Updated 4:40 p.m. | Posted 12:26 p.m.
An environmental impact statement must be completed for the controversial Sandpiper oil pipeline before Minnesota authorities can approve the project, the Minnesota Appeals Court ruled Monday.
The ruling (.pdf) overturned a June decision by the Minnesota Public Utilities Commission to grant the pipeline a so-called "certificate of need" that would have let Canadian pipeline company Enbridge move forward on the line.
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Enbridge first proposed Sandpiper in 2013 to carry 225,000 barrels per day of oil from North Dakota's Bakken fields, across northern Minnesota, to the company's hub in Superior, Wis.
Opponents say the company's preferred route threatens northern Minnesota's sensitive lakes, rivers and wetlands.
Enbridge has argued that sufficient environmental review will take place as part of the work to determine a final route for the pipeline.
However, the court on Monday wrote that because of the proposed pipeline's potential "significant environmental effects," state law requires an environmental impact statement before the commission can rule on need.
"If you're going to build an extensive project like this, 300 miles through the heartland of Minnesota's most pristine waters," said Richard Smith, President of Friends of the Headwaters, which brought the suit. "We thought it was absolutely critical that a full EIS be done."
Enbridge spokesperson Lorraine Little said that prior direction the company had received from the state indicated there already is sufficient environmental review within each phase of the project.
"Our position has always been the Sandpiper Pipeline Project is the safest and most environmentally sound transportation option for the movement of North Dakota crude petroleum while carefully balancing the needs and providing clear and direct benefits to the state of Minnesota," she said in a statement.
Several labor groups and local jurisdictions along the proposed route support the pipeline, which is expected to create 3,000 temporary construction jobs.
Kevin Pranis, organizing director of the Laborers Union in Minnesota and North Dakota, called the decision "a further postponement of a critical piece of infrastructure."
Last year the Public Utilities Commission took the unprecedented step of asking for an environmental review of six alternate routes to Sandpiper, a process that Enbridge officials said delayed the project by a year.
The appellate court ruling noted that this review was not meant to serve as a substitute for the more rigorous review needed to satisfy the Minnesota Environmental Policy Act, "and it cannot take the place of a formal EIS now."
Neither the company nor the PUC said whether it plans to appeal the court's decision. Both say they plan to evaluate their options for next steps.