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Geologist Arne Nielsen got pumped about the oil business at young age

Arne Nielsen.


Arne Nielsen was a young geologist just a few years out of university when he led the team that discovered the Pembina oil field in central Alberta, a huge find that changed the face of the oil business in Canada. He later went on to help discover oil in locations ranging from the prairies of Saskatchewan to the Sable Island field off the coast of Nova Scotia and Hibernia off Newfoundland's coast, along with the Gulf of Mexico and Louisiana.

One of North America's largest conventional oil fields, Alberta's Pembina has been producing since 1953. Oil from such fields is much cheaper to produce than from the oil sands of Northern Alberta.

"My idea at the time was to find oil by looking at the pure geology," Mr. Nielsen wrote in an article in Alberta Oil in April of this year. His method was unconventional and the people running the firm he was working for at first dismissed his ideas, which came from studying electronic and physical evidence from wells drilled in the area.

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It was tedious work but it paid off. "Creativity is one of the characteristics that makes the best geologists," said Mr. Nielsen's wife, Valerie Nielsen, a geophysicist who shares her husband's scientific interests. "Arne's creativity paid off in a big way."

Mr. Nielsen, who died July 2, a few days before his 88th birthday, went on to become president of Mobil Oil Canada. His work on the geology of the Pembina field made his name at an early age and propelled him into a successful career in the Canadian oil business, leading to directorships at oil and gas firms and large corporations outside the energy field such as Toronto-Dominion Bank and Aetna Insurance.

"For a geologist, one of your big objectives is to make a real oil discovery. What I found at Pembina I felt was an oil discovery that was a billion-barrel type in size," Mr. Neilsen wrote in Alberta Oil. "For a young geologist not many years out of university, it gave my career a tremendous boost."

Arne (pronounced Arnie, the Danish way) Nielsen was born July 7, 1925, on a farm in Standard, Alta. His parents, Aksel and Marie Nielsen, were Danish immigrants who first migrated to Iowa but moved to Alberta in 1910, encouraged by a land grant from the Canadian Pacific Railway that allowed Arne's farm labourer father to buy a farm with a 25-year mortgage. Not only was land $15 an acre cheaper, but the weather was better.

"The winters were not as severe as they were in Iowa," Arne Nielsen wrote in his memoirs, We Gambled Everything: The Life and Times of an Oilman, published last year. "There were light snowfalls and weeks of warm weather during which the snow disappeared. In winter, regular Chinook winds occurred."

The CPR built a spur line to Standard, but it was still isolated. An hour's drive east of Calgary today along the Trans-Canada Highway, in the 1920s and 30s there were no highways or oil royalties to finance them. Alberta was poor. Young Arne travelled to school and that was about it. He was 14 the first time he went to Calgary, when his mother took him to the big city to buy him his first suit for his confirmation in the Lutheran church.

The isolation was a bit of a drawback for Arne's father, who wasn't great at fixing things in an era when farmers had to be mechanics and carpenters, able to repair anything that broke. "His father loved studying rocks and he passed that on to Arne, along with his trait of not being able to fix things," Ms. Nielsen said.

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The Danish immigrants valued education and didn't complain about the school tax of $10 per 100 acres. Their descendants went on to amass an impressive number of university degrees.

Too young to join the army at the start of the Second World War, Mr. Nielsen enlisted in late 1944. He was being trained in the tank corps at Camp Borden in Ontario when the war ended before he could go overseas. Still listed as a veteran, he qualified for government-financed education and went to the University of Alberta in Edmonton, where he earned a master's degree in geology by 1950. Five of his nine children earned a total of nine degrees from the University of Alberta, with others graduating from the University of Calgary and Harvard.

Mr. Nielsen's first summer job off the farm was with the Geological Survey of Canada in the foothills of the Rocky Mountains, north of the Athabasca River. In 1949, he joined Imperial Oil working on the Leduc property. Discovered just two years earlier, the Leduc No. 1 well started the oil boom that changed the way of life in Alberta, turning it from a struggling, agriculturally dependent province to an oil-rich one.

From the start, Mr. Nielsen loved working in the field. And he loved the oil business. "It was more than a job … it was a way of life," he told the author Peter Newman.

After graduating, Mr. Neilsen started working with Socony-Vacuum Exploration, then a small player in the Alberta oil exploration boom. It would later be renamed Mobil Oil. Mr. Nielsen led the team that moved into Drayton Valley, Alta., where they discovered the Pembina oil field.

"Like many other great western Canada oil and gas discoveries, Pembina No. 1 defied conventional geological wisdom," Mr. Nielsen wrote in his book, which made the bestseller list in Calgary this year.

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"In 1952, the conventional wisdom was that Alberta's best oil prospects were in the Devonian-era limestone reefs – ancient coral reefs of shallow seas now locked up in the province's geologic deposits. The Pembina discovery was made by going off in a completely different direction."

After sitting alone for hundreds of hours going over logs from exploratory drills, Mr. Nielsen had to persuade his superiors that it was worth continuing to drill. They were convinced oil could only be found in old coral reefs like those at Leduc. But Mr. Nielsen thought there could be oil in a different layer, the Cardium sandstone. The thinking was that oil would seep through the sandstone, but Mr. Nielsen said it would pool against the non-porous shale in the next layer.

After discovering some "little puddles" of oil, one of his colleagues suggested fracking, or pushing fluid at high pressure into the well, the technique that has produced the shale oil boom in Canada and the United States. Back then it was a first in Canada.

On June 17, 1953, the first of many producing wells came in. The Pembina oil field was born and is still producing today, with modern fracking techniques extending its life.

"Pembina No. 1 was a great moment for my associates and me. It was particularly a triumph for me," Mr. Nielsen said of the discovery. "I had achieved the dream of every geologist; discovering a large oil field through exploration based on sound geological principles." He was 27 years old.

Mr. Nielsen went on to become the chief geologist of Socony-Vacuum, then was posted to New York, Denver and Houston. He came back to Calgary in 1966 as vice-president of exploration and became the first Canadian president of Mobil Oil Canada a year later.

In 1973, he was part of Canada's first energy trade delegation to China, a year after Richard Nixon's visit to Beijing. China was still fairly closed to the rest of the world and this was one of the first Western business delegations, led by Canada's minister of energy at the time, Donald Macdonald.

The Canadian oil executives travelled 3,000 kilometres through the country, most of it by rail. They visited an oil-producing area in northeast China near the border with the Soviet Union. The Chinese in the era of Mao Zedong were secretive, Mr. Nielsen wrote, but they were excellent hosts and anxious to learn from the Canadian oilmen, although they shunned any foreign investment. "There is a straight line of sight between the China we encountered in 1973 … and China's presence (today) in world oil and gas – including the Canadian oil sands 35 years later."

As a homegrown oil executive, Mr. Nielsen was courted to run Petro-Canada, then a Crown corporation. He recounted that he wasn't keen on the position, and "… influential people in Ottawa decided that I wasn't political enough. I think that verdict was a compliment."

One non-paid government post he accepted was as Honorary Consul of Denmark for Alberta.

In 1976, Mr. Nielsen left Mobil Oil Canada and became president and CEO of Canadian Superior Oil, another subsidiary of an American oil giant. When he left his office at Mobil he had his secretary make a careful list of every item he took with him to avoid any conflicts. It was a prescient move.

About six months after he started at Canadian Superior, Mobil launched a lawsuit against Mr. Nielsen saying he and others had taken company secrets with them. "The basic charge was that I could not work for my new company in the exact same job that I had with Mobil without utilizing confidential Mobil information," Mr. Nielsen wrote. That he was a star geologist as well as an oil executive seemed to worry the American parent of Mobil Oil Canada.

In the end, a judge dismissed Mobil's lawsuit. Mr. Nielsen was on a business trip to Chile when he heard the news.

It appears there were no hard feelings. When Mobil acquired Superior, it also took over the subsidiary Canadian Superior Oil and Mr. Nielsen was appointed chairman and chief executive officer of the merged company in Canada.

Mr. Nielsen was a point man in the oil industry's battle against the National Energy Program, brought in by the Trudeau government in 1980. The NEP was in many ways a reaction to consumer and voter dissatisfaction with rising oil prices.

Mr. Nielsen blamed the indifference of Pierre Trudeau to Alberta for the policy. "He was perceived as a man whose only contact with Alberta was to cross its airspace while flying somewhere else."

He remembered watching as then-energy minister Marc Lalonde put forward his policy on Oct. 28, 1980. "We sat in front of television sets in our offices, mouths agape. Prior to that afternoon, we couldn't have imagined anything the federal government could have done to us would have been worse than what they'd already done. We were naive."

Mr. Nielsen and others set up what they called the Alternative Energy Program. When the Mulroney government, elected in 1984, introduced a new energy program called the Western Accord, Mr. Nielsen signed the document as the representative of the Canadian Petroleum Association. Many of the ideas came from the Alternative Energy Program.

Mr. Nielsen retired as CEO of Mobil Oil Canada in 1989. After retirement, he served on the boards of a number of companies both in and out of the oil business.

He and his first wife, Evelyn, had seven children. She died in 1975 at the age of 43 after suffering a heart attack in a Calgary restaurant. Several years later he married Valerie Thomas and they had two children. He was predeceased by a son.

Mr. Nielsen's main hobby was reading, especially military and natural history. He wrote one technical book, Cardium Stratigraphy of the Pembina Field, as well as his autobiography. In 2007, the house in Standard, Alta., where Mr. Nielsen's immigrant family got their start in Canada – "28 feet by 32 feet with four rooms" – was moved to the Danish Canadian National Museum and Gardens in Dickson, Alta.

As Mr. Nielsen wrote at the close of his memoir, "It's quite a privilege to be part of history while still alive."

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