TransCanada launches legal action over Keystone XL rejection

The Canadian company that proposed the Keystone XL oil pipeline has filed a lawsuit over the USA government’s rejection of the project and says it plans a second legal challenge.

TransCanada said it filed a lawsuit in U.S. Federal Court in Houston that claims Obama’s decision to deny construction of the pipeline exceeded his power under the U.S. Constitution. – Reuters picMONTREAL, Jan 7 ― TransCanada will sue the United States government for US$15 billion (RM66.3 billion) for blocking its controversial project for an oil pipeline linking Canada with the Gulf of Mexico, the firm said on Wednesday.

The 1,900-kilometre pipeline has been in limbo for more than seven years, and at times has been an irritant in U.S.-Canadian relations.

The State Department, which reviews cross-border pipelines like Keystone, didn’t immediately respond to a request for comment.

“Despite the unjustified denial of a presidential permit by the current USA administration, TransCanada is evaluating all of its options in order to construct and operate Keystone XL”, said company spokesman Mark Cooper in an email.

The 1,179-mile pipeline project needed the administration’s sign-off because it would have crossed an worldwide border.

The Keystone Steele City pumping station, into which the planned Keystone XL pipeline was to connect to, is seen in Steele City, Neb.

TransCanada said it was “prepared for a lengthy process that could take several years”.

The project ran into opposition from environmental groups in the United States and blocking it became a litmus test of the green movement’s ability to hinder fossil fuel extraction in Canada’s oil sands.

Even though the State Department concluded that Keystone would not significantly increase North American greenhouse gas emissions, the president said it was important to send a signal to the rest of the world that the US was ready to lead the fight against global warming.

“Despite these actions, TransCanada remains fully committed to that project and I think these actions speak to that”, he said Wednesday.

The denial was a “symbolic gesture” to make the administration’s position on climate change conform to global perceptions, rather than on the merits of the pipeline, according to the press release.

The U.S. has not lost a NAFTA claim.

“We have undertaken a careful evaluation of the (U.S) administration’s action as it relates to NAFTA and believe there has been a clear violation of NAFTA in these circumstances”, TransCanada said.

“We’re aware of recent developments with this file and TransCanada”, he said.