Puslinch wildcatters looked for oil – or someone’s investment money

The following is a re-print of a past column by former Advertiser columnist Stephen Thorning, who passed away on Feb. 23, 2015.

Some text has been updated to reflect changes since the original publication and any images used may not be the same as those that accompanied the original publication.

Wellington County has never been noted for its mineral resources.

True, there have been brickyards scattered here and there, and a few quarries. We have had our share of gravel pits. Puslinch Township, particularly, has had its full share of gravel businesses. Back in 1914 though, the excitement wasn’t over aggregates, but something a little deeper: oil!

Early that summer, a drilling crew set up shop on a farm west of Morriston, and began sinking a shaft. By the middle of July they had drilled a 9-inch diameter hole down 275 feet. At that time they believed they were penetrating the last layer of solid rock, and that within another hundred feet or so they would be into the potential oil bearing strata.

With the drilling rig working day and night, the activity soon attracted attention around the township. Other oil operators showed up. Soon there were two firms, James Pete and Sons, and Climie and Co., both from the Petrolia area, poking around the township looking for drilling sites. Several farmers signed lease agreements, and there were plans to begin drilling a second well on land owned by Dr. Galbraith.

When I stumbled upon old newspaper reports of this activity, I had two questions: Why did the oilmen choose Puslinch Township, and why did they show up in 1914?

To understand the background to the oil activity in Puslinch, it is useful to step back and look at the Ontario oil industry. Commercial petroleum production dates back to 1858, with the digging of the first shallow well at Oil Springs. The date has always been a memorable one for Canadian nationalists. It predates by a year the better known oil strike by Edwin Drake at Titusville, Pennsylvania.

The Oil Springs discoveries, and others in nearby Petrolia, fostered the refining industry in Ontario. The 1860s and 1870s were characterized by violent cyclical price movements, frequent overproduction, and attempts to consolidate the numerous small producers and refiners into larger units, to meet the pressures of American competition. In 1880, 16 firms merged to form Imperial Oil, and a protective tariff sheltered the domestic market for Ontario producers.

Standard Oil, which effectively operated an oil monopoly in the United States, began to eye the Canadian market, and through the 1890s made various incursions into the Ontario petroleum industry, using practices that today would be illegal. Under pressure, Imperial Oil sold out to Standard Oil in 1897. By this time the Canadian oil industry was in poor shape. The Petrolia fields were playing out. Production had peaked in 1894.

Canadian refiners began to rely on American sources for crude oil. Crude oil prices dropped after the Laurier government permitted the importation of bulk American oil. Even though the Ontario market had come under the control of an American giant, there were still 400 independent oil producers operating more than 2,000 wells. In 1904 the independents established the Canadian Oil refinery, but it too was soon taken over by Americans.

The petroleum industry of the 1900 era was a pygmy compared to its size today. There were only two significant products: kerosene, for illumination, and lubricants. A third could be seen clearly on the horizon. The automotive industry’s spiralling demands for gasoline would propel the petroleum industry into a giant within a generation.

After opening the doors to Americans, the Laurier government began to fear the increasing reliance on American sources of crude oil, and in 1904 instituted a bounty on Canadian production that increased the well head price by about 50%.

Surprisingly, this bounty resulted in only a small amount of new production. Crude oil prices were still very low, with the market totally controlled by Standard and Canadian Oil. By 1914 the Ontario market had become large enough that more big players wanted in. That year British American and McColl Frontenac announced that they would construct new refineries. Now there would be four buyers instead of two.

Meanwhile, the Petrolia oil drillers had been busy, though not in oil. With the Petrolia field in decline, and no obvious alternate in sight, they had been using their skills and equipment to drill wells for the municipal water systems that most urban centres were constructing.

This brings us back to Puslinch Township.

Faced with ever increasing demands for water, the city of Guelph in 1909 had constructed a pipeline to artesian wells near Arkell. By 1914, daily consumption of water in Guelph passed the 2 million gallon mark, and authorities thought it wise to seek additional sources.

Early in June 1914 the city hired James Pete and Sons, a firm with much experience in the Petrolia area, to drill a well near the pumping station located at the main reservoir at the east end of the city. A couple of hundred feet down, the drillers found water.

According to the newspaper report, the crew “made queer faces” when they drank it. The lab analysis showed the water to be heavily contaminated with sulphur, ammonia gas and chloride. They drilled on. At 900 feet they became excited. They believed they were penetrating the type of rock formation where oil is found.

The drilling did not produce a single drop of oil, but the firm thought the rock formations so promising that they began to scout around outside the city in Puslinch Township. Reports of a potential oil field soon spread. In late July 1914 oil prospectors were reported to be visiting most of the farms in the Puslinch Lake area.

In the end, the Puslinch “oil boom” proved to be a nine-day wonder. The drillers had limited capitalization, and it appears that no one was willing to invest in the project. Cautious and sceptical, Puslinch farmers neither bought nor sold land, though a few signed lease agreements.

The oil market continued its characteristic volatility through the summer of 1914. The declaration of war in August offered the promise of higher prices, with commodity markets rising quickly. On the other side, Standard Oil, in an obvious effort to spook the new refinery projects out of Ontario, dropped the price of gasoline by 25%.

Was drilling in Puslinch a legitimate exploration project, or an unsuccessful scam? Probably, the “oil boom” contained elements of both. The drillers had a practical knowledge of geology, but little money and no more regular work in the Petrolia fields.

If people took the Puslinch project seriously, there could be a year or two of steady drilling. There were good reasons to be optimistic about the oil business in 1914. However, over a hundred years have passed, and we will never know the true intentions behind this drilling activity.

The oil rumours of 1914 were not the first in Wellington County, and would not be the last. In the 1860s and 1870s, there were several reports of oil seeping from the ground in the Fergus and Elora areas. At least one of these was a practical joke.

One went so far as the formation of the Kinnettles Rock Oil Company.

Many readers will remember a latter drilling project in Puslinch Township. This one was located at the western side of Morriston in the late 1950s, under the auspices of Toronto-based Jonsmith Mines Limited.

Local people scoffed at the project, but a number of Wellington County residents sank large portions of their savings into the hole. They lost it all, but that’s a story for another time.

*This column was originally published in the Wellington Advertiser on Jan. 11, 1999.


Stephen Thorning - 1949-2015