Cooler weather helps with Alberta wildfire as premier visits

[ALBERTA] Cooler temperatures are helping fire fighters battle wildfires raging through Alberta as the blaze retreats from the country's main oil-sands facilities around Fort McMurray.

Rachel Notley, the province's premier, will travel to the city Monday after the fires knocked out an estimated 1 million barrels of daily production and led to the evacuation of more than 80,000 people.

The inferno, which had been forecast to expand to more than 2,500 square kilometres (965 square miles), grew slower than expected and now covers about 1,600 square kilometres, Travis Fairweather, a forestry spokesman, said by phone Monday.

There was some rain overnight but "not enough to make any significant change in the situation," Mr Fairweather said. The province had 33 forest fires burning as of Monday morning, including three judged to be out of control, he said.

Prime Minister Justin Trudeau on Monday said he declined international offers of aid, such as firefighters or aircraft, saying Canada has all the equipment it needs as help arrives in Alberta from across the country.

"Canada will be a partner in how we rebuild Fort McMurray, " Mr Trudeau told reporters Monday in Ottawa. He plans to announce a visit to the city soon, he said.

While the fire on Saturday approached operations of Suncor Energy Inc, Canada's biggest energy company, there was no damage as firefighters held the blaze southwest of the area. Cnooc Ltd's Nexen operations to the south of Fort McMurray have suffered "minor" damage, said Chad Morrison, a wildfire manager for the Alberta government, said Sunday.

The average temperature forecast for Monday was 10 Celsius (50 Fahrenheit), dropping from the torrid 30 Celsius last week that had helped fan the flames, Mr Fairweather said.

Northwest winds are expected to gust up to 20 kilometres an hour (12.4 miles an hour), with relative humidity of 40 per cent, Mr Fairweather said.

"It should help our crews out there quite a bit after a couple of really hot, really dry days when they've had to really work out there," he said. "Now we can try and dig in and make a little progress here."

There are more than 700 firefighters working in and around Fort McMurray to contain the fire, Mr Fairweather said.

While cooler temperatures present responders with a "great opportunity" over the next three to four days, fires deep into the forest will likely last for months, Mr Morrison said. The fire that began a week ago probably had a human cause, though that remains unknown, he said.

"This beast is an extraordinarily difficult problem," federal Public Safety Minister Ralph Goodale told reporters Sunday, in a reference to how the fire has been nicknamed. At the time, the weather meant "the situation is moderating, perhaps a bit," he said.

Disruptions to oil production, the lifeblood of Alberta's economy, add to a human catastrophe as blazes razed entire neighborhoods in Fort McMurray, the gateway to the world's third-largest crude reserves. All of the 25,000 people who had initially gone north to flee the fire have been evacuated south and the majority of them are in Edmonton, Ms Notley said.

The influx led to another problem - a viral outbreak at Edmonton's evacuee welcome centre. About 40 to 50 cases of viral gastroenteritis were reported over the weekend in the center.

"We're seeing an increased number of cases of nausea and vomiting of people attending the reception centre here," Christopher Sikora, Alberta's medical officer of health for the Edmonton region, told reporters Monday, urging diligent hand-washing.

The wildfires covering an area twice the size of New York city have led to production cuts of about 40 per cent of the region's output of 2.5 million barrels, based on IHS Energy estimates. The cuts, and the mass exodus from Fort McMurray, are another blow to an economy already mired in recession from the oil price collapse.

West Texas Intermediate for June delivery fell 1.7 per cent to US$44.93 a barrel at 11:11 am on the New York Mercantile Exchange.

Once the fires are under control, oil-sands-mining projects could be back to normal production levels in about a week, Morgan Stanley said in an e-mailed research note on Monday. In-situ projects, which use steam to extract the oil, could take two or more weeks depending on the start-up method and pressure requirements, it said.

Syncrude Canada, a joint venture controlled by Suncor, shut down its Aurora mine and Mildred Lake operation about 40 kilometres north of the city and has evacuated about 1,200 workers. Syncrude has a capacity for 350,000 barrels of oil a day. Mr Morrison said the oil facilities are highly resistant to fire with their buffer zones.

Smoke reached Syncrude's Mildred Lake site Saturday, company spokesman Leithan Slade said in an e-mailed statement. "We will bring operations back online only when it is safe to do so."

As the fires are set to move away from its oil-sands operations, Suncor said it has begun planning the restart of production after moving more than 10,000 employees, families and Fort McMurray residents out of the region. The restart will happen once it's safe and when third- party pipelines are available, the Calgary-based producer said.

Husky Energy Inc, controlled by Hong Kong billionaire Li Ka-Shing, said Sunday it has completely shut its Sunrise facility, which has a capacity of 60,000 barrels a day and was producing about half that before the blaze began.

Nexen's operation, with a capacity of 92,000 barrels a day, was shut. Phone and e-mail messages left for Colleen Brown, a Nexen spokeswoman, seeking comment on damage to the facilities weren't immediately returned.

The inferno around Fort McMurray may become the costliest catastrophe in the country's history with insurance losses potentially reaching C$9.4 billion (S$10 billion) if all homes in the city are lost. Bank of Montreal cut its second-quarter gross domestic product growth estimate to zero from 1.5 per cent, citing "severe disruptions to oil production" due to the fires.

BMO said the estimate was a placeholder, dependent on receiving more information on the scope of the disaster.

BLOOMBERG