Oil prices fall as Keystone pipeline supply concerns ease
TransCanada plans restart Saturday
The price of oil is falling after Calgary-based TransCanada Corp. reaffirmed its plans to restart a pipeline this weekend that carries crude from Canada to the U.S. Midwest.
Benchmark November oil closed down $2.05, or 2.2 per cent, Friday to $90.05 US per barrel in New York as stock markets traded lower.
TransCanada closed the 3,400-kilometer Keystone pipeline Wednesday after tests showed possible safety issues.
A company spokesman says no leaks have been detected. It plans to restart the pipeline Saturday.
The temporary closure came as Canada's federal energy industry regulator, the National Energy Board, investigates the "safety culture" within subsidiary TransCanada Pipelines Ltd., following revelations from a former engineer about substandard practices.
Evan Vokes told CBC News he reported its substandard practices to the NEB because he believed the company’s management, right up to the chief executive officer, refused to act on his complaints.
Closure said a non-issue
Oil traders largely consider the temporary closure to be a non-issue because U.S. supplies of oil are plentiful.
The company said the possible problems were located on the stretch of pipeline that extends between Missouri and Illinois.
A federal inspector was deployed to review test results, observe repairs and monitor any additional necessary safety issues.
Grady Semmens, a spokesman for the firm, said Thursday the pipeline was shut down as a precaution.
"We found a small anomaly on the outside of the pipe after analyzing the data from an in-line inspection tool," Semmens said in an email.
"As a precaution, we've shut down the line so we can go in and take a closer look."
The shutdown cames amid delays over TransCanada's plans to build another $7 billion US section of pipeline called the Keystone XL that would transport heavy oilsands crude oil from Canada to Texas' Gulf Coast refineries.
Pipeline opponents argue the project is unsafe because it would be carrying heavy, acidic crude oil that could more easily corrode a metal pipe, which would lead to a spill.
They also say refining the oil would further contaminate the air in a region that has long struggled with pollution.
TransCanada says its pipeline would be the safest ever built, and that the crude is no dirtier than oil currently arriving from Venezuela or parts of California.
U.S. President Barack Obama rejected TransCanada's original application for a federal permit to build the pipeline in January by after congressional Republicans imposed a deadline for approval that didn't allow enough time to address questions about the route through Nebraska.
Since then, TransCanada has split the project into two pieces. The company has started construction on the southern section of the pipeline between Oklahoma and the Gulf Coast.
With files from CBC News