Newspaper article The Canadian Press

TransCanada Launches Double-Barrelled Legal Salvo over Keystone XL Rejection

Newspaper article The Canadian Press

TransCanada Launches Double-Barrelled Legal Salvo over Keystone XL Rejection

Article excerpt

Keystone XL rejection triggers legal salvo

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CALGARY - TransCanada launched a double-barrelled legal salvo Wednesday against the U.S. government over its rejection of the company's proposed Keystone XL pipeline.

The company said it intends to file a claim under Chapter 11 of the North American Free Trade Agreement in response to the decision, which it called arbitrary and unjustified.

The Calgary-based firm said it will be looking to recover US$15 billion in costs and damages as a result of what it says is a breach of NAFTA obligations.

TransCanada alleges that, as a signatory to NAFTA, the U.S. government failed in its commitment to protect Canadian investors and ensure the company was treated in accordance with international law.

In its notice of intent to initiate the NAFTA claim, TransCanada said that the U.S. government concluded five times that the pipeline would not have a significant impact on greenhouse gas production, but still rejected the pipeline to appear strong on climate change.

"Stated simply, the delay and the ultimate decision to deny the permit were politically-driven, directly contrary to the findings of the administration's own studies, and not based on the merits of Keystone's application," TransCanada says in its notice of intent.

"The politically-driven denial of Keystone's application was contrary to all precedent; inconsistent with any reasonable and expected application of the relevant rules and regulations; and arbitrary, discriminatory, and expropriatory.

"In short, the decision elevated perceptions over reality, which is the hallmark of a decision tainted by politics."

TransCanada said it has also filed a lawsuit in the U.S. Federal Court in Texas asserting that President Barack Obama's decision in November to deny construction of Keystone XL exceeded his power under the U.S. Constitution.

In its legal filing for that case, TransCanada said the presidential power Obama used to deny the pipeline is "unauthorized by statute, encroaches upon the power of the Congress to regulate domestic and foreign commerce, has been foreclosed by affirmative Congressional action, and unlawfully exceeds the powers granted to the president. …

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