TransCanada Suing U.S. Over Rejection of Keystone XL Pipeline

Written by Sandy Williams

TransCanada says it intends to file a claim for more than $15 billion against the U.S. for what it calls the “arbitrary and unjustified” rejection of the proposed Keystone XL pipeline.

The claim, filed under Chapter 11 of the North American Free Trade Agreement, seeks to recover “costs and damages that it has suffered as a result of the U.S. Administration’s breach of its NAFTA obligations.”

Despite five studies in which the U.S. government concluded that the proposed pipeline would not have an impact on greenhouse gas production, the U.S. still rejected construction of the pipeline as political move to gain favor for the administration regarding climate change, claimed TransCanada.

“In its decision, the U.S. State Department acknowledged the denial was not based on the merits of the project,” said TransCanada in a press release. “Rather, it was a symbolic gesture based on speculation about the perceptions of the international community regarding the Administration’s leadership on climate change and the President’s assertion of unprecedented, independent powers.”

At the time of the decision, President Obama said, “America is now a global leader when it comes to serious action to fight climate change. Approving this project would have undercut that global leadership, and that’s the biggest risk we face: not acting.”

TransCanada also filed a lawsuit in the U.S. Federal Court of Texas alleging that President Obama’s denial of the project “exceeded his power under the U.S. Constitution” and “intruded on Congress’s power under the Constitution to regulate interstate and international commerce.

According to a TransCanada spokesperson the lawsuit does not name President Obama directly, instead naming Secretary of State John Kerry and other officials, because “the decision was made by the State Department, while acting under delegated authority from the president.”

TransCanada claims it had every reason to expect approval of the pipeline because it met the same criteria as other similar cross-border pipelines.

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