Category Archives: Oil producers

BLOOMBERG: Alberta Wildfire Risk Seen Biggest for Storage Tanks, Equipment (map)

Repost from Bloomberg

Alberta Wildfire Risk Seen Biggest for Storage Tanks, Equipment

Alex Nussbaum, May 6, 2016 — 2:25 PM PDT
  • Blaze reaches gates of Cnooc’s Long Lake, official says
  • Oil sands unlikely to burn but equipment, chemicals at risk

“It seals itself off,” he said in a telephone interview. “You can find records of natural wildfires in these deposits for centuries and none of them have produced a situation where you have an extended fire.”

Royal Bank of Canada estimated that as much as 1 million barrels a day of production was shut because of the blaze, or about 40 percent of oil sands output, as companies including Suncor Energy Inc., Cnooc’s Nexen, Royal Dutch Shell Plc, and ConocoPhillips reduce production and open work camps to residents escaping blazes in Alberta’s biggest-ever evacuation. Inter Pipeline Ltd. shut part of its system in the province. The disruptions pushed up the price of oil sands crude.

“Eighty percent of the oil sands are located deep underground and can only be extracted through an in-situ drilling process,” Chelsie Klassen, a spokeswoman for the Canadian Association of Petroleum Producers, said in an e-mail on Thursday. “The remaining 20 percent is mineable from the surface and predominantly located north of Fort McMurray. Hydrocarbons can burn under the right conditions, however oil sands would burn at a much slower pace considering its composition with sand.”

FORT MCMURRAY: Latest on the Alberta wildfires and tar sands mining

By Roger Straw, April 8, 2016

I’ve had my eyes on Alberta Canada since June of 2013, when I first learned about the terrible destruction of pristine boreal forests and native communities in Alberta caused by the mining of tar-sands for crude oil production. Those operations are concentrated in the Fort McMurray area, so my interest and concern peaked recently when reports surfaced about the massive wildfires there.

Most, but not all of the mining operations are north of Fort McMurray, and most, but not all of the worst fires are in and to the south of Fort McMurray.  But the fires and the oil mines are intimately linked.  Here’s are several of the latest reports (thanks to Google):

Fort McMurray fire has been raging for over a week

CBC.ca6 hours ago
It’s been one week since the fire known as “the beast” reared it’s ugly head. The wildfire outside of Fort McMurray, once measured in football fields, now sits at …

Fort McMurray Fire Could Last Months: Officials

Huffington Post Canada17 hours ago

Man watches on CCTV as Fort McMurray fire devastates his home …

Yahoo7 News17 hours ago

Wildfire at Fort McMurray quickly overtakes Canada’s environmental …

In-DepthLos Angeles Times5 hours ago

Fire continues to grow, expected to reach Saskatchewan border

InternationalThe Globe and Mail2 hours ago

Fort McMurray Wildfire: Evacuees Relocated as ‘Absolutely Vicious …

In-DepthNBCNews.com22 hours ago

Fires in Canada’s Oil-Sands Region Grow

Wall Street Journal20 hours ago
More than 500 firefighters, 15 helicopters and 14 air tankers are trying to put out the fires in Fort McMurray, which grew by nearly 50% in the past day to now …

Canada Fire Disrupts, But Doesn’t Destroy, Oil Production

teleSUR English9 hours ago

Emergency teams enter evacuated Fort McMurray to rescue the pets …

The Independent1 hour ago

Disasters highlight the need for climate action

Pittsburgh Post-Gazette11 hours ago

A dire warning

Grand Junction Daily Sentinel5 hours ago

The ties that bind Canada together visible in Fort Mac

InternationalThe Guardian Charlottetown21 hours ago

WALL STREET JOURNAL: Forest Fires Cut Into Canadian Oil Production

Repost from the Wall Street Journal

Forest Fires Cut Into Canadian Oil Production

Alberta oil-sands companies reduce output, evacuate staff due to risk from encroaching blazes

By CHESTER DAWSON, Updated May 6, 2016 2:01 a.m. ET
The Suncor tar sands processing plant near near Fort McMurray, Alberta. Forest fires continued to rage in Canada’s oil-rich province of Alberta on Thursday. PHOTO: REUTERS

CALGARY, Alberta—Raging forest fires in the heart of Canada’s oil-sands region curbed production and helped drive up global prices on Thursday as some worried enough oil was threatened to nearly wipe out the world’s oversupply.

Many companies evacuated staff and cut production because of pipeline outages and the risk from encroaching blazes. No oil operations reported fire damage, but their efforts to protect themselves led to a reduction of at least 645,000 barrels a day, or almost one-quarter of Canada’s 2.5 million barrels in total oil sands production. Much of that output is sent to refineries in the U.S.

The outages are widely expected to be temporary, but they drove up the price of typically heavily discounted Canadian crude in recent trading. Prices for the U.S. benchmark crude rose 1.2% to $44.32 a barrel Thursday, and the global benchmark gained about 1%—with worries about lower supplies from Libya and Nigeria also affecting trading.

If oil production now threatened by the Canadian fires were halted, it would be enough to nearly wipe out the world’s oversupply, said Tim Pickering, chief investment officer of Calgary-based Auspice Capital Advisors Ltd., which manages $300 million and an exchange-traded fund based on the Canadian Crude Index.

“This is the most important issue in oil today,” Mr. Pickering said. “That will put the system back in check really quick.”

Oil prices have been pressured for almost two years by excess supplies. But production has started to fall in the U.S. and elsewhere following massive spending cuts by energy companies. Meanwhile, demand continues to grow.

Analysts say the global market is less oversupplied than it was even a few months ago at a time when producers’ capacity to ramp up production has been reduced. That makes the oil market more vulnerable to a shortage if production is halted in any part of the world.

In addition to Canada, oil traders are currently worried about lower supplies from Libya because of political unrest and from Nigeria due to a pipeline outage. Some analysts also warn that Venezuela’s oil production could fall amid the country’s struggling economy and power shortages.

The longer-term impact of the Alberta fire remains unclear. Some officials say production will likely bounce back once the fire threat recedes; others say damage to infrastructure and from displaced workers could hamper efforts to ramp up output once the fires are put out.

“I expect we’ll recover fairly quickly, but it’s too early to say how much damage has been done to equipment and operations in the town of Fort McMurray,” Steve Laut, president of Canadian Natural Resources Ltd., said on a conference call with analysts. Mr. Laut said that oil sands output at his company, a major oil and gas producer, hasn’t been affected by the disaster.

But the Bank of Nova Scotia said the destruction of property and loss of production at other oil sands operations could cast a long shadow. The forest fire fallout could mean “very little” GDP growth for the overall Canadian economy in the second quarter and that the damage to infrastructure will slow the recovery in the country’s oil patch, the bank said in a report.

In the latest of a series of plant closures, Suncor Energy Inc., Canada’s largest producer, late Thursday shut down all of its wholly owned oil sands assets, including two mines and a pair of well sites, which had been producing a total of 300,000 barrels a day. It had previously reduced output at another mining operation called Syncrude, in which it owns a controlling stake.

Exxon Mobil Corp.’s Imperial Oil and ConocoPhillips also shut some production earlier Thursday. Exxon cut output by an undisclosed amount at its 194,000 barrel-a-day mine, citing “uncertainties.” Conoco halted a 50,000 barrel-a-day mine and evacuated all staff due to a fire near the town of Anzac. They followed a move Wednesday by Nexen Energy ULC, a subsidiary of China’s Cnooc Ltd. On Wednesday, the Canadian unit of Royal Dutch Shell PLC shut down two oil-sands mines, which produce 255,000 barrels a day, that it owns in partnership with Chevron Corp. and Marathon Oil Corp.

“That’s largely being done to allow folks to focus on rendering aid to the community and emergency response,” Lee Tillman, chief executive of Marathon Oil said on a conference call. “The mines themselves are not under any direct or immediate threat.”

—Nicole Friedman, Timothy Puko and Erin Ailworth contributed to this article.

THE NEW YORKER: Fort McMurray and the Fires of Climate Change

Repost from The New Yorker

Fort McMurray and the Fires of Climate Change

BY ELIZABETH KOLBERT, May 5, 2016
A helicopter flies past a wildfire in Fort McMurray, Alberta, on Wednesday. The blaze has spread through an area covering more than three hundred square miles.
A helicopter flies past a wildfire in Fort McMurray, Alberta, on Wednesday. The blaze has spread through an area covering more than three hundred square miles.A helicopter flies past a wildfire in Fort McMurray, Alberta, on Wednesday. The blaze has spread through an area covering more than three hundred square miles. PHOTOGRAPH BY JASON FRANSON / THE CANADIAN PRESS / AP

The town of Fort McMurray, some four hundred miles north of Calgary, in Canada, grew up very quickly on both sides of the Athabasca River. During the nineteen-seventies, the population of the town tripled, and since then it has nearly tripled again. All this growth has been fuelled by a single activity: extracting oil from a Florida-sized formation known as the tar sands. When the price of oil was high, there was so much currency coursing through Fort McMurray’s check-cashing joints that the town was dubbed “Fort McMoney.”

Now Fort McMurray is burning. A forest fire that began to the southwest of the town on Sunday has forced the entire population—almost ninety thousand people—to evacuate. On Wednesday, Alberta’s provincial government declared a state of emergency. By yesterday, more than fifteen hundred buildings had been destroyed and the blaze had spread through an area covering more than three hundred square miles. It was burning so hot that that it was easily able to jump major rivers. One Canadian official described the fire as “catastrophic.” Another called it a “multi-headed monster.”

No one knows exactly how the fire began—whether it was started by a lightning strike or by a spark provided by a person—but it’s clear why the blaze, once under way, raged out of control so quickly. Alberta experienced an unusually dry and warm winter. Precipitation was low, about half of the norm, and what snow there was melted early. April was exceptionally mild, with temperatures regularly in the seventies; two days ago, the thermometer hit ninety, which is about thirty degrees higher than the region’s normal May maximum. “You hate to use the ​cliché, but it really was kind of a perfect storm,” Mike Wotton, a research scientist with the Canadian Forest Service, told the CBC.

Though it’s tough to pin any particular disaster on climate change, in the case of Fort McMurray the link is pretty compelling. In Canada, and also in the United States and much of the rest of the world, higher temperatures have been extending the wildfire season. Last year, wildfires consumed ten million acres in the U.S., which was the largest area of any year on record. All of the top five years occurred in the past decade. In some areas, “we now have year-round fire seasons,” Matt Jolly, a research ecologist for the United States Forest Service, recently told the Times.

“You can say it couldn’t get worse,” Jolly added, but based on its own projections, the forest service expects that it will get worse. According to a Forest Service report published last April, “Climate change has led to fire seasons that are now on average 78 days longer than in 1970.” Over the past three decades, the area destroyed each year by forest fires has doubled, and the service’s scientists project that it’s likely to “double again by midcentury.” A group of scientists who analyzed lake cores from Alaska to obtain a record of forest fires over the past ten thousand years found that, in recent decades, blazes were both unusually frequent and unusually severe. “This extreme combination suggests a transition to a unique regime of unprecedented fire activity,” they concluded.

All of this brings us to what one commentator referred to as “the black irony” of the fire that has destroyed most of Fort McMurray.

The town exists to get at the tar sands, and the tar sands produce a particularly carbon-intensive form of fuel. (The fight over the Keystone XL pipeline is, at its heart, a fight over whether the U.S. should be encouraging —or, if you prefer, profiting from—the exploitation of the tar sands.) The more carbon that goes into the atmosphere, the warmer the world will get, and the more likely we are to see devastating fires like the one now raging.

To raise environmental concerns in the midst of human tragedy is to risk the charge of insensitivity. Prime Minister Justin Trudeau alluded to this danger at a recent news conference: “Any time we try to make a political argument out of one particular disaster, I think there’s a bit of a shortcut that can sometimes not have the desired outcome.” And certainly it would be wrong to blame the residents of Fort McMurray for the disaster that has befallen them. As Andrew Weaver, a Canadian climate scientist who is a Green Party member of British Columbia’s provincial legislature, noted, “The reality is we are all consumers of products that come from oil.”

But to fail to acknowledge the connection is to risk another kind of offense. We are all consumers of oil, not to mention coal and natural gas, which means that we’ve all contributed to the latest inferno. We need to own up to our responsibility, and then we need to do something about it. The fire next time is one that we’ve been warned about, and that we’ve all had a hand in starting.


Elizabeth Kolbert has been a staff writer at The New Yorker since 1999. She won the 2015 Pulitzer Prize for general nonfiction for “The Sixth Extinction: An Unnatural History.”

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