Author(s): Lucian Deaton. Published on July 1, 2016.

Business Plan

A Canadian wildfire highlights the need for business continuity awareness

BY LUCIAN DEATON

In May, a newspaper headline caught my attention during the height of the wildfire in Fort McMurray, Alberta: “Fort McMurray Wildfire Cuts Canada’s Oil Output by a Third.

Oil was not the main story. The fire, which began over the weekend of May 1, forced more than 90,000 people to evacuate their homes, damaged or destroyed about 2,400 structures, razed entire neighborhoods, and resulted in the deaths of two people who died in a car accident during the evacuation. Even so, the fire nonetheless illustrated how important disaster resilience and planning for business continuity is in wildfire preparedness. NFPA has standards that deal directly with business continuity and disaster planning, and the Fort McMurray fire is a firm reminder of why we should engage with these standards more directly in our wildfire preparedness outreach. While out-of-control wildfires affect people, their homes, and the environment, they also impact livelihoods and, in this case, a national economy.

Alberta has the third-largest crude oil reserves in the world and is the largest exporter of crude to the United States; Fort McMurray is the production hub of Canada’s oil sands petroleum industry. When the fire’s advance forced evacuations, more than a third—possibly even half, according to some news outlets—of Canada’s daily oil production stopped. Oil companies halted production due to the wildfire’s threat to pipelines, the evacuation of oil employees from Fort McMurray, and the evacuation of employees from the nearby production camps to accommodate thousands of fleeing residents. Oil companies declared force majeure—“unavoidable catastrophe”—contract clauses to remove themselves from pending crude oil delivery liabilities. As May unfolded, news articles began to raise questions about how a prolonged shutdown would impact Canada’s gross domestic product.

While the tireless work of Canadian national and local fire services saved 90 percent of the structures in Fort McMurray, initial estimates are that the fire still managed to cause about $1 billion (CAN) in insured losses. A complete assessment of loss and the return of steady oil production will take time.

With these types of incidents in mind, last year NFPA added new language to its vision statement advocating for the elimination of “economic loss” from fire due to its enormous potential impact on business. Documents aimed at this goal include the 2016 edition of NFPA 1600®, Disaster/Emergency Management and Business Continuity of Operations Programs, which provides direct guidance for continuity planning, supply chain risks, and recovery. Also, the forthcoming NFPA 1616, Mass Evacuation and Sheltering, outlines steps for how to plan and carry out the kind of mass evacuation and sheltering of residents seen during the Fort McMurray wildfire.

As similar large fires have shown, these events are not rare. The 2003 Okanagan Mountain Park Fire in British Columbia burned 238 homes and incurred more than $250 million (CAN) in insured losses, while the 2011 Slave Lake Fire in Alberta destroyed 484 homes and caused more than $775 million (CAN) in insured losses.

These fires offer further proof that the scope of preparation must go beyond the home and include planning for how businesses and industries will address and rebound from such events. In a future of increased risk from wildfire, business continuity planning should recognize its voice in wildfire preparedness and outreach messaging.

LUCIAN DEATON is a project manager in NFPA's Wildland Fire Operations Division. Top Photograph: Reuters