Because of Nafta, U.S taxpayers may have to pay $15 billion to compensate TransCanada for the Keystone pipeline
The extension of the Keystone pipeline would have been an environmental nightmare and was fortunately rejected by the Obama administration in November 2015. However, the big oil corporation behind the pipeline project, TransCanada, is determined to have its revenge against the American population and has decided to sue the United States and demand $15 billion in damages because the project didn't go through. Of course, such a preposterous lawsuit would not fly in any normal court, so TransCanada will use the NAFTA arbitration system instead, a system that has proven its support to big corporations again and again. This highlights the threat of free trade agreements and the arbitration systems attached to them. And this legitimates the fight against the free trade deals that are currently being negotiated : the TPP and TAFTA.
- 1 A dirty pipeline that was fortunately not extended
- 2 An outrageous lawsuit by TransCanada
- 3 The threat of the TPP that would extend this arbitration system
A dirty pipeline that was fortunately not extended[edit | edit source]
A huge source of carbon emissions[edit | edit source]
The Keystone XL project was an additional pipeline connecting Canada and the United States. It was designed to start in Alberta and cross the American states of Montana, South Dakota and Nebraska where it would have joined another section of the Keystone pipeline in Steele City. This new project would have duplicated the first section of the pipeline that was completed in 2010. However, environmental groups fought to reject this new pipeline because of the disastrous ecological consequences it would have had in Canada, in the U.S and in the world. Indeed Keystone XL's purpose was essentially to carry more tar sands oil from Canada to the U.S, and tar sands oil is the dirtiest form of oil in the world. Indeed, tar sands oil is thicker than conventional oil and therefore requires a very energy-intensive and polluting process to extract and transform the oil. This is why extracting tar sands oil generates three to four times more carbon emissions that conventional oil ! And this Keystone XL pipeline would have transported 830,000 barrels of this incredibly dirty oil to the U.S, every day, which would have led to as much pollution as 5.6 million new cars. Obama was right to point out that the danger of global warming means that a big part of the remaining fossil fuels should be left in the ground and therefore any project that ambitions to expand the oil production capacity makes no sense whatsoever.
A source of water and soil pollution[edit | edit source]
But air pollution wasn't the only problem with the pipeline and the tar sands oil it meant to carry. To begin with, extracting the oil is a very dirty process for the environment. Because the oil isn't liquid, oil companies like Suncor destroy vast areas of woodlands to dig open pits. Then they use huge amounts of water mixed with chemicals to separate the bitumen from sand and clay, about 3 barrels of water for every barrel of oil that is extracted. But of course, doing that leaves the water with very high levels of pollution. And the likes of Suncor don't worry about processing that water to make it clean and safe again, they just dump it in big artificial pools called tailing ponds where they gradually seep into the ground and contaminate nearby streams and water tables. So Keystone XL was an incredibly bad idea because it would have encouraged the development of the tar sands extraction that is wrecking the environment in Alberta. Furthermore, transporting the oil in the pipeline was also an additional source of danger. Indeed pipelines can leak, and the track record of pipelines in the U.S proves that the danger is very high. TransCanada's first Keystone pipeline spilled a dozen times in the first year after it opened ! In 2010, another pipeline burst in Michigan, leading to a million gallon spill in Kalamazoo river which cost a billion dollars to clean up ! This pipeline was engineered by another Canadian company, Enbridge. And good old Exxon has also let its pipelines leak in the U.S. Worse than that, in 2013, the residents of Mayflower, Arkansas, realized Exxon had built a pipeline underneath their town when it started leaking and polluting Lake Conway, the local source of drinking water and a place where they loved to fish. So pipeline spills are a big danger and transporting tar sands oil would only make the danger bigger because that kind of oil is much more corrosive because of the chemicals used to process it, so that would definitely enhance the risk of a spill. All these risks of soil and water pollution are more than good reasons not to approve the project and Barack Obama took a stand and rejected the project as is his right and duty a president of the U.S. But TransCanada hasn't accepted the loss of the juicy profits it would have gotten from its pipeline and decided to sue the U.S for damages.
An outrageous lawsuit by TransCanada[edit | edit source]
A $15 billion claim at the taxpayer's expense[edit | edit source]
In January 2016, two months after the rejection of Keystone XL, TransCanada announced that it intended to sue the U.S for damages. It finally filed its claim on June 24 and asked for no less than $15 billion ! What could possibly be the justification for such an amount ? TransCanada contends that the American decision upset the company's “expectations” : "at the time Keystone submitted its applications, the express policy of the United States was to expedite the development of energy production and transmission projects including oil pipelines". A very obscure argument indeed ! Just because previous projects were approved in the past doesn't mean future ones have to be. Maybe someone should inform the heads of TransCanada that in a democracy, the elections are supposed to have an impact on the policy making and that changes in policy are normal, especially when the majority changes like it did in 2008 when Barack Obama was elected after George W. Bush's two terms. The claim also contends that the rejection was politically motivated... Well of course ! Again, it's called democracy people ! Elected leaders make political decisions based on the mandate given by the people. And how about the amount of the claim, $15 billion ? TransCanada says that it represents the investment that had already been made while it awaited the approval for the pipeline. But then again, if TransCanada chooses to invest if an endeavour that hasn't been approved yet, it should bear the risk. No, the true reason is probably elsewhere. A quick look on the sizeable paycheck of its CEO Russell Girling and the lawsuit is already easier to understand. When your CEO earns almost $10 million a year, you need to find someone to pay. And because U.S courts would never have even considered such a ludicrous lawsuit, TransCanada has asked the arbitration system of NAFTA to rule.
A NAFTA arbitration system that protects corporate interests[edit | edit source]
Indeed it's no wonder that TransCanada has filed suit in the private tribunal of NAFTA. The arbitration system of the trade agreement consists in a jury of three lawyers that will rule the case without being accountable to any domestic court. Furthermore, the lawyers won't be bound to follow precedents from past cases which means that they'll have a lot of freedom to decide how they rule and therefore that TransCanada can very easily influence one or several lawyers of the case. Past rulings has shown that in environmentally sensitive cases like this one, the NAFTA arbitration system hinders any regulation that protects the environment against corporate abuse. For instance, in January, a Canadian mining company, Northern Dynasty Minerals, threatened to sue the U.S in the NAFTA arbitration tribunal because its project of a gold and copper mine in Alaska had been rejected. But this project would have been an environmental nightmare and would have polluted the waters home to a very large population of wild sockeye salmon. So case after case, we can see how the rules of NAFTA are used to legitimate corporate attacks on the environment and how the government is gradually losing the ability to regulate and protect natural areas and the people who live in them. This trend will only get worse if new free trade agreements like the TPP of TAFTA go through.
The threat of the TPP that would extend this arbitration system[edit | edit source]
The weapon TransCanada is currently using against the U.S and its environmental regulations could tomorrow be used by many more corporations from all around the world if new free trade agreements are approved. The Sierra Club has estimated that the TPP alone could double the number of companies that could imitate TransCanada's strategy and challenge U.S environmental rules in private and unaccountable tribunals. This would nearly double the number of companies that could potentially attack the regulations on fracking that states are beginning to impose because leaders realise how bad fracking is for the ecosystems and for people. Basically, free trade agreements like NAFTA and the TPP will make it extremely hard to meet the targets of the COP21 summit because any regulation or decision that isn't in line with the immediate financial interests of fossil fuel companies might be challenged by a lawsuit and this will ultimately deter leaders from taking such decisions. This is why in the beginning of June over 450 environmental and grassroot organizations wrote a joined letter to Congress, calling Congressmen to stop the negotiation on the TPP, saying that the only way to mitigate global warming and climate change was to protect and enhance environmental regulations.