U.S. Court Rules Against Permit for Keystone XL

WINNIPEG, Manitoba (Reuters) — A U.S. court on Wednesday ruled against the U.S. Army Corps of Engineers' use of a permit that allows new energy pipelines to cross water bodies, in the latest setback to TC Energy Corp's plans to build the Keystone XL oil pipeline

Montana Chief District Judge Brian Morris ruled that the Corps violated federal law by failing to adequately consult on risks to endangered species and habitat, and it must comply before it can apply the nationwide permit to any project.

Such permits are a means of streamlining the permitting process for certain projects, although the Army Corps can also issue permits case by case. Nationwide Permit 12, which governs projects such as pipelines and utility lines, must be reissued every five years or left to expire.

The ruling does not affect current work on a span of the $8-billion Keystone XL pipeline across the Canada-U.S. border, but it does raise questions about securing water-crossing permissions for the rest of the route, said Jared Margolis, senior attorney with the Center for Biological Diversity, one of plaintiffs.

"Most of the rest of the project has water crossings everywhere (so) it does affect construction overall," Margolis said.

The ruling requires additional review for two specific river crossings, said Kavi Bal, spokesman for the Alberta energy minister. 

"This additional consultation and review can take place while TC Energy proceeds with construction on the many other segments of the project," he said.

Keystone XL, which would carry 830,000 barrels per day of crude from Alberta to the U.S. Midwest, has been delayed for more than a decade by opposition from landowners, environmental groups and tribes, but construction was finally supposed to start this spring. 

Alberta in March said it would invest $1.1 billion in Keystone XL and back TC Energy's $4.2 billion credit facility to get the project built.

The U.S. Army Corps could not be reached for comment.

Northern Plains Resource Council and other activist groups challenged the Corps' reissuance of a nationwide permit in 2017.

TC Energy is reviewing the ruling, said Terry Cunha, spokesman for the Calgary, Alberta-based company.

"We remain committed to building this important energy infrastructure project," said Cunha.

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