Canada's Alberta wildfires spread, threatening further oil production

The wildfires that occurred in Alberta are still spreading, and in addition to putting crude oil production at further risk, evacuation advisories have also been issued.

Currently, only a small amount of oil production has been suppressed due to wildfires, but there are concerns that the degree of suppression will increase if wildfires continue to spread.

At the beginning of July, Sanko announced that it would curb production at firebag sites and evacuate unnecessary personnel. This week, Imperial Oil announced it would evacuate some personnel from its Kearl site. Together, Firebag and Kearl produce more than 0.5 million barrels of oil each day.

Reuters reports that two-thirds of Alberta's oil production comes from the oil sands region, and the wildfire situation is causing some analysts to worry that there is a possibility that it will affect more production.

As of midnight on Wednesday, 175 wildfires had occurred across Alberta, 12 of which were around Fort McMurray, Alberta's largest oil sands production site.

Due to the effects of the wildfires that occurred this week, a state of emergency was declared in one town in Alberta, and an evacuation order was issued in the town of Jasper in western Alberta due to the approach of wildfires.

The petroleum industry in Alberta and Canada has had a strong year so far, with the Trans Mountain Pipeline finally starting operation and production volumes are on the rise. However, there is a possibility that the situation will change rapidly as the federal government has set out a plan to impose emission caps on the oil industry.

The plan proposes to reduce emissions in 2030 by 35% to 38% compared to 2019, while providing compliance flexibility to reduce emissions to a level where emissions are reduced by approximately 20% to 23% compared to 2019.

The industry and the oil-producing state of Alberta criticized this emissions cap plan as effectively setting an upper limit on oil and gas production. According to the Canadian Petroleum Producers Association, the industry could lose 55 billion dollars of investment if this cap is implemented.