United States District Court Judge Brian Morris issued an injunction Thursday preventing either Calgary-based TransCanada or the US federal government "from engaging in any activity in furtherance of the construction or operation" of the Keystone XL pipeline.
The judge's order was handed down as Calgary-based TransCanada was preparing to begin building the pipeline in northern Montana. Trump signed memoranda approving the Keystone XL and Dakota Access pipelines early in his presidency in January 2017, promising the projects would provide jobs and stimulate the economy.
The judge ordered TransCanada, the company behind the project, to halt work on Keystone while the USA government conducts a more thorough review of its impact.
"An agency can not simply disregard contrary or inconvenient factual determinations that it made in the past", Morris wrote Thursday.
The judge added that the Trump administration had not adequately accounted for potential declines in oil prices, which have been depressed since the crash of 2014, and which would have a major effect on the long-term viability of such a project.
Trump suggested that the government likely would appeal the case to the United States Court of Appeals for the Ninth Circuit.
No immediate impact in oil markets is seen, as the pipeline isn't scheduled to come online for years regardless of the ruling.
But the Trump administration dismissed environmental objections as roadblocks and claimed that there were "numerous developments related to global action to address climate change" in the years since Obama-era rejection of the project.
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Keystone XL would transport up to 830,000 barrels of crude oil per day from Alberta, Canada and Montana to Oklahoma and the Gulf Coast.
But on Friday McCuaig Boyd said Notley's New Democratic Party government had always supported the Keystone XL plan.
He said it could take several months before the State Department is able to issue a new environmental impact statement, putting a timeline for a decision "well into 2019".
"And frankly, approving this project would have undercut that global leadership", he said, adding that the "biggest risk" the USA faced was "not acting".
Other plaintiffs in the suit included The Center for Biological Diversity, Friends of the Earth, the Sierra Club, the Natural Resources Defense Council and Bold Nebraska.
With the Keystone XL once again on hold and a judge ordering the Trump administration to redo the reasoning behind its approval, the pipeline's future remains as uncertain as ever.
Since its conception, the pipeline has sparked a backlash from environmentalists and indigenous peoples who say it violates historical treaty boundaries and would bring environmental problems. "That's why we keep winning in the court".
The judge barred both TransCanada and the U.S. from "from engaging in any activity in furtherance of the construction or operation of Keystone and associated facilities" until the U.S. State Department completes a supplemental review.