TC Energy, the Canadian pipeline operator that was building the Keystone XL project is seeking $15 billion in damages from the Biden Administration.
According to the notice, the US administration violated the North American Free Trade Agreement with its decision to kill the $9-billion project that would have carried 830,000 bpd of Canadian crude to the United States. The company had to official drop Keystone XL after President Biden revoked a crucial permit.
Proponents of the Keystone XL project have argued that scrapping the pipeline would not diminish the demand for the heavy crude oil that the pipeline would have carried to US refineries. Instead, it would merely raise the United States’ dependence on crude oil from OPEC countries. An argument has been made that it would also kill jobs on both sides of the border.
Also on rt.com Oil prices surge after OPEC+ fails to reach deal to boost global crude productionOpponents, on the other hand, argued that the Keystone XL was unnecessary because there were enough pipelines carrying Canadian crude into the US. It was on the grounds of this perceived lack of necessity for the infrastructure that President Obama suspended the project years ago before his successor, Donald Trump, revived it.
It was suggested back in January that if TC Energy did not challenge the permit rescission in court or through NAFTA, it might sell some of the pipes from the project to offset some of what has been invested so far.
Canadian oil sands production, meanwhile, is on the rise, suggesting demand is quite healthy. According to IHS Markit, oil sands output is on its way to rebounding to pre-pandemic levels and rise by 650,000 bpd between this year and 2030. Since most of the oil sands output not used locally goes to US refineries, this means the argument against additional pipelines may have been premature.
This article was originally published on Oilprice.com