Friday, May 30, 2008

Taking Centre Stage

This article appears in the June 2008 Issue of Oilweek magazine.
By Peter McKenzie-Brown

At 10 o’clock in the morning of February 13, 1947, a group of dignitaries welcomed in the Canadian oil industry’s modern era. On that day Imperial Oil brought in its Leduc #1 discovery with fanfare, but the event was primarily of local interest. Internationally, only the American oil press paid heed.

The event that brought Alberta’s potential to the attention of the world came a year later. The occasion was the storied blowout at Atlantic Leduc #3. Here is the tale of that extraordinary event as seen through the eyes of Hugh Leiper – the last surviving crewman on the well. Twenty years old and at the beginning of a long and successful career, Leiper was derrickman on the rig as the adventure started.

His father worked in the small refinery at Turner Valley, which hosted Canada’s first major oilfield, so Leiper had lived with the industry from childhood. When the Second World War ended, the Turner Valley field was essentially dead from overproduction. “It had been ruined during the war,” says Leiper. “Jobs in drilling were not plentiful, to say the least. There were two rigs working in Wainright, one or two in Taber, Cantex had two working for California Standard and that was about the extent of the drilling industry at that time. Imperial had a rig of its own, the one they used at Leduc.”

After a year at Calgary’s Mount Royal College, Leiper couldn’t afford to continue studying petroleum technology. He signed on as a roughneck with Cantex in 1946 and moved to a new contractor, General Petroleums, a year later. “We were pretty lucky. We lived in camps. We were getting six bucks a day, but they deducted $1.50 for room and board. The steam rigs we used were cheap to operate; all you needed was water and fuel. But they were hard to tear down and move, and by 1949 they were gone. The new power rigs were faster and more portable.”

As drilling contractor, General Petroleums had already drilled two good wells on a quarter section of John Rebus’s 320-acre farm. Rebus owned freehold oil and gas rights, and fabled Calgary oilman Frank McMahon had snapped up that quarter section for Atlantic Oil Company, which he had founded.

The first two wells – wells that would take 4-5 days to drill today – had each taken a month of drilling. Rather than tear down the steam-powered rig to get ready for #3, Leiper says, “We bolted two huge steel beams across the bottom frame of the substructure, then used hydraulic jacks to put the end of each beam on an athey wagon. Athey wagons were steel contraptions, each with a pair of caterpillar tracks, but with no power. Then we hooked on a cat and lugged the whole rig, completely intact, over to the new location. I’d say that rig weighed 50 ton.”

“We had an old blowout preventer but they were usually clogged with mud and crud,” he says. “We really just put them on for show, and sometimes didn’t put them on at all. They were a joke, but I’m getting ahead of myself.”

Drilling began, but “we pretty soon lost circulation in the well. We pumped down straw, wire mesh, golf balls, chicken feathers – I can still smell those chicken feathers -- and anything else we could to try to regain circulation. Nothing worked.”

One evening Leiper was in the cookhouse listening to an argument among the engineers. Some of them “wanted to drill dry – just pump clear water down past the drill bit. The cuttings would theoretically seal off the lost circulation zone.” After fierce arguments, the dry drillers won the day, and disaster loomed.

It was 3 am, March 8th, 1948. Leiper continues, “A fellow named Cliff Covey and I were in the cellar under the rig thawing out a line that was frozen solid. Then suddenly the mud started flowing up. There was a blurp of mud over the drilling nipple, and I said to Covey ‘Let’s get the hell out of here.’ We ran west under the rig and a huge master bushing (a rotary table) weighing several hundred pounds went up through the rig and into the air and landed just 20 feet ahead of us.

“There it was. What an awesome sight, the roar of this thing. You couldn’t talk to each other because of the noise. The rig was winterized as they called it in those days – boarded in with tin. The well was blowing huge chunks of shale and they were penetrating that tin just like you’d taken an AK-47 and opened up on it.

“The driller was a guy named Bill Murray, a very capable driller. He dispatched a couple of people to run down as fast as they could to the boiler house and tell them to shut the fire off. Then he and I ran up to the derrick floor and we raised the string of drill pipe as high as we could, chained down the brake on the draw works, and got off the rig.

“The crown of the rig was more than 150 feet off the ground, and when daylight came we could see what we were dealing with. Oil was blowing over the crown. It seems like lunacy today, but we put up some windsocks. We wanted to know when it was safe to fire up the boilers to pump weighted mud into the well. We were wading in oil up to our bellybuttons, carrying these sacks for the drilling mud.”

“This went on for three days,” he says. Then, suddenly, “the flow subsided. It must have got plugged up a bit, naturally.” The crew got the primitive blowout preventer functioning, and things appeared to be looking up. “I’m running one of the steam pumps, and the mud gauge is going down. It looked like we were winning. Then someone came up to me and said ‘I just come by some seismic shot holes on the road and I saw oil and gas coming out of them.’ That’s when it started. That’s when she started cratering, and it gradually got worse and worse.”

“There was two to three feet of snow in the field, and we needed to get water to the rig, we had to get a line strung up to the well to continue killing it. We started setting up a line using five-inch drill pipe in 45-foot lengths, and we were using bull chains to cinch up these thick-walled pipes.”

“I saw Cliff Covey go walking by, and I wondered what he was doing, going back to the rig. Then I saw him waving his arms for us to come. Well, he was just off the farm, and he had gone into an outdoor privy, lit a cigarette and thrown the match down the hole and caught the toilet on fire. We didn’t have anything to fight fire with. We got some gunny sacks and some little hand fire extinguishers from the pumpers. The flames had gone from the toilet to the sump. We’d swat out a bit of fire here and it would jump over there. None of us should have even been in there. It was lunacy. But we were young and didn’t realize the consequences, and eventually we got it out. We always called him Shithouse Covey after that.

“We decided to do a huge cement job on that well. We got 10,000 sacks of cement, put it into the hopper and pumped it down the well. Didn’t fizz a bit on that hole, not one damned bit. It was an awesome sight. The derrick, the equipment, everything but the boilers was collapsing into the crater.”

Eventually, command of the control operation went to Imperial Oil, although Leiper worked at the site until the end, for General Petroleums. “We didn’t get any danger pay,” he recalls. “The Imperial Oil guys got danger pay – they were a mile and a half away at the river. We didn’t get any, and we were right at ground zero.”

Imperial decided to drill two relief wells, but “one of those holes was plagued with fishing jobs and every other problem you can imagine. Then, in early September, the well caught fire. But we had finished a new water line from the North Saskatchewan River to the operations area, and we pumped huge amounts of river water down the relief wells. Finally, I think it was on September 8th, the well came under control. It just went quiet.”

It took six months, two relief wells and the injection of some 700,000 barrels of river water to bring Atlantic #3 under control. As part of the crude oil recovery effort, trucks sucked more than two million barrels of oil from ditches and gathering pools in the area. Oilman Frank McMahon quipped that the well was “producing through a 40-acre choke.”

The size of the blowout and the cleanup operation created a legend. The whole world knew from newsreels and photo features about it. The words “oil” and “Alberta” had become inseparable.

From a technical perspective, much good came from this disaster. Most importantly, the blowout led to new regulation. “I didn’t see any Oil and Gas Conservation Board (ERCB) people in the area when we were fighting that well,” says Leiper. But after the event the board held a public hearing, and later instituted two important regulations.

The first had to do with surface pipe. The well had been cemented to a shallow shale formation which didn’t have a chance of containing the monster reservoir pressures it encountered. Under the new regulations, drillers had to install adequate surface pipe, and it had to be cemented into a “geologically competent formation” – one that would hold in the event of a blowout.

The second had to do with blowout preventers. After Atlantic #3, BOPs had to be adequate, and there had to be two of them, so you had a backup. This was costly to the industry. “The substructure had to be a lot higher after that, so you could fit all this equipment in the cellar,” Leiper observes. “But this changed the whole complexion of the industry. After #3 there was public regulation of the drilling sector. Prior to that, you were on your own.”

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