Alberta forest fires affect several oilsands operations
Evacuations of facilities result in 15% cut in overall oilsands production
Out-of-control forest fires in Alberta have prompted the closing of several facilities in the northern part of the province, and oilsands production is down more than 15 per cent overall as a result.
MEG Energy is the latest company to evacuate its operations as the company moved 900 workers out of its Christina Lake site. About 80 employees remain at the plant and they can be flown out via the company's airstrip in an emergency.
The closure of MEG Energy's Christina Lake operation could represent a major problem for the company if the forest fires persist for a considerable amount of time.
Christina Lake is MEG's only source of oil production. Last year, it generated about 70,000 barrels a day. The company said current production is about 80,000 barrels a day.
"We are keeping in close contact with the government around the tracking and progress of the fires in the area," said MEG spokesman Brad Bellows. "We made this move as a precautionary measure."
Meanwhile, Statoil Canada is removing some staff from its Leismer project south of Fort McMurray because the fires are about 15 kilometres away. Canadian Natural Resources and Cenovus facilities are also affected by the fires.
Provincial officials told CBC News Tuesday evening there are 70 fires across Alberta, 19 of which are burning out of control. They said a fire northwest of Cold Lake, near the affected oilsands operations, is "of concern." A government update on Tuesday evening described the fire as about 17,500 hectares in size.
The fires are not only affecting the oil industry, but could hurt the country's economy. Oilsands shutdowns could mean a 0.1-0.3 per cent hit to second-quarter annualized GDP, according to a Bank of America Merrill Lynch Global Research report. Analysts suggest the fires will likely have much more of an impact than if plants were closing for routine maintenance.
"We don't know what these wildfires will mean in terms of pipelines — will there be impacts to broader industries, there might be impacts on infrastructure and so on," said Emanuella Enenajor, senior Canada and U.S. economist with Bank of America Merrill Lynch. "So, I think the risk is greater here because we don't know the full impact of the blaze."
Cenovus evacuated its facilities at Foster Creek because fire threatened the only road out. Approximately 1,800 staff were removed. The facility produces 135,000 barrels a day.
Elsewhere, the company activated its emergency response plan at its Narrows Lake project, located about 150 kilometres south of Fort McMurray. The oilsands project is currently under construction. Cenovus also shut down its Birch Mountain natural gas plant and used a helicopter to transport two workers from the facility as a fire burned 10 kilometres away. The plant is near Fort McKay, about 100 kilometres north of Fort McMurray.
Canadian Natural Resources has two operations closer to the fires. The Primrose facility is shut-in, cutting 80,000 barrels per day of oil production. The Kirby South plants are still producing oil, but production is down 18,000 barrels a day to 12,000.
While workers are removed from some of the plants, there is little danger of the facilities burning to the ground, since they are built far from the tree lines.
"This shows that production is important to our industry, but safety is paramount," said Chelsie Klassen, spokeswoman for the Canadian Association of Petroleum Producers (CAPP).
Other companies such as Devon and Imperial Oil are keeping a close eye on the situation.
"We have a team actively monitoring the situation and have regular communication with Sustainable Resource Development on the status of the wildfires in the area," said Devon spokeswoman Nadine Barber.