TC Energy has filed a federal suit against the US government to recover costs from a cancelled oil pipeline project, a week after the company said it reached a settlement with the US Interior Department on another part of the development.
TC Energy sued on Friday to recover $122m it claims it will lose by not being able to build the proposed Keystone XL pipeline and the easement it obtained for it from the federal government. The state of Nebraska is also suing for $50m, according to court documents.
The suit, filed with the district court of Nebraska and the US district court for the district of Montana, seeks to recover costs incurred by TC Energy by virtue of its permits to move crude oil through various government agencies and coastal waters.
It comes a week after the Nebraska supreme court rejected the US government’s decision to unilaterally approve the pipeline because of the matter’s proximity to a tribal reservation. Nebraska supreme court justices ruled in favour of the Culpepper tribe, which argued that approving the project would force the tribe to forfeit land.
The president, Donald Trump, has sought to revive the pipeline since he took office. He had originally wanted the pipeline to run through the national border of Montana and South Dakota, as initially proposed. But environmentalists have opposed the pipeline, saying that a 1,134-mile pipeline without new pipelines between Canada and Nebraska could lead to greater corrosion, further pollution and increases in risk of spillage and oil spills.
Trump said he would push through the pipeline project despite the opposition by Indigenous groups and environmentalists because Canada was going to make the necessary changes.
Environmentalists and indigenous tribes were fighting a federal government move to approve a 1,134-mile pipeline. Photograph: Meghan McCusker/The Washington Post/Getty Images
Talks with the state of Nebraska to reach a compromise and the state’s high court were ongoing last month, when officials confirmed the deal was reached, but a day later, a federal judge ruled that a decision to grant a 1,179-mile easement under an interstate pipeline route for the TransCanada Keystone XL could not be made by the interior department without a determination of its “sole and exclusive” purpose.
A week after the ruling, TC Energy announced that a settlement with the interior department could be reached to settle a separate legal dispute the department had filed related to funding for the $5.3bn project in late November.
Under the terms of the settlement, the company will not be required to pay $1.5bn due the department if the Obama administration grants a presidential permit for the pipeline, but if the permit is not granted the company must pay that amount, plus interest.
A spokesperson for the company, Kate Moss, said in a statement: “We continue to believe strongly in the need for this critical infrastructure that will support the continuing production and shipping of US crude oil.
“We have previously explained the inherent challenges to the US President’s method of issuing a pipeline permit within the confines of the Trans-boundary easement, and the company will not play games with taxpayers’ money. The company will defend its claim vigorously.”