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Canada's energy sector hit hard by wildfires, down 2.1% in May - report

Kitco Media
By Vladimir Basov
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(Kitco News) - According to Statistics Canada (StatsCan), the domestic mining, quarrying and oil and gas extraction was the biggest detractor to the country’s GDP growth in May, as many companies, specifically in Alberta, reduced operations as a result of forest fires in the province.

StatsCan said the domestic energy sector, which was severely impacted by wildfires in May, was down 2.1%, adding that this was the sector's first decline in five months and its largest since August 2020.

According to the report, in May 2023, the energy sector was most impacted by declines in mining, quarrying and oil and gas extraction, which fell 2.9%.

Following four months of growth, the oil and gas extraction subsector fell 3.6% in May, as all components contributed to the decline.

The agency noted that oil and gas extraction (except oil sands) dropped 6.6% as a result of the forest fires in Alberta.

“The fires primarily impacted installations in the western parts of the province, from Edmonton to the Rocky Mountains' Foothills in the Clearwater, Montney and Duvernay formations,” StatsCan said. “These played a crucial role in the industry's largest monthly contraction since April 2020, resulting in a steep drop in both natural gas extraction and crude oil.”

The country’s oil sands extraction decreased 1.6% in May 2023, as maintenance at a number of facilities in Alberta throughout the month contributed to lower production.

At the same time, pipeline transportation contracted 2.1%, reflecting a 3.8% decrease in transportation of natural gas and a 0.4% decline in crude oil and other pipeline transportation.

Natural gas distribution also dropped, down 3.9% as both commercial and residential distribution contributed the most to the decline.

The agency also reported that support activities for mining and oil and gas extraction decreased 4.0% as all types of supporting activities were down in May.

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Vladimir Basov

Vladimir (PhD, MEng in Mining) is a professional mining engineer, scientist and analyst that has more than 20 years of practical in-field and research experience. He is particularly interested in collecting, processing baseline data and writing insightful data-driven mining industry analytics, articles, statistical and research reports.

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