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THE CANOL PROJECT

For some time after Pearl Harbour, the western part of North America was dangerously vulnerable. The shortest route to America from Japan lies along the Great Circle that passes close to the Aleutian Islands. These islands were soon occupied by Japanese forces, and the strategic impartance of Alaska at once became apparent. One of the vital requirements of military operations in Alaska was an assured supply of motor fuel. The oilfields of southern California were separated from Alaska by a long sea route which was exposed to enemy attack from the sea and possibly from the air. Moreover, tankers were scarce, and the military situation in Europe and North Africa did not permit the transfer of any bottoms from the Atlantic to the Pacific.

An adequate source of oil and a means of transportation free from enemy interference were therefore matters of some urgency. It was under these circumstances that the Canol Project was conceived. The object of this p oject was fourfold namely: a large increase in the production of the Norman Wells oilfield; the construction of a pipeline to carry the crude oil from Norman Wells to Whitehorse; the erection of a refinery at Whitehorse to provide aviation gasoline and other petroleum products; and the construction of supplementary pipelines for the distribution of the petroleum products of the refinery. Once the decision was taken by the United States and the Canadian Govern- ments to develop the Norman Wells field, work on the

various phases o. the pro‘ect was pushed with all possible speed.

The Norman Wells Oilfield

During the early years o the nineteenth century, Alexander Mackenzie found oil seepages in the area around Fort Norman on the Mackenzie River. In 1887, R. G. McConnell, of the Geological Survey 0° Canada, noted promising indications in certain areas o° the presence of oil in the Devonian rocks of the Mackenzie Valley. In 1914, a Calgary syndicate engaged Dr. T. O. Bosworth to investigate oil possibilities along the Mackenzie River. Bosworth staked three claims ‘containing oil seepages on the northeast bank of the river about 50 miles below Fort Norman. These claims were subsequently acquired by the Northwest Company, a subsidiary of Imperial Oil, Limited.

The First World War intervened to delay exploration of the field, and it was not until 1919 that drilling equipment was shipped to the claims. During the following summer, the first well was drilled and oil in commercial quantities was encountered at a depth of 783 feet. In 1921, a small refinery capable of producing motor gasoline and diesel fuel was erected, but the market was so restricted that operations were suspended during the same year.

Development of the field was handicapped by the vast distances from markets and sources of supplies, and by the mountainous country separating the Mackenzie Valley

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from the Pacific seaboard. By 1924, only six wells had been drilled, two of which were producers. In 1932, however, development of the pitchblende-silver deposits of Eldorado Gold Mines at Great Bear Lake created a relatively substantial local demand for oil. In 1938, the seventh well was drilled and additional equipment was installed in the refinery to supply the increasing needs of air transport in the region. By 1940, the refinery had a processing capacity of about 840 barrels of crude oil per day. In 1941, production totalled 80,000 gallcens of — aviation gasoline, 112,000 gallons of motor fuel, and 230,000 gallons of fuel oil.

The Canol Agreement

After negotiation between the United States Govern- ment and the Canadian Government, an agreement on development of the Canol Project was reached in June, 1942. Under the terms of this agreement, the cost of the Project was to be borne by the United States. Canada was to provide essential land and rights of way, waive import duties, taxes, licence fees, and royalties on oil production, and facilitate entry of the necessary equipment, labour, and personnel. The United States wa to retain ownership of the pipelines and the refinery until the end of the war, at which time they would be offered for sale, with the Canadian Government given the first option of purchase. Failing sale, disposition of the pipelines and the refinery would be referred to the Permanent Joint Board on Defence.

Development of Norman Wells under the Canol Project

Prior to the Canol Project, “mperial Oil, Limited had drilled four producing wells, three of which were in opera- tion in the spring of 1942. The peace-time market for the oil was not large enough to justify extensive exploratory drilling, and consequently, when the Canol Project was initiated, the potential of the Norman Wells oilfield was unknown. The possibility of meeting military require- ments was considered only fair.

Work was started on the project by the United States Army Engineers, private contractors, and Imperial Oil, Limited, in the spring of 1942. The last had entered into a contract with the United States Government to drill new wells with the object of increasing the output of the Norman field by more than 3,000 barrels of oil per day. By June, 1942, a camp and loading facilities had been built at the railhead at Waterways and freight was moving 1,200 miles down the river and lake system to Norman Wells.

The water route to Norman Wells starts at Waterways, the northern terminal of the Northern Alberta Railways, proceeds down the Athabaska River to Lake Athabaska, and thence down the Slave River to Fitzgerald. At this point, a series of rapids on the Slave River necessitates a 16-mile portage by road to Fort Smith. The water route continues from Fort Smith down the Slave River to Great