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The U.S. State Department will complete an environmental impact review for the now notorious US$8-billion Keystone XL oil pipeline even if a federal appeals court dismisses the November 2018 ruling of a Montana judge that effectively blocked work on the project, CBC reports, quoting government attorneys.
Washington filed an appeal against the November ruling last month in an attempt to get at least some work done on the pipeline that will carry some 830,000 bpd from Alberta through Montana, South Dakota, and Nebraska, where it would connect to the existing pipeline network that goes on to the Gulf Coast. The ruling required the State Department to once again review the project’s environmental impact documentation, which opponents of Keystone XL considered a victory.
In the appeal, however, the government attorneys argued that a second review of the environmental impact documentation of the project was meaningless because President Trump had issued TransCanada—now TC Energy—a new permit earlier this year, several months after the Montana district court ruling. The new permit sought to go around the obstacles that made the basis for the lawsuit against the project, basically boiling down to an incomplete assessment of the potential environmental damages a spill could lead to.
Outside the environmental concern space, opponents’ main argument is that U.S. refiners do not need this much pipeline capacity in the long term, despite a shortage of pipeline capacity in Alberta right now that is forcing producers to ship their oil south by rail.
Meanwhile, the Canadian authorities in January approved some preparatory work on the project, such as clearing trees and foliage around parts of the route of the pipeline but this is nowhere near what TC Energy and the U.S. government, not to mention Albertan oil producers, want to see. Sadly for them all, TC Energy would not be able to begin construction works on Keystone XL this year as a result of the legal challenges, the company said in its latest earnings call earlier this week.
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.