What’s Going on with Keystone XL?

Posted on February 20, 2019 by Mark Walker

As one of his earliest executive actions, and following through on campaign promises, on January 24, 2017, President Trump signed an Executive Memorandum (EM) inviting TransCanada to resubmit its application for an international border crossing permit for the Keystone XL pipeline.  To facilitate prompt action, the EM directed the Secretary of State to make a final decision on the application within sixty days utilizing “to the maximum extent permitted by law” the State Department’s January 2014 Environmental Impact Statement (EIS).

On March 24, 2017, a Presidential border crossing permit was issued for Keystone XL based upon the findings in the 2014 EIS.  The Indigenous Environmental Network and others immediately appealed in federal court in Montana (Case 4:17-cv-00029-BMM, District of Montana, Great Falls Divisions) claiming, among other reasons, that the record of decision (ROD) failed to adequately explain why the State Department had reversed Obama’s denial of the permit in 2015 because approval of the pipeline “would undermine U.S. climate leadership.”

On November 8, 2018, Judge Brian Morris issued a 53-page order which enjoined further construction activities.  This was based in part on the Court’s finding that the 2017 ROD did not provide a “reasoned explanation” for its reversal in policy course.While acknowledging the Trump Administration’s authority to change policy and reverse course, the Court held that, “when reversing a policy after an election, an agency cannot simply discard prior factual findings without a reasoned explanation.” 

The 2017 ROD attempted to justify the shift in policy by finding that, since 2015 “there have been numerous developments related to global action to address climate change, including announcements by many countries to do so” and “a decision to approve [the] proposed Project would support U.S. priorities relating to energy security, economic development and infrastructure.”  The Court held that this was not sufficient because it failed to adequately explain why the climate change findings in the 2015 ROD were no longer applicable.  Quoting from a U.S. Supreme Court decision, the Court held, “an agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past.”  

The Court also held that the use of the 2014 EIS violated NEPA in several respects, including: (1) it was based upon outdated oil market data (the 2014 EIS predicted $100 to $140 per barrel oil for the next 20 years); (2) it failed to evaluate the cumulative climate impacts from the Alberta Clipper pipeline; (3) it failed to complete the required cultural resources analysis; and (4) it was based on outdated information regarding the frequency of oil spills and, therefore, it also did not adequately assess the potential impact of oil spills on certain endangered species.

The Court’s order gives the Trump Administration the opportunity on remand to supplement the 2014 EIS to address the deficiencies and an opportunity to provide a reasoned explanation for its policy reversal.  The EIS supplementation will likely take several years to complete.  It looks like the Keystone XL border crossing permit is now into the next election cycle, and certainly more appeals will follow.



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