Production halted at Alberta oil sands mine after fire breaks out

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Canadian Natural Resources Ltd. has halted crude production at its northern Alberta Horizon oil sands mine after a fire broke out in a key plant facility Thursday afternoon.

The fire will have a significant impact on a major source of Alberta crude, by stopping production at a plant that produced just over 90,000 barrels per day in 2010, or roughly six per cent of Canada's oil sands output. CNRL gave no indication of how long the outage might last.

Four people were injured in the fire, which started at 3:30 p.m. MST in the Horizon upgrader. One worker suffered third-degree burns, another first-degree burns and a third a neck injury. All three were taken to hospital and are in stable condition. The fourth worker was treated on site and released.

In a brief news release, CNRL said that "an orderly shutdown commenced at our facility immediately following the incident. Workers in the immediate area have been evacuated."

Late Thursday, the company said the fire's fuel source had been isolated and the fire contained to one part of its plant.

Local media reported that the fire was preceded by a large explosion. Oil sands operators use a mutual aid agreement to call in more help if needed, and a spokeswoman with Syncrude Canada Ltd. confirmed that an aerial fire engine and some personnel responded to a request for assistance. Fort McMurray's fire department said it had not been called, however.

At Fort McKay, a community of just over 600 that's about 15 kilometres from the CNRL site, spectators watched a huge tongue of flame throw a thick plume of black smoke into the sky Thursday afternoon. Environmental crews scrambled to check a local air quality monitoring station, but found no cause for alarm, said Jeff Winsor, the chief operating officer for the Fort McKay First Nation.

"There was a fairly large smoke plume at one period of time, but it hasn't impacted the community itself," he said. "There's no state of emergency or plans for an evacuation right now, but of course we're watching it hour by hour."

First Nation staff have been in contact with CNRL, and have been told that the company is "close to getting it under control," Mr. Winsor said Thursday evening.

Horizon is located 70 kilometres north of Fort McMurray.

An upgrader transforms oil sands crude, which is so thick it barely flows at room temperatures, into a lighter oil that can flow through pipelines and be further refined into products like gasoline and jet fuel.

Fires are relatively rare, although not uncommon at oil sands plants, where huge pieces of machinery operate at higher temperatures. In one period ending early last year, Suncor Energy Inc. experienced three fires in five months. Such fires can have a substantial impact on corporate performance: A Suncor fire in 2005 cut its output in half for eight months.

This is not the first major worker incident at Horizon, which has seen three fatalities in the past four years. CNRL and a Chinese contractor were hit with 53 occupati 8 onal health and safety charges after one of those incidents, in 2007, killed two Chinese workers.

Oil sands operations are equipped with their own fire crews that have a first response ability similar to a town fire hall.

"They have safety systems and fire suppression systems in place all over the plant, as well as pumpers and manpower to be able to fight a fire," said Brian Makey, fire chief for the regional municipality of Wood Buffalo. "They're really set up no different than you would find in a municipality."