The Guardian did a great job reporting on the Pussy Riot and Arctic 30 cases, and has covered the war in Ukraine in a balanced and honest way. The paper’s US coverage, in contrast, is often distorted by its ideological biases. Still, its on-the-ground reporting from the US can be second to none. When it comes to business and finance, especially the energy sector, The Guardian‘s standards allow for amateurish ignorance and worse.
The latest example is this piece on TransCanada’s two challenges to Obama’s denial of a trans-border permit for the Keystone XL pipeline: a forthcoming complaint to a NAFTA arbitration body and a lawsuit filed with a US district court in Houston. The Guardian reports:
TransCanada Corporation said it was looking to recover an estimated $15bn it spent over many years trying to win approval for the pipeline.
Did TransCanada really say this? $15 billion spent on a lobbying effort? Seriously?
This is what the company actually released to the press:
Through the NAFTA claim, TransCanada will be seeking to recover more than US$15 billion in costs and damages that it has suffered as a result of the U.S. Administration’s breach of its NAFTA obligations.
Likewise, TransCanada’s letter of intent (to sue the US in a NAFTA tribunal) only mentions
damages of over US$ 15 billion arising from the United States’s breach of its NAFTA obligations.
I have no way of telling what exactly the $15 billion is made up of, but sunk construction costs and lost future revenues are major contributors. From TransCanada’s complaint filed with the US district court:
VI. HARM TO TRANSCANADA
123. Defendants’ actions giving effect to the denial of the permit authorizing
TransCanada to build, own, or operate the portion of the Keystone XL Pipeline that crosses the U.S.-Canada border would prevent the construction and the operation of the portion of the Keystone Pipeline XL Pipeline extending from Hardisty, Alberta to Steele City, Nebraska.
124. If TransCanada is precluded from constructing and operating the Keystone XL Pipeline from Hardisty, Alberta to Steele City, Nebraska, it will be unable to provide oil transport services demanded by shippers and their customers for oil from Alberta and Montana destined to points in the United States, will lose the value of the capital expenditures made and expenses incurred in preparing to build that portion of the Keystone XL Pipeline, and will be unable to profit from providing those services. TransCanada has expended billions of dollars in preparation for constructing the portion of the Keystone XL Pipeline extending from Hardisty, Alberta to Steele City, Nebraska.
125. Portions of the originally proposed Keystone XL Pipeline, including the Gulf
Coast Pipeline and the Houston Lateral, have been completed or are nearing completion and are or soon will be in operation. Those facilities were designed and constructed to provide services to shippers including those that sought to transport oil from Hardisty, Alberta and the Bakken formation in Montana to destinations near Gulf Coast refineries in the United States. If TransCanada is precluded from completing and operating the portion of the Keystone XL Pipeline from Hardisty, Alberta to Steele City, Nebraska, it will be unable to provide the anticipated levels of service over the Gulf Coast Pipeline and the Houston Lateral. As a result, the revenues it will secure from operating the Gulf Coast Pipeline and the Houston Lateral will be significantly reduced, and TransCanada will be unable to recover a significant portion of the expenses associated with constructing and operating those facilities.
The Guardian‘s reader is left with the impression that the $15 billion TransCanada wants in damages is more or less equal to the amount it has spent on lobbying and PR in the US. Clearly it is not the case – at best, it is an unfounded and bizarre conjecture.