Editorial: Restitution deserved over Keystone dallying

The Detroit News

The Keystone XL Pipeline has been absent from political debate since President Barack Obama nixed it last November. But that doesn’t mean the company behind the pipeline is satisfied with the outcome, or their losses — nor should it be.

TransCanada is suing the United States for more than $15 billion to repay its actual losses, as well as lost opportunity costs. It’s allowed to do so before an arbitration panel under the terms of the North American Free Trade Agreement.

Part of the U.S. obligation under NAFTA is to treat all investors equally. TransCanada will argue, compellingly, that it failed to meet those requirements. Free trade agreements are supposed to make these kinds of business arrangements with the U.S. more fair and expedient, not less so.

But instead Obama and his administration strung along the company and its investors for almost his entire time in office — seven years. Meantime, the issue became increasingly and unnecessarily political, and some of Obama’s biggest donors, such as billionaire climate activist Tom Steyer, entered the conversation.

But during all that, the administration continually delayed approval of the permit, while simultaneously signaling that approval would likely come through.

The pipeline was clearly in American interests. It would make crude oil more accessible and more affordable, create hundreds of thousands of jobs and allow the southern U.S. to depend less on oil from South America.

Additionally, the company worked with the administration every step of the way to meet its various demands.

It even paid $25 million so the State Department could hire an outside group to study the pipeline’s potential environmental impact.

The draft result of that study concluded the pipeline would have few adverse effects on the environment. The results were widely shared, and then-Secretary of State Hillary Clinton seemed as if she would OK the project.

The final report from the State Department had similar results, although at that point the pipeline had become an issue with the state of Nebraska, through which it was slated to run.

TransCanada continued to invest in the project and search for an alternate route to avoid Nebraska, and subsequent State Department reports were issued finding the pipeline wouldn’t adversely affect the environment. Still, the permit was ultimately denied.

Why would foreign investors want to do business in the U.S. after such a debacle?

TransCanada is arguing Obama acted outside the bounds of the Constitution in prohibiting the pipeline. Article 1 states Congress has the power to direct national and international commerce. And legal precedent upholds that presidents can’t claim unilateral power with regard to private business proposals.

Both houses of Congress approved the pipeline before Obama vetoed it.

Obama argues he sought to protect the environment, but that decision is outside his purview and also completely unprecedented in presidential permitting approval history. Additionally, within the past decade two similar projects that crossed borders were approved by U.S. regulators.

TransCanada had no reason to assume its permit request would become such a drawn-out disaster. Its reputation and certainly the project itself have been dragged through the political mud for self-serving reasons on the part of the Obama administration.

The outcome of this case will set an important precedent for U.S. business relationships moving forward — and say much about the country’s commitment to the rule of law.