US stumbles in push to speed pipeline buildout

A judge's decision to block work on the Keystone XL crude pipeline shows the limits of President Donald Trump's efforts to "fast-track" oil and gas pipelines.

Sometimes speedy approvals by the administration lead to later delays as courts block projects because of incomplete reviews.

Last week, a judge scrapped required permits for Keystone XL, saying the US State Department failed to adequately analyze issues such as the effect of low oil prices and oil spill risks and did not provide a sufficient explanation for reversing an earlier finding under former president Barack Obama that the 830,000 b/d pipeline was not in the public interest.

If the ruling remains intact, pipeline developer TransCanada will face a hard path to hitting its target of starting construction early next year. The court decision is also providing ammunition to critics who say Trump's decision to set a 60-day deadline to approve the pipeline ended up backfiring by providing too little time to update initial analyses that were initially finished in 2014.

"This is definitely a direct result of the Trump administration trying to push things as quickly as possible without regard to following the law," said Sierra Club attorney Doug Hayes, who was involved in one of the lawsuits challenging the permit.

Keystone XL is but the latest project to face legal setbacks over permits the administration has approved. The 1.9 Bcf/d Mountain Valley and the 1.4 Bcf/d Atlantic Coast gas pipelines were each forced to halt construction in some areas after courts threw out key permits, contributing to delays and cost overruns now estimated at $900mn and $2bn, respectively.

Trump pushed to expedite permitting early in his term, through efforts such as seeking a two-year deadline to approve most infrastructure projects. Last year he said he took "historic steps" to speed pipeline approvals and touted his personal intervention to rapidly approve Keystone XL.

"We got it approved. And we got it approved fast," Trump said.

But environmentalists say the focus on speed is generating administrative records that fall short on the details demanded by laws such as the National Environmental Policy Act and the Administrative Procedure Act. The White House did not respond for comment.

"It is yet another case of an attempt to cut corners and skirt legal obligations, which is really not a way of expediting projects," Natural Resources Defense Council's Canada project director Anthony Swift said.

Pipeline developers reject the contention that permitting has been rushed. Dominion Energy, which is developing the Atlantic Coast pipeline, says the project went through an exhaustive review that took four years to complete. The company says federal agencies have "diligently addressed" errors that courts have found with a few of the permits.

EQT, which is developing the Mountain Valley pipeline, and TransCanada did not respond for comment.

The permitting push has succeeded for other projects. Trump signed an order in early 2017 seeking expedited approval for the 525,000 b/d Dakota Access pipeline, helping it start service about four months later. The pipeline was allowed to stay open even after a judged ordered a redo for part of the permit. The pipeline's developer Energy Transfer Partners says the order was "instrumental" in finishing the pipeline.