Canadian Manufacturing

TC Energy files request for arbitration to recoup more than US$15B

Cancelling the presidential permit issued by predecessor Donald Trump was one of Biden's first decisions when he took office in January.

November 24, 2021  The Canadian Press

Pipeline giant TC Energy is formally seeking to recover more than US$15 billion in “economic damages” from the U.S. government following President Joe Biden’s Day 1 decision to cancel the cross-border Keystone XL expansion project.

The Calgary-based company officially filed a request for arbitration on Nov. 22 with the U.S. State Department after it made its intentions clear in a notice of intent filed with the department earlier this summer.

“As a public company, TC Energy has a responsibility to our shareholders to seek recovery of the losses incurred due to the permit revocation, which resulted in the termination of the project,” the company said in a statement.

“We will not comment further and will follow the process as set out.”

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Cancelling the presidential permit issued by predecessor Donald Trump was one of Biden’s first decisions when he took office in January, effectively ending 13 years of on-again, off-again wrangling that bedevilled three presidents and two prime ministers.

Over the course of its troubled history, Keystone XL became an enduring symbol of fossil-fuel excess for environmental activists determined to prevent what they considered a dangerous and damaging expansion of Alberta’s oilsands.

The company officially abandoned all hope for the expansion in June, and shortly afterward filed notice of its intent to seek compensation under the now-defunct North American Free Trade Agreement.

At the time, the company said it would be seeking more than US$15 billion in damages “that it has suffered as a result of the U.S. government’s breach of its NAFTA obligations.”

NAFTA’s replacement, the U.S.-Canada-Mexico Agreement, did away with its predecessor’s dispute-resolution mechanism, but allows companies to file legacy claims for lost investment under the terms of the previous deal.

In Canada, where gasoline prices are typically higher than in the U.S., globalpetrolprices.com reported the average price on Nov. 22 was C$1.63 a litre, or about C$6.20 a gallon — roughly US$1.28 per litre or $4.85 a gallon.

The price increases in the U.S. add to Biden’s relentless series of post-pandemic headaches: opening up the strategic reserves and urging U.S. energy companies to open their production taps runs counter to his administration’s hard-charging efforts to invest in green energy and electric-vehicle production, with an eye toward eventually weaning the country off fossil fuels for good.