TransCanada filed a federal lawsuit Wednesday in Houston alleging
President Barack Obama's decision in November to kill the pipeline
exceeded his power under the U.S. Constitution.
The company also announced the same day that it will submit a separate
petition seeking the billions in damages, alleging the U.S. breached its
obligations under the North American Free Trade Agreement.
In November, Obama quashed the pipeline, declaring it would have
undercut U.S. efforts to clinch a global climate change deal at the
center of his environmental legacy. The president said he agreed with a State Department conclusion that Keystone wouldn't advance U.S. national interests.
"TransCanada has been unjustly deprived of the value of its
multi-billion dollar investment by the U.S. Administration's action,"
TransCanada said in a statement. "As the administration candidly
admitted, its decision was not based on the merits of the project.
Rather, the denial was a symbolic gesture based on speculation about the
(false) perceptions of the international community regarding the
administration's leadership on climate change."
In its lawsuit, TransCanada alleges Obama's decision exceeded his powers
as president and infringed upon Congress' power under the Constitution
to regulate interstate and international commerce.
The White House and the State Department both declined to comment on the lawsuit or the NAFTA challenge.
The lawsuit does not seek any monetary damages but asks for a ruling
that the denial of the pipeline permit was without legal merit and that
the federal government officials named in the lawsuit not be allowed to
enforce Obama's decision to not proceed with the pipeline. Named as
defendants in the lawsuit are: Secretary of State John Kerry;
U.S. Attorney General Loretta Lynch; Homeland Security Secretary Jeh
Johnson; and Secretary of the Department of Interior Sally Jewell.
TransCanada said it plans to submit a separate petition that alleges the
U.S. breached four articles under NAFTA — which governs trade between
the U.S., Canada and Mexico — that provide financial protections for all
Canadian investors.
"The denial was based on politics, not the merits of the application,"
attorneys for TransCanada said in a notice they filed with the State
Department on Wednesday that the company will submit a claim of
arbitration under NAFTA and ask for more than $15 billion in damages.
TransCanada first applied for Keystone permits in September 2008 —
shortly before Obama was elected. As envisioned, Keystone would snake
from Canada's tar sands through Montana, South Dakota and Nebraska, then
connect with existing pipelines to carry more than 800,000 barrels of
crude oil a day to specialized refineries along the Texas Gulf Coast.
Most pipelines wait roughly a year and a half for permits to cross the
U.S. border, but Keystone's review dragged on more than five times as
long as average, according to an Associated Press analysis.
Republicans, Canadian politicians and the energy industry argued the
pipeline would create thousands of jobs and inject billions into the
economy. But Democrats and environmental groups latched onto Keystone as
just the type of project that must be phased out if the world is to
seriously combat climate change.
By: Juan A. Lozano (Associated Press).
Contributions: Josh Lederman (Associated Press).
Review: Emerging Market Formulations & Research Unit, Flagship Records.
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