In a move that has left TC Energy Corp. reeling, a trade tribunal has dismissed the company’s ambitious claim for US$15 billion in damages over the doomed Keystone XL pipeline project. This setback is a significant blow to the Calgary-based energy giant, which launched its legal battle in 2021 after U.S. President Joe Biden nixed the controversial pipeline on his first day in office.
The claim hinged on provisions of the now-defunct North American Free Trade Agreement (NAFTA). TC Energy argued that the U.S. government’s decision breached its free trade obligations under NAFTA, alleging that the abrupt cancellation of the Keystone XL pipeline inflicted immense financial damage. The pipeline was intended to channel crude oil from Alberta’s oilsands to refineries on the Gulf Coast, but it became a flashpoint for environmental protests and political wrangling.
The International Centre for Settlement of Investment Disputes (ICSID) tribunal, however, was unmoved by TC Energy’s arguments. The tribunal ruled last Friday that it lacked the jurisdiction to hear the case, noting that the claims pertained to actions taken after NAFTA had been replaced by the U.S.-Mexico-Canada Agreement (USMCA). Biden’s revocation of the pipeline’s permit fell under the new trade framework, leaving TC Energy without a legal leg to stand on under the old rules.
Environmental advocates cheered the tribunal’s decision, viewing it as a landmark victory in the ongoing struggle against climate change. “This sets a critical precedent,” declared Keith Stewart, senior energy strategist at Greenpeace Canada. “It signals that governments can and should enact policies to protect the environment without fear of retribution from fossil fuel corporations.” Meanwhile, Alberta’s government, which had invested heavily in the Keystone XL project, continues to pursue its own legal challenges, maintaining that the pipeline’s cancellation was an unjust economic blow to the province.
(Source: Canadian Press | Calgary Herald)
