Keystone XL Or Bust

Earlier this month, TransCanada filed a lawsuit against the Obama administration.  The lawsuit was filed in the U.S. District Court for the Southern District of Texas and claimed that President Obama overstepped his bounds by vetoing the Keystone XL pipeline from moving forward in November 2015.As quoted in the Los Angeles Times in a January 6 article by Christopher Guly, TransCanada has stated that the President’s dismissal of the project was “a symbolic gesture based on speculation about the perceptions of the international community regarding the Administration’s leadership on climate change and the President’s assertion of unprecedented, independent powers.”  Now, if you break that down, TransCanada is accusing the administration of being worried about its current image regarding climate change and anything that could cause that image to be questioned. Only three years before, President Obama said he was going to “cut through the red tape” as it were, and push the Keystone XL project through to the end.  He even issued an executive order expediting the process.  Each phase of this four phase, seven years long project has been riddled with pushback from environmentalists arguing that the pipeline would significantly contribute to climate change as well as have a negative impact on the environment, specifically, the Sandhills of Nebraska.  The first phase of constructing the Keystone pipeline consisted of running piping from Hardisty, Alberta, Canada to Patoka, Illinois covering 2,147 miles and was completed in 2010.  In 2011, 300 miles were added from Steele City, Nebraska to Cushing, Oklahoma as part of phase two.  Phase three connected Cushing and Port Arthur, Texas with 487 miles of more piping, rounding the total cost up to $5.2 billion.  The fourth phase, the Keystone XL extension, would have been less than 1,200 miles long, which is only a small percentage of the existing 2.6 million miles of piping that already run through the U. S., and it would have taken a less circuitous route from Alberta to Steele City, while carrying more oil. The Obama administration’s own Department of State issued a Final Environment Impact Statement on the pipeline which read “…the proposed Keystone XL pipeline would be unlikely to alter global greenhouse gas emissions.”  In addition, the State Department’s report did not find any “significant new environmental concerns related to the pipeline.” Most opposition to the pipeline is based on the desire to find an alternative energy source.  I believe Senator John Tester (D-MT) said it well when he spoke about alternative sources for energy.  “We’re not there yet, and my perspective on the Keystone pipeline is that if you shut the valve off… they’re (still) going to find a place for that oil to go… until we find an alternative to take its place, I think it’s unrealistic to say ‘no.’”  Though TransCanada changed its plans and the location of the pipeline to cause less of a disruption to the Sandhills, the project was still vetoed by the President after the legislation passed both the House and the Senate with Republican and Democratic support.

If the Texas court rules in favor of the Canadian company, the federal government will have to pay TransCanada $15 billion.

Thanks to the North American Free Trade Agreement (NAFTA), TransCanada is able to sue the US government for damages.  Though the court cannot overturn the President’s decision, TransCanada is hoping their lawsuit falls under the heading of “unrealized profits” and that TransCanada’s demands for money are enough to change the administration’s mind on the issue.  If the Texas court rules in favor of the Canadian company, the federal government will have to pay TransCanada $15 billion.  Not only has the change in plan disrupted TransCanada’s business, it has also put a strain on US/Canadian relations.  The Canadian ambassador to the US, Gary Doer, has stated that there is no reason the construction of the Keystone XL pipeline should not or could not move forward.  Canadian Prime Minister Stephen Harper said of the pipeline proposal, “the logic here is overwhelming.”  Allan Gotlieb, a former Canadian ambassador to the U.S., went on the record stating that with regards to U.S./Canada relations, “I think the relationship is as cool as I ever remember.”  The day after the President’s decision to veto the proposal, Mr. Gotlieb noted that “the Keystone pipeline has been handled with considerable insensitivity,” no doubt the cause of the coolness between the countries.  Prime Minister Justin Trudeau, who took office two days before President Obama vetoed the pipeline in November 2015, has stated that he is “disappointed by the decision” to veto the Keystone XL project.