TransCanada launches legal battle over Keystone XL rejection

HOUSTON — TransCanada will launch a new round of legal battles over the Keystone XL pipeline, two months after U.S. President Barack Obama denied a key permit for the controversial project, the company said on Wednesday.

The Calgary, Alberta-based company filed a lawsuit in federal court in Houston, arguing that the President overstepped his constitutional authority when denied a cross-border permit for the pipeline in November.

Separately, TransCanada will initiate a $15 billion claim to recover costs and damages under a provision of the North American Free Trade Agreement. The company said it will argue the rejection was “arbitrary and unjustified.”

The company also said it expects to take an as much as CAD$2.9 billion, or about U.S. $2.1 billion, writedown as a result of the project’s cancellation.

Keystone XL, designed to span 1,179 miles and cross three states on its way to Steele City, Neb., would have sent bitumen extracted in Alberta along a cheaper route to the United States’ Gulf Coast.

Because the hydrocarbon is typically extracted through open-pit mining and energy-intensive steam-assisted techniques, environmentalists say it produces more carbon dioxide emissions over its entire life cycle, from production to eventual combustion. Strong opposition to the project eventually resulted in the administration’s rejection of the cross-border permit.

TransCanada Complaint January 6 2016