Suncor Energy Inc. filed a disclosure document last year laying out what would happen if extreme weather were to force a 10-day shutdown of its massive Base Plant oilsands mine in northern Alberta.

The document sa国际传媒� which Suncor filed with CDP, a global non-profit that maintains a database on corporate environmental action and climate risk sa国际传媒� details the financial risk to the company posed by such a scenario.

While the likelihood of extreme weather events remains sa国际传媒渦nknown,sa国际传媒� Suncor said in the document that a 10-day Base Plant shutdown could cost the company $56 million per day (more than half a billion dollars in total) in the form of lost revenue due to production losses.

When analysts talk about the oil and gas sectorsa国际传媒檚 exposure to climate change-related risk, they often come at it from a policy or demand forecast perspective. They look at the risk that climate change will prompt governments to impose more regulation on the fossil fuel sector, or that the energy transition will lead to a decline in demand for oil and gas.

But the oil and gas sector, like all industries, is also exposed to climate risk in a physical sense. That risk has been hammered home this month, as out-of-control wildfires in northern Alberta forced several Canadian oilsands companies to evacuate non-essential workers from their sites. Suncor itself, Canadasa国际传媒檚 second-largest oilsands producer by volume, has temporarily curtailed production at its Firebag complex due to the fire danger.

Also this month, Hurricane Beryl forced the temporary shutdown of offshore oil platforms along the U.S. Gulf Coast, one of North Americasa国际传媒檚 most important regions for energy resources and infrastructure.

sa国际传媒淥il and gas infrastructure, like everything else, has been increasingly exposed to severe weather events fuelled increasingly by climate change,sa国际传媒� said Craig Stewart, vice-president of climate change with the Insurance Bureau of Canada.

sa国际传媒淲esa国际传媒檝e seen it all the way back to Hurricane Katrina, which disrupted activity in the Gulf of Mexico back in 2005. We saw it in the Fort McMurray fire in 2016, where oil and gas sector or oilsands activity was disrupted for a month sa国际传媒� and wesa国际传媒檝e seen it elsewhere in the world as well.sa国际传媒�

More than 40 per cent of the worldsa国际传媒檚 commercially recoverable oil and gas reserves are highly exposed to the effects of climate change, according to a 2021 report by risk intelligence company Verisk Maplecroft. The report pointed to that yearsa国际传媒檚 deep freeze in Texas that knocked U.S. oil and gas output to a three-year low, as well as the effects of Hurricane Ida, which caused a record 55 spills in the Gulf of Mexico and created historic disruptions to the supply of both crude oil and refined products.

Refineries, drilling rigs, export terminals and pipelines are also vulnerable to flooding, tornadoes and even drought, which has the potential to limit the amount of water the industry can draw on for processes like hydraulic fracturing. And all of these weather events are becoming more common, Verisk Maplecroft said.

sa国际传媒淭hese types of eventssa国际传媒痑re going to become more frequent and more extreme, creating even greater shocks within the industry,sa国际传媒� the report stated.

Theresa国际传媒檚 big money in oil and gas, which means there are millions of dollars at play every time a tropical storm rears its head or a refinery trips off during a heat wave. If weather knocks out a significant amount of a jurisdictionsa国际传媒檚 oil output, it can cause temporary commodity price spikes that trickle all the way down to the consumer.

For example, nearly half of the total petroleum refinery capacity in the U.S. and 51 per cent of that countrysa国际传媒檚 total natural gas processing plant capacity is located along the Gulf Coast.

Earlier this year, the U.S. Energy Information Administration warned of the potential for a sa国际传媒減articularly intensesa国际传媒� hurricane season in 2024, suggesting there is a heightened risk of weather-related production outages.

The EIA has also said a sa国际传媒渉igh-impactsa国际传媒� hurricane that significantly disrupts U.S. oil production could increase monthly average retail gasoline prices by up to 30 cents US per gallon.

In Canada, the largest oil-producing region is the oilsands, located in the boreal forest of northern Alberta sa国际传媒� an area highly prone to wildfires. Thousands of oilsands workers were evacuated in the 2016 wildfire that destroyed part of the community of Fort McMurray, forcing companies to reduce their oil output by a million barrels per day.

The resulting economic impact was so severe that Canadian GDP contracted 0.4 per cent in the second quarter of 2016. Economists say GDP would have grown 0.1 per cent that quarter, excluding the impact of wildfire on Canadian oil production.

Thomas Liles, vice-president of upstream research for Rystad Energy, said while that event took place more than eight years ago, it remains fresh in the minds of many.

sa国际传媒淔rom the industrysa国际传媒檚 perspective, theresa国际传媒檚 still a lot of scarring from the events in 2016,sa国际传媒� he said.

Environmentalists say itsa国际传媒檚 ironic that the fossil fuel sector is being affected by climate change-related disasters, even as it makes plans to continue to grow oil and gas output in the future.

sa国际传媒淭heysa国际传媒檙e just throwing fuel on the fire,sa国际传媒� said Keith Stewart, senior energy strategist for Greenpeace Canada.

sa国际传媒淭hese companies have business plans that are going to make extreme weather even more extreme.sa国际传媒�

But Liles said while the risk remains, the energy industry is better prepared for weather-related disasters than it was a decade ago. Companies have spent years developing detailed emergency response plans to protect their workers and their assets.

sa国际传媒淚 think the industry at large is pretty used to judging risks and dealing with those accordingly,sa国际传媒� he said, adding that even if extreme weather intensifies in the years to come, itsa国际传媒檚 unlikely to dissuade companies from investing in lucrative areas like the oilsands or the Gulf of Mexico.

What fossil fuel companies are increasingly doing, said the IBCsa国际传媒檚 Stewart, is seeking insurance coverage to protect them against not just physical loss and damage, but against the impacts of business interruption in the event of extreme weather.

So far, they have had sa国际传媒渧aryingsa国际传媒� success, he said.

sa国际传媒淩einsurers have reduced their exposure to the commercial market in Canada over the last five years due to the growing threat of climate-driven disaster,sa国际传媒� Stewart said, adding that getting insurance in wildfire-prone areas like the boreal forest is becoming increasingly difficult for businesses.

sa国际传媒淎ny operations, whether oil or gas or something else, that are located in those areas are going to have difficulty.sa国际传媒�

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Amanda Stephenson, The Canadian Press