Keystone pipeline halted for environmental review
Environmentalists and tribal groups cheer ruling by a U.S. district judge in Montana
WASHINGTON — In a setback for the Trump administration, a federal judge has blocked a permit for construction of the Keystone XL oil pipeline from Canada and ordered officials to conduct a new environmental review.
Environmentalists and tribal groups cheered the ruling by a U.S. district judge in Montana, while President Donald Trump called it “a political decision” and “a disgrace.”
The 1,184-mile pipeline would begin in Alberta and shuttle as much as 830,000 barrels a day of crude through a half dozen states to terminals on the Gulf Coast.
Trump has touted the $8 billion pipeline as part of his pledge to achieve North American “energy dominance” and has contrasted his administration's quick approval of the project with years of delay under President Barack Obama.
The Trump administration has not said whether it would appeal the new ruling. The State Department said it was reviewing the decision, but declined further comment, citing ongoing litigation.
The pipeline was first proposed by Calgary-based TransCanada in 2008. It has become the focal point of a decade-long dispute that pits Democrats, environmental groups and Native American tribes who warn of pollution and increased greenhouse gas emissions against business groups and Republicans who cheer the project's jobs and potential energy production.
U.S. District Judge Brian Morris put a hold on the project late Thursday, ruling that the State Department had not fully considered potential oil spills and other impacts as required by federal law. He ordered the department to complete a new review that addresses issues that have emerged since the last environmental review was completed in 2014.
New topics include the cumulative effects on greenhouse gas emissions of Keystone XL and a related pipeline that brings oil from Canada; the effects of current oil prices on the pipeline's viability; updated modeling of potential oil spills; and the project's effect on cultural resources of native tribes and other groups along the pipeline's route.
The review could take up to a year to complete.
Last summer, Oklahoma's 2nd District Congressman Markwayne Mullin authored a failed bill intended to prevent delays hampering construction of the Keystone XL Pipeline.
“We hear a lot of stuff about it damaging the environment. It doesn't,” Mullin told Roll Call. “We're talking about crossing a border and taking a situation that was held up for eight years, with the Keystone Pipeline, and making sure it has a transparent and consistent approach on how we regulate these permits.”
Environmentalists and Native American groups had sued to stop the project, citing property rights and possible spills.
Becky Mitchell, chairwoman of the Northern Plains Resource Council, a plaintiff in the case, said her organization is thrilled with the ruling.
“This decision sends TransCanada back to the drawing board,” Mitchell said, calling the ruling “the results of grassroots democracy in action, winning for water and people.”
TransCanada said in a statement that it was reviewing the judge's 54page decision. “We remain committed to building this important energy infrastructure project,” TransCanada spokesman Terry Cunha said.
Environmental groups declared victory and predicted the long-delayed project will never be built.
The court ruling “makes it clear once and for all that it's time for TransCanada to give up on their Keystone XL pipe dream,” said Doug Hayes, a senior attorney with the Sierra Club, the nation's largest environmental group.
The fight over the project has spanned several presidencies and involved standoffs between protesters and law enforcement.
After years of legal wrangling, Obama rejected a permit for the pipeline in 2015. The company responded by seeking $15 billion in damages.
Trump signed executive actions to again advance construction of the project in 2017. The action drew protests across the country, including in Tulsa.
TransCanada had recently announced plans to start construction next year, after a State Department review ordered by Morris concluded that major environmental damage from a leak is unlikely and could quickly be mitigated. Morris said that review was inadequate.
WASHINGTON — Led by costlier gas, food and chemicals, U.S. wholesale prices surged 0.6 percent in October, the biggest month-to-month rise in six years. Yet excluding items that tend to fluctuate sharply from month to month, inflation pressures remain tame.
The jump in the producer price index, which measures prices before they reach consumers, followed a smaller 0.2 percent increase in September. Compared with 12 months earlier, producer prices rose a sharp 2.9 percent in October.
But when food, energy and other volatile categories are excluded, so-called core wholesale prices rose only a modest 0.2 percent in October and 2.8 percent from a year earlier.
Higher prices for services such as transportation and warehousing drove most of October's overall increase in wholesale prices. Many trucking companies have had to pay bonuses and raise pay to hire enough truck drivers, for example.
And the year-over-year increase in wholesale prices is still lower than it was in the summer, when it topped 3 percent. In addition, oil prices declined in October, which will likely lower gasoline costs in the coming months.
“There is little sign that a more marked acceleration (in inflation) lies around the corner,” Andrew Hunter, U.S. economist at Capital Economics, a forecasting firm, said in a research note.
Economists say the Trump administration's trade war with China, which has led it to impose tariffs on $250 billion of Chinese imports, has so far had only a limited impact. Hunter suggested that the dollar's rise in value this year, which makes imports less expensive for Americans, might be offsetting much of the impact of the tariffs.
Wholesale prices for pork rose by the most in more than two years last month. But Stephen Stanley, chief economist at Amherst Pierpont, said that likely marked a snapback after China imposed retaliatory tariffs on U.S. pork earlier this year. Those tariffs initially depressed China's purchases and forced pork farmers to lower their prices. That trend now appears to be reversing itself, Stanley said.
The Federal Reserve is keeping a close eye on price changes as it monitors the economy for signs of overheating. The unemployment rate is at a five-decade low of 3.7 percent, and companies are raising wages and salaries to attract and keep workers. Average hourly pay rose in October from a year earlier at the fastest pace in nearly a decade.
Companies may have to raise prices to offset the costs of higher pay, which could spur higher inflation. But businesses could also invest in more machinery and software to make their employees more efficient, which would enable them to pay more without raising prices.
Fed policymakers finished a two-day meeting Thursday without changing the short-term interest rate they control. But most economists expect the Fed will hike shortterm rates for a fourth time this year when it next meets in December. The Fed has signaled it expects to raise rates three more times next year.
After its meeting Thursday, the Fed issued a statement that suggested it saw little sign that inflation would accelerate beyond its 2 percent target.