TransCanada, the developer behind the rejected Keystone XL pipeline, yesterday launched two lawsuits against the US government in a bid to recover more than $15bn in damages that resulted from President Obama's decision to block the controversial project.
The developers have launched a lawsuit claiming Obama overstepped his Constitutional authority in rejecting the $8bn pipeline project in November on climate-related grounds. TransCanada is also seeking $15bn in damages in sunk costs for the project, in a separate claim under the North American Free Trade Agreement (NAFTA).
The rejected pipeline was intended to link tar sands in Canada with the refineries in the US.
After seven years of debate Obama vetoed the controversial project in November on the grounds that it would be incompatible with the administration's emission reduction targets and would not be meaningfully beneficial to the US economy.
In a statement TransCanada said the refusal was "arbitrary and unjustified", adding that it was a "symbolic gesture based on speculation about the perceptions of the international community regarding the administration's leadership on climate change".
The firm also said the pipeline did not receive the same level of scrutiny as previous pipeline projects.
The lawsuit threatens to revive one of the longest-running disputes of the Obama presidency. TransCanada first applied for permits for the project in 2008, and the review dragged on for more than seven years before November's decision.
During that time the pipeline became a symbolic battle for environmentalists, who claimed that such projects must be phased out as the world moves towards a low-carbon economy. However, the project's supporters argued it would bring jobs and prosperity for the US economy.
The project could yet feature in this year's US presidential election with Republican candidates vowing to revive the plans if they take the White House.
Alongside damages, TransCanada said it is seeking a ruling which would declare the pipeline's rejection as invalid. The case could take up to four years to reach a resolution. TransCanada said it is prepared for the lengthy process, but acknowledged that the US has never lost a dispute under NAFTA.
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