Wildfires raging in Alberta are still spreading, jeopardizing more crude oil production and prompting evacuation alerts.
For now, the amount of oil production curtailed because of the wildfires is modest but there are fears that if the fires continue to spread, the degree of curtailment would increase.
Earlier in July, Suncor said it was curbing production at its Firebag site as it evacuated non-essential personnel. This week, Imperial Oil said it would evacuate some non-essential workers from its Kearl site. Firebag and Kearl together produce more than 500,000 barrels of oil daily.
Reuters noted in a report that as much as two-thirds of Alberta’s oil production comes from the oil sands region and the situation with the wildfires is worrying some analysts that more output could be affected.
As of late Wednesday, there were 175 active wildfires across the oil province, with a dozen in the area of Fort McMurry—the biggest oil sands production center in Alberta.
The wildfires this week prompted a town in Alberta to declare a state of emergency and another to issue an evacuation order for the town of Jasper in western Alberta due to approaching wildfires.
Alberta’s—and Canada’s—oil industry has had a good year so far, with the Trans Mountain pipeline finally beginning operation and production growth on the cards. However, plans by the federal government to impose an emissions cap on the industry could see the situation change very quickly.
The plan proposes to cap 2030 emissions at 35% to 38% below 2019 levels while providing compliance flexibilities to emit up to a level roughly 20 to 23% below 2019 levels.
The industry and the oil-producing province of Alberta slammed the emissions cap proposal, saying it would effectively cap oil and gas production. According to the Canadian Association of Petroleum Producers, the industry could lose $55 billion in investments if that cap is effected.
By Irina Slav for Oilprice.com
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