TransCanada files claim under NAFTA over Keystone rejection

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. Its request for $15 billion under NAFTA reflects its desire to recover its investment in the pipeline.

“Stated simply, 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”, the NAFTA notice of intent states.

The Canadian company that proposed a 2,639-mile cross-border pipeline to the U.S. Gulf Coast is suing the Obama administration for rejecting it last November.

The State Department concluded Keystone XL would not significantly increase global greenhouse gas (GHG) emissions and that, in fact, alternative methods of oil transportation were more GHG intensive. Together the global pipeline would have carried up to 830,000 barrels of oil per day.

A depot used to store pipes for Transcanada Corp’s planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota November 14, 2014.

Chapter 11 of the NAFTA trade agreement between Canada, Mexico and the United States gives investors the right to make claims against governments.

The company in a statement acknowledged the U.S. had never lost a NAFTA lawsuit. The process could take years.

Supporters of the project long have maintained that Keystone was unfairly targeted and, for political reasons, was turned into a test of whether the president was serious about combating climate change.

The US State Department declined to comment.

In Ottawa, a spokesman for the Canadian foreign ministry said the government “has no role in this dispute”.

“Alberta’s trade with the U.S.is critical to our prosperity and we look forward to continuing to collaborate with our USA partners to create jobs and grow the economy on both sides of the border”.

The project had prompted opposition from Native American tribes, some landowners and environmental groups that were concerned the pipeline would contaminate water supplies and contribute to pollution.

In the end, Mr. Obama sided with environmental activists. “Rather, the denial was a symbolic gesture based on speculation about the (false) perceptions of the worldwide community regarding the administration’s leadership on climate change”.