TransCanada says it will file NAFTA claim over Keystone XL rejection

The company said it expects to record around 2.5 billion to 2.9 billion Canadian dollars in after-tax write-downs in its fourth-quarter results.

The proposed Keystone XL pipeline would have connected Canadian oil sands producers to USA refineries on the Texas Gulf Coast.

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.

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. They also accused the company of exploiting provisions in NAFTA.

The federal suit, which does not seek legal damages, wants the permit denial invalidated.

“It really just reiterates what we’ve said before, which is that KXL should be approved on its merit and it appears the decision that was taken by President Obama was a political decision, not an evidence-based decision on the State Department report”, he said.

Obama rejected Keystone in November, saying it would not make a meaningful long-term contribution to the US economy.

“The denial reflected an unprecedented exercise of presidential power and intruded on Congress’s power under the Constitution to regulate interstate and worldwide commerce”, TransCanada said. “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”.

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”. They had combined the issue of the pipeline to campaigns that are deliberated at combating climate change.

Canadian energy companies viewed the pipeline as the key to sustaining growth, since the United States buys the vast majority of petroleum produced by the oil sands.

Supporters of the pipeline said it would create thousands of USA construction jobs and reduce North America’s reliance on imported oil. Named as defendants in the lawsuit are: Secretary of State John Kerry; U.S. Attorney General Loretta Lynch; Homeland Security Secretary Jeh Johnson; and Secretary of the Department of Interior Sally Jewell.

Frank Benenati, a White House spokesman, didn’t respond to a request for comment.