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Canada vows years-long effort to rebuild fire-struck town

LAC LA BICHE, Alberta (Reuters) - Canadian officials will take their first look on Monday at the oil sands boomtown devastated by a wildfire that has been raging for more than a week, and the prime minister vowed a years-long commitment to rebuil...

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Two Royal Canadian Mounted Police (RCMP) officers survey damage from the large wildfire that is burning in and around Ft McMurray, Alberta, Canada, May 7, 2016. REUTERS/RCMP

LAC LA BICHE, Alberta (Reuters) - Canadian officials will take their first look on Monday at the oil sands boomtown devastated by a wildfire that has been raging for more than a week, and the prime minister vowed a years-long commitment to rebuild the town.

Prime Minister Justin Trudeau said the national government was working with local officials and businesses to get a better handle on the damage in Fort McMurray, whose 88,000 residents evacuated following the start of the fire on May 1.

"We will support and invest in rebuilding Fort McMurray in a broad range of ways in the coming days, weeks, months and yes, years," he told reporters in Ottawa, but gave no details.

Alberta Premier Rachel Notley will lead regional officials and media on an inspection of the town and warned the nation to brace for grim images, with entire neighborhoods destroyed.

But fire officials said that cooler weather had slowed the growth of the fire, which has moved far enough away from inhabited areas to make an inspection safe, officials said.

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Damage, while extensive, could be less costly than initially feared, according to data released on Monday.

Canada's largest property and casualty insurer Intact Financial Corp expects to suffer losses ranging from C$130 million to C$160 million ($100 million-$123 million) from the wildfire. Intact used satellite imagery and geocoding technology to see if buildings were a total loss or partially destroyed.

Analysts said Intact's forecast implied overall industry losses of between C$1 billion C$1.1 billion ($769 million-$846 million), much less than the earlier forecast of C$9 billion ($7 billion).

Previous analysts' estimates, based on less precise data, had expected losses to dwarf previous records in Canadian history, including C$1.9 billion ($1.46 billion) from the North American ice storm of 1998 and the Alberta floods of 2013.

 

COOLER WEATHER COULD HELP

Firefighters hoped that cooler weather would aid in the battle against the blaze.

Temperatures cooled on Monday, with a forecast high of 50 degrees Fahrenheit (10 degrees Celsius), down from Sunday's high of 63 degrees Fahrenheit (17 degrees Celsius).

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The cool weather was expected to linger through Thursday, according to Environment Canada. Still, much of the province of Alberta in western Canada is tinder-box dry after a mild winter and warm spring.

Alberta's government said Monday the fire had consumed 161,000 hectares (395,000 acres), an estimate unchanged from Sunday. It had expanded to within 40 kilometers (25 miles) of the border of Saskatchewan, the province east of Alberta, but was not expected to cross into the neighboring province, said Travis Fairweather, an Alberta wildlife information officer.

Officials said it was too early to know when the thousands of evacuees camped in nearby towns could go back to Fort McMurray, even if their homes were intact.

The city's gas has been turned off, its power grid is damaged and the water is undrinkable.

Fort McMurray is the center of Canada's oil sands region. About half of its crude output, or 1 million barrels per day, has been taken offline, according to a Reuters estimate.

Statoil ASA said it will suspend all production at its Leismer oil sands project in northern Alberta until midstream terminals needed to transport crude oil via pipeline reopen.

Its move followed shutdowns of Nexen Energy's Long Lake facility, Suncor Energy's base plant operations, the Syncrude project and Conoco Phillips' Surmont project.

U.S. oil prices fell 2.6 percent.

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Nearly all of Fort McMurray's residents escaped the fire safely, although two teenagers died in a car crash during the evacuation.

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