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TransCanada President and CEO Russ Girling, whose company has now sued the U.S. government under provisions of NAFTA for rejecting its request to build the Keystone XL pipeline. (Photo: Reuters)

TransCanada's Pathetic Keystone XL Lawsuit Could Galvanize Resistance to New Trade Agreements

Jamie Henn


Talk about sore losers. The Canadian pipeline company TransCanada announced this afternoon that it is suing Obama Administration over its decision to reject the Keystone XL pipeline.

The lawsuit won't do anything to help get the pipeline built, it's too late for that. The only purpose is for TransCanada to get compensated for the billions of dollars it wasted on this boondoggle in the first place. It's a greedy and pathetic move, but I guess that's what we've come to expect from the fossil fuel industry.

TransCanada is bringing their lawsuit under NAFTA, otherwise known as the North American Free Trade Agreement. More specifically, they're using a complex and opaque process known as the investor-state dispute system, which allows corporations to bring lawsuits against countries that they feel are unfairly blocking the free flow of trade. TransCanada's accusation is that the Obama Administration rejected Keystone XL for purely symbolic reasons, rather than its impact on the climate, and therefore the company has been discriminated against.

The accusation would normally be absurd (you can't build an 800,000 barrel a day pipeline that would carry the dirtiest fuel on the planet without having a climate impact), except for the fact that during the State Department's review process for the pipeline they hired an industry contractor that botched the job and made some roundabout arguments that because tar sands development was "inevitable" therefore the pipeline didn't matter. Nearly all other independent analysts disagreed, as did the Environmental Protection Agency, and ultimately the White House. But the process created enough confusion that TransCanada may now actually have a case.

TransCanada's lawsuit is another important reminder of how terrible trade agreements like NAFTA can be for our environment, and the ability of local and national governments to keep fossil fuels in the ground. The timing is particularly ironic. At this very moment, the Obama Administration is pressuring Congress and other nations to sign off on a new NAFTA-like agreement, the Trans Pacific Partnership, which would give corporations even more power to bring forward cases like TransCanada's.

What would this mean in practice? Things like: if your province wanted to ban fracking, an oil company could file a lawsuit against you to say that you're unfairly blocking them from getting at the natural gas under your land. Or that if a country decided that it wanted to keep its oil in the soil rather than pollute the atmosphere, Exxon or Chevron could sue because they feel like they have the right to drill, baby, drill.

Ultimately, TransCanada's lawsuit won't do much to change the outcome of the fight against Keystone XL, we already won that battle. But it could help fuel new fights against trade agreements like the TPP, and it will certainly help galvanize more opposition to the fossil fuel industry. They say they have the right to mine, drill and burn at all costs? We say: keep it in the ground.

© 2014
Jamie Henn

Jamie Henn

Jamie Henn is the director of Fossil Free Media and a co-founder of Follow him on twitter: @jamieclimate 

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