TransCanada files $15B XL claim against US
GARY PARK For Petroleum News
TransCanada has shed its cool and calm exterior by claiming US$15 billion in damages from the Obama administration’s rejection of the Keystone XL pipeline.
In applying for arbitration under the North American Free Trade Agreement, TransCanada has argued its proposal for the pipeline was delayed more than seven years through a succession of “arbitrary and contrived” analyses and justifications.
It said the final decision by the White House 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 (in five environmental impact assessments between 2008 and 2015) that denial would have no significant impact on the environment.”
In a 42-page filing, the company said the U.S. government “ultimately denied Keystone’s application, not because of any concerns over the merits of the pipeline, but because President Obama wanted to prove his administration’s environmental credentials to a vocal activist constituency that asserted the pipeline would lead to increased production and consumption of crude oil and, therefore, significantly increased greenhouse gas emissions.”
A three member panel will determine, in what TransCanada expects will be a lengthy process, whether the company was treated unfairly when Obama rejected Keystone XL last Nov. 6.
TransCanada said six months ago it would seek US$15 billion in compensation over the US$8 billion project because it has been left with billions of dollars of worthless assets and because of lost economic returns.
TransCanada said a negotiated settlement is still possible, although its efforts in recent months to reach an amicable agreement have failed.
Sierra Club Executive Director Michael Brune said TransCanada’s efforts to make U.S. taxpayers hand over US$15 billion “because the company’s dirty Keystone XL pipeline was rejected shows exactly why NAFTA was wrong and why the even more dangerous and far-reaching Trans-Pacific Partnership must be stopped.”
“The TPP would empower thousands of new firms operating in the U.S., including major polluters, to follow in TransCanada’s footsteps and undermine our critical climate safeguards in private trade tribunals.”
But Obama told a news conference in Germany three months ago he is confident that, regardless of opposition from many Democratic lawmakers, that he can gain ratification of TPP once the heat from the U.S. primary election season cools off.
The Obama administration has insisted there will be adequate protections in the TPP to prevent the arbitration process from being exploited.
Since NAFTA was implemented in 1994 corporate claims against the U.S. have been rare and the U.S. has established a strong record of fending off those disputes.
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