The ability of the United States to make its own decisions regarding how, where and why to build transcontinental oil pipelines has been challenged by TransCanada Corporation, which sued the U.S. yesterday for the loss of potential future profits associated with the cancellation of the Keystone XL pipeline. The move represents a threat to both U.S. national sovereignty and national security, given the role of energy policy in protecting the homeland. The suit could also establish a precedent for challenging sovereign rights to address climate change through energy policy, not just in the U.S., but in any country that is party to the North American Free Trade Agreement (NAFTA).
The standing of TransCanada to sue the American government is provided not in any formal U.S. legal judiciary setting, but through rules laid down in a trade regime, NAFTA. The terms of this agreement, and other similar trade agreements, are designed to protect the rights of foreign investors over the rights of the states in which they are investing.
If successful, the suit will incur more losses to U.S. citizens than those associated with sovereign rights and national security. TransCanada is asking for $15 billion dollars in lost potential future profits. Furthermore, in an additional suit filed in Houston, Texas, TransCanada is seeking to limit the power of the President of the United States in setting U.S. energy policy by claiming that the Keystone decision was unconstitutional.
So what is going on? On Wednesday, TransCanada formally announced its intent to file a trade dispute with the United States, claiming that rejection of the Keystone XL pipeline announced by President Obama in November 2015 was unfair based on the rules set in NAFTA, and that the November decision deprives them of future lost profits. In the opinion of TransCanada, the decision against Keystone was a political one designed to show U.S. leadership on climate change. In effect, what TransCanada is saying is, “our profits trump your national energy policy.”
The really bad news is that TransCanada has a strong case for saying so. Why? Because we have entered into trade agreements that DO trump our national sovereignty and we are heading straight into more of them with our eyes wide shut. TransCanada is helping open those eyes. And that is the very good news in all of this.
Thanks to TransCanada’s extraordinary actions, the lid has blown off intentionally obscure provisions of NAFTA that favor corporate interests over national sovereignty and security in a way that Americans can see and feel. That means that new trade agreements, including the Trans-Pacific Partnership (TPP), and the Trans-Atlantic Trade and Investment Partnership (TTIP), will no longer be able to hide similar provisions that are, by design, intended to grant special legal rights to corporations and further erode the national sovereignty of the U.S. and each and every nation that signs them.