Canada wildfire rages near oil sand facilities, extending shutdowns

Tue May 17, 2016 6:07pm EDT
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By Nia Williams

CALGARY, Alberta (Reuters) - A massive wildfire raged near Fort McMurray, Alberta on Tuesday and threatened major oil sands production facilities, forcing the evacuation of thousands of workers and prolonging a shutdown that cut Canadian oil output by 1 million barrels a day.

The fire jumped a critical firebreak late Monday where plants and trees had been removed to stop its spread, moving north of Fort McMurray into oil sand camp areas. Some 8,000 workers were evacuated in the heavily forested northern part of the province.

The wildfire was taking a toll on the province's economy, with one study estimating the lost oil production would cut gross domestic product (GDP) by more than C$70 million a day.

The uncontrolled blaze covered 355,000 hectares (877,224 acres), up from 285,000 hectares on Monday. The fire on Tuesday burned a 655-room lodge for oil sands workers about 35 km (20 miles) north of Fort McMurray and threatened other housing.

High temperatures and winds were working against firefighters, and the fire was forecast to move to the east, putting oil operations in its path, officials said.

None of the oil sands have caught fire, and the industry was redoubling efforts to ensure facilities were well-protected, said Alberta wildfire manager Chad Morrison.

"Because of the cleared vegetation, lots of gravel on site and because they have an industrial firefighting service on site that understands this ... we feel fairly confident the sites themselves will be OK," Morrison told a news conference.

The lost Canadian production of 1 million barrels a day represents about one-quarter of total Canadian output. Canadian crude oil prices strengthened in light trading on Tuesday and Global oil prices touched a six-month high, with the Alberta outages among factors lending support.[O/R]   Continued...

A wildfire burns as evacuees who were stranded north of Fort McMurray, Alberta, Canada head south of Fort McMurray on Highway 63, May 6, 2016. REUTERS/Chris Wattie/File Photo