The Great Falls Tribune reports U.S. District Judge Brian Morris' order on Thursday came as Calgary-based TransCanada was preparing to build the first stages of the oil pipeline in northern Montana. Trump signed an executive order two days into his presidency setting in motion a course reversal on the Keystone XL pipeline and the Dakota Access pipeline.
Morris' ruling requires the Trump administration to conduct a more complete review of the potential environmental impacts of the pipeline.
In Thursday's ruling, Morris ordered the government to issue a more thorough environmental analysis before the project can move forward.
"Rejecting the destructive Keystone XL pipeline is a victory for the grassroots activists who have worked against the Keystone XL pipeline for the past decade". The Obama administration stalled the project, only for Trump to revive it.
"The Trump administration tried to force this dirty pipeline project on the American people, but they can't ignore the threats it would pose to our clean water, our climate, and our communities", said the Sierra Club, one of the environmental groups involved in the lawsuit.
No immediate impact in oil markets is seen, as the pipeline isn't scheduled to come online for years regardless of the ruling.
Delays also may send TransCanada back to oil producers or Canada's government for assurances that the trouble of trying to push ahead with the pipeline will be worthwhile, according to Royal Bank of Canada's Robert Kwan.
TransCanada Corp's almost 1,200-mile pipeline has become one of the major battlegrounds in the climate change debate and, if completed, would carry an estimated 800,000 barrels per day from Canada's tar sands pits to Gulf Coast refineries in the US.
Morris, a former clerk to the late Chief Justice William Rehnquist, was appointed to the bench by President Barack Obama.
Morris found that the U.S. government's use of a 2014 environmental review to justify issuing a presidential permit for construction of the cross-border pipeline violated the National Environmental Policy Act, the Endangered Species Act and the Administrative Procedure Act. A presidential permit is required for infrastructure projects that cross worldwide borders.
In Thursday's ruling, Morris wrote that the State Department's analysis of potential environmental effects fell short of a "hard look" on the effects of current oil prices on the viability of Keystone, cumulative effects of greenhouse gas emissions, cultural resources and potential oil spills.
Construction on the USA section was due to begin next year. "As the court has made clear yet again, the Trump administration's flawed and unsafe proposal should be shelved forever".
"And frankly, approving this project would have undercut that global leadership", he said, adding that the "biggest risk" the USA faced was "not acting".
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