The story of the Imperial Oil Gas and Oil Company is a story of innovation, risk taking, and perseverance. Starting in 1866 when John S. Blacklock first drilled for oil in Enniskillen, Ontario through to its eventual merger with Standard Oil of New Jersey to form present-day Imperial Oil — a company that can be considered among the most innovative companies in Canadian history. This article about Imperial Oil provides insight into their beginnings as a gas company, their key innovations between the years 1890 to 1920 as well as their expansion plans shortly thereafter into natural gas distribution and pipeline ownership. Furthermore, it highlights some lesser known facts about this Canadian icon.
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Back in the Days of Horse Power: The Founding of Imperial Oil
The Imperial Oil Company was founded in 1866 by John S. Blacklock in Enniskillen, Ontario. The company’s original mandate was to produce illumination oil from the Athabasca bituminous sands through a process of ‘cracking’ heavy crude oil. In June 1870, Blacklock’s company was purchased by three Toronto entrepreneurs: Charles Wilson, Joseph Allan and James Miller. Their vision was to create a company that would be more than just a company that produced oil, but rather a company that would be involved from ‘wellhead to lamp.’ In 1888, the company was purchased by a syndicate led by Sir William Mackenzie and Donald Mann. The tenure of Mackenzie and Mann would last until the early 20th century when they sold the company to Standard Oil of New Jersey.
Enter Standard Oil
In March 1896, the Standard Oil Company of New Jersey purchased the Imperial Oil Company. Imperial’s management remained in place, including William ‘Captain’ Bryce who was retained as president. The sale of Imperial Oil to Standard Oil was a natural progression for both companies. It was at this time that Standard Oil was looking to expand its presence in the Canadian market and Imperial Oil was looking to expand its refining capacity in the Sarnia region. Standard Oil’s acquisition of Imperial Oil was significant since it was the first merger between a Canadian company and an American company. The significance of an American company owning a Canadian company was not lost on anyone during this time. Imperial Oil was one of the first companies to be owned by a foreign company.
Early Innovation and Expansion
The early years of the Standard Oil–Imperial Oil partnership were marked by aggressive expansion and innovation. Starting in 1898, Imperial Oil began constructing a new refinery in Sarnia, Ontario. This was the first of a series of refinery expansions that would be completed in stages. The refinery was completed in 1901 and was the first to be built on a large scale in Canada. In the same year, Standard Oil formed a joint venture with the Royal Dutch Petroleum Company to explore the sandy areas surrounding the Saguenay River in Quebec. The joint venture resulted in the discovery of large quantities of oil. In 1902, the Saguenay Oil Company was incorporated. Imperial Oil became a minority owner of the Saguenay Oil Company when Standard Oil purchased a controlling interest in Imperial Oil. In 1904, Standard Oil and Imperial Oil purchased a majority interest in the Dominion Oil and Gas Company which held a monopoly on natural gas production in the province of Ontario. Dominion Oil and Gas Company had been formed in 1902 as a joint stock company (a Canadian company) jointly owned by the Canadian Pacific Railway Company, Canadian Pacific Railway Company, National Bank of Canada, Canadian General Electric Company and the Bank of Toronto. Its mission was to produce and distribute natural gas to light Canadian cities.
Imperial Becomes a Natural Gas Company
In 1905, the Saguenay Oil Company discovered a large deposit of natural gas in the province of Quebec. Two years later, Standard Oil and Imperial Oil formed a joint stock company (Imperial Natural Gas Company) to consolidate the ownership of the Saguenay and Quebec natural gas deposits. In 1907, Imperial Oil began constructing a natural gas transmission system that would stretch from Sarnia to Hamilton and Montreal. The first phase of the transmission line was completed in 1908, connecting Sarnia and Hamilton. By 1910, the transmission system had been extended to Montreal, becoming the first interprovincial natural gas transmission system in Canada. Imperial Oil’s interprovincial transmission system was the first large scale, long distance transmission system constructed in the world. The system would be the forerunner for other long distance, high pressure transmission systems built throughout Canada over the next several decades.
Pipeline System Ownership and Construction
In 1911, Imperial Oil and the Canadian Northern Railway Company formed a joint venture to construct and operate a natural gas pipeline from the Saguenay region to Montreal. In 1912, the Natural Gas Transmission Company was incorporated as a subsidiary of Imperial Oil to construct the Montreal segment of the transmission system. The following year, the Canadian Northern Railway Company formed a new joint venture with the Canadian Pacific Railway Company to construct and operate a natural gas pipeline from the Saguenay region to Toronto. The construction and development of Canada’s first major natural gas transmission systems were significant events. They marked the beginning of an era of pipeline construction that would continue for several decades and establish Canada as an energy superpower. The construction of the transmission systems by two joint ventures in which Imperial Oil had an ownership stake were notable since they were the first joint ventures between a major Canadian company and a foreign company.
Imperial Oil was a pioneer and innovator in the field of high pressure, long distance natural gas transmission. The company’s ownership of a natural gas transmission system was the first of its kind and resulted in the company having an ‘outsized’ presence in the Canadian energy industry in its early years. The construction of natural gas transmission systems in the early 1900s was the result of two interrelated factors: the emergence of the natural gas industry in Canada and advancements in the technology associated with natural gas transmission. The construction of the interprovincial transmission systems by Imperial Oil and the Canadian Northern Railway Company and later by the Canadian Pacific Railway Company were not only significant events in the history of the Canadian energy industry, but also in the history of Canada.