TransCanada Corp. has launched a free-trade agreement challenge claiming US$15 billion in damages and filed a constitutional lawsuit against the United States government over its rejection of the Keystone XL pipeline. The company’s lawsuit in federal court in Houston does not seek legal damages but wants the permit denial invalidated and seeks a ruling that no future president can block construction.
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Reaction is pouring in Wednesday after TransCanada announced its intention to seek legal action against the USA administration following the rejection of the Keystone XL pipeline in November.
On Wednesday, TransCanada said the $15-billion claim it will make through its NAFTA action represents the initial estimated loss of value of TransCanada’s investments.
“TransCanada has already lost the battle to get this dirty tar sands pipeline built”, said Dallas Goldtooth of the Indigenous Environmental Network.
A Calgary lawyer specializing in energy and pipeline regulations says there is merit to TransCanada’s arguments. “While the president has traditionally granted permits on narrow, established grounds, any such power does not exist when Congress has acted to the contrary or when the decision is based on the unprecedented and symbolic grounds that are the foundation of the denial in this case”. The 1,180-mile pipeline would carry bitumen from the oil sands in Alberta to U.S. Golf Coast refineries.
“This decision in South Dakota today further strengthens our commitment to Keystone XL, the safest and most environmentally sound way to transport needed Canadian and American oil to the people of the United States”.
Since October, Canada has been run by Prime Minister Justin Trudeau’s Liberals, who backed the pipeline but has said the Canada-U.S. relationship is “much bigger than any one project”. Environmentalists urged him to squash Keystone, and powerful labor unions pushed the administration to green-light the project and create tens of thousands of jobs in the process.
TransCanada plans to take an estimated $1.78 billion to $2.06 billion, fourth-quarter after-tax writedown tied to Keystone XL, according to a statement.
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It said that the Obama administration had instead bowed to pressure from environmental activists “even though the administration had concluded on six occasions that the pipeline would not have a significant impact on climate change”.
