U.S. judge halts construction of Keystone XL pipeline

U.S. judge halts construction of Keystone XL pipeline

In its ruling Thursday, however, the U.S. District Court for the District of Montana found that in its reversal of the Obama-era decision, the Trump administration's U.S. Department of State had violated the National Environmental Policy Act and the Administrative Procedure Act.

The decision is a blow to Trump, who signed an executive order after just two days in the White House to grant a permit for the construction of Keystone XL and Dakota Access, another bitterly-opposed project that sparked fierce protests form native American groups.

The company building the pipeline, TransCanada, said in a statement they are reviewing the ruling but they "remain committed to building this important energy infrastructure project".

Judge Brian Morris, of the US District Court for the District of Montana, said construction could not go ahead until a more thorough review of the impact on the climate, cultural resources and wildlife was conducted.

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

The decision highlights a broader legal vulnerability in the Trump administration's push to roll back Obama-era environmental protections. The Trump administration or TransCanada could still appeal the court's ruling to the Court of Appeals for the Ninth Circuit.

Construction on the United States section was due to begin next year.

Energy producers in the northern nation already are struggling with a shortage of pipeline space that has hammered prices for their crude, sending its discount to US benchmarks to the widest on record in recent weeks.

The 1,900-kilometer-long pipeline is created to transport up to 830,000 barrels per day of tar sand oil from Alberta, Canada, to Nebraska, where it would then enter existing pipelines to U.S. Gulf Coast refineries.

A Montana federal judge's ruling that threatens to further delay TransCanada Corp.'s (TRP.TO) Keystone XL pipeline comes at one of the worst possible times for the Canadian oil industry.

Morris said the government must provide "new and relevant information regarding the risk of spills".

The decade-long saga over the Keystone XL pipeline has had more detours than the project's almost 1,200-mile proposed path from Hardisty, Alberta, to Steele City, Nebraska. 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.

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.

On another pipeline battlefront, the Nebraska Supreme Court heard oral arguments last week from the attorneys from the pipeline's landowners there - the Ponca Tribe of Nebraska, the Yankton Sioux Tribe and the Sierra Club.

The judge barred both TransCanada and the U.S. from "from engaging in any activity in furtherance of the construction or operation of Keystone and associated facilities" until the U.S. State Department completes a supplemental review.

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