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TC Energy considers selling steel among next steps after Keystone XL cancellation – CBC.ca

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TC Energy is considering selling steel and other spare equipment from its Keystone XL project as it continues to decide its next course of action on the failed pipeline proposal.

Almost one month after U.S. President Joe Biden pulled the permit for the project, Calgary-based TC Energy is still assessing its options and looking at how it will recoup expenses related to Keystone XL.

The company has laid off more than a thousand workers as construction was halted on the pipeline last month and it is now looking at selling its inventory of pipe and other materials.

 “This is a very complex process, and as we evaluate our path forward, we have begun to immediately wind down our construction activities in both Canada and the U.S.,” said Bevin Wirzba, an executive vice-president with TC Energy, during a conference call with investors on Thursday.

“It’s going to take some time to work with our partners and customers to determine what those exact next steps will look like.”

TC Energy said it expects to take a “substantive” charge when it reports its results for the next financial quarter due to the cancelled project, although the company would not say what the size of the writedown could be.

Several analysts asked company officials about the project’s future.

“They’re not saying, frankly, that it’s officially dead, but practically speaking, they’re moving on,” said analyst Elias Foscolos, with Industrial Alliance Securities, in an interview.

Partners in the project include the Alberta government, which invested billions of dollars to support the project. Alberta Premier Jason Kenney previously said he is prepared to “use all legal avenues available to protect its interest in the project.”

Pipe waiting to be used in the construction of the Alberta leg of the Keystone XL pipeline in September 2020. (Kyle Bakx/CBC)

The Keystone XL pipeline saga began when the project was first announced in 2005.

The 1,897-kilometre pipeline would have carried 830,000 barrels of crude a day from the oilsands in Alberta to Nebraska. It would then have connected with the original Keystone pipeline that runs to refineries on the U.S. Gulf Coast.

Biden’s revoking of the permit was part of a series of executive orders aimed at tackling climate change that also included re-entering the Paris climate accord. 

The move effectively cancelled the project, with TC Energy announcing the same day that it would lay off a thousand workers related to the project.

The news was also a blow to Alberta’s United Conservative government, which had backed the project with an investment of $1.5 billion plus loan guarantees. 

Keystone opponents — who have fought the project with protests and in the courts — celebrated Biden’s decision. For years, they had been raising a red flag over the harm they said the pipeline would have on the environment and climate change.

But Biden’s move has been criticized by some U.S. politicians concerned about the impact on American workers, the energy sector and future investment.

Kenney is also among those expressing worry about what the decision could mean for existing cross-border pipelines that also face opposition. 

In an interview earlier this week, Dennis McConaghy, a former vice-president with TC Energy, said he believes the company should be looking at meeting Biden’s decision with legal action.

“They should be prepared to test that just as a matter of common law, let alone under NAFTA, that they have claims that they should be pursuing,” he said Tuesday.

In his view, the economic argument for the project still stands, saying it would be the best way of getting Alberta crude to its highest-value market, the U.S. Gulf Coast. 

He suggested Biden’s decision will leave a legacy that will make it difficult for companies to consider risking billions of dollars on a project when one White House administration can provide a permit “and have it revoked capriciously when another one comes in.”

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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