Opportunities: 1939-1945

The Second World War resulted in major challenges for Alberta’s oil and gas companies but also presented an opportunity for growth. Canada’s war effort required a stable supply of energy resources. Petroleum products were strategic assets, and Turner Valley’s importance to the war effort quickly became apparent to the federal government. In 1940, domestic oil fields produced only 8.4 million barrels of the 51 million barrels refined in Canada. The rest of Canada’s oil supplies were imported from the United States (primarily California, Montana, Oklahoma and Texas), Peru, Colombia and Venezuela. Increased domestic production could not hope to eliminate the need for imported oil, but any increase would help greatly. Furthermore, demand for oil and gas increased dramatically during the war. Canada needed to supply oil to Allied naval and merchant vessels sailing out of its harbours, and Canada’s commitment to the British Commonwealth Air Training Plan, which resulted in dozens of training bases and airfields being constructed across the country, required vast quantities of aviation fuel.

The Government of Canada used the War Measures Act to exert control over energy resources to ensure that the country’s energy needs and wartime obligations could be met. In April 1940, the federal government established the Department of Munitions and Supply, under the control of Minister of Transport Clarence Decatur Howe, and the Wartime Industrial Control Board. The board was mandated to investigate

Canada's oil resources. George R. Cottrelle, a Toronto-based oil company executive and banker, was appointed Dominion Oil Controller. Howe also created the Allied War Supplies Corporation, which built two plants just south of Calgary for the production of materials needed for high-octane aviation fuel and chemicals for munitions production.

Wartime demand caused production at Turner Valley to increase. The Alberta Petroleum Association, established just prior to the war, saw the wartime measures as an opportunity to improve industry practices. Oil company leaders and Alberta’s conservation board recognized the need for increased production and wanted to meet the demand, not only to gain potential profits, but also out of a real desire to support the Canadian war effort. However, there was reluctance to increase production, largely born out of the fear that increased production would further deplete the gas pressure on the Turner Valley field and make extracting oil more difficult. The industry made efforts to produce increased and stable volumes throughout the year by keeping at least 25 rotary rigs continuously drilling to ensure a steady supply. Production at Turner Valley peaked in 1942 at about 10 million barrels (approximately 27,000 barrels per day). This made up about 95% of Canada’s oil production. The downside of the increased production was, as feared by the industry insiders, the lowering of the gas pressure, which ultimately shortened the productive life of the field.

Royalite expanded the Turner Valley plant over the course of the war, adding equipment required to increase capacity, improve existing products and develop new products required for the war effort. In 1941 a Girbotol natural gas scrubber was built to increase capacity and the quality of the gas produced. The gas was sent by pipeline to one of the Allied War Supplies Corporation facilities. The Turner Valley gas plant became the chief supplier of gas with a total of four million cubic feet per day, which climbed to nine million cubic feet per day by June 1943.

Two unusual spherical storage tanks known as Horton Spheres were installed at the Turner Valley plant in 1942. Imported from the United States, these two 5,000 barrel storage tanks were necessary for storing isobutane. Isobutane was a necessary component in

the manufacture of aviation fuel and was ultimately sent to the Allied War Supplies facility. The spherical shape of the tanks was the best shape for holding volatile liquids, such as isobutane, under pressure. The Horton Spheres became iconic symbols of Turner Valley gas plant.

The war-time boom also resulted in some restructuring. In 1945, Royalite responded to provincial legislation declaring natural gas facilities as public utilities by creating a subsidiary company, Madison Natural Gas, to manage the collection and sweetening of gas and the delivery of natural gas to markets. Royalite transferred much of its natural gas scrubbing equipment and its pipeline network to the new subsidiary company.