TransCanada says it intends to file a claim under Chapter 11 of the North American Free Trade Agreement in response to the USA government’s rejection of the company’s proposed Keystone XL pipeline.
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TransCanada, the company behind the Keystone XL pipeline, is suing the USA government because President Obama struck down the next step in the pipeline plan in November.
When they finally rejected the application in November, President Obama said the pipeline was nixed because it “would not make a meaningful long-term contribution to our economy”, “would not lower gas prices for American consumers”, and “shipping dirtier crude oil into our country would not increase America’s energy security”.
It’s seeking to recover more than $15 billion in costs and damages.
Most pipelines wait roughly a year and a half for permits to cross the US border, but Keystone’s review dragged on more than five times as long as average, according to an Associated Press analysis.
John Harter, a Tripp County landowner whose property would be crossed by the pipeline, said the decision is “basically just leaving me hanging” since TransCanada doesn’t have a presidential permit to move forward with the project.
The State Department did not immediately respond to BuzzFeed News’ request for comment.
The line would have carried as much as 830,000 barrels of oil a day (BPD), including roughly 100,000 BPD from North Dakota’s Bakken Shale.
TransCanada said in its complaint that the permit denial discriminated against it – noting that three other pipeline companies had been granted permits for similar operations carrying Alberta crude into the United States.
“We’re aware of recent developments with this file and TransCanada”, he said.
The company noted that the USA has never before lost a NAFTA claim, however, “we have undertaken a careful evaluation of the administration’s action as it relates to NAFTA and believe there has been a clear violation of NAFTA in these circumstances”.
TransCanada said it will also take an after-tax write down of C$2.5 billion ($1.78 billion) to C$2.9 billion in the fourth quarter after the permit denial.
The rejection of the project was seen as a victory for environmental advocates.
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Environmentalists Wednesday were quick to criticize TransCanada’s legal actions against the Obama administration.
