An arbitration panel has dismissed TC Energy's $15 billion claim against the U.S. over the Biden administration's 2021 cancellation of the Keystone XL Pipeline, the company said Tuesday.

TC Energy had claimed the U.S. violated provisions of the North American Free Trade Agreement when Biden revoked permits for the 830,000 b/d crude oil pipeline.

But the tribunal from the World Bank's International Centre for Settlement of Investment Disputes ruled in an unpublished opinion Friday that provisions of the United States-Mexico-Canada Agreement dealing with legacy claims under NAFTA only applied to incidents the occurred while NAFTA was in force, the company said. The USMCA agreement went into effect in July 2020, before Biden took office.

"We are both disappointed and frustrated with the Tribunal's decision to deny our right to bring a legacy NAFTA claim," Patrick Keys, TC Energy executive vice president and general counsel said in Tuesday's statement. "This ruling does not align with our expectations and views of the plain interpretation of the protections NAFTA and the USMCA were designed to offer."

Keys said his company "was treated unfairly and inequitably in the revocation of the permit, which was driven by political considerations."

TC Energy claimed the $15 billion would cover costs it had incurred prior to Biden's cancellation of the permits.

Biden revoked presidential permits that allowed the pipeline to cross the U.S.-Canada border shortly after taking office in January 2021. The president said the move was necessary to fight climate change.

While hailed by environmentalists, who had long battled the pipeline plan, the cancellation became a focal point for criticism of Biden's energy policies, particularly as fuel prices rose to record levels during his tenure.

The 1,210-mile pipeline would have transported Canadian crude from Hardisty, Alberta, to Steele City, Neb., where it would connect with the existing pipelines to reach the U.S. Gulf Coast.

Groups opposed to the pipeline project hailed the tribunal decision.

"President Biden canceled the Keystone XL Pipeline on his first day in office, wisely reversing the Trump administration's anti-climate, pro-pipeline stance. The action was taken months after the USMCA was in effect, so it is only logical that this (investor-state dispute settlement) claim should not have gone forward on jurisdiction," said Melinda St. Louis, global trade watch director for the group Public Citizen.


This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.


--Reporting by Steve Cronin, scronin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com


(END) Dow Jones Newswires

07-16-24 1505ET