US-Canada Pipeline Connection Project Ultimately Halted... Litigation Begins in Earnest

Five Months After Biden's Business Suspension Executive Order
23 US States Oppose Construction Halt...Intense Legal Battles Expected

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] TC Energy, which had been promoting a pipeline connection project between the United States and Canada, officially declared the complete suspension of the entire connection project. The pipeline project was fully halted five months after U.S. President Joe Biden issued an order to stop the project. While the Biden administration's strong commitment to environmental policies has been clearly expressed, 23 states in the U.S. have jointly filed lawsuits against the Biden administration, and a fierce legal battle is expected to unfold.

According to local media including Canada's CBC News on the 9th (local time), TC Energy announced that it would officially suspend the Keystone XL pipeline project, a pipeline connection project between the U.S. and Canada. The project, which had been underway since 2008, was an approximately $8 billion project to construct a 2,735 km pipeline from Alberta, Canada, to the Gulf of Texas in the U.S., with plans to transport 800,000 barrels of oil per day. According to CBC News, it is estimated that about $1.3 billion in sunk costs, including construction expenses incurred so far, will be lost.

President Biden made the suspension of this pipeline connection project a major campaign promise in last year's presidential election and signed an administrative order to halt the Keystone XL pipeline project shortly after January this year. TC Energy had persistently requested the U.S. government to reverse the decision, citing sunk costs and mass unemployment of construction workers, but after confirming the strong will of the Biden administration, it is interpreted that the company officially announced the project suspension.

The project was originally halted once during the Barack Obama administration but was resumed under the previous Donald Trump administration with strong support from the Republican Party. Accordingly, Republican governors are reportedly strongly opposing this suspension and preparing joint lawsuits.

According to CNN, on the 3rd, Florida and Alaska joined the lawsuit, increasing the number of states opposing the pipeline construction suspension to 23. These states are reportedly preparing legal action, arguing in court that the president and central government do not have the authority to unilaterally regulate trade between foreign countries and states or cancel projects passed by Congress.