A federal judge in Montana, US has annulled a key permit for the controversial $8bn Keystone XL cross-border crude oil pipeline project.

Montana Chief District Judge Brian Morris claimed that the US Army Corps of Engineers’ key water crossing permit, named Nationwide Permit 12, for the TransCanada’s Keystone XL project granted earlier violates federal law.

The court held that the Corps failed to adequately access the impacts of new pipelines on endangered species on the water bodies that it would cross.

US Army Corps of Engineers challenged by conservation groups

The latest setback for the project comes in response to a lawsuit filed in 2019 by Northern Plains and other conservation groups.

In the filing, the groups challenged the Corps’ failure to make an adequate assessment on the impacts of new pipelines, including Keystone XL, on local waterways, lands, wildlife, and communities.

Northern Plains said that the new federal ruling would block construction through almost 700 waterways along the Keystone XL pipeline route.

The court would also decide on whether to block the ongoing construction on the cross-border segment of the project that started last week, Northern Plains noted.

Northern Plains Resource Council member Dena Hoff said: “This ruling proves, once again, that we are a nation of laws no matter how many times powerful forces seek to undermine bedrock American legal protections.”

Recently, the project received receive $1.1bn in equity investment from the Albertan state to “substantially cover” the construction costs for 2020.

With a capacity of 830,000 barrels of heavy crude oil a day, the long-delayed 1,897km Keystone XL pipeline aims to supply crude from the Alberta oil sands in Canada to the US Gulf Coast refineries.