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A federal judge has ruled that a lawsuit brought by environmentalists over the Trump administration's approval of the Keystone XL pipeline can proceed.
The decision comes just two days after Nebraska regulators lifted the final regulatory obstacle to the project. It creates a potential roadblock for pipeline operator TransCanada's long-stalled project to transport heavy Canadian crude to U.S. refining hubs.
On Wednesday, U.S. District Judge Brian Morris rejected efforts by the Trump administration and TransCanada to have the lawsuit dismissed. The administration argued that no further environmental reviews were necessary when President Donald Trump approved construction of Keystone XL.
The environmentalists said the State Department and other agencies relied on outdated environmental reviews for the Keystone XL pipeline and did not consider relevant information when Trump issued his executive action in January.
"Once again, the courts are serving as a critical backstop against this administration's attempts to flout the law for the benefit of corporate polluters," said Doug Hayes, senior attorney at Sierra Club, in a statement.
The Sierra Club filed the lawsuit in March along with the Northern Plains Resource Council, Bold Alliance, Center for Biological Diversity, Friends of the Earth and the Natural Resources Defense Council.
TransCanada said in a statement, "We are in the process of assessing today's decision and preparing for the next steps in the process."
The Nebraska Public Service Commission on Monday approved a route through the state for the project after Nebraska landowners fought a years-long legal battle with TransCanada.
However, the commission did not approve TransCanada's preferred route, raising questions about previous federal environmental impact studies, which focused on the desired pathway. A State Department spokesperson told The Hill the agency is investigating whether the approval of a modified route would impact the federal permitting process.
TransCanada on Monday said it would review the commission's decision to determine how it impacts the project's cost and schedule.
The Obama administration refused to permit Keystone XL in 2015, in large part over environmental concerns. The proposed extension to the existing Keystone pipeline has been a lightning rod in a growing movement among environmentalists to mitigate the effects of global warming by preventing new energy infrastructure from being built.
Environmentalists oppose the project because it will encourage the development of Canada's oil sands, a type of oil resource that requires more energy to tap than conventional reserves. Backers of the project say it will reduce U.S. reliance on oil from the Middle East and allow the country to fulfill its energy needs from one of its closest allies.