Key­stone pipe­line halted for en­vi­ron­men­tal re­view

En­vi­ron­men­tal­ists and tribal groups cheer rul­ing by a U.S. dis­trict judge in Mon­tana

Tulsa World - - Work&money - By Matthew Daly

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.

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