Keystone XL will transport crude oil from Hardisty

A federal judge in the US state of Montana has blocked the construction of the proposed $8bn Keystone XL oil pipeline, which will carry oil from Canada to the US.

The US District Court for Montana judge Brian Morris has ruled that the administration did not adequately consider the cumulative effects of greenhouse gas emissions and the impact on Native American land resources before approving the pipeline project last year.

The 36in-diameter, 1,200-mile Keystone XL pipeline will offer connectivity to refineries in the Gulf Coast and transport crude oil from Hardisty, Alberta, Canada, to Steele City, Nebraska.

The US section of the 830,000bbl/d pipeline would pass through Montana and South Dakota.

“Pipeline operator TransCanada has stated that it is committed to proceeding with the development of the project.”

Environmental groups have been against the project for more than a decade. The previous administration under President Barack Obama did not approve the project considering the opposition to the project and the environmental concerns surrounding it.

However, the project is being supported by the Canadian Federal Government as a key infrastructure development needed to provide greater market access to oil producers in the country.

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Producers are reportedly lamenting a lack of pipeline infrastructure in the country leading to clogged pipelines, which subsequently resulted in steeper discounts on Canadian oil.

Pipeline operator TransCanada has stated that it is committed to proceeding with the development of the project. The company is yet to make a final investment decision (FID) on the project.

Earlier this month, Reuters reported that TransCanada is considering joint ventures and divestments to secure funds for the construction of the pipeline.

Canada Natural Resources Minister Amarjeet Sohi was quoted by the news agency as saying: “I am disappointed in the court’s decision and I will be reaching out to TransCanada later on today to show our support to them and understand what the path forward is for them.”

TransCanada aims to begin pipeline construction next year.

Another major project that has been facing legal issues is the Trans Mountain pipeline project, which connects Alberta to Burnaby, British Columbia (BC). In August, Canada’s Federal Court of Appeal cancelled the approval given by the government to the Trans Mountain pipeline expansion project.