Alberta could join TC Energy in $15B trade dispute over Keystone XL

The Alberta government is considering its legal options over the cancellation of the Keystone XL pipeline in the U.S., including joining a trade complaint filed by TC Energy. 

But that route could be an expensive gamble. 

First reported in the Financial Post, the government could join the Calgary-based company's $15 billion claim for damages through the North American Free Trade Agreement. The trade deal was replaced in 2020, but there is a three-year window to file complaints under the old agreement. 

When asked about the legal challenge, the energy minister's office sent a statement saying the government has been clear that it will seek to recoup costs for the project. The government invested $1.5 billion and estimates it will have lost $1.3 billion. 

"In the legislative assembly, the premier has also emphatically stated our intentions to seek legal recourse," the statement read. "We are carefully examining all legal remedies available to us and will make an announcement soon."

Permit cancelled 

The pipeline was intended to carry crude from Hardisty, Alta., to Nebraska, where it would connect with the existing Keystone pipeline that runs to refineries on the Gulf Coast. 

The presidential permit issued by former U.S. President Donald Trump was cancelled by President Joe Biden on his first day in office, not long after the Alberta government announced it's investment in the project. 

Nigel Bankes, a former professor of law at the University of Calgary, says he's not surprised the government is considering a NAFTA challenge, but says joining TC Energy's claim could be contentious. 

"The U.S., for example, may say these are different enough claims that they ought not to be heard together, and I guess that will perhaps increase expenses," he said. 

"The government may be wanting to ride on the coat tails of TC Energy to reduce some of its costs."

He said going it alone would be expensive up to "tens of millions."

Arbitration could not order the U.S. government to reverse its decision.