers quickly focused their attention on the new field. The population of Oil Springs dropped to 300 almost overnight.
Oil Springs may have suffered an untimely demise but the effects of its brief moment of glory were far reaching. Shaw and his generation of drillers, producers and refiners raised the productivity of the fledgling industry enormously. Kerosene had become a household product in Ontario by 1863. The oil business was clearly here to stay.
Establishment and Growth of Petrolia
The next phase of development occurred eleven kilometres north of Oil Springs in the Bear Creek basin where by 1865 there were about twenty wells. To the east of the wells were a few log houses but within a year the settlement had been incorporated as the village of Petrolia with nine hotels and a population exceeding 2,300. Interest in the Petrolia field rose rapidly during 1866 after Captain Bernard King of St. Catharines, manager of the North Eastern Oil Company, discovered a flowing well in the high ground to the west of the previous drilling site. The King well erupted at 2,000 barrels per day and produced an average of 265 barrels a day for over forty years. Wells in the Petrolia area were deeper than those at Oil Springs, some as much as 150 metres. The costs of such wells were high and drillers had to be better financed in Petrolia than they had been in Oil Springs. The risk of a dry well, however, did not seem to be as great in Petrolia. King's well indicated the presence of a lucrative new field and other drillers soon proved the supposition correct. The Petrolia discovery was much more reliable than Oil Springs, ten times as big (about fifty square kilometres) and, eventually, 6,000 wells were drilled there. While Oil Springs had been the founding site of the industry, Petrolia was to be the place where the different systems of drilling, pumping, transporting, refining and marketing were finally harnessed to form an effective industrial operation.
One of the men who figured largely in this period of consolidation was John Henry Fairbank (1831-1914). Fairbank, who had come to Oil Springs in 1861, was responsible for introducing the "jerker-line system" for pumping wells once pressure was insufficient to send oil to the surface. This system allowed a hundred or more wells to be operated from a single steam engine and made pumping an efficient and economically feasible proposition, thus lengthening the life of a field substantially.
Oil production in Petrolia rose so sharply in 1866 that a number of producers, under Fairbank's leadership, had raised $50,000 to build an eight-kilometre spur line to link up with the Great Western Railroad's main line to the north. The link with major urban markets was now secure. The rail spur, however, was only the final part of an integrated system of moving oil from the well to market. The barrels which Hugh Nixon Shaw had filled directly from his flowing well in 1862 were now replaced by large wooden storage tanks at the wellhead. These tanks were connected to the pump in the well by means of a pipe. The pump lifted the oil from beneath the ground directly into the tank. When the storage tank became full, a horse drawn tank wagon was used to transport the crude oil to the refinery receiving station. By 1865, railway tank cars had been introduced and the bulk shipment to outside markets of both crude and refined oil became possible.
The mid-1800s also saw a distinctively Canadian modification to the drilling system. It was discovered that a bit which was connected to the spring pole by a series of black ash rods cut through the rock more effectively than one which was suspended by a cable. The solid rods allowed a better sense of the bit's progress through the rock. After 1874, when Canadian drillers were called in to open oil fields around the world, this modification became identified as " The Canadian Rig".
In addition to conventional drilling, companies adopted the American technique of shattering the rock with a charge of nitroglycerine. Lowered into the well, the nitroglycerine was then exploded, the explosion cracking the rock around the well hole and causing any oil deposits to flow into the original hole. At one time, there was so much of this explosive in Petrolia that the Town Council passed a bylaw forbidding its transport through the town. Several manufacturing plants for nitroglycerine were located on the north edge of town and, in due course, they all blew up.
The consolidation of oil production and refining in Petrolia involved other inconveniences and hazards. As the town grew, the population had to contend with a very high level of industrial pollution, a swampy townsite which meant an inadequate water supply and a sewage disposal problem, as well as a dearth of cultural and social amenities. But the greatest hazard of all was fire. In the summer of 1867, a fire broke out at one of the rigs in the Petrolia field and soon engulfed an adjacent wooden storage tank. Before long the flaming tank collapsed, sending burning oil across the field and igniting other storage tanks. The fire burned for more than two weeks over an eight hectare site, charring the ground to a depth of 0.6 metres. As a result of this experience, a system of large (8,000 barrel capacity) underground storage tanks was developed and the citizens of Petrolia began to maintain two fire departments.
The growth of the Petrolia oil field also saw a change in the organization of refinery operations. In Oil Springs, nearly every producer had his own still , but in Petrolia refining became a specialized component of the industry. The advent of boiler plate steel made it possible to construct much bigger containers than the earlier, cast iron ones. By 1868, boiler plate stills in the form of horizontal cylinders with a capacity of 250 barrels were in use. The Carbon Oil Company's "Big Still" held 2,500 barrels, half the capacity of all the other refineries in Canada combined. "The Big Still" produced kerosene in vast quantities for a year before it blew up in the late 1860s. A contemporary account describes one operator's still:
His still looked like two sugar kettles placed one above the other forming together an iron globe, from the top of which was connected the worm. The vapours passed up this pipe through a fine iron, and then a brass wire mesh, which the inventor claimed held back many impurities. From this iron pipe connecting the still to the worm, another small iron pipe passed through the roof to the open air which allowed the benzole to pass away. The remaining vapour condensed in the worm, from which it drained to a collecting tank. By this method, 50 percent illuminating oil was gained and the remainder was lost.
This inefficiency in the refining process was typical of the industry throughout the period 1855-1875 when crude oil was frequently wasted in vast quantities. As this initial period of development drew to a close, efforts were being made at stabilization and the industry's emphasis began to shift from production and refining to marketing. As part of this evolution, Petrolia welcomed its own bank. In 1869, its first year of operation, the Bank of Vaughn and Fairbank had 1,500,000 dollars of business. In 1871, the Petrolia oil men built their first oil exchange in the town's Victoria Park and in 1884 the exchange moved to Vaughn and Fairbank's "Little Red Bank" where it acted as a central agency for buying and selling oil in an attempt to control production and price fluctuations.
In some ways, Petrolia was more important for the men it produced than for its oil. Beginning in 1874 and continuing until after World War I, Canadian drillers left Petrolia to open oil fields in forty countries, including those of the Middle East which figure so prominently in current world affairs. Few of these "foreign drillers" achieved personal wealth or fame, with the exception of William H. McGarvey (1844-1914) who founded and controlled Europe's largest petroleum company until its collapse early in the Great War.
The final chapter in Canada's early oil industry began with the establishment of the Imperial Oil Company in London, Ontario in 1880. By 1883, the company had moved its barrel plant to Petrolia where it was producing more than 30,000 barrels annually. When, in that same year, Imperial's London refining operation was struck by lightning and burned, the company decided to expand and consolidate its refineries in Petrolia under the leadership of one of Imperial's and Petrolia's most astute businessmen, Jacob Lew Englehart (1847-1921). Englehart had such successfully built his own refining operation on the site of the Carbon Oil Company's "Big Still" in the early 1870s. Following his merger with Imperial, the company's interests dominated the Petrolia refining scene and Petrolia became Imperial's only refining site, with operations covering twenty hectares. It had a refining capacity of 2,000 barrels and a crude oil storage capacity of 100,000 barrels. Before long, Imperial had developed a national distribution and dealer network, and its prospects were excellent.
Foreign Ownership
From the time of Drake's Pennsylvania discovery in 1859, the American petroleum industry's development had far outstripped that of its Canadian counterpart. By 1889, John D. Rockefeller's Standard Oil Company was looking with great interest at the Canadian market. Rockefeller's offers to purchase Imperial Oil, however, were rejected by the Canadians. Determined to gain a foothold in Canada, Standard Oil began buying up smaller Canadian companies and expanding them with a seemingly unlimited supply of capital. In 1895, Imperial needed money to reorganize and equip itself to meet increasing competition from companies financed from the United States. Imperial Oil was unable to raise the necessary capital and on July 1,1898, agreement was reached that the Standard Oil Company would supply the capital needed for expansion in Canada in exchange for a majority interest in Imperial Oil. Shortly afterwards, all of the Standard Oil affiliates in Canada were merged with Imperial Oil. As the Sarnia Observer correctly noted, "This virtually embraces all the oil interests of Petrolia and gives Standard complete control of the Canadian oil business".
At the time of the takeover, industrial leaders did not foresee the expansion of the oil industry which lay immediately ahead. They still felt that a refinery with a capacity of 1,000 barrels per day would adequately meet the projected demand. But an event occurred in that same year, 1898, which marked the beginning of a radical transformation of both the petroleum industry and the face of the entire nation the arrival of Canada's first automobile. From its modest beginnings the oil industry would become a crucial aspect of the Canadian economy.
