Canada chem companies take action amid wildfires

As 80,000 people evacuated the area, oil and chemical majors halted or reduced operations after wildfires spread around Fort McMurray, Alberta. (Canadian Press/REX/Shutterstock)

TORONTO (ICIS)–Canada’s NOVA Chemicals has slightly reduced ethylene output at its crackers in Alberta province in the wake of the ongoing wildfires in the Fort McMurray oil sands region, a company spokesman told ICIS on Friday.

The wildfires at Fort McMurray, about 400 kilometres northeast of Edmonton, triggered the largest fire-related evacuation in Alberta’s history, with more than 80,000 people displaced.

NOVA spokesman Pace Markowitz said the company’s production cuts are due problems at some downstream customers, and not because of ethane supplies to NOVA.

“We have sufficient ethane,” he said. He stressed that while the direct impact on NOVA was minor, the impact on the province was “huge”.

Dow Chemical’s operations in Alberta are not directly affected, a company spokeswoman said. The company does not draw feedstocks from the Fort McMurray region, she added.

An official at a regional trade group, Alberta Industrial Heartland, told ICIS that overall direct impacts on petrochemicals production were likely only small, given that the chemical sites are located hundreds of kilometres south of Fort McMurray.

Dow Chemical has world-scale production units at Alberta’s Fort Saskatchewan petrochemicals hub near Edmonton, where it produces hydrocarbons, ethylene, polyethylene, among other products. It also has production near Red Deer, some 160 kilometres south of Edmonton.

NOVA’s crackers are located at Joffre, near Red Deer. Also, part of NOVA’s ethane feedstock comes from outside the province, being sourced from the US Bakken shale region in North Dakota.

Homes are reduced to smouldering ash in Slave Lake, Alberta, on 4 May as the wildfires spread. (Canadian Press/REX/Shutterstock)

Meanwhile, Pembina Pipeline, a large Canadian midstream energy, confirmed on Friday that its facilities in the Fort McMurray area remain fully operational. However, one pipeline is currently not delivering due to the shutdown of downstream facilities, it said.

Pembina continues to monitor and assess the safety of operations, and it will “react accordingly”, it said.

Most oil majors with operations in the region – including Suncor, Shell, Nexen and ExxonMobil’s Canadian Imperial Oil affiliated – reported production suspended or at reduced levels.

However, the firms stressed that their facilities remained safe. The production measures were prompted by firms concerned about their workers, who need to get their families safely out of the affected region.

The firms are supporting firefighters, and they are helping people who sought refuge.

Meanwhile, police and emergency workers are organising big convoys to get evacuees out the Fort McMurray area to Edmonton and other cities.

A massive convoy was underway on Friday to move evacuees stranded at oil field camps north of Fort McMurray, with police and military overseeing the procession of an estimated 1,500 vehicles, media reported.

Furthermore, authorities expect to resume airlifting evacuees out of the area. On Thursday, about 8,000 people were already flown out.

Alberta government officials keep warning that “fire conditions remain extreme”. A declared state of emergency for the affected area and mandatory evacuation orders remain in effect.

More than 1,110 firefighters, 145 helicopters, 138 pieces of heavy equipment and 22 air tankers were reported to be fighting the fires, according to a government update.

Fire officials said they desperately need rain, but rain in the area is not predicted until Sunday, 8 May.

Analysts said that given their extensive impacts and duration, the Alberta wildfires could reduce Canada’s second-quarter GDP growth to zero. In 2011, wildfires in the province also hurt Canadian GDP, but those fires were on a much smaller scale.

Alberta produces about 3m bbl/day of oil, most of which is exported to markets in the US.

Cots litter the gym floor on 4 May 2016 at an evacuee centre set up by the regional municipality of Wood Buffalo in Anzac, Alberta. (Canadian Press/REX/Shutterstock)

INSET IMAGE: Evacuees comfort each other at a shelter in Edmonton Expo Centre on 4 May. (Canadian Press/REX/Shutterstock)

Additional reporting by Ben Lake