TransCanada files federal lawsuit over Keystone XL rejection

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”.

CALGARY/WASHINGTON TransCanada Corp sued the U.S government on Wednesday to reverse President Barack Obama’s rejection of the Keystone XL pipeline, and also plans to seek $15 billion in damages from a trade tribunal.

The company said it intends to file a claim under Chapter 11 of the North American Free Trade Agreement in response to the decision, which it called arbitrary and unjustified.

“This case challenges the president’s assertion of unilateral power to prevent the domestic and worldwide commerce reflected in the development and operation of a major USA oil pipeline extending overseas from established domestic oil pipeline systems”, the federal court filing states. 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.

“This isn’t going to get the pipeline built”, he said.

“Shipping dirtier crude oil into our country would not increase America’s energy security”, said Obama.

A fellow with a Washington-based think-tank says the move by TransCanada may have been more effective once Obama was out of office.

A Calgary lawyer specializing in energy and pipeline regulations says there is merit to TransCanada’s arguments.

Some environmental groups, landowners and First Nations collectively slammed the legal actions as “the corporate equivalent of a temper tantrum”.

“The NAFTA claim asserts that TransCanada had every reason to expect its application would be granted as the application met the same criteria the U.S. State Department applied when approving applications to construct other similar cross-border pipelines – including the existing Keystone pipeline, which was approved in under two years, in contrast with the seven years the administration took to make a decision on Keystone XL”, TransCanada said in a news release.

The pipeline was expected to bring more than 800,000 barrels of oil daily to U.S. refineries.

TransCanada said it is prepared for the lengthy process, but acknowledged that the United States has never lost a dispute under NAFTA.

TransCanada plans to take an estimated C$2.5 billion to C$2.9 billion ($1.78 billion to $2.06 billion) after-tax writedown tied to Keystone XL, according to a statement.

Anthony Swift, director of the Canada Project at the Natural Resources Defense Council, said TransCanada was “wrong to try to force American taxpayers to pay for its mistakes”.

South Dakota commissioners voted Tuesday to accept TransCanada’s guarantee that it can complete the project while meeting the conditions of the initial permit.