TransCanada Corp. on Thursday suffered another legal setback when Judge Brian Morris of the U.S. District Court for Montana ordered all work to stop on the Keystone XL pipeline, a growth enabler for the Alberta thermal oil sands production that is Canada's largest industrial natural gas user.
The 54-page verdict impacts the entire project, extending further the environmental review that Morris ordered in August for alterations to Keystone’s Nebraska leg.
In his second ruling on a protest lawsuit led by the Indigenous Environmental Network, the judge granted an injunction to halt all construction until the State Department fully justifies President Donald Trump's 2017 Keystone approval.
The administration’s approval failed to give adequate reasons for reversing the 2015 decision by the Obama administration that denied a border-crossing permit for the Canadian oil export project, according to the court.
Morris, an Obama appointee, ruled that additional review is still required for multiple environmental issues involving Keystone, such as greenhouse gas emissions, oil spill risks and effects on native resources.
The ruling deflated industry optimism aroused by Trump's project approval, which prompted TransCanada to set a 2019 target date for starting $8 billion in construction on the 1,179-mile conduit for 830,000 b/d.
Neither TransCanada nor the State Department responded to Morris's decision or indicated whether an appeal would be launched.
Washington political commentators described the ruling as a thumping defeat for Trump's industrial growth and deregulation agenda. Environmental opponents of oil and gas operations such as the Sierra Club, a participant in the case, celebrated the decision as a landmark victory after nearly a decade of protests against the 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," Sierra Club lawyer Doug Hayes.