Keystone XL Hits Another Snag in Court

TC Energy Corp.’s plans for the Keystone XL oil pipeline hit another legal setback this week. On April 15 a United States court ruled against the U.S. Army Corps of Engineers’ use of a permit that lets new pipelines cross bodies of water.

Chief District Judge Brian Morris decided that the Corps did not sufficiently review risks to endangered species and related habitats, and it has to do so before the permit can apply to any project nationwide.

The decision has no impact on the parts of the pipeline that run across the Canada-U.S. border. The problem is now with obtaining permission to cross bodies of water for the rest of it.

The pipeline, which has faced delays for more than 10 years, is targeted to be 1,210-miles long and would be capable of delivering 830,000 barrels per day of oil from Hardisty, Alberta to Steele City, Nebraska where it will connect with TC Energy’s existing facilities to reach U.S. Gulf Coast refiners. Construction was due to start this spring and the pipeline was supposed to enter service in 2023.

After six months of negotiations, in late March Alberta agreed to support the pipeline’s construction with $1.5 billion in equity investment in 2020 followed by a $6 billion loan guarantee in 2021.

The project was also expected to create over 1,400 direct and 5,400 indirect jobs in Alberta during construction and would generate an estimated $30 billion in tax and royalty revenues for the province.

To contact the author, email bertie.taylor@rigzone.com.