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TransCanada files lawsuit challenging Keystone XL pipeline veto

[JURIST] TransCanda [official website] on Wednesday brought a lawsuit against the US Government in federal court challenging President Barack Obama's decision to reject the expansion of the Keystone pipeline. TransCanada filed its suit in the US District Court for the Southern District of Texas [official website] claiming that Obama lacked the constitutional authority to veto the expansion. The complaint alleges that Obama exceeded his authority acting "without statutory authority and contrary to the expressed will of congress." TransCanada also claims that the act to stop expansion violates the North American Free Trade Agreement (NAFTA), calling it "arbitrary and unjustified." The lawsuit does not seek compensation but rather to have Obama's decision reversed.

The proposed Keystone XL pipeline has generated significant controversy [JURIST report]. In March the US Senate failed [JURIST report] to override Obama's veto of the Keystone XL Pipeline Approval Act. Expansion [WP report] of the existing Keystone pipeline would allow for the transmission of 830,000 barrels of crude oil daily from the tar sand producing regions of Alberta, Canada, to refining facilities on the Gulf of Mexico. TransCanada, the company seeking to build the pipeline, indicates [project website] that this development would support crude oil production in the Bakken Shale formation, which lies primarily in North Dakota and Montana, and that it is crucial to energy security in the US. Under US law, TransCanada must receive a permit from the US Department of State [official website] because the project crosses the US-Canada border. According to the State Department, Executive Order 13337 [text, PDF] grants the Secretary of State "the power to decide whether a project serves the national interest before granting a Presidential Permit."

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