[CTC] Canada's Alberta province files trade challenge over scrapped Keystone XL pipeline

Wed Feb 9 13:13:01 PST 2022

Two articles below…

https://www.reuters.com/business/energy/canadas-alberta-province-files-trade-challenge-over-scrapped-keystone-xl-2022-02-09/ <https://www.reuters.com/business/energy/canadas-alberta-province-files-trade-challenge-over-scrapped-keystone-xl-2022-02-09/>

Canada's Alberta province files trade challenge over scrapped Keystone XL pipeline

CALGARY, Alberta, Feb 9 (Reuters) - The Canadian province of Alberta on Wednesday formally initiated a trade challenge to recover its investment in the Keystone XL oil pipeline, which was scrapped in 2021 after the United States cancelled a key permit.

Alberta, Canada's largest oil-producing province, had invested C$1.3 billion in the project and is seeking compensation from the United States through a legacy North American Free Trade Agreement claim, under the new Canada-United States-Mexico Agreement.

Keystone XL would have carried 830,000 barrels per day of oil from Alberta to the U.S. Midwest, but was held up for a more than a decade by environmental opposition and regulatory hurdles, before U.S. President Joe Biden finally scuttled the project by revoking a presidential permit last year.

The pipeline's developer TC Energy (TRP.TO) also filed a legacy NAFTA claim seeking more than $15 billion in damages last year. read more

"After examining all available options, we have determined a legacy claim is the best avenue to recover the government's investment in the Keystone XL project," Alberta Energy Minister Sonya Savage said in a statement.

"We remain disappointed about the events and circumstances that led to the cancellation of this project.”

=======

CANADIAN PROVINCE OF ALBERTA FILES NAFTA/USMCA NOTICE OF INTENT IN RELATION TO KEYSTONE XL PIPELINE DISPUTE WITH THE USA
Feb 09, 2022 | By Lisa Bohmer

Case(s) discussed in this article: Transcanada v. USA (1) <https://www.iareporter.com/arbitration-cases/transcanada-v-usa-1/>,TC Energy & Transcanada v. USA (2) <https://www.iareporter.com/arbitration-cases/tc-energy-transcanada-v-usa-2-2/>
The Canadian province of Alberta has sent a notice of intent to the USA in relation to the US government’s decision to cancel the Keystone XL Pipeline project, which was meant to transport crude oil from Alberta’s oil sands to refineries located in the USA.

IAReporter has confirmed that the notice of intent was filed on February 9, 2022.

In a February 9, 2022 communication <https://www.alberta.ca/release.cfm?xID=81862B613462A-FE6C-F515-ABFDDD9B2520DC66>, Alberta’s Minister of Energy, Sonya Savage, has stated that the province has “determined a legacy claim is the best avenue to recover the government’s investment in the Keystone XL project”.

Readers may recall that the disputed pipeline project has previously given rise to two arbitration claims against the USA: the 2016 Transcanada v. USA <https://www.iareporter.com/arbitration-cases/transcanada-v-usa-1/> ICSID arbitration (which was discontinued in 2017, after the Trump administration issued required permits), and the pending TC Energy & Transcanada v. USA <https://www.iareporter.com/arbitration-cases/tc-energy-transcanada-v-usa-2-2/> ICSID case (which was brought by the pipeline companies in November of 2021, after the Biden administration revoked the pipeline’s permit earlier that year).

As we reported <https://www.iareporter.com/articles/province-of-alberta-confirms-intention-to-lodge-its-own-treaty-claim-against-the-usa-over-cancellation-of-keystone-xl-pipeline/>, between these two arbitration claims, Alberta acquired a 1.5 billion USD equity interest in TC Energy. Following the cancellation of TC Energy’s permits by the current US administration, the province then confirmed its intention <https://www.iareporter.com/articles/province-of-alberta-confirms-intention-to-lodge-its-own-treaty-claim-against-the-usa-over-cancellation-of-keystone-xl-pipeline/> to lodge its own NAFTA legacy claim against the USA. According to Ms. Savage’s recent press statement, the province has now decided to follow up on its earlier threats, and it has “taken formal steps to initiate a legacy North American Free Trade Agreement claim”.

Notably, both the TC Energy arbitration and Alberta’s notice of intent rely on the NAFTA legacy provision of the United States-Mexico-Canada Agreement (USMCA <https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/14-Investment.pdf>), which allows for submission of claims involving legacy investments for a period of three years following the USMCA’s entry into force in mid-2020. Canada thus stands to benefit from an investor-state arbitration mechanism from which it has purposefully opted out in the USMCA’s main provisions.

The claim promises to be an interesting one – if only because treaty-based claims by a political subdivision of one state against another state are a rare occurrence. While a similar situation occurred in the Tatarstan et al. v. Ukraine  <https://www.iareporter.com/articles/claim-against-ukraine-is-allowed-to-proceed-but-one-of-the-claimants-fails-to-clear-jurisdictional-hurdle/>arbitration, the tribunal hearing that case declined jurisdiction over a political subdivision of Russia, the Republic of Tatarstan <https://www.iareporter.com/articles/claim-against-ukraine-is-allowed-to-proceed-but-one-of-the-claimants-fails-to-clear-jurisdictional-hurdle/> (while upholding jurisdiction over its co-claimants) – although the reasoning behind this 2019 award remains undisclosed.

The identity of Alberta’s counsel in this potential NAFTA legacy claim remains unknown. (Readers may recall that in the pending TC Energy & Transcanada v. USA arbitration, the claimants are represented by Sidley Austin in Washington, D.C., while the USA relies on government counsel.)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20220209/9069ec56/attachment.html>