UPDATE 4-TransCanada sues U.S. over Keystone XL pipeline rejection

Wed Jan 6, 2016 7:42pm EST
 
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(Adds byline, TransCanada comment)

By Nia Williams and Valerie Volcovici

CALGARY/WASHINGTON Jan 6 (Reuters) - TransCanada Corp sued the U.S government on Wednesday to reverse President Barack Obama's rejection of the Keystone XL pipeline, and also plans to seek $15 billion in damages from a trade tribunal.

TranCanada's lawsuit in a federal court in Houston, Texas, called rejection of its permit to build the pipeline unconstitutional. In a separate action under the North American Free Trade Agreement (NAFTA), the company said the pipeline permit denial was "arbitrary and unjustified."

The company's U.S. lawsuit does not seek monetary damages but wants the permit denial invalidated and seeks a ruling that no future president can block construction. Its request for $15 billion under NAFTA reflects its desire to recover its investment in the pipeline.

Defendants in the Houston lawsuit are U.S. Secretary of State John Kerry, Attorney General Loretta Lynch, U.S. Homeland Security Secretary Jeh Johnson and Sally Jewell, Secretary of the Department of Interior.

Obama, who is not named as a defendant, rejected the cross-border crude oil pipeline last November, seven years after it was first proposed, saying it would not make a meaningful long-term contribution to the U.S. economy.

The Keystone XL was designed to link existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in Illinois and, eventually, the Gulf of Mexico coast.

All the Democratic U.S. presidential candidates, including front runner Hillary Clinton, oppose the pipeline while most Republican candidates are in favor.   Continued...