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

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FILE PHOTO: Deer gather at a depot used to store pipes for the planned Keystone XL oil pipeline in Gascoyne

By Nia Williams

CALGARY, Alberta – 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 also filed a legacy NAFTA claim seeking more than $15 billion in damages last year.

“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.”

(Reporting by Nia Williams; Editing by Sandra Maler)