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Alberta wildfire keeps growing as evacuee convoy rolls to safety

In this May 5, 2016 photo provided by the Royal Canadian Mounted Police Alberta, an RCMP officer surveys the damage on a street in fire-ravaged Fort McMurray, Alberta.

RCMP ALBERTA VIA THE CANADIAN PRESS VIA AP

By GERRIT DE VYNCK, SCOTT DEVEAU AND ROBERT TUTTLE | Bloomberg | Published: May 6, 2016

Wildfires ravaging the center of Canada's oil production region in northern Alberta extended their reach overnight, covering 390 square miles as police began shepherding a convoy of 1,500 vehicles to safety through the now-devastated town of Fort McMurray.

The evacuees are among those who fled north to oil-sands work camps before the fires, now almost the size of Hong Kong, overtook the town and cutting them off from the rest of the country. Police are letting 50 vehicles through at a time, escorted by helicopters and supplied by gasoline tankers, the Royal Canadian Mounted Police said. Authorities were airlifting another 8,000 to safety on Thursday.

"There's a window of opportunity and they're going to go for it," said Sgt. John Spaans, a spokesman from the RCMP, Canada's national police force, said in a phone interview from south of Fort McMurray. About 10,000 people still need to be moved from north of the city, he said. Helicopters are being used to spot fires.

The inferno around Fort McMurray has destroyed homes and businesses, forcing more than 80,000 people to flee, disrupted Western Canada's oil-sands operations and may become the costliest catastrophe in the country's history with insurance losses potentially reaching $9.4 billion Canadian ($7.3 billion U.S.). Bank of Montreal cut its second-quarter gross domestic product estimate to zero from 1.5 percent growth, citing "severe disruptions to oil production" due to the fires. BMO said the estimate was a placeholder, dependent on receiving more information on the scope of the disaster.

"The wildfire situation is still volatile and sudden road closures are still possible," Alberta's emergency management authority said on its website. New fires were still starting and high winds threatened to keep stoking the blaze, creating even more work for the more than 1,000 firefighters battling the wildfire. Environment Canada said temperatures would rise again to 80 degrees Fahrenheit on Saturday, with a 40 percent chance of rain on Sunday and Monday.

On Thursday, responders were concentrating efforts on protecting key facilities such as the airport and the water treatment plant as the total area covered by the fires continued to grow, Alberta Premier Rachel Notley said at a press briefing.

The wildfire is the latest blow to a province already grappling with the economic toll of a two-year oil price slump in one of the world's most expensive places to extract crude. More than 40,000 energy jobs have been lost in Canada since the price crash began in 2014.

Royal Bank of Canada estimated that as much as 1 million barrels a day of production was shut because of the blaze, or about 40 percent of oil sands output, as companies including Suncor Energy., Nexen, Royal Dutch Shell and ConocoPhillips reduce production and open work camps to residents escaping blazes in the Alberta's biggest-ever evacuation. Inter Pipeline shut part of its system in the province. The disruptions pushed up the price of oil sands crude.

Major oil-sands sites are near Fort McMurray and are concentrated to the north while the fire is to the south. Fire danger to their operations is likely to be minimal.

"Eighty percent of the oil sands are located deep underground and can only be extracted through an in-situ drilling process," Chelsie Klassen, a spokeswoman for the Canadian Association of Petroleum Producers, said in an e-mail on Thursday. "The remaining 20 percent is mineable from the surface and predominantly located north of Fort McMurray. Hydrocarbons can burn under the right conditions, however oil sands would burn at a much slower pace considering its composition with sand."

Changing weather patterns prompted Alberta's provincial government Wednesday evening to evacuate two communities more than 22 miles south of Fort McMurray — Anzac and Gregoire Lake Estates — as well as Fort McMurray First Nation, according to a tweet by the Regional Municipality of Wood Buffalo.

On Thursday there was a total of 49 fires burning and seven considered "out of control," according to a government statement. More than 1,110 firefighters, 145 helicopters, 138 pieces of heavy equipment and 22 air tankers are fighting the fires.A total of 25,000 residents of Fort McMurray fled north to nearby sites where companies were flying out workers and making room for evacuees. Shell has shut its 255,000 barrel-a-day Albian Sands mine and Suncor, Syncrude Canada Ltd. and Connacher Oil & Gas Ltd. have also reduced output from the region.

Rebecca Penty and Rita Devlin Marier contributed.

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