Regulation

Alberta petroleum fields went largely unregulated until the 1930s when the provincial government began its attempts to encourage conservation. It was the infamous and wasteful flaring at the Turner Valley wells that spurred the first attempts at government regulation, but those attempts were stymied for nearly two decades due to opposition and controversy. Thus, when the provincial government finally gained the tools required to enforce conservation, it was too late; profligate flaring for almost twenty-five years had rendered approximately ninety percent of the oil reserves unrecoverable.

The lack of a viable market had hampered efficient use of Turner Valley gas in the early days of the field’s

operations. Once the useful naphtha was separated from the wet natural gas, the remainder was flared just to get rid of a product considered a nuisance. Before the 1924 discovery of the Royalite No. 4 well, the amount of gas flared did not seem objectionable, but the 1936 discovery of the oil column highlighted the true consequences of the wasteful practice. Without adequate pressure on the reservoir, previously applied by the gas itself, the oil contained within would never emerge. Historical ignorance of this relationship can perhaps be excused, but even after understanding dawned, damaging flaring continued due more to greed than any other cause. Producers were greedy for profits, and politicians were greedy for votes.

Alberta’s first attempt at petroleum conservation regulation was the 1926 Oil and Gas Wells Act, but because the federal government still controlled the province’s natural resources, no regulations were ever issued or enforced. After Alberta gained control of its petroleum resources in 1930, efforts to halt the waste resumed, but Premier Brownlee’s approach of waiting for voluntary compliance resulted in no compliance. The earlier legislation was revised, but producers, both independent and corporate, refused to comply and instead mounted legal challenges. Amidst repeated hearings, conferences, newspaper articles, meetings, warnings, threats, and even a fistfight in the hall of Edmonton’s Legislature Building, gas continued to flare while provincial and federal authorities and angry producers wrestled over the issue of conservation.

Finally, with Social Credit’s Nathan Tanner at the helm of the Ministry of Land and Mines, legislation strong enough to enable enforcement was passed, and in 1938 the new Alberta Petroleum and Natural Gas Conservation Board (as of 2013, regulatory functions are the responsibility of the Alberta Energy Regulator) was successful in reducing drilling, production, and flaring. Notwithstanding the period during WWII when Turner Valley was pushed to maximize production levels, the Board worked to create a comprehensive system of regulation designed to manage resources efficiently and safely. In many cases, other countries first creating their own petroleum regulation have relied upon the model provided by Alberta’s legislation, which began with Turner Valley.