TransCanada Corp. has filed a lawsuit in U.S. federal court and said it intends to initiate a claim under the North American Free Trade Agreement (NAFTA) over the Obama administration's rejection of the controversial Keystone XL oil pipeline. The company is seeking $15 billion damages.
On Wednesday, Calgary-based TransCanada filed a lawsuit in U.S. District Court for the Southern District of Texas in Houston, arguing that President Obama exceeded his authority when he rejected the pipeline last November (see Shale Daily, Nov. 6, 2015). TransCanada said only Congress, which approved construction of the pipeline earlier last year (see Shale Daily, Feb. 12, 2015), has the authority to decide the pipeline's fate.
TransCanada said it has also filed a notice of intent to initiate a claim under Chapter 11 of NAFTA, where it intends to recoup more than $15 billion "in costs and damages that it has suffered as a result on the U.S. administration's breach of its NAFTA obligations."
The company said it has so far invested C$4.3 billion ($3.1 billion) in the Keystone XL project, and expects to take an estimated C$2.5 billion to C$2.9 billion after-tax writedown in its 4Q2015 results.
Last November, TransCanada pulled its pending application with Nebraska regulators over a proposed route for the pipeline through the state, but it reserved the right to reapply (see Shale Daily, Nov. 18, 2015).
Keystone XL is proposed to run from Alberta, Canada, to the U.S. Gulf Coast and transport 830,000 b/d to U.S. refineries, including 100,000 b/d from the Bakken Shale (see Shale Daily, May 7, 2012).