U.S. judge orders Keystone XL pipeline review in setback for Trump

A federal judge in Montana on Wednesday ordered the U.S. State Department to do a full environmental review of a revised route for the Keystone XL crude oil pipeline, a move that could delay the project and prove a setback for the Trump administration.

The review will focus on the new route through Nebraska approved last year

A new route through Nebraska for the Keystone XL pipeline, ordered last year, should be subjected to an environmental review, said judge. (Daniel Acker/Bloomberg)

A federal judge in Montana on Wednesday ordered the U.S. State Department to do a full environmental review of a revised route for the Keystone XL crude oil pipeline, a move that could delay the project and prove a setback for the Trump administration.

For more than a decade, environmentalists, tribal groups, and ranchers have fought the $8-billion US, 1,900-km pipeline to carry heavy crude to Steele City in Nebraska from Canada's oilsands in Alberta.

U.S. District Court Judge Brian Morris ruled for the Indigenous Environmental Network and other plaintiffs, ordering the review of a revised pipeline route through Nebraska to supplement one the department did on the original path in 2014.

In his ruling, Morris said the State Department was obligated to "analyze new information relevant to the environmental impacts of its decision" to issue a permit for the pipeline last year.

Multiple legal challenges

Stephan Volker, the lawyer acting for the Indigenous Environmental Network and North Coast Rivers Alliance, filed the initial court action last year asking the court to look at roughly a dozen issues.

The court's summary judgment on Wednesday dealt with just one of those concerns.

"We also raised the number of other important questions about the potential for impacts on the three major rivers that the pipeline crosses … and whether the technology used by the Trump administration was sufficient to detect spills and to arrest them before they became irretrievably dangerous for public health and safety and for wildlife," Volker said.

He anticipates the judge will address the other issues in the coming months, before TransCanada Corp. begins construction.

TransCanada 'reviewing' decision

Supporting the project are Canadian oil producers, who face price discounts over transport bottlenecks, and U.S. oil interests and pipeline builders.

TransCanada, which wants to build Keystone XL, would only say it was reviewing the judge's decision when contacted on Thursday. 

It hopes to start preliminary work in Montana in coming months and begin construction in the second quarter of 2019.

The White House did not immediately respond to a request for comment, nor did the State Department.

The ruling was "a rejection of the Trump administration's attempt to flout the law and force Keystone XL on the American people," said Jackie Prange, a lawyer for the Natural Resources Defence Council, an environmental group.

But an analyst with Calgary-based RS Energy Group said the setback could be minor. 

"At first blush, it seems solvable," said Samir Kayande.

"It seems to be kind of having to do with technicalities involving the permits themselves. So I can't imagine that, provided the federal agencies that are responsible for permit conditions actually get their act together and do the permits properly, it seems to me that they should be able to resolve these issues. It might be a bit of a delay."

Pipeline politics

In 2015, then-president Barack Obama, a Democrat, rejected the pipeline, saying it would add to emissions that cause climate change and would mostly benefit Canadians.

President Donald Trump, a Republican, pushed to approve the pipeline soon after he took office. A State Department official signed a so-called presidential permit in 2017 allowing the line to move forward.

However, Morris declined the plaintiff's request to vacate that permit, which was based on the 2014 review.

Last year, Nebraska regulators approved an alternative route for the pipeline which will cost TransCanada millions of dollars more than the original path.

In a draft environmental assessment last month, the State Department said Keystone XL would cause no major harm to water supplies or wildlife. That review is less wide-ranging than the full environmental impact statement Morris ordered. 

With files from CBC News.