TransCanada Corp. has filed a lawsuit against the Obama administration over the rejection of the company's Keystone XL pipeline project. The energy company also plans to file a claim under the North American Free Trade Agreement (NAFTA) for $15 billion in damages.
TransCanada spokesman Mark Cooper said in a statement that the company has undertaken careful evaluation of the administration's action and believe there has been a clear violation of NAFTA and the U.S. Constitution in the circumstances, according to Fox News.
The company said that the U.S. administration's decision to deny a presidential permit for the Keystone XL pipeline was arbitrary and unjustified. TransCanada said in NAFTA claim that it "had every reason to expect its application would be granted," after it had meet the same criteria the U.S. used to approve other similar cross-border pipelines.
According to Reuters, TransCanada's $8 billion Keystone XL was designed to link existing pipeline networks in Canada and the U.S. to bring crude oil from Alberta and North Dakota to refineries in Illinois and the Gulf of Mexico coast. The pipeline would move about 100,000 barrels of crude oil daily.
Canadian energy companies viewed the pipeline as the key to sustaining growth, since the U.S. is their major petroleum buyer.
But the project had prompted opposition from Native American tribes, some landowners and environmental groups that were concerned the pipeline would contribute to pullution.
President Obama blocked the pipeline plan in November, saying the cross-border pipeline would undercut the country's leadership on climate change. He added that the pipeline would neither be a silver bullet for the economy, nor the express lane to climate disaster proclaimed by others.
TransCanada's federal lawsuit filed in the U.S. Federal Court in Texas argues that Obama's decision to block construction of Keystone XL was unconstitutional as it exceeded his power under the U.S. Constitution. Other federal lawsuits have challenged the approval of presidential permits for the pipeline and mostly focused on environmental and alleged violations of administrative law.
According to CBC News, the Alberta government said in a statement that the government will be watching closely on a private sector decision made by TransCanada.
Alberta government said that the trade with the U.S. is critical to its prosperity and it look forward to continuing to collaborate with the U.S. partners to create jobs and grow the economy on both sides of the border.
