The company behind the Keystone XL pipeline filed a $15 billion lawsuit Friday against the Obama administration under the North American Free Trade Agreement (NAFTA).
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TransCanada was quoted by Bloomberg as saying: “None of that technical analysis or legal wrangling was material to the administration’s final decision”.
President Barack Obama rejected the pipeline due to the perception among environmentalists that it would increase global warming.
Obama rejected the pipeline proposal last November.
On Friday, TransCanada filed a formal request under NAFTA seeking to recover costs and damages related to the thwarted pipeline project, following through on a threat it made in January.
TransCanada and the U.S. Department of Energy did not immediately respond to requests for comment.
Keystone XL would have added to the existing Keystone oil pipe system.
In documents filed 24 June with the International Centre for Settlement of Investment Disputes, the Canadian pipeline operator said an attempt to meet and settle the matter with officials in Washington in April were unsuccessful.
The Keystone XL was created to link existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in IL and, eventually, the Gulf of Mexico coast.
Environmental organisation Sierra Club executive director Michael Brune said: “Today, we have a prime example of how polluter-friendly trade deals threaten our efforts to tackle the climate crisis, spotlighting the need for a new model of trade model that supports rather than undermines climate action”.
TransCanada wants the U.S. government to compensate it for the almost US$8 billion spent during KXL’s seven-year review and money lost on now-useful assets throughout the country and lost economic returns.
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TransCanada claimed “The delay and the ultimate decision to deny the permit were politically driven, directly contrary to the findings of the administration’s own studies and not based on the merits of Keystone’s application”. But NAFTA has been a target of anti-free trade sentiment in the US recently.
