Keystone XL pipeline faces new legal roadblock

Daniel Fowler
November 9, 2018

TransCanada's $10-billion Keystone XL pipeline project has suffered another setback after a US federal judge blocked its construction to allow more time to study the potential environmental impact. Native American groups in Montana and elsewhere fought the Keystone project as well, saying its route failed to adhere to historical treaty boundaries and would impinge on their water systems and sacred lands.

In Thursday's ruling, Morris ordered the government to issue a more thorough environmental analysis before the project can move forward.

Since its conception, the pipeline has sparked a backlash from environmentalists and indigenous peoples who say it violates historical treaty boundaries and would bring environmental problems.

Becky Mitchell, chairwoman of the Northern Plains Resource Council, a plaintiff in the case, said that the organization is thrilled with the ruling.

In 2008, the U.S. State Department issued a presidential permit for the pipeline and TransCanada filed paperwork to expand the project. The State Department initially denied the pipeline a permit in 2015, under the Obama administration.

He added: "The department instead simply discarded prior factual findings related to climate change to support its course reversal".

"An agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past, any more than it can ignore inconvenient facts when it writes on a blank slate".

Oil Prices Slide After API Reports Large Crude Build
Still, Brent is poised for an nearly 3 percent drop for the week, its fifth straight week of decline. The global benchmark crude traded at a $9.93 premium to WTI for the same month.

Thursday night's ruling is the latest set-back for the Calgary-based pipeline company in its decade-long push to construct a 1,179-mile long conduit to deliver crude from Alberta's oil sands to a Nebraska junction, en route to refineries near the Gulf of Mexico.

No immediate impact in oil markets is seen, as the pipeline isn't scheduled to come online for years regardless of the ruling.

The same environmental analysis that the department carried out before denying the permit in 2015 was ignored when the department turned around past year and approved it, the judge argued.

TransCanada, which is pushing the project, did not immediately respond to a request for comment early Friday.

He also ruled the analysis failed to fully review the effects of the current oil price on the pipeline's viability and did not fully model potential oil spills and offer mitigations measures.

The administration can appeal against the decision.

In 2015, on the eve of the global climate talks in Paris, the Obama administration appeared to bring an end to the seven-year-long saga when it announced it was halting construction of the pipeline, arguing that approval would compromise the country's effort to reduce its greenhouse gas emissions.

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