Foes of Pa­cific trade deal say Key­stone shows pact’s risk

The Denver Post - - BUSINESS - By Jen­nifer A. Dlouhy and Brian Wingfield

A le­gal dis­pute over the Key­stone XL oil pipe­line is giv­ing op­po­nents of a Pa­cific trade agree­ment a fresh ar­gu­ment in their ef­fort to get Congress to kill the pact.

They say the case an­nounced Wed­nes­day, in which Tran­sCanada Corp. is seek­ing ar­bi­tra­tion to re­cover $15 bil­lion tied to the Obama ad­min­is­tra­tion’s re­jec­tion of Key­stone, shows how for­eign com­pa­nies could use pro­vi­sions of the pro­posed Trans-Pa­cific Part­ner­ship trade agree­ment to chal­lenge U.S. pol­icy on the en­vi­ron­ment and other mat­ters.

“I can’t think of many clearer sig­nals that could have been of­fered at this mo­ment to show how big a threat the TPP poses to our ef­forts to keep fos­sil fu­els in the ground,” said Ben Beachy, a se­nior pol­icy ad­viser for the Sierra Club, the San Francisco-based en­vi­ron­men­tal group.

The trade pact will en­cour­age oil and gas com­pa­nies to use ar­bi­tra­tion to seek com­pen­sa­tion from the U.S., he said.

Tran­sCanada ar­gues that by re­ject­ing the pipe­line, the Obama ad­min­is­tra­tion vi­o­lated pro­vi­sions of a dif­fer­ent trade deal — the North Amer­i­can Free Trade agree­ment.

The Calgary, Alberta-based com­pany said it in­tends to start a claim for costs and dam­ages un­der NAFTA against the United States. The dis­pute would be de­cided by a three­mem­ber ar­bi­tra­tion panel to be es­tab­lished un­der the terms of the trade agree­ment. A panel couldn’t force ap­proval of the pipe­line, pro­posed to carry Cana­dian crude into the U.S., but it could award dam­ages for lost prof­its and costs in­curred by the com­pany.

Key­stone supporters said con­ser­va­tion­ists were con­fus­ing the is­sue.

“Pres­i­dent Obama’s en­vi­ron­men­tal ex­trem­ist friends will look for any ex­cuse to deny Amer­i­cans nat­u­ral re­sources, driv­ing up the cost of en­ergy and cost­ing jobs,” said Ash­Lee Strong, a spokes­woman for House Speaker Paul Ryan, a Wis­con­sin Repub­li­can who backs pas­sage of the trade agree­ment.

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