Alberta oilsands operations slow to recover after fire

With the wildfire threat having peaked in northern Alberta, oilsands companies are turning their attention to restarting their facilities and getting the oil flowing.

The massive fire near Fort McMurray forced the emergency evacuation of the city along with several oilsands facilities, knocking about one-half of all oilsands production offline. 

Slowly, companies are beginning to return the tens of thousands of displaced employees to work. Monday night proved how difficult the process can be while the unpredictable wildfire continues to burn.

Several work camps were evacuated again. Evacuation orders were made through Monday night which affected 8,000 people.

That's one reason analysts aren't sure how long it will take before oilsands is back on its feet and production returns to previous levels.

"They are all going to be ramping up pretty much as fast as possible," said Kevin Birn, an oilsands analyst with IHS Energy. "They have a great financial motivation to do so."

• Fort McMurray fire has economists cutting growth forecasts for Canada
• Oilsands growth in doubt and could affect national GDP, federal finance report warns

He expects it will be an uneven production return because every facility was affected differently.

"Think about when you get on a plane, we expect a pilot to go through all the checks. A plane is a couple million dollars, while oilsands operations are multiple-billion-dollar facilities. They have checklists that are extensive because they want to bring them up in a controlled fashion, a safe fashion." 

It's been difficult. Obviously this is an unprecedented event that we've seen.- Leithan Slade, Syncrude

Some facilities are starting to produce oil again, including Shell Canada's Albian site after the fire changed direction and the plant was considered secure.

"Safe restart is important to our company and staff to allow us to contribute to the recovery efforts of the Fort McMurray area," said Shell's Zoe Yujnovich in a statement.

Some oilsands facilities were damaged in the fire, such as Nexen's Long Lake plant. The company has reported the main facility and well pads are "intact," although the camp site was apparently destroyed. 

Others, like Syncrude, are still trying to get a sense of whether any damage was caused and remain without a timeline for when production will resume.

"Right now we are looking at three key steps, which is assess and ensure the safety of the site, prepare for startup via inspections of the unit and equipment, and then work on commissioning and restarting operations in a staged manner," said Syncrude spokesman Leithan Slade.

Organizing the restart

Most of Syncrude's 4,800 employees lived in Fort McMurray, but are now scattered across the province and in some cases, elsewhere in Canada. Companies are facing significant logistical challenges keeping track of employees and beginning to arrange transportation once workers are needed back up north.

Syncrude held an employee town hall in Calgary on Monday and will host another in Edmonton on Tuesday to help answer questions about its restart plans.

"It's been difficult. Obviously this is an unprecedented event that we've seen," said Slade. "There are several hundred [people] on site now, but for several days following the complete evacuation of site and complete shutdown, there was no personnel left on site."

While the wildfire threat is greatly reduced, some risk remains. Both Syncrude and Suncor had to evacuate certain work camps on Monday as the fire changed directions. Air quality is a concern in the area.

"We continue to closely monitor the smoke conditions in the region," said Slade. 

Wildfires have forced oilsands operations to shut down in recent years. In 2015, Cenovus evacuated its Foster Creek facility as a fire closed in on the only access road to the site. Foster Creek was shut down for 11 full days and required 10 days to return to normal operations.

Employee pay

Pipelines to the region are returning to full operation. Enbridge, for instance, is once again operating lines 18 and 19 south of Cheecham, while staff are back at its Athabasca and Cheecham terminals.

Although most oilsands workers remain off the job, they are not without pay. Many companies, including Suncor, are continuing to provide at least base pay for employees.

The main road from Edmonton to Fort McMurray, Highway 63, is closed to the public, though the provincial government is allowing employees and suppliers of oilsands operations to return and resume production.

Suncor is also urging its returning workers to be aware of higher than normal wildlife activity in the Wood Buffalo region, including bears. 

Fire conditions remain extreme in Alberta because of hot and dry weather. The Fort McMurray wildfire remains out of control and it is estimated to cover 284,214 hectares.