A U.S. court decision to block the Keystone XL pipeline is a “frustrating setback” and underscores the need to build pipelines within Canada’s borders, says Alberta’s energy minister.
Minister Marg McCuaig-Boyd also reiterated that Ottawa needs to increase crude-by-rail to deal with a price differential she described as “horrible right now.”
Alberta heavy oil producers are facing a wide price gap compared to their U.S. light oil counterparts — around US$40 to US$50 a barrel in recent weeks.
“We need to get more rail capacity,” McCuaig-Boyd said at a Friday news conference, reacting to a U.S. federal court decision in Montana that blocked the permit for the construction of Keystone XL and ordered officials to complete an environmental review.
“While that’s a temporary solution, the long-term solution is still to get pipeline access to help with the differential.”
McCuaig-Boyd said she hasn’t heard back yet from Ottawa on Alberta’s crude-by-rail proposal.
The 1,900-kilometre Keystone XL pipeline would begin in Alberta and shuttle nearly 830,000 barrels a day of crude through a half-dozen states to terminals on the Gulf Coast.
Environmentalists and tribal groups cheered Thursday’s ruling by a U.S. district judge in Montana, while President Donald Trump called it “a political decision” and “a disgrace.”
Trump has touted the $8-billion pipeline as part of his pledge to achieve North American “energy dominance” and has contrasted his administration’s quick approval of the project with years of delay under President Barack Obama.
The pipeline was first proposed by Calgary-based TransCanada in 2008. It has become the focal point of a decade-long dispute that pits Democrats, environmental groups and Native American tribes who warn of pollution and increased greenhouse gas emissions against business groups and Republicans who cheer the project’s jobs and potential energy production.
U.S. District Judge Brian Morris put a hold on the project late Thursday, ruling that the State Department had not fully considered potential oil spills and other impacts as required by federal law. He ordered the department to complete a full review. Environmentalists and Indigenous groups had sued to stop the project, citing property rights and possible spills.
TransCanada said in a statement that it was reviewing the judge’s 54-page decision. “We remain committed to building this important energy infrastructure project,” TransCanada spokesman Terry Cunha said.
The fight over the project has spanned several presidencies and involved standoffs between protesters and law enforcement.
After years of legal wrangling, Obama rejected a permit for the pipeline in 2015. The company responded by seeking $15 billion in damages.
Trump signed executive actions to again advance construction of the project in 2017.
TransCanada had recently announced plans to start construction next year, after a State Department review ordered by Morris concluded that major environmental damage from a leak is unlikely and could quickly be mitigated. Morris said that review was inadequate.
TransCanada has promised continuous monitoring and says automatic shut-off valves would help officials quickly identify a leak or rupture.
Becky Mitchell, chairwoman of the Northern Plains Resource Council, a plaintiff in the case, said her organization is thrilled with the ruling.
“This decision sends TransCanada back to the drawing board,” Mitchell said, calling the ruling “the results of grassroots democracy in action, winning for water and people.”
McCuaig-Boyd, who noted Alberta has no ability to appeal the court decision, said the province needs to “work within what we can control.
“We knew there would be setbacks in this project,” she said.
“This ruling by a foreign court underscores once again the urgent need for Canada to build pipelines within our own borders.”
She continued to tout the importance of the Trans Mountain pipeline expansion, which was stalled when a Canadian Federal Court of Appeal quashed the approval given to the project by the National Energy Board and cabinet in 2016.
Last month, Premier Rachel Notley said Alberta would let the federal process play out as Ottawa redoes Indigenous consultations and counts down to a February deadline for the NEB to review environmental concerns.
The United Conservative Party also slammed the U.S. court ruling on Keystone XL Friday.
“This ruling is a reminder of the foolishness of abandoning other viable pipeline projects, including both Northern Gateway and Energy East,” said UCP energy critic Prasad Panda. “We cannot afford to put all our eggs in one basket.”
— With files from The Associated Press
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