Federal Judge Halts Construction of Keystone XL Pipeline

Federal Judge Halts Construction Of Keystone XL Pipeline

Thursday's ruling deals a major blow to President Donald Trump and the oil industry.

A federal judge has blocked construction of the proposed Keystone XL pipeline.

Morris' order does not permanently extinguish hopes Keystone XL will go ahead, but it will require the administration to come up with a better explanation as to why it should proceed.

The Keystone XL (the initials stand for "export limited"), which aims to extend TransCanada's existing Keystone pipeline, would transport up to 830,000 barrels of crude oil per day through a 36-inch pipe from Alberta, Canada, and Montana to Oklahoma and the Gulf Coast. The Obama administration stalled the project, only for Trump to revive it.

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".

Morris wrote that the State Department had "simply discarded prior factual findings related to climate change" from the Obama administration in its zeal to further Trump's goal of letting the pipeline move forward.

"And Judge Morris correctly ruled it was not in the public interest because Secretary [of State John] Kerry had found in a detailed ruling several years ago it was not in the public interest".

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"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.

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.

Opposition to the Keystone XL pipeline has centered on climate change concerns, as well as potential damage to endangered species and to local landowners, including native Americans, whose property would be dug up for the pipeline. The government and TransCanada, the company behind the pipeline, are now legally barred from continuing construction on the pipeline until the Trump administration completes a supplemental document justifying the pipeline that satisfies the legal requirements.

Canadian oil stocks traded lower on Friday following the decision and as oil prices entered bear market territory, with shares in the country's five largest oil producers falling between one to three per cent, and TransCanada shares slipping 1.42 per cent to $51.46. The lawsuit prompting this week's order was brought by a collection of opponents, including the Indigenous Environmental Network and the Northern Plains Resource Council, a conservation coalition based in Montana.

The state department has now been ordered to do a more thorough review of the effect on issues like the climate.

After years of legal wrangling, Obama rejected a permit for the pipeline in 2015.

TransCanada Corp. said it remains committed to its long-delayed, often-challenged $10-billion Keystone XL pipeline Friday even after a US federal judge blocked the project. Trump signed executive actions to again advance construction of the project in 2017.

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