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Canada’s Oil Heartland Mulls U.S. Compensation for Keystone XL

CommoditiesFeb 04, 2021 02:00PM ET
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© Bloomberg. Pipes for the Keystone XL pipeline sit stacked in a yard near Oyen, Alberta on Jan. 26.

(Bloomberg) -- The oil-rich Canadian province that was hit hard by Joe Biden’s move to kill the Keystone XL pipeline is considering seeking compensation from the U.S. through an old free-trade rule that’s still in place.

Alberta, which spent C$1.5 billion ($1.2 billion) to help jump start construction of the project, may resort to a North American Free Trade Agreement provision allowing compensation claims for lost investments, an official from Alberta Premier Jason Kenney’s office said. While Nafta was replaced by the United States-Mexico-Canada Agreement during the Trump administration, the rule remains in place during a phase-out period.

The pipeline cancellation dealt another blow to an oil-dependent province that was already reeling from two crude-market crashes since 2014. TC Energy (NYSE:TRP) Corp.’s Keystone XL would ship more than 800,000 barrels a day of crude from Alberta’s oil sands to U.S. refineries.

The project’s demise prompted TC Energy to let go of about 1,000 union workers on both sides of the border.

After the U.S. president’s decision on his first day in office, Kenney said that Alberta would consider legal action and urged Canadian Prime Minister Justin Trudeau to impose trade sanctions if the Biden administration didn’t negotiate.

In 2016, TC Energy sought $15 billion in compensation under Nafta after President Barack Obama rejected the project the previous year on environmental grounds, but the case was dropped after President Donald Trump approved the project early in his term.

©2021 Bloomberg L.P.

Canada’s Oil Heartland Mulls U.S. Compensation for Keystone XL
 

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Comments (2)
Dugan Webb
Dugan Webb Feb 05, 2021 12:58AM ET
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Somebody tell Greta and her wolfpack about this big scam! Now the oil will be shipped via rail causing 10x the pollution, plus more wasted oil/ fuel that runs the trains! If only the masses had brains capable of thinking about bigger picture than their silly emo triggers! Obama was famous for the $5 gallon gas and tripling healthcare costs! Here we go again! Sell your gas guzzlers Merica!
Alan Rice
Alan Rice Feb 04, 2021 6:34PM ET
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Alberta: Getting tired of depending on more dinosaurs dying to keep warm. yet ?? Tic-toc.
 
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