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Oil sands production to resume as wildfire dies down, no layoffs

Suncor Energy CEO Steve Williams optimistic production will ramp up quickly.

May 11, 2016   by Bob Weber

EDMONTON — Alberta Premier Rachel Notley stood with oil sands executives May 10 to say the province’s mainstay industry would be back in production after the Fort McMurray wildfire within weeks.

“We expect ultimately that many companies will begin to resume their production in the coming days and short weeks ahead,” she said after a meeting with leaders from the oilsands, pipeline and power industries.

Suncor Energy CEO Steve Williams was optimistic that production from the oil sands – now down by more than one million barrels a day because of the fire – would ramp up quickly.

“To the north of Fort McMurray, there was no damage to the actual facilities. To the north we will be able to resume our operations in a quicker way.”

Williams said no plants would fire up unless it was safe to do so. Environmental considerations would take precedence over a quick restart.

No layoffs of oilsands workers are planned, said Williams.

“From what I heard this morning from the companies, they’ve guaranteed pay in advance so that pay to workers will not be interrupted,” he said

It’s likely the oilsands plants will be ready to go before the city, where residents probably won’t be able to return for weeks, not days. That shouldn’t stop industry from producing, Williams said.

“We have big capability to move people in and out and we have the camps in place, so people should not be a barrier to starting up.”

Infrastructure will need to be examined. Power lines, exposed to the flames, will probably pose a bigger problem than buried pipelines.

Over the course of the last week, the wildfire shut down five open-pit oilsands mines, although Shell resumed production on Monday. It also shut down six in situ operations. The loss in daily revenue has been estimated at about $65 million.

Williams said some plants could be back on their feet within 24 hours.

“Some will be more difficult and will be a week or two. The most difficult will be the ones we’ve been unable to get into to see, which will be down south of Fort McMurray.”
Williams said the costs of the wildfire – Suncor hosted thousands of evacuees at its work camps in addition to its lost production – will be “significant.” He said the company isn’t yet worried about that.

“They’re immaterial as far as Suncor is concerned.”

Notley said the government isn’t yet able to determine how much the shutdown is costing the province in terms of lost royalties.

“As things stand now, the majority of production has stopped. If that were to continue for a month or two you’d start to see measurable outcomes to our GDP, but that’s premature at this point.”

Notley said the meeting marked an significant step as Alberta begins to recover from the fire, which evacuated Fort McMurray, destroyed about 2,400 structures and burned over 2,300 square kilometres.

“This is an important step in the recovery of our people, our communities and our province – and quite frankly, the national economy as well.”


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