Canadian gas production slumps as Alberta wildfires heat up

The rebound in western Canadian natural gas production has stalled this month, as wildfires across Alberta have accelerated recently amid dry weather and heat warnings from government authorities.

Total Canadian gas production was estimated at 17.7 Bcf/d June 7—down from a peak of more than 18 Bcf/d in late May. Prior to the outbreak of wildfires across Alberta in early May, Canadian gas production had averaged about 18.5 Bcf/d from January through April, legacy IHS PointLogic data from S&P Global Commodity Insights showed.

Despite the slump in Canadian gas production, pipeline exports to the US have rebounded this month, climbing to an average of 5 Bcf/d after briefly dropping to just 3.5 Bcf/d in late May.

Halting gas production in western Canada comes as wildfire conditions across Alberta have deteriorated recently. Currently, some 64 wildfires are now actively burning across the province with 17 classified as out of control, according to the Alberta Wildfire Status Dashboard, ArcGIS Online. The number of active wildfires had dropped to just 51 on May 26, according to previous reporting from S&P Global.

Hot, dry conditions persist

As hot and dry conditions persist across western Canada, wildfires pose a continued challenge to both firefighters and oil and gas producers looking to restore previously curtailed output.

Environment Canada issued a heat warning June 7 for Calgary and parts of southern Alberta with a forecast predicting temperatures would reach 29 degrees Celsius, or about 84 Fahrenheit. For June 8, the government agency forecast another high of 29 C with just a 30% chance of rain. Through the upcoming weekend, temperatures are expected to remain in the mid-20s C amid dry conditions.

Producers affected by wildfires

Among the producers affected by the wildfires in western Canada, Cenovus Energy was the latest to provide an update June 5, saying that it had safely restarted about 62,000 barrels of oil equivalent a day of output from the 85,000 boe/d that the wildfires curtailed last month. Over the next week, the company said it intends to restart another 20,000 boe/d with another 3,000 boe/d likely to remain offline longer.

Crescent Point said a week earlier, on May 28, that it had also restored the entire 45,000 boe/d of production that was previously curtailed, while Paramount Resources advised that it too had restored most of the 38,000 boe/d previously curtailed.

Just days earlier, on May 25, both Kiwetinohk Energy and Pipestone Energy provided updates on restored production.