Varcoe: Alberta industry employs lessons from past facing new threat from drought, wildfires

An early start to the wildfire season underscores the challenges facing Western Canada as warmer weather arrives this spring

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Drought and fire. 

For companies operating across Alberta, those two forces of nature could define the coming months as employers and employees — and thousands of residents — grapple with the tandem risks created by severe drought and wildfires. 

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Trican Well Service, a Calgary-based well completion firm, is carefully watching what could be a dry spring and summer in Western Canada.

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“We will closely monitor the water availability issues, which is a key component to a fracturing operation. Certain areas of Western Canada have drought conditions and (that) definitely could cause water restriction issues this summer,” Trican CEO Bradley Fedora said on an earnings call Tuesday morning. 

“We will also be monitoring forest fire activity throughout B.C. and Alberta.” 

There are 44 active wildfires in Alberta this week.

Fires burning southwest of Fort McMurray prompted the evacuation of more than 6,000 people on Tuesday. Wildfires also continue to burn around Grande Prairie and near Fort Nelson, B.C.

Companies are focused on keeping their staff safe during such emergencies. Some, such as Calgary-based ATCO, also help to ensure the lights stay on and the necessary infrastructure keeps operating. 

Fort McMurray wildfire

ATCO Energy Systems’ chief operating officer Wayne Stensby said Wednesday the company, which operates and maintains electric and gas transmission and distribution lines, has already seen some limited damage to its infrastructure caused by the blazes.

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“There were a couple of instances further north where (crews) had some damage to distribution structures that they’ve now replaced, and been able to re-energize some telecommunications facilities,” he said. 

“We’re prepared. We, of course, do hope that Mother Nature co-operates and there’s some moisture provided.”

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The issue of building and maintaining resilient infrastructure is a pressing matter, given the extreme weather that has hit the province over the past decade, and growing concerns about climate change.  

After ATCO’s annual meeting Wednesday, CEO Nancy Southern noted the company has taken steps to prepare for extreme weather events.

It placed a durable metal mesh wrap around the bottom of almost 8,000 power poles last year to help prevent fire damage — and another 3,000 this year.

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It also has temporary accommodations available for workers should housing be required; five of its staff have been evacuated in the Fort McMurray area.

“We have got structures camps ready to go. We’ve got our crews working on the fire mitigation around our installations,” Southern told reporters. 

“We have to be prepared for everything now.” 

ATCO CEO Nancy Southern
File photo: ATCO CEO Nancy Southern speaks at the ATCO annual general meeting in Calgary on Wednesday, May 10, 2023. Jim Wells/Postmedia

During last year’s record-setting wildfire season in the province, blazes in northern Alberta forced the evacuation of thousands of people. 

In 2016, a massive fire forced more than 80,000 people in Fort McMurray to evacuate and destroyed more than 2,000 buildings.

With the 2024 wildfire season now underway, the industry is applying lessons it’s learned in past years. 

Peyto Exploration & Development CEO Jean-Paul Lachance said the primary concern for the company is ensuring the safety of its employees and communities. Last year, fires in the Edson area led the company to briefly shut in about 1,500 barrels of oil equivalent per day.

Peyto has created buffers around its natural gas plants, installed cameras around its sites to monitor fires in real time, and the company can operate most plants remotely for short periods of time.

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“There’s a lot to learn from last year that we’ll again apply this year,” Lachance said. 

“Things move pretty quickly and they change fast . . . So our ability to respond to that — by redirecting gas, or changing egress or changing processes — is really important. It’s only a matter of days when these things happen. You’ve got to move quickly.“ 

Alberta wildfire
This fire near Edson was one of the first wildfires of the year that led to mandatory evacuation orders for about 13,000 people in early May 2023. Photo by supplied /Alberta Wildfire

Drought is also a major concern this spring. 

Following several years of below-average snowpack and a relatively warm winter, 25 water shortage advisories have been put in place across Alberta for water management areas, as of May 10. 

The provincial government released a drought-response plan earlier this month, while the Alberta Energy Regulator issued a bulletin in December to licence holders, cautioning them about the possibility of less water being available in 2024. 

At Trican, Fedora noted much of the oil and gas sector has been getting ready for the possibility of water limitations.

“A lot of the customer base, having experienced drought conditions last year . . . have been doing lots of work to plan for water for the summer, like building pits, storing water, looking at recycle options,” he added. 

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“We don’t expect there to be a significant interruption this summer from water restrictions, as I think the industry pretty much is ahead of the game.”

Oldman River
The Oldman River cuts through decades of silt in the Oldman Dam reservoir north of Cowley, Ab., on Monday, April 15, 2024. Mike Drew/Postmedia

A recent survey of oil and gas industry executives by ATB Capital Markets indicated concerns about drought have been growing within the sector. 

The poll of industry executives and institutional investors, conducted last month, found more than half of oilfield services leaders surveyed believe a severe drought this year would have a “significant impact” on industry activity. 

However, 69 per cent of producers expect a drought this year would only have a marginal effect, while only eight per cent say it would be significant. 

ATB analyst Tim Monachello said oilfield service companies generally operate across larger geographic areas than producers, which may explain the differing views within the industry. 

“The drought impact is one (companies) can see coming,” he added. “Companies across the industry are preparing.”

Chris Varcoe is a Calgary Herald columnist.

[email protected]

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