David O'Laney unlocks the gate to the historic site he is charged with protecting and swings it wide, allowing entrance to what is arguably the birthplace of modern Alberta and all that has meant to the rest of Canada.

Appropriately, the road in is paved with bitumen.

"This is where the first experimental oilsands processing took place," says O'Laney, who monitors and maintains the site for Alberta Culture.

"This" — a stretch of Athabasca River bank north of Fort McMurray — is Bitumount.

The Bitumount mine

It’s where almost a century ago, men and money laboured mightily to turn the black, gooey, sandy gunk into something — anything — that people would pay for.

Eventually, an industry was founded. The result changed Alberta — and Canada — forever.

"It really did change the economy and the political landscape of the country," says University of Toronto political scientist Chris Cochrane. "It's still changing them."

Half homestead, half abandoned industrial yard, Bitumount doesn't look like a birthplace.

THE CANADIAN PRESS/Jason Franson

It was started in the mid-1920s when Robert Fitzsimmons, a career oilman, decided the tarry goo along the riverbank was his ticket to riches.

For more than a decade, he did everything he could to make the oilsands pay. He advertised 38 different ways to use bitumen, including road paving, home roofing and even as a therapeutic bath.

His cabin and those of his workers, the gaps in the walls chinked with bitumen, still stand.

Some of today's mines have their own airstrips, but in those days the only way in and out was Fitzsimmon's boat. The Golden Slipper still moulders on the riverbank.

Fitzsimmons was bought out in 1942 by Lloyd Champion, a serial entrepreneur who thought bitumen just the thing to pave the Alaska Highway, then under construction. Champion later partnered with the provincial government, which ultimately ran the site until it closed in 1955.

Touring Bitumount today, it's impossible not to be struck by the parallels between past and present. Despite their rusty patina, many of the structures from Fitzsimmons' time would look familiar to today's oilsands workers — the dormitories, the power plant, the refinery, the pipelines.

There's an old rail car on site once used as a travelling road show to sell the oilsands — a harbinger of the two-storey dump truck Alberta brought to Washington D.C. in 2006 for the same purpose.

Fitzsimmons' old operation even presaged the modern method of using hot water to separate the oil from the sand it's mixed with. Except his workers stirred a huge open-air cauldron and raked off the oily slurry off by hand.

"Imagine the smell," says O'Laney.

Those old crews produced about 60 barrels a day. Now, 2.3 million barrels are piped out each day.

That's the result of decades of innovative engineering — and a pipeline of money.

"The perfect metaphor is someone spiking the punch bowl," says Todd Hirsch, chief economist for Alberta Treasury Branches, a provincially owned bank.

In 2014 alone, the oilsands attracted $34 billion in investment.

Alberta, a jurisdiction of just over four million people, knocked back years of that.

It was quite a party.

Corporate shindigs featured caviar and filet at the Calgary Stampede, where $100 hot dogs loaded with cognac and lobster sold out. Mobile homes in Fort McMurray sold for $400,000.

A 17-year-old could make $80 an hour driving a truck. Retail sales staff in Alberta could expect to earn $5,000 a year more than elsewhere in the country.

Every year from 2000 to 2015, Alberta gained about 23,000 people at the expense of the other provinces. The Alberta economy grew by a fifth between 2010 and 2014.

That's not necessarily good, Hirsch says.

Everyone would like to have a more diverse economy, but when oil's at $100 a barrel it pinches off any attempts.

University of Toronto political scientist Chris Cochrane

"When you have one dominant industry that pulls so much capital, it turns into a bit of a black hole that has its own gravitational force and it pulls in everything around it including labour, capital, everything from office space to building materials to all kinds of talent. It makes it very difficult for other industries and non-energy sectors to compete."

The industry has created enormous wealth, but it has left Alberta vulnerable.

"Everyone would like to have a more diverse economy, but when oil's at $100 a barrel it pinches off any attempts," says Hirsch.

Nationally, the oilsands boom exaggerated the regional tensions that have plagued Canada since 1867, says Cochrane.

"It's very difficult to craft comprehensive economic strategies for this country given the variable conditions and industries that dominate in different regions.

"I don't want to say the oilsands have damaged Canadian politics or national unity. (But) I think the reaction to the oilsands has left a lasting impact on people's sense of national cohesiveness.

A look at the development of the oilsands in Canada:
1875
Canada's Geological Survey registers presence of Athabasca oilsands.
A portion of the Shell Albian Sands oilsands mine is seen from an overlook near Fort McMurray, Alta., on July 9, 2008. THE CANADIAN PRESS/Jeff McIntosh
1927
Robert Fitzsimmons forms International Bitumen Company at a site called Bitumount in northern Alberta.
Historic Bitumount oil sands mining, separating and refining facility in Fort McMurray Alta, on Tuesday October 5, 2016. Between 1925 and 1958, Bitumount was the site of experimental oil sands separation plants and was designated a Provincial Historic Resource in 1974. THE CANADIAN PRESS/Jason Franson
1929
Dr. Karl Clark patents a hot water separation process, the basic concept still behind most oilsands extraction today.
1930
Fitzsimmons uses a version of the Clark process at Bitumount and produces 300 barrels of oil over the course of the summer.
Inside the separation plant at historic Bitumount oil sands mining, separating and refining facility in Fort McMurray Alta, on Tuesday October 5, 2016. Between 1925 and 1958, Bitumount was the site of experimental oil sands separation plants and was designated a Provincial Historic Resource in 1974. THE CANADIAN PRESS/Jason Franson
1941
Fitzsimmons, out of money, sells Bitumount to Lloyd Champion. Alberta eventually takes control of site, including a mine, extracting facility and refinery.
Heritage Conservation Technologist David O'Laney walks though an open bitumen mine at historic Bitumount oil sands mining, separating and refining facility in Fort McMurray Alta, on Tuesday October 5, 2016. Between 1925 and 1958, Bitumount was the site of experimental oil sands separation plants and was designated a Provincial Historic Resource in 1974. THE CANADIAN PRESS/Jason Franson
1955
Bitumount closes.
Pieces of hardware left behind at historic Bitumount oil sands mining, separating and refining facility in Fort McMurray Alta, on Tuesday October 5, 2016. Between 1925 and 1958, Bitumount was the site of experimental oil sands separation plants and was designated a Provincial Historic Resource in 1974. THE CANADIAN PRESS/Jason Franson
1964
Esso starts its Cold Lake project while construction on Great Canadian Oil Sands begins.
1967
Great Canadian Oilsands begins production at 32,000 barrels per day.
An oilsands facility is seen from a helicopter near Fort McMurray, Alta., Tuesday, July 10, 2012. THE CANADIAN PRESS/Jeff McIntosh
1978
Syncrude begin production at 109,000 barrels per day.
The Syncrude oil sands extraction facility is reflected in a tailings pond near the town of Fort McMurray, Alberta on Sunday June 1, 2014. THE CANADIAN PRESS/Jason Franson
1979
Suncor forms when all the Canadian operations of Sun Company Inc. are amalgamated with Great Canadian Oil Sands.
A pedestrian is reflected in a Suncor Energy sign in Calgary, Monday, Feb. 1, 2010. THE CANADIAN PRESS/Jeff McIntosh
1993
Truck and shovel technology is adapted.
A haul truck carryong a full load drives away from a mining shovel at the Shell Albian Sands oilsands mine near Fort McMurray, Alta., on Monday. July 9, 2008. THE CANADIAN PRESS/Jeff McIntosh
1996
Annual investment in oilsands reaches $1 billion.
2001
The first commercial steam-assisted gravity drainage drilling project is launched, allowing exploitation of much deeper reserves of bitumen.
2004
Oilsands production reaches 1 million barrels per day.
The Suncor Refinery in Edmonton is seen on Tuesday, April 29, 2014. THE CANADIAN PRESS/Jason Franson
2008
Annual investment in oilsands reaches $20.8 billion.
2013
Annual investment in oilsands reaches $32.7 billion.
The Suncor Firebag oil sands facility seen from a helicopter near Fort McMurray, Alta., Tuesday, July 10, 2012. THE CANADIAN PRESS/Jeff McIntosh
2014
Oil prices collapse from more than $100 a barrel to less than $50.
2015
Oilsands production reaches 2.4 million barrels per day.
2016
Alberta government introduces legislation capping oilsands greenhouse gas emissions at 100 megatonnes each year.
Alberta Premier Rachel Notley speaks during a media availability at the Alberta Legislature Building in Edmonton on May 26, 2016. THE CANADIAN PRESS/Codie McLachlan

Alberta's financial strength during the 2000s was enough to destabilize the relationship between Alberta, Ottawa and the other provinces, says Hirsch.

"If the Fathers of Confederation had to go back and make a redo, they probably wouldn't have handed over natural resources to provinces," he says. "This is really what has caused the enormous imbalances between the provinces."

Think of the now-notorious 2001 firewall letter, written by a young lobbyist named Stephen Harper to then-Alberta Premier Ralph Klein urging him to opt out of national programs such as the Canada Health Act.

Alberta Premier Ralph Klein waves to the media as he is greeted by Prime Minister Stephen Harper prior to an informal meeting with Canadian Premiers, in Ottawa Friday Feb 24, 2006.(CP PHOTO/Tom Hanson)

The oilsands have also become an international issue.

"At one point in 2010, arguments from environmental groups convinced six Fortune 500 companies to promise to avoid oilsands-derived fuel in their transportation fleet. Ad campaigns targeting the industry ran throughout the U.S. and in Europe.

Under attack, Albertans became more than a bit defensive about the industry that butters their bread.

"We are a bit on our back foot," says Hirsch. "We've painted outselves into a corner where we find ourselves with a dependence on a commodity that the rest of the world is viewing unfavourably."

Things, of course, have changed since 2014. Oil prices have collapsed from over $100 a barrel to about $50.

Oil price - 2000 to 2017

Crude Oil (petroleum), West Texas Intermediate 40 API, Midland Texas, US$ per barrel. Source


Analysts wonder if the age of megaprojects such as the $16.5-billion Fort Hills project — jointly owned by Suncor, Total and Teck Resources, next door to Bitumount — is nearing the end.

ExxonMobile recently wrote down $183 billion of oilsands reserves in response to concerns from American securities regulators that they were no longer economic to produce.

And other multinationals are backing away from the resource.

Royal Dutch Shell recently sold most of its oilsands holdings to Canadian Natural Resources. Statoil has sold its oilsands assets to Athabasca Oil Corp. of Calgary.

Alberta actually lost people to other provinces last year.

Hirsch suggests the current oil price is Goldilocks — high enough to stabilize the industry and keep it profitable, low enough to leave economic space for diversification.

A hydraulic shovel loads a heavy hauler at an oilsands mine north of Fort McMurray, Alta. on June 19, 2003. THE CANADIAN PRESS/Adrian Wyld

Even if the oilsands remain stable, it's hard to see where new jobs for all those skilled trades will come from, says Cochrane.

"To what extent are people fundamentally malleable in terms of the kinds of things they're willing or able to do?" he asks.

"There's a kind of person who stands to gain stable employment from oilsands work. One line of thinking is that these folks will have to go away and retrain and adapt to another kind of economy.

"I think that people's horizons for what they want to do, the kind of thing they're good at, isn't as infinite as some of these arguments imply."

Canadians who have grown accustomed to fat oilsands paycheques may be facing a reckoning, Hirsch says.

"Wages are coming down, wage expectations are coming down, and that is difficult when households have set up budgets and expectations of how much money and how many vacations to Maui."

A wild fire rips through the forest 16 kilometres south of Fort McMurray, Alta., on highway 63 on May 7, 2016. THE CANADIAN PRESS/Jonathan Hayward

And the challenge of climate change — perhaps the biggest one the industry faces — has never gone away.

Industry has agreed to a hard cap of 100 megatonnes of carbon emissions, a limit that will be pretty much maxed out when projects now in the regulatory process are all built.

I'm trying to think about how a government could bring an entire country together around a policy that will leave a pile of money in the ground and unemploy a lot of people, if handled incorrectly.

University of Toronto political scientist Chris Cochrane

Industry says technological advances will eventually allow more production without CO2 growth, but it's been saying that for a long time and possible solutions are a long way from commercially feasible.

Many analysts suggest that meeting Canada's international greenhouse gas reduction goals will mean the country will simply have to walk away from some bitumen deposits.

"I'm trying to think about how a government could bring an entire country together around a policy that will leave a pile of money in the ground and unemploy a lot of people, if handled incorrectly,” Cochrane says.

"If there is going to be a convincing strategy of moving away from oilsands development, it's going to have to be a policy that's going to benefit those most likely to lose from the shift. That's going to be hard to tell people in Quebec or Ontario."

Still, Bitumount holds one more lesson, this one more optimistic.

The oilsands are just one more example of Canadians creating value with persistence, hard work and imagination -- turning an ugly duckling into a golden goose.

"The oilsands didn't work at the beginning," says Hirsch. "Agriculture, at the beginning, did not work here.

"We took a marginal resource and turned it into something."

This is a corrected story. An earlier version incorrectly stated that Chevron was affected by a writedown in oilsands assets due to concerns from American securities regulators that they were no longer economic to produce. In fact, the valuation of Chevron's oilsands assets was unaffected by those concerns.