Canada's Wildfire Season Already Threatens Oil-Rich Areas

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Canadian wildfire season is under way in earnest, with evacuation alerts in oil-rich Alberta targeting an area that has experience with multi-million-dollar disasters.

Authorities in Wood Buffalo, a municipality in Alberta, issued an evacuation alert due to wildfires moving toward the community. Residents there are advised to keep their windows closed, make emergency plans and prepare 72-hour emergency kits.

While not an official evacuation notice, authorities said residents should be prepared to leave.

More than 1,300 square miles were impacted by wildfires in and around the Wood Buffalo area in 2016. Evacuation orders were issued for an estimated 80,000 residents and municipal authorities put the total cost of their response at around $130 million.

Fires that year forced Canadian energy company Suncor Energy (NYSE:SU) (Calgary, Alberta) to evacuate thousands of employees from Wood Buffalo. About 560 homes and a dozen apartment complexes were deemed unsafe for habitation after wildfires in the broader Fort McMurray area forced the largest evacuation in Canadian history.

Smoke from Alberta wildfires last year, meanwhile, blanketed much of North America east of the Mississippi River. More than 100 active fires in the region in May 2023 prompted oil and gas producers in Alberta to shut in production.

Spring marks the start of wildfire season in Alberta. Authorities in Edson, about five hours south of Wood Buffalo, issued a fire advisory for forested areas early last week.

"Dry grass can catch easily and burn quickly. Any spark, hot exhaust or friction can cause a wildfire," a regional advisory issued last Tuesday read. "Avoid working near or on dry vegetation to help prevent wildfires."

The threat from those dry conditions were evident last week. The Canada Energy Regulator (CER) is still investigating an incident on part of the NOVA Gas Transmission Ltd line (NGTL), a 15,500-mile network that ties western Canadian gas markets to the domestic and U.S. markets.

A rupture on a section of the pipeline triggered a small wildfire near Edson last week. TC Energy (NYSE:TRP) (Calgary) said in a notice Friday that it was reducing pressure on the line while investigations continue.

"Out of an abundance of caution and in consultation with the Canada Energy Regulator (CER), we have reduced pressure on a segment of the NGTL system to support continued safe operations as the investigation progresses," the company said. "We are communicating directly with our customers about any impacts to service."

Alberta's government expects crude oil production to increase 17% from 2022 levels by 2025 to average 569,600 barrels per day (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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