Extreme Wildfire Danger Threatens Alberta’s Oil Production

Authorities in Fort McMurray, which is not far from much of Alberta’s oil sands production sites, issued an “extreme” wildfire danger for the forest area that could threaten to shut in or disrupt some Canadian crude oil or natural gas output in the coming days and weeks.

Alberta Wildfire “is currently responding to an out of control wildfire southwest of Fort McMurray,” the lead firefighting agency in the province said in an update late on Tuesday.

The MWF017 fire, classified as out of control at 20,940 hectares, “grew significantly to the east and northeast today, driven by gusty winds”, Alberta Wildfire said on Tuesday evening local time.

The Regional Municipality of Wood Buffalo has issued an evacuation order for the communities of Prairie Creek, Beacon Hill, Abasand, and Grayling Terrace.

Although the out-of-control fire is currently not directly threatening oil sands operations, its current southern perimeter is just 5 miles from the Hangingstone production site of Athabasca Oil Corporation.

Hangingstone produced nearly 7,500 barrels per day (bpd) of crude in February this year, per data from the Alberta Energy Regulator cited by Bloomberg.

There is other energy infrastructure in the proximity of the wildfire zone. These are two natural gas liquids pipelines operated by Inter Pipeline and a crude oil pipeline operated by Pembina Pipeline Corporation. They pass through the western end of the wildfire area, per data from the regulator and Alberta Wildfire.

An evacuation alert was issued earlier this week for Fort McMurray, a key hub for the oil sands industry in Alberta amid wildfires in the area.

Spring is wildfire season in Canada’s oil country and the blazes sometimes interfere with oil sands production. Back in 2016, a total of 90,000 people in Fort McMurray were evacuated because of a wildfire, which also shut in about 1 million bpd in oil production in the area.

By Tsvetana Paraskova for Oilprice.com

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