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• PIPELINE NEWS NORTH
MAY/JUNE 2012
special feature
western dreams
How one man’s vision built a Canadian energy icon
Spectra Energy’s McMahon natural gas processing plant in Taylor, British Columbia still bears the name of the legendary founder of Westcoast Energy, Frank McMahon, who built the company on a dream of supplying natural gas to the rest of the province and the Northwest United States from a Peace Region natural gas play. photO courtesy of Mike McNicholas/westcoast energy archives
james waterman Pipeline News North Mike McNicholas’ personal history with Westcoast Energy only began in 1979, but his almost encyclopedic knowledge of the company would suggest that he was sitting right next to Frank McMahon when the founder of Westcoast saw that Pouce Coupe gas well burst into flames in 1921. “I was working on… the Queen Charlotte Islands,” said McNicholas, reminiscing about his introduction to the company where he still works today. “And some oldtimer there told me I should go to Fort Nelson and work for Westcoast Transmission. I didn’t know anything about the business or what Westcoast Transmission was about, but I was prepared to get out there and see what it was. So, he phoned our hiring office and said, ‘I’m sending this guy in. Go ahead and hire him.’ With that, I had a job in Fort Nelson.” He spent seventeen years at the gas plant in Fort Nelson before moving to the McMahon plant in Taylor for five years. “Then moved on to the transmission system,” he added. “And I’ve been there for a dozen years. “In that length of time, you get to know a lot of people and a lot of the history of the organization. Come across a lot of the archives for the company. A lot of old photo albums and that. And it was really interesting just to get to look at the history of the people, particularly on the transmission system, since that was the original facility. It’s really neat, because we have second and third generations of those original employees. That was my big interest.”
It was also the story of Frank McMahon that caught his attention. “He was a wildcatter,” said McNicholas. “He was just out there to do the wildest things. And some paid off and some didn’t. He went broke many times… But when he struck it rich, it paid off big time. “And he followed the dream. His dream of building the Westcoast Transmission company – that took him 20 years. It took an awful lot of work. He had to get acts of parliament changed. He took many trips to Washington because there was a lot of people in Washington objecting to the fact that Canadian gas was going to flow down into the U.S.” McMahon’s dream of creating Westcoast really began when he saw the flame from that gas well that was struck by Imperial Oil geologists in 1921. Imperial had no interest in the well. Gas was almost seen as a nuisance byproduct of producing oil. Besides, there was no market for Pouce Coupe gas and nobody to build a pipeline to transport the fuel regardless. It was too remote. The tale sounds vaguely familiar to talk of the Horn River Basin shale gas play and the quest for liquids-rich gas in the Montney and Duvernay today. “But there are still the dreamers out there that are looking further out than that,” said McNicholas. “And they don’t worry about cycles. There have been so many cycles in the natural gas business since Frank McMahon’s day. “We know that there will be change,” he continued. “A few years ago, we didn’t know that there was going to be such a glut of gas. That glut of gas is a great opportunity to create new industries.” Imperial Oil had no interest in that gas
well, but McMahon thought it could be the first clue to a Peace River gas field big enough to rival the prolific Viking play in Alberta, not to mention one that could supply Vancouver – and possibly the Northwest United States – with natural gas. Construction of the Westcoast pipeline that would finally accomplish that goal didn’t officially begin until 1956. The work actually started in October of 1955.
“What happened at that time,” McNicholas explained, “was that he was really confident that he was going to get approval for the pipeline, but he did not have approval from the National Energy Board.” He secured a $19 million loan from the bank and went about the business of convincing “everybody that the safest place to store thirty inch pipe was in the ground.” Construction was soon underway. “Originally, they were just going to put the pipe up in the northern sections,” said McNicholas. “Out of sight. But, no, they started right at the U.S. border. Put the pipe in the ground and took that gamble that they would get approval. “When they bought the 30 inch pipe,” he continued, “it was just sitting around. And they weren’t too concerned about that because they knew that they could resell the pipe. Once you put the pipe in the ground, it’s really hard to dig it up and sell it and make any money on it. So, they took quite a gamble there about getting approvals.” Of course, a lot happened in the 36 years between the day McMahon witnessed the fire of the Pouce Coupe gas well and the day the pipeline was complete, not the least of which were the Great Depression and the Second World War. Engineers had drawn the first map of what would eventually be that Westcoast transmission line in 1937, but that was two years after the provincial government in British Columbia decided oil and gas would be developed by the province alone. They wouldn’t be selling any mineral rights. “He was very much a capitalist,” McNicholas said of McMahon and his aversion to that policy, especially since it
Welding 36 pipe sections at Sikanni River circa 1980. As is typical of installations on steep slopes, the pipe is encased in concrete to protect it from the rocks. photO courtesy of Mike McNicholas/westcoast energy archives