In its notice of intent to initiate the NAFTA claim, TransCanada said that the USA government concluded five times that the pipeline would not have a significant impact on greenhouse gas production, but still rejected the pipeline to appear strong on climate change. Its request for $15 billion under NAFTA reflects its desire to recover its investment in the pipeline.
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TransCanada has filed a lawsuit against the US Government to reverse President Barack Obama’s rejection of the $8bn Keystone XL pipeline that was planned to connect the Western Canadian Sedimentary Basin in Alberta to US refineries.
A legal dispute over the Keystone XL oil pipeline is giving opponents of a Pacific trade agreement a fresh argument in their effort to get Congress to kill the pact.
The decision, which came seven years after the company first submitted the project, marred US-Canada relations and angered many in the oil industry in both countries.
Omaha attorney Dave Domina, who waged a legal battle on behalf of Nebraska landowners opposed to the Keystone XL, said it is ironic TransCanada made its announcement on the same day oil prices hit an 11-year low, diving below $35 a barrel.
State regulators in South Dakota have again approved the section of the Keystone XL pipeline that would go through the state even though the pipeline project is now stalled at the federal level. The NAFTA tribunal process, which can not reverse the president’s decision, would likely be lengthy and expensive.
The project could yet feature in this year’s United States presidential election with Republican candidates vowing to revive the plans if they take the White House. He noted that courts have considered cross-border pipeline decisions before and have generally found they fall within the president’s discretion.
“We’re aware of recent developments with this file and TransCanada”, he said.
The lawsuit argues that the U.S. Constitution “expressly commits regulation of domestic and global commerce to Congress”, which had passed legislation authorizing the construction.
However, Canadian Green Party Leader Elizabeth May said she expects that TransCanada will lose its NAFTA claim if not the lawsuit too.
The rejection of the project was seen as a victory for environmental advocates.
The company also said it invested some $4.3 billion in the project before Obama denied the pipeline’s application on November 6, 2015.
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“The TPP would empower many more fossil fuel companies to follow TransCanada’s lead to ask unaccountable tribunals of private lawyers to order the US government to hand over our tax dollars for laws protecting our communities and the environment”. TransCanada’s common shares trade on the Toronto and NY stock exchanges under the symbol TRP.
