Support Just the News

Help Fund Honest Journalism

Donate

Canceled Keystone Pipeline company suing U.S. for $15 billion

TC Energy is suing the Biden administration over a "breach of the United States' free trade obligations."

Updated: July 17, 2021 - 11:09pm

The Facts Inside Our Reporter’s Notebook

In a show of solidarity with environmental activists, President Joe Biden canceled the Keystone XL Pipeline on his first day in office this year, despite being the only Democrat candidate for president not to sign a declaration that he would veto the Trump administration's permit for the pipeline.

That decision may now be coming back to bite the administration through the courts.

The pipeline project received a permit to proceed from then-President Donald Trump in 2017. TC Energy (formerly TransCanada), the owner of Keystone, invested $9 billion in the pipeline, which was designed to carry 830,000 barrels of crude oil from Canada to Montana to Gulf Coast refineries. The project weathered years of environmental reviews to obtain federal approval.

Biden summarily revoked the permit via Executive Order 13990 in a matter of hours. TC Energy was not afforded any type of hearing or opportunity to defend the project or appeal the decision.

Twenty-three states, led by Texas and Montana, are suing the administration over the cancelation. Earlier this month, TC Energy filed a notice of intent to take legal action against the government. The company is seeking $15 billion in taxpayer-funded damages.

On July 2, TC Energy filed its notice with the U.S. Department of State to begin a legacy North American Free Trade Association (NAFTA) claim. The U.S. "has never lost before a NAFTA arbitration panel," the Wall Street Journal editorial board explained last week. "But TC Energy ... has a good case. To prevail, TC Energy will have to show that it had good reason in March 2020 to believe that its $9 billion investment was protected by the U.S. permit when it announced that it would 'proceed with construction.'"

Senior Manhattan Institute Fellow Mark Mills, an expert in energy and technology, recently said he views the immediate cancelation of the pipeline as a costly "virtue signal action." During a virtual fireside chat with Jason Kenney, the premier of Alberta, Canada, Mills pointed out that the cancelation will not lessen the amount of oil used by either country.

The oil "will be transported in an expensive way, costing money to your businesses and your tax base," Mills said to Kenney.

Without a pipeline, the oil will be transported by rail and truck, producing "higher emissions, higher environmental impact, and higher risks," he argued. According to Montana Attorney General Austin Knudsen, five of the six counties in the state that the pipeline would have traversed are designated "high poverty" areas. 

Despite Biden's concession to environmentalists on his first day in office, left-wing activists continue to stage demonstrations in an ongoing effort to disrupt the pipeline economy of the U.S. and Canada.

Just the News Spotlight