TransCanada initiates legal action over Keystone XL refusal

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CALGARY, A.B. — In response to the U.S. Administration’s decision to deny a Presidential Permit to Keystone XL, TransCanada says they have initiated legal actions and will be filing a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA), on the grounds that the denial was arbitrary and unjustified.

Global Affairs Canada states on their website that Chapter 11 of NAFTA ‘establishes a framework of rules and disciplines that provides investors from NAFTA countries with a predictable, rules-based investment climate’ and dispute settlement procedures.

Through the NAFTA claim, TransCanada will be seeking to recover more than US$15 billion in costs and damages –which is currently $21 billion — that it has suffered as a result of their breach of its NAFTA obligations.

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TransCanada says the State Department concluded Keystone XL would not significantly increase global greenhouse gas emissions. In fact, they assert alternative methods of oil transportation were more GHG intensive.

The corporation has also filed a lawsuit in the U.S. Federal Court in Texas, asserting that the President’s decision exceeded his power under the U.S. Constitution. Furthermore, in the federal court filing, TransCanada asserts the Administration’s action was contrary to Congress’ power under the U.S. Constitution to regulate interstate and international commerce.

In early 2015, both houses of Congress passed a bipartisan bill approving the construction of Keystone XL, which the President later vetoed.

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