TC Energy Wants $15B From the U.S. for Cancelling Keystone XL Pipeline

For the $15 billion that TC Energy Inc. spent trying to develop the Keystone XL pipeline, it has filed a formal arbitration request under NAFTA regulations.

Late Monday, the company announced that it had officially filed paperwork under NAFTA rules that allow for compensation for lost investment. Because it is a legacy case, and NAFTA was the trade law in effect when it began, Erin LeBlanc, a lecturer at the Smith School of Business in Kingston, Ont., says the case will proceed under NAFTA rules rather than CUSMA rules.

“It’s the largest claim for a Canadian organization against the U.S. government at $15 billion,” she said, citing the figure first reported by Bloomberg of how much in damages the company is seeking.

It was proposed during the Obama administration, but the application was ultimately rejected due to environmental concerns. Obama administration officials The project was then resurrected by President Trump before being sinked again by President Biden.

Early this year, on his first day in office, U.S. President Joe Biden symbolically ended the pipeline project that had been in the works under three different administrations for years, with the goal of transporting crude oil from Alberta to refineries on the U.S. Gulf Coast at a rate of 900,00 barrels per day.

TC Energy is suing to recover the money it spent on the project, but it has no plans to restart the pipeline now that it has been abandoned. “As a public company, TC Energy has a responsibility to our shareholders to seek recovery of the losses incurred due to the permit revocation, which resulted in the termination of the project,”

LeBlanc said she thinks the case has huge implications.

“Governments on both sides are going to look at it because of the amount, but other companies are going to be looking as to how it gets handled.” According LeBlanc the case has big implications.

She believes TC Energy has “valid claims” in the issue. Cancelling the pipeline undo “amounts to indirect expropriation without compensation. Their investment was brought down to a value of zero by one stroke of a pen.”

Trade lawyer Mark Warner says the company faces an uphill fight despite the facts being on their side.

“The United States has never lost any single case that’s been brought under NAFTA Chapter 11,” he said in an interview. “That’s not to say it’s impossible, but the cases that have succeeded have tended to succeed against Canada and Mexico.”

If the US government decides to settle for political reasons to avoid a long, protracted fight, Warner says politics may be TC’s best chance of claiming a victory.

“They’ve got deep pockets and they can wait the other party out, and they’ve had a pretty good track record of winning,” Warner said. “It’s always a possibility that the Biden administration says, ‘We don’t want to fight this,’ but I think that’s unlikely to happen.”

Original source material for this article taken from here