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Wildfire season has returned to Canada’s oil sands region, with seven active blazes in the area on Sunday raising risks for communities, workers, companies and investors.
Canada is the world’s fourth-largest oil producer, and the bulk of its production is clustered in northern Alberta’s boreal forest. Wildfires, which have always occurred in this environment but are more common now due to climate change, have become a perennial threat to Canadian oil output.
So far this year, there have been no significant disruptions to Canadian oil company operations due to wildfire.
But on Sunday, there were about seven active blazes burning in the Fort McMurray and Lac La Biche areas of northern Alberta, with some of the fires within 20 kilometers (12.43 miles) of major oil sands sites such as Cenovus Energy’s Christina Lake and Canadian Natural Resources’ Jackfish.
A forecast for heavy rain was expected to aid firefighters’ efforts throughout the day, and an evacuation alert issued on Saturday for the nearby small community of Conklin was lifted on Sunday.
While no other communities were under threat from existing blazes, the risk of new fires starting due to warm, dry conditions remains “extreme” in the Fort McMurray area, according to fire officials.
The recurring risk of fire in Canada’s oil sands region adds a level of uncertainty to company production forecasts in the spring and summer.
Last year, fires forced Canadian oil companies to temporarily shut in some 344,000 barrels per day of oil sands production, or about 7% of the country’s overall crude oil output.
In May of 2023, companies shut in at least 319,000 barrels of oil equivalent per day, or 3.7% of Canada’s total production, as more than 100 wildfires burned in Alberta.
The most extreme example occurred in 2016, when thousands of oil sands workers were evacuated as a monster wildfire destroyed part of the community of Fort McMurray. At the height of the disaster, companies were forced to reduce their oil output by a million barrels per day.
(Reporting by Amanda Stephenson in Calgary; Editing by Bill Berkrot)
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