Oil giant files $15 billion claim against US government for rescinded Keystone XL permit

TC Energy Corporation, the Canadian energy company behind the Keystone XL pipeline, has just filed a $15 billion claim against the U.S. government accusing the U.S. of “violating free trade obligations by blocking further development of the tar sands oil project,” reports Common Dreams

On his first day in office, President Biden had taken action against the Keystone XL tar sand pipeline. He rescinded the “presidential permit” for the proposed pipeline, which was first introduced in 2008, that would have carried 830,000 gallons of crude oil from Alberta, Canada through Montana, South Dakota and Nebraska. Former President Trump reversed former President Obama’s 2015 rejection of the pipeline, but construction of the pipeline continued to stall because of legal challenges.

TC Energy had finally announced the pipeline was, in fact, officially dead sometime last month. According to Common Dreams,  “to recover economic damages” stemming from the Biden administration’s cancellation of the project, the fossil fuel giant on Friday filed a Notice of Intent with the U.S. State Department to initiate a legacy North American Free Trade Agreement (NAFTA) claim under the United States-Mexico-Canada Agreement (USMCA).

After a huge victory for climate activists and environmentalists, this news comes as a disappointing blow. 

As Common Dreams author Kenny Stancil writes, because investments in the Keystone XL pipeline predate USMCA, TC Energy’s lawsuit is still able to invoke NAFTA’s Investor-State Dispute Settlement (ISDS) clause, which allows foreign investors to sue governments for profits that are “lost” due to regulatory interventions. However, “TC Energy’s claim may now be weaker because the permit issued by the Trump administration explicitly stated that it could be rescinded, essentially at the president’s whim.”

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