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WINNIPEG, Manitoba / NEW YORK – A US judge in Montana has blocked the construction of the Keystone XL pipeline designed to transport heavy crude oil from Canada to the United States, drawing praise Friday from environmental groups and President Donald Trump.
The decision last Thursday by a US court in Montana caused TransCanada Corp to lose its shares, which fell 1.7% in Toronto. Shares of companies that would deliver oil by pipeline also fell.
TransCanada said in a statement that it remained committed to building the pipeline, worth $ 8 billion (1,180 miles) (1,900 km), but also said it was looking for partners and not have made a final investment decision.
The decision angered Trump, who approved the pipeline shortly after taking office.
It also puts pressure on Canadian Prime Minister Justin Trudeau to help the country's troubled oil sector by speeding rail crude oil shipments to oil pipelines. Clogged oil pipelines have made the Canadian oil rebates even steeper than they were earlier this year when Scotiabank announced it could cost the country's economy $ 16 billion.
Judge Brian Morris of the US District Court wrote that an environmental scan conducted by the US State Department on Keystone XL "was not" thorough "in terms of the cumulative effects of greenhouse gas emissions of greenhouse gases and their impact on Native American land resources.
"It was a political decision made by a judge. I think it's a shame, "Trump told reporters.
The decision was a victory for environmental groups that sued the US government in 2017 after Trump announced the issuance of a presidential permit for the project. Tribal groups and ranchers have also spent more than a decade fighting the planned pipeline.
"The Trump administration has tried to impose this dirty pipeline project on the American people, but they can not 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 decision and has made no comment because of the ongoing dispute, a spokesman said.
The pipeline would deliver Alberta heavy crude oil to Steele City, Nebraska, where it would connect to refineries in the US Midwest and Gulf Coast, as well as Gulf export terminals.
Canadian oil producer shares Canadian Natural Resources Ltd and Cenovus Energy lost 2.7% and 2.2% respectively.
Canada is the main source of imported US oil, but congested Alberta pipelines, where tar-like bitumen is mined, have forced oil shippers to use more expensive railways and trucks.
Two pipeline projects were abandoned due to opposition and the Trans Mountain Line Project is still behind schedule even after the Canadian government purchased it this year to move it forward.
"One has to wonder how long investors will tolerate delays and whether the Canadian government will intervene again to protect the industry," said Sandy Fielden, a Morningstar analyst.
It is essential that Trudeau plan to build at least one pipeline, with a Canadian election scheduled for next fall.
"I am disappointed with the court's decision and will be in touch with TransCanada later today to show our support and understand the path forward for them," said Natural Resources Minister Amarjeet Sohi , in Edmonton, Alberta.
Alberta has felt the financial pressure and an industry source said the provincial government last month solicited proposals from companies to speed up crude transportation by rail. The source said the proposals included ideas such as buying cars and investing in loading terminals.
"I have never seen (the Government of Alberta) so active on this front," said the source, who asked not to be identified because the issue is politically sensitive. "It's a change."
Alberta Energy Minister Margaret McCuaig-Boyd said the province had sent a proposal to Ottawa to speed up the transportation of crude oil by rail, implying a provision of more tank cars.
"We give our resources cheap," she told reporters. "We need access to the market."
Neighboring Saskatchewan may lose $ 500 million in annual royalties if the reduction for Canadian crude remains strong, said Saskatchewan Energy Minister Bronwyn Eyre.
"People have put a lot of hope into this project (Keystone), so it's a major setback," she said in an interview.
Morris, in its decision, ordered the government to release a more in-depth environmental scan before project implementation. He added that the analysis did not fully examine the effects of the current oil price on the viability of the pipeline, nor could it fully model potential spills or offer mitigation measures.
This decision will likely delay Keystone for a year, said Dan Ripp, chairman of Bradley Woods Research.
Reuters
Report by Rod Nickel in Winnipeg, David Gaffen in New York and Brendan O & # 39; Brien; Roberta Rampton and Timothy Gardner in Washington, Julie Gordon in Vancouver and David Ljunggren in Ottawa; Edited by Jeffrey Benkoe, David Gregorio and Cynthia Osterman
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