Fifty years ago, Fred Gallagher’s father started a little Calgary company named Dome Petroleum and — unheard of at the time — went drilling for oil in the Arctic.
Like the oilpatch’s legendary “Smiling Jack” Gallagher, his youngest son is an energy pioneer.
With one big difference.
Fred Gallagher, managing director of Vision Quest Windelectric, is erecting 15-storey wind turbines rather than drilling oil wells. But just like they did with Smiling Jack, other energy companies are starting to take notice.
TransAlta Utilities Corporation invested $5 million this summer in Vision Quest and its wind-generated, trademarked Green Energy. Vision Quest’s customers include Enmax Corporation (the City of Calgary’s electric utility) and Suncor Energy.
Gallagher says his father, who died two years ago, was an inspiration. But at first he, too, wondered why his geologist son would leave a good job in the oilpatch to tilt at windmills.
“What he realized as we went forward was indeed I’m in the same position he was in 1950 when he created Dome,” Gallagher says. “He was drilling up in the Arctic, and everybody said: ‘You’re crazy . . .’
“But guess where everybody (in the oilpatch) is today?”
Smiling Jack had a keen passion for the North. His son, born and raised in Calgary, grew up having an interest in the environment and the land. After obtaining a degree in geology, Gallagher joined the oilpatch and for 10 years explored for oil with Amoco Canada Petroleum Ltd. Amoco eventually took over the little company that his father built into one of North America’s petroleum giants.
But one thing kept nagging Gallagher about the future of oil and gas. They were finite resources, and they were in decline. Yet at the same time, the worldwide demand for energy kept growing.
“So you look at it and say: ‘Well, why are we in this industry looking at managing decline when the market is telling us that there’s an ever-increasing consumption?”
The petroleum industry at the time couldn’t see beyond its fossil fuel products and their market, Gallagher concluded. He took a leave from Amoco and never returned.
Gallagher went to Switzerland to do a graduate degree in business administration. His MBA project focused on the energy business and its most likely future. After his degree, he worked at a financial services firm in the United Kingdom, which was in the midst of deregulating the country’s electrical power sector.
Gallagher studied the various energy technologies coming to the fore through deregulation. He says he asked himself not only: “What is good for the environment?” but “What makes best business sense?”
The answer was electricity, and it was blowin’ in the wind.
Gallagher, well-groomed, crisply dressed and trim, looks younger than his 44 years. Born in 1956, he became a teenager in the year man walked on the Moon. It was a time when choices seemed infinite. It’s that sense of having choices to which Gallagher keeps circling back, like a propeller on a wind turbine, when he talks about his business.
Energy is a commodity, he says. Consumers, to suit their values and lifestyles, can pick from myriad brands of cellphones or even buy regular versus organic bananas. When it comes to energy, “the real key here is choice — that people will want a choice.”
Gallagher returned to Calgary just as Alberta started on the path to energy deregulation. He worked on the issue through the provincial energy minister’s advisory committee. He launched a company called Canadian Enhanced Energy Development.
Starting Jan. 1, 2001, Alberta’s deregulated wholesale energy market will offer retail customers the choice of which energy source they want to buy.
“Without deregulation,” Gallagher notes, “we would not be doing what we’re doing today.”
In 1996, Gallagher teamed up with Jason Edworthy and Michael Bourns, two wind-energy stalwarts who six years earlier had started The Chinook Project. The renewable energy developer had built 9.9 megawatts of wind power on the Cowley Ridge in southwest Alberta.
Together, the three partners formed Vision Quest Windelectric. Taking a calculated risk, they ordered their first two 600-kilowatt wind turbines before they had customers for the product.
“We knew that we could make the market happen if we had the pieces in place,” Gallagher says.
With the turbines on order, Vision Quest landed its first contract with Enmax, which in turn had a contract to supply the wind energy to federal government facilities in Calgary.
Enmax has been a key player in expanding the market for wind energy, Gallagher says. “They’ve been a customer that has recognized the fact that the market is there, and they’ve recognized that they can actually take the product and gain value from it.”
Enmax markets wind energy under its voluntary Greenmax program. Residential customers can choose a monthly premium of $5, $10 or $15, and purchase as much as 45 per cent of a household’s average monthly energy consumption from wind-generated power.
The number of residential customers for Greenmax has more than doubled this year to nearly 2,000, says Theresa Howland, product manager of Greenmax. Enmax also has businesses signed up to buy wind energy in its recently launched commercial program, she says.
Vision Quest and Enmax promote wind energy’s environmental benefits, including virtually no polluting emissions. Consumers, for the cost of one pizza per month, can keep 600 kilograms of coal in the ground and prevent 1,200 kg of greenhouse-gas emissions.
Vision Quest’s surveys show 70 per cent of Canadians want to buy clean energy, Gallagher adds. Of that 70 per cent, about 60 per cent say they are willing to pay more for wind energy.
Vision Quest has grown to where it has 20 turbines generating 13 megawatts of wind power in Alberta. The company has just acquired a retail licence for Ontario, and has leased more than 50,000 acres of wind-tested properties across Canada, capable of generating more than 1,000 megawatts.
So what do his colleagues in the oilpatch think of Gallagher’s breezy vision? Except for a few who are looking toward the future “most think I’m whacko,” Gallagher says with a laugh. Just like the sticks-in-the-mud who thought Smiling Jack had lost it when he went drilling for oil in the Arctic 50 years ago.
Jack Gallagher became a shareholder in Vision Quest and a strong supporter of his son’s dream. His father had a wonderful expression, Fred recalls. “He used to say: ‘Are you going to plough a new furrow? Or are you going to keep ploughing the same old furrow?’ ”
