As Wildfires in Alberta Cool Down, Canada’s Natural Gas Exports Increase

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According to provincial government officials, significant progress has been made by firefighters in addressing the wildfires in Alberta, thanks to the occurrence of rain and cooler temperatures. Additionally, Canadian natural gas exports to the United States have rebounded after a nearly three-week period of reduced flows.

Following precautionary shutdowns, numerous oil and gas companies have either restarted their operations or are in the process of doing so. At their peak, these fires led to the closure of a minimum of 319,000 barrels of oil equivalent per day, equivalent to approximately 3.7% of national production, and resulted in the evacuation of around 30,000 residents in Alberta.

While around 7,000 individuals remain under evacuation orders and 65 wildfires are still active, the cooler weather conditions are proving beneficial to the firefighting efforts.

Christie Tucker, the information unit manager at Alberta Wildfire, has confirmed that “the extreme rate of growth we saw in these wildfires earlier this month has now slowed.”

The province of Alberta, which is the primary producer of oil and gas in Canada, is facing an unprecedented start to the wildfire season, which typically extends until October. This year has witnessed the occurrence of 521 wildfires and the burning of over 1 million hectares of land, approximately five times the average for a typical season.

As a result of the improving situation regarding the wildfires, producers are making preparations to restart any oil and gas facilities that are still closed, said Tristan Goodman, the CEO of the Explorers and Producers Association of Canada.

“It’s not yet back to normal, but now people are getting ready because the fires are under control,” added Goodman.

Canadian natural gas exports to the United States have returned to pre-wildfire levels, leading to a decline of about 10% in U.S. gas futures.

Canada is responsible for supplying about 8% of the gas consumed in or exported from the United States. The reduction in supplies from Canada caused a significant 14% increase in U.S. gas prices last week.

The volume of gas exported from Canada to the United States is expected to remain close to a three-week high of 8.1 billion cubic feet per day (bcfd) for the second consecutive day on Wednesday, data from Refinitiv showed.

On May 17, the wildfires compelled Canadian producers to reduce exports to a 25-month low of just 6.4 bcfd. Over the past few weeks, gas flows from Canada to the U.S. averaged 7.2 bcfd, which is below the average of 8.3 bcfd recorded since the beginning of the year.

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Written by Olivia Woods

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