Key U.S. oil pipeline company pulls support for controversial pipeline

Work has been halted for at least a week on the Trans Mountain oil pipeline in the Canadian province of British Columbia after it was revealed that Royal Dutch Shell withdrew support for the facility, causing an uproar in the province of British Columbia.

Shell had been working on an application for an oil export terminal in the disputed site, with the intention of shipping crude from oil fields in northeast B.C. to refineries in Washington State. In December, Shell said it would cancel its plans to build the terminal, as a result of a ruling from Canada’s Federal Court of Appeal. The decision put the government of British Columbia on the spot, as it faced the uncertainty of attempting to rebuild the plans of an energy company.

The federal government of Canada appeared to skirt around the opposition of B.C. as it “temporarily paused construction on its proposed oil pipeline expansion in northern British Columbia,” according to an online report Monday from The Globe and Mail.

In court documents filed earlier this month, Shell said it felt there were too many legal issues to work on before considering the energy terminal’s application. Shell expressed concern it would be hit with an unspecified sanction by the province, and wanted to assess the risks posed by operating in a court-ordered injunction that bar the B.C. government from interfering with the project.

Both Shell and the federal government of Canada have urged courts in Canada to review the decision to quash their pipeline plans, calling the ruling by the Federal Court of Appeal politically motivated.

“We don’t understand why they didn’t just move [the project] down the road,” Gordon O’Connor, Canada’s deputy minister of energy and natural resources, told reporters in early January. “I don’t think anybody in the industry thought that was a win for any proponent.”

The question of who has jurisdiction over oil-extraction and export has been an issue over the past several years in Canada, especially as some have called for setting up a coast guard on British Columbia’s rugged northern coast. The debate has pushed the federal government to seek to clarify the country’s environmental laws.

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