In a surprise move, Keystone pipeline promoter TC Energy Corporation, seeks compensation, due to the decision by the Biden government to cancelling of its approvals for this long-delayed project. TC Energy is asking for some $15 billion in damages, for a project yet to obtain the final go-ahead by its backers.
However, this pipeline project has been viewed by many industry experts as not viable. This is especially given low oil prices the market has enjoyed ,and the surplus caused by the boom in American crude oil production in the past years, reducing demand from Gulf Coast refineries for Canadian oil output. In addition, opposition has grown from landowners, green groups along the proposed route of the Keystone pipeline. It had been argued by pipeline opponents that the project once completed is not in keeping with America’s efforts to fight climate change, plus the potential damage oil leaks could have on the environment and water supplies.
TC Energy Corporation bases its claim that the American government breached its free trade obligations when it revoked the permit for the project. However, TC Energy Corporation in June announced that was cancelling the Keystone pipeline, after President Biden revoked the permit for the project during his first day in office.
In order to recover potential economic damages from the project's cancellation, TC Energy (TRP) last week filed a Notice of Intent with the US State Department to initiate a legacy NAFTA claim under the United States-Mexico-Canada Agreement, the company said in a statement.