TC Energy (TRP) to seek damages for Keystone XL cancellation

TC Energy company TRP is attempting to recoup financial losses resulting from the cancellation of the Presidential Permit for the Keystone XL pipeline project.

Notably, the Company submitted a notice of intent to initiate a North American Free Trade Agreement (“NAFTA”) claim under the United States-Mexico-Canada Agreement. TC Energy is seeking to recover more than $15 billion in damages suffered as a result of violations of its NAFTA obligations by the United States government.

The Keystone pipeline project has been under criticism for 12 years because it would impact local communities and exacerbate climate change. The project was therefore abandoned last month in response to US President Joe Biden’s decision to suspend presidential permits to proceed with the construction of the pipeline.

The $8 billion pipeline was designed to transport crude oil from Alberta’s tar sands to refineries on the U.S. Gulf Coast. However, the project has faced opposition from environmental activists in Canada and the United States, saying the production and extraction of oil from the tar sands would release a massive amount of greenhouse gases.

Even if the pipeline were to be a green pipeline, its operation would have generated 1.44 million tonnes of carbon dioxide per year. This is equivalent to the annual emissions of 300,000 passenger cars. Therefore, the construction and operation of the pipeline involved risks related to water supply and the environment.

TC Energy said suspending the project will result in several job losses and hinder economic opportunities for thousands of workers. The company is currently considering canceling the already completed construction. It will notably cooperate with regulators, shareholders and indigenous groups to ensure a safe closure and exit from the project.

Company Profile and Price Performance

Headquartered in Calgary, Alberta, TC Energy is a leading provider of midstream energy services focused on natural gas. The company is also involved in other businesses, including power generation, natural gas storage and oil pipelines.

The company’s shares have underperformed the sector over the past six months. Its stock gained 20% compared to the industry’s growth of 24.5%.

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Zacks Rank and Stocks to Consider

The company currently has a Zack Rank #3 (Hold).

Some higher ranked players in the energy field are Range Resources Company CRR, Baker Hughes Company BKR and Repsol SA REPYY, each currently carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Range Resources’ 2021 earnings are expected to increase 16.2% year over year.

Baker Hughes’ 2021 earnings are expected to increase 56.9% year-over-year.

Repsol’s 2021 profits are expected to increase 12.4% year-on-year.

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