There is a bylaw in the City of Medicine Hat’s records, numbered 48 and passed in September 1901, and it is the reason a prairie town of sixty-eight thousand people has spent the last century and a quarter selling itself its own natural gas. The flame was lit in November 1902. Four wells, a hundred-odd metered services, gas at $0.30 per thousand cubic feet and then cut to $0.17 to undercut coal. A town council in 1901 looked at what was under the ground and decided the town should own it rather than rent it, and that decision has been paying out ever since.
Key facts
- The City of Medicine Hat records that Bylaw 48, passed in September 1901, committed the town to a municipal gas system, with service turned on in November 1902.
- Canadian Pacific Railway crews drilling for locomotive water struck natural gas in 1883 at about 1,120 feet at the Langevin siding, later renamed Alderson, northwest of Medicine Hat, per Alberta’s Energy Heritage.
- The Government of Alberta records that by 1913 Medicine Hat ran twenty gas wells and claimed thirty major industries, with the town’s population tripling between 1911 and 1913.
- The City of Medicine Hat acquired Pembina Pipeline properties in March 1982 for $46 million, more than doubling its producing wells from 250 to 500.
- A KPMG review delivered to Medicine Hat council on 25 November 2024 recommended expediting the abandonment or sale of the city’s natural gas production assets, and council voted 5 to 4 in July 2025 against creating a municipally controlled corporation to run the energy business.
The gas was found by people who did not want it
Everything here starts with a railway crew looking for something else. In 1883 Canadian Pacific Railway men were drilling for water to feed locomotives at a siding northwest of town, the place later called Alderson, and at around 1,120 feet they hit gas instead, which to a man whose job is boiler water is not a discovery but a nuisance. It sat there for sixteen years. The Calgary Herald noticed. Nobody else did much.
It took a private citizen to do anything useful with it. In October 1899 a local stonemason drilled a well behind his own Main Street property, found a strong flow at 750 feet and ran pipe to his own house and to his neighbours, which is the sort of thing a man does when he is cold and the alternative is hauling coal. The City spells his surname Coulter and the Medicine Hat News spells it Colter, and a hundred and twenty-seven years on nobody has settled it, which tells you something about how much attention was being paid at the time to what turned out to be the founding act of the local economy.
By 1904 the street lights ran on it. By 1913 the city was operating twenty wells and claiming thirty major industries, and the population had tripled in two years. Rudyard Kipling came through in 1907 and said the country seemed to have all hell for a basement with the only trapdoor in Medicine Hat, which the town has been putting on merchandise ever since, and fairly so. A place gets one good line from a passing novelist in its entire history and it would be ungrateful not to use it.
The bet paid for roughly forty years of somebody else’s tax bill
The city itself stated in September 2019 that its oil and gas assets had put more than $600 million into municipal coffers over the previous forty years. That is the whole argument for municipal ownership in one figure. Other towns in the same geology watched the royalties leave and got a tax base out of it. Medicine Hat got the royalties, the dividend and the tax base, and it bought more in March 1982, when $46 million of Pembina Pipeline properties took it from 250 producing wells to 500.
The shallow field that started it is old now, in the way that shallow gas fields become old. An accelerated abandonment programme begun in 2019 has now closed in on 2,100 wells. The KPMG review that landed on council’s table on 25 November 2024 told the city to move faster on selling or abandoning what is left. In June 2025 the remaining six to seven hundred wells went out for sale through a Calgary broker, carrying roughly $32 million of asset value against $52 million of closure liability, with the gas wells having lost $725,000 in 2024. In July 2025 council voted 5 to 4 against building a separate corporation to hold the business.
Nobody has said publicly how the sale ended
Bids were due on 3 July 2025. More than a year later there is no public statement of what happened to them, and the city’s own energy engagement page has not carried a substantive update since December 2024. In the meantime the budget has moved the other way, with property taxes up 5.6% in 2025, 5.6% in 2026 as first approved and then trimmed to 4.9%, and a stated plan to run the municipal budget without leaning on energy dividends by 2028. The thing the town bought in 1901 to keep its costs down is being quietly untied from the household bill, and the untying has been done in the ordinary way, through budget documents rather than announcements.
That is not a scandal and it should not be written as one. Fields deplete. Liabilities come due. A 1901 decision that returned $600 million does not owe anybody a further century. But there is a difference between a town choosing to end something and a town letting it end while nobody is looking, and the difference is whether the residents were ever told plainly which one is happening. Somebody in that council chamber knows how the July 2025 bids came out. It is a reasonable thing for the people who own the wells to be told.
Alberta has a poor record of keeping its own record, and a municipal utility is not the sort of thing anybody thinks to photograph.
Drive out past the edge of town and the old wellheads are still there in the grass, squat and painted and mostly quiet, each one a small iron argument that a place can own what is underneath it if it decides early enough.
