TransCanada to file multi-billion NAFTA claim over Keystone XL rejection

“The State Department itself concluded that Keystone XL would not significantly increase global greenhouse gas emissions, and that alternative methods of transportation would be more greenhouse gas intensive than the pipeline”, TransCanada spokesman Mark Cooper said in an email.

In November, Obama quashed the pipeline, declaring it would have undercut USA efforts to clinch a global climate change deal at the center of his environmental legacy. It claims the denial is without legal merit and that no further presidential action is necessary before construction of Keystone XL can begin.

Trudeau, though a supporter of Keystone, had promised a sharp break with the pro-oil policies of his conservative predecessor, Stephen Harper.

The permitting process was delayed for years by the State Department.

The company, which has spent $3.1 billion on the project already including on pipe and payments to landowners, said the $15 billion damage claim includes compensation for foregone tolls and other profit it otherwise would have earned.

TRP also intends to file a claim with NAFTA authorities saying the pipeline permit denial was “arbitrary and unjustified”; through the NAFTA claim, TRP says it seeks to recover more than $15B in costs and damages it says it has suffered as a result of the denial.

First proposed seven years ago, the project was created to transport crude oil from Canada’s oil sands region down to refineries on the U.S. Gulf Coast.

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Wednesday’s action by TransCanada also brings NAFTA and its Chapter 11 provisions into the spotlight.

“TransCanada, by launching this case, is going to basically stop all dialogue between the two governments on pipelines and projects like this and that’s going to continue even after there’s someone new in the White House”, Chris Sands of the Hudson Institute said.

TransCanada announced Wednesday it has started two legal actions in response to the U.S. president’s rejection of its permit application in November, weeks before the United Nations climate talks began in Paris.

“This won’t actually help build the pipeline, too late for that”, he said. The company expects that an after-tax write-down between CA$2.5 billion and CA$2.9 billion will be recorded in fourth quarter results. “Pipelines safest way to move energy in N. America, get more $ for SK oil”. Proponents touted job creation and said it would provide oil from a reliable US ally.