President Donald Trump issued a new permit for\u00a0TransCanada Corp.\u2019controversial Keystone XL pipeline Friday, circumventing a court ruling that blocked a previous authorization by his State Department.<\/p>\n
The move aims to undercut legal challenges to the $8 billion project, including a November ruling by a Montana-based district judge that faulted the State Department\u2019s previous environmental analysis, according to a person familiar with the matter. It could pave the way for beginning some preliminary work, according to Clearview Energy Partners.<\/p>\n
\u201cIt looks like the intent is to wipe the slate clean and replace the previous presidential permit with this new one,\u201d Height Securities LLC analyst Katie Bays said. Keystone XL doesn\u2019t need the changes to the supplemental environmental impact statement \u201cbecause Trump invalidated that whole process and issued this new president permit.\u201d<\/p>\n
The pipeline, proposed more than a decade ago, would carry crude from Canada\u2019s oil sands to the U.S. Midwest. Trump\u2019s State Department approved the project in 2017 after President Barack Obama denied TransCanada a permit on grounds its oil would contribute to global warning.<\/p>\n
It\u2019s good news for Canada\u2019s energy producers after delays to planned expansions of the Trans Mountain pipeline and Enbridge Inc.\u2019s Line 3. The lack of pipelines is partially blamed for a slowdown in oil sands investment and the partial pullback of some international oil companies including Royal Dutch Shell Plc.<\/p>\n
Unlike the earlier State Department\u00a0permit, which was issued after a deep environmental analysis required under the National Environmental Policy Act, the new presidential permit is not directly tied to any such review. And the NEPA statute that generally compels environmental study of energy projects and major agency actions does not apply to the president.<\/p>\n
Pipeline developers are generally required to receive presidential permits for border-crossing facilities. The State Department has been tasked with vetting permit applications for oil pipelines since 1968, when an executive order put the agency in charge.<\/p>\n
But Trump still retains the authority to issue presidential permits himself, said the person, who asked for anonymity to discuss internal deliberations. And because Trump\u2019s permit is not subject to environmental review requirements in federal law, it effectively restarts the process and undercuts the Montana lawsuit.<\/p>\n
TransCanada, which is yet to make a final investment decision on the project, applauded the White House\u2019s action.<\/p>\n
\u201cPresident Trump has been clear that he wants to create jobs and advance U.S. energy security and the Keystone XL pipeline does both of those things,\u201d Russ Girling, president and chief executive officer, said in a statement.<\/p>\n
U.S. District Judge Brian Morris\u2019s November ruling found that the 2014 environmental assessment by the Obama administration fell short. Trump had used that review in a March 2017 decision allowing the project to proceed. Morris said the government must consider oil prices, greenhouse-gas emissions and formulate a new spill-response strategy before allowing the pipeline to move forward.<\/p>\n
Administration lawyers could file a motion seeking to dismiss the Montana case, which it has appealed to the 9th Circuit Court of Appeals.<\/p>\n