Environmental groups had sued TransCanada and the U.S. Department of State in federal court in Great Falls.
In Thursday's ruling, Morris wrote that the State Department's analysis of potential environmental effects fell short of a "hard look" on the effects of current oil prices on the viability of Keystone, cumulative effects of greenhouse gas emissions, cultural resources and potential oil spills.
"This is a significant setback for TransCanada's Keystone XL pipeline project and big win for Indigenous defenders, the environment, and for the thousands of people who have been fighting this pipeline for almost a decade".
In doing so the administration overturned a ruling by then president Barack Obama in 2015 that denied a permit for the pipeline, largely on environmental grounds, in particular the USA contribution to climate change.
Morris particularly criticized the Trump administration for ignoring the recognized effects of the pipeline on climate change.
Also on Thursday, a federal appeals court ruled that President Trump can not immediately end the program, DACA, that shields from deportation young undocumented immigrants who were brought to the country as children.
Native tribes protest US President Donald Trump's decision to revive the Dakota Access project, and the Keystone XL pipeline. "The Trump administration tried to force this dirty pipeline project on the American people, but they can't ignore the threats it would pose to our clean water, our climate, and our communities". TransCanada, the Calgary-based group behind the project, did not respond to request for comment early Friday morning.
The groups argued the U.S. State Department violated several acts in issuing a presidential permit for the pipeline without a proper environmental assessment of the changed route.
TransCanada Corp's almost 1,200-mile pipeline has become one of the major battlegrounds in the climate change debate and, if completed, would carry an estimated 800,000 barrels per day from Canada's tar sands pits to Gulf Coast refineries in the US. It has become one of the most controversial oil projects in North America, but it is also one of the most important for Canadian crude oil producers hit by a significant pipeline capacity shortage.
"Rejecting the destructive Keystone XL pipeline is a victory for the grassroots activists who have worked against the Keystone XL pipeline for the past decade", Keever continued. In the USA, the pipeline would stretch 875 miles through Montana, South Dakota and Nebraska, with the rest continuing into Canada. The U.S. Obama said, was now a "global leader when it comes to taking serious action to fight climate change". The order came as a Canadian energy company prepared to assemble initial stages of the 1,200-mile long, cross-border project. He ordered the department to complete a full review.
Morris' order does not permanently extinguish hopes Keystone XL will go ahead, but it will require the administration to come up with a better explanation as to why it should proceed.