Image courtesy of Clarence McCloud/Wikimedia Commons.

A massive wildfire in Alberta cut the province’s natural gas consumption by nearly a quarter, according to the U.S. Energy Information Administration.

The EIA said Thursday that natural gas demand fell by about 25 percent in Alberta after several oil sands operations were forced to halt production earlier this month as the blaze spread around the Fort McMurray region.

The fires began May 1 and, at their height, forced about 1 million barrels per day of oil sands production offline temporarily.

Natural gas is used in mining and upgrading operations and is also used by many oil sands producers to operate cogeneration facilities.

The crude production decline was primarily tied to employee evacuations and not to damage at any facilities.

The dip in oil sands production pushed Canadian natural gas spot rises to record lows.

On the AECO trading point, a major hub for Canadian spot natural gas markets that represents all deliveries along TransCanada’s Alberta pipeline system, prices dropped to $0.55 per million British thermal units on Monday, the lowest price in the 14 years of available data the EIA said.

Prices rebounded back to $1.12 per million Btu on Wednesday as some producers were able to restart operations.

Shell Canada was able to safely restart production at a reduced rate at the Shell Albian Sands mining operations thanks to improved conditions, including improved air quality and weather.

Nexen Energy’s Long Lake facility, Husky Energy’s Sunrise Energy Project, Statoil’s Leismer facility and Suncor’s operations in the Regional Municipality of Wood Buffalo were still closed as of Thursday.

Although more than 88,000 people were forced to evacuate the Fort McMurray area, officials estimate that about 90 percent of the city’s structures survived the fires.

“Prices at AECO had been relatively low before the fires, due at least in part to high storage levels in the United States and Canada,” the EIA said.

According to some industry analyst estimates seen by the EIA, Alberta storage is nearing capacity and could be full within the next several months.


Leave a Reply