MONTREAL: TransCanada will sue the US government for US$15 billion for blocking its controversial project for an oil pipeline linking Canada with the Gulf of Mexico, the firm said on Wednesday.
TransCanada Corp. said the denial of a permit to complete the Keystone XL pipeline "was arbitrary and unjustified" under the North American Free Trade Agreement, and that the decision also exceeded the constitutional powers of US President Barack Obama.
The Obama administration decided in October to deny the Canadian company a permit to construct a key section of the pipeline across the US-Canada border, ruling it would harm the fight against climate change.
The decision, which came seven years after the company first submitted the project, marred US-Canada relations and angered many in the oil industry in both countries.
The pipeline would carry crude oil from the Alberta tar sands deposits all the way to the US Gulf Coast, and blocking the 1,179-mile (1,900 kilometer) Alberta-Nebraska section effectively undermined the entire project.
Environmentalists have assailed the project -- and the move to sue -- arguing that the Alberta deposits produce some of the "dirtiest" crude in the world.
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