Canada Wildfires Raise Threat to Oil-Sands Mining Operations
TEHRAN (Tasnim) – Forest fires in Northern Alberta spread to the edges of two major oil-sands mining complexes, government officials said on Tuesday, a day after 8,000 workers evacuated camps and production facilities at risk from uncontrolled blazes.
Two weeks after fires forced 80,000 residents to leave a northern town at the hub of the energy industry, shutdowns at many oil-sands sites have reduced Canadian production by at least one million barrels of oil a day, or about 40% of the country’s total oil-sands output. The latest flare up has forced some oil sands operators to abandon plans laid last week to restart production.
The production disruption has contributed to a recent rise in oil prices. On Tuesday, light, sweet crude for June delivery settled up 59 cents, or 1.2%, at $48.31 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 9.
Alberta Premier Rachel Notley said the fires approached the doorstep of oil-sands mines operated by industry leader Suncor Energy Inc. and its subsidiary Syncrude north of the town of Fort McMurray, which the blaze devastated this month.
Provincial government officials said by late Tuesday firefighters succeeded in halting the advance of the flames to the south and west perimeters of those facilities, and that weather conditions were expected to help slow the spread of the fires later this week, the Wall Street Journal reported.
While not damaged, oil sands sites have been affected by staffing issues stemming from the evacuation of Fort McMurray’s residents and logistics issues preventing them from shipping heavy crude. Pipeline operator Enbridge Inc. has reduced its oil-sands crude shipments by about 900,000 barrels a day, down from a capacity of 1.5 million barrels a day.
The forest fire around these mines and other oil sands sites grew to more than 877,000 acres, or nearly 1,370 square miles, up from 704,250 acres on Monday, according to the province.
The fire’s expansion led to the evacuations of nearly 20 worker camps late Monday. That included a 655-unit lodge operated by Horizon North Logistics Inc., which caught fire early Tuesday, the company and provincial officials said.
The government said the fire posed a renewed threat to neighborhoods in northwestern Fort McMurray, which has lost some 2,400 houses and other buildings since the fire was first detected on May 1. The cause remains under investigation. Thick smoke and fire risks have postponed efforts to restore utilities and plans for some retail business operations to resume in the town, officials said.
Two unexplained explosions damaged homes late Monday in residential neighborhoods in Fort McMurray, they said.
The outages are expected to have a minimal impact on Canadian economic growth, according to a report from the Conference Board of Canada released early Tuesday. The Ottawa think tank bases its findings on an estimated oil-production loss of about 1.2 million barrels a day over a two-week period.
