Canadian town, already staggering from oil bust, hit by wildfires

EDMONTON, Alberta (Reuters) - Fort McMurray, the Canadian oil town engulfed by wildfires, was already crippled by a collapse in crude prices before flames raced into the once-booming city, burning hundreds of homes to the ground and chasing residents into bush camps for safety.

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Dubbed Fort McMoney when its oilsands industry was flourishing and residents were among the wealthiest in Canada, Fort McMurray had been hemorrhaging workers and wealth for 18 months before fires forced the evacuation of the entire city’s 88,000 residents.

“Fort McMurray was really the ground zero of all that was happening related to oil and gas,” said Sandeep Agrawal, urban studies and regional planning professor at the University of Alberta. “When this bust happened, it was catastrophic in many ways.”

Surrounded by thick boreal forest and vast oil sands deposits, hundreds of kilometres from the nearest major city, Fort McMurray was deeply reliant on a single commodity.

Its population ballooned to over 120,000 in 2015, sparking housing shortages and skyrocketing prices, before a 70 percent drop in oil prices last year slammed the door on growth, prompting the exodus of almost one-third of its inhabitants.

“Stores were closing, small businesses were closing. A year or two ago you could not get a seat in the restaurants, but the buying power was not there any more,” said Ria Dickason, a South African immigrant who has lived in Fort McMurray for 14 years and fled the fires on Tuesday.

“Everyone was concerned about it, because it impacted every single person. It doesn’t matter what type of work you do because lots and lots and lots of people lost their jobs.”

Real estate websites are littered with listings for sprawling Fort McMurray homes with asking prices approaching C$1 million - double Canada’s average home price - in neighborhoods that are now charred and smoldering amid Alberta’s largest-ever evacuation for a fire.

Wildfires had been threatening the remote city for days when flames nearly doubled in size, fueled by dry conditions blamed on global warming, forcing the evacuation of the entire city by Tuesday afternoon.

While oil sands facilities are not in the fire’s path, at least four companies have curbed activities to allow workers and others to get to safety. It was unclear what percentage of production had been affected by the fire.

“While the full extent of the damage isn’t yet known, we certainly do know that for those who have been affected this fire is absolutely devastating. It’s a loss on a scale that is hard for many of us to imagine,” Canadian Prime Minister Pierre Trudeau told a news conference in Ottawa.

As residents fled to oil sands workcamps to the north of the city, or south on the one clogged highway out of town, hundreds of dwellings furiously burned.

“I was panicking, to be honest with you, we could see the ash - a rain of ash, the cars were full of ashes,” said Fatima Mian, a single mother of three who raced to pick up her children from school before fleeing the city on Tuesday. She found refuge in an oil workers’ camp about an hour from the city.

A realtor who has been trying to sell homes left vacant by the exodus, Mian said she knows the city is vilified by environmentalists who blame the development of the oil sands for increasing greenhouse gases and climate change.

“Fort McMurray has a big stigma attached to it, but it’s a work town, people come here to work and make money. We understand global warming and stuff but ... people do long shifts here to raise a family and support a family,” said Mian.

Additional reporting by Andrea Hopkins in Toronto and Nia Williams in Calgary, Writing by Andrea Hopkins; Editing by Alan Crosby