Montana judge blocks Keystone, draws Trump’s ire
Order halts construction, provokes near 2-per-cent drop in TransCanada shares
A U.S. judge in Montana has halted construction of the Keystone XL pipeline designed to carry heavy crude oil from Canada to the United States, drawing a sharp rebuke on Friday from U.S. President Donald Trump.
The ruling out by a U.S. court in Montana late on Thursday dealt a major setback to TransCanada Corp., whose stock dropped nearly 2 per cent in Toronto. Shares of companies that would ship oil on the pipeline also fell. TransCanada said in a statement it remains committed to building the US$8-billion, 1,900-kilometre pipeline.
The ruling drew an angry response from Mr. Trump, who approved the pipeline shortly after taking office. It also piles pressure on Canadian Prime Minister Justin Trudeau to assist the country’s ailing oil sector.
It was a win for environmental groups that sued the U.S. government in 2017, soon after Mr. Trump announced a presidential permit for the project. The ruling also rewarded Native American groups and ranchers who have spent more than a decade fighting the planned pipeline.
U.S. District Court Justice Brian Morris wrote that a U.S. State Department environmental analysis of Keystone XL “fell short of a ‘hard look’ ” at the cumulative effects of greenhouse gas emissions and the impact on Native American land resources.
“It was a political decision made by a judge. I think it’s a disgrace,” Mr. Trump told reporters at the White House.
“The Trump administration tried to force this dirty pipeline project on the American people, but they can’t ignore the threats it would pose to our clean water, our climate and our communities,” said the Sierra Club, one of the environmental groups involved in the lawsuit.
Representatives of Mr. Trudeau and Canadian Natural Resources Minister Amarjeet Sohi did not immediately comment. The U.S. State Department was not immediately available for comment.
The pipeline would carry heavy crude from Alberta to Steele City, Neb., where it would connect to refineries in the U.S. Midwest and Gulf Coast, as well as Gulf export terminals.
Shares of Canadian oil producers Canadian Natural Resources Ltd. and Cenovus Energy Inc. shed 3 per cent. Canada has long sought more arteries to move oil out of Alberta, where the tar-like bitumen is extracted.
Several pipeline projects have been scrapped because of opposition and the Trans Mountain line project still faces delays, even after the Canadian government purchased it this year to move it forward.
Ensuring at least one pipeline is built is critical to Mr. Trudeau’s economic and environmental plans, with a Canadian election expected next fall.
Canada is the primary source of imported U.S. oil, but congested pipelines have forced oil shippers to use costlier rail and trucks.