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Keystone XL Oil Pipeline Progress Halted by U.S. Federal Court

Dan Murtaugh, Andrew Harris and Ben Livesey

(Bloomberg) -- TransCanada Corp.’s long-troubled Keystone XL oil pipeline project hit another roadblock as a U.S. District Court in Montana ruled it must wait for a further environmental review.

The court blocked any activity furthering the construction or operation until the U.S. State Department completes a supplement to a 2014 environmental impact statement that complies with the National Environmental Policy Act and the Administrative Procedure Act.

Key Insights

The 1,179-mile conduit from western Canada to the central U.S. has faced opposition almost since its inception, as environmentalists see it allowing the further expansion of carbon-intensive oil sands production in Alberta. President Donald Trump approved a permit for the pipeline in January 2017, reversing a 2015 decision by his predecessor Barack Obama.The pipeline would help carry 830,000 barrels of crude a day from Alberta to Steele City, Nebraska, where it could then move on to refineries in the central U.S. and Gulf Coast. Western Canadian Select crude oil is selling at about $18 a barrel as its discount to U.S. benchmark West Texas Intermediate as a lack of pipeline capacity bottlenecks production in Alberta.

Market Impact

U.S. benchmark WTI little changed after the decision, trading down 0.1 percent.No immediate impact in oil markets as the pipeline isn’t scheduled to come online for years regardless of the ruling.Canadian dollar extended its decline after the news, trading down 0.2 percent versus the dollar at $1.3182.

To contact the reporters on this story: Dan Murtaugh in Singapore at dmurtaugh@bloomberg.net;Andrew Harris in Washington at aharris16@bloomberg.net;Ben Livesey in San Francisco at blivesey@bloomberg.net

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Alexander Kwiatkowski

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