Montana Judge Puts Brakes On Keystone XL

A Montana district court judge has ordered the suspension of construction work on the Keystone XL pipeline on the grounds that violations were made in the government’s environmental review.

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.

The court has asked the government to review its assessment and revise it, taking into account the changes in the oil markets since 2014, the latest in climate change, and the presence of “cultural resources” along the route of the pipeline that was planned to carry heavy oil from Alberta to U.S. refineries. The 830,000 bpd pipeline will run from the Albertan oil sands through Montana and South Dakota, ending in Nebraska, where it would connect to the existing pipeline network that goes on to the Gulf Coast. 

The court’s ruling comes a little more than a month after TransCanada said that construction of the pipeline could begin as soon as next year. The announcement followed an environmental impact review from the U.S. State Department, which concluded the pipeline’s impact on the environment would be “negligible to moderate.”

That environmental impact review was ordered by the same Montana judge, Brian Morris, who now ruled for another review, suspending all work on the project. As a result, the number of people who will be genuinely surprised if the Keystone XL project—vetoed by the Obama administration and later revived by President Trump—ever sees the light of day is growing. It has become one of the most controversial oil projects in North America, but it is also one of the most important for Canadian crude oil producers hit by a significant pipeline capacity shortage. 

By Irina Slav for Oilprice.com

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