Imperial oil fails to overturn eco-ruling

 refinery crude oil Imperial Oil Ltd has failed in a court bid to reinstate a key permit for its planned Kearl oil sands project in Alberta, increasing the odds that the C$8 billion ($8 billion) development will be delayed. In dismissing Imperial's application on Wednesday, Federal Justice Douglas Campbell ruled that Canada's Department of Fisheries and Oceans was right in revoking its permit in March after another court sent Kearl's environmental approval back to regulators for explanation. Campbell agreed with Ottawa that the approval must be complete for the fisheries permit to be in effect. The demand for explanation from the panel, over the projected handling of greenhouse gases, nullified the authorization, he said in his written decision. Environmental groups, including the Pembina Institute, Prairie Acid Rain Coalition, Sierra Club and Toxics Watch Society of Alberta, opposed Imperial's application at a court hearing in Calgary last week. "The judge has upheld that it's not appropriate for a project to proceed based on an incomplete environmental assessment," Simon Dyer, the Pembina Institute's oil sands program director, said. "We're very pleased that Canada's environmental law has been upheld. I don't think we were that surprised by the decision." During the proceedings, Imperial's lawyer said the 300,000 barrel a day project could face a year or more delay without the permit being reinstated and work proceeding. Imperial spokesman Gordon Wong declined to say if the planned 2011 startup might be pushed back now. The company will keep working to secure permits for the project, located north of Fort McMurray, Alberta, Wong said. Kearl is one of more than $100 billion worth of oil sands developments on the drawing board or under construction. "We asked the court for clarity and we received clarity," he said. "In our minds, Kearl is an important project and this decision doesn't change that. We feel that Kearl is a significant undertaking that will have a positive economic effect on the Canadian economy." Imperial, which wants to develop Kearl in partnership with U.S. oil major Exxon Mobil Corp , needs the fisheries permit to disturb marshland that will make up part of the mining site. But in a successful appeal of the approval by the environmental coalition earlier this year, another federal judge, Justice Daniele Tremblay-Lamer, ordered the review panel to explain why it ruled that greenhouse gas emissions from the project would have minimal impact. Complicating issues, the panel issued its explanations for that decision last week. The environmentalists have since said it failed to answer the query on how Imperial will deal with a projected 3.7 million tons of carbon dioxide annually. The company's shares were off 12 Canadian cents at C$57.82 on the Toronto Stock Exchange on Wednesday afternoon. Exxon Mobil owns 69.6 percent of Imperial.