Alberta test case: Planned sale of gas wells, pipelines raises cleanup concerns

Calgary-based Houston Oil & Gas ceases operations, leaving almost 1,300 wells needing cleanup

The possible transfer of hundreds of sour gas wells, pipelines and other facilities from an energy giant to a much smaller company has raised concerns about Alberta’s efforts to ensure taxpayers don’t get stuck with the cleanup bill.

“My faith that the [regulator] is making some form of really careful stress test on these companies is just not there,” said Mike Judd, a retired guide and outfitter who lives in the middle of the gas field and has filed a statement of concern over the sale.

Last summer, Shell Canada agreed to sell 284 wells, 66 facilities and 82 pipelines in the southern Alberta foothills to Pieridae Energy, a Calgary-based company with a market value less than the price of the assets. Its stock price is under $1.

The purchase is part of a plan to move Alberta gas to a yet-to-be-built, $10-billion liquefied natural gas plant in Nova Scotia, from where it would be shipped to Europe. Pieridae says it is eligible for a $4.5-billion loan from the German government for the project.

The Alberta Energy Regulator must approve the transfer, a decision it must make as it copes with a growing list of wells, pipelines and other infrastructure abandoned by companies that went bankrupt during the energy price slump.

Orphan wells swell

Since January, the number of wells transferred to the Orphan Well Association has increased to 3,400 from 3,100. Alberta’s cleanup spending is budgeted at $70 million by 2023 — a more than 50-per-cent increase in otherwise belt-tightening times.

The regulator has promised a closer eye on licence transfers to ensure purchasers are able to cover reclamation costs.

“We … are broadening our assessment processes to allow for a more holistic approach to assess a company’s ability to address its end-of-life obligations,” said an email from regulator spokesman Shawn Roth.

“The AER will assess the proposed transfer to determine whether regulatory requirements have been satisfied and whether a security deposit will be required.”

The Shell-Pieridae sale is a test case, suggested Shaun Fluker, a University of Calgary law professor.

“You would think these assets fit under that discussion,” he said. “They keep talking about wanting to rework the existing policy they have for ensuring assets are properly looked after. At some point they’re going to have to be proactive and take steps to make sure that happens.”

Pieridae spokesman James Millar said in an email that Shell will cover any contamination from when it owned the sites — although that doesn’t include the cost of reclaiming the sites themselves.

Millar wrote that Pieridae is “still working through” those costs.

“We did consider the asset retirement obligation of the assets before we purchased them.”

He points out that Shell had planned to close the field, which would have been a severe blow to nearby communities such as Pincher Creek. Pieridae plans a new drilling program and says the purchase would be profitable almost right away.

Fluker said Albertans deserve more than company assurances that those who profit from the province’s resources are able to clean up their mess. This sale is a chance to establish clear, publicly understood rules for such transfers, he said.

“Why not … impose what [the regulator] says it’s looking at, which is real timelines for reclamation and things like that? It’s a good opportunity.”

Judd just wants to be able to believe that the wells and pipelines pumping toxic sour gas near his home will be cleaned up safely.

“Our children and our grandchildren are going to end up with an environmental cleanup that is way beyond their capability to deal with,” he said.

“We in Alberta have gotten way too used to backroom deals and backroom regulators that are not transparent.”

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Pelosi says agreement on revamped NAFTA ‘imminent’

Pelosi says agreement on revamped NAFTA 'imminent'

House Speaker Nancy Pelosi says she wants to see Congress pass U.S. President Donald Trump’s revamped North American free trade deal this year.

In a news conference Thursday, the California Democrat said an agreement on the pact is “imminent.”

The United States, Mexico and Canada last year agreed to replace the 25-year-old North American Free Trade Agreement with a new version designed to encourage more investment in factories and jobs in the U.S.

But the so-called U.S.-Mexico-Canada Agreement, or USMCA, needs congressional approval. Democratic lawmakers have demanded changes designed to do more to protect workers and the environment and to make sure the deal’s provisions can be enforced.

Pelosi’s upbeat comments suggest progress in negotiations between congressional Democrats and Trump administration officials at the Office of the U.S. Trade Representative.

Moving ahead on the trade deal could signal that Democrats and Republicans can work on substantive issues even as the House pursues a divisive impeachment case against Trump.

Still, the administration has yet to release a text of the legislation Congress will vote on, so business and labour groups don’t have details on how Trump’s team and Democrats are attempting to bridge their differences.

“There’s no question (Pelosi’s comment) is tangible progress toward passing USMCA,” said Daniel Ujczo, a trade lawyer at Dickinson Wright PLLC in Columbus, Ohio. “I’m just not sure we’re at the goal line now.”

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Why Hong Kong student protests matter to markets and vice versa: Don Pittis

Why Hong Kong student protests matter to markets and vice versa: Don Pittis

As Hong Kong’s rule of law descends into something more like a police state, the Chinese region’s financial markets may be more important than many demonstrators realize.

By Wednesday the Hang Seng Index, sort of a cross between Toronto’s TSX Composite and New York’s Dow Jones Industrial Average, was down about four per cent amid a week of increasing violence. 

A four per cent decline over three days is nothing to be sneezed at in a world where that amount represents a healthy percentage gain for an entire year for Canadians saving for retirement. That the Hang Seng fell so much despite the influence of China’s government-controlled companies adds to the impact. 

And while the tumble represents a loss of something in the order of $2 trillion US — from a market that earlier this year surpassed Tokyo as the world’s third biggest — it is unlikely student demonstrators or many Canadians will be shedding tears for wealthy shareholders.

In fact, one reader objected to a column earlier this week that ended on a reference to the potential impact of the violence on global financial markets.

“Good piece by @don_pittis until the very end,” the reader, a Canadian environmentalist and social activist, tweeted. “Greed is the root of our woes and media keeps reminding us that cash is king.”

I had sympathy for the reader’s comment. As Greta Thunberg has instructed us, the clamour for endless industrial growth may not be compatible with saving the world from terminal climate change. That said, there are many credible environmentalists who insist market forces can and will be used to improve the climate.

And greed may have contributed to the mess in Hong Kong. It has been widely remarked that income disparity, high housing costs and a shortage of good jobs have been among the early motivations for the youthful discontent that has blown up into something so much worse.

Hong Kong’s Hang Seng Index in February last year. On Thursday, the HSI closed down 0.9 per cent at 26,352 as it continued losing ground amid days of violence. (Bobby Yip/Reuters)

My current job at the CBC is to write about economics and financial markets, so it is hard to escape the fact that anything I write about Hong Kong will include those kind of references. But the reader’s tweet made me think about how important financial markets are, specifically in the case of this dispute that has grown through mismanagement from peaceful demonstrations to pitched battles reminiscent of a war zone. 

The first thing to say is that, while far from perfect in their current rendition, markets remain valuable tools, that, until we invent a better system, are essential to our well-being as individuals and as a society. Arguably they are often commandeered by elite special interests. However, while too complex to describe all their benefits here, financial markets also allow us to build large, useful structures and evaluate their relative worth.

Intricate network

The best financial markets, like the best ports or highway systems, are not built overnight. The most reliable ones only occur in relatively healthy societies, ones that have a well-educated workforce, functioning transportation, good housing and laws that try to discourage corruption and fraud. As an example of such a society, Hong Kong — with median incomes at developed-country levels, reliable courts and good services — has been ideal.

While stock markets may be the visible portion, a successful financial centre like Hong Kong is an intricate network of highly skilled humans working together in banking, law, insurance, sales, communication and a variety of specialist jobs it is hard for most of us to imagine. Large financial centres are enormously valuable for the services they provide, the local wealth they generate in terms of employment and other spin-offs.

As a rule, successful financial markets and the complex system required to run them do not grow up in unstable war zones. And when stable societies crumble, markets crumble with them.

This is one of the reasons the current chaos in the streets of Hong Kong matters to markets and why those markets may act as a deterrence to greater police violence or the kind of invasion threatened by Chinese military police. Because the more Hong Kong degenerates into a war zone, with battles in the streets and buildings in flames, the harder it is for all those people to do their jobs and the less likely the people who make the region’s markets so valuable will want to stay.

Another reason markets make a difference to Hong Kong demonstrators is that sharply falling markets draw world attention. While the world may have grown used to months of demonstrations, falling markets act as an indicator that something new and more serious is happening.

A third effect is the danger of serious market declines for China. China’s explosive growth means Hong Kong’s share of the country’s GDP has shrunk to about three per cent, but that is with only half a per cent of China’s population. Recent calculations by Reuters show the region’s markets continued to punch above its weight in importance to the Chinese economy, with Chinese assets in Hong Kong worth almost 10 per cent of the whole country’s GDP.

“Losing such a massive financing channel risks destabilizing the already slowing Chinese economy, hurting confidence that the Communist Party can continue to deliver prosperity after a strong, decades-long track record,” said the Reuters analysis.

De-escalating the current destructive violence with peaceful negotiations will likely be the best outcome for pro-democracy demonstrators. It would also help preserve Hong Kong’s economy and its value to China.

But for the powerful government in Beijing, the danger of shattering Hong Kong’s value as a vigorous financial market due to an extended military crackdown, with the resulting danger that it would weaken the Communist Party’s grip on power, may be the strongest impetus for Chinese government moderation.

Follow Don on Twitter @don_pittis

China’s President Xi Jinping in Brazil yesterday. Damaging the Chinese economy by smashing Hong Kong could weaken his grip on power. (Ueslei Marcelino/Reuters)

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Bell petitions Trudeau government to overrule CRTC on wholesale network rates

Bell petitions Trudeau government to overrule CRTC on wholesale network rates

BCE Inc.’s Bell Canada has asked the federal cabinet to prevent the country’s telecommunications regulator from slashing the wholesale rates that large carriers charge smaller rivals for access to their broadband networks.

Among other things, Bell is asking the federal government to restore wholesale rates for high-speed access that had been in place prior to a decision issued in August by the Canadian Radio-television and Telecommunications Commission.

The company also wants the government to overrule the CRTC’s decision to make the lower wholesale rates retroactive to 2016, potentially forcing Bell and other carriers to repay hundreds of millions of dollars to Canada’s independent internet providers.

Bell — the country’s largest phone company — and most of Canada’s large cable companies have already challenged the CRTC at the Federal Court of Appeal, which issued a temporary stay on the CRTC decisions in September.

Negative consequences 

The large companies have warned there will be serious negative consequences if network owners aren’t able to charge a higher wholesale price to smaller internet service providers.

“The commission failed to heed this warning,” BCE said in a 37-page petition filed with the government Wednesday.

“The incentive to invest in facilities capable of achieving a nearly 200-fold speed improvement has been completely negated by the order.

“There is no clearer proof than the fact that Videotron has withdrawn its flagship gigabit Internet offer from the market, including for its own retail customers, explicitly as a result of the order.”

Videotron is a subsidiary of Montreal-based Quebecor Inc. that competes in Quebec against Bell, but shares BCE’s view that the CRTC’s wholesale broadband pricing regime should be scrapped.

Videotron joined Rogers, Shaw and other large cable network operators in a suit filed with the federal appeal court. Bell Canada filed a similar suit with the court on behalf of itself, Bell MTS and Bell Aliant.

‘Tried this play before’

BCE’s latest tactic — an approach to the prime minister and his ministers through a petition to the “governor in council” — follows a hard-fought election that reduced the Liberals to a minority government.

Bell had a similar tactic following the 2015 federal election. After the CRTC ruled that large telecom companies must sell wholesale access to their fibre networks to independent internet providers, Bell appealed the ruling to both the CRTC and the federal government.

“Big Telecom’s already tried this play before, right after the last election –  and the government rightly rejected it, recognizing it for what it was: a desperate move with no standing,” Laura Tribe, executive director of OpenMedia, said in a statement to CBC News.

“Since then, the government has issued a new policy direction for the CRTC focusing on customers and affordability, and even more recently made promises during the election to bring more affordable Internet services to Canadians.”

OpenMedia is a Canadian company that works to keep the internet open and affordable. 

The Prime Minister’s Office was not immediately available for comment Wednesday.

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Companies still can’t account for 13 cent gap in B.C. gas prices, report finds

Companies still can't account for 13 cent gap in B.C. gas prices, report finds

Five major companies operating in B.C. are still unable to account for an unexplained gas price difference of 13 cents per litre between southern B.C. and other parts of the Pacific Northwest, according to a report released Tuesday.

The companies had the opportunity to explain the discrepancy this fall after the B.C. Utilities Commission (BCUC) highlighted the gap following a provincial inquiry. A statement from the commission Tuesday said its panel has reviewed the companies’ attempted explanations but found the evidence they offered does not add up.

“The Panel finds their evidence either inconclusive or conflicting,” the statement said.

The lack of concrete evidence means there is still no explicit explanation for the price gap costing drivers on the Canadian side of the border nearly $500 million a year.

Inquiry called amid record-breaking prices

Wholesale prices in southern B.C. are set based on those in the Pacific Northwest of the United States because it is a nearby region and a similar price is considered justifiable, BCUC CEO David Morton said when the commission’s initial inquiry report came out in August.

The commission found that even after accounting for transportation costs and higher B.C. fuel standards, Metro Vancouver drivers are still paying more than those in Washington.

“The higher price differentials cannot be explained by economic theory or justified by known factors in the market, nor can the panel find a specific trigger in 2015 that would explain the beginning of this disconnect,” Morton said at a news conference in August.

An Esso gas station at the corner of Burrard and Davie streets in downtown Vancouver shows a price of $167.9 per litre for mid-grade gas, just before prices hit record highs of $1.70 in April 2019. (David Horemans/CBC)

Premier John Horgan called the public inquiry in May as prices reached a record-breaking $1.70 per litre. It was asked to explore factors influencing gas and diesel prices since 2015, not including taxes, as well as actions the province could take.

Morton said some things have changed, including higher crude prices, the Trans Mountain pipeline’s capacity constraints and higher costs for retailers.

But prior to 2015, Metro Vancouver drivers paid five cents a litre more than Seattle drivers. Wholesale prices in northern B.C. are based on Edmonton prices and drivers in that part of the province pay six cents more a litre, he added.

Morton said B.C.’s wholesale market is not truly competitive because a small number of wholesalers control distribution and have the ability to influence prices.

Morton said the 13-cent price gap means British Columbians pay $490 million a year more than they otherwise would.

Suncor Energy, Parkland Fuel, Imperial Oil, Advanced Biofuels and 7-Eleven Canada participated in the one-month comment period after the initial inquiry in August. All five companies filed evidence in an effort to explain the price gap.

The supplementary report Tuesday said the evidence was not conclusive enough to account for the gap. At best, it said, the evidence could bring the gap down 10 cents per litre instead of the originally reported 13-cent discrepancy.

The Suncor Energy sign is seen outside Suncor’s head office in Calgary on Oct. 2, 2009. (Todd Korol/Reuters)

The statement Tuesday said the cost of the most expensive five per cent of the gas supply in the Pacific Northwest is driving the price of all gas sold in B.C. The panel received more than 40 letters from residents during the comment period, expressing anger and concern about sky-high gas prices.

More than half of those letters came from Powell River. The Sunshine Coast city has seen gas pricers hovering around $1.59 per litre — prices similar to those in Vancouver and consistently higher than those in the Lower Mainland, despite the difference in land value and access to alternative modes of transportation. 

The panel said it could not explain the city’s prices.

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Driller Ensign Energy shares fall on slashed dividend and quarterly loss

Driller Ensign Energy shares fall on slashed dividend and quarterly loss

Poor drilling market prospects and a desire to save money to pay down debt and for other priorities convinced Ensign Energy Services Inc. to chop its dividend in half and kill its dividend reinvestment program, the company said Tuesday.

The Calgary-based driller’s shares closed down more than 14 per cent or 38 cents at $2.30, their lowest point in at least 10 years, after it announced it will now pay a quarterly dividend of six cents per share, down from 12 cents.

“The dividend is the obvious headline news this quarter,” said president and chief operating officer Bob Geddes on a conference call after markets closed.

“Quite simply, the board decided to address the dilution and eliminate the DRIP while at the same time retain substantially the same cash payout. The cash payout ratio drops to a very conservative 12 per cent of cash flow and still provides a healthy yield.”

The DRIP allowed investors to use their dividends to purchase more stock at a discount directly from the company without paying brokerage fees.

Changes came as surprise

The dividend changes came as a surprise because the company has the forecasted cash flow to support continuing those programs, pointed out analyst Waqar Syed of AltaCorp Capital in a report.

The annual dividend yield will now be about nine per cent versus about 18 per cent before the cut, he said.

Ensign reported a third-quarter loss of $37.8 million, compared with a loss of $32.8 million in the same period last year.

Revenue was $393.5 million, up from $288.7 million in the third quarter of 2018, mainly due to the acquisition of 89.3 per cent of Trinidad Drilling Ltd. in the fourth quarter of 2018 and the remaining stake in the first quarter of 2019.

The company has completed the integration of Trinidad, adding access to key markets in the Texas Permian and Middle East regions, Geddes said on the call.

He noted that Canada is now Ensign’s third-largest division with 17 per cent of adjusted earnings versus 20 per cent from its international division (which includes Australia, the Middle East and Latin America) and 63 per cent from the United States.

Flat activity expected in some markets

All three markets are expected to experience flat levels of activity through the rest of 2019 and into next year, the company said.

Geddes welcomed news last week that the Alberta government will exempt new conventional oil wells from its oil production curtailment program, pointing out it will likely encourage some operators to “put a few more rigs back to work this winter.”

The province has gradually been easing quotas under the program which started last January to support local crude prices.

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Canadian pot company Cronos Group misses revenue estimates, hit by over supply

Canadian pot company Cronos Group misses revenue estimates, hit by over supply

Cronos Group Inc. fell short of quarterly revenue estimates on Tuesday, as the Canadian producer’s revenue per gram of cannabis sold fell in a market suffering from surplus supply.

The cannabis industry in the country is facing a supply glut as companies ramp up production. But retail sales have failed to offset the surplus, even though there has been a rise in the number of weed stores and the sale of cannabis-derivative products has been allowed in Canada.

Cronos said its net product revenue per gram sold outside the United States nearly halved to $3.75 in the third quarter, dulling a 31 per cent improvement in cost of sales per gram sold.

Total operating expenses rose nearly five fold to $34.8 million, driven by a surge in general and administrative expenses.

Higher spending on research and development, acquisitions and expanding in new markets has weighed on cannabis companies’ profitability, with the sector down about 25 per cent this year.

Cronos said cannabis sales rose six fold to 3,142 kilograms outside the United States, primarily driven by increased cannabis production.

The Toronto-based company reported a wider-than-expected adjusted core loss of $23.9 million, in the quarter ended Sept. 30, compared with the average analyst estimate of $19.87 million, according to IBES data from Refinitiv.

Revenue rose more than three fold to $12.70 million, but missed expectations of $14.14 million.

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Uber CEO walks back comment on Jamal Khashoggi’s murder

Uber CEO walks back comment on Jamal Khashoggi's murder

Uber CEO Dara Khosrowshahi is being criticized for calling the murder of a Washington Post columnist “a mistake” and comparing it to the death of a pedestrian struck by one of the company’s autonomous vehicles.

Khosrowshahi later said he regretted his comments, made during an interview with Axios on HBO. He tweeted Monday that there’s no forgiving or forgetting what happened to the journalist Jamal Khashoggi and he was wrong to call it a mistake.

Critics say Khosrowshahi is downplaying Khashoggi’s grisly murder to placate one of the company’s biggest investors.

Saudi Arabia’s sovereign wealth fund, known as The Public Investment Fund, holds about $1.9 billion US worth of Uber stock, making it the company’s fifth largest stakeholder. Its managing director, Yasir Al-Rumayyan, sits on Uber’s board.

Officials with the U.S. and the United Nations suspect that Saudi Arabia’s Prince Mohammed bin Salman played a role in Khashoggi’s slaying. Prince Mohammed has said he takes full responsibility but denied ordering the killing, calling the slaying “a mistake” in an interview in September.

In an interview with Axios which aired Sunday, Khosrowshahi echoed those comments, saying “I think that government said that they made a mistake.” He then compared Khashoggi’s slaying to an accident in which one of Uber’s autonomous vehicles struck and killed a pedestrian last year.

“It’s a serious mistake. We’ve made mistakes too, with self-driving, and we stopped driving and we’re recovering from that mistake,” Khosrowshahi said. “So I think that people make mistakes, it doesn’t mean that they can never be forgiven. I think they’ve taken it seriously.”

Khashoggi was killed and dismembered by Saudi intelligence officials and a forensic doctor last year at the Saudi Consulate in Istanbul. He was a longtime editor at state-linked newspapers in Saudi Arabia and had been in self-imposed exile in the U.S. while writing critically about Saudi leadership.

‘Planned’ and ‘organized’ killing

A UN investigator said the Saudi journalist was the victim of “a planned, organized, well-resourced and premeditated extrajudicial killing for which the state of Saudi Arabia must bear responsibility.”

In his Monday tweet, Khosrowshahi said he told Axios after the interview “I said something in the moment I don’t believe. Our investors have long known my views here & I’m sorry I wasn’t as clear on Axios.”

Nonetheless, the hashtag #BoycottUber began to trend Monday on Twitter, recalling the #DeleteUber movement that gathered steam years ago as the company struggled with image problems and lost customers to rival Lyft.

Khosrowshahi was brought in as CEO to turn around a company plagued with self-inflicted wounds. Co-founder Travis Kalanick was ousted as CEO in 2017 after revelations arose about rampant internal sexual harassment accusations that drivers had assaulted passengers and a coverup of a computer break-in that stole personal information about its passengers, among other problems.

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China-U.S. trade uncertainty weighs on global stocks

China-U.S. trade uncertainty weighs on global stocks

Shares around the world fell Monday as hopes for a breakthrough in the trade war between the United States and China diminished after President Donald Trump said Washington had not agreed to gradually roll back tariffs as negotiations progress.

Hopes were shaken when Trump on Friday dismissed a Chinese official’s assertion that the U.S. side had agreed to gradually lift tariffs on Chinese goods that it has imposed in the conflict over trade and technology policies.

A Chinese Commerce Ministry spokesman had said Thursday that the two sides had agreed to a phased cancellation of their tariff hikes as part of an agreement now under negotiation.

“They’d like to have a rollback,” Trump told reporters at the White House. “I haven’t agreed to anything.”

That raised doubts in the markets that some sort of agreement is imminent.

“Market participants have become more cautious over the potential positive impact for global growth from a partial US-China trade deal,” said Lee Hardman, an analyst at MUFG Bank.

The Dow Jones Industrial Average fell 100.58 points, or 0.36 per cent, at the open to 27,580.66.

The S&P 500 opened lower by 12.75 points, or 0.41 per cent, at 3,080.33. The Nasdaq Composite dropped 44.05 points, or 0.52 per cent, to 8,431.26 at the opening bell.

In Europe, Germany’s DAX fell 0.4 per cent to 13,176 while the CAC 40 in France was down 0.1 per cent at 5,884.

Britain’s FTSE 100 index underperformed, falling by 1.2 per cent to 7,270 after the pound struck a one-week high of $1.2880 following the news that the Brexit Party won’t contest seats won by the governing Conservative Party in 2017 so as not to split the pro-Brexit vote. That announcement could boost the chances that Prime Minister Boris Johnson’s Conservatives win a majority in the general election on Dec. 12.

U.K. stocks often have an inverse relationship with the pound as many companies listed on the index are international companies so a higher currency could weigh on exports as well as reducing their dollar earnings.

Uncertainty rises in Hong Kong

In Asia, Hong Kong led the retreat, with the Hang Seng losing 2.6 per cent to 26,926.55 after a police officer shot and wounded a protester.

Uncertainty has risen in the city after more than five months of protests that began with a fight over an extradition bill that has expanded to include demands for greater democracy and police accountability.

Elsewhere in Asia, the Shanghai Composite index declined 1.8 per cent to 2,909.97, while Japan’s Nikkei 225 index lost 0.3 per cent to 23,331.84. South Korea’s Kospi dropped 0.6 per cent to 2,124.09 while the Sensex in India lost 0.1 per cent to 40,287.29.

Australia’s S&P ASX/200 was the sole major index to advance, gaining 0.7 per cent to 6,772.50. Taiwan’s benchmark dropped 1.3 per cent and shares were lower in Southeast Asia.

In other trading, benchmark crude oil lost 75 cents to $56.49 US a barrel in electronic trading on the New York Mercantile Exchange while Brent crude oil, the international standard, lost 70 cents to $61.81 per barrel.

In currency markets, the euro was up 0.2 per cent at $1.1036 while the dollar fell 0.3 per cent to 108.93 yen.

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Keystone pipeline reopens after 1.4 million-litre spill in North Dakota

Keystone pipeline reopens after 1.4 million-litre spill in North Dakota

The Keystone pipeline resumed moving crude oil Sunday after 1.4 million litres (9,120 barrels) of oil were spilled in North Dakota in late October.

Pipeline operator TC Energy will operate it at a reduced pressure, gradually increasing the volume of crude oil moving through the system, the Calgary-based company stated in an emailed release Sunday afternoon. The company said the repair and restart plan was approved by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA).

The spill was one of the largest on-shore crude oil spills in the region in the last decade and Keystone’s largest spill.

The pipeline, which delivers roughly 93.8 million litres per day from Hardisty, Alta., to the U.S. Gulf Coast, had been shut down since the spill near Edinburg, N.D., was detected on Oct. 29. The spill impacted a nearby wetland.

TC Energy said it’s still investigating what caused the incident and analyzing the segment of removed pipe. “No significant impacts to the environment” have been found so far, the company’s website states.

Around 200 personnel have been working around the clock to clean up the site, and have recovered more than 1.08 million litres of oil.

In 2017, a Keystone leak in rural South Dakota spilled around 1.04 million litres, PHMSA data shows. Earlier this year, Keystone was partially shut after leaking 6,800 litres of crude in Missouri.

TC Energy has been working to expand the pipeline system to double its capacity but has faced regulatory hurdles. Completion of the Keystone XL project is currently slated for 2021.

The differential between West Texas Intermediate and Western Canadian Select sat at around $22 US as of Thursday.

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