- Blaze doubles in size, approaches Suncor, Syncrude sites
- Fire five times size of New York crosses into Saskatchewan
Alberta fire fighters successfully defended Suncor Energy Inc. and Syncrude Canada Ltd.’s oil sands sites from wildfires and rain brought some relief as a blaze that shut more than a million barrels a day of production in Canada’s oil patch continued to grow.
The fire, which is now 5,050 square kilometers (1,950 square miles) in size, burned up to and around the companies’ oil sands mines and is now spreading into remote forests to the east into neighboring Saskatchewan, said Chad Morrison, an Alberta fire official. Fire fighters were helped by “a trace” of rain in the morning with more showers forecast for the coming days. The blaze, which erupted at the beginning of the month, has burned entire neighborhoods in Fort McMurray and forced the evacuation of more than 80,000 people.
“The threat has diminished around the community and the oil sands facilities for sure,” Morrison said.
The wildfire at the heart of Canada’s energy industry has doubled over the past week, ravaging an area more than five times bigger than New York City. While a lag in the fires growth last week allowed energy companies to begin restarting oil sands production, the threat returned as temperatures rose. About 8,000 workers were forced to evacuate from camps in the north, delaying the resumption of crude production. The provincial government on Wednesday announced plans for a phased reentry of Fort McMurray residents over four days starting on June 1 for those who wish to go back.
There has been no additional damage to any energy industry facilities, including work camps. While the fire is still heading northeast in the vicinity of oil-sands plants, it’s expected to shift course and burn back on itself toward the southwest, Travis Fairweather, an Alberta Forestry spokesman, said by phone.
The delays resuming production in the oil sands, which contain the world’s third-largest reserves, helped push crude to a seven-month high. West Texas Intermediate touched $48.95 a barrel Wednesday in New York, the highest since October. WTI fell 3 cents to $48.16 a barrel in New York Thursday.
The fire is a setback for Canada’s economy and energy industry and is estimated to be the country’s costliest disaster. The Conference Board of Canada forecasts that 14 days of production cuts in the oil sands represent a hit of about C$985 million ($763 million) to the Alberta economy.
Rain is expected to continue through Sunday, according to government weather forecasts. There are more than 2,400 firefighters battling fires across Alberta, including the blaze around Fort McMurray, Danielle Larivee, Alberta’s municipal affairs minister, said in the Thursday press conference from Edmonton.
Oil-sands production came offline as companies evacuated workers and shut down power lines and pipelines. Inter Pipeline Ltd., which said Tuesday it had partially shut down its Polaris and Corridor systems due to fires, said Wednesday it had resumed operations.
Canadian Natural Resources Ltd. was far away from fires and could continue producing during the crisis. Royal Dutch Shell Plc has been able to continue ramping up initial lost output even with the blaze turning north earlier this week. Mining operations will be able to restart quickly once the fire risk subsides, while projects that use steam to melt bitumen below the surface and pump it out of the ground will probably take more than a week, Amir Arif, an analyst at Cormark Securities Inc. in Calgary, said by phone Wednesday.
While producers make plans to get workers back to their plants and camps, the Alberta government is focused on getting Fort McMurray residents safely home, Alberta Premier Rachel Notley said Wednesday. Evacuees will be allowed to return in waves, based on the neighborhoods where they lived, and are being advised to bring non-perishable food, flashlights, prescription medications and other supplies, she said.
“We don’t want to have people completely commit to a certain date but at the same time, we’ve been hearing more and more that people need to have some idea of the dates they’re dealing with,” Notley said. “We hope we’ve achieved that balance.”