July 15, 1943

LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

We have drafted a set of regulations, which have been tabled, covering the granting of permits for oil in the Northwest Territories. The permits have been issued to the company going in there to drill. We have not encouraged; we have discouraged what might be called purely speculative interests; that is, people who might think there was oil up in that country and would reserve a certain area, pay a ground rental on it for a year, and then try to sell it off to someone else who would develop it. We have discouraged that.

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CCF

Percy Ellis Wright

Co-operative Commonwealth Federation (C.C.F.)

Mr. WRIGHT:

And given it to one

company.

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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

We have given permits to responsible people who would go in there and develop it. There is no use in giving a permit, for instance, to some person who

War Appropriation-Mines and Resources

would go in and use it for speculative purposes. After all, the government were not prepared to do the drilling there. There is not much prospect, I can assure my hon. friend, of developing oil at Fort Norman for uses other than those involved in this increased development for defence purposes, which is costing a considerable amount of money per gallon of oil when it is delivered, and for such operations as there are at Bear lake. It is not an economic proposition at the present time to develop an oil well at Fort Norman, 1,400 miles north of Edmonton. How would you get the oil to Edmonton, for instance, where it could be used? When you had got it out, transportation would cost so much that it could not for a second compete with oil from other sources. Unquestionably this development was stimulated by the state of war which existed with Japan and the need of getting oil supplies to the Alaskan frontier. That is the whole reason for this increased development. It is quite true that the government might have said, "No; because it is the Imperial Oil company we will not have anything to do with it," and we would have blocked the war effort, and that would have been that. I do not think there could be any justification for the dominion government going into an oil development 1,400 miles north of Edmonton, that might cost hundreds of thousands or millions of dollars, for uses in ordinary times.

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CCF

Percy Ellis Wright

Co-operative Commonwealth Federation (C.C.F.)

Mr. WRIGHT:

The minister has stated that the dominion has turned over these deposits to one company to develop. None of us is quite naive enough to believe that this one company are in there for their health; that they are not getting anything out of these deposits; that they are simply developing it for war purposes without any chance of ever making anything out of it. They are certainly getting their share out of it, or they would not have developed it, and they are given a monopoly as far as this development is concerned. Whether it is economic or not depends on how much oil is there. In the United States oil is being transported great distances, from Oklahoma, near the gulf, right up to the northern states. It depends on the quantity of oil that is in the field, and if reports we hear are correct this may be a very important field. I certainly do not think the government are doing what is right in giving the company a complete monopoly of that field.

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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

My hon. friend, of course, is quite entitled to his view; there is no doubt about that. As a matter of fact, as a purely commercial proposition you would not get 72537-3104

one oil company in ten to look at that field. I venture to say that the Imperial Oil Company have spent more money there by a long margin than they have recovered, or will recover for a good many years. That is for the simple reason that, as I stated a moment ago, it is not feasible commercially to take oil even in the quantities they have, at Fort Norman, 1,400 miles north of Edmonton, to the places where it can be used. The United States government in respect of its interest in this development asked that the permits be granted to the Imperial Oil company. Under the permits, when the war is over, we have the right to have half the area they have prospected and developed come back to the government, including half the wells and half the equipment. When my hon. friends of the Cooperative Commonwealth Federation come into office, as they hope to do some day, they may find this all ready for operation by then.

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CCF

Percy Ellis Wright

Co-operative Commonwealth Federation (C.C.F.)

Mr. WRIGHT:

They will find it tied up

pretty well by one particular company. The minister's statement hardly holds water. In one breath he tells us he has to give it to one company to prevent speculators going in-

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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

I did not say anything of

the kind.

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CCF

Percy Ellis Wright

Co-operative Commonwealth Federation (C.C.F.)

Mr. WRIGHT:

Oh, yes, you did.

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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

I said that the Imperial

Oil company were in there years ago; that they had developed certain works at Fort Norman, and that when this idea developed for the supply of oil and gasoline for Alaskan defence, the United States government asked that the Imperial Oil, who had had experience in the field, be given some .additional territory, and that additional territory was given under terms which I mentioned1 a moment ago, that when the war is over, the government secures, without cost one-half the development which has taken place. What my hon. friend was speaking about a moment ago, as to permits being issued, did not refer, as I understood it, to the Imperial Oil company. We could have to-day numerous speculative interests, who probably are not oil developers at all, to go in and, if we gave them a permit, preempt a certain territory in the hope that later on they could turn it over at a profit to someone who would develop it. Now we have effectively prevented that sort of thing.

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NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

Perhaps I can set the

matter straight. I mentioned the subject a short time ago. I have not any brief for the Imperial Oil, but I commend them for what they have done in that part of the country.

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War Appropriation-Mines and Resources

They went in there quite a few years ago, and got nothing out of it commensurate with what they invested in it. They deserve credit for drilling wells at Fort Norman. I believe that" up to the time that war broke out they had had six wells more or less that perhaps could produce am average of, I understand, 300 barrels a day, at any rate not a large number. The wells did not operate for a few years, so that the company received no return outside of what oil they have sold to the radium mine on Great Bear lake and to the mines at Yellowknife on Great Slave lake. Their oil barges came up the Mackenzie river and sailed over Great Slave lake to Yellowknife and to other mining centres on Great Slave lake. Also they sent oil up the Bear- river which they had to move around the rapids of Bear river, and then on Great Bear lake to the radium mines at the east end of that lake. After the United States became embroiled in the war with Japan they wished to have oil for their war activities in Alaska. It was then they considered running a pipeline from Fort Norman over to White Horse. Other wells had been drilled by or for them, I believe, and I assume that what the minister refers to as to the United States investing in that part of the country is what they have invested in the wells they have drilled since they went there and the pipeline. From what the minister said I understand that the United States government or someone representing it has taken over for the time being the wells which were formely operated by and for the Imperial Oil company. Am I right?

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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

No; that is not correct.

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NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

Is the Imperial Oil also

producing oil?

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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

The United States government made an arrangement or reached an understanding with the Imperial Oil company-

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NAT
LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

-to carry on drilling operations. That is according to the information that has been supplied me. What the nature of that arrangement is, how the United States government assisted the Imperial Oil company financially, or the terms upon which they assisted them, I do not know. That is a matter between the United States government and the company.

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NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

The United States government takes over all the oil produced at present at Fort Norman.

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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

They buy oil from the operating company. The United States has not acquired title to a single oil well.

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NAT
LIB
PC

Alfred Henry Bence

Progressive Conservative

Mr. BENCE:

I should like to obtain more information about the item. How much of this money is spent in Saskatchewan and how much in Alberta, and where is the money spent in Saskatchewan?

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July 15, 1943