Proponents of the Keystone XL crude oil pipeline on Thursday lost their second attempt to revive a crucial water-crossing permit for the project, in a case with implications for pipeline projects across the country.
The U.S. Court of Appeals for the Ninth Circuit denied a motion filed by the U.S. Army Corps of Engineers and an affiliate of project sponsor TC Energy Corp. to lift an injunction imposed in April by the U.S. District Court for the District of Montana.
The April ruling not only vacated Keystone XL’s water crossing permit issued by the Corps, it prohibited the Corps from issuing the same permit, known as Nationwide Permit (NWP) 12, for other pipeline projects.
If completed, the 1,210-mile pipeline would transport 830,000 b/d of Western Canadian crude to Steel City, NE, where it would connect with existing infrastructure to reach Gulf Coast refining markets.
The Corps and TC Energy appealed the April ruling and sought permission to revive the permit while the appeal process was ongoing, a request that was first denied in May by U.S. District Court Judge Brian Morris in Montana.
Because of its heavy caseload, the Ninth Circuit is unlikely to rule on the underlying appeal until the first quarter of 2021, analysts at ClearView Energy Partners LLC said Thursday in a note to clients.
The analysts said that after the latest ruling, they “continue to think the Corps may turn to the U.S. Supreme Court to challenge the ability of a single federal district court to enjoin or suspend a nationwide program…Absent relief from the Supreme Court, we think the Corps would be unlikely issue new NWP permits before fall at the earliest.”
American Petroleum Institute’s (API) Paul Alfonso, chief legal officer, said the group is “extremely disappointed” in the latest decision. “This ruling could delay the construction of over 70 pipelines this year alone, disrupting half a million well paying, middle class sustaining jobs and costing American businesses up to $2 billion.
“It is completely inappropriate that the district court has singled out natural gas and oil companies to cut out of a long established regulatory process, when infrastructure and affordable energy are more important than ever to getting people back to work and the economy moving again.”
Environmental groups, meanwhile, praised the decision.
“Keystone XL would have a devastating effect on communities, wildlife and the climate — and those impacts should be carefully considered in all permitting decisions,” said attorney Ceilia Segal of the Natural Resources Defense Council. “If that analysis is based on science and facts, pipelines like Keystone XL will never see the light of day…”
Sierra Club senior attorney Doug Hayes said, “The Trump administration has repeatedly violated the law in their relentless pursuit of seeing Keystone XL built,” adding that, “we’ll continue to fight to ensure it is blocked for good.”
Adding to Keystone’s woes, Democratic presidential candidate Joe Biden has pledged to rescind its permit if he is elected.
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