Alberta wildfires threaten oil sands production region

(Bloomberg) – Wildfires have erupted in Canada’s oil sands-producing region of Alberta with large blazes within 20 kilometers (12.4 miles) of about half a million barrels a day of crude production. 

A total of six out-of-control fires are burning in the Lac la Biche region, where many of the largest in-situ oil sands well sites are located, with the biggest blaze being 1,000 hectares (2,471.1 acres) in size, according to Alberta Wildfire. 

Major oil sands sites including Cenovus Energy Inc.’s Christina Lake, Canadian Natural Resources Ltd.’s Jackfish and Kirby North and ConocoPhillips’ Surmont are between 11 and 19 kilometers away from wildfires bigger than 10 hectares, according to Alberta Energy Regulator and Alberta Wildfire data. The approximately 229 residents of the community of Conklin have been told to prepare to evacuate, should the need arise. 

Emails to the three companies as well as Harvest Operations Corp., a smaller oil sands operator, were not immediately returned.

Wildfires can pose a threat to oil production in Canada in the spring and summer. This year, the fire season coincides with the curtailment of as much as 20% of the world’s oil supplies from the Middle East due to the Iran war, sending crude prices above $100 a barrel at times over the past three months. Canada is the world’s fourth-largest oil producer with most crude output coming from the Alberta oil sands and going to the US. 

To be sure, nearby wildfires don’t normally affect operations at oil and gas facilities. But blazes last summer shut about 7% of the country’s oil production at one point, and massive wildfires in 2016 shut down more than a million barrels a day for weeks and burned down parts of Fort McMurray, the unofficial capital of the oil sands. 

Below are facilities within 20 kilometers of out-of-control fires, their proximity from the blazes and approximate average oil and gas production over the past year, based on Alberta Energy Regulator data.