TransCanada Asks US For $15 Billion Over Cancelled Keystone XL Pipeline

Environmentalists may have cheered President Obama’s decision to reject the Keystone XL Pipeline, but the Canadian company involved in the project now wants its money back.

TransCanada Corp. (NYSE:TRP) is taking steps to recoup some $15 billion from the U.S. in the wake of Obama’s decision last November to reject the Keystone XL pipeline, which would have transported oil from Canada to refineries in the United States.

TransCanada, who until November had operated under the assumption that the project would inevitably be approved, filed papers on Friday asking for arbitration under the North American Free Trade Act (NAFTA), maintaining that the United States put off the decision on the project for seven years, hampered by what it called “arbitrary and contrived” analyses and justifications.

The document said in part: ““None of that technical analysis or legal wrangling was material to the administration’s final decision…instead, the rejection was symbolic and based merely on the desire to make the U.S. appear strong on climate change, even though the State Department had itself concluded that denial would have no significant impact on the environment.”

The project was decried by environmentalists and others who said that the project had experienced past breaks in the pipeline. In May, the company stated that it had plans to replace sections of the pipeline in the U.S. to permit the product to flow at a higher capacity. Additionally, Secretary of State John Kerry had said that the pipeline was not in the best interests of the United States. Related: Russia-German Pipeline May Break Europe’s Energy Union

In January, TransCanada filed a notice of intent, in which it accused the United States of violating its obligations under NAFTA when it blocked a border-crossing permit for the pipeline.

TransCanada claimed “The delay and the ultimate decision to deny the permit were politically driven, directly contrary to the findings of the administration’s own studies and not based on the merits of Keystone’s application.”

The company has also filed a lawsuit in a federal district court in Texas, maintaining that the administration did not have the authority to block the pipeline.

By Lincoln Brown for Oilprice.com

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