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President Donald Trump has circumvented a court order blocking the authorization of the controversial Keystone XL oil pipeline project and has issued a permit for the project.
Preliminary work on Keystone XL ground to a halt last October after a Montana district court judge who ordered the suspension of construction work on the Keystone XL pipeline on the grounds that violations were made in the government’s environmental review.
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 came a little more than a month after TransCanada said that construction of the pipeline could begin in 2019. The company has still not made the final investment decision on the pipeline.
Now, according to a financial analyst who spoke to Bloomberg, President Trump has invalidated the environmental assessment review process by issuing this new permit.
“It looks like the intent is to wipe the slate clean and replace the previous presidential permit with this new one,” Katie Bays from Height Securities said.
Across the border, Canada’s National Energy Board in January approved some minor preliminary work on the project that would make life a little bit easier for Albertan oil producers by boosting export capacity. The work would include tree and foliage clearing around parts of the route that the pipeline will follow, NEB’s approval came after TransCanada made a request to perform the clearing works.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.