Hurdles Rise Higher: Court Loss New Obstacle for Keystone XL

While the Nebraska Public Services Commission (PSC) grabbed all the Keystone XL pipeline headlines last week, a federal court in Montana dealt TransCanada’s proposed tar sands pipeline a second blow just two days later. Ruling in favor of environmental groups—including NRDC—who sued the Trump administration following its issuance of a cross-border permit for Keystone XL, U.S. District Judge Brian Morris found that the suit can move forward to be argued on its merits. This sets up a chance to fully litigate the administration’s fast-tracked permit issuance, a process that was done without public comment and completed without significant updates to required environmental impact analyses.

Last week’s ruling is a remarkable win for the environmental plaintiffs. By surviving the government’s and TransCanada’s motion to dismiss, the Trump administration’s sloppy granting of Keystone XL’s cross-border permit will get a full airing in court. This throws the future of the federal cross-border permit into question and opens the door for a new set of hurdles for TransCanada to contemplate as it weighs whether to continue pursuing its ill-conceived and increasingly obsolete project. It also means that, contrary to the administration’s arguments, the granting of the permit was a judicially reviewable executive action and not the type of presidential decision to which courts typically grant wide deference.

The case moving forward on its merits is also a major win for the environment. Keystone XL’s potential contribution to climate change and impacts to endangered species, major changes in oil markets, and advances in the understanding of the spill risks posed by tar sands oils are all critical points of analysis that the administration should have spent time considering before it leapt to grant TransCanada’s renewed request for a cross-border permit earlier this year.

At nearly the same time, the Nebraska PSC’s denial of TransCanada’s preferred route through the state and approval of an alternative route opened a host of new procedural and environmental questions. The newly approved route has never been analyzed at either the state or federal levels, a fact that suggests federal and Nebraska authorities will need to consider a growing list of new issues in significantly updated environmental analyses. Similarly, the decision moves the potential pipeline corridor into the critical habitat of several new endangered species—including the pallid sturgeon—an additional fact that will require new analysis and new permitting.

The bottom line is that last week’s ruling creates even more uncertainty for TransCanada and the prospects of Keystone XL ever being built. With its cross-border permit already under review by courts and its Nebraska route permit appealable into the state court system, both could be tied up for years. Meanwhile, TransCanada saw weak interest from shippers during its extended open season for the pipeline and now must confront growing fallout from the major leak its existing Keystone pipeline sprung in South Dakota two weeks ago.

This latest obstacle for Keystone XL is another in a long list of reminders that we need to be moving in a different direction. Building projects whose economic foundations rely on expanded production of some of the world’s most high-carbon resources is backward thinking. Careful, transparent review that considers up-to-date information about projects like Keystone XL will lay this truth bare. Building a project reliant on new sources of oil while the world should be reducing consumption moves us closer to climate catastrophe in a moment when our time and ambition should instead be deployed to help accelerate the global transition to cleaner, renewable sources of energy.

About the Authors

Josh Axelrod

Manager of fossil fuels and climate policy, Canada Project, International Program

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