American Elephants


A Bit More on the Alternative Reality by The Elephant's Child

Five days ago I wrote a post on TransCanada Corp.’s two new lawsuits against the Obama Administration’s denial of the Keystone XL Pipeline for the long drawn-out, multi-year rejection of the pipeline. One lawsuit filed in a Houston Federal Court, states that President Obama exceeded his authority in November when he blocked the pipeline’s construction, the other, separately filed, is an international petition under NAFTA seeking to recover $15 billion in costs and damages incurred in its attempt to build the cross-border pipeline.

Today, it seems that the same Obama Administration that rejected the Keystone XL pipeline has no problem at all in supporting a new oil pipeline project in Kenya. U.S. Ambassador Robert Godec told Kenya’s energy minister that the Obama Administration would help Nairobi raise $18 billion to finance its PowerAfrica project. The pipeline, the Wall Street Journal reports, would stretch from Kenya’s Rift Valley to Lamu on the coast. Mr. Godec said that “Kenya needs $18 billion worth of financing, so one of the questions we are discussing is how we can work together with the private sector and governments to raise that sum, to find ways to make certain that this financing becomes available.”

Under the North American Free Trade Agreement, the U.S. is obliged to treat a Canadian company in the same way it would treat an American company. The case may well succeed because of the extraordinary regulatory barriers the U.S. imposed on the investment. It’s clear that President Obama blocked the project on arbitrary political grounds. The resolution of these two cases will be interesting to watch. A oil pipeline would undoubtedly help Kenya, but I’m not sure it should be financed with taxpayer dollars.


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