Mineral fuels in Alberta
Mineral fuels in Alberta are a significant aspect of the province's economic landscape, highlighted by its rich deposits of coal, conventional crude oil, natural gas, and oil sands. Alberta's geological history, shaped by ancient seas over 300 million years ago, has resulted in a thick layer of sedimentary rocks that house these valuable resources. The province is home to 70 percent of Canada’s coal reserves, with a substantial portion exported internationally for steelmaking and energy production. Natural gas began transforming Alberta's energy supply in the early 20th century, eventually displacing coal as the primary heating fuel and facilitating rapid industrial growth through extensive pipeline networks.
Conventional crude oil has played a critical role in Alberta's development since its first significant discovery in the early 20th century, particularly after the boom in oil production post-World War II. The province has established itself as a central player in Canada's oil and gas sector, generating substantial revenue that has been reinvested in public services through the Alberta Heritage Fund. As of recent years, the production landscape has shifted, with heavy crude oil from oil sands growing significantly, reflecting changes in both domestic and international markets. While Alberta aims to phase out coal power by 2030, it remains a key energy source, alongside a growing commitment to natural gas and renewable energy, underscoring the province’s ongoing evolution in the energy sector.
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Mineral fuels in Alberta
Summary: Alberta, one of Canada’s prairie provinces, yields wheat, canola oil, and dinosaur remains, but it is most famous for having Canada’s richest concentration of fossil fuels.
Bounded by Montana on the south and extending 700 miles north to the 60th parallel, Alberta is underlain by a thick wedge of sedimentary rocks deposited by ancient seas that invaded the region periodically, beginning more than 300 million years ago. Buried in these rocks are coal, conventional crude oil and natural gas, and bituminous oil sands. In roughly that order, these mineral fuels have been discovered, developed, and—in the case of conventional crude oil and natural gas—severely depleted.
Coal
Shallow beds of coal exposed in riverbanks were used in the eighteenth century, when Fort Edmonton was a Hudson Bay trading post on the North Saskatchewan River. Discovery and development of deeper coals, mostly in the southwestern part of the province, have shown that Alberta holds 70 percent of Canada’s reserves. While shallow coals of low rank were used for years to heat buildings, most Alberta coal is higher in rank and energy content; in fact, deeper deposits in the Rocky Mountain foothills are suitable for use in steelmaking. Most of that is exported to Asia, Europe, and eastern Canada, while large tonnages of lower-ranked coals are used in electrical power plants within the province. Currently a number of deposits are being studied with a view to extracting natural gas as coal-bed methane.
Natural Gas
Early in the 20th century, shallow deposits of natural gas were used by small communities; but in 1905 a large discovery led to the first pipelines serving Alberta towns, and by 1923 both Edmonton, the provincial capital, and Calgary were served by natural gas, which displaced coal as the main heating fuel.
Homes now could have cleaner fuel, thermostats, and spare rooms where the basement coal storage bins used to be. Natural gas production to supply buildings and industries increased rapidly through the years and fed pipelines exporting gas to the United States and eastern Canada. Production peaked in 2001, and now is declining as old fields are exhausted and as exploration is discouraged by lower gas prices due to growing production of shale gas near US markets.
Conventional Crude Oil
Conventional crude oil is distinguished from unconventional (heavy) crude, such as that derived from oil sands. In Alberta, the first significant discovery of conventional crude oil was in the Turner Valley field, in tightly folded rocks of the Rocky Mountain foothills, in 1914. During intense exploration following World War II in 1947, Imperial Oil discovered the Leduc field, just south of Edmonton. The reservoir rock there is an ancient tropical reef whose irregular cavernous limestone yielded oil at a fabulous rate and made Alberta an oil-rich province. The city of Edmonton grew rapidly as workers from across Canada migrated to the area, and oil service companies established Edmonton as a base. Meanwhile, 200 miles south, Calgary was transformed from cow town and gateway to Banff National Park into an oil town where major oil companies, geophysical companies, and consulting firms made their headquarters.
After 1947, exploration found more reefs and other reservoir rocks. Production increased steadily, making Alberta Canada’s leading producer of oil and gas, despite sizable discoveries in the neighboring provinces of British Columbia, Saskatchewan, and Manitoba and later fields in Atlantic offshore areas near Newfoundland. The province has enjoyed a large revenue stream from royalties on production and in 1976 established the Alberta Heritage Fund to invest and preserve that revenue and to support various projects in health care, education, and infrastructure. It has also committed millions to the study of technologies that will reduce the impact of the expanding oil sands operations. The value of the fund in March 2024 was $22.9 billion.
As the industry matured, production peaked sometime in 1973 and has continued to decline. In earlier years, Alberta crude dominated Canadian production, but by 2010 it accounted for only 42 percent of the total, while Atlantic offshore production was 32 percent. By 2022, Alberta crude had returned to a dominant market position, supplying 83 percent of the nation's oil production.
At the same time, oil sands production, begun in the mid-1960s, has expanded rapidly. This change is reflected in the composition of oil exports from Canada: In 1993, conventional crude was 57 percent of exports and heavy crude 43 percent, but in 2010 conventional crude was only 30 percent whereas heavy crude had grown to 69 percent of exports. Heavy crude production continued to rise, reaching 25.3 million cubic meters or more than 3.8 million barrels per day in 2023.
Electrical Generation
The fuels used in Alberta’s power plants are not surprising. Though Alberta has set the goal of phasing out coal-fired power plants by 2030, replacing them with a combination of natural gas and renewable energy, coal has remained the dominant source of energy in the province. Of the total generating capacity of 76.1 terawatts in 2020, 54 percent was generated by natural gas, 36 percent was generated by coal and coke, and the remainder was generated by wind, hydro, and geothermal power. In 2024, Alberta was Canada's third-largest generator of electricity, providing about 13 percent of the nation's power.
Bibliography
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Fellows, G. Kent, et al. "The Challenge of Integrating Renewable Generation in the Alberta Electricity Market." The School of Public Policy, vol. 9, no. 25, 2016. The School of Public Policy, www.policyschool.ca/wp-content/uploads/2016/09/Renewables-AB-Electricity-Market-Fellows-Moore-Shaffer.pdf. Accessed 29 July 2024.
McQuarrie, John R. The Alberta Oil Patch: Then and Now. Ottawa: Magic Light, 2010.
"Provincial and Territorial Energy Profiles—Alberta." National Energy Board, www.neb-one.gc.ca/nrg/ntgrtd/mrkt/nrgsstmprfls/ab-eng.html. Accessed 29 July 2024.
"Record High Crude Oil Production Largely Driven by Oil Sands: Crude Oil Year in Review 2023." Statistics Canada, 7 Mar. 2024, www.statcan.gc.ca/o1/en/plus/5781-record-high-crude-oil-production-largely-driven-oil-sands-crude-oil-year-review-2023. Accessed 29 July 2024.