Alberta’s wildfire season, running every year from March 1st through October 31st, is well underway. In the final days of May 2025, several fires began encroaching upon northern Alberta’s oil sands region, which accounted for 49% of total Canadian oil production in 2024. As a result, Cenovus Energy, a major oil sands producer, announced evacuations and shut-ins as a preemptive safety measure on May 29th, with other major producers, including Canadian Natural Resources (CNRL) and MEG Energy, following suit shortly after. Production has already started to come back online, though the amount that these large producers took offline amounts to nearly 8% of total Canadian oil production and 19% of total oil sands production, or around 345 Mb/d. This alone highlights wildfires’ continued threat to, and these producers’ outsized impact on, Canadian oil sands production.
Understanding Oil Sands
Oil sands production is categorized into two primary extraction methods: mined and in-situ. In regions where the oil sands are shallow, surface mining is the most effective recovery technique, allowing for direct excavation. However, in areas where the resource lies deeper within the stratigraphic column, methods such as Steam-Assisted Gravity Drainage (SAGD) or Cyclic Steam Stimulation (CSS) are employed to reduce the viscosity of the bitumen and enable it to be produced. Examining historical oil sands production, mined oil sands have made up between 33% and 55% of annual oil sands production since 2010 and an average of 48% this past year.
The Big Producers
When it comes to the large oil sands producers, over 40% of total oil sands production comes from Cenovus, CNRL, and MEG, making their recent shut-in announcements fairly impactful for the region. The late-May announcements regarding the Caribou Lake Wildfire and others nearby specifically led to CNRL halting production at Jackfish 1 and evacuating non-essential workers, Cenovus Energy shutting in approximately 238 Mb/d on May 29th, and MEG evacuating non-essential personnel from its Christina Lake site. While all have since made efforts to restart or resume normal operations, the impact of the recent fires on these three operators reduced oil sands production by almost 19% and total Canadian oil production by almost 8%.
Wildfires and Their Effects
While the loss of 19% of Canadian oil sands production was temporary, the effects of wildfires and their seasonal nature is a large component of the region’s production outlook. As these fires occur annually but at different degrees of severity, it can be challenging to predict the amount of production that will be impacted. Informed by history, oil sands production is, on average, lowest in May and highest in December, which has led to the largest swings in production to occur in January, April, and June. As such, these historical fluctuations align with the recent producer announcements. For example, Canada’s wildfire season in 2023 was record-breaking in terms of most area burned. The greatest dip in production that year occurred between March and April, leading total Canadian oil sands production to fall around 6%, or just over 101 Mb/d.
Takeaways
This latest round of wildfire announcements affecting Canadian oil sands has had a significant, though short-lived, impact on not only oil sands production but total Canadian production as well. The shut-ins led to a reduction of over 19% of Canadian oil sands production and nearly 8% of total Canadian oil production. These percentages highlight the impact that wildfires and only a few days of reduced production from only three producers can have on Canada’s oil sands production overall. Be sure to check back in for more Insights from BTU Analytics, a FactSet Company, as we continue to cover Canadian production and many more energy topics.
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