Keystone XL Decision Angers Alberta
The oil-rich Canadian province that was hit hard by Joe Biden’s move to kill the Keystone XL pipeline is considering seeking compensation from the U.S. through an old free-trade rule that’s still in place.
Alberta, which spent $1.2 billion (U.S.) to help jump start construction of the project, may resort to a North American Free Trade Agreement (NAFTA) provision allowing compensation claims for lost investments, Alberta Premier Jason Kenney said. While NAFTA was replaced by the United States-Mexico-Canada Agreement during the Trump administration, the rule remains in place during a phase-out period.
To “retroactively remove regulatory approval on the basis of which an investment was made is, in my view, a slam dunk case of a claim for damages through NAFTA under the investor protection provisions,” Kenney said on a Facebook. “We believe we have a very strong case for damages, and we’ll be continuing to work with TC Energy on that.”
Enjoying our insights?
Subscribe to our newsletter to keep up with the latest industry trends and developments.Stay Informed
The pipeline cancellation dealt another blow to an oil-dependent province that was already reeling from two crude-market crashes since 2014. TC Energy Corp.’s Keystone XL would ship more than 800,000 barrels a day of crude from Alberta’s oil sands to U.S. refineries.
The project’s demise prompted TC Energy to let go of about 1,000 union workers on both sides of the border.
After the U.S. president’s decision on his first day in office, Kenney said that Alberta would consider legal action and urged Canadian Prime Minister Justin Trudeau to impose trade sanctions if the Biden administration didn’t negotiate.
In 2016, TC Energy sought $15 billion in compensation under NAFTA after President Barack Obama rejected the project the previous year on environmental grounds, but the case was dropped after President Donald Trump approved the project early in his term.
You've reached the end of this article, but there's more to discover!
Subscribe to our newsletter for exclusive industry news and insights.Join Our Community
The Keystone XL pipeline had to be stopped, because a toxic bitumen spill into the Ogallala Aquifer would poison the drinking water for millions. That would be worse than a weapon of mass destruction and would destroy the agriculture of the Great Plains states.