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Friday 27 April 2018

Most of Canada's oil sands production shut down by wildfire

Rachel Notley said the massive oil sands mines north of Fort McMurray have not been damaged (Rachel La Corte/Canadian Press/AP)
Rachel Notley said the massive oil sands mines north of Fort McMurray have not been damaged (Rachel La Corte/Canadian Press/AP)

The majority of Canada's oil sands industry has stopped production and will only resume when it is "absolutely safe", Alberta's premier said after meeting company officials.

Rachel Notley was speaking after they discussed the impact of the massive wildfire that destroyed more than 10% of the homes and buildings in Canada's main oil sands city, Fort McMurray.

Suncor chief executive Steve Williams, the head of Canada's largest oil company, said about a million barrels a day went offline but some of that has already started to come back. Ms Notley said the massive oil sands mines north of Fort McMurray had not been damaged.

Shell Canada said it had resumed production at its Albian Sands mining operations but at a reduced rate after a seven-day closure.

The wildfire that broke out a week ago is expected to impact an economy already hurt by the fall in oil prices. Alberta's oil sands have the third-largest reserves of oil in the world behind Saudi Arabia and Venezuela. Its workers largely live in Fort McMurray, a frontier outpost-turned-city whose residents come from all over Canada.

Ms Notley said getting pipelines and electricity operational are priorities. She added that getting production back online will be a matter of "days and short weeks".

"The majority of production has stopped, certainly not all of it, but the majority. If that were to continue for a month or two you would start to see measurable outcomes to our GDP."

Ms Notley said the halted production affects the livelihood of thousands of Canadians, with companies and the government losing revenue. She said the main highway into Fort McMurray and to the mines to the north has been reopened for oil workers but they are not allowed to visit the city.

Officials said 85% to 90% of Fort McMurray remains intact, including the business district. About 2,400 homes and buildings were destroyed, but officials said firefighters saved 25,000 others in the city, including the hospital, municipal buildings and every functioning school.

A plan is being put together within two weeks so most of the 88,000 evacuees can return to their homes. The fire continues to grow outside the city in Alberta's vast boreal forest after merging with another and is about 884 square miles in size. That includes areas already burned and currently burning.

The bulk of the city's evacuees moved south after a mandatory evacuation order, but 25,000 went north and were housed in camps normally used for oil sands workers until they also could be evacuated south.

Ms Notley thanked the industry for helping the evacuees. Most are staying with family and friends or have returned to homes elsewhere in Canada, including many who have homes on Canada's Atlantic coast where there are fewer jobs.

"We will get back to normal as quickly as possible," she said.

Mr Williams said getting production back up will depend on each company and facility.

"The shortest ones will be 24 to 48 hours before they are operating. Some will be more difficult and will be a week or two. The most difficult are the ones we haven't been to yet which will be down south of Fort McMurray where the fire actually went across the plants," he said.

Prime minister Justin Trudeau plans to visit Fort McMurray on Friday.

No deaths or injuries have been reported from the fire itself, but two people died in a traffic accident during the evacuation.

Press Association

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