TransCanada sued US government to reverse Keystone XL pipelines rejection

By Staff Writer

Jan 07, 2016 10:52 PM EST

In an attempt to force President Barack Obama to reverse his decision to reject the Keystone XL pipeline, TransCanada Corp files a lawsuit against US government.

Reuters reported that the Canadian firm also seek $15 billion in damages from the North American Free Trade Agreement (NAFTA). The lawsuit was filed in a federal court in Houston, Texas. The lawsuit calls the rejection of the pipelines' construction unconstitutional.

The defendants against the lawsuit include Secretary of the Department of Interior Sally Jewell, US Homeland Security Secretary Jeh Johnson, Attorney General Loretta Lynch, and US Secretary of State John Kerry.

The company also filed separate action in the NAFTA, where it claimed that the rejection to build the pipeline was "arbitrary and unjustified." The US lawsuit seeks to invalidate the permit denial and to prevent any future president to deny construction.

However, its request to get $15 billion under NAFTA shows that it wants to recover its lost investments in the pipeline.

Duetsche Welle wrote that TransCanada has already invested $3.1 billion in its Keystone XL project. It will report a balance-sheet of $2.9 billion in after-tax write-offs due to the US government's blocking the project.

Meanwhile, the firm claimed in its NAFTA filing that it expects the XL pipeline development application to be granted since it had met the US State Department criteria that other cross-border pipelines got approved with.

"TransCanada's Keystone XL permit was denied because construction of the pipeline was not in the United States national interest," said Friends of the Earth President Erich Pica in a report by Telesur TV. "Instead of honoring President Obama's reasoned decision, TransCanada wants to turn to secretive trade tribunals to force American taxpayers to compensate it for a project that should never have been proposed."

President Obama rejected the oil pipeline November 2015, since he believes that it would not benefit the US economy in the long term. The XL pipeline was proposed seven years ago. It was supposed to link the pipeline networks from Canada to the United States, transporting oil from Alberta and North Dakota to Illinois, and even Mexico.

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