Canadian Think Tank: Government Should Back U.S. In TC Energy Pipeline Lawsuit

Canada shouldn’t back Canadian pipeline company TC Energy in its lawsuit against the United States, a new report from a Canadian think tank suggested.

In the $15 billion lawsuit that TC Energy has filed against the United States for the Biden Administration’s cancellation of its crude oil cross-border pipeline expansion project known as the Keystone XL pipeline, Ottawa should back the United States, the Canadian Centre for Policy Alternatives recommended.

“Though the TC Energy dispute pits a Canadian company against the U.S. state, it does not follow that it is in Canada’s interest for TC Energy to prevail,” the report says, adding that “The Keystone XL case is a clear example of a company wanting to be compensated for making a risky bet.”

That risky bet refers to former President Donald Trump getting re-elected in 2020.

TC Energy originally proposed the expansion project back in 2008 in hopes of moving more than 800,000 barrels per day of tar sands oil to Gulf Coast refineries in Texas. President Obama denied the necessary permit for the project in 2015. President Trump granted it. Then President Biden revoked that permit the first day he served in office as President. TC Energy officially mothballed the project in June 2021. But the company is looking to recoup its costs from the United States.

TC Energy is hoping to recoup the costs under the NAFTA agreement that expired in 2020, arguing that the project originally dates back to 2008. NAFTA had a three-year grace period for lodging disputes, which was up on April 30—after TC Energy filed its dispute.

The United States is arguing that the Biden Administration revoked the permit after NAFTA expired.

The report suggests that Canada should actively support the United States in the case and not sit idly by, which would be tantamount to suggesting the U.S. position in the matter “is not credible.”

By Julianne Geiger for Oilprice.com

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