Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Oil sands restart plans thwarted as Alberta fire threat returns

Oil-sands blaze
A wildfire burns behind abandoned vehicles on the Alberta Highway 63 near Fort McMurray, Alberta, Canada, on Saturday, May 7, 2016.

Plans to bring back more than 1 million barrels a day of lost production in Canada’s oil sands are being delayed as wildfires sweeping across northern Alberta threaten operations again, prompting Suncor Energy Inc. to evacuate three sites it was restarting.

The nation’s largest oil producer flew employees from its MacKay River, Firebag and base plant sites as it shut down the facilities days after beginning the process of resuming output. The wildfire that’s raged for more than two weeks circled back north of Fort McMurray toward the main operations in the oil sands, the world’s third-largest reserves.

About 8,000 workers were removed from lodging facilities as the blaze grew to about 3,550 square kilometers (1,370 square miles), Alberta Premier Rachel Notley said Tuesday. That’s an area bigger than Rhode Island. Horizon North Logistics Inc.’s Blacksand lodge, a work camp about 40 kilometers (24 miles) northwest of Fort McMurray that serves Suncor and Syncrude Canada Ltd. sites, some of the largest oil-sands facilities, was destroyed by fire, Notley said.

“Mother Nature continues to be our foe in this regard and not our friend,” Notley said in a briefing. Westerly winds were forecast to push the fire closer to Suncor and Syncrude oil-sands plants, though both facilities are very resilient, she said. “We expect fire growth in the area of many of these camps.”

Production Cuts

The delay to restarts is another setback for Canada’s economy and energy industry in what is already estimated to be the country’s costliest disaster, following the evacuation of more than 80,000 people from their homes earlier this month as entire neighborhoods in Fort McMurray were razed. Oil-sands output has been reduced by about 1.2 million barrels a day, according to estimates from the Conference Board of Canada. The research group forecasts that 14 days of production cuts represents a hit of about C$985 million ($763 million) to the Alberta economy.

Suncor is focused on moving people out of the oil-sands region, Sneh Seetal, a spokeswoman, said by phone. The MacKay River, Firebag and base plant mine sites together have a capacity to produce about 740,000 barrels a day. Syncrude, a joint venture controlled by Suncor, also evacuated workers because of the fire threat, Will Gibson, a spokesman, said in an e-mail. Syncrude’s Mildred Lake and Aurora mines together have a capacity to produce about 407,000 barrels a day.

Rain Forecast

Rainfall as early as Wednesday may help slow the fires, Travis Fairweather, an Alberta Forestry spokesman, said by phone late Tuesday. There were 1,754 firefighters, 208 helicopters, 412 pieces of heavy equipment and 29 air tankers currently battling fires across Alberta, including the blaze around Fort McMurray, the provincial government said.

The renewed threat to oil-sands production helped push crude to a seven-month high on Tuesday. West Texas Intermediate gained as much as $1.04 to $48.76 a barrel in after-hours trading on the New York Mercantile Exchange, the highest since Oct. 12.

The reduced production will cut Alberta’s gross domestic product by about 0.33 percent this year and erode Canada’s GDP by 0.06 percent, the Conference Board said in a statement Tuesday. The rebuilding effort to replace the 2,400 homes and buildings in Fort McMurray destroyed by the fires will add about C$1.3 billion to the economy next year.

‘Major Impact’

“The shutdown of activity in Fort McMurray and in the oil sands will have a major impact on the local economy in the short term,” the Ottawa-based group said.

The Conference Board estimates are in the range of what the Alberta government is considering, though it’s too early to provide specific figures, Notley said.

Oil-sands production came offline as companies took precautionary measures including evacuating workers and shutting down power lines and pipelines. Companies are taking similar measures again. Inter Pipeline Ltd. said Tuesday it had partially shut down its Polaris and Corridor systems due to fires.

The fires came within a kilometer of Enbridge Inc.’s Cheecham oil terminal, where crude is stored and shipped from the Athabasca region about 75 kilometers southeast of Fort McMurray. Enbridge sought to widen an existing firebreak around the terminal and spray down the facilities, Graham White, a company spokesman, said by e-mail Monday. Some pipelines in and out of the terminal were operating.

Work Camps

Other work camps are currently threatened by the fire, in addition to the Horizon North facility that was already destroyed, officials said on Tuesday. Highway 63, the main road in and out of Fort McMurray that has been closed for periods during the fire, is very likely threatened and may close again, Notley said.

Horizon’s Blacksand lodge, a 665-room facility, was safely evacuated and the company assumes it was entirely lost, Rod Graham, the company’s chief executive officer, said in a phone interview.

“If the workers are being evacuated, it would delay getting back to full capacity” in the oil sands, Graham said. “This fire is unpredictable and volatile.”

Recommended for you

More from Energy Voice

Latest Posts