Published: Fri, November 09, 2018
Research | By Clarence Powell

Keystone XL Pipeline: US judge orders halt on construction

Keystone XL Pipeline: US judge orders halt on construction

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.

The Great Falls Tribune reports U.S. District Judge Brian Morris' order on Thursday came as the Calgary-based energy giant was preparing to build the first stages of the oil pipeline in northern Montana.

The State Department initially denied the permit under the Obama administration citing the potential environmental impact, but shortly after President Donald Trump took office he revived the project and the administration reversed the previous denial and allowed the project to move forward.

"This is a significant setback for TransCanada's Keystone XL pipeline project and big win for Indigenous defenders, the environment, and for the thousands of people who have been fighting this pipeline for almost a decade".

The privately financed pipeline is projected to stretch 1,179-miles (1,897km) from the oil sands of Canada's Alberta province, through Montana and South Dakota, to rejoin an existing pipeline to Texas.

The judge also argued that the State Department failed to properly account for factors such as low oil prices, the cumulative impacts of greenhouse gases from the pipeline and the risk of oil spills. "As the court has made clear yet again, the Trump administration's flawed and risky proposal should be shelved forever". 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.

Trump criticized the ruling, calling it a disgrace. A presidential permit is required for infrastructure projects that cross global borders.

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"Rejecting the destructive Keystone XL pipeline is a victory for the grassroots activists who have worked against the Keystone XL pipeline for the past decade", Keever continued.

Western Canadian Select crude oil is selling at about $18 a barrel as its discount to USA benchmark West Texas Intermediate as a lack of pipeline capacity bottlenecks production in Alberta.

TransCanada had recently announced plans to start construction next year, after a State Department review ordered by Morris concluded that major environmental damage from a leak is unlikely and could quickly be mitigated.

USA benchmark WTI little changed after the decision, trading down 0.1 percent.

"The department's 2017 conclusory analysis that climate-related impacts from Keystone subsequently would prove inconsequential and its corresponding reliance on this conclusion as a centerpiece of its policy change required the department to provide a 'reasoned explanation, '" Judge Morris said.

"An agency can not simply disregard contrary or inconvenient factual determinations that it made in the past", Morris wrote Thursday.

Jackie Prange, senior attorney with the Natural Resources Defense Council, called the ruling a "huge win" not just for the environmental activists and tribal groups who have been fighting the pipeline, but for "anyone who cares about the rule of law and holding this administration to the facts".

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