Focus on oil infrastructure as Canada’s Alberta fires retreat

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Alberta’s Premier, Rachel Notley, says she expects oil sands companies that suspended output of crude oil by up to one million barrels a day due to wildfires that ravaged the Fort McMurray area to resume production “in the coming days and weeks”.

Ms Notley made the comment after meeting with energy executives this week to discuss the steps required for production to be resumed, including ensuring that ­infrastructure such as pipelines and electricity is operational, and there is housing and medical care for workers.

Cooler temperatures and firefighting efforts have helped slow the spread of the wildfires but production remains affected due to staff evacuations and logistic hurdles such as pipeline outages. Royal Dutch Shell said it was able to restart production at its Albian mine, which it suspended on May 3, marking the first major producer to resume operations since the fire. The company said it would rely on fly-in, fly-out staff to operate the mine. Shell’s oil sands production capacity is 255,000 barrels a day.

The decline in output reached at least 839,000 barrels a day, or about a third of Canada’s production, before Shell said it had restarted Albian.

There was no damage to oil sands facilities north of Fort McMurray, Ms Notley said. Companies have cut or halted production to evacuate workers as a precaution and to cope with supply disruptions and smoke that interfered with operations.

Steve Williams, chief of Suncor, said his “primary focus is to work with our pipeline companies and our power companies” to make sure infrastructure is intact.

The statements from Ms Notley, Mr Williams and other industry leaders at a media conference were the first effort to put forward a timeline for resuming operations. On Monday, Ms Notley toured the Fort McMurray area to assess the damage from what she described as an “ocean of fire” that surrounded the area. While around 2400 homes and buildings were destroyed by the fires, about 90 per cent of buildings in Fort McMurray, including schools and a hospital, remain intact.

The loss of oil sands output, a key driver of the Canadian economy, is expected to dampen growth in the second quarter, and worsen a downturn from low oil prices that already has led to large job cuts and lost production.

While the discussions this week focused on the timing of resuming operations, they came after Imperial Oil, Exxon Mobil’s Canadian unit, said it completed a controlled shutdown of its Kearl oil sands mine, which produces around 194,000 barrels a day and is about 65km north of Fort McMurray, the oil sands hub.

Prime Minister Justin Trudeau is expected to visit Fort McMurray tomorrow to assess the damage and meet local leaders.

The fires continue to move eastwards from Fort McMurray, but growth appears to be slowing as cooler temperatures, lighter winds and some rain helped slow the spread.

The fires are estimated to now cover close to 230,000 hectares and are nearly 15km from the province’s border with Saskatchewan.

“It’s slowing down a lot because we’ve had a bit of change in weather but also our firefighters have had a chance to anchor themselves and dig in,” said Chad Morrison, Alberta’s manager of wildfire prevention.

“They’re really starting to chase this (fire) down.”

There are more than 700 firefighters battling blazes in and around Fort McMurray, along with 20 helicopters and 15 air tankers.