U.S. judge halts Key­stone XL oil pipe­line in blow to Trump, Trudeau

Stabroek News - - WORLD NEWS -

WIN­NIPEG, Man­i­toba/NEW YORK, (Reuters) - A U.S. judge in Mon­tana has blocked con­struc­tion of the Key­stone XL pipe­line de­signed to carry heavy crude oil from Canada to the United States, draw­ing praise yes­ter­day from en­vi­ron­men­tal groups and a re­buke from Pres­i­dent Donald Trump.

The rul­ing of a U.S. Court in Mon­tana late on Thurs­day dealt a set­back to TransCanada Corp, whose stock fell 1.7 per­cent in Toronto. Shares of com­pa­nies that would ship oil on the pipe­line also slid.

TransCanada said in a state­ment it re­mains com­mit­ted to build­ing the $8 bil­lion, 1,180 mile (1,900 km) pipe­line, but it has also said it is seek­ing part­ners and has not taken a fi­nal in­vest­ment de­ci­sion.

The rul­ing drew an an­gry re­sponse from 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 by ac­cel­er­at­ing crude ship­ments by rail un­til pipe­lines are built. Clogged pipe­lines have made dis­counts on Cana­dian oil even steeper than they were ear­lier this year when Sco­tia­bank warned that they may cost the coun­try’s econ­omy C$16 bil­lion.

U.S. District Court Judge 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,” Trump told re­porters at the White House.

The rul­ing was a win for en­vi­ron­men­tal groups who sued the U.S. govern­ment in 2017 af­ter Trump an­nounced a pres­i­den­tial per­mit for the project. Tribal groups and ranch­ers also have spent more than a decade fight­ing the planned pipe­line.

“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.

The State Depart­ment is re­view­ing the judge’s or­der and had no comment due to on­go­ing lit­i­ga­tion, a spokesman said.

The pipe­line would carry heavy crude from Al­berta to Steele City, Ne­braska, 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 lost 2.7 per­cent and 2.2 per­cent re­spec­tively.

Canada is the pri­mary source of im­ported U.S. oil, but con­gested pipe­lines in Al­berta, where tar-like bi­tu­men is extracted, have forced oil ship­pers to use costlier rail and trucks.

Two pipe­line pro­jects have been scrapped due to op­po­si­tion, and the Trans Moun­tain line project still faces de­lays even af­ter the Cana­dian govern­ment pur­chased it this year to move it for­ward.

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