The company is taking the unusual step of suing through the North American Free Trade Agreement, calling the decision “arbitrary and unjustified.” The Canadian business also filed a lawsuit in Houston asking that the decision be overturned.
“TransCanada has been unjustly deprived of the value of its multibillion-dollar investment by the U.S. administration’s action,” the company said in a statement. “Rather, the denial was a symbolic gesture based on speculation about the (false) perceptions of the international community regarding the administration’s leadership on climate change.”
The $8 billion Keystone XL pipeline would have connected Canada’s oil sands to American refineries on the Gulf Coast, offering the promise of improving prices. Canadian energy companies viewed the pipeline as the key to sustaining growth, since the United States buys the vast majority of petroleum produced by the oil sands.
But many American environmentalists used the project as a proxy for the oil sands, a energy source that they considered particularly polluting. The pipeline plan got caught in a regulatory and legal struggle, as the State Department environmental review dragged on for years.
In November, President Obama rejected the plan, saying the pipeline would undercut the country’s leadership on climate change. Still, he added “this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others.”
TransCanada said it would take a write-down of $1.8 billion to $2 billion for its fourth quarter.