TransCanada Sues U.S. Over Obama's Keystone XL Pipeline Rejection

TransCanada believes the administration is in "clear violation of NAFTA and the U.S. Constitution.”

Finally, President Obama's rejection of the Keystone XL pipeline is being challenged in a serious way. TransCanada filed a federal lawsuit Wednesday claiming that Obama’s refusal to allow construction of the Keystone XL pipeline exceeded his Constitutional powers. 

According to Fox News, the company also filed an additional legal action under the North American Free Trade Agreement, alleging that the permit decision was "arbitrary and unjustified." Through this latter legal action, TransCanada is seeking $15 billion in damages.

In filing a NAFTA claim, TransCanada said it “had every reason to expect its application would be granted,” after it had met the same criteria the U.S. State Department used when approving other similar cross-border pipelines.  

“TransCanada has undertaken a careful evaluation of the Administration’s action and believe there has been a clear violation of NAFTA and the U.S. Constitution in these circumstances,” TransCanada spokesman Mark Cooper said in a statement. 

Obama blocked the cross-border pipeline in November after it was first proposed seven years ago.

The project had prompted opposition from Native American tribes, some landowners and environmental groups that were concerned the pipeline would contaminate water supplies and contribute to pollution.

The company claims that the Constitution gives Congress the authority to regulate interstate and foreign commerce.

The federal suit, which does not seek legal damages, wants the permit denial invalidated. It also requests no future presidential action be needed for construction to continue. 

The proposed pipeline would have the ability to connect with more than 800,000 barrels of crude oil per day and move roughly 100,000 barrels of oil daily from North Dakota. The pipeline's construction was touted, even by union members usually beholden to the Democrat agenda, for having the ability to create jobs and strengthen the economy. None of that mattered to Obama, however. Now his administration will have to answer to it.