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White House defends Obama's rejection of Keystone pipeline over TransCanada lawsuit

Xinhua, January 8, 2016 Adjust font size:

The White House said Thursday that it is confident that the Obama administration acted lawfully in rejecting the proposed Keystone XL pipeline project, in response to a lawsuit filed by TransCanada against the U.S. government

"The president agreed that building the Keystone pipeline would not serve the national interests of the United States," White House spokesman Josh Earnest said in a regular press briefing.

"We're confident that the decision that was made vis-a-vis the Keystone pipeline is entirely consistent with all of our international obligations, including our obligations under NAFTA," Earnest added, referring to the North American Free Trade Agreement.

Earnest's remarks came one day after TransCanada Corporation, the developer of the proposed Keystone XL pipeline, filed a lawsuit in a U.S. federal court in Houston, Texas, against President Obama's decision to deny construction of the pipeline, which would bring Canada's oil sands to refineries in the United States. The company also sought more than 15 billion U.S. dollars in compensation under the NAFTA.

Transcanada, headquartered in Calgary in the Canadian province of Alberta, named four members of Obama's cabinet -- Secretary of State John Kerry, Attorney General Loretta Lynch, Homeland Security Secretary Jeh Johnson and Interior Secretary Sally Jewell -- as defendants, arguing the U.S. Congress has passed the legislation authorizing the construction and operation of the project.

"TransCanada's legal actions challenge the foundation of the U.S. administration's decision to deny a Presidential border crossing permit for the project," the Canadian company said Wednesday in a statement.

"The U.S. State Department acknowledged the denial was not based on the merits of the project. Rather, it was a symbolic gesture based on speculation about the perceptions of the international community regarding the administration's leadership on climate change," the company argued.

Obama announced his decision to block the proposed pipeline last November, saying that the project would not make a meaningful long-term contribution to the U.S. economy or lower gasoline prices, and approving the project would have undercut U.S. global leadership in fighting climate change.

The 8-billion-U.S.-dollar Keystone XL project is proposed to go from Canada through the U.S. states of Montana and South Dakota to Nebraska, where it would connect with existing pipelines to carry more than 800,000 barrels of crude oil a day to refineries along the U.S. Gulf Coast. To cross the U.S.-Canadian border, it needs a presidential permit from the U.S. administration.

TransCanada said the company expected to take an after-tax write-down of 2.5 billion to 2.9 billion Canadian dollars (1.77 billion to 2.06 billion U.S. dollars) from its earnings for the fourth quarter of 2015 as a result of the permit denial.

Although TransCanada declined interview requests, spokesman Mark Cooper issued a lengthy backgrounder detailing the steps ahead, which could include the company reapplying for a presidential permit for the project.

Conservative international trade critic Gerry Ritz said that Prime Minister Justin Trudeau "will have the perfect opportunity to raise this issue" with Obama at a state dinner next Sunday in Trudeau's honor at the White House in Washington. Endi