The evacuation may further delay a restart of at least one million barrels a day in oil-sands production
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| Burned-out homes in the Abasand neighborhood of Fort McMurray, Alberta, Canada on May 9, after wildfires forced the evacuation of the town. |
The move threatens to further delay a restart of at least one million barrels a day in oil-sands production sidelined by the forest fires. Canadian oil sands production averaged 2.5 million barrels a day last year, much of which was imported by the U.S. for refining into petroleum products.
The mandatory evacuation order issued by the local municipal government affects staff who remained or returned after major oil sands operators in the area shut down their operations earlier this month. That came after wildfires destroyed 2,400 houses and other buildings in the town of Fort McMurray, a regional hub that has been under an evacuation order for residents since May 3.
The latest order, which came at 11:30 p.m. local time on Monday, is a setback for large oil-sands producers such as industry leader Suncor Energy Inc., which had said last week that it was in the process of planning to resume production at its oil sands sites. Suncor has shut in production of 300,000 barrels of oil a day at two mines and a pair of oil-sands well sites.
Authorities extended the evacuation zone from north of Fort McMurray to just south of Fort MacKay, a smaller community located about 34 miles away. It applies mainly to oil-sands sites and nearby housing camps in remote boreal forests such as those run by Suncor and its 350,000 barrel a day capacity oil sands mining subsidiary, Syncrude.
Suncor said it was relocating workers in the area to camps farther north that aren’t part of the evacuation order.
Other sites impacted include oil-sands projects operated by Marathon Oil Corp. and PetroChina unit Brion Energy, according to the Regional Municipality of Wood Buffalo, which estimated at least 8,000 people would be subject to evacuation.
None of these oil-sands facilities have sustained damage from the fires, but they have been affected by staffing issues stemming from the evacuation of Fort McMurray’s resident and logistics issues preventing them from shipping heavy crude. Pipeline operator Enbridge Inc. has reduced its oil-sands crude shipments by about 900,000 barrels a day, down from a capacity of 1.5 million barrels a day.
Earlier Monday, Enbridge said it would widen a firebreak and continue to spray down equipment at its Cheecham oil storage terminal, a facility located about 43 miles southeast of Fort McMurray.
The government of Alberta said the wildfire near Fort McMurray had spread to more than 702,000 acres, or about 1,096 square miles, due in part to hot, dry weather conditions. It has been burning out of control since first being detected on May 1.
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