Keystone XL Pipeline Owners Seek $15 Billion in Compensation From US for Cancelation of Project

The developers of the Keystone XL pipeline, TC Energy Inc., are seeking $15 billion against the U.S. government in compensation for money already spent developing the canceled pipeline.

President Joe Biden killed the pipeline earlier this year, citing climate change, following a 13-year dispute lasting three presidential administrations.

According to a Nov. 22 press release, TC Energy filed a claim in one of the largest international trade disputes made against the United States that is being watched by corporations and in government on both sides of the U.S.–Canada border.

The Keystone Pipeline, which was still under construction upon its termination, was to bring 900,000 barrels a day of crude oil from Alberta to refineries on the U.S. Gulf Coast.

Originally approved during the Bush administration in 2008, it was rejected by former President Barack Obama in 2015 on environmental grounds. The pipeline project was then revived by former President Donald Trump before its permit was rescinded by Biden on his first day in office.

TC Energy stated that “The U.S. decision to revoke the permit was unfair and inequitable,” saying that it has a public responsibility to its “shareholders to seek recovery of the losses incurred due to the permit revocation,” but that it has no intention of ever reviving the pipeline.

“We’re not doing this for symbolic or political purposes. This is a business decision,” said Richard Prior, the company’s senior vice-president for liquids pipelines, in an interview with Bloomberg. “We had all the permits and requirements in place to start construction on the line, and did so, and we worked with federal and state regulators in both countries for a very long period of time. This is just about recovering that destroyed value of investment.”

TC Energy filed its formal arbitration claims under legacy provisions of the North American Free Trade Agreement, which allows foreign companies to challenge U.S. policy decisions and seek compensation for lost investments.

Unlike the old NAFTA rules that favor TC in this case, the new USMCA trade rules that replaced it limit the use of so-called investor-state dispute settlement systems.

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