In what could be a body blow to Alberta’s already strained infrastructure, a European energy consultancy is warning that up to 80% of the province’s oil sands production is at risk due to the worsening wildfire situation..According to Oslo-based Rostand Energy, up to 2.7 million barrels per day (bpd) of mined and pumped bitumen is at risk due to “extreme” and “very high” wildfire warnings in the northern part of the province. Given that Alberta produces about 3.4 million bpd of upgraded synthetic oil and raw bitumen, that means about 80% of the province’s daily output is at risk of shut-ins or damage..Of projected production for the month of May, Rystad said about 60% are subject to “extreme” wildfire warnings, while another 40% are in areas with “very high” risk, it said..In 2016, wildfires in Fort McMurray knocked out more than a million bpd for almost two months..That’s on top of an estimated 300,000 conventional barrels and at least two billion cubic feet per day of gas that has already been shut in due to fires. Rystad that number is almost certainly low as the number of oil producers continued to report outages..Kelt Exploration said it had shuttered about 5,000 barrels of oil equivalent (boe) while Calgary-based Whitecap Resources said about 26,000 boe of 40,000 remain closed. Likewise, Crescent Point said it was temporarily deactivating about 45,000 boe as a “precautionary measure.”.To date, there have been no reports of damages or losses. But that didn’t stop natural gas prices from spiking in New York on Thursday, where they jumped more than 10% to $2.60. Prices are up almost 20% in the last week alone.. NYMEX natural gas price chartWildfires in Alberta have caused North American natural gas prices to spike. .Geographically speaking, most of the oil sands is centred around Fort McMurray in the northeastern part of the province, while the conventional oil and natural gas is in the west-central region around Drayton Valley and Edson, and the Peace River Block near Grand Prairie extending northwest to Fort St. John in British Columbia..As of Thursday morning, more than 2,500 firefighters from as far afoot as Mexico and the US, were battling the blazes alongside the Canadian Forces..There were 98 fires, with 26 considered out of control. British Columbia reported 60 fires — up from 20 at the start of the week — with 12 out of control. Saskatchewan has 24 active fires, with four considered ‘not contained’.. Fire mapAlberta’s wildfires are geographically concentrated in major oil and gas producing regions. .Conditions are expected to worsen over the weekend. The Alberta government on Thursday issued a ‘red alert’ for the High Level, Fort Vermillion and Fort Chipewyan regions due to high expected wind gusts temperatures of up to 28C..In addition to oil and gas, the fires have also caused rail disruptions. Earlier this week CN Rail was forced to stop all traffic on its mainline from Edmonton to Jasper. Service was restored by the end of the week but it took additional precautions, including reduced speeds and spraying tracks with water..“CN worked with local emergency services to minimize the impacts of wildfires threatening its network over the past week but continue to be a significant danger in Alberta and northeastern British Columbia. CN is closely monitoring network operations in affected areas to ensure the safety of our employees and local communities,” it said in its weekly grain report.
In what could be a body blow to Alberta’s already strained infrastructure, a European energy consultancy is warning that up to 80% of the province’s oil sands production is at risk due to the worsening wildfire situation..According to Oslo-based Rostand Energy, up to 2.7 million barrels per day (bpd) of mined and pumped bitumen is at risk due to “extreme” and “very high” wildfire warnings in the northern part of the province. Given that Alberta produces about 3.4 million bpd of upgraded synthetic oil and raw bitumen, that means about 80% of the province’s daily output is at risk of shut-ins or damage..Of projected production for the month of May, Rystad said about 60% are subject to “extreme” wildfire warnings, while another 40% are in areas with “very high” risk, it said..In 2016, wildfires in Fort McMurray knocked out more than a million bpd for almost two months..That’s on top of an estimated 300,000 conventional barrels and at least two billion cubic feet per day of gas that has already been shut in due to fires. Rystad that number is almost certainly low as the number of oil producers continued to report outages..Kelt Exploration said it had shuttered about 5,000 barrels of oil equivalent (boe) while Calgary-based Whitecap Resources said about 26,000 boe of 40,000 remain closed. Likewise, Crescent Point said it was temporarily deactivating about 45,000 boe as a “precautionary measure.”.To date, there have been no reports of damages or losses. But that didn’t stop natural gas prices from spiking in New York on Thursday, where they jumped more than 10% to $2.60. Prices are up almost 20% in the last week alone.. NYMEX natural gas price chartWildfires in Alberta have caused North American natural gas prices to spike. .Geographically speaking, most of the oil sands is centred around Fort McMurray in the northeastern part of the province, while the conventional oil and natural gas is in the west-central region around Drayton Valley and Edson, and the Peace River Block near Grand Prairie extending northwest to Fort St. John in British Columbia..As of Thursday morning, more than 2,500 firefighters from as far afoot as Mexico and the US, were battling the blazes alongside the Canadian Forces..There were 98 fires, with 26 considered out of control. British Columbia reported 60 fires — up from 20 at the start of the week — with 12 out of control. Saskatchewan has 24 active fires, with four considered ‘not contained’.. Fire mapAlberta’s wildfires are geographically concentrated in major oil and gas producing regions. .Conditions are expected to worsen over the weekend. The Alberta government on Thursday issued a ‘red alert’ for the High Level, Fort Vermillion and Fort Chipewyan regions due to high expected wind gusts temperatures of up to 28C..In addition to oil and gas, the fires have also caused rail disruptions. Earlier this week CN Rail was forced to stop all traffic on its mainline from Edmonton to Jasper. Service was restored by the end of the week but it took additional precautions, including reduced speeds and spraying tracks with water..“CN worked with local emergency services to minimize the impacts of wildfires threatening its network over the past week but continue to be a significant danger in Alberta and northeastern British Columbia. CN is closely monitoring network operations in affected areas to ensure the safety of our employees and local communities,” it said in its weekly grain report.
