TC Energy's bid for a $15 billion payout over the canceled Keystone XL pipeline project has hit a wall. A trade tribunal has dismissed the company's claim, marking a significant setback for the Canadian energy giant. The decision came after a lengthy legal battle that began when President Joe Biden revoked the project's permit on his first day in office-as promised-halting construction and sparking TC Energy's compensation demand under the North American Free Trade Agreement (NAFTA).
The tribunal, operating under the US-Mexico-Canada Agreement (USMCA), determined that TC Energy did not meet the necessary criteria to qualify for the damages it sought. The claim argued that the US government's decision to revoke the permit was unjust and had caused significant financial harm to the company. However, the tribunal found that the permit's revocation was within the US's rights and did not constitute a breach of NAFTA or USMCA provisions.
TC Energy, which has already incurred substantial losses from the halted project, expressed disappointment with the ruling. The company had invested heavily in Keystone XL, which was designed to transport oil from Alberta's oil sands to refineries on the US Gulf Coast. The cancellation affected TC Energy's bottom line and had wider implications for the North American energy market and US-Canada trade relations.
The decision serves as a reminder of the uncertainties inherent in large-scale infrastructure energy investments.
It is unclear if TC Energy will pursue further legal action over the Keystone XL matter.
In 2022, after the cancellation of the pipeline by President Biden, a poll revealed that 71% of Americans favored "very much" or "somewhat" a reversal of Biden's decision to cancel the pipeline.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More