American Oil and Gas Reporter - July 2019 - 14

IndustryDigest
Court Ruling Favors
Keystone XL Pipeline,
But Hurdles Remain
Industry groups are hailing a federal
appeals court ruling that lifted an
injunction against the Keystone XL
Pipeline, but environmental opponents
vow to continue their fight to block the
proposed crude oil line.
On June 6, the U.S. Court of Appeals
for the 9th Circuit granted TransCanada
Corporation's and the U.S.
government's motions to vacate a
permanent injunction against
constructing the pipeline that was issued
last November by the U.S. District
Court for the District of Montana. In
granting the injunction, U.S. District
Judge Brian Morris found the State
Department's failure to complete a
supplement to Keystone XL's 2014 final
supplemental environmental impact
statement violated the Administrative
Procedure Act, National Environmental
Policy Act and the Endangered Species
Act (AOGR, December 2018, pg. 18).
A blog post by the U.S. Chamber of
Commerce's Global Energy Institute
greeted the news with the words,
"Hurdles removed!"
The Montana Petroleum Association
also cheers the ruling, observing that
Keystone XL applied for its first bordercrossing permit in 2008. "The
subsequent delays and court appeals
have become a battle ground for
political gamesmanship and conflicting
ideologies. The Keystone XL Pipeline
project is one example of how political
posturing has harmed our economy by
stifling employment and slowing
reasonable access to markets,"
complains MPA Executive Director
Alan Olson.
In November 2015, President Barack
Obama denied TransCanada's initial
application to construct the 1,187-mile
pipeline intended to carry 800,000
barrels a day of crude from Hardisty,
Alberta to Steele City, Ne., for eventual
shipment to Gulf Coast refineries, but
President Trump reversed that decision
in March 2017, which led to Judge
Morris' ruling.
Then in March of this year, Trump
revoked his 2017 permit and issued a
second presidential permit, which the
administration contended was not
bound by the U.S. District Court for the
District of Montana's injunction
14 THE AMERICAN OIL & GAS REPORTER

(AOGR, May 2019, pg. 28).
Nevertheless, sources note, hurdles
remain. Shortly after the 9th Circuit's
ruling, published reports indicate TC
Energy-In May, TransCanada formally
changed its name to TC Energy
Corporation-told shareholders the
litigation had caused Keystone XL to
miss the 2019 construction season.
However, on June 27, TC Energy
launched an open season to solicit
binding commitments for crude oil
transportation services on Keystone XL
from Hardisty to markets on the U.S.
Gulf Coast.
But, the U.S. Chamber predicts, "As
Keystone XL gets closer to construction,
we can expect more lawsuits and more
extreme measures by opponents hoping
to further delay the project."
Indeed, the Indigenous
Environmental Network, which is one
of the two primary plaintiffs in the U.S.
District Court for the District of
Montana case, says it already has
challenged Keystone XL's second
presidential permit in that same court,
alleging President Trump defied
previous court rulings against the
pipeline, which the group contends is
unlawful conduct subject to federal
court review under Article III of the
U.S. Constitution. ❒

Federal Judge Orders
Climate Studies For
Western State Leases
WASHINGTON-A federal judge has
ordered government agencies to
consider climate change impacts when
leasing 250 square miles of public lands
in Wyoming, Colorado and Utah for oil
and natural gas operations. Under the
judge's order, the Bureau of Land
Management must revise its
environmental assessment and findings
of no significant impacts (FONSIs) for
the leases and cannot issue new
Wyoming leases until it completes the
climate assessment.
In WildEarth Guardians v. Zinke,
filed in the U.S. District Court for the
District of Columbia, WildEarth
Guardians and the Physicians for Social
Responsibility assert BLM violated
federal law by not sufficiently
considering climate change.
The Western Energy Alliance,
Petroleum Association of Wyoming and

American Petroleum Association of
Wyoming intervened as defendants.
"BLM summarized the potential onthe-ground impacts of climate change in
the state, the region, and across the
county," U.S. District Court Judge
Rudolph Contreras wrote. "It failed,
however, to provide the information
necessary for the public and agency
decision makers to understand the
degree to which the leasing decisions at
issue would contribute to those impacts.
In short, BLM did not adequately
quantify the climate change impacts of
oil and gas leasing."
In March, Contreras blocked drilling
on 300,000 acres in Wyoming, saying
BLM failed to sufficiently consider the
impacts of climate change when it
auctioned the leases under President
Barack Obama in 2015 and 2016
(AOGR, April 2019, pg. 125). His order
required the agency to complete a new
environmental review of the impacts of
using fossil fuels.
In this lawsuit, the plaintiffs claim,
BLM's FONSIs accompanying the EAs
were deficient, as were the agency's
decisions to not require environmental
impact statements. According to court
documents, federal laws require an EIS
for any major federal action that will
significantly affect the quality of the
human environment.
Contreras rejected those arguments,
saying BLM considered the climate
change methodologies suggested by
WildEarth Guardians and Physicians for
Social Responsibility and explained
why it didn't use them, writing, "Those
explanations were not flawed."
"Ultimately, BLM is entrusted with
the responsibility for considering
various modes of scientific evaluation,
and it isn't required to accept every
possible method of analyzing data," the
judge stated, noting the agency was not
required "to follow (WildEarth's)
comments slavishly-it just (had) to take
them seriously."
However, the court said the National
Environmental Policy Act requires
federal agencies to conduct robust
analyses of greenhouse gas emissions
from oil and gas drilling and
downstream use, and BLM's EAs and
FONSIs for the Wyoming lease sales
were inadequate. Contreras declined to
void the leases, leaving them in place
while ordering BLM to cure
deficiencies in its documentation. ❒
American Oil and Gas Reporter - July 2019

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