TransCanada Corp.'s challenge to President Obama’s decision to reject a construction permit for the Keystone XL pipeline could keep the pipeline an issue in the upcoming presidential elections.
Construction groups and labor unions had pushed for the $3.3-billion project, saying it would create much-needed jobs and transport crude from Canada's Tar Sands region more safely to the U.S. than by rail. But critics said the pipeline would have spurred more development of Tar Sands crude oil, which, they said, causes more pollution than other types of fuel.
TransCanada said on Jan. 6 that the administration’s decision to deny a permit on the final 1,179-mile, unbuilt stretch of the pipeline from Alberta to Hardisty, Neb., was arbitrary and unjustified.
The Calgary-based company has launched a two-pronged plan against Obama’s Nov. 6. decision that the project was not in the national interest: filing a complaint under Chapter 11 of the North American Free Trade Agreement (NAFTA) and filing a lawsuit in federal court.
The energy giant also is seeking more than $15 billion in costs and damages that it claims it has suffered as a result of the U.S. administration’s “breach” of its NAFTA obligations.
The administration says it is on solid legal ground, but the legal proceedings could take months and stretch into the next presidential administration.
In denying the permit, the U.S. State Dept. said that although its supplemental environmental impact statement, completed in early 2014, showed that the pipeline would have a minimal impact on greenhouse gas emissions, rejecting the pipeline would carry an enormous symbolic message to the world, particularly going into the international climate change negotiations in Paris in late last year.
But TransCanada takes issue with the administration’s reasoning. In a Jan. 6 statement, TransCanada said that it had “every reason to expect its application would be granted as the application met the same criteria as the U.S. State Dept. applied when approving applications to construction other similar cross-border pipelines”—including the already completed portions of the Keystone pipeline.
In its filing in the federal district court in Houston, TransCanada claims that the president’s decision to deny the permit exceeded his constitutional power.
White House Spokesman Josh Earnest told reporters on Jan. 7 that Obama remains confident that his decision to deny the permit was lawful. Moreover, Earnest said that “we are confident that the decision … is entirely consistent with all of our international obligations, including our obligations under NAFTA.”
Environmental groups criticized TransCanada's attempt to revive the project.
But Brian Turmail, a spokesman for the Associated General Contractors of America, says that the pipeline's fate rests squarely on who is elected to be the next president. "If the country elects someone who understands the clear economic benefits of safely transporting energy from one of our closest allies vs. importing oil from less friendly regimes, then this pipeline could quite possibly be built."
He added, "But if we elect a president who would rather risk our energy independence and economic vitality for the sake of generating some environmentally friendly headlines—and forcing more oil to be shipped by rail which is more dangerous—then this project will remain dead."
