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Spreading Canadian wildfires prompt more evacuation warnings, oil production worries
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Spreading Canadian wildfires prompt more evacuation warnings, oil production worries
Jul 24, 2024 12:38 PM

July 24 (Reuters) - Hundreds of uncontrolled wildfires

burned across western Canada on Wednesday, putting more

communities under evacuation alert and raising concerns about

the blazes impacting Canadian crude production.

There are 430 active wildfires in British Columbia and 177

active wildfires in Alberta, including more than a dozen in the

Fort McMurray region, Canada's key oil sands hub.

This week British Columbia was hit by more than 58,000

lightning strikes, according to the provincial wildfire agency,

sparking scores of new blazes in forests that are tinder-dry

after a three-week heat wave.

Around 25,000 people, including residents and visitors, were

forced to evacuate the popular tourist town of Jasper, Alberta,

and its surroundings early Tuesday as a wildfire neared.

The Canadian government-owned Trans Mountain pipeline, which

can carry 890,000 barrels per day (bpd) of oil from Edmonton to

Vancouver and runs through Jasper National Park, said on

Wednesday it was still operating safely and using sprinklers to

protect its infrastructure.

Alberta officials said 17,500 residents had been forced to

leave their homes because of wildfires, while British Columbia

has issued 19 evacuation orders and 28 evacuation alerts.

Many communities in western Canada are blanketed by thick

smoke, including Alberta's largest city Calgary where residents

were advised to limit time outdoors.

Imperial Oil ( IMO ) said it has reduced non-essential

staff at its 275,000-bpd Kearl oil sands site, approximately 70

km north of Fort McMurray, in northern Alberta as a precaution.

Imperial said there was no direct impact on operations at

the moment and it continues to monitor the situation closely.

Earlier this month Suncor, Canada's second-largest

oil company, temporarily curtailed some production and evacuated

non-essential workers from its 215,000-bpd Firebag site because

of a nearby fire.

About two-thirds of Canada's five million barrels per day of

production comes from the oil sands region and the worsening

wildfire situation is fuelling concerns among some analysts that

production could be cut significantly.

"While wildfires have already forced some producers to

curtail production, these fires still threaten a large amount of

supply," ING Group analysts said in a research note.

The small curtailments so far have been offset by a drop in

demand after storms in Illinois forced Exxon Mobil's ( XOM )

Joliet refinery, a major consumer of Canadian heavy crude,

offline for a week, one Calgary-based trader said.

The wildfire danger level is designated as "extreme" across

the Fort McMurray forest area and a fire ban is in effect for

the entire area, the Alberta government said on Tuesday, adding

that one major blaze is less than 7 km away from industrial

facilities, but containment lines were mostly holding.

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