Alberta's Energy Sector Escapes Wildfire Season Unfazed

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--With only a few weeks left of summer, the Canadian energy sector seems to have escaped wildfire season with only a few facilities impacted by blazes.

Last year's wildfire season in the Canadian Rockies was extreme, with fires in and around Alberta's Fort McMurray area sidelining oil production and blanketing much of North America with smoke.

The 2023 wildfire season was the most destructive on record, with more than 16.5 million hectares--or some 64,000 square miles--lost. A typical wildfire season leaves 2.5 million hectares destroyed.

The 2024 season, meanwhile, got off to an early start, with parts of the municipality of Wood Buffalo, located near oil-rich Fort McMurray in northeast Alberta, placed under evacuation orders because of wildfires in March.

This year's fires torched the resort town of Jasper and the surrounding Jasper National Park in Alberta, though residents may be allowed to return home later this week. An evacuation order remains in place, though returns are tentatively scheduled for Friday.

As of Tuesday evening, the provincial government of Alberta said there were 115 active wildfires in the area, but only 12 are considered out of control.

The impact on the energy sector was minimal relative to previous years. Cenovus Energy Incorporated (NYSE:CVE) (Calgary, Alberta) called on non-essential staff to leave its Sunrise project, just outside of Fort McMurray, due to fires raging from the Firebag complex, but saw no major operational impacts.

Cenovus in its second-quarter earnings report said it realized total net production during the three-month period ending June 30 of 800,800 barrels of oil equivalent per day, a 10% increase over year-ago levels.

Suncor Energy Incorporated (NYSE:SU) (Calgary, Alberta) also had closed down its 215,000 barrel-per-day Firebag oil sands operations. That was the only Canadian facility so far this year to experience an actual production issue due to wildfires.

Elsewhere, with Canada increasing its export reach by way of the expansion to the Trans Mountain crude oil pipeline from Alberta to British Columbia, operators had worried the blazes would encroach on its network near Jasper.

The company had deployed a sprinkler system around its infrastructure near Jasper to protect the pipeline, which has a peak carrying capacity of 890,000 barrels per day (BBL/d).

Wildfire season has not been as severe as in past years, despite early forecasts suggesting a hot summer would compound the situation. Most of the energy companies operating in the region have turned in strong financial returns and, in many cases, upped their guidance on production.

Alberta's government expects crude oil production to increase 17% from 2022 levels by 2025, to average 569,600 BBL/d. Natural gas production is expected to increase from 11 billion cubic feet per day (Bcf/d) in 2022 to 12.1 Bcf/d by 2032.

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