TransCanada says Pres. Obama’s denial of the Keystone XL application was unlawful
Calgary-based TransCanada Corp. (ticker: TRP) announced today that it will sue the U.S. government, alleging President Barack Obama exceed his power under the U.S. Constitution when he rejected the Keystone XL pipeline project. The suit was filed in the U.S. Federal Court in Houston, Texas, according to a press release from TransCanada.
“In its decision, the U.S. State Department acknowledged the denial was not based on the merits of the project,” said the company statement. “Rather, it was a symbolic gesture based on speculation about the perceptions of the international community regarding the Administration’s leadership on climate change and the President’s assertion of unprecedented, independent powers.”
TransCanada also filed a Notice of Intent to initiate a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA), under which TRP hopes to recover more than US$15 billion in costs and damages that it suffered as a result of the U.S. Administration’s breach of its NAFTA obligations.
The company filed the claims saying that other similar projects had been approved, including the Keystone pipeline, which was approved in under two years, and that President Obama’s decision was contrary to Congress’ power under the U.S. Constitution to regulate interstate and international commerce.
Both houses of Congress passed bills approving the construction of the Keystone XL pipeline in early 2015, before the project was vetoed by President Obama.
TransCanada expects $2.5-$2.9 billion in write-downs
As a result of the permit denial, TransCanada is reviewing the approximate C$4.3 billion (US$3.1 billion)carrying value invested in the project and related assets and expects that an estimated C$2.5-C$2.9 billion (US$1.78-US$2.06 billion) after-tax write-down will be recorded in the company’s fourth quarter results.