A federal judge temporarily blocked construction of the controversial Keystone XL pipeline, ruling late Thursday that the Trump administration had failed to justify its decision granting a permit for the 1,200-mile long project created to connect Canada's tar sands crude with refineries on the Texas Gulf Coast.
TransCanada says it remains committed to the project despite the Montana judge's ruling that it must pass a further environmental review.
The court has asked the government to review its assessment and revise it, taking into account the changes in the oil markets since 2014, the latest in climate change, and the presence of "cultural resources" along the route of the pipeline that was planned to carry heavy oil from Alberta to USA refineries.
"An agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past, any more than it can ignore inconvenient facts when it writes on a blank slate".
Morris particularly criticized the Trump administration for ignoring the recognized effects of the pipeline on climate change.
Construction on the United States section was due to begin next year.
Under President Trump, the State Department wrote "there have been numerous developments related to global action to address climate change, including announcements by many countries of their plans to do so" since the Obama administration's decision two years earlier.
If constructed, the Keystone XL Pipeline would stretch from Hardisty, Alberta, to Nebraska, where it would connect to an existing pipeline going to the Gulf Coast.
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".
The project has met sustained opposition from environmental advocacy groups, who argue the pipeline would be especially damaging to the climate because it would mean extracting thick, low-quality oil from Canada's oil sands, with tree-cutting and energy consumption in the process.
"And frankly, approving this project would have undercut that global leadership", he said, adding that the "biggest risk" the USA faced was "not acting".
TransCanada said in a statement that it was reviewing the judge's 54-page decision.
Tom Goldtooth, executive director for the Indigenous Environmental Network said the ruling was a win for tribes, water "and for the sacredness of Mother Earth".
The ruling in Montana against Keystone XL is "eerily similar" to the Federal Court of Appeals ruling against the Trans Mountain pipeline, according to Chris Bloomer, Canadian Energy Pipelines Association president and CEO.
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.