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TransCanada to File $15B Claim Over Keystone XL Rejection

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Obama exceeded Constitutional power, lawsuit claims.

TransCanada said it will file a claim under the North American Free Trade Agreement (NAFTA) in a bid to refute U.S. President Barack Obama’s rejection of the Keystone XL pipeline.

The company also filed a lawsuit in a Texas federal court claiming Obama “exceeded his power under the U.S. constitution” when he rejected the controversial $8 billion project. The 1,180-mile pipeline would carry bitumen from the oil sands in Alberta to U.S. Golf Coast refineries.

TransCanada officials said they want to recoup US$15 billion in costs and damages they say were incurred when Obama rejected the proposal in November.

The company maintains the rejection was not justified.

“TransCanada has been unjustly deprived of the value of its multibillion dollar investment by the U.S. administration’s actions,” according to a statement. “TransCanada asserts the U.S. administration’s decision to deny a presidential permit for the Keystone XL pipeline was arbitrary and unjustified.”

The press release said that the company filed a notice of intent to initiate a claim under NAFTA, Chapter 11, that “establishes a framework of rules and disciplines that provides investors from NAFTA countries with a predictable, rules-based investment climate” and sets out dispute settlement procedures.

When he rejected the pipeline, Obama said it would not serve the national interests of the U.S., although the country’s State Department concluded that the project would not have “significant impacts to the environment” and communities would benefit from tens of thousands of jobs and tax revenues.

TransCanada said it expected the project to get the go ahead because it met the same criteria as other pipelines that were approved, and that Obama overstepped his presidential authority by killing it.

“The denial reflected an unprecedented exercise of presidential power and intruded on Congress’ power under the Constitution to regulate interstate and international commerce,” TransCanada said.

The denial was a “symbolic gesture” to make the administration’s position on climate change conform to international perceptions, rather than on the merits of the pipeline, according to the press release.

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