The Canadian company that planned to build the Keystone XL Pipeline says the U.S. government owes them $15 billion dollars.
TC Energy said last week that it will file a legacy North American Free Trade Agreement claim through the new United States-Mexico-Canada Agreement “to recover economic damages resulting from the revocation of the Keystone XL project’s presidential permit.”
The Canadian province of Alberta, which has spent or pledged billions for the pipeline, plans to sign on as well, according to the Financial Post.
Presidential permits are required for cross-border projects such as the Keystone XL Pipeline, which would have crossed from Canada into Montana before heading through South Dakota.
The permit was rejected under Barack Obama, approved under Donald Trump and rejected again by Joe Biden.
Myanna Dellinger is a professor at the University of South Dakota who specializes in international public and business law.
“So in this case they’re claiming that the United States’ decision interfered with Canada and their Canadian companies’ legitimate interest in investing in this energy pipeline in its own country, in Canada in other words,” she said.
The U.S. has never lost a NAFTA claim specifically related to Chapter 11 investments and this claim is likely to fail as well, according to USD environmental law professor Sean Kammer.
He pointed to Donald Trump’s presidential cross-border permit that warns the document could be rescinded.
But it’s not impossible for TC Energy to win, Kammer said. The presidential flip-flopping could work for or against the company.
“There could be read into that a tacit acceptance of that on the part of Canada that its oil and gas developers might be subject to presidential whim,” he said.
The back and forth could alternatively be a sign that the U.S. treated TC Energy unfairly.
Kammer pointed to the original State Department report under the Obama administration. He said the report was flawed but found little environmental risk, which clashes with Obama’s decision to reject the permit.
TC Energy could also highlight how the Obama administration approved American fossil fuel projects while rejecting the TC Energy one.