Keystone XL setback seen as expensive

CALGARY — The Canadian oil industry reacted with frustration and bitterness Friday after a U.S. judge ordered a halt to the Keystone XL pipeline project until it passes further environmental review.

The decision on Thursday means longer delays in finding a way to drain a glut of oil in Western Canada that has driven price discounts to multiyear highs and stalled investment, said Tim McMillan, CEO of the Canadian Association of Petroleum Producers.

“It’s a vulnerability that we can’t control and will cost us hundreds of millions if not billions of dollars as a nation and thousands of jobs,” he said Friday.

“And the only reason it does have such a massive impact on us is self-inflicted wounds here at home on projects that could have given us resilience against this sort of ruling.”

U.S. District Judge Brian Morris found Thursday that the potential impact of TransCanada Corp.’s $10-billion pipeline had not been considered as required by federal law. Environmentalists and Native American groups had sued to stop the project, citing property rights and potential oil spills.

The judge, who was appointed by former president Barack Obama, issued a federal court order blocking a Trump administration permit for construction of the pipeline.

TransCanada remains committed to the project, spokesman Terry Cunha wrote in a brief email on Friday, adding the company has received the judge’s ruling and is reviewing it.