Alberta is known around the world for oil and natural gas, but the industry is not evenly distributed across the province.
Different parts of Alberta produce very different types of hydrocarbons. Northern Alberta is dominated by the oil sands. Northwestern Alberta has become increasingly important for natural gas and condensate. Central Alberta contains mature conventional fields as well as newer horizontal oil developments. Southern Alberta has a long history of natural gas production.
For someone trying to understand Alberta’s energy industry, knowing where the major producing regions are located is a useful starting point.
It also helps explain why cities such as Calgary, Grande Prairie, Fort McMurray, Red Deer and Lloydminster have developed very different relationships with oil and gas.
Northwestern Alberta
Northwestern Alberta is currently one of the most important areas for conventional oil and natural gas development in the province.
Grande Prairie serves as the main service centre for much of this activity.
The region contains portions of the Montney formation, one of Western Canada’s most important natural gas and liquids producing formations.
Development in this part of Alberta increasingly relies on horizontal drilling and hydraulic fracturing. Multiple wells can be drilled from the same surface pad, allowing producers to access a large underground area while concentrating surface infrastructure.
Natural gas is a major product, but many wells also produce valuable liquids.
Condensate is particularly important because it has a major market within Alberta’s oil sands industry, where it can be used as a diluent to help heavy bitumen move through pipelines.
The concentration of drilling has helped Grande Prairie develop into one of Alberta’s largest oilfield service centres.
Drilling contractors, pressure pumping companies, coiled tubing providers, trucking businesses, pipeline contractors and equipment suppliers all operate in the region.
For someone looking for field based oil and gas work, northwestern Alberta is one of the most important regions to understand.
Fort McMurray and the Athabasca Oil Sands
Travel northeast from Edmonton and the energy industry changes dramatically.
The Fort McMurray region is home to the Athabasca oil sands.
Some bitumen deposits near the surface can be recovered through large mining operations. These projects look very different from conventional oilfields.
Instead of individual pumpjacks scattered across farmland, mining operations can include enormous excavation areas, processing facilities and fleets of heavy equipment.
But only part of Alberta’s oil sands resource is close enough to the surface to be mined.
Deeper deposits are generally developed using in situ recovery methods.
Steam assisted gravity drainage, commonly called SAGD, is one of the best known methods.
Rather than excavating the oil sands, producers drill horizontal wells underground and use steam to heat the bitumen so it can flow toward a producing well.
This means an oil sands development may look very different depending on where it is located and how deep the resource is.
The Cold Lake Region
Eastern Alberta around Cold Lake is another major heavy oil and oil sands producing region.
Cold Lake has a long history of thermal oil production.
The area is associated with in situ recovery rather than the enormous surface mines commonly associated with Fort McMurray.
Thermal recovery methods use heat to help mobilize heavy bitumen underground.
Cold Lake also demonstrates why the phrase “oil sands” should not automatically create an image of a mine.
A substantial portion of Alberta’s bitumen is recovered through wells.
From the surface, these operations can resemble industrial oil and gas facilities rather than open pit mines.
Lloydminster and East Central Alberta
The Lloydminster region is another important part of Alberta’s heavy oil industry.
Lloydminster is unusual because the city sits directly on the Alberta and Saskatchewan boundary.
Oil development therefore occurs on both sides of the provincial border.
The surrounding area has extensive heavy oil production and supports a large network of service businesses.
Pumpjacks are a common sight throughout parts of east central Alberta, reflecting the region’s long history of conventional and heavy oil development.
For service companies, Lloydminster provides access to producing areas in two provinces.
That makes the city an important regional centre for well servicing, trucking, maintenance and other oilfield activities.
Central Alberta
Central Alberta has one of the longest histories of petroleum development in the province.
The region surrounding Edmonton, Leduc, Red Deer and communities farther west contains numerous conventional oil and natural gas fields.
The famous Leduc discovery south of Edmonton helped transform Alberta’s economy and launched the modern era of large scale petroleum development in the province.
Many fields in central Alberta are mature today, but mature does not mean irrelevant.
Existing wells continue producing while companies use improved technology to recover additional resources from established formations.
Horizontal drilling has also renewed interest in some areas that were developed previously with vertical wells.
The result is a landscape where older conventional infrastructure can exist alongside modern horizontal development.
The Clearwater Play
One of the more interesting Alberta oil developments of recent years has been activity targeting the Clearwater formation.
Development is concentrated primarily in north central Alberta.
The Clearwater has attracted attention because producers have been able to develop portions of the formation using horizontal wells with relatively straightforward completion designs.
Not every modern oil development requires the same intensive hydraulic fracturing programs associated with formations such as the Montney.
Geology determines the appropriate development method.
That is one reason Alberta’s drilling industry is so diverse.
Equipment and techniques that work well in one region may not be appropriate in another.
Southern Alberta
Southern Alberta played an important role in the early development of Canada’s natural gas industry.
The region around Medicine Hat has such a long connection with natural gas that the resource became central to the city’s identity.
Although much of Alberta’s most aggressive modern drilling has shifted toward western and northwestern regions, southern Alberta continues to contain producing oil and gas infrastructure.
The area also supports service companies that work throughout southern and southeastern Alberta.
Medicine Hat remains an important regional energy centre even though the character of activity is different from Grande Prairie or Fort McMurray.
Why Are There Fewer Wells Around Calgary?
Calgary is Canada’s best known oil and gas business city, which sometimes creates the impression that it should also be surrounded by the province’s largest producing fields.
That is not the case.
Calgary’s importance comes primarily from its role as a corporate, financial and technical centre.
Major producers, pipeline companies, engineering businesses and oilfield service companies maintain headquarters or offices in Calgary even when their physical operations are hundreds of kilometres away.
A geologist can work in downtown Calgary on a development near Grande Prairie.
An engineer in Calgary can support an oil sands facility near Fort McMurray.
A corporate team can manage assets scattered throughout Western Canada.
This separation between corporate offices and field operations is fundamental to understanding Alberta’s energy industry.
Why Do Companies Drill in Some Areas but Not Others?
Oil and natural gas are not distributed evenly underground.
Alberta contains layers of sedimentary rock that were deposited over enormous periods of geological time.
Some formations contain commercially recoverable hydrocarbons while others do not.
Even within the same geological formation, well economics can vary substantially from one location to another.
Companies therefore study seismic information, historical wells, production results and geological data before deciding where to invest.
Infrastructure matters too.
A strong natural gas well can be less attractive if there is no economical way to process and transport the gas.
An area with established roads, pipelines and processing plants can therefore have advantages over a remote region requiring extensive new infrastructure.
Why Do You Sometimes See Several Wells in One Location?
Modern drilling has changed what an Alberta oilfield looks like.
Historically, developing a reservoir often required many individual well sites spread across the landscape.
Horizontal drilling allows multiple wells to originate from a single surface location and travel in different directions underground.
These locations are commonly called multiwell pads.
One pad can therefore access a much larger underground area than its surface footprint might suggest.
This is particularly common in modern natural gas developments.
A person driving past a single drilling site may not realize that numerous horizontal wells can eventually extend underground from that location.
Alberta’s Oil and Gas Map Is Constantly Changing
The geography of Alberta’s energy industry is not permanent.
Some of the province’s historic producing regions have matured while new drilling technology has made other areas more attractive.
Grande Prairie has become increasingly important because of natural gas and liquids development in northwestern Alberta.
Fort McMurray remains synonymous with the Athabasca oil sands.
Cold Lake and Lloydminster continue to be important heavy oil regions.
Central Alberta combines mature petroleum infrastructure with newer development opportunities.
Calgary remains the corporate centre connecting much of this activity.
Understanding these regional differences makes Alberta’s oil and gas industry much easier to follow.
There is no single Alberta oilfield.
The province is a collection of very different producing regions, geological formations and development methods.
And that geography influences almost everything else, including where companies invest, where service businesses establish operations and where Alberta’s oil and gas jobs are ultimately created.