Leduc No. 1 and all that: Was February 13, 1947, Alberta’s unluckiest lucky day?

Posted on February 13, 2017, 12:18 am
11 mins

PHOTOS: Dignitaries stand around and have their photos taken at the Leduc No. 1 well near Devon on – if the Internet is to be believed – this day in 1947. Not sure if I believe that, seeing as the first photo below was supposed to have been taken on the same day. Below that: Social Credit premier William Aberhart, Progressive Conservative premier Peter Lougheed and NDP Energy Minister Margaret McCuaig-Boyd.

Today is the 70th anniversary of the day Alberta simultaneously won the lottery and started to watch everything go to hell in a handcart. February 13 … Alberta’s unluckiest lucky day.

In other words, 70 years ago today, with memories of the Great Depression and World War II still very fresh in the minds of the province’s population of about 800,000 souls, Leduc No. 1, a few miles south of Edmonton, struck oil and the whole world changed.

Cars didn’t have seat belts back in 1947, so no one thought to say: “Fasten your seat belts!” But by gosh, they should’ve!

Here it is 2017, and we’ve hardly ever planned for the stuff that started gushing out of the ground just west of the farm fields now occupied by Edmonton International Airport. That’s a problem, seeing as the rate it gushes at is starting to slow down.

Had we done more planning, we might be better prepared for the entirely predictable decline of oil, of which we’ve had some harsh intimations these past couple of years.

It may be upon us sooner than we imagined. In which case we’re in deep trouble. Or maybe not. In which case we may be in another kind of trouble. Either way, back in 1947, we seem to have just climbed onto the sled and started sliding down the hill.

It’s been great fun for a lot of us. Perhaps not so much for others. An exciting, invigorating, rollercoaster ride that nevertheless trended downhill – environmentally destructive, socially divisive and inclined to undermine our democracy.

It might have been the unexpected death of Premier William Aberhart in 1943 that began the transition of Social Credit from a revolutionary social experiment to just another conservative party. Certainly, Ernest Manning, who succeeded “Bible Bill,” was no wild-eyed revolutionist. But it might just as likely been the good and bad that came with the substance that rose from the earth on Feb. 13 that caused that change.

Certainly oil made some of us very rich, and benefitted many others in plenty of ways. In 1946, Canada produced only about 20,000 barrels of oil a day, most of it in Alberta, and consumed 10 times as much. A decade after Leduc No. 1 came in, Alberta was producing 400,000 barrels a day.

Oil wealth allowed the investment in wonderful infrastructure that would otherwise have been beyond our means, or at least beyond our confidence. It also meant the implementation of right-wing nostrums without many of the economic consequences that would have been inevitable in a place not so blessed – or cursed, depending on how you look at it.

A one-note economy based on a single resource? Don’t worry about it. A series of lurches from dustbowl to boom, to bust and back again? Never mind, blame Ottawa for what at times amounted to a near total lack of management. Low taxes that made us feel rich – and made us feel as if no commitment to democracy was necessary or desirable? Never mind … go back to sleep.

Nowadays, we’re aware of the symptoms of “Dutch Disease” – but who around here cares? We don’t manufacture much anyway, so the symptoms are all experienced elsewhere in Canada.

Certain Albertans like to complain about equalization payments, but we’ve been happy to share the downside of our wealth with the rest of the country. And we wonder why our neighbours don’t want our pipelines to tidewater!

So we’d better mark that one down to the liabilities column too.

On the other hand, here in Alberta we’ve had historically low unemployment rates, big money for many working class Albertans and the ability to spend as if there was no future while still anticipating a great future.

It’s interesting to note that this phenomenon continues to be the norm, even in the midst of an economic downturn political parties opposed to our current NDP government would like us to believe is nigh unto the End of the World. Leastways, as the latest census results show, people continue to move here in droves. As Mr. Aberhart, who was first elected in 1935, could have told us, it may have been bad for a couple of years, but it’s been nothing like the 1930s.

Without Alberta’s oil wealth, a wise premier like Peter Lougheed couldn’t have led the building of modern hospitals in towns and cities across the province. Without Alberta’s oil wealth, a fool of a premier like Ralph Klein couldn’t have squandered a billion and a half dollars on one-time payments to Albertans big enough to buy a iPod or two weeks’ worth of beer and pizza … and then billed it “the Alberta Advantage.” I doubt many fortunes were based on that confused tribute to social credit.

If we hadn’t had oil, would Alberta today be a rural backwater like petroleum-free Manitoba, or a modern technological success story like petroleum-free post-war Finland? I can’t answer that. My crystal ball is foggy today.

Having the stuff, though, we sure could have managed it better – as Mr. Lougheed, to his credit, tried to do. We could have been a Norway, if we’d stuck to the Lougheed plan. Instead, we’re something less. On the other hand, at least we avoided the ugly fates of the worst of the world’s failed petro-tyrannies. It’s helped that we were part of a federation with a constitution that includes a Charter of Rights and Freedoms.

Having seen the price of natural gas go bust, and our conventional oil reserves decline and lose value, we seem to have put all our hopes in bitumen – which no one can argue we don’t have in plentitude. Alas, it’s expensive to process, dirty and doesn’t exactly sell at a premium at a time when oil prices are languishing worldwide anyway.

So it’s not clear if this is the best plan or the only possible plan. The NDP Government of Rachel Notley has certainly tried to suggest otherwise – while building social license to continue with the extraction and exploitation of bitumen.

But there’s a group of people here in Alberta who erupt into threatening jeers if you dare to suggest differently – as Ms. Notley and her government have discovered to their distress, and their peril.

Later today, Margaret McCuaig-Boyd, Ms. Notley’s minister of energy, will mark this date at the site of Leduc No. 1 near the town of Devon.

The premier will probably be assailed by the angriest segments of the Alberta right for not being there herself to pay obeisance to oil.

There will be no such protest, however, that also invited is the president of the Canadian Association of Oilwell Drilling Contractors.

Mark Scholz was a founding member of the Alberta Alliance Party, which became the Wildrose Party. He was chief of staff to Paul Hinman, first leader of the Wildrose Party, in 2008, and was a member of the party’s executive council for five years. The “Oil Respect” campaign that featured the risible Bernard-the-Roughneck meme is said by Alberta Oil magazine to have been his brainchild.

What was our government thinking to give him a platform, no matter what his business card says?

Maybe higher oil prices will be back soon, but the realities of the market, and the realities of the biosphere, won’t be changed by the ideology of capitalism. So beware politicians promising you they can Make Alberta Great Again with a snap of a finger.

The good luck on this day in 1947 was that money started to flow into this province with the oil. The bad luck may be that a lot of both flowed right back out again, along with a good deal of our Prairie common sense.

This post also appears on Rabble.ca.

13 Comments to: Leduc No. 1 and all that: Was February 13, 1947, Alberta’s unluckiest lucky day?

  1. Pogo

    February 13th, 2017

    Shiv Devi · Ottawa, Ontario
    Donald Trump is like the lord baby Jebus! Praise Trump! Praise his disciple Kenney! For he is our Trump oracle, come to cleanse us from our misguided desires for equality, fairness and prosperity for all, no matter our circumstances. He has great wrath for those who are and would be weak, and blameworthy! Heaping shame on those who have failed and are wanting, he comes to save us all! [youtube https://www.youtube.com/watch?v=TMlpqOsc2BU&w=640&h=360%5D

    Reply
  2. David

    February 13th, 2017

    I don’t think the Leduc oil discovery was an unlucky day for Alberta, but it did change Alberta in many ways and not all for the better. Like many who come into sudden and unexpected wealth, we have not always handled it well.

    I suppose we have done better than Nigeria or Venezuela, but not as well as Alaska or Norway. Of course, Alberta is a province not a country and so sometimes has been constrained in making foolish decisions in the midst of boom times and has also got some support in bust times.

    I think our greatest mistake was not following through Lougheed’s vision in building up a larger savings fund from non renewable resource royalties. Instead, we cut taxes for corporations and higher income earners way below most other provinces because we could use the royalties to make up the revenue short fall. It is sad for us that Alaska and Norway started their savings funds after ours (I believe Norway even used Alberta as a model), but now they vastly exceed ours.

    I think most Albertans realize something was not quite right with the PC’s later management of the economy even though the right wing continues to insist it was the way to go and seem to want to go back to their boom and bust style of fiscal management. Hopefully that will not happen as we really do need to build more savings in the boom times to help cushion the bust.

    Reply
    • Val

      February 14th, 2017

      i agree with your view on discovery of massive oil and gas reserves in Alberta. it’s a blessing. the curse not our resources but “leaders”. since retirement of Peter Lougheed Alberta didn’t have even half as much visionary, decent and smart premier, as he was. sadly Ms. Notley not exclusion from followed line of premiers, albeit, to be honest, i was in hope something will change if not radically, at least on significant scale.

      Reply
      • David

        February 14th, 2017

        Premier Notley hasn’t had any boom times to govern in yet, so I think how she would manage in such times can not be concluded on. Also, to be fair to some of the other PC premiers, not all since Lougheed have had a long sustained period of increasing oil and gas prices.

        Reply
        • Val

          February 15th, 2017

          David, i know it, thus in my consideration her performance is based on existing economic and social conditions. whatever, there are way more opportunities for work on provincial level with what we have, than she explores and uses. very strong impression that she afraid to step out of track, which was laid by her predecessors.
          if there could be rating scale let say from 1 to 10, i could give PC from 90’s to their defeat, 3 points for province governing. at present NDP earned 4 points at most. which is only 1 point for few innovations, mainly in regards of transparency but in the rest like economic management, finance distribution, services and entrepreneurial performance, pretty much still same as it was in Klein era.

          Reply
  3. Expat Albertan

    February 13th, 2017

    One small clarification – it’s the ‘federal’ equalization paid out to the provinces from income and corporate taxes paid out to Ottawa from ALL Canadians. The way it’s written makes it seem like it is provincial money. As we all know, this distinction matters, particularly in Alberta.

    Reply
    • David Climenhaga

      February 14th, 2017

      Good point. I re-read the passage and, you’re right, it did leave that impression. As you know, I know better. I have amended it. DJC

      Reply
  4. Val

    February 13th, 2017

    hey David, how come that Peter Lougheed was a wise premier, if he wasn’t on the left, pro-socialism side?
    🙂

    Reply
    • Kang the barbarian

      February 14th, 2017

      Well actually he was Val. He was educated at the Harvard business school and understood the limits of unregulated capitalism. When the California utilities tried to play Ab nat. gas producers off against each other, Lougheed put in a unified minimum border price. Later he instituted a quota policy for private pipeline companies forcing them to give fair access to all producers.

      He ordered the industry to strip the ethane from export nat gas and mandated that the ethane had to be processed into plastics in Alberta. Take a look at the Prentiss and Ft. Sask. areas.

      He nationalized Pacific Western Airlines to make sure we had that transportation link and Ft. Mac was made possible by his government’s research into upgrading tar sands into high value synthetic oil. He also coordinated with Hydro Quebec’s mega-dam projects to make sure Canada did not suffer from Dutch Disease during the first Ft. Mac boom.

      His PC successors blew it all and then some as they became increasingly captured by the foreign owned energy industry and their quislings in Alberta business.

      Now it looks like we have a permanently energy-industry captured government – or else.

      Reply
      • Val

        February 14th, 2017

        i just teasing blog’s author

        Reply
        • Kang the Barbarian

          February 15th, 2017

          My apologies, I have no sense of humor so far as I know.

          Reply
  5. Farmer B

    February 15th, 2017

    Personally I think in Alberta we were very fortunate to be blessed with the natural resources we have. I know quite a few local farmers who worked rigs in the winter to pay for the farms they worked on in the summer. I would also admit I know many people who squandered their good wages and when the down cycles happened were in financial straits.

    I will agree that Alberta’s oil wealth has created a belief and expectation in low taxes and any time a sales tax is brought up it is quickly dismissed as unsalable. I will agree that Peter Lougheed was a good Premier who did many good things for Alberta. But I will add a contrary view, I think he saw that the provincial house he built was unsustainable and he exited before it started to implode. He left Don Getty to deal with the fallout. I will agree that some of the policies that followed were wanting. Hind sight is always 20-20.

    So where does that leave us today? Natural resources are finite. As such how do you spread that wealth over the generations to come? By using the royalties generated to pay for services today? Obviously not, there is no doubt in my mind a good portion should be saved and invested for future generations. The 2016-2017 Alberta budget has a roughly 15 billion dollar deficit once capital spending is included. To raise enough revenue to balance this budget would require a 15% sales tax on top of the GST. That is what we would need for revenue so that we could start putting our energy royalties aside for future generations! Dave I think your right on one point, Albertans do have a spending problem!!

    Reply

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