13.01.16. Keystone XL developer TransCanada is taking legal action against President’s Obama’s denial of permit for the US$8 billion pipeline.
The US President’s decision against the pipeline, which is slated to stretch 1,179 miles from east-central Alberta, Canada, to the Texas Gulf Coast, was hailed late last year by green lobbyists as a victory against the further exploitation of Alberta’s tar sands.
However, Trans Canada has now launched a legal process challenging that decision under the North American Free Trade Agreement (NAFTA) as well as initiating Constitutional litigation against the US Administration.
The NAFTA claim seeks recovery of the billions of dollars of damages that TransCanada says it has suffered as a result of the US Administration’s breach of its NAFTA obligations. It specifically asserts that TransCanada had every reason to expect its application would be granted, as the application met the same criteria the US State Department applied when approving applications to construct similar cross-border pipelines, including the existing Keystone Pipeline, which has safely transported more than 1.1 billion barrels of Canadian and American oil through Canada and the United States.
The Constitutional challenge, filed in the US Federal Court in Texas, alleges that the permit denial reflected “an unprecedented assertion of Presidential power” and that it intruded on the power of the US Congress under the Constitution to regulate interstate and international commerce. The federal court suit does not seek damages, but rather a declaration that the permit denial is without legal merit and that no further Presidential action is required before construction of the pipeline can proceed.
A full analysis of the latest development in the Keystone XL story is feature in the upcoming issue of Storage Terminals Magazine.
13th January 2016
