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Keystone XL Pipeline Block Sought to Undo Trump's Approval

Updated on
  • Environmental and Native American groups file suits in Montana
  • Pipeline review flawed, threatens Missouri River, groups say

Environmental groups are seeking to undo President Donald Trump’s approval of TransCanada Corp.’s Keystone XL pipeline after more than eight years of political wrangling on its future and scope.

The Sierra Club and five other conservation groups sued Thursday in federal court in Montana, just days after two other groups filed a similar complaint in the same court. The suits are likely the first in a flurry of courthouse challenges to the president’s decision. Keystone XL’s drama is playing out as another controversial project, the Dakota Access pipeline, nears completion.

The lawsuits are the latest hurdle for the Trump administration as his initiatives come under legal and political attack. Trump’s travel ban has been put on hold by several courts, and environmentalists are fighting his latest bid to roll back a suite of Obama-era climate policies. That includes moves to counter Trump’s attempt to put litigation over the Clean Power Plan on hold and a lawsuit challenging the decision to restart federal coal leasing.

Representatives of both TransCanada and the U.S. State Department declined to comment on the Montana suits. 

Keystone’s “best-case scenario for coming online” is the second half of 2019, according to Bloomberg Intelligence analysts Rob Barnett and Brandon Barnes. Legal and administrative challenges in Montana and Nebraska could affect that timeline.

Legal Challenges

“You’re looking at two to three years of legal challenges in the state of Nebraska, at least, before things are resolved,” Jane Kleeb, president of the activist group Bold Alliance, told reporters last week. That includes at least six months for review by the Nebraska Public Service Commission, as well as potential litigation over any attempts by TransCanada to use eminent domain to procure land for Keystone’s construction.

Projected to cost $8 billion, the approximately 1,179-mile long Keystone XL is to carry Canadian crude from Hardisty, Alberta, to a junction in Steele City, Nebraska, where it will connect to an existing pipeline network extending south to refineries on the U.S. Gulf Coast.

The Sierra Club and other groups took issue with the Trump administration’s review, saying that “in their haste to issue a cross-border permit” government officials violated federal environmental laws and “ignored significant new information that bears on the project’s threats to the people, environment and national interests of the U.S.”

The groups filing Thursday’s suit say the U.S. State Department approved construction based on outdated analyses. One study assumed the price of oil would remain over $100 per barrel for the next two decades. Oil costs roughly half that today.

Oil Economics

New pipelines also are coming online to move Canadian oil sands crude to markets, perhaps decreasing the urgency for Keystone XL, said Anthony Swift, director of the Natural Resources Defense Council’s Canada Project. The NRDC too is a plaintiff in the latest lawsuit.

Both market changes could alter the economics of shipping oil through Keystone XL, which means the State Department’s conclusions about the project’s environmental impact won’t reflect reality, Swift said.

Scientists also have new information about how dense crude oil that would be carried through Keystone XL reacts to water -- research that wasn’t included in earlier environmental assessments. Heavy crude could defy traditional methods for cleaning up oil spills, according to a 2015 National Academy of Sciences report.

‘Unacceptable Risk’

“KXL poses an unacceptable risk to the Missouri River and its fisheries,” Frank Egger, president of the North Coast Rivers Alliance, said in a statement on Thursday announcing the complaint filed March 27 by his organization and the Indigenous Environmental Network, a Native American group.

“No oil pipeline is safe,” he said. “One major oil spill, and the Missouri River and adjacent aquifers would be polluted for generations.”

TransCanada’s plans previously foundered in Nebraska amid a succession of legal challenges from landowners and environmentalists before being shelved when the Obama administration denied permission to cross the countries’ shared border.

Opponents fought the pipeline’s initial path through Nebraska when it seemed to threaten the environmentally sensitive Sand Hills region. A revised route, devised by then-governor Dave Heineman and TransCanada, also met challenges because the process skirted state law requiring review by the state’s Public Service Commission.

Though the pipeline company initially prevailed at the state’s supreme court, TransCanada later conceded and applied for PSC approval in September 2015. The Obama administration’s denial came two months later.

Sierra Club, the Northern Plains Resource Council and other groups are seeking a court order putting the project on hold, setting aside the Trump administration’s permit allowing Keystone XL to cross the U.S.-Canada border, and requiring the government to comply with applicable laws.

The Sierra Club’s case is Northern Plains Resource Council v. Shannon, 17-cv-31, U.S. District Court, District of Montana (Great Falls). The earlier case, in the same court, is Citizens for Clean Energy v. U.S. Department of the Interior, 17-cv-30.