TransCanada Sues Obama Administration Over Keystone Pipeline Rejection

The company behind the Keystone XL pipeline has taken legal action against the U.S. government for the Obama administration’s shootdown of the cross-border project.

The permitting process was delayed for years by the State Department. When they finally rejected the application in November, President Obama said the pipeline was nixed because it “would not make a meaningful long-term contribution to our economy,” “would not lower gas prices for American consumers,” and “shipping dirtier crude oil into our country would not increase America’s energy security.”

TransCanada responded today by filing a Notice of Intent to initiate a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA) on the basis that the denial was arbitrary and unjustified, the company said today. The company seeks more than $15 billion in damages.

They’ve also filed a lawsuit in federal court in Houston alleging that Obama overstepped his constitutional authority in blocking pipeline construction.

“TransCanada asserts the administration’s action was contrary to Congress’ power under the U.S. Constitution to regulate interstate and international commerce,” the company said. “While the president has traditionally granted permits on narrow, established grounds, any such power does not exist when Congress has acted to the contrary or when the decision is based on the unprecedented and symbolic grounds that are the foundation of the denial in this case. In early 2015, both houses of Congress passed a bipartisan bill approving the construction of Keystone XL, which the president later vetoed.”

North Dakota Sen. John Hoeven (R), a strong pipeline proponent, said Obama’s actions will now likely stick taxpayers with a big bill to the Canadian company.

“Unfortunately, the president’s arbitrary decision to turn down the Keystone XL pipeline means we do not have this important energy infrastructure project under construction, or the jobs and other benefits that go with it, but also the American taxpayer is now on the hook for potentially billions of dollars in fines and legal costs,” Hoeven said.

“The president denied the Keystone XL pipeline permit, even though Congress approved it on a bipartisan basis, all six states along the route approved it and the American people overwhelmingly support it.”