Spreading wildfires in Alberta are negatively impacting Canada’s production of oil and natural gas.
Raging wildfires have led to the evacuation of 30,000 people from rural Alberta and cut at least 234,000 barrels a day of oil and natural gas production as companies shut down wells and pipelines amid the growing crisis.
A total of 100 blazes are now reported to be burning across Alberta, with a quarter of them classified as “out of control.”
The provincial government in Edmonton has declared a state of emergency, and evacuation orders were issued for communities throughout Alberta.
The fires are impacting Canada’s primary natural gas region, including the Montney and Duvernay formations, an area covered with wells, processing plants and pipelines.
The curtailed production has sent prices for some local grades of crude oil rising.
Edmonton Mixed Sweet’s discount to West Texas Intermediate (WTI) crude oil, for example, has narrowed by more than a third to $2.50 U.S. a barrel, the smallest discount since March of this year.
Alberta’s oil and natural gas production has a history of being disrupted by wildfires, including a massive blaze in 2016 that shutdown more than one million barrels a day of output from the oil sands in the province’s northeast territory.
Alberta Premier Danielle Smith has requested military aid to combat the current outbreak of wildfires in the province.
