White House Issues New Permit for Keystone XL Pipeline

• The new permit circumvents a court order by a Montana Judge in November that faulted the State Department’s previous environmental analysis.
• This could pave the way for beginning some preliminary work, according to Clearview Energy Partners.
• The Keystone XL is an $8 billion project.

The pipeline, proposed more than a decade ago, would carry crude oil from Canada’s oil sands to the U.S. Midwest. Trump’s State Department approved the project in 2017 after President Barack Obama denied TransCanada a permit on grounds its oil would contribute to global warning.

It’s good news for Canada’s energy producers after delays to planned expansions of the Trans Mountain pipeline and Enbridge Inc.’s 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.

Unlike the earlier State Department permit, which was issued after a deep environmental analysis required under the National Environmental Policy Act (NEPA), 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.

Trump still retains the authority to issue presidential permits himself, and because Trump’s permit is not subject to environmental review requirements in federal law, it effectively restarts the process and undercuts the Montana lawsuit.

Although the move may help resolve concerns in Montana that focused on the State Department’s environmental review, it does little to address a case before Nebraska’s Supreme Court, which has yet to rule on an opposition challenge to the state Public Service Commission’s approval of an alternate route to the path championed by TransCanada. TransCanada also appears to need multiple water quality permits for the project in South Dakota, according to Clearview.

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