Alberta Premier Rachel Notley met with energy company executives on Tuesday to discuss how the Fort McMurray wildfire has impacted the industry, and how to get oil production back on track.
“Our meeting today was a chance for me to listen and hear directly from our industry partners on their current situation,” Notley told reports after the gathering. “I can say that government and infrastructure are working together to support industry operations.”
The wildfire that's forced more than 80,000 residents to flee their homes also prompted several major oil companies, including Syncrude and Suncor, to suspend operations. It's estimated that daily oil production in the province has been cut in half, down more than a million barrels per day.
“For many operators there was no wildfire risk and production continues as before. For those in and around Fort McMurray though, there is an economic consequence to taking production off line,” Notley said. “There is foregone revenue to both companies and to the crown.”
FirstEnergy Capital analyst Martin King says the oilsands shutdown has in turn reduced demand for natural gas in the province. King says the demand for natural gas in Alberta has dropped by 700 million to 900 million cubic feet per day since the wildfire first prompted oil companies to suspend production.
The energy industry uses natural gas in the oilsands production processes.
King said the drop in demand for natural gas could force producers in Alberta to sell the fuel for less than the cost of shipping it, meaning producers will experience losses on their gas sales.
Notley said the province will be working closely with oil companies to help them resume production as quickly as possible.
“Operators have committed to starting production as soon as they can and they have identified for us critical initial steps that must be taken to help safely start reproduction in this region,” she said.
That includes ensuring that infrastructure such as pipelines and electricity grids are still intact and making sure goods and materials can still be transported to and from oil facilities, the premier said.
But Notley said the most important task will be ensuring the safety of those who will be working in the oil patch.
“We agree that operations will only start when it is absolutely safe to do so for personnel as well as environment.”
Notley said that getting oil production back on line will both stabilize the province’s economy and lift the spirits of many of those affected by the devastating fire.
“While thousands of lives will never be the same, we can take small steps to getting back the rhythm of north-east Alberta,” she said. “For many in Fort McMurray, that means rolling up the sleeves and returning to work doing what they love which is working in the energy sector.”
On Monday, Notley toured Fort McMurray, along with the mayor, city planners and a small group of journalists.
She said that nearly 90 per cent of the city's structures remained intact, with firefighters saving more than 25,000 structures. Approximately 2,400 structures were destroyed.
The premier stressed that it's not safe for people to return home yet, because large parts of the city don't have power or water.
Notley said she expects to be able to "provide a schedule for return within two weeks."
Meanwhile, fire crews are benefitting from low temperatures and increased humidity as they continue to battle the wildfire, according to Wildfire Information Officer Matthew Anderson.
The fire continues to edge east, away from Fort McMurray toward the Saskatchewan border, Anderson said.
In other wildfire-related news, Statistics Canada said Fort McMurray residents who fled the city will not be expected to complete the 2016 census by today's deadline.
With files from The Canadian Press
