TransCanada Corp. plans to launch a North American free-trade agreement claim seeking more than $15-billion (U.S.) in damages in response to the U.S. government’s decision to deny a permit for the controversial Keystone XL pipeline. 
 
 Adding to the likely test of U.S.-Canada relations, TransCanada also said Wednesday it has launched a separate lawsuit in the U.S. Federal Court in Houston asserting that U.S. President Barack Obama’s decision to deny construction of the $8-billion project exceeded his power under the U.S. Constitution. 
 
 TransCanada also said it expects to take a writedown of $2.5-billion (Canadian) to $2.9-billion after tax in the fourth quarter related to the Keystone XL permit denial. 
 
 After years of delays, the Obama administration quashed the project last November. The Calgary-based pipeline company says the United States has never before denied a cross-border oil pipeline from Canada, and the rejection of the project designed to transport vast quantities of Canadian oil sands and some Bakken crude to Gulf Coast refineries “was arbitrary and unjustified.” 
 
 TransCanada’s announcement comes as Mr. Obama is due to host Prime Minister Justin Trudeau at a state dinner in Washington in March. At the same time, Washington and Ottawa are working with the Mexican government to forge a North American energy and climate agreement that would move the three countries closer to a continental market. 
 
 In rejecting the proposal last November, Obama called crude from Alberta’s oil sands “dirtier” but acknowledged that debate over the pipeline has played an “overinflated role” in his country’s political discourse. 
 
 “This pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others,” the President said, before concluding that the project wouldn’t significantly help his country’s economy, lower gasoline prices or increase energy security. 
 
 In its notice to claim to arbitration under Chapter 11 of NAFTA, TransCanada’s lawyers argue environmental activists turned opposition to Keystone XL into a litmus test for politicians to prove their environmental credentials. “The activists’ strategy succeeded.” 
 
 On Wednesday, TransCanada said in a news release that the $15-billion (U.S.) claim it will make through its NAFTA action represents the initial estimated loss of value. “TransCanada has invested billions of dollars in assets that have now been rendered useless for the intended purpose, specifically the transportation of Canadian and American oil.” 
 
 The midstream energy firm said it had every reason to expect its application would get a green light, as the application met the same criteria the U.S. State Department applied when approving applications to construct other, similar cross-border pipelines. 
 
 “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 and the President’s assertion of unprecedented, independent powers,” TransCanada said. 
 
 The company noted that the U.S. has never before lost a NAFTA claim, however, “we have undertaken a careful evaluation of the administration’s action as it relates to NAFTA and believe there has been a clear violation of NAFTA in these circumstances.” 
 
 Toronto trade lawyer Lawrence Herman said these types of lawsuits “are all long shots,” but TransCanada appears to have a solid case in arguing that it was unfairly treated and that the decision was politically motivated. 
 
 “The argument is that they were not given fair and equitable treatment as required under the NAFTA,” he said. 
 
 “I’ve thought for some time that that this was a politicized issue, and there are good arguments that decisions affecting Keystone were based on political considerations. To the degree that that is so, TransCanada has a viable if not a strong case.” 
 
 Activists who opposed the pipeline insist the rejection was a legitimate policy decision, driven by concerns about rising greenhouse gas emissions in the oil sands, and by worries about local pollution from pipeline spills. 
 
 “The rejection of Keystone XL was justified in order to protect the land, water and property rights of farmers and ranchers,” said Jane Kleeb, president of Bold Nebraska, a prominent local group. “This desperate attempt by TransCanada is a move to show their shareholders they have a viable project when they have hit a dead end.” 
 
 Bill McKibben, founder of the climate group 350.org, said the legal action isn’t going to get the pipeline built. “The idea that some trade agreement should force us to overheat the planet’s atmosphere is, quite simply, insane. But the oil industry is so used to always winning that I fear this kind of tantrum is predictable.” 
 
 The federal government offered little comment on the lawsuit, but said it would not undermine Ottawa’s effort to forge a closer energy relationship with the United States. 
 
 “This is a private lawsuit that is being launched by TransCanada under Chapter 11 and the corporation has the right to launch and they’ve made the decision this is how they’d like to proceed,” said Adam Barratt, spokesman for Foreign Affairs Minister Stéphane Dion, said in a telephone interview. “It would be inappropriate for the government to comment any further at this time.” 
 
 However, Mr. Barratt noted that the Liberal government had expressed its disappointment in November when President Obama announced the decision. 
 
 “The relationship between Canada and the United States is on a very warm footing, and the discussions on energy in North America are much broader than Keystone,” he said. 
 
 Report Typo/Error ||||| By Nia Williams and Valerie Volcovici 
 
 CALGARY/WASHINGTON (Reuters) - TransCanada Corp sued the U.S government on Wednesday to reverse President Barack Obama's rejection of the Keystone XL pipeline, and also plans to seek $15 billion in damages from a trade tribunal. 
 
 TranCanada's lawsuit in a federal court in Houston, Texas, called rejection of its permit to build the pipeline unconstitutional. In a separate action under the North American Free Trade Agreement (NAFTA), the company said the pipeline permit denial was "arbitrary and unjustified." 
 
 The company's U.S. lawsuit does not seek monetary damages but wants the permit denial invalidated and seeks a ruling that no future president can block construction. Its request for $15 billion under NAFTA reflects its desire to recover its investment in the pipeline. 
 
 Defendants in the Houston lawsuit are U.S. Secretary of State John Kerry, Attorney General Loretta Lynch, U.S. Homeland Security Secretary Jeh Johnson and Sally Jewell, Secretary of the Department of Interior. 
 
 Obama, who is not named as a defendant, rejected the cross-border crude oil pipeline last November, seven years after it was first proposed, saying it would not make a meaningful long-term contribution to the U.S. economy. 
 
 The Keystone XL was designed to link existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in Illinois and, eventually, the Gulf of Mexico coast. 
 
 All the Democratic U.S. presidential candidates, including front runner Hillary Clinton, oppose the pipeline while most Republican candidates are in favor. ||||| TransCanada Corp. (TRP)’s Keystone XL pipeline route through Nebraska was ruled illegal by a state court judge in a decision seen as setting back the project by as long as a year as U.S. officials consider approving it. 
 
 The ruling resets the pipeline approval process in Nebraska as the Obama administration studies the northern portion of the international project. President Barack Obama has been urged by some Democratic supporters to reject the project as too big a contributor to global warming while Republican leaders have pressured him to approve it and Canadian officials have criticized him for taking too long to decide. 
 
 “This gives the U.S. State Department and Obama an out,” said Bob Schulz, a University of Calgary business professor, who predicted there will be an appeal of the ruling. “Why would they decide if they don’t have to decide? I think he’s going to push it back another year.” 
 
 Judge Stephanie Stacy in Lincoln, the state’s capital, today struck down legislation that shifted the power to approve the pipeline route to Governor Dave Heineman, a Republican, from the state’s Public Service Commission. Legislation depriving the commission of that power violates the Nebraska Constitution, Stacy said, declaring the measure “unconstitutional and void.” 
 
 “Because the governor’s actions of Jan. 22, 2013, in approving the Keystone XL Pipeline route were predicated on an unconstitutional statute, the court also finds the governor’s actions in that regard must be declared null and void,” she said. 
 
 Alberta, Texas 
 
 TransCanada, based in Calgary, is seeking to build the 830,000 barrel-a-day pipeline through the U.S. heartland, connecting oil sands in Alberta with refineries along the Gulf Coast of Texas and Louisiana. The 1,179-mile (1,897-kilometer) pipeline would run from Hardisty, Alberta, to Steele City, Nebraska. From there it would connect to an existing network. 
 
 Stacy’s ruling comes in a case pressed by three Nebraska property owners who sued to block the proposed path. Stacy heard arguments over the siting legislation on Sept. 27. Her decision prohibits the governor or the state’s Department of Environmental Quality from taking any further action on the pipeline project. 
 
 Heineman, whose term expires at the end of this year and is barred by law from seeking re-election, had referred calls about the ruling to the office of Nebraska Attorney General Jon Bruning. 
 
 “We’re reviewing the decision,” Bruning’s spokeswoman, Shannon Kingery, said in an e-mailed statement. 
 
 State Department 
 
 Heineman said in a statement later that Bruning has already told the court the state plans to appeal. “This is an important issue for the state of Nebraska,” the governor said. 
 
 Because the pipeline crosses an international boundary, it is subject to U.S. State Department review. 
 
 Canadian Prime Minister Stephen Harper has called Keystone XL a “no-brainer” for the U.S. and last month criticized Obama for “punting” the decision on the line. While the project remains on hold, Harper’s government has redoubled efforts to get new oil conduits built to Canada’s Atlantic and Pacific coasts, by making faster regulatory reviews law and increasing discussions with aboriginal groups along pipeline paths. 
 
 Harper, Obama 
 
 Obama met today in Toluca, Mexico, with Harper and Mexican President Enrique Pena Nieto. Obama gave no ground on speeding up the review of the Keystone XL after the meeting. 
 
 “Keystone will proceed along the path that’s already been set forth,” Obama said at a press conference after the meeting. He said he and Harper discussed “a shared interest in dealing with greenhouse gas emissions. This is something we have to deal with.” 
 
 Harper said he and Obama “had an exchange” on the Keystone XL project. “We’ll continue on that discussion,” he said. 
 
 Today’s court’s decision strikes down a 2012 law passed by the Nebraska legislature that expedited pipeline route review and created a procedure under which siting could be determined by Heineman and the state’s Department of Environmental Quality, rather than the Public Service Commission. 
 
 If Stacy’s decision survives appeal, the routing process will revert to the commission, which was granted oversight in 2011. That legislation was passed amid opposition by the governor and other leaders and ranchers to TransCanada’s original proposed route that would have taken the Keystone XL through the state’s environmentally sensitive Sand Hills region. 
 
 Special Treatment 
 
 The commission never began a review of the pipeline because the legislation created a different process, said state Senator Annette Dubas, who sponsored the 2011 bill. 
 
 The 2012 law created special treatment for TransCanada’s proposal, Dubas said in a phone interview. 
 
 “I believed all along that the bill was unconstitutional and would run into problems,” she said. 
 
 The ruling effectively rescinds Heineman’s notification to the Obama administration that Nebraska legal procedures for approving the pipeline had been satisfied, said attorney David Domina, who represents the suing landowners. 
 
 “Now it is back to the drawing board for Governor Heineman and the Legislature,” Domina said in a statement. 
 
 Stacy said in her ruling that the case isn’t about the merits of the Keystone XL pipeline project. 
 
 “We are disappointed and disagree with the decision,” Shawn Howard, a TransCanada spokesman, said today in an e-mailed statement. “We will now analyze the judgment and decide what next steps may be taken.” 
 
 ‘Secure Supply’ 
 
 The company continues to believe in the project and the benefits it would confer to the U.S., including thousands of jobs and “a secure supply of crude oil from a trusted neighbor in Canada,” he said. 
 
 The Nebraska commission has seven months to approve or deny a pipeline route application, according to state documents that outline the commission’s regulations. 
 
 The commission doesn’t take into account safety concerns and is instructed to weigh the reputation of the applicant, how a company proposes to mitigate any potential environmental damage and any economic and social effects, according to the documents. 
 
 The Nebraska ruling is “another bump in the road for Keystone” and may have a “mildly negative” impact on TransCanada’s share price, Robert Kwan, an analyst at RBC Capital Markets, said in a research note. 
 
 “We would not be surprised if the administration used the events in Nebraska as a reason to delay making a decision as part of the presidential permit process,” Kwan said. 
 
 Difficult Path 
 
 Jim Murphy, an attorney with the National Wildlife Federation, which opposes the pipeline, said in a phone interview he doesn’t believe Secretary of State John Kerry could approve a route that a judge threw out as improper. 
 
 “The State Department analyzed a certain route in Nebraska and a judge has now thrown that route out,” Murphy said. “I would think that a path to approval is very difficult.” 
 
 The landowners’ lawyer, Domina, predicted in an interview last month that the case would go to the state’s Supreme Court. 
 
 “The chances are 99.82 percent,” the attorney said then, adding it may take as long as 10 months for Nebraska’s top court to render a ruling. Domina last month declared himself a Democratic candidate for the U.S. Senate. The seat is currently held by Republican Mike Johanns, who has said he’s retiring. 
 
 Oil Bottleneck 
 
 TransCanada first applied to build Keystone XL in September 2008 to connect rising volumes of oil-sands crude with U.S. Gulf Coast refineries. Producers are counting on the project to help ease a transportation bottleneck and raise the price of Canada’s heavy crude, which averaged $24.50 a barrel lower than the main U.S. benchmark last year. 
 
 Oil is Canada’s most valuable export, with shipments worth about C$73 billion ($65.9 billion) in 2012, according to the national statistics agency. Almost all Canadian crude exports go to the U.S. 
 
 While the Nebraska route issue may delay Keystone XL, the effect on TransCanada from another hold-up on the pipeline isn’t as big as it would have been in 2008 because the company is focusing on other projects, said Juan Plessis, an analyst at Canaccord Genuity Corp. in Vancouver. 
 
 “Will the stock open lower tomorrow because of this? Probably not,” Plessis said. “Most investors are quite jaded by the delay. They’ve pretty much seen everything. It’s been five years since this was put forth to the U.S.” 
 
 For TransCanada, Keystone XL’s significance is being overshadowed by a much larger crude pipeline it now plans to build, the C$12-billion Energy East project that would carry oil-sands production to eastern Canadian refineries and a port on the nation’s Atlantic Coast for export as far as India. 
 
 The case is Thompson v. Heineman, CI 12-2060, Lancaster County, Nebraska, District Court (Lincoln). 
 
 To contact the reporters on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net; Rebecca Penty in Calgary at rpenty@bloomberg.net 
 
 To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Susan Warren at susanwarren@bloomberg.net
– See you in court, eh? TransCanada, a Canadian company hit hard by President Obama's rejection of its Keystone XL pipeline project, has filed twin lawsuits seeking $15 billion in damages and a reversal of the US decision, the New York Times reports. One lawsuit, filed under the North American Free Trade Agreement, seeks damages because the permit rejection was "arbitrary and unjustified," reports Reuters. The suit claims that Obama overstepped his authority because of his "unprecedented and symbolic grounds" for turning down the project, which he argued would bring "dirtier crude oil into our country" while doing little to boost the American economy. The second lawsuit, filed in a federal court in Houston, calls for a reversal of Obama's "unconstitutional" decision and a ruling that no future president can block the pipeline project, reports Reuters. A Canadian trade lawyer tells the Globe and Mail that it's tough to predict how these kinds of lawsuits will go, but that TransCanada's argument that it was treated unfairly because the issue had become politicized appears solid. The Times notes that a win for the Canadian company would be unprecedented: In the 22 years of the NAFTA agreement, the US has won all 12 of the challenges it faced from Canadian firms, while US firms have prevailed in trade agreement cases in Canada.