Energy Spared So Far During Canada's Wildfire Season

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Alberta's energy sector has been spared so far from any severe damage from fires in the Canadian Rockies, though many blazes remain out of control.

Wildfire season got off to an early start in the Canadian Rockies, 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.

Wildfires in the region have in the past curtailed around 1 million barrels per day (BBL/d) in oil production. Last year, more than 235,000 people were ordered to evacuate their homes during what was the worst wildfire season in the nation's history.

This year could be even worse as higher-than-normal temperatures are expected across the nation. Parts of the resort town of Jasper, in the broader Jasper National Park area, were razed by wildfires that erupted in July.

The wildfires in the park are still considered out of control, with more than 130 square miles consumed.

"Cooler weather and precipitation forecast over the next few days should help subdue wildfire behavior," the provincial government of Alberta said Monday.

Cenovus Energy Incorporated (NYSE:CVE) (Calgary, Alberta) had already called on non-essential staff to leave its Sunrise project, just outside of Fort McMurray, due to fires raging from the Firebag complex.

"As the wildfire threat continues to be successfully mitigated, we are proceeding with the safe return of all site personnel," the company said in a media statement published Friday. "Our first priority is the safety of our people. We continue to monitor wildfire conditions in the region."

Apart from some minor disruptions, the oil and gas sector in Alberta has shown resilience during this year's wildfire season. In late July, Alberta oil sands producer Athabasca Oil Corporation (Calgary) raised its guidance for annual production by 1,000 barrels of oil equivalent per day (BOE/d) for a target rate of between 36,000 and 37,000 BOE/d.

The company also reported around US$290 million in net midstream sales of petroleum and natural gas over the three-month period ending in June, a 42% increase over year-ago levels.

Last week, Cenovus said it expected to produce as much as 797,500 BOE/d this year, an upward revision from early-year expectations.

The company realized total net production during the three-month period ending June 30 of 800,800 BOE/d, a 10% increase over year-ago levels. Cenovus also loaded its debut cargo onto foreign-bound vessels carrying products from the expanded Trans Mountain crude oil pipeline. "We will continue our focus on safely delivering profitable and predictable operations, while progressing our growth projects to further improve the resiliency of the company," President and Chief Executive Officer Jon McKenzie said.

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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