Feb 4, 2021
Alberta mulls U.S. compensation for scrapping Keystone XL
Alberta will use 'every legal recourse' in fight for Keystone XL: Kenney
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 $1.5 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 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 US$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.