Federal Judge Halts Construction of Keystone XL Pipeline
Federal Judge Halts Construction of Keystone XL Pipeline
The pipeline would transport up to barrels of crude a day from Alberta Canada and Montana to facilities in Nebraska
10 November, 2018, 02:49
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.
Western Canadian Select crude oil is selling at about $18 a barrel as its discount to US benchmark West Texas Intermediate as a lack of pipeline capacity bottlenecks production in Alberta. The Obama-appointed judge specifically called out State's disregarding the climate change arguments against the pipeline it had made under Mr. Obama.
The 1,897-kilometre pipeline would carry as much as 830,000 barrels of crude per day from Hardisty, Alta., to Steel City, Neb., and on through a half dozen states to refineries on the Gulf Coast.
TransCanada has claimed that the pipeline would result in few oil spills by decreasing the amount of oil being transported by rail, and lower greenhouse gas emissions by lowering the amount of oil being transported by ocean tanker. 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.
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.
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The decision to deny the pipeline permit came after the completion of a long-awaited final environmental impact statement - 11 volumes of analysis released in 2014. "Simultaneously, the State Department will start work on a revised environmental analysis". According to the department, "there are no substantial changes or significant new information which would affect the continued reliability" of the report. She also drew attention to the embattled Trans Mountain pipeline expansion proposal to bring oilsands oil to tankers in Burnaby, B.C. "Our government has always supported the Keystone XL project, and we are disappointed by this decision".
In a press release, the Center for Biological Diversity, one of the staunchest opponents of the project, noted that TransCanada had not yet made the final investment decision on Keystone XL and the latest court ruling might shake its belief that it is still a commercially viable project. It "ignored its duty to take a "hard look" at these two connected actions". "The Department appears to have jumped the gun". It did not provide one. The Trump administration can appeal to a higher court.
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".
"We sleep well tonight and tomorrow we continue to keep our guard up, working stronger as good relatives until Keystone XL vanishes, and it will", said Faith Spotted Eagle, member of the Yankton Sioux Nation and Brave Heart Society.
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