Fort McMurray wildfire forces oilsands to scale back production
She wouldn’t speak on precise restart dates for different companies, but said those dates would depend on the location of the plant, the location in comparison to the fire, and the type of facility.
READ MORE: Fort McMurray wildfire forces oilsands to scale back production
Steve Williams, CEO of Suncor, says it’s important for the Canadian economy to get production back on track. He says there doesn’t appear to be any damage to pipelines so far and he doesn’t anticipate any layoffs generally because of the fire.
WATCH: Oilsands facilities not damaged by Fort McMurray wildfire: Notley
About a dozen oilsands projects have shut down because of the fire at an estimated loss of $65 million in daily revenue.
READ MORE: Could the Fort McMurray fire affect gas prices across Canada?
“We’ll get back to normal as quickly as possible,” Notley said, adding she couldn’t give an estimate on the total economic impact of the shut down.
“As we talk about brining employees back into the camps… That is a separate process from re-entry into the City of Fort McMurray,” the premier said.
“The restart is very distinct from the City of Fort McMurray itself,” Williams added.
He explained plants that are closer to the city will take longer to restart.
However, he said they’d work very closely with the province and the community.
“You’ll see all of us standing very much shoulder to shoulder.”
READ MORE: Fort McMurray wildfire: Evacuees staying in work camps, homes and temporary shelters around Alberta
Notley said road access to the facilities began earlier Tuesday and plans were in the works to improve airspace access, subject to emergency response needs and firefighter needs.
WATCH: Industrial plants shut down in a ‘safe way,’ says Suncor CEO following Fort McMurray wildfire
Notley also thanked the industry for their help flying out thousands of residents trapped by the fire. She said she didn’t know of another community as isolated as Fort McMurray that would have been able to evacuate its entire population so quickly.
“I want to extend my sincere thanks to the energy companies and their staff for their tremendous efforts to help in our time of crisis. Their role with the evacuation, temporary housing and then relocation of thousands of Albertans was essential. This work was happening while companies were also securing their own facilities and shutting in oil production. While everyone’s focus continues to be on the safety of people, the situation is having an impact on the jobs of so many Albertans and the overall economy. I gave my commitment to industry that we will continue to work closely together to protect key infrastructure and on the plan for a safe and timely recovery.”
Watch below: Alberta’s energy industry has seen its operations significantly disrupted because of the Fort McMurray wildfire. Now, plans are underway to resume full operations in the oilsands. But as Vinesh Pratap reports, there are a lot of variables at play: electricity, pipeline capacity, transportation, employee housing.
The province said Tuesday oilsands sites in the Fort McMurray region have been secured and are not in danger from the fire. No consequential damage was sustained by any oilsands facility or energy infrastructure.
The following 13 energy leaders were part of Tuesday’s discussion:
Rob Broen, CEO of Athabasca Oil CorporationSteve Laut, president of Canadian Natural Resources LimitedAl Reid, an executive vice president with Cenovus Energy Inc.Richard Kruger, CEO of Imperial Oil ResourcesFang Zhi, CEO of Nexen Energy UlcMichael Crothers, president and vice president of Shell Canada EnergySteve Williams, president and CEO of Suncor Energy Inc.Mark Ward, president and CEO of Syncrude Canada Ltd.Al Monaco, president and CEO of EnbridgeSiegfried Kiefer, president and COO with ATCOKen Lueers, president of Conocophillips Canada Resources Corp.Toshiyuki Hirata, president of Japan Canada Oil Sands LimitedTim McMillan, president and CEO of CAPP (Canadian Association of Petroleum Producers)
“We’re just trying to make sure we have the best information possible so we can make good decisions,” Al Reid told Global News.
The Cenovus Energy executive was among a dozen that came to Edmonton Tuesday afternoon to meet with Notley. The wildfires have not only resulted in the evacuation of Fort McMurray, but some oilsands operations have been impacted as well.
It’s estimated production has been cut by one million barrels per day. Oilsands operators are eager to return to normal operations.
“Our staff’s health and safety is our number one priority,” said Toshiyuki Hirata with Japan Canada Oil Sands Ltd.
READ MORE: ‘Ocean of fire’ destroys 2,400 structures but 85% of Fort McMurray still stands
Warren Mabee, director of the Institute for Energy and Environmental Policy at Queen’s University, said he thinks the companies will be anxious to see people allowed back into Fort McMurray as soon as possible because a stable workforce is critical to their operations.
“I would be looking for a better update on what’s happening on the ground,” he said. “The oilsands can continue to operate — as we said, they haven’t really lost a lot of their critical infrastructure — but what they have lost, right now, is the support mechanism that the whole city represented and that is significant.
“Without that, their costs go through the roof. It’s essential to those companies that the city gets up and running even if all the neighbourhoods aren’t inhabited, even if all of it isn’t back where it was.”
Mabee said an extended period of downtime due to infrastructure or staffing issues could lead to the industry requesting financial help through bailouts or tax incentives.
Rob Bedin, a 30-year engineer and director at Calgary-based consultancy RS Energy Group, said he doesn’t think the industry will ask for money but agreed that staffing is one of the biggest questions it is facing before the production of an estimated one million barrels per day of raw and upgraded bitumen can resume.
“The fact that it was an organized shutdown, that’s positive in regards to the speed at which it will come back,” Bedin said.
One concern for the sector is water quality. Oilsands mines that draw water from the Athabasca River or have open storage ponds could be exposed to ash contamination. Bedin said producers who have been able to keep their water heating systems warm will have an easier time getting their plants running again.
Jackie Forrest, vice-president of energy research at ARC Financial in Calgary, pointed out the oil sector was back in business within two weeks after wildfires that had closed thermal operations south of Fort McMurray were extinguished last spring.
“Although this is much more serious, once the fires were out, the operators were in there fairly quickly and getting their production back on line,” she said. “Assuming there’s no damage to the actual facilities, that will happen quite quickly.”
Earlier Monday, the Canadian subsidiary of Norwegian energy giant Statoil ASA said it had closed its Leismer demonstration oil project, which had been producing about 20,000 barrels of bitumen a day. It was shut down after the precautionary closure of an Enbridge pipeline that supplies light oil to the Leismer site, Statoil ASA said.
With files from Dan Healing,