The Obama administration rejected the Keystone XL project after several long years of delaying a decision, and for what many considered political reasons, but now TransCanada is fighting back with a decision to file a Chapter 11 NAFTA claim against the United States Government as well as suing the US Government in court as well. According to TransCanada the decision to deny the Keystone XL project was unjustified, arbitrary, and completely political in nature. The company is asking that it is allowed to recover damages and costs that amount to $15 billion US dollars due to a breach of the obligations under the North America Free Trade Agreement. According to a notice of intent to initiate a claim under NAFTA TransCanada states “Stated simply, the delay and the ultimate decision to deny the permit were politically-driven, directly contrary to the findings of the administration’s own studies, and not based on the merits of Keystone’s application. The politically-driven denial of Keystone’s application was contrary to all precedent; inconsistent with any reasonable and expected application of the relevant rules and regulations; and arbitrary, discriminatory, and expropriatory.”

In the NAFTA claim that will be filed by TransCanada as a result of the Keystone XL project denial there are many different allegations. Because the USA is a signatory to the NAFTA agreement the country is expected to treat other signatory countries in accordance with international law and take steps to protect the investors. TransCanada alleges that the US Government did not do anything to protect investors from Canada, and that the USA did not follow recognized international law in the decision making process. Even many Americans believe that the Keystone XL decision by the Obama administration was politically motivated due to the announcement of the decision right before a key climate change summit in Paris.