Since President Trump signed an executive order last month which paves the way for construction of the Keystone XL pipeline, TransCanada Corp (TRP.TO) suspended its $15 billion lawsuit against the United States this week over rejection of the long-awaited project, according to an article in Reuters.
“If operational, Keystone XL would bring more than 800,000 barrels per day of heavy crude to the Gulf Coast from Canada, which holds the world’s third-largest reserves but lacks the infrastructure to move it easily,” according to the article. Canada has given the project regulatory approval and government funding, however, American environmentalists have been protesting the pipeline for the past seven years.
TransCanada’s North American Free Trade Agreement (NAFTA) lawsuit, which had been seeking to recover $15 billion worth of costs and damages, was suspended until March 27th. The company was also involved in a separate suit in Houston, Texas that involved the pipeline. It has also been suspended.
A proponent of the pipeline, Alberta Premier Rachel Notley was reported to have said that suspension of the NAFTA suit was a “prudent” move that alows the Calgary, Alberta-based company to keep its legal rights without spending a lot of money on fees.
“It’s probably evidence … they’re taking a wait-and-see approach,” she said, according to the report.
The arbitration provisions of NAFTA, which permit companies to challenge governments before international panels, have been targeted by those who are against free-trade practices in the United States.
“Trump has said he wants to renegotiate the pact for more favorable terms,” according to the report, and he wants to the do same for the Keystone XL. No telling when the project will begin, said analysts.
TransCanada has already profited from the news. Reuters said the company’s shares climbed 1.34 percent at C$61.31 on the Toronto Stock Exchange before noon while the rest of the energy sector lagged behind.
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