The massive wildfire in Canada could cause the country’s oil production to fall by an average of a half-million barrels per day, the Energy Department’s analysis arm estimates.
Oil companies in the region have had to stop or slow production as the wildfires burn through 621 square miles of Alberta. About 3 million barrels per day of crude oil comes from the region, whose tar sands hold the world’s third-largest oil reserves behind Venezuela and Saudi Arabia. Almost all of it is exported to the U.S.
Production in Alberta’s tar sands has dropped by as much as million barrels per day recently due to shutdowns caused by the massive wildfire in the region, according to the Energy Information Administration’s weekly petroleum outlook. The shutdown could cause a drop in production during the second quarter before rebounding later this year.
“At this point, press accounts say the wildfires have been slowed, helped by cooler weather, and plans are underway for rebuilding the portion of the town destroyed and reconnecting utilities throughout Fort McMurray,” the report said. “It is likely that companies will be able to provide temporary accommodations and services for critical personnel.
The wildfires have caused mass evacuations from Fort McMurray, where many oil workers’ families live while the workers are at camps in the northern part of the province.
The wildfire is among the worst in Canadian history. The blaze has prompted an evacuation of 80,000 people, and some estimate it could be weeks before the fires are brought under control, let alone extinguished.
