USA judge blocks construction of $10-billion Keystone XL pipeline

10 November, 2018, 08:59 | Author: Rosalie Gross
  • Federal Judge Halts Construction Of Keystone XL Pipeline

A federal judge in Montana issued a "landmark" ruling temporarily blocking construction on the controversial Keystone XL Pipeline Thursday in a decision welcomed by environmental groups.

"This is a complete repudiation of the Trump administration's attempts to evade environmental laws and prioritize oil company profits over clean water and wildlife", Jared Margolis, senior attorney with the Center for Biological Diversity, said in astatement.

In doing so the administration overturned a ruling by then president Barack Obama in 2015 that denied a permit for the pipeline, largely on environmental grounds, in particular the U.S. contribution to climate change.

Analysts say the decision could cause a delay of up to one year for Keystone XL, which was first proposed 10 years ago. The Trump administration claimed, with no supporting information, that those impacts "would prove inconsequential".

Becky Mitchell, chairwoman of the Northern Plains Resource Council, a plaintiff in the Montana legal action against Keystone XL, said her environmental organization is thrilled with the ruling. "TransCanada does not have an approved pipeline at this point".

Obama appointed Morris, the judge who made the ruling.

On Friday, President Trump called the judge's ruling "a political decision".

TransCanada would likely provide more information on how it will deal with Thursday's court ruling at its investor day presentation next week, according to Chris Cox, analyst at Raymond James. No immediate comment came from the administration after the pipeline order.

"An important dynamic here is whether the company remains committed to pursuing the project in light of ongoing regulatory delays, especially as we believe there is a strong desire to substantially complete the project before the next USA presidential election", Cox said.

It's meant to be an extension of TransCanada's existing Keystone Pipeline, which was completed in 2013.

The 830,000 bpd pipeline will run from the Albertan oil sands through Montana and South Dakota, ending in Nebraska, where it would connect to the existing pipeline network that goes on to the Gulf Coast.

The proposed US portion of the pipeline would run about 875 miles through Montana, South Dakota and Nebraska.

It met sustained opposition from environmental advocacy groups, as well as from Obama, who anxious about the contribution it would make toward climate change.

But it has been the subject of protests for more than a decade, both from environmentalists and Native American groups, who say it will cut through their sovereign lands.

Part of the reason behind the court's ruling was the Trump administration's willingness to ignore the pipeline's impact on climate change, which the Obama administration found "provided a significant basis for denying" the pipeline permit.

USA benchmark WTI little changed after the decision, trading down 0.1 percent. "And frankly, approving this project would have undercut that global leadership", he said.

Morris said, however, that there have indeed been changes since the 2014 assessment and that the Trump administration failed to consider them. She also drew attention to the embattled Trans Mountain pipeline expansion proposal to bring oilsands oil to tankers in Burnaby, B.C. Those could alter the overall impact of Keystone XL and should have been considered by the government.

The analysis of a cross-border project like this is done by the State Department. It "ignored its duty to take a "hard look" at these two connected actions". He ordered the department to complete a full review. "The Department appears to have jumped the gun".

"An agency can not simply disregard contrary or inconvenient factual determinations that it made in the past", Judge Morris said in his ruling.

In an email to National Observer, Adams also said that the project would support "good, middle-class jobs in Canada" and boost exports, while fitting in with a climate change plan proposed by the Alberta government.

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