Prairie provinces, the provincial governments took over all mineral rights from the federal government in 1905, (except those owned by the Canadian Pacific Railway and the Hudson’s Bay Company). The provinces thus collect the royalties and the land owners receive only a small rental from oil companies, for the use of their surface rights. Few people in the east believe farmers get such a shoddy deal.
In 1904, oil companies were receiving $1.86½ a barrel at the refinery in Sarnia. The refiners paid $1.34 a barrel and the federal government 52½ cents bounty. The bounty was paid to encourage drilling for oil, as the demand in Canada then made it necessary to import large amounts from the United States.
At the time, the U.S. was carrying out an intensive drilling program of 1,400 wells a month, while Canada was spudding in only 20, despite the royalty.
The politics of government intervention in oil pricing is interesting. The Canadian government subsidy didn’t succeed in increasing supplies, because there wasn’t much oil in Ontario for self-sufficiency in 1904. However, in the 1980s, the National Energy Program tax of the Trudeau government, nearly put the Canadian oil industry out of business in the West. This policy was a repeat of a five-cent-a-barrel tax, which Pennsylvania placed on its oil production, a tax which forced small producers out of business.
The bounty never had a chance to prove anything in the Leamington field as it petered out by 1910.
When Tiny and Frosty finished drilling three low-producing wells for Winter, work had started to become scarce. Thus, when Eugene Coste, the geologist for the Provincial Natural Gas and Fuel Company, offered them a contract to drill three wells at Dunnville, Ont., at the east end of Lake Erie, they moved there quickly.
These wells were part of a wildcatting program. Coste visited the rig while they were setting it up. He was disappointed in their equipment, which looked like all oil drilling outfits when piled on the ground: a pile of junk. He doubted they could drill a well with it.
However, they persevered and brought in a hole with a slight showing of gas. Coste sold the pipe in the hole to a farmer and the gas went to supply his home and a nearby school. Tiny wrote of Coste on page 18:
“I told him our pile of junk was all Frosty and I had to make our living. If we didn’t think we could finish the contract, we wouldn’t have taken it. Coste admired our spirit. He told us to go ahead and he’d consider what was to be done on the second hole. What he did was the biggest surprise of our lives.
“Although he was a professional geologist he had the common touch. He would come into a rig and look around and want to know everything. He asked questions to the point of annoyance to the crew. He was also quick-tempered and could get into a quarrel mighty fast. But he was admired and respected by the workers in the field. If he came out and had to stay overnight and no extra cots were available, he would roll up in a blanket and sleep on the floor of the tent.
Eugene Coste of Amherstberg, Ontario, the man with the “golden touch”. Photo: Glenbow Archives, Calgary, Alberta.
“He was a good man to be around as every project he touched made money. He had a golden touch.”
The Costes were a remarkable family. Eugene was the third son of a Frenchman, Napoleon Coste of Marseilles, who went to sea but jumped ship at Amherstburg, Ontario. Here Eugene was born in 1859.
Four years later the family moved back to France, where the sons were later educated as professional engineers in Paris. The money to finance their education was made by Napoleon as a contractor on the Suez Canal, completed in 1869.
The family moved back to Amherstburg in 1882 and built Mireille, a large house that became a landmark. It was similar to Coste House built by Eugene in Calgary 30 years later, also a landmark.
Eugene went looking for gold in Ontario, then oil and gas. He brought some science to oil exploration, which had been previously based on the work of “witches” or dowsers.
His science was a bit different than the American and British school. He contended to his dying day, that oil and natural gas originated in inorganic or volcanic rocks. Mysterious fluids were created and they seeped into sediomentary formations where man could tap pools of them. The other view is oil and gas are of organic origin, living material which has been buried and compressed and congregates in underground pools.
Coste’s first well was near Kingsville, Ont. It came in at 1,031 feet, with a flow of 10 million cubic feet a day. His Prairie Natural Gas and Fuel Company exported gas to both Buffalo and Detroit. This continued until supplies became depleted by the turn of the century.
Back in Dunnville, Coste showed up at the second hole of Tiny and Frosty and asked them to break off and go to Langham, Saskatchewan, to a wildcat site on the North Saskatchewan River 20 miles northwest of Saskatoon. He had been retained by the railroad-building team of Mackenzie and Mann, to find oil to fuel the engines on the Canadian Northern Railway instead of coal. Oil would generally have speeded up the West’s development. The year previous Coste had brought in a couple of Texas drillers with standard cable tools and they had run into trouble. They then persuaded him to buy one of the new rotary drills. It didn’t work out; they twisted off three pipes and lost all their tools at the bottom of a 900-foot hole. Tiny and Frosty started over with cable tools.
Chapter 6
The Langham, Saskatchewan Adventure
The standard cable tool rig was invented at least 2,000 years ago, by the Chinese. They used it for drilling for salt water, to be evaporated to supply table salt. The chief changes made in the ancient contraption by the latter-day American drillers, was replacing the wooden tripod with a wooden derrick 40 feet high, (the height of the derrick was later doubled so that two lengths of 30-foot pipe could be handled at a time instead of one, and coolie labour was replaced by steam, (although early American and Canadian drillers for many years utilized manpower to “kick down” wells with spring pole tool outfits).
The cable tool outfit consisted of a derrick from which a long, chiselnosed bit was suspended on a manilla rope line. The bit was a long heavy bar with its lower end dressed to a cutting edge. This was used to pound out a hole, as its weight broke or cut the stone where it struck. At each blow the bit was turned a little, making a round hole whose diameter is just the width of the cutting edge. It differed from hand drilling in a quarry, in that the drilling bar was not struck by any kind of a hammer. The drill, suspended from the end of the rope, was lifted for each stroke. The process was one of drilling, not one of boring, as it was sometimes called.
Steam power was used to raise the bit. After the drill had been working a while, the chips of rocks or drilling began to fill the hole and break the blow upon the solid rock. At intervals the driller was forced to pull his bit to clean the hole.
In some cases a sand trap could be used to clean out the rock and earth. However, the usual process was to pour in water and lift the fluid mud out with a long narrow baler with a valve at the lower end. These operations are alternated, first, drilling ahead five feet, then cleaning out the fine mud, drilling again and so on day and night till the desired depth has been reached. In the early days, each five feet of drilling was called a “screw.”
Attached to the top of the bit were several kinds of weights and jars. The whole was called a “string of tools.” Some of the strings later on were 60 feet long, as different attachments were added.
When
