Fort McMurray is an urban service area in the Regional Municipality (R.M.) of Wood Buffalo in Alberta, Canada. It was previously incorporated as a city on September 1, 1980. It became an urban service area when it amalgamated with Improvement District No. 143 on April 1, 1995 to create the Municipality of Wood Buffalo (renamed the R.M. of Wood Buffalo on August 14, 1996). Despite its current official designation of urban service area, many locals, politicians and the media still refer to Fort McMurray as a city.
Before the arrival of Europeans in the late 18th Century, the Cree were the dominant First Nations people in the Fort McMurray area. The oil sands were known to the locals and the surface deposits were used to waterproof their canoes. In 1778 the first European explorer, Peter Pond, came to the region in search of furs, as the European demand for this commodity at the time was strong. Pond explored the region further south along the Athabasca River and the Clearwater River, but chose to set up a trading post much farther north by the Athabasca River near Lake Athabasca. However, his post closed in 1788 in favour of Fort Chipewyan, now the oldest continuous settlement in Alberta.
In 1790, the explorer Alexander MacKenzie made the first recorded description of the oil sands. By that time, trading between the explorers and the Cree was already occurring at the confluence of the Clearwater and Athabasca Rivers. The Hudson's Bay Company and the North West Company were in fierce competition in this region. Fort McMurray was established there as a Hudson's Bay Company post by 1870, and continued to operate as a transportation stopover in the decades afterwards.
The community has played a significant role in the history of the petroleum industry in Canada. Oil exploration is known to have occurred as early as the early 20th Century, but Fort McMurray's population remained small, no more than a few hundred people. By 1921, there was serious interest in developing a refining plant to separate the oil from the sands. Alcan Oil Company was the first outfit to begin bulk tests at Fort McMurray. The nearby community of Waterways was established to provide a terminus for waterborne transportation, until 1925, when the Alberta and Great Waterways Railway reached there.
Abasands Oil was the first company to successfully extract oil from the oil sands through hot water extraction by the 1930s, but production was very low. Fort McMurray's processing output gradually grew to over 1,100 barrels/day by World War II, and Fort McMurray was set up by the US and Canadian forces as staging ground for the Canol project.
Fort McMurray and Waterways amalgamated as the village of McMurray (the "Fort" was dropped until 1962, when it was restored to reflect its heritage) by 1947, and became a town a year later. Fort McMurray was granted the status of new town so it could get more provincial funding. By 1966, the town's population was over 2,000.
In 1967, the Great Canadian Oil Sands (now Suncor) plant opened and Fort McMurray's growth soon took off. More oil sands plants were opened up, especially after 1973 and 1979, when serious political tensions and conflicts in the Middle East triggered oil price spikes. The population of the town reached 6,847 by 1971 and climbed to 31,000 by 1981, a year after its incorporation as a city.
The city continued to grow for a few years even after the oil bust caused by the collapse in world oil prices and the National Energy Program, which was scrapped after the Progressive Conservative Party formed the Government of Canada in 1984. The population peaked at almost 37,000 in 1985, then declined to under 34,000 by 1989. Low oil prices since the oil price collapse in 1986 slowed the oil sands production greatly, as oil extraction from the oil sands is a very expensive process and lower world prices made this uneconomical. However, the oil price increases since 2003 have made oil extraction profitable again.
On April 1, 1995, the City of Fort McMurray and Improvement District No. 143 were amalgamated to form the Municipality of Wood Buffalo. The new municipality was subsequently renamed the Regional Municipality (R.M.) of Wood Buffalo on August 14, 1996. As a result, Fort McMurray was no longer officially designated a city. Instead, it was designated an urban service area within a specialized municipality. The amalgamation resulted in the entire R.M. of Wood Buffalo being under a single government in which Fort McMurray is the municipal seat.