Ontario's Untapped Oil Reserves
The Canada eZine - Economics

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Forgotten Oil

By Charles Moffat - January 2008.

Contrary to popular belief Alberta and Newfoundland are not the only places in Canada that has oil reserves. Canada's far north also has oil which is still being explored, and indeed almost every province and territory in Canada has some oil, but one vastly ignored and untapped region is the Old Ontario Oil Belt...

North America’s first commercial oil well was drilled in Ontario in 1858.

In 1880 the Imperial Oil Company (now owned mostly by Exxon-Mobil) was founded in London Ontario. Ontario's oil boom started in 1865 and the company wanted to cash in on the growing market for oil, gasoline and heating oil.

The boom caused small towns and villages to spring up all over south-west Ontario with names like Oil City, Oil Springs and Petrolia.

Local First Nations knew about the gum beds (pools of oil that have seeped to the surface). They used the sticky oil to waterproof their canoes and for medicinal purposes long before carriage-maker James Williams registered the world's first commercial oil well in 1858. It was located in Oil Springs, Ontario.

Entrepreneurs like John Henry Fairbank invented the jerker rod system of pumping oil. His descendants have continued to pump oil for over 145 years in Oil Springs, Ontario. Upstart oil company Charles Fairbank Oil Properties Ltd. of Ontario is actually the oldest petroleum company in the world.

Most of the crude oil and natural gas used in Ontario comes from Alberta, but significant quantities are also produced from wells located in southern Ontario.

During the early oil boom approx. 50,000 wells were drilled in south-western Ontario, although records are available for only 20,000. Currently 100 oil wells and 1200 gas wells produce commercial quantities of oil. Some Canadian also operate private gas wells for non-commercial purposes. Although Ontario is not a significant petroleum producer, the province has 2,500 low-producing oil and gas wells.

The business at the time was so profitable a group of drillers known as Hard Oilers were able to go overseas and explore other regions of the world looking for more oil. It was the Hard Oilers who discovered oil in Iraq and much of the oil in Africa, Asia, the Middle East and South America.

These days however Ontario's oil industry is so widely ignored because it is basically considered to be small potatos.

Which is weird when you consider that Ontario's oil boom was the first oil boom in history and later fueled the growth of the American automobile industry.

These days however, with oil barrels topping $100 US/barrel, I think it is time we rethink the Ontario oil industry. It has been producing reasonable quantities of oil for the last 150 years. How much more oil is down there? Nobody really knows.

You'd think that after 150 years the wells would have dried up, but they haven't.

The oil wells in Ontario are relatively shallow. There has never been (to my knowledge) deeper wells drilled to see the full extent of Ontario's oil reserves.

We have barely even tapped it.

And there has never been a better time to invest in Ontario's oil industry. With oil prices above $100/barrel it means even small amounts of oil production can be hugely profitable.

There is of course one flaw with this: Global warming.

It might be to our economic benefit to explore Ontario's oil fields and drill deeper, but what about the long term of goals of eventually reducing our greenhouse gases and our dependency to oil?

Nonsense I say.

Some people will never grow out of their interest in driving gasoline cars, especially antiques. Fifty years from now, while most the of the world has switched to hydrogen cars there will still be a need for oil as an industrial lubricant, especially in fields like robotics, engineering and anything else we invent in the next 50 years, we will undoubtably still have people driving older gasoline-powered cars.

But for now, what is to stop us from actually using Ontario's oil resources? It is certainly better than killing people in Iraq/Iran and then taking their oil.

Hard Oilers explorers posing for a group photo.

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